2018 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
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
Auditor's Report
Biogas plant in Kalimantan
Consolidated Income Statement
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4
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11
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46
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Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
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
Company addresses, advisers and website
63
AEP has a Premium Listing on the London Stock
64
Exchange. The Company was formed and floated in
1985.
65
Primary activities are
the crop production and
processing of palm oil and some rubber through
operations in Indonesia and Malaysia.
68
66
102
The Group is committed to responsible development
103
and management of its plantations and facilities for the
benefit of both the environment and society in which it
operates. Palm oil is an important commodity and the
industry reportedly employs 4 million people directly
and a further 12 million indirectly in Indonesia alone.
Inside Back Cover
108
104
Immature oil palms
Annual Report 2018 | 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
https://www.angloeastern.co.uk/
Company advisers
Auditor
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
20 Old Bailey
London EC4M 7AN
United Kingdom
Sponsor/Broker
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
United Kingdom
About Anglo-Eastern Plantations
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.
Biogas plant in Kalimantan
Immature oil palms
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 both the environment and society in which it
operates. Palm oil is an important commodity and the
industry reportedly employs 4 million people directly
and a further 12 million indirectly in Indonesia alone.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
About Anglo-Eastern Plantations
Oil Palm Plantations
The Group has developed over 56,000ha of mature oil palm in sixteen
plantations across Indonesia, together with one plantation in Malaysia.
Oil Palm Development
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
approximately 10,300ha of recently planted immature plantations of which
1,764ha were planted in 2018, including replanting of 470ha.
Palm Oil Mills
The Group operates six palm oil mills in Indonesia processing up to a combined
295mt of fresh fruit bunches (“FFB”) per hour. One of the mills has a biomass
plant which processes the empty fruit bunches (“EFB”) into dried long fibres for
export. The Group has begun construction of its seventh mill in North Sumatera.
Third Party Palm Oil Processing
In 2018 the Group purchased approximately 1.01 million mt of FFB from third
party producers, comprising small plantations and local farmers, for processing
through its mills. The total FFB throughput at the Group’s mills in 2018 was 2.02
million mt producing 418,800 mt of crude palm oil (“CPO”). The Group has the
capacity to store up to 48,400mt CPO at its 6 mills.
Rubber Plantations
The Group has 262ha of established rubber plantations which produced 637mt of
raw latex and rubber lumps in 2018. The size of rubber plantations will reduce
further as the Group replaces ageing rubber trees with oil palm.
Biogas Plants
Three mills are equipped with biogas plants to capture the methane gas emission
to generate electricity which is sold to Indonesian state authorities. This reduces
the reliance on fossil fuels and improves the Group’s carbon footprint. A fourth
biogas plant is being constructed in North Sumatera.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Financial Highlights
Revenue
Profit before tax:
- before biological assets (“BA”) movement
- after BA movement
Basic Earnings per ordinary share (“EPS”):
- before BA movement
- after BA movement
Dividend (cents)
Anglo-Eastern Plantations Plc
2018
$m
2017
$m
250.9
291.9
33.2
30.9
70.0
69.7
32.50cts
28.79cts
3.0cts
91.80cts
91.37cts
4.0cts
%
FTSE 100
Share Price
Turnover by volume
Annual Report 2018 | Anglo-Eastern Plantations Plc
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4
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Financial Highlights
300,000
250,000
200,000
150,000
100,000
50,000
0
Revenue ($000)
Profit Before Tax Before BA
($000)
100,000
80,000
60,000
40,000
20,000
0
2014 2015 2016 2017 2018
2014 2015 2016 2017 2018
Basic Earnings Per Share
Before BA ($, cents)
Asset Value Per Share
($, cents)
140.00
120.00
100.00
80.00
60.00
40.00
20.00
0.00
1,200
1,000
800
600
400
200
0
2014 2015 2016 2017 2018
2014 2015 2016 2017 2018
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Key Information
Age of Palm Trees
(as at 31/12/18)
(as at 31/12/17)
17%
16%
13%
18%
24%
27%
43%
42%
Immature
Young
Prime
Old
Own FFB Production & Outside Purchase (mt)
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
-
2014
2015
2016
2017
2018
Own FFB Production
Outside Purchase
Crude Palm Oil & Palm Kernel Production (mt)
2014
2015
CPO
2016
Palm Kernel
2017
2018
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Shareholder Information
Market capitalisation
The market capitalisation of Anglo-Eastern Plantations Plc at 31 December 2018 was £225 million, the ordinary
share price at the close of business on 18 April 2019 was 528 pence giving a market capitalisation of £209 million.
Website
https://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 environment, social
and governance matters and 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 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)
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 34th Annual General Meeting (“AGM”) 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 Monday, 24 June 2019. Notice of the meeting
is set out at the end of this Annual Report on pages 108 to 111.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Shareholder Information
Proxy Voting
Shareholders will not receive a hard copy of the proxy form for the 2019 AGM. Instead shareholders will be able to
vote electronically using the link www.signalshares.com. Shareholders will need to log into their Signal Shares
account, or register if shareholders have not previously done so. To register, shareholders will need their Investor
Code which is detailed on their share certificates or available from the Registrar, Link Assets Services.
Voting by proxy prior to the AGM does not affect the shareholders’ right to attend the AGM and vote in person should
shareholder wish. Proxy votes must be received no later than 11am on Thursday, 20 June 2019.
Shareholders may request a hard copy of the proxy form directly from the Registrar, Link Asset Services on Tel:
0371 664 0300. Lines are open between 9am to 5.30pm from Monday to Friday excluding public holidays in England
and Wales.
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
will be deemed to have elected to receive their dividends in Pounds Sterling and those with addresses outside the
UK will be deemed to have elected to receive their dividends in US Dollars.
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 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Chairman’s Statement
The Group’s FFB production in 2018 was 1.04 million mt, 11.9% higher than the previous year of 929,600mt. The
crop production in the Riau region continued to outperform in good weather conditions. An improvement in the
evacuation of FFB in Bengkulu together with a higher yield from maturing trees in Kalimantan also contributed to a
better harvest. The throughput at the six mills reached an all-time high in 2018 as the Group purchased more
external crops in addition to a higher internal production. FFB bought-in from surrounding smallholders was 1.01
million mt, 1% more than 2017 of 998,400mt. The Tasik Raja mill purchased 17% more outside crops as recent
replanting exercise has reduced its own internal crops. The mills, as a result, processed 6% more FFB and
increased the CPO production by 7% to 418,800 mt (2017: 390,600mt).
Although the Group achieved higher CPO production during the year, revenue and profitability were, however, lower
as announced during the year because of the significant drop in CPO price to a three and a half year low due to high
inventory across the market. The average CPO price ex-Rotterdam in 2018 was 17% lower at $595/mt, compared to
$718/mt in 2017.
The Group’s revenue was lower by 14% at $250.9 million, compared to $291.9 million achieved in 2017. The
operating profit for the Group in 2018, before biological asset (“BA”) movement was $30.9 million, 54% lower
compared to $66.7 million achieved in 2017. Earnings per share, before BA movement, decreased by 65% to
32.50cts, from 91.80cts in 2017. The Group’s operating profit after BA for 2018 was at $28.6 million after a
downward BA movement of $2.3 million as compared to 2017 operating profit of $66.4 million after a downward BA
movement of $0.3 million.
The Group’s new planting including plasma for 2018 totalled 1,563ha compared to 1,807ha last year. The slower rate
of planting was due to protracted land compensation negotiations. New planting was also delayed in Kalimantan as
the Group awaits permission from the local authority to clear and to plant. The local authority took some time to
review the results of the high carbon stock sustainability study which was independently performed to determine
areas that cannot be planted with oil palm due to high conservation and high carbon stock values.
The two biogas plants with a combined capacity of 3 megawatt generated over 13,800MWh of electricity in 2018
compared to 11,500MWh last year. The revenue from the sale of surplus electricity to the national grid was $0.86
million, slightly lower than last year of $0.87 million due to a weaker Indonesian Rupiah and the shutdown of a
biogas plant in Blankahan for a major overhaul. The maintenance work which took one month was recommended
after 25,000 hours of operation. The third biogas plant in Kalimantan has been operating from the first quarter of
2018. The 6.7km of power transmission line jointly funded by the Group and the state electric company has been
installed and tested. It expects to sell the electricity after permits for the power generation and supply are issued by
the local authority in the first quarter of 2019. The use of clean energy will further reduce the mills’ reliance on fossil
fuels and improve the Group’s carbon footprint.
Despite the volatility of the CPO prices, the Group continues the construction of its seventh mill and fourth biogas
plant in North Sumatera as the Group believes its long-term prospects are strong. The earthworks for the mill and
biogas plant are in progress. The 60mt/hr mill is estimated to cost approximately $19 million and is expected to be
completed in about two years. The biogas plant costing about $3.8 million is expected to be completed by early
2020. In order to ensure that there is no disruption to its operation, the mill in Kalimantan will expand its CPO storage
facility from 9,000mt to 13,000mt at a cost of $200,000 in 2019. Bulking silos for storage of kernels will also be
expanded in three mills at a cost of $800,000.
The Indian government in January 2019 reduced the import tax on CPO and refined palm oil which made them more
competitive against other soft oils. India is the largest consumer of CPO and the reduction of import tax may help to
increase the demand which had declined in 2018.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Chairman’s Statement
The decision by some members of the European Union (“EU”) to ban or phase out the use of palm oil and palm
biodiesel is likely to hurt the industry. 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
current attractive price discount to soybean oil.
The Board has declared a final dividend of 3.0cts per share, in line with our reporting currency, in respect of the year
to 31 December 2018 (2017: 4.0cts). In the absence of any specific instructions up to the date of closing of the
register on 7 June 2019, shareholders with addresses in the UK will be deemed to have elected to receive their
dividends in Pounds Sterling and those with addresses outside of UK will be deemed to have elected to receive their
dividends in US Dollars. Subject to the approval by shareholders at the Annual General Meeting, the final dividend
will be paid on 12 July 2019 to those shareholders on the register on 7 June 2019.
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
23 April 2019
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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 and production of
CPO. 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 limit of 20,000ha per province
and a national total of 100,000ha on the licensed development of oil palms for companies that are not listed in
Indonesia or with less than a 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 return to the investors and to enhance shareholder
value. Profitability, however, is very much dependent on the CPO price, which is volatile and is 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. Other crops
would require up to eight times as much land to produce an equivalent weight of palm oil. It was reported that
amongst the major oilseeds, oil palm occupies about 7% of the total agricultural land but contributes more than 30%
of the world’s supply of oils and fats.
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 19.3mt/ha, 143% mill efficiency and production cost of $284/mt on the Indonesian
operations. This compared to 2017 where the Group achieved a yield of 17.9mt/ha, 134% mill efficiency and
production cost of $281/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 the 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 be planted.
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 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
For the year ended 31 December 2018, revenue for the Group was $250.9 million, 14% lower than $291.9 million
reported in 2017 due primarily to lower CPO prices and partly weaker Rupiah.
The Group’s operating profit for 2018, before biological asset movement, was $30.9 million, 54% less than $66.7
million in 2017.
FFB production for 2018 was 1.04 million mt, 11.9% higher than the 929,600mt produced in 2017. The yield for 2018
improved due to the strong recovery of production in Riau, improved evacuation of FFB in Bengkulu and a higher
crop output from maturing trees in Kalimantan. FFB bought-in from local smallholders in 2018 was 1.01 million mt
(2017: 998,400mt), 1% higher compared to 2017. During the year, the Group’s mills processed 2.02 million mt of
FFB, 6% higher than last year of 1.9 million mt. CPO production, as a result, was 7% higher at 418,800mt, compared
to 390,600mt in 2017.
Profit before tax and after BA movement for the Group was $30.9 million, 56% lower compared to a profit of $69.7
million in 2017. The BA movement was a debit of $2.3 million, compared to a debit of $0.3 million in 2017. The BA
movement was mainly due to change in FFB price which was lower in 2018. The profit before tax was also affected
by an impairment charge on the development cost of the plantation and land amounting to $4.3 million compared to
a reversal of impairment amounting to $0.9 million in 2017.
The average CPO price ex-Rotterdam for 2018 was $595/mt, 17% lower than 2017 of $718/mt.
Earnings per share before BA movement decreased by 65% to 32.50cts compared to 91.80cts in 2017. Earnings per
share after BA movement decreased from 91.37cts to 28.79cts.
Going Concern
The Group’s balance sheet remains strong. As at 31 December 2018, the Group had cash and cash equivalents of
$112.2 million (2017: $139.5million) and borrowings of $19.3 million (2017: $27.9million), giving it a net cash position
of $92.9 million, compared to $111.6 million in 2017. The net cash flows from operating activities was lower by 67%
due mainly to the lower CPO price and higher overseas tax paid. The cash position was also lower in 2018 due to an
exchange loss on translation of $8.7 million and repayment of loan. As the CPO prices are projected to perform
better in 2019, the Group barring any unforeseen circumstances is expected to generate positive cash flows. The tax
recoverable for 2019 amounted to $44.3 million, a 51% increase over the previous year of $29.4 million. The
substantial increase is due to the value added tax (“VAT”) paid which is refundable by tax authority after tax audit. A
detailed description is provided in note 8. 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 (“HPP”),
Blankahan, Rambung, Sg Musam and Cahaya Pelita (“CPA”), produced 289,700mt in 2018 (2017: 289,900mt). The
yield in North Sumatera improved to 21.1mt/ha from 20.9mt/ha in 2017. While the yield is higher, the replanting of
aged palms in North Sumatera has reduced the regional production. During the year another 309 ha of oil palms
were replanted in Anak Tasik while 161ha of old rubber trees in Rambung were replaced with oil palm. The average
yield in CPA remains low at 17mt/ha as the FFB production during the year was constantly disrupted by floods in
500ha of low laying fields. About 50% of CPA plantation is less than 5 metres above the sea level. Flood mitigation
efforts appeared to work as the size of flooded areas were reduced despite a higher rainfall exceeding 5,000mm per
annum recorded in 2018. Over 1,500ha of oil palms in HPP suffered from the desiccation of fronds and ganoderma
causing a loss of 35,000 trees. The desiccation was caused by a shortage of water from lower rainfall. Building of
water gates and canals between the oil palms had helped to ease the problem.
Ganoderma fungus and Upper Stem Rot which attack about 7% to 10% of the productive palms in Anak Tasik and
HPP 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 in Rambung to lengthen the economic lifespan of oil
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
palms. Replanting 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 5,700MWh (2017: 6,700 MWh) of surplus electricity and generated $0.42
million in revenue compared to $0.53 million last year. The biogas plant was shut down for one month for a major
overhaul after 25,000 hours of operation resulting in lower electricity production. The sales from the biomass plant
were higher in 2018 at $0.91 million compared to $0.64 million last year as it enjoyed better prices for its dried long
fibres even though it exported 4% less at 6,959mt compared to 7,228mt last year. The lower production was due to
the closure of one production line for maintenance.
FFB production in Bengkulu and South Sumatera, which aggregates the estates of Puding Mas (“MPM”), Alno,
KKST, ELAP and RAA produced 358,400mt (2017: 334,000mt), 7% higher than 2017. Lower rainfall in 2018
provided opportunities to repair the roads. The Group purchased additional four-wheel drive vehicles and trucks to
improve the evacuation of FFB from hilly terrain after some contracts to outsource transportation expired. This
improved the crop yield in Bengkulu from 18.1mt/ha to 19.1mt/ha in 2018. In its effort to improve efficiency the
management introduced a cut and go harvesting system. The changes were made to speed up the harvest and
collection of loose fruits. The yield in South Sumatera averaged 6.7mt/ha in 2018 compared to previous year of
5.2mt/ha due to the low density of 95 stems per ha. Spot planting is planned for more than 5,800ha in 2019 to
improve the density to 105 stems per ha. The high gradient in South Sumatera cannot support a higher number of
trees per ha. Over 61,000mt 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 sold over 8,100MWh of surplus electricity and generated $0.44million in revenue in 2018
compared to 4,800 MWh worth $0.34million in 2017. MPM has applied for certification under International
Sustainability and Carbon Certification (“ISCC”) for its mill. Certification work is underway and on successful
completion will enable the mill to sell its CPO at a premium. The mill at MPM and Sumindo continued to experience
high free fatty acids (“FFA’) in its CPO production due to transport and workforce problems resulting in late deliveries
of FFB to the mills. CPO with high FFA is normally sold at a discount averaging between 10% to 15%. The
management team was recently reorganized to deal with these serious issues. During the year over 28,300mt of
CPO was sold a discount of $0.98 million due to a high level of FFA.
FFB production in the Riau region, comprising Bina Pitri estates, produced 143,200mt in 2018 (2017: 124,500mt),
15% higher than 2017. Good weather with no prolonged dry months resulted in higher yield of 29.4mt/ha from
25.6mt/ha in 2017. External crop purchase at the mill was on par with last year. Overall CPO production improved by
4% to 72,100mt compared to 69,200mt in 2017.
FFB production in Kalimantan which comprises of the Sawit Graha Manunggal (“SGM”) and Kahayan Agro
Plantation (“KAP”) estates was 222,700mt in 2018 (2017: 158,000mt) 41% higher than 2017 as more trees matured
and reached the peak production age. The yield in Kalimantan reached 19.2mt/ha compared to 16.3mt/ha in 2017.
Rainfall was moderately lower than last year with no prolonged drought which also contributed to a better harvest.
During the year, the Group introduced mechanization in the application of fertilizers using spreader to boost its
efficiency. The purchase of external crops in SGM has also improved by 59% from 34,500mt to 55,000mt in 2018
improving the utilization of the mill. Over 45,000mt of EFB was applied to improve the structure of the sandy soil and
moisture. The SGM biogas plant has been in operation since early 2018. After successful negotiation with the state
electric company to share the cost, the 6.7km of transmission lines was built and completed at a cost of $230,000.
The sale of electricity is expected to begin in the second quarter of 2019 after receiving the proper permits and
certification. In the year, over 1,400ha of palm trees in KAP matured leading to its first harvest. The FFB from KAP
was transported over 600km to SGM mill for processing. However, in the wet months when the journey can take
more than two to three days due to flooding and resulting bad roads, KAP will sell the harvest to local millers. CPO
sold in Kalimantan fetched a lower price compared to mills in North Sumatera due to higher logistics costs caused by
the distance to the refinery and the poor road infrastructure.
During the year a Malaysian based agronomist made monthly field visits to underperforming estates in Indonesia to
provide advice on optimizing field disciplines and improving crop yields. The Board believes that the monitoring of
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
field performance more closely has resulted in improvements in the underperforming estates which should further
improve the crop yield in the coming years.
Overall bought-in crops for Indonesian operations were 1% higher at 1.01 million mt for the year 2018 (2017:
998,400mt). The average oil extraction rate for our mills improved marginally to 20.7% in 2018 (2017: 20.5%).
Fertilising through mechanical spreader Transporting FFB in low laying and hilly terrain
Malaysia
FFB production in 2018 was 16% lower at 18,500mt, compared to 21,900mt in 2017. 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 the industry is
facing in Malaysia. The Group recruited sixteen workers from Bangladesh to complement its Indonesian workforce in
2018. However, nine workers had since absconded from the estate without completion of their two-year contract.
The estate uses unskilled aborigines, when available, to collect loose fruits and perform basic maintenance work.
The Malaysian plantation in 2018 generated a loss before tax after BA movement of $0.5 million compared to profit
before tax after BA movement of $0.6 million in 2017.
The financial performances of the various regions are reported in note 6 on segmental information.
Commodity Prices
The CPO ex-Rotterdam price started the year high at $678/mt (2017: $790/mt) but gradually trended downwards due
to higher inventory and subdued demand. It dipped to its lowest level of $440/mt in the middle of November 2018. Its
peak was at $700/mt recorded at the end of February 2018. It ended the year at $506/mt (2017: $670/mt), averaging
$595/mt for the year, 17% lower than last year (2017: $718/mt).
The CPO prices also move in tandem with price of soybean oil and crude oil being its closest competitors in
vegetable oil and biodiesel market respectively. Over a period of ten years, CPO price has touched a high of
$1,335/mt and a low of $440/mt. The average price over the ten years is about $801/mt. The price is under
tremendous pressure and remains volatile due to discriminatory actions to either ban or phase out the use of palm oil
and palm biodiesel by certain EU members. The higher tax on CPO imports into India and the trade war between US
and China had also fanned the price volatility in 2018. In January 2019 India lowered the tax on import of CPO and
refined palm oil. This would improve palm oil competitiveness and may translate into a higher demand of CPO from
Indian consumers. It was reported that the Indonesian government plans to introduce higher blending from next year
for its current B20 biodiesel programme whereby 20% of palm methyl ester is blended with 80% petroleum diesel. In
Malaysia, a B10 biodiesel programme was introduced to help the industry pare down the palm oil stockpile. In the
long run these programmes are expected to help shore up demand as well as the CPO price besides supporting
cleaner energy.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
CPO CIF Rotterdam
$/mt
1600
1400
1200
1000
800
600
400
200
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Source: IEG Vu
Rubber prices averaged $1,243/mt for 2018 (2017: $1,607/mt). Our small area of 262ha of mature rubber contributed
a revenue of $0.8 million in 2018 (2017: $1.3 million).
Corporate Development
In 2018, the Group opened up new land and planted 1,563ha of oil palm mainly in Kalimantan, boosting planted area
including the smallholder cooperative scheme, known as Plasma, by 2% to 69,793ha (2017: 68,310ha). This
excludes the replanting of 470ha of oil palm in North Sumatera. The Group faced difficulties in concluding fair prices
with some villagers over land compensation. In some instances, villagers held onto their land and refused to sell
especially in South Sumatera and Bangka.
With the current shortage of power supply in North Sumatera, the Group had begun construction of its fourth biogas
plant in Rantau Prapat which is expected to cost up to $3.8 million. The earthworks were delayed by poor soil
structure at the biogas lagoon which resulted in erosion and sliding of the embankment. Further soil tests were
conducted by geotechnical experts to find the appropriate solution.
The Group has started 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
earthworks would be higher as the mill is built on shallow peat soil. The level of the site needs to be raised higher by
filling and compacting with imported mineral soil. The civil works will require 38-metre-long concrete piles to support
the buildings 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 mill, however, it was not able to obtain the necessary
permit which allows conversion of agricultural into industrial land.
Our buyers in Kalimantan rely on barges and tankers to move the CPO purchased. The unavailability of barges or
difficult road conditions in remote locations often delay the collection of CPO from the mill. In order to ensure that
there is no disruption to the mill operation, the Group decided to build an additional storage tank and expand its
storage facility in the mill in Kalimantan from 9,000mt to 13,000mt at a cost of $200,000.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
In 2019 the three mills in MPM, Sumindo and SGM will be expanding as well as building new bulking silos for
storage of kernels at a cost of $800,000 as production increases.
Corporate Social Responsibility
Corporate Social Responsibility (“CSR”) is an integral part of corporate self-regulation incorporated into our business
model. Our Group embraces responsibility for the impact of its activities on the environment, consumers, employees,
communities, stakeholders and all other members of the public sphere. In engaging the social dimension of CSR, the
Group’s business has taken cognizance of the contribution and further enrichment of its employees while continuing
to make contributions to improve the well-being of the surrounding community.
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
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 seventy-
five mosques and nineteen 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 cows for sacrifice to celebrate religious festivals. The Group spent $389,200 in 2018 to maintain these
amenities and to support the communal activities.
The Group provides free education for all employees’ children in the local plantations and communities where they
work. The access to education and the spread of knowledge to hundreds of children across remote locations provide
a chance to overcome poverty, whom otherwise may be deprived and without prospect for the future. 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 schools are
provided by the Group. Over the years a total of thirty-eight schools which comprised of twenty-one pre-schools,
eleven primary schools, five secondary schools and one high school have been built with a combined enrolment of
over 4,290 students. It currently employs one hundred and fifty-seven teachers in the estates. The Group operated
thirty-eight vehicles and spent some $812,000 on running the schools and operating the buses in 2018.
Free schooling for employees’ children Power transmission line jointly built
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
Bengkulu in 2013 to sponsor and to provide students with the chance to pursue higher education. Up to 2018, over
three hundred and fifty-three scholarships had been awarded at a cost of $123,000. Similarly, one hundred children
of our employees were sponsored, which cost over $96,500 since its introduction in 1999, to study in various
universities in Indonesia. The popular courses ranged from Engineering, Education, Economics to Agriculture. Forty-
four of them had successfully graduated from the universities with some of them now working for the Group.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
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 twenty-three clinics
operated by 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 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
the spread of dengue mosquitoes.
In remote and isolated locations where piped water is not available, the Group drilled tube wells to provide clean
water. Related healthcare expenses for full and part-time field workers including monthly contributions to Health and
Social Security Agency in 2018 were $914,000.
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
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
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 fieldwork. A total of four hundred and sixty-eight employees have
participated in the programme since its inception in 1993 with 39% still working for the Group. Over the years, one
employee has successfully been promoted to General Manager level with another nineteen being employed in
various senior positions in the head office, plantations and mills.
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
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
in Sumatera and Kalimantan. Out of the 6,960ha plasma commitment, the Group has planted oil palm in 3,181ha. In
2018 the Group received 25,800mt of FFB from Plasma schemes compared to 16,400mt the previous year. Total
revenue after deduction of management fees received by Plasma cooperatives was $2.4 million in 2018 against $1.6
million in 2017. There is a substantial increase in Plasma planting from 2017 of 2,862ha which is in line with the
Group’s commitment.
In order to aid the development of Plasma schemes, the Group provided corporate guarantees of over $16 million
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.
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 twenty-two smallholder village schemes of palm
oil across four companies.
In addition, the Group also develops infrastructure such as the construction and repair of bridges and maintained
over 236km of external roads in 2018. 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.
In 2018, the Group started a vegetable farm in a one-hectare site in North Sumatera where it planted various organic
vegetables. The produce had been sold to employees at subsidized prices to reduce their cost of living as well as to
promote heathy living. It also donated some vegetables to local charitable homes.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
Repairing public road Organic farm
In October 2018, the Group contributed $14,500 towards national efforts to build shelters for displaced victims of the
earthquake and tsunami that hit Palu and Donggala, respectively, in Southeast Sulawesi.
Indonesian Sustainable Palm Oil (“ISPO”)
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
standard for Indonesian planters. In comparison, RSPO has the most comprehensive social impact assessment
requirements and the strongest measures for biodiversity protection. While ISPO may be less stringent, protection
for biodiversity was enhanced through the Presidential Decree 8/2018 that imposed a three-year moratorium on the
clearance of primary forest for plantations.
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
safety culture in workplaces at all the estates and mills. The Group compiles and reviews statistics on work related
accidents in its operations. Any incident resulting in fatality or serious injury will be rigorously investigated to identify
the cause so that corrective action can be implemented to prevent future incident. In 2018 the regional government
in North Sumatera awarded three operating companies the Group Zero Accident Awards in recognition of the
companies’ effort to reduce accidents at the workplace. 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.
Every estate under ISPO is required to have a fire team with each personnel fully trained and equipped with
certificate of competence issued by the fire departments. Our Group conducts a fire drill at least once a year. Watch
towers are constructed in every estate to monitor fire outbreaks. The watch towers are manned constantly
particularly during the dry weather. Standard operating 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 worked closely with appointed certification consultants in the implementation of ISPO standard. CPA,
Bina Pitri and Alno were awarded their ISPO certification in 2018. To-date ten companies have been ISPO certified.
SGM and HPP had completed the second stage of ISPO audit while certification audits have started for a further five
companies. 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.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
Environment Social and Governance Practices
Environmentally friendly plantation practices are a must to maintain the industry’s long-term prospects. 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, Nephrolepis biserrata 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 to reduce its biological oxygen demand (“BOD”). The final
discharge is applied to the estate’s land where it is used as fertilisers. The BOD is tested regularly to ensure that it is
below the legal limit for land application in Indonesia. The Group is working towards zero-effluent policy whereby no
by-products from the production of CPO is expelled into rivers.
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. A fourth biogas plant is in the early stage of construction.
Similar undertakings for the Group’s mills are planned and shall be implemented in stages. The Group intends to sell
the surplus power generated from future biogas plants.
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. We do not use rat baits to control
the rat population. 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.
Barn owls, natural ways to control rats Breeding barn owls
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
The Group does not use Class 1 pesticide and herbicide to control vermin and weeds due to high level of toxicity
except in specific instances where outbreak is severe. We are, however, committed to reducing the usage of toxic
pesticide and herbicide and will not hesitate to phase them out once a suitable substitute is available. 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. The Group
reinforced the standard occupational safety measures like the use of protective suits and equipment when mixing,
loading and applying the pesticides which is mandatory by the Manpower and Transmigration Ministerial Decree No.
08/2010. Managers and employees risked being penalized and disciplined as safety standards compliance are
audited from time to time. ISPO certified companies are also prohibited from using 36 banned active ingredients
used in pesticides which can cause various health issues in humans and the environment. The Group has in place
standard operating procedure that required the management to be informed for instances of pesticides poisoning
among its pesticide applicators.
Pesticide sprayers in full protective gear Independent High Carbon Stock survey
In order to minimize accidents at workplaces, regular training and refresher courses are held to instill the importance
of safe working practices. Warnings and reminders are displayed at the mills and estates to remind the workers on
their safety. Warning signs are placed at strategic locations such as speed limits in housing estates and warning
against crossing Irish bridges when river water is at danger level.
The Group continues to comply and preserve the High Conservative Value (“HCV”) areas recognised by the
Department of Forestry. All HCV areas were mapped with boundaries clearly indicated by independent surveyors to
ensure that the Group does not plant in these sensitive areas. The Group is committed to zero deforestation and to
preserve the flora and fauna species in these areas. The Group has identified about 7,800ha as riparian reserves
and another 4,800ha as areas of HCV within its land. 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
as well as to check erosion.
In Indonesia where drought occurs regularly, an emergency response team is set up in the estate armed with proper
equipment and gear to put out fire and prevent them from spreading during the dry months. Regular training on fire-
fighting techniques and safety is provided by the fire departments.
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. Some of these locations are posted on the company’s websites.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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20
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
The six mills in the Group are operating in compliance with criteria set by Program for Pollution Control Evaluation
and Rating (“PROPER”) overseen by the Indonesian Department of Environment. Many of the criteria set by
PROPER are also part of the ISPO requirement. Four of the mills are officially graded Blue 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.
Although no official grading is required for the remaining two mills, the Group plans to rate them voluntary in 2019 to
confirm that they are in compliance.
One of the mills has started the process of obtaining a certification under International Sustainability and Carbon
Certification (“ISCC”). This certification is issued by ISCC System GmbH, a global certification body based in
Cologne, Germany. The criteria used in the certification process are:
Implement social and ecological sustainability criteria
•
• Monitor deforestation-free supply chains
• Avoid conversion of biodiverse grassland
• Calculate and reduce greenhouse gas (“GHG”) emissions
• Establish traceability in global supply chains
A certification identified a company as a responsible player in the industry that has taken efforts to produce
sustainable CPO.
The Group is working to formalise a policy framework which incorporates the requirement of all the sustainability
standards and regulations to which the Group is already practicing and committed.
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.
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
Country and regulatory
in
The Group’s operations are located
substantially
Indonesia and
rely on
significantly
therefore
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
some parts of
Indonesia. The
Group’s operations were not
interrupted by the regional security
including occasional
problems
racial conflicts.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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21
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
Nature of the risk and its origin
Country and regulatory (cont’d)
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.
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
Transfer of profit from Indonesia to
the United Kingdom (“UK”) will be
restricted affecting servicing of UK
of
obligations
dividends to shareholders.
payment
and
the government
The Board is not aware of any
attempt by
to
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
in
profits
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.
foreign
Mandatory reduction of
ownership
Indonesian
in
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.
Imposition of
import controls or
taxes in consuming and exporting
countries. In November 2017, the
Indian government imposed a steep
levy on the import of CPO and
refined oil into India. There was
however some reduction in 2019.
Efforts by some members of EU to
ban the use of palm oil and palm
biodiesel on sustainable issues.
Reduced revenue and reduction in
cash flow and profit. The higher
import levy will raise the price of
CPO and make it less competitive
in
thus
the global oil market,
reducing demand. It will be more
difficult to export palm oil to EU
either for food or palm biodiesel
and will hurt the demand of CPO
in EU which is the third largest
consumer of CPO.
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
Indonesian
The
government
allows free export of CPO but
applies a sliding scale of duties on
exports which allows producers
economic margins. Despite
the
ban on use of palm oil and palm
biodiesel in some parts of EU,
CPO
the
cheapest source of vegetable oil in
a growing population.
amongst
remains
Annual Report 2018 | Anglo-Eastern Plantations Plc
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22
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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
alternative soft oils such as
soybean oil. CPO price also moves
in tandem with crude oil prices
which
the
determine
competitiveness of CPO as a
source of biodiesel.
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
which
is sown annually and
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.
Social, community and human rights issues
could
disrupt
Any material breakdown in relations
between the Group and the host
population in the vicinity of the
operations
the
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.
Disputes over compensation
for
land allocated to the Group which
were previously used by
the
communities for their livelihood.
significant
Communication breakdown would
cause disruption on the operation
and consequently financial loss.
Access
to areas of disputed
compensation is restricted due to
blockages by the communities.
The Group mitigates this risk by
liaising
village
regularly with
to mediate on
representatives
disputes.
It develops a close
relationship with villagers by
improving local living standards
through
beneficial
mutually
economic and social interaction
with the local villages. The Group,
when possible, gives priority to
applications for employment from
the local population and supports
specific initiatives to encourage
local farmers and tradesmen to act
as suppliers to the Group, its
employees and their dependents.
The Group spends considerable
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 villages and Plasma schemes
surrounding the operating estates.
The returns from these plots are
villages’
to
used
community welfare.
improve
Annual Report 2018 | Anglo-Eastern Plantations Plc
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23
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
Nature of the risk and its origin
Weather and natural disasters
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
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. Indonesia, where most its
plantations are located, frequently
like
experience natural disasters
earthquake, forest fire and tsunami.
in some
in palm
term. Drought
in particular, will
Dry periods,
the short and
in
affect yields
induces
medium
moisture stress
trees.
High levels of rainfall can disrupt
estate operations and result in
harvesting delays with loss of FFB
or deterioration in fruit quality.
Delay in collection of harvested
FFB could raise the level of free
fatty acid (“FFA”) in the CPO.
CPO with high FFA would be sold
at a discount to market prices.
Low level of sunshine could result
formation of FFB
in
in delay
resulting
loss of
in potential
revenue. Any natural disaster
could result
in a shortage of
workers and incur temporary work
stoppage due to damage to the
plantation or mill.
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
risks of floods, earthquake or haze
are mitigated by the geographical
spread of the plantations but an
occurrence
adverse
uninsured event could result in the
Group sustaining material losses.
an
of
Exchange rates
a
CPO is a US Dollar denominated
significant
commodity
and
proportion of operating costs
in
Indonesia (such as fertiliser and
fuel) and development costs (such
as heavy machinery and mill
equipment) are imported and are
US Dollar related.
Hedging risk
The Group's subsidiaries have
borrowings in US Dollar.
Adverse movements of Rupiah
against US Dollar can have a
negative effect on the operating
costs and raise funding costs.
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 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
volatility are both
difficult to achieve and would not
be cost effective.
The risk is partially mitigated by
US Dollar denominated cash
balances and the higher average
interest rate on Rupiah deposits
which is 4.85% higher than on US
the
Dollar deposits whereas
interest rate for Rupiah borrowings
is about 4.09% higher compared
to US Dollar borrowings.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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24
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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
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
Failure
could cause disruption
to our
business operations. Potential
loss of financial records leading to
error or misstatement in financial
statements.
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.
Gender diversity
The AEP Plc Board is composed of three men and one woman with extensive knowledge in their respective fields of
experience. The Board has taken note of the recent legislative initiatives with regard to the representation of women
on the boards of Directors of listed companies and will make every effort to conform based on legislative
requirement.
Group Headcount
Board (Company and subsidiaries)
Senior Management (GM and above)
Managers & Executives
Full Time
Part-time Field Workers
Total
%
2018 average employed during the year
Total
Women
Men
3
-
33
225
4,956
5,217
30%
13
6
380
5,664
5,903
11,966
70%
16
6
413
5,889
10,859
17,183
100%
Group Headcount
Board (Company and subsidiaries)
Senior Management (GM and above)
Managers & Executives
Full Time
Part-time Field Workers
Total
%
2017 average employed during the year
Women
2
-
31
200
4,244
4,477
29%
Men
14
6
379
5,062
5,753
11,214
71%
Total
16
6
410
5,262
9,997
15,691
100%
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
cities. Nevertheless, the number of female part-time field workers increased by 17% from 4,244 to 4,956 in 2018.
Overall, the percentage of female workers within the Group increased from 4,477 or 29% in 2017 to 5,217 or 30% in
2018.
Annual Report 2018 | Anglo-Eastern Plantations Plc
25
25
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
Employees
Oil palm cultivation is a labour-intensive industry. In 2018, the number of full-time workers averaged 6,324 (2017:
5,694) while the part-time labour averaged 10,859 (2017: 9,997). The headcount in 2018 was higher by 9.5% as
additional workers were required as more plantations reached peak production age. The Group has introduced
mechanisation in the field to boost productivity. Mechanisation though has its limits but where possible could help
relieve the acute shortage of labour and reduce the cost pressure from rising minimum wages.
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
employees to ensure that management can address any significant issues.
Existing employees are selected on a regular basis for training programmes organised by the Group’s training centre
that provide grounding and refresher courses in technical aspects of oil palm estate and mill management. The
training centre also conducts regular programmes for all levels of employees to raise the competency and quality of
employees in general. These programmes are often supplemented by external management development courses
including attending industry conferences for technical updates. A wide variety of topics are covered including work
ethics, motivation, self-improvement, company values and health and safety.
The Group operates a cadet program where graduates from local universities are selected to undergo theory and
field training over a twelve-month period. On successful completion, they are assigned as assistants to various mills
and estates.
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 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, these extensive benefits and privileges help the Group to retain and motivate its
employees. The Group complied with the minimum wage policy issued by the Indonesian government. It respects
the rights of employees and does not exploit workers, use child or forced labour and is not involved in human
trafficking as described in the UK’s Modern Slavery Act 2015.
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 human resources engage members of the labour unions representing full-time workers at least once
a year on their yearly performance bonuses and grievances. A whistle-blower policy will be introduced from next year
that would allow workforce to raise concerns in confidence and if they wish anonymously to the Board of the holding
company for independent investigation and follow-up action.
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. The Group organises an annual dinner to
recognise high achievers in the plantation and mill operations. It also has an annual family gathering to foster
camaraderie among its employees.
Although the Group does not have a specific policy on the 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.
Annual Report 2018 | Anglo-Eastern Plantations Plc
26
26
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Strategic Report
Outlook
FFB production for the three months to March 2019 was 3% higher against the same period in 2018 mainly due to
the increase in production from North Sumatera and Kalimantan regions. It is too early to forecast whether the
production will be better for the rest of the year.
The CPO price ex-Rotterdam opened the year at $517/mt and averaged about $540 for the first three months of
2019. Palm oil’s discount to rival soybean oil has also widened to over $200/mt from $133/mt in March 2018. Palm
oil prices remain attractive and should lift demand going forward.
The rising material costs and wages in Indonesia are expected to increase the overall production cost in 2019. The
Indonesian government recently announced in 2019 regional increases in minimum wage averaging 8.7%. These
wage hikes will raise overall estate costs and may erode profit margins.
Nevertheless, barring any unforeseen circumstances, the Group is confident that CPO demand will be sustainable in
the long-term and we can expect a satisfactory trading outturn and cash flow for 2019.
On behalf of the Board
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
23 April 2019
Annual Report 2018 | Anglo-Eastern Plantations Plc
27
27
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Financial Record
Income statement
Revenue
Operating profit before BA
Profit attributable to shareholders after BA
2018
$000
2017
$000
2016
$000
2015
$000
2014
$000
250,859
291,907
246,210
196,451
251,258
30,928
11,413
66,676
36,214
52,480
34,713
23,667
9,775
78,845
30,762
Dividend proposed for year
(1,189)
(1,585)
(1,463)
(1,028)
(1,854)
Financial position
$000
$000
$000
$000
$000
Non-current assets & long-term receivables
351,387
362,038
360,681
340,099
481,761
Cash net of short-term borrowings
101,134
130,895
111,973
102,864
125,624
Long-term loans and borrowings
(8,203)
(19,281)
(27,875)
(32,875)
(34,625)
Other working capital
Deferred tax
Non-controlling interests
Net worth
Share capital
Treasury shares
29,156
16,320
17,094
3,898
(10,343)
(8,893)
464,581
(92,601)
(13,081)
476,891
(91,799)
(16,612)
445,261
(82,150)
(19,373)
394,613
(73,598)
(44,368)
518,049
(90,813)
371,980
385,092
363,111
321,015
427,236
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
(193,862)
(170,147)
(158,532)
(167,402)
(133,474)
Retained earnings
526,487
515,884
482,288
449,062
521,355
Equity attributable to shareholders’ funds
371,980
385,092
363,111
321,015
427,236
Ordinary shares in issue (‘000s)
39,976
39,976
39,976
39,976
39,976
Basic EPS before BA movement (US cents)
32.50cts
91.80cts
82.16cts
25.89cts
132.26cts
Basic EPS after BA movement (US cents)
28.79cts
91.37cts
87.58cts
24.66cts
77.61cts
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 2018 | Anglo-Eastern Plantations Plc
3.0cts
938cts
4.0cts
972cts
3.8cts
916cts
2.5cts
4.5cts
810cts
1,078cts
14,481
13,548
13,436
13,795
12,385
1.28
4.13
1.35
4.05
1.23
4.49
1.48
4.29
1.56
3.50
14,246
13,383
13,307
13,392
11,861
1.33
4.04
1.29
4.30
1.35
4.14
1.53
3.91
1.65
3.27
28
28
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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Annual Report 2018 | Anglo-Eastern Plantations Plc
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29
29
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Location of Estates
Annual Report 2018 | Anglo-Eastern Plantations Plc
30
30
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
The Directors present their annual report on the affairs of the Group, together with the financial statements and
auditor’s report, for the year ended 31 December 2018.
auditor’s report, for the year ended 31 December 2018.
Accountability and audit
Accountability and audit
AEP is committed to ensure that the quality of its financial reporting is of a high standard. The Board continually
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
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
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 48.
of the Group’s internal controls and risk management systems are further disclosed on page 48.
The Board considers the annual report and accounts including the strategic report when taken as a whole, is fair,
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
balanced and understandable as it provides the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
position and performance, business model and strategy.
Results and dividends
Results and dividends
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
Viability Statement
Viability Statement
The viability assessment considers solvency and liquidity over a longer period than for the purposes of the going
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.
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 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
the local operating environment are covered under the Strategic Report. In undertaking its review of the Group’s
performance in 2018, the Board considered the prospects of the Company over one and five-year periods. The
performance in 2018, the Board considered the prospects of the Company over one and five-year periods. The
process involved a detailed review of the 2019 detailed budget and the five-year income and cash flow projection.
process involved a detailed review of the 2019 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 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
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
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
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
scenarios, including the need to support financially loss-making newly matured estates together with the projected
capital expenditure. On this basis and other matters considered and reviewed by the Board during the year, the
capital expenditure. On this basis 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
Board concluded and believed that the Group has adequate resources to continue in operation and meet its liabilities
over the five years from 2019 to 2023.
over the five years from 2019 to 2023.
Research and Development
Research and Development
The Group did not undertake any research and development activities. It relies on third parties to conduct research
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.
and development of new disease resistant and higher yield oil palm seeds.
Land Valuation
Land Valuation
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
2018 to provide indicative fair values and support the valuation for the estate land. The Directors revalued the estate
2018 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.
land not covered by the valuation exercise based on the regional appreciation rate quantified by the qualified valuers.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
31
31
31
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Political donations, anti-bribery and anti-corruption
auditor’s report, for the year ended 31 December 2018.
The Group made no political donation during the year.
Accountability and audit
The Group has in place policies and procedures in respect of bribery and corruption, with detailed guidelines and
AEP is committed to ensure that the quality of its financial reporting is of a high standard. The Board continually
reporting requirements. Management and senior staff have had training programmes and updates as part of their
reviews its internal controls and risk management systems to ensure the Group’s affairs and the Group’s financial
responsibility to ensure that bribery and corruption do not exist in the Group’s operation. The Group uses its best
reporting comply with the applicable accounting standards as well as good corporate governance. The main features
endeavour to seek that its business partners are in compliance with the anti-bribery and anti-corruption regulations.
of the Group’s internal controls and risk management systems are further disclosed on page 48.
Carbon Reporting
The Board considers the annual report and accounts including the strategic report when taken as a whole, is fair,
A GHG emissions assessment quantifies greenhouse gases produced directly and indirectly from the Group’s
balanced and understandable as it provides the information necessary for shareholders to assess the Group’s
agricultural activities. Also known as a carbon footprint, it is an essential tool in the process of understanding,
position and performance, business model and strategy.
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
Results and dividends
from mineral fertiliser use, company owned vehicle use, third party vehicle fuel use, electricity consumption in
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
employee housing and emissions associated with land use change and carbon sequestration.
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
The report identifies and quantifies GHG emissions in the production of CPO at the Group’s mills and related estate
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
supply base and planting activities. The Board believes that this report will help the Group plan and facilitate the
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
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
Viability Statement
identify and respond to reducing the environmental risk and impact by developing appropriate sustainable practices.
The viability assessment considers solvency and liquidity over a longer period than for the purposes of the going
We remain committed to monitoring, targeting and reducing all our environmental impact across the Group.
concern assessment made on page 12. Inevitably, the degree of certainty reduces over this longer period.
This assessment has been carried out in accordance with the World Business Council for Sustainable Development
The Group’s business activities, financial performance, corporate development and principal risks associated with
and World Resources Institute’s (WBCSD/WRI) Greenhouse Gas Protocol; a Corporate Accounting and Reporting
the local operating environment are covered under the Strategic Report. In undertaking its review of the Group’s
Standard, together with the latest emission factors from recognised public sources including, but not limited to, Defra,
performance in 2018, the Board considered the prospects of the Company over one and five-year periods. The
the International Energy Agency, the US Energy Information Association, the US Environmental Protection Agency
process involved a detailed review of the 2019 detailed budget and the five-year income and cash flow projection.
and the Intergovernmental Panel on Climate Change. The values for the amount of carbon sequestered by the oil
The one-year budget has a greater level of certainty and is used to set detailed budgetary targets at all levels across
palm have been taken from the OPRODSIM and OPCABSIM average growth models provided in the PalmGHG
the Group. It is also used by the Remuneration Committee to set targets for the annual incentive. The five-year
Tool. GHG emissions have been reported by the three WBCSD/WRI scopes. Land use emissions and carbon
income and cash flow projection contains less certainty of the outcome but provides a robust planning tool against
sequestration results were calculated in line with the methodology used by The Roundtable for Sustainable Palm Oil
which strategic decisions can be made. The Board also considered the five-year cash flow projection under various
(“RSPO”) GHG Working Group 2 throughout the PalmGHG Calculator. The carbon stock values were derived by the
scenarios, including the need to support financially loss-making newly matured estates together with the projected
RSPO based on a review of relevant literature and satellite images for land use changes associated with oil palm
capital expenditure. On this basis and other matters considered and reviewed by the Board during the year, the
plantations in Indonesia and Malaysia. An estimate of CO2 emissions from cultivation of peat soils has been included
Board concluded and believed that the Group has adequate resources to continue in operation and meet its liabilities
in this report. The detailed methodology in the calculation of the GHG emissions under the three scopes can be
over the five years from 2019 to 2023.
viewed at www.ghgprotocol.org.
Research and Development
Cultivation of peat soils results in CO2 emissions due to oxidation of organic carbon; therefore, an estimate of these
The Group did not undertake any research and development activities. It relies on third parties to conduct research
emissions from AEP’s peat soil estates has been included in this report. There is a lot of uncertainty regarding the
and development of new disease resistant and higher yield oil palm seeds.
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.
Land Valuation
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
The gross overall emissions computed by the outsourced agent were 640,816 tCO2e for 2018 compared to
2018 to provide indicative fair values and support the valuation for the estate land. The Directors revalued the estate
1,180,752 tCO2e for 2017. The overall emissions have decreased by 539,936 tCO2e, or 46%, during the 2017 to
land not covered by the valuation exercise based on the regional appreciation rate quantified by the qualified valuers.
2018 assessment period. This decrease was mainly due to a decrease in emissions associated with land clearance
by AEP and out-growers where AEP mills bought the crops from.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
31
32
32
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
2017 Emissions in tCO2e
2018 Emissions in tCO2e
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Emissions source
auditor’s report, for the year ended 31 December 2018.
204,771
POME treatment
Accountability and audit
Fertiliser application
25,952
AEP is committed to ensure that the quality of its financial reporting is of a high standard. The Board continually
Premises energy consumption
14,800
reviews its internal controls and risk management systems to ensure the Group’s affairs and the Group’s financial
6,361
Company owned vehicles
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 48.
Third party vehicle use
7,110
Employee housing
1,736
The Board considers the annual report and accounts including the strategic report when taken as a whole, is fair,
260,730
balanced and understandable as it provides the information necessary for shareholders to assess the Group’s
Out-grower crop
position and performance, business model and strategy.
Land clearance
780,038
Results and dividends
Carbon sequestered by standing crop
-588,675
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
Peat soils cultivation
58,838
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
920,022
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
1,180,752
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
189,794
28,014
15,231
7,102
7,641
1,772
249,554
Own crop Out-grower crop
429,480
-509,470
62,490
391,262
640,816
Total land use emissions
Overall emissions
429,970
-510,051
488,843
708,166
-534,435
496,090
Total operational emissions
Own crop
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.
2018 and 2017 emissions in tCO2e
Associated with POME treatment and others
2,000,000
1,500,000
1,000,000
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 2018, the Board considered the prospects of the Company over one and five-year periods. The
process involved a detailed review of the 2019 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
2018
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
2017
capital expenditure. On this basis 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 2019 to 2023.
Land clearance Carbon sequestered
by standing crop
Operational
emissions (Exc.
POME)
Peat soils
cultivation
POME treatment
e
2
O
C
t
-500,000
500,000
0
-1,000,000
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.
-1,500,000
Land Valuation
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
The following chart displays 2017 and 2018 overall emissions by scope.
2018 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.
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
majority of the GHG emissions. This has decreased in 2018 due primarily to a decrease in land clearance emissions.
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.
The decrease in 2018 was due to the decrease in emissions associated with out-grower crop land clearance.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
31
33
33
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
auditor’s report, for the year ended 31 December 2018.
2018 and 2017 Emissions in tCO2e by Scope
1,000,000
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 48.
800,000
600,000
e
2
O
C
t
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.
400,000
2017
2018
200,000
Results and dividends
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
Scope 3
Scope 2
Scope 1
0
-200,000
2018 in tCO2e
Viability Statement
Comparison of GHG emissions per production metrics (excluding land use change emissions):
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.
Operational emissions reporting metric
The Group’s business activities, financial performance, corporate development and principal risks associated with
GHG per tonne of CPO production
the local operating environment are covered under the Strategic Report. In undertaking its review of the Group’s
performance in 2018, the Board considered the prospects of the Company over one and five-year periods. The
GHG per tonne of FFB production
process involved a detailed review of the 2019 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
GHG per tonne of FFB processed
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
GHG per hectare of planted area
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 this basis and other matters considered and reviewed by the Board during the year, the
2018 and 2017 emissions per reporting metric in tCO2e
Board concluded and believed that the Group has adequate resources to continue in operation and meet its liabilities
(excluding land use change emissions)
over the five years from 2019 to 2023.
2017 in tCO2e
0.14
3.92
0.28
3.78
0.12
0.67
0.24
0.60
4.50
4.00
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.
3.50
3.00
Land Valuation
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
2018 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.
2018
2.50
2.00
t
i
n
u
r
e
p
e
2
O
C
t
1.50
1.00
0.50
0.00
2017
per tonne of CPO
production
per tonne of FFB
production
per tonne of FFB
processed
per hectare of planted
area
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
31
34
34
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Comparison of GHG total emissions per production metrics (including land use change emissions):
auditor’s report, for the year ended 31 December 2018.
2018 in tCO2e
Operational emissions reporting metric
Accountability and audit
AEP is committed to ensure that the quality of its financial reporting is of a high standard. The Board continually
GHG per tonne of CPO production
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
GHG per tonne of FFB production
of the Group’s internal controls and risk management systems are further disclosed on page 48.
GHG per tonne of FFB processed
The Board considers the annual report and accounts including the strategic report when taken as a whole, is fair,
GHG per hectare of planted area
balanced and understandable as it provides the information necessary for shareholders to assess the Group’s
position and performance, business model and strategy.
2017 in tCO2e
17.77
0.32
1.27
9.70
3.02
1.53
0.62
0.62
18
2018 and 2017 total emissions per reporting metric in tCO2e
Results and dividends
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
16
14
t
i
n
u
r
e
p
e
2
O
C
t
8
Viability Statement
12
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.
10
2018
6
4
2
0
2017
per tonne of FFB
production
per tonne of CPO
production
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 2018, the Board considered the prospects of the Company over one and five-year periods. The
process involved a detailed review of the 2019 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 this basis 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
Principal risks
over the five years from 2019 to 2023.
Information on financial instruments risks is set out in note 25 to the consolidated financial statements and
information on other risks is set out in Strategic Report.
Research and Development
The Group did not undertake any research and development activities. It relies on third parties to conduct research
Property, plant and equipment
and development of new disease resistant and higher yield oil palm seeds.
Information relating to changes in property, plant and equipment is given in note 11 to the consolidated financial
statements.
Land Valuation
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
Directors
2018 to provide indicative fair values and support the valuation for the estate land. The Directors revalued the estate
Madam Lim Siew Kim, Dato’ John Lim Ewe Chuan, Mr. Lim Tian Huat and Mr. Jonathan Law Ngee Song will be
land not covered by the valuation exercise based on the regional appreciation rate quantified by the qualified valuers.
submitting themselves for re-appointment at the forthcoming annual general meeting.
per hectare of planted
area
per tonne of FFB
processed
Brief profiles of all Directors are set out on page 40 of this Annual Report.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
31
35
35
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Substantial share interests
auditor’s report, for the year ended 31 December 2018.
As at 17 April 2019 and 31 December 2018, the following interests had been notified to the Company, being interests
in excess of 3% of the issued ordinary share capital of the Company:
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
Percentage of
reporting comply with the applicable accounting standards as well as good corporate governance. The main features
voting rights held
Number
Name of holder
of the Group’s internal controls and risk management systems are further disclosed on page 48.
Percentage of
voting rights held
As at 31.12.2018
As at 17.4.2019
Number
Genton International Limited
51.08%
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
Nokia Bell Pensioenfonds Ofp
17.70%
7,015,000
position and performance, business model and strategy.
51.08% 20,247,814
17.70%
20,247,814
7,015,000
4.51%
3.45%
3.02%
1,366,900
1,197,043
1,197,043
1,366,900
1,786,217
1,787,015
4.51%
KBC Securities
Results and dividends
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
Spencer Nicholas Roditi
3.45%
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
Value Square Asset Management
3.02%
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
Share capital, restrictions on transfer of shares, arrangements affected by change of control and other
additional information
Viability Statement
The Company has one class of share capital, ordinary shares. All the shares rank pari passu. The articles of
The viability assessment considers solvency and liquidity over a longer period than for the purposes of the going
association of the Company contain provisions governing the transfer of shares, voting rights, the appointment and
concern assessment made on page 12. Inevitably, the degree of certainty reduces over this longer period.
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
The Group’s business activities, financial performance, corporate development and principal risks associated with
agreements to which the Company is a party which take effect, alter or terminate in the event of a change of control
the local operating environment are covered under the Strategic Report. In undertaking its review of the Group’s
of the Company. There are no agreements providing for compensation for Directors or employees on change of
performance in 2018, the Board considered the prospects of the Company over one and five-year periods. The
control.
process involved a detailed review of the 2019 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
Auditor
the Group. It is also used by the Remuneration Committee to set targets for the annual incentive. The five-year
All of the current Directors have taken all the steps to make themselves aware of any information needed by the
income and cash flow projection contains less certainty of the outcome but provides a robust planning tool against
Company’s auditor for the purposes of their audit and to establish that the auditor is aware of the information. The
which strategic decisions can be made. The Board also considered the five-year cash flow projection under various
Directors are not aware of any relevant audit information of which the auditor is unaware.
scenarios, including the need to support financially loss-making newly matured estates together with the projected
capital expenditure. On this basis and other matters considered and reviewed by the Board during the year, the
BDO LLP has expressed its willingness to continue in office and a resolution to re-appoint them will be proposed as
Board concluded and believed that the Group has adequate resources to continue in operation and meet its liabilities
Resolution 8 at the forthcoming annual general meeting.
over the five years from 2019 to 2023.
Authority to allot shares
Research and Development
At the annual general meeting held on 25 June 2018 shareholders authorised the Board under the provisions of
The Group did not undertake any research and development activities. It relies on third parties to conduct research
section 551 of the Companies Act 2006 to allot relevant securities within specified limits for a period of five years.
and development of new disease resistant and higher yield oil palm seeds.
Renewal of this authority is being sought under Resolution 10 at the forthcoming annual general meeting.
Land Valuation
The aggregate nominal value which can be allotted under the authority set out in paragraph (i) of the resolution is
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
limited to £3,303,031 (representing 13,212,124 ordinary shares of 25p each) which is approximately one third of the
2018 to provide indicative fair values and support the valuation for the estate land. The Directors revalued the estate
issued ordinary capital of the Company as at 23 April 2019 (being the latest practicable date before publication of
land not covered by the valuation exercise based on the regional appreciation rate quantified by the qualified valuers.
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 23 April 2019. 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 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
31
36
36
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Disapplication of pre-emption rights
auditor’s report, for the year ended 31 December 2018.
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
Accountability and audit
requirements of the Companies Act, which create problems with regard to fractional entitlements and overseas
AEP is committed to ensure that the quality of its financial reporting is of a high standard. The Board continually
shareholders. In addition, the authority will empower the Board to make issues of shares for cash to persons other
reviews its internal controls and risk management systems to ensure the Group’s affairs and the Group’s financial
than existing shareholders up to a maximum aggregate nominal amount of £495,454 representing 5% of the current
reporting comply with the applicable accounting standards as well as good corporate governance. The main features
issued share capital. The authority will be expiring at the forthcoming annual general meeting or on 30 June 2019,
of the Group’s internal controls and risk management systems are further disclosed on page 48.
whichever is earlier. Renewal of this authority on similar terms is being sought under Resolution 11 at the
forthcoming annual general meeting.
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
Acquisition of the Company’s own shares and authority to purchase own shares
position and performance, business model and strategy.
At 23 April 2019, the Directors had remaining authority under the shareholders’ resolution of 25 June 2018, to make
purchases of 3,963,637 of the Company’s ordinary shares. This authority expires on 30 June 2019. The Board will
Results and dividends
only make purchases if they believe the earnings or net assets per share of the Company would be improved by
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
such purchases. All such purchases will be market purchases made through the London Stock Exchange.
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
Companies can hold their own shares which have been purchased in this way in treasury rather than having to
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
cancel them. The Directors would, therefore, consider holding the Company’s own shares which have been
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
purchased by the Company as treasury shares as this would give the Company the flexibility of being able to sell
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
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.
Viability Statement
The viability assessment considers solvency and liquidity over a longer period than for the purposes of the going
Resolution 12 to be proposed at the forthcoming annual general meeting seeks renewed authority to purchase up to
concern assessment made on page 12. Inevitably, the degree of certainty reduces over this longer period.
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
The Group’s business activities, financial performance, corporate development and principal risks associated with
maximum price which may be paid for an ordinary share on any exercise of the authority will be restricted to the
the local operating environment are covered under the Strategic Report. In undertaking its review of the Group’s
highest of (i) an amount equal to 5% above the average middle market quotations for such shares as derived from
performance in 2018, the Board considered the prospects of the Company over one and five-year periods. The
the London Stock Exchange Daily Official List for the five business days before the purchase is made and (ii) the
process involved a detailed review of the 2019 detailed budget and the five-year income and cash flow projection.
higher of price of the last independent trade and the highest current independent bid on the London Stock Exchange.
The one-year budget has a greater level of certainty and is used to set detailed budgetary targets at all levels across
The maximum number of shares and the price range are stated for the purpose of compliance with statutory
the Group. It is also used by the Remuneration Committee to set targets for the annual incentive. The five-year
requirements in seeking this authority and should not be taken as an indication of the level of purchases, or the
income and cash flow projection contains less certainty of the outcome but provides a robust planning tool against
prices thereof, that the Company would intend to make.
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
Dividends
capital expenditure. On this basis and other matters considered and reviewed by the Board during the year, the
The Board has declared a final dividend of 3.0cts per share (2017: 4.0cts), in line with our reporting currency, in
Board concluded and believed that the Group has adequate resources to continue in operation and meet its liabilities
respect of the year to 31 December 2018. Subject to shareholders approval of Resolution 3 at the annual general
over the five years from 2019 to 2023.
meeting, the final dividend will be paid on 12 July 2019 to those shareholders on the register on 7 June 2019.
Research and Development
While the dividend is declared in US Dollar, as mentioned in the Shareholders Information section of the Annual
The Group did not undertake any research and development activities. It relies on third parties to conduct research
Report, shareholders can choose to receive the dividends in Pounds Sterling. In the absence of any specific
and development of new disease resistant and higher yield oil palm seeds.
instruction up to the date of closing of the register on 7 June 2019, shareholders with addresses in the UK are
deemed to have elected to receive their dividends in Sterling and those with addresses outside of UK in US Dollar.
Land Valuation
Shareholders who choose to receive the dividends in Pounds Sterling will do so at the exchange rate ruling on 7
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
June 2019, being the dividend record date. Based on the exchange rate at 17 April 2019 of $1.30 / £, the proposed
2018 to provide indicative fair values and support the valuation for the estate land. The Directors revalued the estate
dividend would be equivalent to 2.3p (2017: 2.8p). Shareholders are reminded that the last day to revoke a currency
land not covered by the valuation exercise based on the regional appreciation rate quantified by the qualified valuers.
election is on 17 June 2019.
AEP operates a dividend reinvestment plan (“DRIP”). Holders of the shares may elect to reinvest their final dividend.
The latest election date is 17 June 2019.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
31
37
37
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Report
Directors’ Report
The Directors present their annual report on the affairs of the Group, together with the financial statements and
Liability insurance for Company officers
auditor’s report, for the year ended 31 December 2018.
As permitted by the Companies Act the Company has maintained insurance cover for the Directors against liabilities
in relation to the Company.
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
On behalf of the Board
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 48.
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.
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
Results and dividends
The audited financial statements for the year ended 31 December 2018 are set out on pages 62 to 107. The Group’s
profit for the year on ordinary activities before taxation was $30,929,000 (2017: profit $69,691,000) and the profit
attributable to ordinary shareholders was $11,413,000 (2017: profit $36,214,000). No interim dividend was paid. The
Directors recommend a final dividend of 3.0cts (2017: 4.0cts) to be paid to shareholders on 12 July 2019.
Shareholders may elect to receive their dividend in Pounds Sterling as described on page 37.
23 April 2019
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 2018, the Board considered the prospects of the Company over one and five-year periods. The
process involved a detailed review of the 2019 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 this basis 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 2019 to 2023.
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
Eight companies located across North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in
2018 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 2018 | Anglo-Eastern Plantations Plc
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38
38
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Responsibilities
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
Standards (“IFRSs”) as adopted by the European Union. The Directors have elected to prepare the Company
financial statements in accordance with FRS 101 Reduced Disclosure Framework under the UK Generally Accepted
Accounting Practice (“UK GAAP”). Under company law, the Directors must not approve the financial statements
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;
make judgements and accounting estimates that are reasonable and prudent;
state whether they have been prepared in accordance with applicable accounting standards, subject to any
material departures disclosed and explained in the financial statements;
prepare a Strategic Report, a Director’s Report and Director’s Remuneration report which comply with the
requirements of the Companies Act 2006; and
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
and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the
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.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a
website. Financial statements are published on the Company’s website in accordance with the legislation in the UK
governing the preparation and dissemination of financial statements, which may vary from legislation in other
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 40 confirm to the best of their knowledge:
The Group financial statements have been prepared in accordance with IFRSs as adopted by the European
Union and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position
and profit and loss of the Group.
The Strategic Report in the annual report includes a fair review of the development and performance of the
business and the financial position of the Group, together with a description or the principal risks and
uncertainties that they face.
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
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
23 April 2019
Annual Report 2018 | Anglo-Eastern Plantations Plc
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39
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors
Madam Lim Siew Kim
(Non-Executive Chairman, age 70).
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.
Dato’ John Lim Ewe Chuan
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
Governance and Remuneration Committees, age 69).
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.
Chartered Certified Accountant; partner with UHY Hacker Young LLP, London, since 1998; previously he had a
professional accounting career in Singapore and the UK.
Lim Tian Huat
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
Governance Committee and member of Remuneration Committee, age 64).
Appointed 8 May 2015.
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
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
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.
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.
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.
Independent Non-Executive Director of Malaysia Building Society Berhad and UEM Sunrise Berhad, both of which
are listed on Bursa Malaysia.
Jonathan Law Ngee Song
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit Committee and
Nomination & Corporate Governance Committees, age 53).
Appointed 4 July 2013.
Mr. Law graduated from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of Laws.
He was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991. He is in legal practice and
currently a Partner in Messrs. Azmi & Associates handling merger and acquisitions and corporate practice. He was
previously a Partner in Messrs. Nik Saghir & Ismail (1996 to March 2019) and Allen & Gledhill (1991 to 1995).
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
2010. He is also the Chairman of Remuneration Committee and a member of Nomination Committee of Evergreen
Fibreboard Berhad.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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40
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Statement on Corporate Governance
Statement on Corporate Governance
Application of the UK Corporate Governance Code
Application of the UK Corporate Governance Code
AEP is committed to business integrity, appropriately high ethical standards and professionalism in all its activities
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
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.
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
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
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
available from the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. Where provisions of the Code
were not met during 2018, the particular comment is made in the statements below and in the Directors’
were not met during 2018, the particular comment is made in the statements below and in the Directors’
remuneration report on pages 49 to 53. The directors are mindful of the proposed revisions to the Code which are
remuneration report on pages 49 to 53. The directors are mindful of the proposed revisions to the Code which are
expected to take effect on 1 January 2019 and will pay due regards to such revisions when published.
expected to take effect on 1 January 2019 and will pay due regards to such revisions when published.
Relationship Agreement with Controlling Shareholder
Relationship Agreement with Controlling Shareholder
The UK Listing Rules require a premium listed issuer with a controlling shareholder to have in place a relationship
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
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
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
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
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
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
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
relationship agreement with Genton on 14 November 2014. The agreement is available for inspection by the
shareholders upon request from the Company Secretary. The Board has reviewed this agreement with the
shareholders upon request from the Company Secretary. The Board has reviewed this agreement with the
controlling shareholder and concluded that AEP Plc has complied with the independence provisions included in the
controlling shareholder and concluded that AEP Plc has complied with the independence provisions included in the
agreement and that, in so far as it is aware, those independence provisions have been complied with by Genton.
agreement and that, in so far as it is aware, those independence provisions have been complied with by Genton.
The Board
The Board
AEP is led by a strong and experienced Board of Directors (see biographical details set out on page 40). During
AEP is led by a strong and experienced Board of Directors (see biographical details set out on page 40). During
2018 the Board comprised the Non-Executive Chairman, one Executive Director and two Non-Executive Directors,
2018 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.
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
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.
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
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
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
Committee is of the view that Madam Lim, who indirectly owns 52% of the Company’s shares, with her experience in
plantation businesses as she was the Chairman of the Company from 1993 to 1998 is an appropriate candidate for
plantation businesses 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,
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. AEP
and given the presence of the Independent Non-Executive Directors, there is a reasonable balance of influence. AEP
has complied with the Code which provides that excluding the Chairman, the Board should be made up of more than
has complied with the Code which provides that excluding the Chairman, the Board should be made up of more than
50% Non-Executive Directors.
50% Non-Executive Directors.
Independence of the Non-Executive Directors
Independence of the Non-Executive Directors
The Board has evaluated the independence of each of its Non-Executive Directors. Following this assessment, the
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
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
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.
conditions relating to the appointment of the Non-Executive Directors are available from the Company Secretary.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
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41
41
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Statement on Corporate Governance
Statement on Corporate Governance
Application of the UK Corporate Governance Code
In arriving at its conclusion, the Board considered the factors set out in the UK Corporate Governance Code
AEP is committed to business integrity, appropriately high ethical standards and professionalism in all its activities
including, inter alia, whether any of the Non-Executive Directors:
and operations. This includes a commitment to high standards in corporate governance relating in particular to
has been an employee of the Group within the last five years;
appropriate systems and controls adopted at a senior level of management of the Group and operation of the Board.
has, or had within the last three years, a material business relationship with the Group;
The benchmark standards in this regard are set out in the UK Corporate Governance Code (‘the Code’), as most
receives remuneration from the Group other than a Director’s fee;
recently revised in June 2016 which forms part of the Listing Rules of the London Stock Exchange. The Code is
has close family ties with any of the Group’s advisors, Directors or senior employees;
available from the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. Where provisions of the Code
holds cross-directorships or has significant links with other Directors through involvement in other companies or
were not met during 2018, the particular comment is made in the statements below and in the Directors’
bodies;
remuneration report on pages 49 to 53. The directors are mindful of the proposed revisions to the Code which are
has served more than nine years on the Board; or
expected to take effect on 1 January 2019 and will pay due regards to such revisions when published.
represents a significant shareholder.
Relationship Agreement with Controlling Shareholder
The UK Corporate Governance Code acknowledges that a Director may be regarded as
independent
The UK Listing Rules require a premium listed issuer with a controlling shareholder to have in place a relationship
notwithstanding the existence of any of the above factors.
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
The Independent Non-Executive Directors have a wide range of business interests beyond their position with the
shareholders. The requirement is not intended to prevent a controlling shareholder from engaging fairly with an
Company and the rest of the Board agree unanimously that they have shown themselves to be fully independent.
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
Senior Independent Non-Executive Director
International Limited (“Genton”) as the only controlling shareholder. In this respect, the Company entered into a
Mr. Lim Tian Huat, an experienced Chartered Accountant acted in the capacity of Senior Independent Non-Executive
relationship agreement with Genton on 14 November 2014. The agreement is available for inspection by the
Director from 8 May 2015.
shareholders upon request from the Company Secretary. The Board has reviewed this agreement with the
controlling shareholder and concluded that AEP Plc has complied with the independence provisions included in the
Operation of the Board
agreement and that, in so far as it is aware, those independence provisions have been complied with by Genton.
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
The Board
are available for inspection upon request from the Company Secretary.
AEP is led by a strong and experienced Board of Directors (see biographical details set out on page 40). During
2018 the Board comprised the Non-Executive Chairman, one Executive Director and two Non-Executive Directors,
Unless warranted by unusual matters, the Board normally meets two to three times each year. Otherwise, all other
both of whom are considered by the Board to be Independent.
matters are dealt with by written resolution and telephone conference. During 2018 there were two Board meetings
attended as follows:
Dato’ John Lim Ewe Chuan was appointed as the Executive Director, Corporate Finance and Corporate Affairs on 1
Attendance
September 2010. Prior to 1 September 2010, Dato’ John Lim was the Senior Independent Non-Executive Director.
Madam Lim Siew Kim
Dato’ John Lim Ewe Chuan
Madam Lim Siew Kim was appointed as the Non-Executive Chairman on 31 January 2011. Neither external search
Lim Tian Huat
consultancy nor open advertising was used for the appointment. The Nomination and Corporate Governance
Jonathan Law Ngee Song
Committee is of the view that Madam Lim, who indirectly owns 52% of the Company’s shares, with her experience in
plantation businesses as she was the Chairman of the Company from 1993 to 1998 is an appropriate candidate for
Agenda and minutes of previous meetings were circulated prior to meetings.
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. AEP
The Independent Non-Executive Directors met on their own during 2018. Telephone discussions between the
has complied with the Code which provides that excluding the Chairman, the Board should be made up of more than
Chairman and the Non-Executive Directors also took place outside these meetings.
50% Non-Executive Directors.
The Board is supplied with relevant, timely and accurate information for review prior to each meeting to enable them
Independence of the Non-Executive Directors
to discharge their duties. The Audit Committee is responsible for the integrity of the financial information and this is
The Board has evaluated the independence of each of its Non-Executive Directors. Following this assessment, the
achieved by interacting with the management and with the internal auditors. The Board has identified and formally
Board has determined that, throughout the reporting period, both of its Non-Executive Directors, who were appointed
adopted a schedule of key matters that are reserved for its decision, including the annual fiscal and capital budgets,
for specified terms of office, were independent, based above all on their objectivity and integrity. The terms and
interim, preliminary and final results announcements, final dividends, the appointment of Directors and the Company
conditions relating to the appointment of the Non-Executive Directors are available from the Company Secretary.
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.
2/2
2/2
2/2
2/2
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Statement on Corporate Governance
Statement on Corporate Governance
Application of the UK Corporate Governance Code
During 2018, the Board followed the Group results and the development of the activities of the various subsidiaries
AEP is committed to business integrity, appropriately high ethical standards and professionalism in all its activities
by means of reports prepared by the management in Malaysia and Indonesia. It received further reports and minutes
of the Executive Committee meetings in Indonesia chaired by the Group senior general manager from Malaysia. The
and operations. This includes a commitment to high standards in corporate governance relating in particular to
objectives of the Executive Committee are to resolve operational issues and to drive the performance budget set at
appropriate systems and controls adopted at a senior level of management of the Group and operation of the Board.
the beginning of every year by the Board. Besides the senior general manager from Malaysia, the Executive
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
Committee are made up of senior members of the management team based in Indonesia which includes the Chief
Executive Officer, the Chief Operating Officer, the Finance Director and the Engineering Director.
available from the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. Where provisions of the Code
were not met during 2018, the particular comment is made in the statements below and in the Directors’
Each Board member has access to the impartial advice and services of the Company Secretary, who is responsible
remuneration report on pages 49 to 53. The directors are mindful of the proposed revisions to the Code which are
expected to take effect on 1 January 2019 and will pay due regards to such revisions when published.
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 2018.
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
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
prevent controlling shareholders from exercising their influence in a way that is improper or unfair to minority
will review the position of each Director for the yearly re-election under the Code.
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
Dato’ John Lim, the only Executive Director on the Board, sits on the Audit, Nomination and Remuneration
Committees for 2018. The UK Corporate Governance Code provides for smaller companies like AEP to have two
International Limited (“Genton”) as the only controlling shareholder. In this respect, the Company entered into a
independent Non-Executive Directors in the Audit and Remuneration Committees and a majority independent Non-
relationship agreement with Genton on 14 November 2014. The agreement is available for inspection by the
Executive Directors in the Nomination Committee. The Code does not expressly provide for the exclusion of the
shareholders upon request from the Company Secretary. The Board has reviewed this agreement with the
controlling shareholder and concluded that AEP Plc has complied with the independence provisions included in the
Executive Director in the Audit and Remuneration Committees. In practice, companies would normally exclude the
agreement and that, in so far as it is aware, those independence provisions have been complied with by Genton.
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
The Board
AEP is led by a strong and experienced Board of Directors (see biographical details set out on page 40). During
being the only Director based in London could only adequately represent the Company in any shareholder and
investor meetings if he sits in the three Committees. The Board also believes that the Non-Executive Directors, being
2018 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.
professionals in their own areas of expertise would maintain their impartiality and independence by their majority
presence in all three Committees.
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.
In 2018 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.
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
Following a review of the internal control and risks management in April 2019 and in the absence of any reported
failure and weaknesses which the Board considered significant, it concluded that these remain effective and
plantation businesses as she was the Chairman of the Company from 1993 to 1998 is an appropriate candidate for
sufficient for their purpose.
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. AEP
has complied with the Code which provides that excluding the Chairman, the Board should be made up of more than
Nomination and Corporate Governance Committee
50% Non-Executive Directors.
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 three meetings during 2018, attended
Independence of the Non-Executive Directors
by all members.
The Board has evaluated the independence of each of its Non-Executive Directors. Following this assessment, the
The policy on gender diversity is described on page 25 of the Strategic Report.
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 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
41
43
43
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Statement on Corporate Governance
Statement on Corporate Governance
During the year, the Nomination Committee reviewed and deliberated on the Statement of Corporate Governance for
Application of the UK Corporate Governance Code
inclusion in the Annual Report. It also met to recommend and extend the contract of a director. In 2018 it organised
AEP is committed to business integrity, appropriately high ethical standards and professionalism in all its activities
two video conferences with its sponsor and legal advisors on the continuing obligations of the directors under the
and operations. This includes a commitment to high standards in corporate governance relating in particular to
Corporate Governance Code, Market Abuse Regulation and the UK Listing rules. The panel updated the members of
appropriate systems and controls adopted at a senior level of management of the Group and operation of the Board.
the key features of the new Corporate Governance Code which includes board leadership, company purpose,
The benchmark standards in this regard are set out in the UK Corporate Governance Code (‘the Code’), as most
shareholder dissent, engagement with stakeholders, division of responsibilities, independence of Non-Executive
recently revised in June 2016 which forms part of the Listing Rules of the London Stock Exchange. The Code is
Directors, composition, succession and evaluation of the Board. On Market Abuse Regulation, the members were
available from the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. Where provisions of the Code
briefed on what constitutes inside information, selective disclosure, dealing with rumours, closed periods, unlawful
were not met during 2018, the particular comment is made in the statements below and in the Directors’
disclosure, insider dealing, market manipulation and sanctions for contravention of the Regulation. Members were
remuneration report on pages 49 to 53. The directors are mindful of the proposed revisions to the Code which are
also refreshed on related party transactions under the Listing rules.
expected to take effect on 1 January 2019 and will pay due regards to such revisions when published.
Relations with shareholders
Relationship Agreement with Controlling Shareholder
All shareholders may attend the Company’s AGM and put questions to the Board and such questions must be with at
The UK Listing Rules require a premium listed issuer with a controlling shareholder to have in place a relationship
least twenty working days’ notice. At the conclusion of the AGM, a summary of votes for each resolution is reported
agreement with the controlling shareholder. The mandatory requirement for the relationship agreement is intended to
and made available at the company’s website as soon as practicable after the meeting. Shareholders will not
prevent controlling shareholders from exercising their influence in a way that is improper or unfair to minority
receive a hard copy of the proxy form for the 2019 AGM. Instead shareholders will be able to vote electronically
shareholders. The requirement is not intended to prevent a controlling shareholder from engaging fairly with an
using the link www.signalshares.com. For more details please refer to Proxy Voting on page 8 of the Annual Report.
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
The Executive Director contacted and met certain principal shareholders during the year to understand their
International Limited (“Genton”) as the only controlling shareholder. In this respect, the Company entered into a
concerns and at all times are pleased to speak to and meet any shareholder. The views of the shareholders were
relationship agreement with Genton on 14 November 2014. The agreement is available for inspection by the
communicated to the Board to ensure that it is mindful of the shareholders’ sentiment and issues arising at all times.
shareholders upon request from the Company Secretary. The Board has reviewed this agreement with the
Given the dispersion of Directors and shareholders, it is not possible for every Director to meet the shareholders. A
controlling shareholder and concluded that AEP Plc has complied with the independence provisions included in the
member of the Audit, Nomination and Remuneration Committees will be available at the 2019 AGM. It is the intention
agreement and that, in so far as it is aware, those independence provisions have been complied with by Genton.
of the Board that the Company would engage with identifiable shareholders who have voted against Company’s
resolutions in the past.
The Board
AEP is led by a strong and experienced Board of Directors (see biographical details set out on page 40). During
The annual report, interim report and trading statements are intended to keep the shareholders informed as to the
2018 the Board comprised the Non-Executive Chairman, one Executive Director and two Non-Executive Directors,
progress in the operational and financial performance of the Group. The Company maintains a corporate website at
both of whom are considered by the Board to be Independent.
https://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, the price of crude palm oil,
Dato’ John Lim Ewe Chuan was appointed as the Executive Director, Corporate Finance and Corporate Affairs on 1
environmental, social and governance matters.
September 2010. Prior to 1 September 2010, Dato’ John Lim was the Senior Independent Non-Executive Director.
The Company’s results and other news releases issued via the London Stock Exchange’s Regulatory News Service
Madam Lim Siew Kim was appointed as the Non-Executive Chairman on 31 January 2011. Neither external search
are published on the “Investors Information” and “News” sections of the website and together with other relevant
consultancy nor open advertising was used for the appointment. The Nomination and Corporate Governance
information concerning the Company and the Industry, are available for downloading. The website was upgraded
Committee is of the view that Madam Lim, who indirectly owns 52% of the Company’s shares, with her experience in
recently to enable shareholders and investors to select and receive e-mail alerts from the Company on the selected
plantation businesses as she was the Chairman of the Company from 1993 to 1998 is an appropriate candidate for
regulatory news to follow the development of the Company.
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. AEP
Environmental and corporate responsibility
has complied with the Code which provides that excluding the Chairman, the Board should be made up of more than
In 2004 a group of growers, processors, retailers and wildlife and conservation groups founded the “Roundtable for
50% Non-Executive Directors.
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
Independence of the Non-Executive Directors
responsibilities and are fully committed to the principles developed by RSPO. Many of these principles overlap with
The Board has evaluated the independence of each of its Non-Executive Directors. Following this assessment, the
ISPO of which compliance is mandatory for AEP. These principles cover eight headings as follows:
Board has determined that, throughout the reporting period, both of its Non-Executive Directors, who were appointed
• Transparency;
for specified terms of office, were independent, based above all on their objectivity and integrity. The terms and
• Compliance with local laws and regulations;
conditions relating to the appointment of the Non-Executive Directors are available from the Company Secretary.
• Commitment to long-term economic and financial viability;
• Use of appropriate best practices by growers and millers;
• Environmental responsibility and conservation of natural resources and biodiversity;
• Responsible consideration of individuals and communities affected by growers and mills;
• Responsible development of new plantings; and
• Commitment to continuous improvement in key areas of activity.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
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41
44
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Statement on Corporate Governance
Statement on Corporate Governance
Application of the UK Corporate Governance Code
Within these headings are 40 detailed principles. Among the most important are:
AEP is committed to business integrity, appropriately high ethical standards and professionalism in all its activities
• Not to remove primary forest;
• Not to use fire for clearing areas designated for new or replanting;
and operations. This includes a commitment to high standards in corporate governance relating in particular to
• To follow accepted soil and water conservation practices;
appropriate systems and controls adopted at a senior level of management of the Group and operation of the Board.
• To use agrochemicals in ways that do not endanger health or the environment and to promote non-chemical
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
• To leave wild areas for wildlife corridors, water catchment and riparian protection;
available from the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. Where provisions of the Code
• Provide full treatment of mill effluent water;
were not met during 2018, the particular comment is made in the statements below and in the Directors’
• Ensure the wishes of local communities and individuals are taken account of; and
remuneration report on pages 49 to 53. The directors are mindful of the proposed revisions to the Code which are
expected to take effect on 1 January 2019 and will pay due regards to such revisions when published.
• To pay to individuals with residual rights over land only freely agreed compensation, in addition to following
methods of pest management;
government land regulations.
Relationship Agreement with Controlling Shareholder
AEP seeks to comply with these principles in all areas of its activities. Some of the measures taken for environmental
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
protection will be disclosed and updated in the company’s website from time to time.
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
Lim Tian Huat
board positions. AEP Plc has identified all controlling shareholders and regarded its major shareholder, Genton
Chairman, Nomination and Corporate Governance Committee 23 April 2019
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. The Board has reviewed this agreement with the
controlling shareholder and concluded that AEP Plc has complied with the independence provisions included in the
agreement and that, in 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 40). During
2018 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 businesses 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. AEP
has complied with the Code which provides that excluding the Chairman, the Board should be made up of more than
50% Non-Executive Directors.
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 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Audit Committee Report
Audit Committee Report
Audit Committee
Audit Committee
The Audit Committee comprises Mr. Lim Tian Huat (Chairman), Dato’ John Lim Ewe Chuan and Mr. Jonathan Law
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
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.
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
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
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 Practitioners of Malaysia. He has extensive experience in accounting, auditing, finance and corporate
insolvency. In addition to in-house training, he participated in nine external courses and seminars in 2018, three of
insolvency. In addition to in-house training, he participated in nine external courses and seminars in 2018, three of
which were organised by Malaysian Institute of Accountants. Topics covered were megatrends, Islamic financing,
which were organised by Malaysian Institute of Accountants. Topics covered were megatrends, Islamic financing,
corporate liabilities, exercising judgement in financial reporting and review of new and existing accounting standards.
corporate liabilities, exercising judgement in financial reporting and review of new and existing accounting standards.
Dato’ John Lim attended webinars hosted by UHY Hacker Young LLP on the update of accounting and auditing
Dato’ John Lim attended webinars hosted by UHY Hacker Young LLP on the update of accounting and auditing
standards.
standards.
Mr. Jonathan Law attended three seminars covering topics on Malaysia Code on Corporate Governance reporting,
Mr. Jonathan Law attended three seminars covering topics on Malaysia Code on Corporate Governance reporting,
guide and implementation and also the Essence of Independence.
guide and implementation and also the Essence of Independence.
Both Mr. Lim and Dato’ John Lim have recent and relevant financial experience in their discharge of duties on the
Both Mr. Lim and Dato’ John Lim have recent and relevant financial experience in their discharge of duties on the
Audit Committee.
Audit Committee.
Overview
Overview
The Audit Committee met prior to the completion of the 2018 accounts and five times during 2018 with full
The Audit Committee met prior to the completion of the 2018 accounts and five times during 2018 with full
attendance except for Mr. Lim who was absent from one meeting.
attendance except for Mr. Lim who was absent from one meeting.
During the year, the Committee reviewed and discussed the 2017 Annual Report, Interim Results, 1st Quarter and 3rd
During the year, the Committee reviewed and discussed the 2017 Annual Report, Interim Results, 1st Quarter and 3rd
Quarter Trading Statement for 2018. The Committee also deliberated and recommended to the Board the dividend
Quarter Trading Statement for 2018. 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
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
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
sustainable issues and governmental protective policies. The internal audit reports were tabled bi-annually at the
Audit Committee meetings and were discussed in detail. The Committee also recommended to the Board to appoint
Audit Committee meetings and were discussed in detail. The Committee also recommended to the Board to appoint
an external audit firm to review the quality of internal audit work and function every five years. This independent
an external audit firm to review the quality of internal audit work and function every five years. This independent
review is meant to assist the Board to assess the functionality of internal audit department and to improve the quality
review is meant to assist the Board to assess the functionality of internal audit department and to improve the quality
of internal audit work. The Committee also approved the Internal Audit Plan for the year. The Committee deliberated
of internal audit work. The Committee also approved the Internal Audit Plan for the year. The Committee deliberated
extensively and made changes before recommending the Budget for 2018 to the Board. In May 2018, a member of
extensively and made changes before recommending the Budget for 2018 to the Board. In May 2018, a member of
the Audit Committee visited the Indonesian operations and took the opportunities to meet the key managers. There
the Audit Committee visited the Indonesian operations and took the opportunities to meet the key managers. There
are regular dialogues, both formal and informal between the Audit Committee and the senior management in
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 also recommended set-up of
Indonesia and Malaysia and the discussions are open and constructive. The Committee also recommended set-up of
a whistle blower policy in 2019 as a means for the workforce in Indonesia to raise concerns in confidence and if they
a whistle blower policy in 2019 as a means for the workforce in Indonesia to raise concerns in confidence and if they
wish anonymously to a designated Non-Executive Director.
wish anonymously to a designated Non-Executive Director.
The Committee met with the external auditor twice in 2018 to discuss the audit findings and to plan the audit for 2018
The Committee met with the external auditor twice in 2018 to discuss the audit findings and to plan the audit for 2018
financial year. The external auditor during the audit planning highlighted to the Audit Committee their scope of audit
financial year. The external auditor during the audit planning highlighted to the Audit Committee their scope of audit
and their assessment of areas of audit risks. The significant risks include management override of controls, revenue
and their assessment of areas of audit risks. The significant risks include management override of controls, revenue
recognition, valuation of estate land, valuation of biological assets and impairment of bearer plants. Other risks
recognition, valuation of estate land, valuation of biological assets and impairment of bearer plants. Other risks
include completeness of related party transactions, recoverability of plasma scheme receivables and various
include completeness of related party transactions, recoverability of plasma scheme receivables and various
disclosure requirements under newly introduced IFRS. The auditor continued to stress on the directors’
disclosure requirements under newly introduced IFRS. The auditor continued to stress on the directors’
responsibilities and shared with the Committee several soundbites on corporate governance, audit quality, reporting
responsibilities and shared with the Committee several soundbites on corporate governance, audit quality, reporting
changes and IFRS implementation. During the year the audit engagement team from BDO (UK) visited Indonesia
changes and IFRS implementation. During the year the audit engagement team from BDO (UK) visited Indonesia
and Malaysia to review the work of the component auditors.
and Malaysia to review the work of the component auditors.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
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46
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Audit Committee Report
Audit Committee Report
In the 2018 Annual Report, the management has taken reasonable steps including independent external evaluation
Audit Committee
to assess whether there is any indication that an asset may be impaired, in particular, the plantations. Impairment for
The Audit Committee comprises Mr. Lim Tian Huat (Chairman), Dato’ John Lim Ewe Chuan and Mr. Jonathan Law
plantations is measured by comparing its carrying amount with its recoverable amount, which is the higher of the fair
Ngee Song, all of whom are considered by the Directors to have relevant financial and professional experiences to
value less cost to sell and its value in use. Given the nature of the business, its recoverable amount was based on
discharge their specific duties with respect to the Audit Committee.
the value in use calculation on the basis that it will be higher than fair value less cost to sell. This requires the
management to exercise significant judgement in determining the underlying assumptions used in the calculation of
Mr. Lim is a Fellow member of the Association of Chartered Certified Accountants and a member of the Malaysian
the recoverable amount. In 2018, the impairment loss of the plantations of the Group was $3.4 million (2017: reversal
Institute of Accountants and Malaysian Institute of Certified Public Accountants. He is also the founding President of
of impairment loss of $1.7 million). The details of the calculation of the recoverable amount are disclosed in note 11 -
Insolvency Practitioners of Malaysia. He has extensive experience in accounting, auditing, finance and corporate
Property, plant and equipment to the consolidated financial statements.
insolvency. In addition to in-house training, he participated in nine external courses and seminars in 2018, three of
which were organised by Malaysian Institute of Accountants. Topics covered were megatrends, Islamic financing,
To provide indicative fair values and to support the valuation of the estate land, eight companies located across
corporate liabilities, exercising judgement in financial reporting and review of new and existing accounting standards.
North Sumatera, Bengkulu, Riau and Kalimantan were valued by qualified valuers in 2018. 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
Dato’ John Lim attended webinars hosted by UHY Hacker Young LLP on the update of accounting and auditing
years. More details on land valuation work are covered on page 31.
standards.
The Committee also reviewed the policy on revenue recognition and believes that revenue is recognized when
Mr. Jonathan Law attended three seminars covering topics on Malaysia Code on Corporate Governance reporting,
control of the FFB and CPO has been transferred to the buyers. The Group generates revenue predominantly from
guide and implementation and also the Essence of Independence.
the sale of CPO from processed FFB.
Both Mr. Lim and Dato’ John Lim have recent and relevant financial experience in their discharge of duties on the
The Board receives reports from executive management in Indonesia and Malaysia and focuses principally on
Audit Committee.
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
Overview
movements, exchange rate movements, political and social change and government legislation.
The Audit Committee met prior to the completion of the 2018 accounts and five times during 2018 with full
attendance except for Mr. Lim who was absent from one meeting.
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
During the year, the Committee reviewed and discussed the 2017 Annual Report, Interim Results, 1st Quarter and 3rd
Group Accountant and focused on certain criteria which the Committee considered to be important factors in
Quarter Trading Statement for 2018. The Committee also deliberated and recommended to the Board the dividend
demonstrating an effective audit process. These factors included the quality of audit staff, the planning and execution
rate for AEP and the Indonesian subsidiaries. It also assessed the risks management report and concluded that the
of the audit according to agreed plans and timeline, provision of sound advice on technical issues and degree of
risks generally remained unchanged. The industry continues to face many challenges and uncertainties over
independence and professionalism displayed during the audit for 2017. The tenure of audit and extent of non-audit
sustainable issues and governmental protective policies. The internal audit reports were tabled bi-annually at the
work that will affect the independence of the auditor were reviewed. During 2018, the non-audit work undertaken by
Audit Committee meetings and were discussed in detail. The Committee also recommended to the Board to appoint
BDO (UK) was on the review of the interim report for compliance before the announcement. The Committee
an external audit firm to review the quality of internal audit work and function every five years. This independent
considered the nature, scope of engagement and remuneration paid were such that the independence and
review is meant to assist the Board to assess the functionality of internal audit department and to improve the quality
objectivity of the auditor were not impaired. Fees paid for audit and non-audit services are provided in note 5. The
of internal audit work. The Committee also approved the Internal Audit Plan for the year. The Committee deliberated
Committee considered the key members of the audit engagement team and component auditors involved in the
extensively and made changes before recommending the Budget for 2018 to the Board. In May 2018, a member of
Group Audit. This includes the Audit Partner and the Audit Manager from BDO (UK) and the various partners from
the Audit Committee visited the Indonesian operations and took the opportunities to meet the key managers. There
BDO in Malaysia and Indonesia. The current Audit Partner from BDO (UK) has been the Company’s audit
are regular dialogues, both formal and informal between the Audit Committee and the senior management in
engagement partner for the past five years and will be rotated by next year. For the audit in Malaysia a new Audit
Indonesia and Malaysia and the discussions are open and constructive. The Committee also recommended set-up of
Partner was assigned. The Audit Partner for the Indonesian audit has been involved for three years since 2015.
a whistle blower policy in 2019 as a means for the workforce in Indonesia to raise concerns in confidence and if they
Following this assessment, the Committee concluded that the external audit process remained effective, and that the
wish anonymously to a designated Non-Executive Director.
objectivity of the external auditor was not impaired and that it provides an appropriate independent challenge of the
senior management of the Group.
The Committee met with the external auditor twice in 2018 to discuss the audit findings and to plan the audit for 2018
financial year. The external auditor during the audit planning highlighted to the Audit Committee their scope of audit
and their assessment of areas of audit risks. The significant risks include management override of controls, revenue
recognition, valuation of estate land, valuation of biological assets and impairment of bearer plants. Other risks
include completeness of related party transactions, recoverability of plasma scheme receivables and various
disclosure requirements under newly introduced IFRS. The auditor continued to stress on the directors’
responsibilities and shared with the Committee several soundbites on corporate governance, audit quality, reporting
changes and IFRS implementation. During the year the audit engagement team from BDO (UK) visited Indonesia
and Malaysia to review the work of the component auditors.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
47
46
47
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Audit Committee Report
Audit Committee Report
Responsibility
Audit Committee
Audit Committee is responsible for:
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
Monitoring the integrity of the financial statements and reviewing formal announcements of financial
discharge their specific duties with respect to the Audit Committee.
performance and significant reporting issues and judgements that such statements and announcements are fair
and balanced;
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
Reviewing the effectiveness of the internal control functions (including the internal financial controls and the
Insolvency Practitioners of Malaysia. He has extensive experience in accounting, auditing, finance and corporate
internal audit function);
insolvency. In addition to in-house training, he participated in nine external courses and seminars in 2018, three of
Making recommendations to the Board in relation to the appointment, reappointment and removal of the
which were organised by Malaysian Institute of Accountants. Topics covered were megatrends, Islamic financing,
external auditor, their remuneration and terms of engagement;
corporate liabilities, exercising judgement in financial reporting and review of new and existing accounting standards.
Reviewing and monitoring the independence of the external auditor 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
Dato’ John Lim attended webinars hosted by UHY Hacker Young LLP on the update of accounting and auditing
concern statement in the Annual Reports.
standards.
The Committee also monitors the engagement of the auditor to perform non-audit work. The Committee considered
Mr. Jonathan Law attended three seminars covering topics on Malaysia Code on Corporate Governance reporting,
that the nature and scope of, and remuneration payable in respect of, these engagements were such that the
guide and implementation and also the Essence of Independence.
independence and objectivity of the auditor were not impaired.
Both Mr. Lim and Dato’ John Lim have recent and relevant financial experience in their discharge of duties on the
The members of the Committee discharge their responsibilities by informal discussions between themselves, by
Audit Committee.
meeting with the external auditor, the internal auditors and management and by consideration of reports by
management and by holding at least one formal meeting in each year.
Overview
The Audit Committee met prior to the completion of the 2018 accounts and five times during 2018 with full
Internal control
attendance except for Mr. Lim who was absent from one meeting.
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
During the year, the Committee reviewed and discussed the 2017 Annual Report, Interim Results, 1st Quarter and 3rd
Council in 2014. The Board has overall responsibility for the Group’s systems of internal control and risk
Quarter Trading Statement for 2018. The Committee also deliberated and recommended to the Board the dividend
management and for reviewing its effectiveness. Such a system is designed to manage, rather than eliminate, the
rate for AEP and the Indonesian subsidiaries. It also assessed the risks management report and concluded that the
risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against
risks generally remained unchanged. The industry continues to face many challenges and uncertainties over
material misstatement or loss. The Audit Committee reviews and monitors specific risks and internal control
sustainable issues and governmental protective policies. The internal audit reports were tabled bi-annually at the
procedures and reports to the Board where appropriate. Executive staff and Directors are responsible for
Audit Committee meetings and were discussed in detail. The Committee also recommended to the Board to appoint
implementation of control procedures and for identifying and managing business risks.
an external audit firm to review the quality of internal audit work and function every five years. This independent
review is meant to assist the Board to assess the functionality of internal audit department and to improve the quality
The Group has internal auditors who visit operating sites in Indonesia and Malaysia regularly based on an approved
of internal audit work. The Committee also approved the Internal Audit Plan for the year. The Committee deliberated
Internal Audit Plan and provide summarized internal audit reports to the Audit Committee on a regular basis. The
extensively and made changes before recommending the Budget for 2018 to the Board. In May 2018, a member of
Internal Audit also conducts special audits throughout the year as and when required by management. The internal
the Audit Committee visited the Indonesian operations and took the opportunities to meet the key managers. There
audit team provides objective assurance as to the effectiveness of the Group’s systems of internal control and risk
are regular dialogues, both formal and informal between the Audit Committee and the senior management in
management of the Group’s operating management to the Committee. Follow-up audits and discussions are also
Indonesia and Malaysia and the discussions are open and constructive. The Committee also recommended set-up of
held to ensure remedial actions are taken promptly. The internal audit review is a continuous and sequential process
a whistle blower policy in 2019 as a means for the workforce in Indonesia to raise concerns in confidence and if they
and in any one year does not necessarily cover all risks which are significant to the Group. The process aims to
wish anonymously to a designated Non-Executive Director.
provide reasonable assurance against material misstatement or loss but cannot eliminate the risk of loss. The Audit
Committee has decided to engage external auditor to independently review and assess the quality of internal audit
The Committee met with the external auditor twice in 2018 to discuss the audit findings and to plan the audit for 2018
work and its manpower every five years. Besides helping to improve the internal controls, it also raises the standard
financial year. The external auditor during the audit planning highlighted to the Audit Committee their scope of audit
of the internal audit work. Several audit firms have been invited to tender and the review is expected to start in the
and their assessment of areas of audit risks. The significant risks include management override of controls, revenue
second quarter of 2019.
recognition, valuation of estate land, valuation of biological assets and impairment of bearer plants. Other risks
include completeness of related party transactions, recoverability of plasma scheme receivables and various
disclosure requirements under newly introduced IFRS. The auditor continued to stress on the directors’
responsibilities and shared with the Committee several soundbites on corporate governance, audit quality, reporting
changes and IFRS implementation. During the year the audit engagement team from BDO (UK) visited Indonesia
and Malaysia to review the work of the component auditors.
Lim Tian Huat
Chairman, Audit Committee 23 April 2019
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
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46
48
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Remuneration Report
Directors’ Remuneration Report
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2018. It
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2018. It
sets out the remuneration policy and remuneration details for the Executive and Non-Executive directors of the
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
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.
(Accounts and Reports) Regulations 2008 as amended in August 2013.
The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Directors’
The Companies Act 2006 requires the auditor 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
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
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
indicated in that report. The report by the Chairman of the Remuneration Committee and the policy statement are not
subject to audit.
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
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
of activities relating to corporate finance and corporate affairs, including liaising with the Company’s advisers and
regulators and interaction with shareholders.
regulators and interaction with shareholders.
The Executive Director basic salary remains and is capped at £90,000 per annum until August 2020.
The Executive Director basic salary remains and is capped at £90,000 per annum until August 2020.
The operating units in Indonesia and Malaysia have in place a variable compensation policy that rewards senior
The operating units in Indonesia and Malaysia 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
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
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.
revised in May 2014 following discussion and consultation with the Company’s Chairman.
There was no change in Remuneration policy which was last voted and approved in 2017. In the meeting, the
There was no change in Remuneration policy which was last voted and approved in 2017. In the meeting, the
shareholders voted in the following manner:
shareholders voted in the following manner:
To approve Remuneration policy
To approve Remuneration policy
For
For
44
44
Against
Against
12
12
% For
% For
98.9%
98.9%
% Against
% Against
1.1%
1.1%
The Director’s Remuneration report was last approved at Company’s AGM on 25 June 2018. In the meeting, the
The Director’s Remuneration report was last approved at Company’s AGM on 25 June 2018. In the meeting, the
shareholders voted in the following manner:
shareholders voted in the following manner:
To approve Directors’ Remuneration Report
To approve Directors’ Remuneration Report
For
For
62
62
Against
Against
8
8
% For
% For
99.7%
99.7%
% Against
% Against
0.3%
0.3%
The Committee would welcome your support for our Remuneration Report. The report excluding the policy statement
The Committee would welcome your support for our Remuneration Report. The report excluding the policy statement
will be subject to the shareholders vote in 2019 AGM.
will be subject to the shareholders vote in 2019 AGM.
Remuneration Committee
Remuneration Committee
The Remuneration Committee comprises of Mr. Jonathan Law Ngee Song (Chairman), Dato’ John Lim Ewe Chuan
The Remuneration Committee comprises of Mr. Jonathan Law Ngee Song (Chairman), Dato’ John Lim Ewe Chuan
and Mr. Lim Tian Huat.
and Mr. Lim Tian Huat.
The Committee had three meetings in 2018, attended by all members.
The Committee had three meetings in 2018, attended by all members.
Besides formal meetings, it also has informal discussions and consultation with the Company’s Chairman in relation
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
to the variable bonuses for operational staff in Indonesia. During the year the Remuneration Committee reviewed the
annual
the necessary
the necessary
annual
recommendation to the Board after making an informal comparison with other plantation companies. The Committee
recommendation to the Board after making an informal comparison with other plantation companies. The Committee
also deliberated on the 2018 Remuneration Report and recommended to the Board for acceptance.
also deliberated on the 2018 Remuneration Report and recommended to the Board for acceptance.
increment and bonus entitlement of senior management
increment and bonus entitlement of senior management
Indonesia.
Indonesia.
It made
It made
in
in
Policy
Policy
The Remuneration Committee makes recommendations on senior management pay and conditions, after
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
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. The Group does not
assesses the remuneration of the Non-Executive Directors and submits a proposal to the Board. The Group does not
seek the advice of an external consultant in determining the salaries of senior management and directors.
seek the advice of an external consultant in determining the salaries of senior management and directors.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
49
49
49
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Remuneration Report
Directors’ Remuneration Report
In determining the remuneration policy of senior management, the Committee takes into account the need to attract,
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2018. It
retain and motivate employees. It also makes external comparison with the current market trends and practices of
sets out the remuneration policy and remuneration details for the Executive and Non-Executive directors of the
equivalent roles taking into account the size, business complexity and relative performance.
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.
Non-Executive Directors’ remuneration is considered by the Board and consists exclusively of a fixed payment. The
remuneration is within the range based on a survey of remuneration of directors in Malaysian-listed plantation
The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Directors’
companies.
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
When determining Executive Director’s remuneration, the Committee reviews the pay policy and levels for
indicated in that report. The report by the Chairman of the Remuneration Committee and the policy statement are not
executives below the Board, as well as pay and conditions of employees throughout the Group. Other factors
subject to audit.
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
The Executive Director’s compensation is not linked to the profitability of the Group. It is linked to his role in respect
which is similar to the previous approved policy will continue to be consistently applied in the next financial year. This
of activities relating to corporate finance and corporate affairs, including liaising with the Company’s advisers and
policy including capping the remuneration at £90,000 per annum as set out above will continue to be applied for any
regulators and interaction with shareholders.
new appointment.
The Executive Director basic salary remains and is capped at £90,000 per annum until August 2020.
No employees or shareholders are specifically consulted on the remuneration policy of the Company. If a significant
shareholder expresses a particular concern regarding any aspect of the policy, the views expressed would be
The operating units in Indonesia and Malaysia have in place a variable compensation policy that rewards senior
carefully weighed.
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
Components
revised in May 2014 following discussion and consultation with the Company’s Chairman.
Base salary
Base salaries of senior management are reviewed on an annual basis by the Remuneration Committee or when an
There was no change in Remuneration policy which was last voted and approved in 2017. In the meeting, the
individual changes his responsibilities. Non-Executive Directors receive no benefit other than a fee.
shareholders voted in the following manner:
For
44
For
62
Bonus
To approve Remuneration policy
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,
The Director’s Remuneration report was last approved at Company’s AGM on 25 June 2018. In the meeting, the
efficiency of mill performance and overall profitability. There is no bonus scheme for all the Directors.
shareholders voted in the following manner:
Against
12
% For
98.9%
% Against
1.1%
Against
8
% For
99.7%
% Against
0.3%
Share options
To approve Directors’ Remuneration Report
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
The Committee would welcome your support for our Remuneration Report. The report excluding the policy statement
to issuing no more than 10% of the issued ordinary share capital of the Company from time to time. They provide for
will be subject to the shareholders vote in 2019 AGM.
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. The Company had not issued any share options to all Directors after 2004.
Remuneration Committee
The Remuneration Committee comprises of Mr. Jonathan Law Ngee Song (Chairman), Dato’ John Lim Ewe Chuan
Individual grants vest over three years. The total grant to each holder is determined by seniority and total market
and Mr. Lim Tian Huat.
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
The Committee had three meetings in 2018, attended by all members.
other performance criteria for exercise of options granted so far.
Besides formal meetings, it also has informal discussions and consultation with the Company’s Chairman in relation
Pensions
to the variable bonuses for operational staff in Indonesia. During the year the Remuneration Committee reviewed the
The operating units in Indonesia participate in mandatory pension schemes for their local executives and
the necessary
It made
annual
management. There is no company-sponsored scheme for senior executives outside of Indonesia.
recommendation to the Board after making an informal comparison with other plantation companies. The Committee
also deliberated on the 2018 Remuneration Report and recommended to the Board for acceptance.
Remuneration Policy Table for Executive Director
The table below summarises the key aspects of the Group’s Remuneration Policy for Executive Director effective 1
Policy
January 2015.
The Remuneration Committee makes recommendations on senior management pay and conditions, after
Maximum payment
consultation with the Chairman, and recommends to the Board the terms for the Executive Director. It periodically
Capped at £90,000. The cap is reviewed periodically.
Base salary - fixed pay.
assesses the remuneration of the Non-Executive Directors and submits a proposal to the Board. The Group does not
The policy permits the cap to be changed if this is
seek the advice of an external consultant in determining the salaries of senior management and directors.
deemed necessary to meet business, legislative or
regulatory requirements.
increment and bonus entitlement of senior management
Purpose
To contain fixed costs.
Indonesia.
Type
in
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
50
49
50
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Remuneration Report
Directors’ Remuneration Report
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2018. It
There is no bonus, fringe benefits or employee share option scheme for the Executive Director.
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
Executive Director’s Remuneration over 10 Years
(Accounts and Reports) Regulations 2008 as amended in August 2013.
Pension
Benefit
Year ended 31 Dec
2018
-
-
The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Directors’
-
-
2017
Remuneration Report and to state whether, in their opinion, those parts of the report have been properly prepared in
2016
-
-
accordance with the Regulations. The parts of the annual report on remuneration that are subject to audit are
2015
-
-
indicated in that report. The report by the Chairman of the Remuneration Committee and the policy statement are not
2014
-
-
subject to audit.
-
-
2013
2012
-
-
The Executive Director’s compensation is not linked to the profitability of the Group. It is linked to his role in respect
2011
-
-
of activities relating to corporate finance and corporate affairs, including liaising with the Company’s advisers and
2010
-
-
regulators and interaction with shareholders.
-
-
2009
* The Executive Director’s basic salary from 2015 to 2018 was £90,000 per annum. The fluctuations shown above
The Executive Director basic salary remains and is capped at £90,000 per annum until August 2020.
during this period were the result of exchange translations.
Salary
$123,000*
$113,000*
$127,000*
$137,000*
$133,000
$117,000
$105,000
$83,000
$114,000
$137,000
Total
$123,000
$113,000
$127,000
$137,000
$133,000
$117,000
$105,000
$83,000
$114,000
$137,000
Bonus
-
-
-
-
-
-
-
-
-
-
The operating units in Indonesia and Malaysia have in place a variable compensation policy that rewards senior
Percentage change of remuneration
executives and employees with bonuses ranging from two to seven months’ pay based on individual’s and operating
The following table shows a comparison of the percentage change in salaries of the Executive Director, senior
units’ performance. The key criteria used in the determination of the variable compensation policy for the bonus was
management in Indonesia and total wages and salaries between 2017 and 2018.
revised in May 2014 following discussion and consultation with the Company’s Chairman.
Change
There was no change in Remuneration policy which was last voted and approved in 2017. In the meeting, the
Percentage change in Executive Director’s salary
shareholders voted in the following manner:
Salary
$123,000
$113,000
8.8%
2017
2018
For
44
Against
12
% For
98.9%
% Against
1.1%
To approve Remuneration policy
Percentage change in selected Group senior management salaries
Salaries
-8.9%
The Director’s Remuneration report was last approved at Company’s AGM on 25 June 2018. In the meeting, the
shareholders voted in the following manner:
Percentage change in total wages and salaries
Total wages and salaries
To approve Directors’ Remuneration Report
Relative importance of spend on pay
The Committee would welcome your support for our Remuneration Report. The report excluding the policy statement
will be subject to the shareholders vote in 2019 AGM.
37,991
% Against
0.3%
Against
8
% For
99.7%
$34,846,000
$31,608,000
$1,446,000
$1,587,000
For
62
+10.2%
40000
Remuneration Committee
The Remuneration Committee comprises of Mr. Jonathan Law Ngee Song (Chairman), Dato’ John Lim Ewe Chuan
and Mr. Lim Tian Huat.
35000
34,926
30000
The Committee had three meetings in 2018, attended by all members.
25000
$'000
20000
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 2018 Remuneration Report and recommended to the Board for acceptance.
increment and bonus entitlement of senior management
Indonesia.
It made
15000
in
10000
5000
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. The Group does not
seek the advice of an external consultant in determining the salaries of senior management and directors.
2017 2018 2017 2018
1,585
1,515
0
Total Group Employee Remuneration
Total Dividend Paid
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
49
51
51
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Remuneration Report
Directors’ Remuneration Report
Service contracts
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2018. It
All Directors, Executive and Non-Executive, have formal appointment letters. The Executive and Non-Executives are
sets out the remuneration policy and remuneration details for the Executive and Non-Executive directors of the
appointed normally on two-year terms with notice periods of one month to two months. The service contracts are
Group. It has been prepared in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups
kept at the registered office and may be inspected by shareholders on request. Notice periods for all other senior
(Accounts and Reports) Regulations 2008 as amended in August 2013.
management are generally two months. Therefore, any remuneration payment for loss of office will be capped at a
maximum of two months. It is not the Company policy to include provisions in directors’ service contracts for
The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Directors’
compensation for early termination beyond providing for an entitlement to payment in lieu of notice if due notice is
Remuneration Report and to state whether, in their opinion, those parts of the report have been properly prepared in
not given.
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
At 31 December 2018, the unexpired term of the retiring Directors are:
subject to audit.
Madam Lim Siew Kim
Dato’ John Lim Ewe Chuan
The Executive Director’s compensation is not linked to the profitability of the Group. It is linked to his role in respect
Lim Tian Huat
of activities relating to corporate finance and corporate affairs, including liaising with the Company’s advisers and
Jonathan Law Ngee Song
regulators and interaction with shareholders.
Expiry 30 January 2021
Expiry 31 August 2020
Expiry 7 May 2021
Expiry 3 July 2021
Performance Graph
The Executive Director basic salary remains and is capped at £90,000 per annum until August 2020.
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 2018 (last ten years) to indicate the volatility and trend of the market
The operating units in Indonesia and Malaysia have in place a variable compensation policy that rewards senior
generally. Our share price performance consistently outperformed the FTSE 100 index throughout these periods. In
executives and employees with bonuses ranging from two to seven months’ pay based on individual’s and operating
determining senior management compensation, the Remuneration Committee is influenced by the operating
units’ performance. The key criteria used in the determination of the variable compensation policy for the bonus was
performance of the Company and not directly by the share price. The FTSE 100 index has been selected for this
revised in May 2014 following discussion and consultation with the Company’s Chairman.
comparison as there is no index available that is specific to the activities of the Company.
There was no change in Remuneration policy which was last voted and approved in 2017. In the meeting, the
Directors’ interests (audited)
shareholders voted in the following manner:
The interests of the Directors together with those of their immediate families in the securities of the Company were
as shown below:
To approve Remuneration policy
% Against
1.1%
Against
12
% For
98.9%
For
44
Directors' beneficial interests at 31 December:
The Director’s Remuneration report was last approved at Company’s AGM on 25 June 2018. In the meeting, the
shareholders voted in the following manner:
To approve Directors’ Remuneration Report
Madam Lim Siew Kim
Dato' John Lim Ewe Chuan
Lim Tian Huat
Jonathan Law Ngee Song
For
62
The Committee would welcome your support for our Remuneration Report. The report excluding the policy statement
will be subject to the shareholders vote in 2019 AGM.
2018
Ordinary shares
20,551,914
Against
8
2017
Ordinary shares
% Against
20,551,914
0.3%
-
-
-
% For
99.7%
-
-
-
Remuneration Committee
The interests disclosed for Madam Lim are held by Genton International Ltd and certain other companies of which
The Remuneration Committee comprises of Mr. Jonathan Law Ngee Song (Chairman), Dato’ John Lim Ewe Chuan
Madam Lim is the controlling shareholder.
and Mr. Lim Tian Huat.
There have been no changes in the interests of the Directors in the securities of the Company between 31
The Committee had three meetings in 2018, attended by all members.
December 2018 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
Besides formal meetings, it also has informal discussions and consultation with the Company’s Chairman in relation
requirement for Directors to hold shares in the Company. Other than as set out in notes 7 and 22 to the consolidated
to the variable bonuses for operational staff in Indonesia. During the year the Remuneration Committee reviewed the
financial statements, no Director had a material interest in any contract of the Company subsisting during, or at the
the necessary
annual
end of the financial year.
recommendation to the Board after making an informal comparison with other plantation companies. The Committee
also deliberated on the 2018 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. The Group does not
seek the advice of an external consultant in determining the salaries of senior management and directors.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
52
49
52
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Directors’ Remuneration Report
Directors’ Remuneration Report
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2018. It
Directors’ remuneration (audited)
sets out the remuneration policy and remuneration details for the Executive and Non-Executive directors of the
The following part provides details of the remuneration of all the Directors for the year ended 31 December 2018. The
Group. It has been prepared in accordance with Schedule 8 of The Large and Medium-sized Companies and Groups
numerical components of these disclosures have been audited in accordance with Section 421 of the UK Companies
(Accounts and Reports) Regulations 2008 as amended in August 2013.
Act 2006.
The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Directors’
The remuneration of all Directors who served during the year was:
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
Audited information
indicated in that report. The report by the Chairman of the Remuneration Committee and the policy statement are not
subject to audit.
Name of Directors
The Executive Director’s compensation is not linked to the profitability of the Group. It is linked to his role in respect
Executive:
of activities relating to corporate finance and corporate affairs, including liaising with the Company’s advisers and
Dato' John Lim Ewe Chuan (1)
regulators and interaction with shareholders.
Total 2018 Fees
Total 2017 Fees
$000
$000
123
113
The Executive Director basic salary remains and is capped at £90,000 per annum until August 2020.
Non-Executive:
Lim Siew Kim (2)
The operating units in Indonesia and Malaysia 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
Lim Tian Huat (3)
units’ performance. The key criteria used in the determination of the variable compensation policy for the bonus was
Jonathan Law Ngee Song (4)
revised in May 2014 following discussion and consultation with the Company’s Chairman.
59
22
22
20
55
20
Total
There was no change in Remuneration policy which was last voted and approved in 2017. In the meeting, the
shareholders voted in the following manner:
Directors’ remuneration comprises of directors’ fees only.
226
208
Against
12
% For
98.9%
% Against
1.1%
To approve Remuneration policy
Unaudited information
Notes:
The Director’s Remuneration report was last approved at Company’s AGM on 25 June 2018. In the meeting, the
(1) Appointed as Executive Director on 1 September 2010. Previously was the Senior Independent Non-Executive Director.
shareholders voted in the following manner:
(2) Appointed on 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
(3) Appointed on 8 May 2015.
To approve Directors’ Remuneration Report
(4) Appointed on 4 July 2013.
The Committee would welcome your support for our Remuneration Report. The report excluding the policy statement
will be subject to the shareholders vote in 2019 AGM.
Against
8
% For
99.7%
% Against
0.3%
For
44
For
62
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 three meetings in 2018, attended by all members.
Jonathan Law Ngee Song
Chairman, Remuneration Committee 23 April 2019
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 2018 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. The Group does not
seek the advice of an external consultant in determining the salaries of senior management and directors.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
49
53
53
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s 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
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
subsidiaries (the ‘group’) for the year ended 31 December 2018 which comprise the consolidated income statement,
subsidiaries (the ‘group’) for the year ended 31 December 2018 which comprise the consolidated income statement,
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
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,
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
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 the preparation of the
significant accounting policies. The financial reporting framework that has been applied in the preparation of the
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
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
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 FRS 101 Reduced
financial statements is applicable law and United Kingdom Accounting Standards including FRS 101 Reduced
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
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
as at 31 December 2018 and of the group’s profit for the year then ended;
as at 31 December 2018 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
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
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;
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
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
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 in accordance with the ethical
financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s 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
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
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.
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
(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 21-25 that describe the principal risks and explain how
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
they are being managed or mitigated;
they are being managed or mitigated;
the directors’ confirmation set out on page 21 in the annual report that they have carried out a robust
the directors’ confirmation set out on page 21 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
assessment of the principal risks facing the group, including those that would threaten its business model, future
performance, solvency or liquidity;
performance, solvency or liquidity;
the directors’ statement set out on page 12 in the financial statements about whether the directors considered it
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
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
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;
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
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
Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
54
54
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s 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)
Opinion
the directors’ explanation set out on page 31 in the annual report as to how they have assessed the prospects of
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
the group, over what period they have done so and why they consider that period to be appropriate, and their
subsidiaries (the ‘group’) for the year ended 31 December 2018 which comprise the consolidated income statement,
statement as to whether they have a reasonable expectation that the group will be able to continue in operation
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
and meet its liabilities as they fall due over the period of their assessment, including any related disclosures
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
drawing attention to any necessary qualifications or assumptions.
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 the preparation of the
Key audit matters
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
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements is applicable law and United Kingdom Accounting Standards including FRS 101 Reduced
financial statements of the current period and include the most significant assessed risks of material misstatement
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
(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.
In our opinion:
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
Valuation of biological assets
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 2018 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
The unharvested fresh fruit bunches (FFB) on the bearer
the valuation exercise
The directors performed
the parent company financial statements have been properly prepared in accordance with United Kingdom
plants at the year-end remain within the scope of IAS 41
internally which has been confirmed by an independent,
Generally Accepted Accounting Practice; and
Biological assets and are therefore held at fair value less
professionally qualified valuer as appropriate. We
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
costs to sell determined on the basis of the net present
challenged the assumptions in the underlying data input
and, as regards the group financial statements, Article 4 of the IAS Regulation.
by the directors at the balance sheet date through
value of expected future cash flows arising in the
production of FFB. Management exercise significant
discussions,
peers,
Basis for opinion
judgement in determining the underlying assumptions
independent external data sources and where available
used in the calculation of fair value. These assumptions
to corroboration with supporting documentation,
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
include the estimation of the weight of unharvested FFB
published research and historical trends.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
at the balance sheet date, FFB production, FFB selling
financial statements section of our report. We are independent of the group in accordance with the ethical
price and costs to sell. We identified this as a risk due to
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
the inherent uncertainty around the future estimates.
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
appropriate to provide a basis for our opinion.
Valuation of estate land
Our response to the risks identified
comparisons
industry
to
the current year
Conclusions relating to principal risks, going concern and viability statement
Estate land is carried at fair value, based on periodic
the directors engaged an
In
to perform a market-based
independent valuer
valuations on an open market basis by an independent
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
valuation on all land that was not independently valued
professionally qualified valuer. The directors obtain a
(UK) require us to report to you whether we have anything material to add or draw attention to:
in the prior year ensuring geographical coverage of all
professional valuation on land on a rotational basis and
areas in which they operate. The directors performed
all land has been professionally valued at least once at
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
their own valuation on
the current or previous financial year end. We identified
land by
they are being managed or mitigated;
the valuation of estate land as a risk due to the
considering the movements on the valued land from the
the directors’ confirmation set out on page 21 in the annual report that they have carried out a robust
prior year and applying those same movements to the
subjective judgements involved in the estimation and the
assessment of the principal risks facing the group, including those that would threaten its business model, future
other land in the same geographical region. As there is
volatility of land market prices within Indonesia.
performance, solvency or liquidity;
only one estate in Malaysia, externally valued in the
the directors’ statement set out on page 12 in the financial statements about whether the directors considered it
prior year, the directors have considered the movement
appropriate to adopt the going concern basis of accounting in preparing the financial statements and the
in land values in Malaysia as a whole in the period and
directors’ identification of any material uncertainties to the group and the parent company’s ability to continue to
applied this to their land. We assessed the capabilities,
do so over a period of at least twelve months from the date of approval of the financial statements;
objectivity and competence of the independent valuer
remaining
whether the directors’ statement relating to going concern required under the Listing Rules in accordance with
the
Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
55
55
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s Report
Our response to the risks identified
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)
Opinion
Key audit matter
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
Valuation of estate land (continued)
subsidiaries (the ‘group’) for the year ended 31 December 2018 which comprise the consolidated income statement,
and considered them to be satisfactory. We challenged
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
the assumptions applied by the valuer, verified the input
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
data utilised and assessed the reasonableness of the
the Company statement of changes in equity and notes to the financial statements, including a summary of
movements in the valuation on an estate by estate
significant accounting policies. The financial reporting framework that has been applied in the preparation of the
basis in light of movements in plantation land area and
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
market
the
trends. We
the European Union. The financial reporting framework that has been applied in respect of the parent company
assumptions applied by the directors in their own
financial statements is applicable law and United Kingdom Accounting Standards including FRS 101 Reduced
the
valuation, most notably
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
the
application of
independent valuers to the remaining estates.
for
the movements determined by
challenged
valuation
rationale
their
In our opinion:
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 directors shall estimate
the recoverable amount of the asset.
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
We considered the various indicators of impairment
as at 31 December 2018 and of the group’s profit for the year then ended;
listed in IAS 36 – Impairment of Assets to determine
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
whether any additional plantations to those already
European Union;
identified by the directors should be reviewed for
the parent company financial statements have been properly prepared in accordance with United Kingdom
impairment at 31 December 2018.
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
The directors engaged an
independent valuer to
and, as regards the group financial statements, Article 4 of the IAS Regulation.
determine the value in use for certain estates located in
Indonesia using data provided by management. The
directors prepared the value in use calculation for the
Malaysia estate.
The directors have identified an indicator of impairment
Basis for opinion
on ten plantations and have carried out an impairment
review for those plantations, calculating the recoverable
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
amount to be the asset’s value in use. The directors
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
the
judgement
exercise significant
We challenged the assumptions in the underlying data
financial statements section of our report. We are independent of the group in accordance with the ethical
underlying assumptions used in this calculation.
through
the valuer and management
made by
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
discussions,
peers,
industry
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
independent external data sources and where available
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
through corroboration to supporting documentation and
appropriate to provide a basis for our opinion.
historical trends.
in determining
comparisons
to
Conclusions relating to principal risks, going concern and viability statement
We performed sensitivity analysis on
the key
assumptions in the value in use calculation which were
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
considered to be CPO price and discount rate.
(UK) require us to report to you whether we have anything material to add or draw attention to:
Our application of materiality
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
they are being managed or mitigated;
the directors’ confirmation set out on page 21 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
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
performance, solvency or liquidity;
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
the directors’ statement set out on page 12 in the financial statements about whether the directors considered it
influence the economic decisions of reasonable users that are taken on the basis of the financial statements. In order
appropriate to adopt the going concern basis of accounting in preparing the financial statements and the
to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
directors’ identification of any material uncertainties to the group and the parent company’s ability to continue to
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements
do so over a period of at least twelve months from the date of approval of the financial statements;
below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified
whether the directors’ statement relating to going concern required under the Listing Rules in accordance with
misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial
statements as a whole.
Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
56
56
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s Report
attitude
information
CLEARLY
TRIVIAL
$60,000
2017
MATERIALITY
$3,000,000
CLEARLY
TRIVIAL
$34,000
2018
MATERIALITY
$1,700,000
from components was audited separately,
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)
Opinion
We determined materiality for the group financial statements as a
whole to be US$1.7 million (2017: US$3.00 million) which
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 2018 which comprise the consolidated income statement,
approximates to 5.0% of profit before tax before biological asset
movement (2017: 4.3%). We consider profit before tax before
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
biological asset movement to be an appropriate basis for
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
materiality as it is a key indicator of the Group’s financial
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 the preparation of the
performance.
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
Performance materiality was set at 75% of the above materiality
the European Union. The financial reporting framework that has been applied in respect of the parent company
level (2017: 75%) taking into account various factors including the
financial statements is applicable law and United Kingdom Accounting Standards including FRS 101 Reduced
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
expected total value of known and likely misstatements, brought
forward misstatements, management’s
towards
In our opinion:
adjustments,
the number of material estimates, how
homogeneous processes are within the Group, and the expected
use of sample testing.
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 2018 and of the group’s profit for the year then ended;
Where
financial
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
component materiality levels were set for this purpose at lower levels up to a maximum of 82% (2017: 50%) of group
European Union;
materiality. Materiality levels are lower than in previous years due to the decrease in results for the year.
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
We agreed with the Audit Committee that we would report to the Committee all individual audit differences identified
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
during the course of our audit in excess of US$34,000 (2017: US$60,000). We also agreed to report differences
and, as regards the group financial statements, Article 4 of the IAS Regulation.
below this threshold that, in our view, warranted reporting on qualitative grounds.
Basis for opinion
The materiality for the Parent financial statements, as a holding company, was based on 2% of total assets to be
$1.3m (2017: $1.3m). Performance materiality was set at 75% (2017: 75%) of materiality taking into account various
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
factors including the expected total value of known and likely misstatements, brought forward misstatements,
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
management’s attitude towards adjustments, and the number of material estimates.
financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
An overview of the scope of our audit
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
The Group financial statements are a consolidation of twenty six companies made up of the parent company, four
appropriate to provide a basis for our opinion.
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
Conclusions relating to principal risks, going concern and viability statement
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
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
identified six operating plantation companies which, in our view, required an audit of their complete financial
(UK) require us to report to you whether we have anything material to add or draw attention to:
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 leasehold land and
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
the impairment reviews of bearer plants classified as property plant and equipment, gave us the evidence we needed
they are being managed or mitigated;
to form our opinion on the Group financial statements as a whole.
the directors’ confirmation set out on page 21 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
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
57
57
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s 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)
Opinion
Audits of the subsidiary companies were performed at materiality levels lower than Group materiality and determined
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
by us to be appropriate to the relative size of the company concerned. The audits of each of the operating
subsidiaries (the ‘group’) for the year ended 31 December 2018 which comprise the consolidated income statement,
companies were performed entirely in Malaysia and Indonesia. All audits were conducted by BDO network firms with
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
teams drawn from the UK, Malaysia and Indonesia. As part of our audit strategy, the Senior Statutory Auditor and
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
other senior members of the team between them visit Malaysia and Indonesia every year. During these visits the
the Company statement of changes in equity and notes to the financial statements, including a summary of
Group audit team reviewed the complete audit files for the six operating plantation companies considered to be
significant accounting policies. The financial reporting framework that has been applied in the preparation of the
significant by size and focused on the audit work in relation to the specific areas identified for the remaining eleven
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
companies considered to be significant by risk. Following the review, any further work required by the Group audit
the European Union. The financial reporting framework that has been applied in respect of the parent company
team was performed by the component auditor. The component auditors visit the plantation estates on a rotational
financial statements is applicable law and United Kingdom Accounting Standards including FRS 101 Reduced
basis so that each estate is visited at least once every three years.
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
The remaining components of the Group include non-significant holding companies and these components were
In our opinion:
principally subject to analytical review procedures performed by the Group audit team.
Total assets
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 2018 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
and, as regards the group financial statements, Article 4 of the IAS Regulation.
Basis for opinion
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
Profit before tax
financial statements section of our report. We are independent of the group in accordance 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
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
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
(UK) require us to report to you whether we have anything material to add or draw attention to:
Revenue
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
they are being managed or mitigated;
the directors’ confirmation set out on page 21 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
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
58
58
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s 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)
Opinion
We gained an understanding of the legal and regulatory framework applicable to the Group and the industry in which
We have audited the financial statements of Anglo Eastern Plantations Plc (the ‘parent company’) and its
it operates, and considered the risk of non-compliance or fraud by the Group. We designed audit procedures at both
subsidiaries (the ‘group’) for the year ended 31 December 2018 which comprise the consolidated income statement,
the Group and Significant Component levels to detect material misstatements due to fraud and error. We note that it
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
can be harder to detect those arsing due to fraud as they may involve deliberate concealment or collusion. We
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
focused on laws and regulations that could give rise to a material misstatement in the Group and Parent company
the Company statement of changes in equity and notes to the financial statements, including a summary of
financial statements, including, but not limited to, the Companies Act 2006, the UK Listing Rules and certain
significant accounting policies. The financial reporting framework that has been applied in the preparation of the
requirements from UK, Indonesia and Malaysia legislation. Our tests included, but were not limited to, agreement of
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
the financial statement disclosures to underlying supporting documentation, review of correspondence with
the European Union. The financial reporting framework that has been applied in respect of the parent company
regulators and legal advisors, enquiries of management, review of significant component auditors’ working papers
financial statements is applicable law and United Kingdom Accounting Standards including FRS 101 Reduced
and review of internal audit reports. There are inherent limitations in the audit procedures described above and the
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
more removed from the audited financial transactions, the less likely we would become aware of it.
In our opinion:
Other information
The financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs
The directors are responsible for the other information. The other information comprises the information included in
the annual report, set out on pages 2 to 53, other than the financial statements and our auditor’s report thereon. Our
as at 31 December 2018 and of the group’s profit for the year then ended;
opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
stated in our report, we do not express any form of assurance conclusion thereon.
European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
Generally Accepted Accounting Practice; and
doing so, consider whether the other information is materially inconsistent with the financial statements or our
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material
and, as regards the group financial statements, Article 4 of the IAS Regulation.
inconsistencies or apparent material 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
Basis for opinion
we have performed, we conclude that there is a material misstatement of the other information, we are required to
report that fact.
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 have nothing to report in this regard.
financial statements section of our report. We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
In this context, we also have nothing to report in regard to our responsibility to specifically address the following
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
items in the other information and to report as uncorrected material misstatements of the other information where we
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
conclude that those items meet the following conditions:
appropriate to provide a basis for our opinion.
Conclusions relating to principal risks, going concern and viability statement
Fair, balanced and understandable set out on page 39 – 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
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
materially inconsistent with our knowledge obtained in the audit; or
(UK) require us to report to you whether we have anything material to add or draw attention to:
Audit committee reporting set out on pages 46 to 48 – the section describing the work of the audit committee
does not appropriately address matters communicated by us to the audit committee; or
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
Directors’ statement of compliance with the UK Corporate Governance Code set out on page 41 – the parts of
they are being managed or mitigated;
the directors’ statement required under the Listing Rules relating to the company’s compliance with the UK
the directors’ confirmation set out on page 21 in the annual report that they have carried out a robust
Corporate Governance Code containing provisions specified for review by the auditor in accordance with Listing
assessment of the principal risks facing the group, including those that would threaten its business model, future
Rule 9.8.10R(2) do not properly disclose a departure from a relevant provision of the UK Corporate Governance
performance, solvency or liquidity;
Code.
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;
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
whether the directors’ statement relating to going concern required under the Listing Rules in accordance with
with the Companies Act 2006.
Listing Rule 9.8.6R(3) is materially inconsistent with our knowledge obtained in the audit; or
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
59
59
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s 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)
Opinion
In our opinion, based on the work undertaken in the course of the audit:
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 2018 which comprise the consolidated income statement,
the information given in the strategic report and the directors’ report for the financial year for which the financial
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
statements are prepared is consistent with the financial statements and those reports have been prepared in
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
accordance with applicable legal requirements;
the Company statement of changes in equity and notes to the financial statements, including a summary of
the information about internal control and risk management systems in relation to financial reporting processes
significant accounting policies. The financial reporting framework that has been applied in the preparation of the
and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with
the European Union. The financial reporting framework that has been applied in respect of the parent company
the financial statements and has been prepared in accordance with applicable legal requirements; and
financial statements is applicable law and United Kingdom Accounting Standards including FRS 101 Reduced
information about the company’s corporate governance code and practices and about its administrative,
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
management and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA
Rules.
In our opinion:
Matters on which we are required to report by exception
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 2018 and of the group’s profit for the year then ended;
In the light of the knowledge and understanding of the group and the parent company and its environment obtained
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
in the course of the audit, we have not identified material misstatements in:
European Union;
the parent company financial statements have been properly prepared in accordance with United Kingdom
the strategic report or the directors’ report; or
Generally Accepted Accounting Practice; and
the information about internal control and risk management systems in relation to financial reporting processes
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
and about share capital structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
and, as regards the group financial statements, Article 4 of the IAS Regulation.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us
Basis for opinion
to report to you if, in our opinion:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the
not been received from branches not visited by us; or
financial statements section of our report. We are independent of the group in accordance with the ethical
the parent company financial statements and the part of the directors’ remuneration report to be audited are not
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
in agreement with the accounting records and returns; or
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
certain disclosures of directors’ remuneration specified by law are not made; or
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
we have not received all the information and explanations we require for our audit; or
appropriate to provide a basis for our opinion.
a corporate governance statement has not been prepared by the parent company.
Conclusions relating to principal risks, going concern and viability statement
Responsibilities of directors
We have nothing to report in respect of the following information in the annual report, in relation to which the ISAs
As explained more fully in the directors’ responsibilities statement set out on page 39, the directors are responsible
(UK) require us to report to you whether we have anything material to add or draw attention to:
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
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
from material misstatement, whether due to fraud or error.
they are being managed or mitigated;
the directors’ confirmation set out on page 21 in the annual report that they have carried out a robust
In preparing the financial statements, the directors are responsible for assessing the Group’s and the parent
assessment of the principal risks facing the group, including those that would threaten its business model, future
company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
performance, solvency or liquidity;
using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent
the directors’ statement set out on page 12 in the financial statements about whether the directors considered it
company or to cease operations, or have no realistic alternative but to do so.
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
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
60
60
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Auditor’s Report
Auditor’s 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)
Opinion
Auditor’s responsibilities for the audit of the financial statements
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 2018 which comprise the consolidated income statement,
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
the consolidated statement of comprehensive income, the consolidated statement of financial position, the
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
consolidated statement of changes in equity, the consolidated statement of cash flows, the Company balance sheet,
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
the Company statement of changes in equity and notes to the financial statements, including a summary of
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
significant accounting policies. The financial reporting framework that has been applied in the preparation of the
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
group financial statements is applicable law and International Financial Reporting Standards (IFRSs) as adopted by
economic decisions of users taken on the basis of these financial statements.
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 FRS 101 Reduced
A further description of our responsibilities for the audit of the financial statements is located on the Financial
disclosure framework (United Kingdom Generally Accepted Accounting Practice).
Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
In our opinion:
Other matters which we are required to address
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 2018 and of the group’s profit for the year then ended;
Following the recommendation of the audit committee, we were appointed by the Chairman in 2001 to audit the
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the
financial statements for the year ended 31 December 2001 and subsequent financial periods. In respect of the year
European Union;
ended 31 December 2018 we were re-appointed by the members of the company at the annual general meeting held
on 25 June 2018. The period of total uninterrupted engagement is 18 years, covering the years ended 31 December
the parent company financial statements have been properly prepared in accordance with United Kingdom
2001 to 31 December 2018.
Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006;
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the parent
and, as regards the group financial statements, Article 4 of the IAS Regulation.
company and we remain independent of the Group and the parent company in conducting our audit.
Basis for opinion
Our audit opinion is consistent with the additional report to the audit committee.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Use of our report
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 in accordance with the ethical
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of
requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s
Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company
appropriate to provide a basis for our opinion.
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
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:
Anna Draper (Senior Statutory Auditor)
the disclosures in the annual report set out on pages 21-25 that describe the principal risks and explain how
For and on behalf of BDO LLP, Statutory Auditor
they are being managed or mitigated;
London
the directors’ confirmation set out on page 21 in the annual report that they have carried out a robust
United Kingdom
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;
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
24 April 2019
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
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
54
61
61
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Consolidated Income Statement
Consolidated Income Statement
For the year ended 31 December 2018
For the year ended 31 December 2018
Consolidated Income Statement
For the year ended 31 December 2018
Continuing operations
Continuing operations
Revenue
Revenue
Continuing operations
Cost of sales
Cost of sales
Gross profit
Gross profit
Revenue
Administration expenses
Administration expenses
Cost of sales
(Impairment losses) / reversal of
(Impairment losses) / reversal of
impairment
Gross profit
impairment
Operating profit
Administration expenses
Operating profit
Exchange losses
(Impairment losses) / reversal of
Exchange losses
impairment
Finance income
Finance income
Operating profit
Finance expense
Finance expense
Exchange losses
Profit before tax
Profit before tax
Finance income
Tax expense
Tax expense
Finance expense
Profit for the year
Profit for the year
Profit before tax
Attributable to:
Attributable to:
Tax expense
- Owners of the parent
- Owners of the parent
Profit for the year
- Non-controlling interests
- Non-controlling interests
Attributable to:
- Owners of the parent
Earnings per share for profit
Earnings per share for profit
attributable to the owners of the
- Non-controlling interests
attributable to the owners of the
parent during the year
parent during the year
- basic
- basic
Earnings per share for profit
- diluted
- diluted
attributable to the owners of the
parent during the year
Note
Note
3
3
Note
3
4
4
4
4
5
5
4
8
8
4
5
8
9
9
9
9
Result
Result
before
before
BA
BA
movement
movement
Result
$000
before
$000
250,859
BA
250,859
movement
(206,224)
(206,224)
$000
44,635
44,635
250,859
(9,368)
(9,368)
(206,224)
(4,339)
(4,339)
44,635
30,928
(9,368)
30,928
(1,250)
(1,250)
(4,339)
5,048
5,048
30,928
(1,511)
(1,511)
(1,250)
33,215
33,215
5,048
(13,633)
(13,633)
(1,511)
19,582
19,582
33,215
(13,633)
12,882
12,882
19,582
6,700
6,700
19,582
19,582
12,882
2018
2018
BA
BA
movement
2018
movement
$000
$000
-
BA
-
movement
(2,286)
(2,286)
$000
(2,286)
(2,286)
-
-
-
(2,286)
-
-
(2,286)
(2,286)
-
(2,286)
-
-
-
-
-
(2,286)
-
-
-
(2,286)
(2,286)
-
571
571
-
(1,715)
(1,715)
(2,286)
571
(1,469)
(1,469)
(1,715)
(246)
(246)
(1,715)
(1,715)
(1,469)
Result
Result
before
before
BA
BA
movement
movement
Result
$000
before
$000
291,907
BA
291,907
movement
(217,543)
(217,543)
$000
74,364
74,364
291,907
(8,611)
(8,611)
(217,543)
923
923
74,364
66,676
(8,611)
66,676
(272)
(272)
923
5,337
5,337
66,676
(1,753)
(1,753)
(272)
69,988
69,988
5,337
(23,451)
(23,451)
(1,753)
46,537
46,537
69,988
(23,451)
36,386
36,386
46,537
10,151
10,151
46,537
46,537
36,386
Total
Total
$000
$000
250,859
250,859
Total
(208,510)
(208,510)
$000
42,349
42,349
250,859
(9,368)
(9,368)
(208,510)
(4,339)
(4,339)
42,349
28,642
(9,368)
28,642
(1,250)
(1,250)
(4,339)
5,048
5,048
28,642
(1,511)
(1,511)
(1,250)
30,929
30,929
5,048
(13,062)
(13,062)
(1,511)
17,867
17,867
30,929
(13,062)
11,413
11,413
17,867
6,454
6,454
17,867
17,867
11,413
46,537
17,867
28.79cts
28.79cts
28.79cts
28.79cts
28.79cts
28.79cts
2017
2017
BA
BA
movement
2017
movement
$000
$000
-
BA
-
movement
(297)
(297)
$000
(297)
(297)
-
-
-
(297)
-
-
(297)
(297)
-
(297)
-
-
-
-
-
(297)
-
-
-
(297)
(297)
-
73
73
-
(224)
(224)
(297)
73
(172)
(172)
(224)
(52)
(52)
(224)
(224)
(172)
(52)
(224)
Total
Total
$000
$000
291,907
291,907
Total
(217,840)
(217,840)
$000
74,067
74,067
291,907
(8,611)
(8,611)
(217,840)
923
923
74,067
66,379
(8,611)
66,379
(272)
(272)
923
5,337
5,337
66,379
(1,753)
(1,753)
(272)
69,691
69,691
5,337
(23,378)
(23,378)
(1,753)
46,313
46,313
69,691
(23,378)
36,214
36,214
46,313
10,099
10,099
46,313
46,313
36,214
10,099
46,313
91.37cts
91.37cts
91.29cts
91.29cts
91.37cts
91.29cts
6,700
(246)
6,454
10,151
19,582
(1,715)
- basic
Earnings per share before BA movement are shown in note 9.
Earnings per share before BA movement are shown in note 9.
- diluted
9
9
Earnings per share before BA movement are shown in note 9.
The accompanying notes are an integral part of this consolidated income statement.
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 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
62
62
62
62
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2018
Consolidated Income Statement
For the year ended 31 December 2018
2018
$000
2017
$000
Profit for the year
Other comprehensive expenses:
Items may be reclassified to profit or loss:
Continuing operations
Note
Result
before
BA
movement
2018
BA
movement
Loss on exchange translation of foreign operations
$000
$000
17,867
46,313
2017
Result
before
BA
movement
BA
movement
Total
(29,550)
$000
$000
(1,718)
$000
Total
$000
Net other comprehensive expenses may be reclassified to profit or loss
Revenue
250,859
3
-
250,859
291,907
(29,550)
-
(1,718)
291,907
Cost of sales
Items not to be reclassified to profit or loss:
(206,224)
(2,286)
(208,510)
(217,543)
(297)
(217,840)
(2,286)
42,349
74,364
137
(297)
74,067
(9,948)
Gross profit
Unrealised gain / (loss) on revaluation of leasehold land, net of tax
Administration expenses
Remeasurement of retirement benefits plan, net of tax
(Impairment losses) / reversal of
(9,368)
44,635
(4,339)
impairment
-
-
(9,368)
(4,339)
Net other comprehensive income / (expenses) not being reclassified to profit or loss
30,928
Operating profit
Total other comprehensive expenses for the year, net of tax
(1,250)
Exchange losses
Total comprehensive (expenses) / income for the year
Finance income
(2,286)
5,048
4
-
-
(1,250)
5,048
28,642
(8,611)
894
923
1,031
66,676
(28,519)
(272)
(10,652)
5,337
-
-
(297)
-
-
-
(8,611)
(1,271)
923
(11,219)
66,379
(12,937)
(272)
33,376
5,337
(1,753)
Finance expense
Attributable to:
Profit before tax
- Owners of the parent
Tax expense
- Non-controlling interests
Profit for the year
Attributable to:
- Owners of the parent
- Non-controlling interests
Earnings per share for profit
attributable to the owners of the
parent during the year
- basic
- diluted
4
5
8
9
9
(1,511)
-
(1,511)
(1,753)
33,215
(2,286)
30,929
(13,633)
571
(13,062)
19,582
(1,715)
17,867
69,988
(11,527)
(23,451)
875
(297)
73
69,691
23,496
(23,378)
9,880
46,537
(10,652)
(224)
46,313
33,376
12,882
(1,469)
11,413
6,700
(246)
6,454
36,386
10,151
19,582
(1,715)
17,867
46,537
(172)
(52)
(224)
36,214
10,099
46,313
28.79cts
28.79cts
91.37cts
91.29cts
Earnings per share before BA movement are shown in note 9.
The accompanying notes are an integral part of this consolidated statement of comprehensive income.
The accompanying notes are an integral part of this consolidated income statement.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
63
63
62
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Consolidated Statement of Financial Position
As at 31 December 2018
Consolidated Income Statement
Company Number: 1884630
For the year ended 31 December 2018
Result
before
BA
movement
$000
250,859
44,635
(9,368)
(4,339)
Note
2018
11
12
18
BA
movement
$000
Total
$000
31.12.2018
$000
31.12.2017
$000
340,367
353,680
2017
11,147
11,020
Result
before
BA
movement
362,534
8,358
9,309
BA
movement
371,347
$000
$000
Total
$000
(206,224)
(2,286)
8
(208,510)
-
13
250,859
291,907
9,540
-
9,398
291,907
44,310
(217,543)
4,093
74,364
5,203
(2,286)
14
15
-
42,349
(9,368)
(8,611)
112,212
-
(4,339)
923
175,358
29,430
(297)
(217,840)
(297)
6,772
5,184
74,067
-
139,489
(8,611)
-
190,273
923
30,928
(2,286)
28,642
66,676
(297)
66,379
(1,250)
5,048
(1,511)
16
-
17
-
(1,250)
(11,078)
(272)
5,048
(20,083)
5,337
(5,626)
-
(1,511)
(1,753)
(37)
(8,594)
-
(16,805)
-
(8,637)
-
-
(272)
5,337
(1,753)
33,215
(2,286)
30,929
69,988
(36,824)
(297)
(34,036)
69,691
(13,633)
571
(13,062)
138,534
(23,451)
73
156,237
(23,378)
19,582
(1,715)
17,867
46,537
(224)
46,313
16
(8,203)
(19,281)
Non-current assets
Property, plant and equipment
Receivables
Deferred tax assets
Continuing operations
Note
3
4
4
5
8
Current assets
Revenue
Inventories
Tax receivables
Cost of sales
Biological assets
Gross profit
Trade and other receivables
Administration expenses
Cash and cash equivalents
(Impairment losses) / reversal of
impairment
Operating profit
Current liabilities
Loans and borrowings
Exchange losses
Trade and other payables
Finance income
Tax liabilities
Finance expense
Dividend payables
Profit before tax
Tax expense
Net current assets
Non-current liabilities
Profit for the year
Loans and borrowings
Attributable to:
Deferred tax liabilities
- Owners of the parent
Retirement benefits - net liabilities
- Non-controlling interests
12,882
6,700
Net assets
Earnings per share for profit
Issued capital and reserves attributable to owners of the parent
attributable to the owners of the
parent during the year
Share capital
- basic
Treasury shares
9
19,582
Share premium
- diluted
Capital redemption reserve
9
Revaluation reserves
Earnings per share before BA movement are shown in note 9.
Exchange reserves
Retained earnings
Non-controlling interests
Total equity
(1,469)
18
19
11,413
(20,040)
36,386
(8,244)
(22,390)
(172)
(9,022)
36,214
(246)
6,454
(1,715)
17,867
10,151
(36,487)
46,537
464,581
(52)
(50,693)
10,099
(224)
476,891
46,313
20
20
28.79cts
28.79cts
15,504
(1,171)
23,935
1,087
51,308
(245,170)
526,487
371,980
92,601
464,581
15,504
(1,171)
91.37cts
23,935
91.29cts
1,087
51,288
(221,435)
515,884
385,092
91,799
476,891
The financial statements were approved and authorised for issue by the Board of Directors on 23 April 2019 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 consolidated statement of financial position.
The accompanying notes are an integral part of this consolidated income statement.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
64
64
62
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Exchange
reserves
$000
Retained
earnings
$000
Non-
controlling
interests
$000
Total
$000
Total
equity
$000
(219,570)
482,288
363,111
82,150
445,261
-
-
-
(9,750)
(198)
(9,948)
(1,103)
(1,103)
(168)
(1,271)
(1,865)
(1,865)
-
(1,103)
(1,865)
(12,718)
147
(1,718)
(219)
(12,937)
-
-
36,214
36,214
10,099
46,313
(9,750)
(1,865)
35,111
23,496
9,880
33,376
-
-
(1,515)
(1,515)
(231)
(1,746)
(221,435)
5
6
515,884
2
6
385,092
91,799
476,891
-
-
(23,735)
(23,735)
-
-
775
20
775
117
119
137
894
-
(23,735)
(5,815)
(29,550)
775
11,413
(22,940)
11,413
(5,579)
(28,519)
6,454
17,867
(23,735)
12,188
(11,527)
875
(10,652)
-
(1,585)
(1,585)
(73)
(1,658)
(245,170)
526,487
371,980
92,601
464,581
.
t
n
e
m
e
a
t
t
s
Consolidated Statement of Changes in Equity
For the year ended 31 December 2018
Share
capital
$000
6
7
3
,
3
3
)
6
4
7
,
1
(
Treasury
shares
$000
1
9
8
,
6
7
4
7
3
1
Share
premium
$000
4
9
8
)
0
5
5
,
9
2
(
Capital
redemption
reserve
$000
7
6
8
,
7
1
)
9
1
5
,
8
2
(
)
2
5
6
,
0
1
(
Revaluation
reserves
$000
)
8
5
6
,
1
(
1
8
5
,
4
6
4
15,504
0
8
8
,
9
)
1
3
2
(
(1,171)
23,935
9
1
1
7
1
1
i
0
0
0
$
s
g
n
n
r
a
e
d
e
n
i
a
t
e
R
the year
Dividends paid
e
g
n
a
h
c
x
E
s
e
v
r
e
s
e
r
)
2
7
2
(
0
0
0
$
7
3
3
5
,
)
7
3
9
,
2
1
(
)
9
1
2
(
3
1
3
,
6
4
9
9
0
,
0
1
l
a
t
o
T
y
t
i
u
q
e
0
0
0
$
1
6
2
,
5
4
4
)
8
4
9
,
9
(
)
1
7
2
,
1
(
)
8
1
7
,
1
(
Balance at 31 December 2016
i
l
l
g
n
0
0
0
$
-
n
o
Items of other comprehensive income
N
-Unrealised loss on revaluation of leasehold
s
t
s
e
r
e
t
n
0
5
1
,
2
8
i
)
8
6
1
(
)
8
9
1
(
7
4
1
o
r
t
n
o
c
land, net of tax
-Remeasurement of retirement benefit plan, net
of tax
l
a
t
o
T
0
0
0
$
-(Loss) / Gain on exchange translation of
foreign operations
-
-
)
5
1
5
,
1
(
4
1
2
,
6
3
6
9
4
,
3
2
)
5
6
8
,
1
(
)
8
1
7
,
2
1
(
Total other comprehensive expenses
Profit for the year
Total comprehensive (expenses) / income for
-
-
)
3
0
1
,
1
(
4
1
2
,
6
3
1
1
1
,
5
3
)
0
5
7
,
9
(
)
3
0
1
,
1
(
)
3
0
1
,
1
(
1
1
1
,
3
6
3
8
8
2
,
2
8
4
)
5
6
8
,
1
4
(
1
2
6
3
,
)
2
7
1
(
6
8
3
6
3
,
-
-
-
)
0
7
5
,
9
1
2
(
)
3
5
7
1
(
,
8
3
0
1
6
,
-
Balance at 31 December 2017
Items of other comprehensive income
-Unrealised gain on revaluation of leasehold
-
-
-Remeasurement of retirement benefit plan,
1
9
6
9
6
,
)
8
7
3
3
2
(
,
)
7
9
2
(
3
7
3
1
3
6
4
,
)
0
5
7
9
(
,
)
4
2
2
(
-Loss on exchange translation of foreign
land, net of tax
l
-
0
0
0
$
s
e
v
r
e
s
e
r
n
o
i
t
a
u
a
v
e
R
operations
net of tax
-
)
5
6
8
,
1
(
9
9
0
0
1
,
)
0
5
7
9
(
,
)
2
5
(
3
1
3
6
4
,
-
)
4
2
2
(
)
0
5
7
9
(
,
-
-
-
-
Total other comprehensive income /
-
l
-
-
-
-
-
-
7
8
0
1
,
0
0
0
$
e
v
r
e
s
e
r
n
a
o
t
(expenses)
i
i
p
t
p
6
a
m
7
C
Profit for the year
6
e
6
d
6
e
r
)
3
5
7
1
(
7
3
3
5
)
2
7
2
(
,
,
,
8
8
9
9
6
,
)
1
5
4
3
2
(
,
7
3
5
6
4
,
Total comprehensive income / (expenses)
for the year
0
0
0
$
e
r
a
h
S
m
Dividends paid
u
m
e
r
p
)
0
5
2
1
(
2
4
6
8
2
8
4
0
5
i
,
,
,
5
3
9
3
2
,
)
1
1
5
1
(
,
9
2
9
0
3
,
Balance at 31 December 2018
)
2
6
0
3
1
(
,
7
6
8
7
1
,
-
-
-
3
1
4
1
1
,
-
-
-
-
-
1
5
1
0
1
,
7
3
5
6
4
,
-
-
-
4
5
4
6
,
7
6
8
7
1
,
)
6
8
2
2
(
,
-
s
e
r
a
h
s
-
0
0
0
$
-
)
1
7
1
1
(
,
1
7
5
)
6
8
2
2
(
,
-
)
5
1
7
1
(
,
-
-
)
6
4
2
(
)
-
9
6
4
1
(
,
-
)
5
1
7
1
(
,
-
-
y
r
u
s
a
e
r
T
Annual Report 2018 | Anglo-Eastern Plantations Plc
-
-
-
-
-
l
e
r
a
h
S
)
0
5
2
,
1
(
a
t
i
p
a
c
0
0
0
$
8
4
0
,
5
8
2
9
,
0
3
)
1
1
5
,
1
(
4
0
5
5
1
,
5
1
2
,
3
3
)
3
3
6
,
3
1
(
2
8
5
,
9
1
-
2
8
8
,
2
1
0
0
7
6
,
2
8
5
,
9
1
)
5
6
8
,
1
(
15,504
(1,171)
-
-
-
)
5
1
5
,
1
(
-
-
-
-
e
h
t
9
9
7
,
1
9
2
9
0
,
5
8
3
4
8
8
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
For the year ended 31 December 2018
For the year ended 31 December 2018
Cash flows from operating activities
Cash flows from operating activities
Profit before tax
Profit before tax
Adjustments for:
Adjustments for:
BA movement
BA movement
Gain on disposal of property, plant and equipment
Gain on disposal of property, plant and equipment
Depreciation
Depreciation
Retirement benefit provisions
Retirement benefit provisions
Net finance income
Net finance income
Unrealised loss in foreign exchange
Unrealised loss in foreign exchange
Property, plant and equipment written off
Property, plant and equipment written off
Impairment losses / (reversal of impairment)
Impairment losses / (reversal of impairment)
Operating cash flows before changes in working capital
Operating cash flows before changes in working capital
Increase in inventories
Increase in inventories
Increase in non-current, trade and other receivables
Increase in non-current, trade and other receivables
Increase in trade and other payables
Increase in trade and other payables
Cash inflows from operations
Cash inflows from operations
Interest paid
Interest paid
Retirement benefits paid
Retirement benefits paid
Overseas tax paid
Overseas tax paid
Net cash flows from operating activities
Net cash flows from operating activities
Investing activities
Investing activities
Property, plant and equipment
Property, plant and equipment
- purchases
- purchases
- sales
- sales
Interest received
Interest received
Net cash used in investing activities
Net cash used in investing activities
2018
2018
$000
$000
2017
2017
$000
$000
30,929
30,929
69,691
69,691
2,286
2,286
(21)
(21)
16,752
16,752
1,250
1,250
(3,537)
(3,537)
1,250
1,250
620
620
4,339
4,339
53,868
53,868
(746)
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(2,173)
(2,173)
4,148
4,148
55,097
55,097
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(36,508)
16,821
16,821
297
297
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16,284
16,284
1,520
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(3,584)
272
272
585
585
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84,124
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80,296
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42
42
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267
267
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Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
66
66
66
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
For the year ended 31 December 2018
For the year ended 31 December 2018
Consolidated Income Statement
For the year ended 31 December 2018
Note
Note
2018
2018
$000
$000
2017
2017
$000
$000
(1,515)
(1,515)
(231)
(231)
-
-
(6,197)
(6,197)
Total
(7,943)
(7,943)
$000
21,826
21,826
291,907
Financing activities
Financing activities
Dividends paid to the holders of the parent
Dividends paid to the holders of the parent
Dividends paid to non-controlling interests
Dividends paid to non-controlling interests
Drawdown of long-term loans
Drawdown of long-term loans
Repayment of existing long-term loans
Repayment of existing long-term loans
Continuing operations
Note
Net cash used in financing activities
Net cash used in financing activities
Result
before
BA
movement
2018
BA
movement
$000
$000
Result
before
BA
movement
$000
Total
$000
(1,585)
(1,585)
2017
(73)
(73)
-
-
BA
movement
(8,594)
(8,594)
(10,252)
(10,252)
(18,623)
(18,623)
$000
-
Net (decrease) / increase in cash and cash equivalents
Net (decrease) / increase in cash and cash equivalents
Revenue
3
250,859
-
250,859
291,907
Cost of sales
Cash and cash equivalents
Cash and cash equivalents
Gross profit
At beginning of year
At beginning of year
Administration expenses
Exchange losses
Exchange losses
(Impairment losses) / reversal of
At end of year
At end of year
impairment
Operating profit
Comprising:
Comprising:
Exchange losses
Cash at end of year
Cash at end of year
Finance income
Finance expense
Profit before tax
Tax expense
Profit for the year
Attributable to:
- Owners of the parent
- Non-controlling interests
Earnings per share for profit
attributable to the owners of the
parent during the year
- basic
- diluted
4
4
5
8
9
9
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(2,286)
(208,510)
(217,543)
(297)
(217,840)
44,635
(2,286)
42,349
74,364
(297)
139,489
139,489
(9,368)
(4,339)
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(8,611)
(8,654)
(8,654)
(4,339)
923
112,212
112,212
-
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74,067
118,176
118,176
(8,611)
(513)
(513)
139,489
139,489
923
30,928
(2,286)
28,642
66,676
(297)
66,379
(1,250)
5,048
(1,511)
-
-
-
(1,250)
28
28
5,048
(272)
112,212
112,212
5,337
(1,511)
(1,753)
-
-
-
139,489
139,489
(272)
5,337
(1,753)
33,215
(2,286)
30,929
69,988
(297)
69,691
(13,633)
571
(13,062)
(23,451)
73
(23,378)
19,582
(1,715)
17,867
46,537
(224)
46,313
12,882
(1,469)
11,413
6,700
(246)
6,454
36,386
10,151
19,582
(1,715)
17,867
46,537
(172)
(52)
(224)
36,214
10,099
46,313
28.79cts
28.79cts
91.37cts
91.29cts
Earnings per share before BA movement are shown in note 9.
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.
.
.
The accompanying notes are an integral part of this consolidated income statement.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
67
67
67
62
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
1 Basis of preparation
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,
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
been consistently applied to all years presented, except as detailed in the following paragraph.
Basis of preparation
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
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
(a)
The following amendments are effective for the first time for accounting periods beginning on or after 1 January 2018 in these financial
statements:
•
•
•
•
•
•
•
IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers
Classifications to IFRS 15 revenue from Contracts with Customers
Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions
Amendments to IFRS 4 Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts
Annual Improvements to IFRSs (2014 – 2016 Cycle)
IFRIC 22 Foreign Currency Transactions and Advance Consideration
All the new and amended standards and Interpretations listed above that will apply for the first time in these financial statements are
not expected to impact the Group as they are either not relevant to the Group’s activities or require accounting which is consistent with
the Group’s current accounting policies except IFRS 9 Financial Instruments (see note 15).
(b)
New standards, interpretations and amendments not yet effective.
Except for IFRS 17, the following new standards, interpretations and amendments are effective for periods beginning on 1 January
2019 and have not been applied in these financial statements:
•
•
•
•
•
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatments
Amendments to IFRS 9 Prepayment Features with Negative Compensation
Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures
Annual Improvements to IFRSs 2015-2017 Cycle (IFRS 3 Business Combinations and IFRS 11 Joint Arrangements, IAS 12
Income Taxes, and IAS 23 Borrowing Costs)
Amendments to IAS 19: Plan Amendment, Curtailment or Settlement
IFRS 17 Insurance Contracts (effective 1 January 2021)
•
•
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future
financial statements.
Annual Report 2018 | Anglo-Eastern Plantations Plc
68
68
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
2 Accounting policies
(a)
(b)
(c)
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries) made up to 31 December each year. 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 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.
Business combinations
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 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 date.
Foreign currency
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
currency) with the exception of the Company and its UK subsidiaries which are presented in US 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 Group’s products are ultimately link to the US Dollar.
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.
(d)
Revenue recognition
The Group derives its revenue from the sale of CPO, palm kernel, FFB, shell nut, biomass products, biogas products and rubber slab.
Revenue is recorded net of sales related taxes and levies, including export taxes and recognised when goods are delivered to a
purchaser. Delivery does not take place until goods are paid for. Sales of latex are recognised on signing of the sales contract, this
being the point at which control is transferred to the buyer.
The transacted price for each product is based on the market price or predetermined monthly contract value. There is no right of return
nor warranty provided to the customers on the sale of products and services rendered.
The Group has adopted IFRS 15 using the full retrospective method, there was no adjustment required to either year presented on
transition as there is no impact in terms of revenue recognition.
(e)
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.
(f)
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.
Annual Report 2018 | Anglo-Eastern Plantations Plc
69
69
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
2 Accounting policies - continued
(g)
(h)
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 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; and
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 11)
Biological assets (note 14)
For more detailed information in relation to the fair value measurement of the items above, please refer to the applicable notes.
(i)
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
Annual Report 2018 | Anglo-Eastern Plantations Plc
70
70
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
2 Accounting policies - continued
(j)
(k)
(l)
(m)
(n)
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.
Financial assets
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position. All the Group's receivables and loans are non-derivative financial assets with cash flows
that are solely payments of principal and interest. They are recognised at fair value at inception and subsequently at amortised cost as
this is what the Group considers to be most representative of the business model for these assets.
Cash and cash equivalents consist of cash in hand and short-term deposits at banks with an original maturity not exceeding three
months. Bank overdrafts are shown within loans and borrowings under current liabilities on the balance sheet.
The Group considers a trade receivable or other receivable as credit impaired when one or more events that have a detrimental
impact on the estimated cash flow have occurred. Trade and other receivables are written off when there is no expectation of recovery
based on the assessment performed. Where the receivables are written off, the Group continues to recover the receivables due.
Where recoveries are made, these are recognised in profit or loss.
The Group use three categories for those receivables which reflect their credit risk and how the loss provision is determined for those
categories. These include trade receivables using the simplified approach and debt instruments at amortised costs other than trade
receivables and financial guarantee contracts using the three-stage approach.
(o)
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 in the property, plant and equipment policy.
Trade and other payables are shown at fair value at recognition and subsequently at amortised cost.
(p)
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.
Annual Report 2018 | Anglo-Eastern Plantations Plc
71
71
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
2
Accounting policies - continued
(p)
Deferred tax - continued
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.
(q)
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); and
Any asset ceiling effects (interest inclusive).
(r)
(s)
(t)
Service costs are recognised in comprehensive income and include current and past service costs as well as gains and losses on
curtailments.
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), 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. Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.
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.
Financial guarantee contracts
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.
The details of financial guarantee contracts are disclosed in note 25.
Critical accounting estimates and judgements
The preparation of the Group financial statements in conformity with IFRS requires the use of estimates and assumptions that affect
the reported assets and liabilities and reported revenue and expenses. Actual results could differ from those estimates and
accordingly, they are reviewed on an on-going basis. The main areas in which estimates are used are the fair value of biological
assets, property, plant and equipment, deferred tax and retirement benefits.
Revisions to accounting estimates are recognised in the period in which the estimate is revised or the revision affects only that period,
or in the period of revision and future periods if the revision affects both current and future periods.
Assumptions regarding the valuation of property, plant and equipment and biological assets are set out in note 11 and note 14
respectively. The Group's policy with regard to impairment of such assets is set out above.
Details on deferred tax are given in note 18 and retirement benefits in note 19.
Annual Report 2018 | Anglo-Eastern Plantations Plc
72
72
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
3 Revenue
Disaggregation of Revenue
The Group has disaggregated revenue into various categories in the following table which is intended to:
•
•
Depict how the nature, amount and uncertainty of revenue and cash flows are affected by timing of revenue recognition; and
Enable users to understand the relationship with revenue segment information provided in note 6.
There is no right of return and warranty provided to the customers on the sale of products and services rendered.
Rubber
$000
Shell nut
$000
Biomass
products
$000
Biogas
products
$000
Others
$000
Total
$000
Year to 31 December 2018
Contract counterparties
Government
Non-government
- Wholesalers
Timing of transfer of goods
Delivery to customer premises
Delivery to port of departure
Customer collect from our mills / estates
Upon generation / others
Year to 31 December 2017
Contract counterparties
Government
Non-government
- Wholesalers
Timing of transfer of goods
Delivery to customer premises
Delivery to port of departure
Customer collect from our mills / estates
Upon generation / others
CPO, palm
kernel and
FFB
$000
-
245,595
245,595
2,696
-
242,899
-
245,595
-
792
792
792
-
-
-
792
-
2,047
2,047
-
-
2,047
-
2,047
-
-
-
286,164
286,164
3,306
-
282,858
-
286,164
1,305
1,305
1,305
-
-
-
1,305
2,214
2,214
-
-
2,214
-
2,214
4 Finance income and expense
Finance income
Interest receivable on:
Credit bank balances and time deposits
Finance expense
Interest payable on:
Development loans - (note 16)
Net finance income recognised in income statement
-
914
914
-
914
-
-
914
-
644
644
-
644
-
-
644
863
-
863
-
-
-
863
863
865
-
865
-
-
-
865
865
-
863
648
648
-
-
-
648
648
249,996
250,859
3,488
914
244,946
1,511
250,859
-
865
715
715
-
-
-
715
715
291,042
291,907
4,611
644
285,072
1,580
291,907
2018
$000
2017
$000
5,048
5,337
(1,511)
3,537
(1,753)
3,584
Annual Report 2018 | Anglo-Eastern Plantations Plc
73
73
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
5 Profit before tax
5 Profit before tax
Profit before tax is stated after charging
Profit before tax is stated after charging
Purchase of FFB
Purchase of FFB
Depreciation (note 11)
Depreciation (note 11)
Impairment losses / (Reversal of impairment) (note 11)
Impairment losses / (Reversal of impairment) (note 11)
Exchange losses
Exchange losses
Movement of inventories
Movement of inventories
Operating lease expense
Operating lease expense
- Property
- Property
Professional fees
Professional fees
Staff costs (note 7)
Staff costs (note 7)
Remuneration received by the Group’s auditor or associates of the Group’s auditor:
Remuneration received by the Group’s auditor or associates of the Group’s auditor:
- Audit of parent company
- Audit of parent company
- Audit of consolidated financial statements
- Audit of consolidated financial statements
- Audit of consolidated financial statements (prior year)
- Audit of consolidated financial statements (prior year)
- Audit related assurance service
- Audit related assurance service
- Audit of UK subsidiaries
- Audit of UK subsidiaries
Total audit services
Total audit services
Audit of overseas subsidiaries
Audit of overseas subsidiaries
- Malaysia
- Malaysia
- Indonesia
- Indonesia
Total audit services
Total audit services
Total auditor’s remuneration
Total auditor’s remuneration
6 Segment information
6 Segment information
2018
2018
$000
$000
104,210
104,210
16,752
16,752
4,339
4,339
1,250
1,250
(142)
(142)
528
528
1,422
1,422
37,991
37,991
5
5
137
137
(1)
(1)
6
6
13
13
160
160
19
19
86
86
105
105
265
265
2017
2017
$000
$000
127,795
127,795
16,284
16,284
(923)
(923)
272
272
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Description of the types of products and services from which each reportable segment derives its revenues
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
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 cultivation of plantation, the Group produced the crude palm oil and associated products such as palm kernel, shell
and Malaysia. From the cultivation of plantation, the Group produced the crude palm oil and associated products such as palm kernel, shell
nut, biomass products, biogas products and rubber.
nut, biomass products, biogas products and rubber.
Factors that management used to identify reportable segments in the Group
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
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
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
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 Officer, Finance Director and the Engineering Director.
General Manager in Malaysia, the Chief Executive Officer, the Chief Operating Officer, Finance Director and the Engineering Director.
Measurement of operating segment profit or loss, assets and liabilities
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
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.
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
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.
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.
The Group’s assets are allocated to segments based on geographical location.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
74
74
74
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
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6 Segment information
2018
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
7 Employees' and Directors' remuneration
Average numbers employed (primarily overseas) during the year:
- full-time
- part-time field workers
Staff costs (including Directors) comprise:
Wages and salaries
Social security costs
Retirement benefit costs
- United Kingdom
- Indonesia (note 19)
- Malaysia
2018
Number
2017
Number
6,324
10,859
17,183
2018
$000
34,846
1,399
64
1,651
31
37,991
5,694
9,997
15,691
2017
$000
31,608
1,282
62
1,922
52
34,926
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 49 - 53 of which certain information on page 53 has been audited.
Directors emoluments
Remuneration expense for key management personnel comprise:
Salaries
Social security costs
Retirement benefit costs
2018
$000
226
2018
$000
1,666
-
6
1,672
2017
$000
208
2017
$000
1,790
-
5
1,795
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 53.
8 Tax expense
Foreign corporation tax - current year
Foreign corporation tax - prior year
Deferred tax adjustment - origination and reversal of temporary differences (note 18)
Total tax charge for year
2018
$000
16,852
70
(3,860)
13,062
2017
$000
22,796
365
217
23,378
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 as explained below:
Profit before tax
Profit before tax multiplied by standard rate of UK corporation tax of 19% (2017: 19%)
Effects of:
Rate adjustment relating to overseas profits
Group accounting adjustments not subject to tax
Expenses not allowable for tax
Income not subject to tax
Under provision of prior year income tax
Utilisation of tax losses brought forward
Under provision of prior year deferred tax assets
Total tax charge for year
Annual Report 2018 | Anglo-Eastern Plantations Plc
2018
$000
30,929
5,877
1,905
1,212
4,994
(1,260)
70
90
174
13,062
2017
$000
69,691
13,241
4,093
167
4,474
(1,473)
365
36
2,475
23,378
78
78
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
8 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 payment 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 or more.
9 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 the 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
10 Dividends
Paid during the year
Final dividend of 4.0cts per ordinary share for the year ended 31 December 2017
(2016: 3.8cts equivalent)
2018
$000
12,882
(1,469)
11,413
Number
‘000
39,636
-
39,636
32.50cts
28.79cts
32.50cts
28.79cts
2017
$000
36,386
(172)
36,214
Number
‘000
39,636
33
39,669
91.80cts
91.37cts
91.72cts
91.29cts
2018
$000
2017
$000
1,585
1,515
Proposed final dividend of 3.0cts per ordinary share for the year ended 31 December 2018
(2017: 4.0cts)
1,189
1,585
The proposed dividend for 2018 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 2018 | Anglo-Eastern Plantations Plc
79
79
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
5 Profit before tax
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s
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Professional fees
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Remuneration received by the Group’s auditor or associates of the Group’s auditor:
O
- 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
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Total auditor’s remuneration
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6 Segment information
5
137
(1)
6
13
160
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$000
127,795
16,284
(923)
272
(179)
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1,211
34,926
5
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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 cultivation of plantation, the Group produced the crude palm oil and associated products such as palm kernel, shell
nut, biomass products, biogas products and rubber.
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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 Officer, Finance Director and the Engineering Director.
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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.
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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.
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Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
11 Property, plant and equipment - continued
11 Property, plant and equipment - continued
The Group engaged Muttaqin Bambang Purwanto Rozak Uswatun & Rekan (MBPRU) with its head office located in Jakarta, Indonesia to
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
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
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 2018, valuations were undertaken on the land of eight
obtained from ‘www.kjpp-mbpru.com’. For the year ended 31 December 2018, valuations were undertaken on the land of eight
subsidiaries. The quantum per hectare derived from the current valuation was then applied to the land value of the remaining companies in
subsidiaries. The quantum 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 2018. For the year ended 31 December 2017, independent
the same geographical location to derive the fair value of land as at 31 December 2018. For the year ended 31 December 2017, independent
land valuations were undertaken for twelve subsidiary companies in Indonesia and Malaysia. The same methodology to fair value land was
land valuations were undertaken for twelve 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 2017. Unplantable land was excluded in this exercise since it has
adopted to value the land of the remaining companies as at 31 December 2017. 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
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 $50,571,000 (2017: $50,336,000).
measured on a historical cost basis, their net book value would have been $50,571,000 (2017: $50,336,000).
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
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.
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:
Details of the information about the fair value hierarchy in relation to land at 31 December are as follows:
Land
Land
At 31 December 2018
At 31 December 2018
At 31 December 2017
At 31 December 2017
Level 1
Level 1
$000
$000
Level 2
Level 2
$000
$000
Level 3
Level 3
$000
$000
Fair value
Fair value
$000
$000
-
-
-
-
-
-
-
-
131,597
131,597
137,543
137,543
131,597
131,597
137,543
137,543
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.
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-
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:
relationship between key unobservable inputs and fair value are set out in the table below:
Item
Item
Valuation approach
Valuation approach
Inputs used
Inputs used
Inter-relationship
Inter-relationship
unobservable inputs and fair value
unobservable inputs and fair value
between
between
key
key
Land
Land
location
location
Selling prices of comparable land in
Selling prices of comparable land in
for
similar
similar
for
in key attributes. The
differences
in key attributes. The
differences
valuation model is based on price per
valuation model is based on price per
hectare.
hectare.
adjusted
adjusted
Selling prices of comparable
Selling prices of comparable
land.
land.
The higher the selling price, the higher
The higher the selling price, the higher
the fair value.
the fair value.
Location, legal title, land area,
Location, legal title, land area,
land type and topography.
land type and topography.
These are qualitative
These are qualitative
require
significant
significant
require
professional valuer, MBPRU.
professional valuer, MBPRU.
inputs which
inputs which
by
by
judgement
judgement
There were no changes to the valuation techniques during the year.
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 fair value measurement is based on the above items’ highest and best use, which does not differ from their actual use.
The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is based on the percentage of immature
The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is based on the percentage of immature
area of each estate against total planted area in the estate. The average capitalisation rate is 10.4% (2017: 13.2%). The estates include
area of each estate against total planted area in the estate. The average capitalisation rate is 10.4% (2017: 13.2%). The estates include
$160,000 (2017: $235,000) of interest and $4,245,000 (2017: $3,727,000) of overheads capitalised during the year in respect of expenditure
$160,000 (2017: $235,000) of interest and $4,245,000 (2017: $3,727,000) of overheads capitalised during the year in respect of expenditure
on estates under development.
on estates under development.
The Indonesian authorities have granted certain land exploitation rights and operating permits for the estates. In the case of established
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 2010 and 2044 with rights of renewal thereafter. As of estates in
estates in North Sumatera, these rights and permits expire between 2010 and 2044 with rights of renewal thereafter. As of estates in
Bengkulu land titles were issued between 1994 and 2016 and the titles expire between 2028 and 2051 with rights of renewal thereafter for
Bengkulu land titles were issued between 1994 and 2016 and the titles expire between 2028 and 2051 with rights of renewal thereafter for
two consecutive periods of 25 and 35 years respectively. In Riau, land titles were issued in 2003 and expire in 2033. In Kalimantan, land
two consecutive periods of 25 and 35 years respectively. In Riau, land titles were issued in 2003 and expire in 2033. In Kalimantan, land
titles were issued between 2014 and 2017 and expire between 2019 and 2049. In Bangka, land titles were issued in 2018 and expire
titles were issued between 2014 and 2017 and expire between 2019 and 2049. In Bangka, land titles were issued in 2018 and expire
between 2021 and 2053. The land title for South Sumatera were issued between 2011 and 2015.
between 2021 and 2053. The land title for South Sumatera were issued between 2011 and 2015.
Subject to compliance with the laws and regulations of Indonesia, land rights are usually renewed. The cost of renewing the land rights is not
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. On the basis that the Group has an indefinite right to renew, leasehold land is not depreciated.
significant. On the basis that the Group has an indefinite right to renew, leasehold land is not depreciated.
The land title of the estate in Malaysia is a long-term lease expiring in 2084.
The land title of the estate in Malaysia is a long-term lease expiring in 2084.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
81
81
81
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
11 Property, plant and equipment - continued
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 assessment is based on each cash generating unit (“CGU”) which is defined as each
estate. In 2017, the impairment surplus of $1,738,000 was due to the increase in CPO price. The impairment loss of $3,418,000 recognised
in 2018 was primarily due to the higher cost of new planting and the decrease in CPO price.
Given the nature of the business, the recoverable amount of the Group’s plantations in 2018 was based on value in use calculations on the
basis that it will be higher than fair value less cost to sell. The recoverable amount of the Group’s plantations carried at value in use was
$21,514,000 (2017: $27,224,000).
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 18.7% (2017: 17.4%). 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 following table sets out the key assumptions in the valuation along with the impact on the impairment charge of a 1%
change:
CPO price - decrease of 1%
Pre-tax discount rate - increase by 1%
Inflation rate - increase by 1%
2018
Assumption
applied
Increase in
impairment
$000
2017
Assumption
applied
$600/mt
18.7%
4.66%
975
1,725
1,620
$725/mt
17.4%
5.41%
Increase in
impairment
$000
305
877
518
The plantations carried at value in use are classified as Level 3 in the fair value hierarchy.
12 Receivables: non-current
Due from non-controlling interests
Due from cooperatives under Plasma scheme
2018
2017
Book value
$000
Fair value
$000
Book value
$000
Fair value
$000
2,965
8,055
11,020
1,833
6,240
8,073
3,161
5,197
8,358
1,882
4,621
6,503
The non-controlling interests in PT Alno Agro Utama and PT Cahaya Pelita Andhika have acquired their interests on deferred terms (see
note 25, Credit risk). In 2017, there was 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 which was similarly acquired on deferred terms (see
note 25, Credit risk).
Plasma scheme is an initiative by the Indonesian Government that mandated plantation owners to allocate a percentage of their land
acquired to the surrounding community and to further provide financial and technical assistance to cultivate oil palm on that land to improve
the income and welfare of the community or cooperatives. During the year, certain subsidiary companies have funded plasma of $8,136,000
(2017: $5,197,000) which is recoverable from the cooperatives.
The fair values 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
Due from non-controlling
interests
Due
under Plasma scheme
from cooperatives
Based on cash flows discounted using
current lending rate of 6% (2017: 6%).
Based on cash flows discounted using
an estimated current lending rate of
6.58% (2017: 6.05%).
Discount rate
Discount rate
The details of the expected credit losses {“ECL”} are disclosed in note 15.
Inter-relationship
unobservable inputs and fair value
between
key
The higher the discount rate, the lower the
fair value.
The higher the discount rate, the lower the
fair value.
Annual Report 2018 | Anglo-Eastern Plantations Plc
82
82
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
13 Inventories
Estate and mill consumables
Processed produce for sale
14 Biological assets
At 1 January
Changes in fair value less cost to sell
Decreases due to harvest
Exchange translations
At 31 December
2018
$000
5,916
3,624
9,540
2018
$000
6,772
92,758
(95,044)
(393)
4,093
2017
$000
4,252
5,146
9,398
2017
$000
7,107
111,419
(111,716)
(38)
6,772
The valuation of the unharvested FFB was carried out internally for each plantation of the Group and confirmed by external valuers. 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 prior to the balance sheet date. The weight was 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 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 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:
Item
Valuation approach
Inputs used
Inter-relationship between key unobservable
inputs and fair value
Biological assets
Unharvested produce
-
Based on FFB weight
multiplied by the sum of
FFB selling price
less
harvesting cost
FFB weight
The higher the weight, the higher the fair value
FFB selling price
The higher the selling price, the higher the fair value
Harvesting cost
The higher the harvesting cost, the lower the fair value
15 Trade and other receivables
Trade receivables
Other receivables
Prepayments and accrued income
2018
$000
1,123
3,638
442
5,203
2017
$000
1,574
3,308
302
5,184
The carrying amount of trade and other receivables classified as amortised cost approximates fair value.
As at 31 December 2018, trade receivables of $860,000 (2017: $637,000) were past due but not impaired. They were related to the
customers with no default history and partially secured by bank guarantee. The ageing analysis of trade receivables of the Group are as
follows:
Neither past due nor impaired
Past due but not impaired
31 to 60 days
61 to 90 days
91 to 120 days
> 120 days
Annual Report 2018 | Anglo-Eastern Plantations Plc
2018
$000
263
518
154
146
42
860
1,123
2017
$000
937
378
259
-
-
637
1,574
83
83
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
15 Trade and other receivables - continued
15 Trade and other receivables - continued
The Group applies the IFRS 9 simplified approach to measure ECL using a lifetime ECL provision for trade receivables. To measure ECL on
The Group applies the IFRS 9 simplified approach to measure ECL using a lifetime ECL provision for trade receivables. To measure ECL on
a collective basis, trade receivables are grouped based on similar credit risk and age.
a collective basis, trade receivables are grouped based on similar credit risk and age.
The expected loss rate is based on a combination of the Group’s historical credit losses experienced over the 10-year period prior to the year
The expected loss rate is based on a combination of the Group’s historical credit losses experienced over the 10-year period prior to the year
end and forward-looking information on macroeconomic factors affecting the Group’s customers. The historical loss rate for trade receivables
end and forward-looking information on macroeconomic factors affecting the Group’s customers. The historical loss rate for trade receivables
is considered to be 0% hence no ECL have been recognised.
is considered to be 0% hence no ECL have been recognised.
The Group assesses the ECL associated with its debt instruments carried at amortised cost on a forward-looking basis using the three stage
The Group assesses the ECL associated with its debt instruments carried at amortised cost on a forward-looking basis using the three stage
approach. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
approach. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
The Group considers the probability of default upon initial recognition of an asset and whether there has been significant increase in credit
The Group considers the probability of default upon initial recognition of an asset and whether there has been significant increase in credit
risk on an on-going basis at each reporting date. To assess whether there is a significant increase in credit risk, the Group compares the risk
risk on an on-going basis at each reporting date. To assess whether there is a significant increase in credit risk, the Group compares the risk
of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The Group considers
of default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The Group considers
available, reasonable and supportable forward-looking information, such as:
available, reasonable and supportable forward-looking information, such as:
-
-
-
-
-
-
internal credit rating;
internal credit rating;
external credit rating (as far as available);
external credit rating (as far as available);
actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant
actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant
change to the debtor’s ability to meet its obligation;
change to the debtor’s ability to meet its obligation;
significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit
significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit
enhancements; or
enhancements; or
significant changes in the expected performance or behaviour of the debtor, including changes in the payment status of the debtor.
-
-
significant changes in the expected performance or behaviour of the debtor, including changes in the payment status of the debtor.
There has not been a significant increase in credit risk since initial recognition therefore 12-month ECL have been recognised at 1% on the
There has not been a significant increase in credit risk since initial recognition therefore 12-month ECL have been recognised at 1% on the
majority of balances, unless it has been considered there to be no ECL.
majority of balances, unless it has been considered there to be no ECL.
Movements on the Group’s loss provision on current and non-current other receivables and financial guarantee contracts are as follows:
Movements on the Group’s loss provision on current and non-current other receivables and financial guarantee contracts are as follows:
2017
2017
$000
$000
-
-
-
-
-
-
At 1 January
At 1 January
Loss provision during the year
Loss provision during the year
At 31 December
At 31 December
At 31 December 2018, the expected loss provision for other receivables is as follows:
At 31 December 2018, the expected loss provision for other receivables is as follows:
2018
2018
$000
$000
-
-
308
308
308
308
-
-
2018
2018
Other receivables
Other receivables
Receivables: non-current (note 12)
Receivables: non-current (note 12)
- Due from non-controlling interests
- Due from non-controlling interests
- Due from cooperatives under Plasma scheme
- Due from cooperatives under Plasma scheme
Financial guarantee contracts (note 24)
Financial guarantee contracts (note 24)
Expected
Expected
credit losses
credit losses
rate
rate
1%
1%
1%
1%
1%
1%
1%
1%
Gross carrying
Gross carrying
amount
amount
$000
$000
3,673
3,673
2,995
2,995
8,136
8,136
14,804
14,804
-
-
14,804
14,804
Loss
Loss
provision
provision
$000
$000
(35)
(35)
(30)
(30)
(81)
(81)
(146)
(146)
(162)
(162)
(308)
(308)
Net carrying
Net carrying
amount
amount
$000
$000
3,638
3,638
2,965
2,965
8,055
8,055
14,658
14,658
-
-
14,658
14,658
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
84
84
84
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
16 Loans and borrowings
Non-current
Long-term loan (a)
Long-term loan (b)
Current
Long-term loan (a)
Long-term loan (b)
Total loans and borrowings
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
2018
2017
Book value
$000
Fair value
$000
Book value
$000
Fair value
$000
-
8,203
8,203
1,312
9,766
11,078
19,281
8,203
-
8,203
-
7,742
7,742
1,312
9,766
11,078
18,820
1,312
17,969
19,281
1,563
7,031
8,594
1,233
17,428
18,661
1,563
7,031
8,594
27,875
27,255
11,078
8,203
19,281
(a)
(b)
A subsidiary company, PT Hijau Pryan Perdana, has obtained a long-term loan of $10 million for a period of seven years (including
two years grace repayment period) to support the capital expenditure 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 as to
utilise for repayment of amount due to related parties. It is secured by the subsidiary company’s land with a carrying amount of $5.9
million measured at fair value and its plantation with a carrying amount of $6.6 million as at 31 December 2018. The loan is also
guaranteed by PT Tasik Raja and by the Company. This loan bears interest at a rate based on Base Lending Rate which is payable
quarterly in arrears. Average interest rate in 2018 was about 6.48% (2017: 5.91%). 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 million for a period of eight years
(including four years grace repayment period) to support the capital expenditure 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 $5.3 million measured at fair value and its
plantation with a carrying amount of $23.4 million as at 31 December 2018 and is guaranteed by the Company. This loan bears
interest at a rate based on SIBOR + 4.5% + Liquidity Premium which is payable quarterly in arrears. Average interest rate in 2018
was about 6.68% (2017: 6.18%). The loan is repayable from 30 December 2016 to 30 September 2020.
All the loans and borrowings are denominated in USD. The effect of changes in foreign exchange rates is disclosed in note 25.
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:
2018
2017
Book value
$000
Fair value
$000
Book value
$000
Fair value
$000
Loans and borrowings
19,281
18,820
27,875
27,255
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.
17 Trade and other payables
Trade payables
Other payables
Accruals
2018
$000
7,483
4,724
7,876
20,083
2017
$000
6,028
3,443
7,334
16,805
The carrying amount of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.
Annual Report 2018 | Anglo-Eastern Plantations Plc
85
85
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
18 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
2018
$000
(13,081)
3,059
571
230
(45)
(298)
671
(8,893)
2017
$000
(16,612)
(494)
73
204
3,325
424
(1)
(13,081)
The deferred tax asset and liability, together with the amounts recognised in profit or loss and other comprehensive income are detailed as
follows:
2018
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)
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)
Asset
$000
-
2,056
-
12,459
-
111
14,626
(3,479)
11,147
-
2,250
-
10,524
-
194
12,968
(3,659)
9,309
Liability
$000
(22,316)
-
(1,022)
-
(292)
111
(23,519)
3,479
(20,040)
(23,953)
-
(1,692)
-
(403)
(1)
(26,049)
3,659
(22,390)
Net
$000
(22,316)
2,056
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A deferred tax asset has not been recognised for the following items:
Unutilised tax losses
17,228
15,511
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 their budget. However, the Group does not recognise the tax losses in
certain companies within the Group as tax assets as the future recoverability of losses of these companies cannot be certain.
Annual Report 2018 | Anglo-Eastern Plantations Plc
86
86
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
19 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 requirements on the Company to create a fund asset to pay the
defined benefit obligations.
The first scheme is a 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 the 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
2018
2017
8.0%
8.5%
8.5%
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10% TMI3
8.0%
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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 the form of Long Service Award. Employees who have 10, 20 or 25 years of
continuous service will receive Long Service Award amounting up to 2 months of basic salary.
Service cost
Current service cost
Past service cost
Net interest expense
Actuarial (loss) / gain
Total employee benefits expense
2018
$000
1,538
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1,651
2017
$000
1,339
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587
67
1,922
Annual Report 2018 | Anglo-Eastern Plantations Plc
87
87
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
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Description of the types of products and services from which each reportable segment derives its revenues
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Annual Report 2018 | Anglo-Eastern Plantations Plc
74
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Notes to the Consolidated Financial Statements
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Description of the types of products and services from which each reportable segment derives its revenues
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Annual Report 2018 | Anglo-Eastern Plantations Plc
74
89
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
19 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
Mutual funds
Cash / deposits
2018
$000
-
28
214
242
351
3,730
4,323
2017
$000
108
80
233
421
-
3,893
4,314
(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
(1,178)
1,360
52
1,312
(1,237)
(56)
The weighted average duration of the defined benefit obligation is 15.55 years (2017: 15.54 years). The following contributions, which reflect
expected future service, as appropriate are expected to be paid:
Year
2019
2020 to 2023
2024 to 2028
after 2028
Total
20 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 (769.0p/share)
End of year (568.0p/share)
$000
470
7,226
9,777
104,703
122,176
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
2018
Number
339,900
-
339,900
2017
Number
339,900
-
339,900
Cost
2018
$’000
(1,171)
-
(1,171)
Cost
2017
$’000
(1,171)
-
(1,171)
$’000
3,531
2,465
No treasury share was purchased in 2018 (2017: Nil).
All 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 2018 | Anglo-Eastern Plantations Plc
90
90
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
21 Ultimate controlling shareholder
At 31 December 2018, Genton International Limited (“Genton”), a company registered in Hong Kong, held 20,247,814 (2017: 20,247,814)
shares of the Company representing 51.1% (2017: 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.
22 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 $32,517 (2017: $34,809). The services provided are on an arm’s length basis.
The balance outstanding at the year end was $6,999 (2017: 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 $314,259 (2017: $281,664). There was no balance outstanding at the year end (2017: Nil).
23 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.
24 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
2018
$000
285
22,667
2017
$000
183
41,583
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 12, in relation to a loan taken by KBSS from PT Bank Mandiri (Persero) Tbk. of
Rp226.02 billion ($15.6 million) (2017: Rp226.02 billion, $16.7 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 total carrying amount of $12.6 million as at 31
December 2018 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 2018 as security under the agreement while the Company
provides corporate guarantee amounting to Rp 8.75 billion ($0.6 million).
The Group’s loss provision on financial guarantee is $162,000. The details of the ECL are disclosed in note 15.
Annual Report 2018 | Anglo-Eastern Plantations Plc
91
91
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
25 Disclosure of financial instruments and other risks
The Group's principal financial instruments comprise cash, short and long-term bank loans, trade receivables and payables and receivables
from local partners in respect of their investments.
The Group’s accounting classification of each class of financial asset and liability at 31 December 2018 and 2017 were:
2018
Non-current receivables
Trade and other receivables
Cash and cash equivalent
Loans and borrowings due within one year
Trade and other payables
Loans and borrowings due after one year
2017
Non-current receivables
Trade and other receivables
Cash and cash equivalent
Loans and borrowings due within one year
Trade and other payables
Loans and borrowings due after one year
Amortised
cost
$000
11,020
4,761
112,212
-
-
-
127,993
Financial
liabilities at
amortised cost
$000
Total carrying
value
$000
-
-
-
(11,078)
(20,083)
(8,203)
(39,364)
11,020
4,761
112,212
(11,078)
(20,083)
(8,203)
88,629
Amortised cost
$000
8,358
4,882
139,489
-
-
-
152,729
Financial
liabilities at
amortised cost
$000
Total carrying
value
$000
-
-
-
(8,594)
(16,805)
(19,281)
(44,680)
8,358
4,882
139,489
(8,594)
(16,805)
(19,281)
108,049
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,
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.
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:
- Non-current receivables (note 12); and
- Loans and borrowings (note 16).
The principal financial risks to which the Group is exposed are:
- commodity selling price changes;
- 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.
The Board is directly responsible for setting policies in relation to financial risk management and monitors the levels of the main risks through
review of regular operational reports.
Commodity selling prices
The Group does not normally contract to sell produce more than one month ahead.
Currency risk
Most of the Group's operations are in Indonesia. The Company and Group accounts are prepared in US Dollar which is not the functional
currency of the operating subsidiaries. The Group does not hedge its net investment in its overseas subsidiaries and is therefore exposed to
a currency risk on that investment. The historical cost of investment (including intercompany loans) by the parent in its subsidiaries amounted
to $57,989,000 (2017: $61,876,000), while the balance sheet value of the Group's share of underlying assets at 31 December 2018
amounted to $371,980,000 (2017: $385,092,000).
Annual Report 2018 | Anglo-Eastern Plantations Plc
92
92
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
25 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 4.85% higher than on US Dollar deposits whereas interest rate for local currency
borrowing was about 4.09% higher as compared to US Dollar borrowing. The unmatched balance at 31 December 2018 is represented by
the $806,000 shown in the table below (2017: $11,815,000). If the Group's net cash position continues to improve then US Dollar cash
balances will continue to increase through 2019.
The table below shows the net monetary assets and liabilities of the Group as at 31 December 2018 and 2017 that were not denominated in
the operating or functional currency of the operating unit involved.
Functional currency of Group operation
2018
Rupiah
US Dollar
Ringgit
Total
2017
Rupiah
US Dollar
Ringgit
Total
Net foreign currency assets/(liabilities)
US Dollar
$000
Sterling
$000
(1,921)
-
1,115
(806)
(13,032)
-
1,217
(11,815)
-
991
-
991
-
1,663
-
1,663
Total
$000
(1,921)
991
1,115
185
(13,032)
1,663
1,217
(10,152)
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to foreign exchange risk. The impact on
profit before tax and equity if Ringgit or Rupiah strengthen or weaken by 10% against US Dollar is:
2018
2017
Carrying
Amount
US$
$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
11,020
4,761
112,212
(730)
(246)
(10,093)
(11,078)
(20,083)
(8,203)
1,007
1,713
746
(7,603)
892
301
12,335
(1,231)
(2,094)
(911)
9,292
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
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 2018 | Anglo-Eastern Plantations Plc
93
93
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
25 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 2018, the Group had the following loans and
facilities.
Indonesia:
US Dollar denominated – long-term loan
19,281
45,000
2019 - 2020 (note 16)
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
2018
$000
19,281
1,275
20,556
12,079
8,477
-
-
20,556
2017
$000
27,875
2,710
30,585
10,124
12,004
8,457
-
30,585
Forecasts prepared in December 2018 indicate that the Group has sufficient funds to meet its development plans and financial commitments
through 2019.
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 2018, 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 16.
Financial Assets
Cash and cash equivalents
Financial Liabilities
Borrowings due within one year
Borrowings due after one year
Total (decrease) / increase
2018
2017
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
112,212
(1,053)
1,053
139,489
(1,046)
1,046
(11,078)
(8,203)
111
82
(860)
(111)
(82)
860
(8,594)
(19,281)
86
193
(767)
(86)
(193)
767
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 2018 | Anglo-Eastern Plantations Plc
94
94
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
25 Disclosure of financial instruments and other risks - 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
December were:
2018
Sterling
US Dollar
Rupiah
Ringgit
Total
2017
Sterling
US Dollar
Rupiah
Ringgit
Total
Total
$000
Fixed rate
$000
Variable rate
$000
No interest
$000
991
22,556
99,286
5,160
127,993
1,663
20,214
124,648
6,204
152,729
-
2,995
-
-
2,995
-
3,161
-
-
3,161
19
11,660
89,368
4,292
105,339
20
6,042
93,698
4,867
104,627
972
7,901
9,918
868
19,659
1,643
11,011
30,950
1,337
44,941
Long-term receivables of $2,995,000 (2017: $3,161,000) comprise US Dollar denominated amounts due from non-controlling interests as
described in note 12 on which interest is due at a fixed rate of 6%.
Average US Dollar deposit rate in 2018 was 1.88% (2017: 1.25%) and Rupiah deposit rate was 6.73% (2017: 4.56%).
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:
Total
$000
Fixed rate
$000
Variable rate
$000
No interest
$000
2018
Sterling
US Dollar
Rupiah
Ringgit
Total
2017
Sterling
US Dollar
Rupiah
Ringgit
Total
-
(20,383)
(18,620)
(361)
(39,364)
-
(28,869)
(15,470)
(341)
(44,680)
-
-
-
-
-
-
-
-
-
-
-
(19,281)
-
-
(19,281)
-
(27,875)
-
-
(27,875)
-
(1,102)
(18,620)
(361)
(20,083)
-
(994)
(15,470)
(341)
(16,805)
Weighted average interest rate on variable rate borrowings was 6.66% in 2018 (2017: 6.16%).
Credit risk
The Group has two types of financial assets that are subject to the ECL model:
•
•
Trade receivables for sales of goods and services; and
Debt instruments carried at amortised cost.
The Group also has financial guarantee contracts for which the ECL model is also applicable.
While cash and cash equivalents are also subject to the impairment requirements as set out in IFRS 9, there is no impairment loss identified
given the financial strength of the financial institutions in which the Group have a relationship with. 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 Indonesia, independently rated banks with a
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 of this report.
Annual Report 2018 | Anglo-Eastern Plantations Plc
95
95
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
25 Disclosure of financial instruments and other risks - continued
Credit risk – continued
The Group use three categories for those receivables which reflect their credit risk and how the loss provision is determined for those
categories.
(i)
Trade receivables using the simplified approach
The Group applies the simplified approach under IFRS 9 to measure ECL, which uses a lifetime expected loss provision for all trade
receivables. To measure the expected losses, trade receivables have been grouped based on shared credit risk characteristics and
days past due.
The expected loss rates are based on historical payment profiles of sales and the corresponding historical credit losses experienced
during these periods. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic
factors (such as palm product prices and crude oil price) affecting the ability of the customers to settle the receivables. The historical
loss rates will be adjusted based on the expected changes in these factors. No significant changes to estimation techniques or
assumptions were made during the reporting period.
In determining the expected loss rates, the Group also takes into consideration the collateral or payments received in advance, as set
out below:
Receivables are generally collected within the credit term and therefore there is minimal exposure to doubtful debts. Upfront payments
are also collected for certain sales made by the Group’s subsidiaries in Indonesia.
The Group’s maximum exposure to credit risk and loss provision recognised as at 31 December 2018 is disclosed in note 15. The
remaining amount in which no ECL provision was recognised is deemed to be recoverable, with low probability of default.
In respect of the previous financial years, the impairment of trade receivables was assessed based on the incurred loss model.
Individual receivables were assessed to determine whether there was objective evidence that a loss event had occurred and an
provision for impairment was recognised accordingly when the loss event occurred. Information in respect of the provision for
impairment loss in the prior financial year is disclosed in note 15.
(ii)
Debt instruments at amortised costs other than trade receivables using the three-stage approach
All of the Group’s debt instruments at amortised costs other than trade receivables are considered to have a low credit risk, as these
were considered to be performing, have low risks of default and historically there were minimal instances where contractual cash flow
obligations have not been met.
The maximum exposure to credit risks for debt instruments at amortised cost other than trade receivables are represented by the
carrying amounts recognised in the statements of financial position.
(iii)
Financial guarantee contracts using the three-stage approach
All of the financial guarantee contracts are considered to be performing, have low risks of default and historically there were no
instances where these financial guarantee contracts were called upon by the parties of which the financial guarantee contracts were
issued to. Accordingly,12-month ECL have been recognised at 1% on the financial guarantee contracts and disclosed in note 24.
Information regarding other non-current assets and trade and other receivables that are neither past due nor impaired is disclosed in notes
12 and 15 respectively. Amounts receivable from local partners, amounting to $2,995,000 (2017: $3,161,000), in relation to their investments
in operating subsidiaries are secured on those investments and are repayable from their share of dividends from those subsidiaries.
Amounts receivable due from cooperatives under Plasma scheme, as disclosed in note 12, are unsecured and are to be repaid from FFB
supplied by the cooperatives.
Deposits with banks and other financial institutions, investment securities and derivatives that are neither past due nor impaired are placed
with, or entered into, with reputable financial institutions or companies with high credit ratings and no history of default.
As the Group does not hold any collateral, the maximum exposure to credit risk for each class of financial instrument is the carrying amount
presented on the statement of financial position, except in the case of the financial guarantee contracts offered by two subsidiaries to
cooperatives in order for them to obtain bank loans in 2013 and 2017, which are not held on the statement of financial position of the Group.
See note 24.
Annual Report 2018 | Anglo-Eastern Plantations Plc
96
96
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
25 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 $371,980,000 at 31 December 2018 (2017: $385,092,000).
Group policy presently attempts to fund development from self-generated funds and loans and not from the issue of new share capital. At 31
December 2018, the Group had no net borrowings (2017: Nil) but, depending on market conditions, the Board is prepared for the Group to
have net borrowings.
Plantation industry risk
Please refer to pages 21 - 25.
Annual Report 2018 | Anglo-Eastern Plantations Plc
97
97
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
26 Subsidiary companies
The principal subsidiaries of the Company all of which have been included in these consolidated financial statements are as follows:
Country of
incorporation and
principal place of
business
Proportion of
ownership interest at
31 December
Non-controlling
interests ownership /
voting interest at 31
December
2018
2017
2018
2017
Name
Principal sub-holding company
Anglo-Indonesian Oil Palms Limited
Management company
Indopalm Services Limited
Operating companies
Anglo-Eastern Plantations (M) Sdn Bhd
Anglo-Eastern Plantations Management Sdn Bhd
PT Alno Agro Utama
PT Anak Tasik
PT Bangka Malindo Lestari
PT Bina Pitri Jaya
PT Cahaya Pelita Andhika
PT Empat Lawang Agro Perkasa
PT Hijau Pryan Perdana
PT Kahayan Agro Plantation
PT Karya Kencana Sentosa Tiga
PT Mitra Puding Mas
PT Musam Utjing
PT Riau Agrindo Agung
PT Sawit Graha Manunggal
PT Simpang Ampat
PT Tasik Raja
PT United Kingdom Indonesia Plantations
PT Anglo-Eastern Plantations Management
Indonesia
Dormant companies
United Kingdom
100%
100%
United Kingdom
100%
100%
Malaysia
Malaysia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
55%
100%
90%
100%
95%
80%
90%
95%
80%
95%
95%
90%
75%
95%
82%
100%
80%
75%
100%
55%
100%
90%
100%
95%
80%
90%
95%
80%
95%
95%
90%
75%
95%
82%
100%
80%
75%
100%
-
-
45%
-
10%
-
5%
20%
10%
5%
20%
5%
5%
10%
25%
5%
18%
-
20%
25%
-
-
-
-
-
-
-
45%
-
10%
-
5%
20%
10%
5%
20%
5%
5%
10%
25%
5%
18%
-
20%
25%
-
-
-
-
-
The Ampat (Sumatra) Rubber Estate (1913)
United Kingdom
100%
100%
Limited
Gadek Indonesia (1975) Limited
Mergerset (1980) Limited
Musam Indonesia Limited
United Kingdom
United Kingdom
United Kingdom
100%
100%
100%
100%
100%
100%
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
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 are disclosed below:
Subsidiaries by country
UK registered subsidiaries
Malaysia registered subsidiaries
Indonesia registered subsidiaries
Registered address
Quadrant House, 6th Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
7th Floor, Wisma Equity
150 Jalan Ampang
50450 Kuala Lumpur
Malaysia
3rd Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
Annual Report 2018 | Anglo-Eastern Plantations Plc
98
98
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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and Malaysia. From the cultivation of plantation, the Group produced the crude palm oil and associated products such as palm kernel, shell
nut, biomass products, biogas products and rubber.
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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 Officer, Finance Director and the Engineering Director.
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Annual Report 2018 | Anglo-Eastern Plantations Plc
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99
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
28 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
2018
$000
28,485
83,707
20
112,212
2018
$000
286
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 2018
Cash Flows
Non-cash flows
- Effect of foreign exchange
- New finance lease
- Loans and borrowings classified as non-current at 31 December 2017 becoming
current during 2018
-Interest accruing during the year
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
29 Leases
Operating leases - lessee
Non-current
loans and
borrowings
$000
(19,281)
-
Current
loans and
borrowings
$000
(8,594)
8,735
-
-
11,078
-
(8,203)
(141)
-
(11,078)
-
(11,078)
Non-current
loans and
borrowings
$000
Current
loans and
borrowings
$000
(27,875)
-
(6,203)
6,197
-
-
8,594
-
(19,281)
6
-
(8,594)
-
(8,594)
Total
$000
(27,875)
8,735
(141)
-
-
-
(19,281)
Total
$000
(34,078)
6,197
6
-
-
-
(27,875)
The Group leases various offices and staff houses under operating leases expiring within 1 to 2 years. The leases have varying terms,
escalation clauses and no option for renewal. The total future value of minimum lease payments is due as follows:
Within one year
Later than one year but not more than two years
Later than two years but not more than five years
Later than five years
Annual Report 2018 | Anglo-Eastern Plantations Plc
2018
$000
401
1
-
-
402
2017
$000
384
13
-
-
397
100
100
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Consolidated Financial Statements
30 First time adoption of IFRS 9 and IFRS15
(a) Adoption of IFRS 9 “Financial Instruments”
(i)
Classification and measurement
Under IFRS 9, financial assets are classified according to their cash flow characteristics and the business model which they are
managed. The Group has categorised its financial assets as financial assets measured at amortised cost.
The financial assets held by the Group include trade and other receivables and other non-current receivables currently accounted
for at amortised cost will continue to meet the conditions for classification as amortised cost under IFRS 9.
There is no impact on the Group for financial liabilities as the new requirements only affect the accounting for financial liabilities
that are designated at FVTPL and the Group does not have such liabilities.
(ii)
Impairment
IFRS 9 changes the recognition of impairment provision for financial assets by introducing an ECL model. Upon the adoption of
IFRS 9, the Group has revised its impairment methodology which depends on whether there has been a significant increase in
credit risk. The Group assesses possible increase in credit risk for financial assets measured at amortised cost and contract
assets at the end of each reporting period. The impairment provision is estimated at an amount equal to a 12-month ECL at the
current reporting date if there has not been a significant increase in credit risk. Based on the assessment undertaken, there is no
significant increase in credit risk to the Group as a result of the adoption of the ECL model.
(b) Adoption of IFRS 15 “Revenue from Contracts with Customers”
With the adoption of IFRS 15, revenue is recognised by reference to each distinct performance obligation in the contract with a
customer. Transaction price is allocated to each performance obligation on the basis of the relative standalone selling prices of each
distinct good or service promised in the contract. Depending on the substance of the contract, revenue is recognised when the
performance obligation is satisfied, which may be at a point in time or over time. The Group has applied this standard retrospectively
and there is no impact to the Group other than the disclosure requirements in note 3.
Annual Report 2018 | Anglo-Eastern Plantations Plc
101
101
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Company Balance Sheet
Company Balance Sheet
As at 31 December 2018
As at 31 December 2018
Company Balance Sheet
As at 31 December 2018
Company Number: 1884630
Company Number: 1884630
Company Number: 1884630
Non-current assets
Non-current assets
Property, plant & equipment
Property, plant & equipment
Non-current assets
Investments in subsidiaries
Investments in subsidiaries
Property, plant & equipment
Investments in subsidiaries
Current assets
Current assets
Receivables
Receivables
Current assets
Cash at bank and in hand
Cash at bank and in hand
Receivables
Cash at bank and in hand
Current liabilities
Current liabilities
Other payables
Other payables
Current liabilities
Net current assets / (liabilities)
Net current assets / (liabilities)
Other payables
Net assets
Net assets
Net current assets / (liabilities)
Capital and reserves
Capital and reserves
Net assets
Share capital
Share capital
Capital and reserves
Treasury shares
Treasury shares
Share capital
Share premium
Share premium
Treasury shares
Capital redemption reserve
Capital redemption reserve
Share premium
Exchange reserves
Exchange reserves
Capital redemption reserve
Retained earnings at 1 January
Retained earnings at 1 January
Exchange reserves
Loss for the year
Loss for the year
Retained earnings at 1 January
Dividends paid
Dividends paid
Loss for the year
Retained earnings
Retained earnings
Dividends paid
Shareholders' funds
Shareholders' funds
Retained earnings
Note
Note
Note
4
4
4
5
5
5
6
6
6
7
7
7
7
7
7
2018
2018
$000
$000
2018
$000
9
9
57,943
57,943
9
57,952
57,952
57,943
57,952
3,822
3,822
1,193
1,193
3,822
5,015
5,015
1,193
5,015
(3,548)
(3,548)
1,467
1,467
(3,548)
59,419
59,419
1,467
59,419
15,504
15,504
(1,171)
(1,171)
15,504
23,935
23,935
(1,171)
1,087
1,087
23,935
3,872
3,872
1,087
19,915
19,915
3,872
(2,138)
(2,138)
19,915
(1,585)
(1,585)
(2,138)
16,192
16,192
(1,585)
59,419
59,419
16,192
2017
2017
$000
$000
2017
$000
12
12
61,876
61,876
12
61,888
61,888
61,876
61,888
2,797
2,797
1,860
1,860
2,797
4,657
4,657
1,860
4,657
(3,403)
(3,403)
1,254
1,254
(3,403)
63,142
63,142
1,254
63,142
15,504
15,504
(1,171)
(1,171)
15,504
23,935
23,935
(1,171)
1,087
1,087
23,935
3,872
3,872
1,087
22,605
22,605
3,872
(1,175)
(1,175)
22,605
(1,515)
(1,515)
(1,175)
19,915
19,915
(1,515)
63,142
63,142
19,915
Shareholders' funds
The loss after tax for the year for the Company dealt with in the consolidated financial statements of the Company was $2,138,000 (2017:
The loss after tax for the year for the Company dealt with in the consolidated financial statements of the Company was $2,138,000 (2017:
$1,175,000).
$1,175,000).
The loss after tax for the year for the Company dealt with in the consolidated financial statements of the Company was $2,138,000 (2017:
The financial statements were approved and authorised for issue by the Board of Directors on 23 April 2019 and were signed on its behalf by:
The financial statements were approved and authorised for issue by the Board of Directors on 23 April 2019 and were signed on its behalf by:
$1,175,000).
63,142
59,419
The financial statements were approved and authorised for issue by the Board of Directors on 23 April 2019 and were signed on its behalf by:
Dato’ John Lim Ewe Chuan
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
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 balance sheet.
The accompanying notes are an integral part of this balance sheet.
The accompanying notes are an integral part of this balance sheet.
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
Annual Report 2018 | Anglo-Eastern Plantations Plc
102
102
102
102
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Company Statement of Changes in Equity
For the year ended 31 December 2018
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103
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Company Financial Statements
1 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).
2 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.
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
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 annual general meeting.
Share based payments
As set out under Group accounting policies on page 69.
Deferred taxation
A deferred tax asset has not been recognised in relation to brought forward tax losses of $12.1m (2017: 10.7m) 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 2018 | Anglo-Eastern Plantations Plc
104
104
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Company Financial Statements
2 Accounting policies - continued
(i)
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. The details of financial guarantee
contracts are disclosed in note 25 of the consolidated financial statements.
3
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
$2,133,000 (2017: $1,172,000) and loss after tax for the year was $2,138,000 (2017: $1,175,000).
The remuneration of the directors of the Company is disclosed in note 7 to the consolidated financial statements. Auditor's remuneration is
disclosed in note 5 to the consolidated financial statements.
4
Investments in subsidiaries
At 1 January 2017
Movements during the year
Repayment
At 31 December 2017
Movements during the year:
Repayment
Loss provision
At 31 December 2018
Net carrying amount
At 31 December
Investments in
subsidiaries
undertakings
$000
Loans to
subsidiaries
undertakings
$000
Total
$000
14,188
-
14,188
(1,935)
-
12,253
52,783
66,971
(5,095)
47,688
(1,952)
(46)
45,690
2018
$000
(5,095)
61,876
(3,887)
(46)
57,943
2017
$000
57,943
61,876
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. The details of the ECL is disclosed in note 5.
On 11 April 2018, Anglo-Eastern Plantations (M) Sdn Bhd, had fully redeemed the 8.4% Cumulative Preference Shares of 7,356,000 issued
to Anglo-Eastern Plantation Plc for $1.874 million.
The details of the subsidiaries are disclosed in note 26 of the consolidated financial statements.
Annual Report 2018 | Anglo-Eastern Plantations Plc
105
105
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Company Financial Statements
5 Receivables
Amounts owed by group undertakings:
Anglo-Eastern Plantations Management Sdn Bhd
PT Hijau Pyran Perdana
PT Sawit Graha Manunggal
Other receivables
2018
$000
3,090
150
525
3,765
57
3,822
2017
$000
2,319
100
350
2,769
28
2,797
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.
The details of other receivables related to ECL are disclosed in note 15, note 25 and note 30 of the consolidated financial statements. For
intercompany balances that are repayable on demand, the Company’s ECL is based on the following assumptions:
-
If the borrower has sufficient accessible highly liquid assets in order to repay the loan if demanded at the reporting date, the ECL is
likely to be immaterial.
If the borrower could not repay the loan if demanded at the reporting date, the Company considers the expected manner of recovery to
measure the ECL. The recovery manner could be either through ‘repayment over time’ or a fire sale of less liquid assets by the
borrower.
If the recovery strategies indicate that the Company would fully recover the outstanding balance of the loan, the ECL would be limited
to the effect of the discounting of the amount due on the loan, at the loan’s effective interest rates, over the period until the amount is
fully recovered.
-
-
Movements on the Company’s loss provision on both current and non-current other receivables are as follows:
At 1 January
Loss provision during the year
At 31 December
At 31 December 2018, the expected loss provision for receivables is as follows:
Gross carrying
amount
$000
4,155
65
45,736
49,956
2018
Amounts owed by group undertakings
Other receivables
Investments in subsidiaries (note 4)
- Loans to subsidiaries undertakings
6 Other payables
Amounts owed to group undertakings
Mergerset (1980) Limited
Musam Indonesia Limited
Accruals
2018
$000
-
444
444
2017
$000
-
-
-
Loss provision
$000
(390)
(8)
(46)
(444)
2018
$000
2,163
246
2,409
1,139
3,548
Net carrying
amount
$000
3,765
57
45,690
49,512
2017
$000
2,163
246
2,409
994
3,403
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.
7
Share capital and treasury shares
The details of the share capital and treasury shares are disclosed in note 20 of the consolidated financial statements.
Annual Report 2018 | Anglo-Eastern Plantations Plc
106
106
About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notes to the Company Financial Statements
8 Related party transactions
The details of the related party transactions for UHY Hacker Young LLP are disclosed in note 22 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 $232,488 (2017: $210,264). There was no balance outstanding at the year end (2017: 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 5)
Subsidiaries (note 6)
2018
$000
49
50
175
4,155
2,409
2017
$000
44
50
175
2,769
2,409
The details of the intercompany receivables and payables are disclosed in note 5 and note 6 of the Company financial statements
respectively.
9 Employees' and Directors' remuneration
Average numbers employed during the year
- directors
- staff
Staff costs
Wages and salaries
Social security costs
Retirement benefits
2018
Number
2017
Number
4
-
4
2018
$000
-
-
64
64
4
-
4
2017
$000
-
-
62
62
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 49 - 53 of which certain information on page 53 has been audited.
Directors' emoluments
10 Dividends
2018
$000
226
2017
$000
208
The details of the dividends are disclosed in note 10 of the consolidated financial statements.
11 Guarantees and other financial commitments
The Company has provided guarantees for loans to subsidiaries totalling $45,000,000 (2017: $45,000,000) as set out in note 16 of the
consolidated financial statements.
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notice of Annual General Meeting
Notice is hereby given that the thirty-fourth Annual General Meeting of Anglo-Eastern Plantations Plc will be held at the offices of UHY Hacker
Young LLP, Quadrant House, Floor 6, 4 Thomas More Square, London E1W 1YW on Monday 24 June 2019 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 auditor thereon for the year ended 31 December 2018.
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 2018.
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 auditor.
To authorise the directors to fix the remuneration of the auditor.
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 2020
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 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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 2020 (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 2020 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 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
16 May 2019
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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 20 June 2019 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 20 June 2019 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 16 May 2019 (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 16 May 2019 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 Registrar by 11.00 a.m. on 20 June 2019 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 24 June 2019 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 20 June 2019. 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 https://www.angloeastern.co.uk/. In those
circumstances the Company would be under an obligation to forward a copy of the statement to the auditor 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 https://www.angloeastern.co.uk/.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
Notice of Annual General Meeting
13.
14.
If you are in any doubt as to any aspect of Resolutions 10 to 13 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.
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 Company’s Articles of Association.
Annual Report 2018 | Anglo-Eastern Plantations Plc
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About Anglo-Eastern Plantations Annual Report 2018 | 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. Biogas plant in Kalimantan 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 both the environment and society in which it operates. Palm oil is an important commodity and the industry reportedly employs 4 million people directly and a further 12 million indirectly in Indonesia alone. Immature oil palms
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
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
Auditor's Report
Biogas plant in Kalimantan
Consolidated Income Statement
2
4
6
7
9
11
28
29
30
31
39
40
41
46
49
54
62
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
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
Company addresses, advisers and website
63
AEP has a Premium Listing on the London Stock
64
Exchange. The Company was formed and floated in
1985.
65
Primary activities are
the crop production and
processing of palm oil and some rubber through
operations in Indonesia and Malaysia.
66
68
102
The Group is committed to responsible development
103
and management of its plantations and facilities for the
benefit of both the environment and society in which it
operates. Palm oil is an important commodity and the
industry reportedly employs 4 million people directly
and a further 12 million indirectly in Indonesia alone.
Inside Back Cover
108
104
Immature oil palms
Annual Report 2018 | 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
https://www.angloeastern.co.uk/
Company advisers
Auditor
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
20 Old Bailey
London EC4M 7AN
United Kingdom
Sponsor/Broker
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
United Kingdom