M.P. Evans Group plc Annual Report 2022

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FY2022 Annual Report · M.P. Evans Group plc

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A N N U A L
R E P O R T

For the year ended 31 December 2022

L E BRATIN

150
VANS G R O U P P LC

years

.
P . E

FROM THE
CHAIRMAN

“As we celebrate our 150-year history,

the Group has produced another

set of excellent operational and

financial results. Crop and production

have increased once again, and we have reached the

milestone of processing 1.5 million tonnes of fresh fruit

bunches. The Group remains focused on long-term

and sustainable growth, and has both acquired further

planted hectarage and started production at another

Group palm-oil mill since the end of the year. Profit and

cash generation have remained strong, the Group has

eliminated net debt, and now has net funds in place to

support continued investment and shareholder returns.

The board is recommending a final dividend of 30p per

share, bringing total dividends for the year to 42.5p per

share, up more than 20% from the 35p normal dividends

paid in respect of the previous year, and a further

step forward in the Group’s long-standing progressive

dividend policy.”

Peter Hadsley-Chaplin

L E BRATIN

150
VANS G R O U P P LC

years

.
P . E

CONTENTS

1 Group financial highlights

2 Celebrating 150 years of M.P. Evans

4 Chairman’s statement

7 Operational highlights

8 Map of estates

10 Market information

12 The Group’s business model

STRATEGIC REPORT

14 Strategy

18 Results and financial position

20 Operations: Indonesian palm oil

28 Operations: Malaysian property

30 Risk management

SUSTAINABILITY

34 TCFD disclosure summary

38 Communities

REPORT OF THE DIRECTORS

42 Board of directors

48 Corporate governance

55 Directors’ remuneration report

FINANCIAL STATEMENTS

60 Independent auditors’ report

66 Consolidated income statement

67 Consolidated statement of comprehensive income

68 Consolidated balance sheet

69 Consolidated statement of changes in equity

70 Consolidated cash-flow statement

71 Notes to the consolidated accounts

PARENT COMPANY

92 Parent-Company balance sheet

94 Notes to the parent-Company accounts

OTHER INFORMATION

98 Subsidiary and associated undertakings

99 Analysis of Indonesian plantation land areas

100 Analysis of Group equity value

101 Five-year summary

102 Notice of meeting

104 Officers, professional advisers and representatives

104 Glossary

Front cover image: Mature palms on Bangka estate

GROUP FINANCIAL HIGHLIGHTS

18%
INCREASE
IN REVENUE

2022 US$ 326.9m
2021 US$ 276.6m

21%
INCREASE
IN OPERATING CASH
GENERATED

2022 US$ 132.2m
2021 US$ 109.2m

7%*
DECREASE
IN BASIC EARNINGS
PER SHARE

2022 108.0 pence
2021 115.6 pence

5%
INCREASE
IN GROSS PROFIT

2022 US$ 109.2m
2021 US$ 103.6m

11%*
DECREASE
IN OPERATING
PROFIT

2022 US$ 101.6m
2021 US$ 114.6m

10%
INCREASE
IN TOTAL EQUITY

2022 US$ 488.8m
2021 US$ 445.0m

15%*
DECREASE
IN PROFIT FOR
THE YEAR

2022 US$ 78.4m
2021 US$ 91.8m

21%
INCREASE
IN NORMAL DIVIDEND
PER SHARE

2022 42.5 pence
2021 35.0 pence

NET CASH
SURPLUS

2022 NET CASH
US$ 33.5 million

2021 NET DEBT
US$ 5.4 million

*Note on prior-year figures

Included in the 2021 results was a one-off gain arising on land disposal, increasing
operating profit by US$13.9 million, profit for the year by US$12.6 million, and earnings
per share by 9.2p.

CELEBRATING 150 YEARS OF M.P. EVANS

KEY MILESTONES AND
DEVELOPMENTS IN THE
HISTORY OF OUR GROUP

EARLY 1870’s

Commencement
of business,
in tea
Matthew Pennefather
Evans, founding partner,
starts business as UK
merchant, importing tea
from Ceylon

LATE 1880’s – 1900

Expansion of business
Partnership helps pioneers raise
capital on London market for new
tea plantations and acts as company
secretary and UK selling agent for their
produce

Matthew Pennefather Evans divides
time between UK and Asia

EARLY 1900’s

Introduction of rubber
1902: Matthew Pennefather Evans dies

1905: New partnership formed, bearing
M.P. Evans name

New rubber companies operating in
Malaya and The Dutch East Indies added
to client portfolio

1970’s

A shift to oil palm
Exit from Sri Lankan tea following change in Sri
Lankan government policy: Start of shift from rubber
to oil palm in SE Asia as the superior financial
rewards from oil palm become increasingly clear

1960’s

Indonesian developments
1963: Indonesian government nationalises all foreign
owned plantation land

1968: Indonesian government grants ownership back – no
longer on a freehold, but on a (30-year) leasehold basis

Appointment of SIPEF as managing agents for grouping’s
Indonesian plantations

1950’s

Share acquisitions
M.P. Evans & Co Limited begins acquiring shares in its
client companies which in turn own shares in M.P. Evans
& Co Limited; early beginnings of ‘crossholding’ structure,
which later becomes known as the ‘M.P. Evans grouping’

1940’s

From Partnership
to Company
1941–1943: Partnership
dissolved. M.P. Evans & Co
Limited formed

Initial shareholders are twelve
of its client companies and its
first five directors

1947: Edwin Hadsley-Chaplin
joins company, retiring over
50 years later. He plays a seminal role in developing the
Group and protecting it from takeover

Edwin Hadsley-Chaplin

The Hadsley-Chaplin/Fletcher family remains actively
involved today

M.P. EVANS GROUP PLCANNUAL REPORT 2022CELEBRATING 150 YEARS OF M.P. EVANS

KEY MILESTONES AND

DEVELOPMENTS IN THE

HISTORY OF OUR GROUP

1980’s

UK, Malaysian and Australian
developments

1981: Rowe Evans
Investments PLC
(“REI”) formed
following merger with
companies under
the Rowe White tea
agency, which had
previously merged
with M.P. Evans & Co
Limited. REI is listed
on the London Stock
Exchange

Our Group today
Our Group today now owns 42,000 hectares of
sustainable oil palm in Indonesia and manages 14,000
hectares on behalf of its scheme smallholders. It owns
six palm-oil mills and employs over 11,500 staff

We aim to continue to grow, responsibly, sustainably and
profitably

L E BRATIN

M.P. Evans (Malaysia) Sdn. Berhad formed to
manage grouping’s Malaysian estates

Expansion into Australian agriculture to create
geographical and commodity diversity within
the Group; first sheep, wool and arable, then
irrigated cotton and finally beef cattle

1990’s

Malaysian property development
Start of Malaysian property
development after 2,000
hectares of the grouping’s
Bertam Estate is sold into
a joint venture with two
Malaysian partners

A new town is developed
over the ensuing 30 years,
with approximately
200 hectares still to be
developed today

2005 – 2016

Strategic initiative launched
2005: Grouping structure rationalised into single company:
M.P. Evans Group PLC

Strategic initiative to exit Malaysia by selling its small valuable estates
for property development, using the proceeds to fund a major expansion
of its sustainable plantation areas in Indonesia. Group joins Roundtable
on Sustainable Palm Oil (“RSPO”) shortly after its formation

P.T. Evans (Indonesia) formed
K Chandra Sekaran joins Group
P.T. Evans (Indonesia) takes over
management of all its Indonesian estates

150
years
VANS G R O U P P LC

.
P . E

2016 – 2023

One country;
one commodity
Disposal of investments
in Australian beef cattle
and share of oil-palm joint
venture in Indonesia to
move the Group towards
its strategic objective of
having operations in one
country, in one commodity,
in operations it controls;
sustainable Indonesian
palm oil

CHAIRMAN’S STATEMENT

As we celebrate our 150-year anniversary, we also
celebrate the milestone of processing over
1.5 million tonnes of fresh fruit bunches (“ffb”).
This is a significant achievement and demonstrates
the benefits of the long-term investment made by
the Group in its Indonesian operations, both in the
development of high-quality planted areas and,
more recently, in our own milling capacity.

Peter Hadsley-Chaplin, Chairman

RESULTS
The Group achieved a gross profit

on its environmental obligations. For

average mill-gate price of US$854 per

the first time in 2022, and in advance

tonne, US$44 higher than in 2021.

of US$109.2 million, higher than

of a requirement to do so, the Group

the US$103.6 million recorded

is providing summarised disclosures

in 2021, representing an all-time

based on the Taskforce for Climate-

record. Average palm-oil prices were

related Financial Disclosures (“TCFD”)

particularly strong once again in 2022

in this annual report, as shown on

and these, combined with an increase

pages 34 to 37.

in production, offset some inflationary

cost pressures, most notable in the

fertiliser inputs required to maintain

healthy and productive palms across

our estates.

With five palm-oil mills operational

throughout the year, the Group was

able to increase its own production

and reduce its reliance on outside mills

to process its crop. Since the year end,

this reliance has reduced even further

THE GROUP HAS
ACHIEVED A GROSS
PROFIT OF US$109.2
MILLION, HIGHER THAN
THE US$103.6 MILLION
RECORDED IN 2021,
REPRESENTING AN
ALL-TIME RECORD.

Earnings per share were 108.0p, only

a little lower than the 115.6p recorded

in 2021. The previous year’s earnings

were enhanced by the one-off profit

recorded on the disposal of land in

Malaysia to the Group’s joint-venture

company, Bertam Properties Sdn Bhd,

which accounted for 9.2p of earnings.

In 2022, earnings expressed in sterling

benefited from a comparatively weak

pound during the year, offsetting,

at least in part, the non-recurring

land sale. The Group has continued

to be significantly cash generative,

with net operating cash generated

of US$102.3 million in the year. This

has enabled the Group to maintain

with the opening, in February 2023, of

Palm-oil prices were strong throughout

capital investment, eliminate net debt,

the Group’s sixth mill, located at the

2022, albeit with the cif Rotterdam price

and continue to prioritise progressive

Musi Rawas estate. The Group also

in a wide band between US$895 and

shareholder returns.

increased the volume of its output sold

US$1,990 per tonne. Prices spiked in the

as sustainable palm oil or sustainable

early part of the year at the outbreak

palm kernels during the course of

of war between Russia and Ukraine,

DIVIDEND
An interim dividend of 12.5p per share

2022, and sustainability premia for

and softened somewhat in the second

(2021 – 10p per share) was paid on

the Group’s palm kernels increased

half of the year, particularly following

4 November 2022, and the board is

markedly during the year as demand

a short-term export ban imposed

recommending a final dividend of

for related products increased. Overall,

by the Indonesian government. The

30p per share (2021 – 25p per share).

the Group received US$7.5 million in

average cif Rotterdam price during

This represents another year of

sustainability income during the year,

2022 was US$1,345, and despite several

increasing normal dividends, up by

a 74% increase on the US$4.3 million

changes to the Indonesian export taxes

7.5p from 2021, and a substantial

in 2021. The Group remains committed

and levies that were applied during

increase of 93% from the amount paid

to acting responsibly and focusing

the year, the Group still achieved an

two years ago.

M.P. EVANS GROUP PLCANNUAL REPORT 2022CHAIRMAN’S STATEMENT

Dividends have accelerated in recent

term scaling back of crop purchases

The Group continues to develop its

years as the Group’s operational

from outside suppliers in the first

project at Musi Rawas, including

cash flows have strengthened due

half of the year caused by the palm-

building new housing, roads and other

to the increasing maturity of the

oil export ban, the overall level of

infrastructure, as well as continuing to

Group’s operations. The Group has

purchases in the year increased by 4%

plant further hectares of oil palm, all

an unbroken track record, spanning

to 340,600 tonnes, as the Group was

of which are developed in accordance

more than thirty years, of maintaining

able to purchase outside crop for the

with RSPO guidelines and with the

or increasing dividends, and the

Bumi Mas mill that was in operation

agreement of the local community. As

anticipated trend of increasing crop

for its first whole year in 2022.

the Group’s planted area increases and

and production forms a sound basis

for further dividend increases.

150-YEAR ANNIVERSARY
During 2023 the Group is proud to

be marking its 150-year anniversary,

having traced its origins back to the

early 1870s. An overview of the Group’s

history, development and growth is

included in this report on pages 2

and 3. The Group is holding several

celebratory events, both in Indonesia

and in the UK during the year,

including an AGM at Mansion House

in London followed by a celebratory

lunch, to which shareholders are

invited. Places for the lunch are limited

and registration is required. Further

information is included in the notice of

meeting on page 102.

OPERATIONAL DEVELOPMENTS
The total crop processed by the Group

increased by 11% in the year to just

over 1.5 million tonnes. All of the

Group’s own estates continued to be

87% OF THE GROUP’S
341,700 TONNES OF
CRUDE-PALM-OIL
(“CPO”) PRODUCTION
CAME FROM THE
GROUP’S OWN MILLS.

With the Bumi Mas mill running

throughout the year, the Group

enjoyed the benefit of having five of

its own mills in operation in 2022, and

as a result 87% of the Group’s

341,700 tonnes of crude-palm-

oil (“CPO”) production came from

the Group’s own mills, the highest

proportion that the Group has

achieved to date. Work continued

throughout the year on the

construction of the mill at Musi

Rawas, and this was commissioned

in February 2023, meaning that the

proportion of production in Group

mills will increase once again in 2023.

more productive, with crop increasing

The average oil-extraction rate in

operations become more established,

securing further hectares for planting

can become more expensive and more

time consuming. However, during 2022,

the Group was able to plant a further

585 hectares at Musi Rawas and remains

on target to achieve a minimum total

planted hectarage of 10,000 hectares.

At the end of 2022, the Group managed

54,100 hectares of planted oil palm

from its own and associated scheme-

smallholder areas, 93% of which were

mature and in harvest, and the average

yield per mature planted hectare had

increased to 23 tonnes.

STRATEGIC DEVELOPMENTS
The Group’s four strategic pillars of

responsibility, excellence, growth

and yield remain central to its

day-to-day operations and its ongoing

development. Further details are set

out on page 17 of this report. The

Group is committed to its sustainable

oil-palm estates in Indonesia and to

their maintenance and expansion.

to 905,400 tonnes in the year

Group mills decreased a small amount

By investing for the long term, the

(2021 – 809,700 tonnes). Once again,

in 2022, from 23.3% to 22.9%. There

in proportionate terms, the largest

were several reasons for this, but

Group has demonstrated that it is

possible to develop projects in rural

increase was achieved at Musi Rawas

most notable were some particularly

Indonesia which are run sustainably,

in South Sumatra, where the Group’s

wet conditions experienced during

provide well-paid employment for a

own crop exceeded 100,000 tonnes

the course of 2022. These can

large workforce, and offer high-quality

in 2022 for the first time. This was an

naturally result in slight reductions

estate facilities including housing,

encouraging result in anticipation of

in extraction rates, but can also

medical, educational and other

the start of processing at the Group’s

give rise to some harvesting and

services. Those estates are designed

own mill in early 2023. Crop from the

transportation challenges, and

to be part of their local communities,

Group’s associated scheme small-

oil-extraction rates are sensitive to

particularly through the development

holders went up to 265,700 tonnes,

both optimum ripeness standards and

and planting of valuable scheme-

an increase of 16%. Despite a short-

to processing delay.

smallholder areas. Both these and

M.P. EVANS GROUP PLC
ANNUAL REPORT 2022

CHAIRMAN’S STATEMENT continued

Group areas are managed to high

did benefit, in sterling terms, from a

hectares. Although the existing area

standards, delivering increasing yields

weaker year-end exchange rate when

at Simpang Kiri has been both highly

and therefore attractive returns for all

compared to the position at the

productive and profitable for many

stakeholders.

end of 2021, accounting for £1.58 of

years, it has not been worthwhile

All the Group’s estates are developed

and managed sustainably, but

independent certification enabling

the sale of the Group’s production as

sustainable palm oil is awarded to the

Group’s mills. Certified sustainable

sales rose significantly in 2022 to

almost two thirds of the total, an

increase of approximately 50,000

tonnes from the previous year. As the

Group continues to grow, by adding

milling capacity, maximising the yield

from its existing areas and seeking

additional sustainably managed areas

to provide further Group crop for

those mills, its ambition is to continue

elevating its sustainable output

towards 100%.

THE GROUP INCREASED
THE VOLUME OF ITS
OUTPUT SOLD AS
SUSTAINABLE PALM
OIL IN THE YEAR.

GROUP VALUATION
An independent valuation of the

Group’s plantations and other property

assets is performed at the end of each

year, the details of which are included

on page 100 of this report. The

independent valuation acknowledges

that the Group’s estates are highly

productive and maintained to a

high standard, ascribing an average

valuation to majority-owned areas of

the increase.

PROSPECTS
The Group has made a positive start

to construct our own mill there,

and Group crop has been sent for

outside processing. Whilst some of

the newly acquired hectarage will

to 2023, and total crop processed in

require a certain amount of replanting

the first two months of the year was

and rehabilitation, as crop from the

213,000 tonnes, 8% higher than in the

combined area increases, this is likely,

first two months of 2022. The benefits

in time, to warrant the construction of

of the significant investment made by

an additional Group mill. At that point

the Group in its Indonesian estates

all of the Group’s estates would have

continue to be felt, and, barring

their own mills.

any unforeseen circumstances, the

long-term trend of increasing crop is

expected to continue as the Group

moves further into 2023. The new

mill at Musi Rawas began processing

Group crop in February 2023, and after

a short period of stabilisation, will

soon start to take in crop from outside

suppliers, only adding further to the

Group’s ability to process crop and

increase production.

Palm oil continues to be, by volume

of supply and consumption, the

largest of the vegetable oils produced

globally and of the major vegetable

oils is the most efficient to produce

when measured by tonnes of oil per

hectare of land. The board is of the

belief that sustainably produced palm

oil will continue to be in demand for

the foreseeable future, and that Group

prospects therefore remain positive.

CPO pricing remained stable in the

early part of 2023, and the Group

enjoyed mill-gate prices in a relatively

narrow band around US$750 per

tonne, similar to those achieved in

the latter part of 2022, although sales

prices have increased above US$800

BOARD AND SENIOR MANAGEMENT
CHANGES
There were several changes to the

board and senior management roles

in 2022, all of which were announced

and referred to in previous reports. At

the start of the year, Matthew Coulson

per tonne for recent contracts. Whilst

was appointed as chief executive,

these are lower than the unusually

having previously served as the

high prices seen in the early part of

Group’s finance director, and on

2022, the Group remains confident

1 July 2022 Luke Shaw joined the

that, at these price levels, it will be

Group as chief financial officer, having

able to deliver further significant

previously held a senior finance

profits and cash generation.

position with Spectris plc.

US$20,700 per planted hectare. After

Since the year end, the Group has

On 31 March 2022, Dr Darian McBain

allowing for the Group’s other assets

announced the acquisition of 2,100

stepped down from the board, having

and liabilities, notably including the

planted hectares close to its Simpang

taken up a new full-time role in

Group’s share of year-end net funds,

Kiri project in Aceh Province, northern

Singapore, and on 1 August 2022

being US$31.7 million, this equity value

Sumatra, bringing the total planted

Tanya Ashton joined as an

per share had increased during the

area, including that of associated

independent non-executive director.

year to £14.98 per share. The Group

scheme smallholders, to 4,800

Tanya is the head of sustainability

CHAIRMAN’S STATEMENT

at Walgreens Boots Alliance, Europe,

Finally, as recently announced,

and brings significant sustainability

Philip Fletcher will be retiring from

ACKNOWLEDGEMENTS
As well as being highly profitable, this

experience to the board. On 30

the board on 31 July 2023. Philip

has been another year of development

September, Jock Green-Armytage

has worked for the Group for over

and growth for our Group, and it could

retired from the board after a long

40 years, giving loyal and invaluable

not have been achieved without the

and highly valued association with

service to several Group companies,

constant effort of our management

the Group, in recent years chairing the

including this company, both as

and staff, both in Indonesia and the

audit and remuneration committees,

M.P. Evans Group PLC and in its former

UK, along with the workforce based

and on 1 July 2022 Michael Sherwin,

guise as Rowe Evans Investments PLC,

at our estates and mills. On behalf

former CFO of both Games Workshop

as well as to others such as Bertam

of the board, I would like to thank

plc and Vertu Motors plc, joined as an

Holdings PLC and Lendu Holdings

each and every one of them, and we

independent non-executive director.

PLC. He has variously been finance

look forward to another exciting, and

director, managing director, chairman

successful, year together in 2023.

Since the year end, Lee Yuan Zhang

and, more recently, a non-executive

joined the board as a non-excecutive

director. He was central to the Group’s

As a closing comment, I cannot

director on 1 February 2023. Yuan Zhang

operations and growth, and he played

but reflect that my late father,

is the regional director (plantations)

a pivotal role in devising the strategy,

Edwin Hadsley-Chaplin, without

of Kuala Lumpur Kepong Berhad

formed in 2005, to sell the Group’s

whom our Group would not still

(“KLK”), the Group’s largest shareholder,

Malaysian estates and focus on the

exist today, would have been proud

and has served as president director

expansion of its sustainable palm-

of its recent achievements. I hope that

of PT KLK Agriservindo in Indonesia,

oil interests in Indonesia. This has

Matthew Pennefather Evans would

where he was responsible for the

resulted in the hugely enlarged Group

have been proud too.

management of 140,000 hectares of

we are today. His wisdom, expertise

oil palm. The board is delighted to

and unfailing attention to detail will

Peter Hadsley-Chaplin

welcome Yuan Zhang, particularly in

be greatly missed and everyone at

light of his extensive plantation and

M.P. Evans sends their best wishes to

Chairman

21 March 2023

corporate experience.

Philip in his retirement.

OPERATIONAL HIGHLIGHTS

INDONESIAN PALM OIL

M.P. EVANS GROUP PLC

• Total crop processed up 11% to

• Net current assets up to

1.5 million tonnes

• Group crops up to 905,000 tonnes,

a 12% increase

•

Increasing demand for sustainable
production resulted in increased
sustainability income to US$7.5 million

• 100% of Group and scheme-smallholder
crop grown to sustainability standards

• CPO production up 9% to 342,000 tonnes

US$97.4 million at 31 December 2022

• Group equity value based on

independent valuation increased to
£14.98 per share at 31 December 2022

POST YEAR END

• Group’s sixth palm-oil mill
opened, at Musi Rawas

• Continuing increase in certified sustainable
output, now 64% of Group CPO production

• A further 2,100 planted hectares
acquired close to Simpang Kiri

M.P. Evans is a responsible producer of sustainable Indonesian
palm oil, striving for excellence in its operations, with a focus on
continuing growth and offering an increasing yield.

SIMPANG KIRI
Mature oil-palm estate in the province of Aceh, near
the border with North Sumatra, which was acquired in
the early 1980s. Ffb are processed in a nearby
third-party mill. A further 2,100 hectares were acquired
in early 2023.

2,600 hectares

Group planted area: 2,400 hectares

Scheme-smallholder planted area: 300 hectares

2 KERASAAN

Mature (ex-rubber) oil-palm estate near the
town of Pematangsiantar in North Sumatra.
Ffb are processed in the neighbouring Bukit
Marajah mill, owned by the SIPEF Group -
also the majority shareholder in Kerasaan.

Planted area: 2,200 hectares

Group minority share: 38%

Medan

Sumatra

Malaysia

Kuala Lumpur

Singapore

PANGKATAN GROUP
Grouping of three estates (Pangkatan, Bilah, Sennah) whose fruit is
processed in a 40-tonne mill built on Pangkatan in 2005. Combination of
a long-established, mature (ex-rubber) oil-palm estate (Pangkatan), and
land acquired or planted over the last 30 years (Bilah and Sennah).

7,500 hectares

Group planted area: 7,000 hectares

Scheme-smallholder planted area: 900 hectares

Kalimantan

Samarinda

Bangka
Island

Jakarta

Indonesia

4 MUSI RAWAS

Located in South Sumatra province near the town
of Lubuk Linggau, the project was started in 2012
and is now approaching the target of at least
10,000 planted hectares. A 60-tonne mill was
commissioned in February 2023.

12,000 hectares

Group planted area: 6,800 hectares

5 BANGKA

Located on the island of Bangka, the land
was acquired in 2005. The first areas planted
started production during 2009. A 45-tonne mill
with composting facility and biogas plant was
commissioned in May 2016 and extended to 60
tonnes in 2019.

12,000 hectares

Group planted area: 6,100 hectares

Scheme-smallholder planted area: 2,800 hectares

Scheme-smallholder planted area: 3,900 hectares

M.P. EVANS GROUP PLCANNUAL REPORT 2022

BERTAM PROPERTIES
This land was previously the Group’s Bertam Estate, all of which
has now been sold to Bertam Properties, a joint venture with
two Malaysian partners. Starting in 1992, the area has been
developed into a new town. Following the sale of the last 70
hectares of Bertam Estate into Bertam Properties in 2021, the
remaining developable area is 210 hectares.

Bertam Properties: 313 hectares

Group minority share: 40%

Malaysia

Medan

Kuala Lumpur

Singapore

Sumatra

Kalimantan

Samarinda

Bangka

Island

Jakarta

Indonesia

OPERATIONAL HIGHLIGHTS

BUMI MAS
Located in East Kalimantan, north-east of Sangatta
next to the Manubar river. The land was acquired in
2017. It was largely planted in 2012-14, with the first
harvesting taking place during 2015. A 60-tonne mill
was commissioned in August 2021.

9,000 hectares

Group planted area: 7,500 hectares

Scheme-smallholder planted area: 1,400 hectares

KOTA BANGUN ESTATES
Located in East Kalimantan, close to Kota Bangun
and next to the Mahakam river, the land was
acquired in 2006. The first areas planted started
production during 2010; a 60-tonne mill was
commissioned in December 2012, and a 40-tonne
mill was commissioned in September 2020.

16,000 hectares

Group planted area: 10,400 hectares

Scheme-smallholder planted area: 4,600 hectares

MARKET INFORMATION

PALM OIL
The vegetable-oil market moved into

the growth in mature areas planted

more significantly, Indonesian export

to oil palm in Indonesia is slowing,

taxes and levies. During 2022, as a

2022 in a position of relatively tight

indicative of the government’s

result of the high CPO prices, the

supplies and high prices. Throughout

more restrictive policies on land

Indonesian government made a

January and into the first part of

use. In Malaysia, labour shortages

number of changes to the taxes and

February, cif Rotterdam prices for

remain an issue and, despite some

levies applied to CPO. These included

CPO were already at historically

high levels, between US$1,300

and US$1,500 per tonne. At the

improvements, the shortfall is

changes to the amounts of taxes

expected to be a continuing drag

and levies charged at certain CPO

on production. Whilst not at the

price bands, a temporary export levy

outbreak of war between Russia and

historically high levels seen in the

‘holiday’ and the introduction of a

Ukraine, prices increased sharply,

first half, pricing stabilised in the

temporary additional export tariff.

reaching almost US$2,000 per tonne,

second half of the year with CPO cif

By the end of the year, the export

particularly due to concerns about

Rotterdam a little above US$1,000

tax and levy arrangements had

reductions in sunflower-oil supplies

for much of the period. Demand for

reverted to a similar position to that

from Ukraine, and remained at

palm oil strengthened in the second

in place at the start of the year, and

elevated levels for several months.

half of the year due to its price

there have been no changes for

Indonesia accounts for more than

competitiveness when compared

several months.

half of world palm-oil supplies, and

to other major vegetable oils. At

the Indonesian government took

points during the period, Indonesian

The average mill-gate price received

the unexpected step of introducing

palm oil was trading at a more than

for the Group’s CPO in 2022 was

a temporary ban on exports in April

US$400 per tonne discount to South

US$854 per tonne, up by 5% on the

2022, causing a build-up of stocks,

American soya oil, compared to

US$810 per tonne received in 2021.

an increase in demand for other

average discounts of approximately

In 2022, world production of palm oil

vegetable oils, and a rapid decline

US$100 over the last ten years.

was 78.9 million tonnes, up by 4% on

in prices once the ban was lifted in

late May.

The Group does not receive the full

largest part of the increase was in

benefit of the cif Rotterdam prices

Indonesia where production is now

the 76.0 million produced in 2021. The

The second half of the year was

referred to above. It receives a

46.5 million tonnes. There was a slight

characterised by improving supply

‘mill-gate’ price for its CPO which is

fall in global consumption during

in Indonesia compared to the earlier

based on local tenders, and which

the year, partly as a result of the

part of the year. Looking to the longer

is net of adjustments to allow for

temporary market disruption caused

term, there is some evidence that

transport and insurance costs, but

by the export ban in Indonesia,

Harvesting ffb
at Kota Bangun

M.P. EVANS GROUP PLCANNUAL REPORT 2022

THE PALM-OIL MARKET

MAIN PRODUCERS
OF PALM OIL
2022
59%
23%

Indonesia

Malaysia

Main producing countries
Remaining 18% consists of
Thailand (4%), Colombia (2%),
Nigeria (2%), other countries (10%)

Indonesia

MAIN CONSUMERS
OF PALM OIL
2022
25%
11%
7%
24%
13%
8%

Other Asia

Africa

China

India

Main consuming countries
Remaining 12% consists of
Americas (8%), other countries (4%)

although this was offset by an increasing

consumption in Indonesia’s domestic market.

There was a fall in consumption in China in

2022, but imports are expected to increase as

changes to lockdown policies take effect.

PALM-KERNEL OIL
The Group’s mills produce both CPO and

palm kernels (“PK”). The Group sells its PK

to independent kernel-crushing facilities, in

which palm-kernel oil (“PKO”) is produced.

The price that the Group is able to secure for

its PK is therefore connected to the market

for PKO. That market can also be connected

to the one for coconut oil, because of its use

in similar end products such as personal care

and cosmetic items.

In the early part of 2022, a combination

of high demand for hygiene products and

a reduced level of coconut-oil production

pushed up the prices available for the

Group’s PK, peaking briefly at almost

US$1,000 per tonne in March. Since then, the

disruption caused by the palm-oil export ban,

along with recovering coconut-oil production

causing a change in demand patterns, did

lead to a reduction in prices but, as with CPO,

prices stabilised over the second half of the

year. Over the whole of 2022, the Group’s

average selling price for its palm kernels

was US$611 per tonne, 15% higher than the

US$533 per tonne for 2021.

Source: Oil World 2022 data

CRUDE-PALM-OIL PRICE

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

US$ per tonne
cif Rotterdam

2018

2019

2020

2021

2022

2023

THE GROUP’S BUSINESS MODEL

OUR MAIN RESOURCES

40,200

HECTARES OF
GROUP OIL PALM

13,900

HECTARES OF
SMALLHOLDER OIL PALM

PLANTATION LAND
The Group’s plantation land is used to grow oil palms

RELATIONSHIPS WITH COMMUNITIES
The Group engages with the local communities living

and harvest their fresh fruit bunches.

on and near its operations and manages smallholder

schemes to the same standard as Group areas.

11,700

EMPLOYEES

US$33.5 MILLION

NET CASH

PEOPLE
The Group’s employees include 210 agronomic staff,

STABLE FUNDING
The Group has a robust capital structure with a market

105 engineers and more than 4,700 harvesters.

capitalisation of more than US$527 million*, cash of

US$82 million and low levels of debt.

OUTCOMES

341,700

TONNES OF
CRUDE PALM OIL

Growing production

64%

CERTIFIED
SUSTAINABLE

Sustainable
production

US$402

PER TONNE
OWN PALM PRODUCT

Cost efficient

42.5p

NORMAL DIVIDEND
FOR 2022

Improving returns,
rising dividends

* Based on a share price of 810p on 31 December 2022

M.P. EVANS GROUP PLCANNUAL REPORT 2022
GROUP BUSINESS MODEL

HOW WE OPERATE

PROMOTE A PHILOSOPHY OF
ZERO WASTE
The Group turns its empty bunches into compost

and generates electricity from methane collected

FOCUS ON OUR STRENGTH AS A
PRODUCER OF SUSTAINABLE INDONESIAN
PALM OIL
The Group builds shareholder returns by

from mill effluent. It establishes and maintains

exploiting the Group’s strengths as an efficient

conservation areas and strictly adheres to Group

producer of sustainable Indonesian palm

environmental policies.

oil to generate increasing crop, production

and revenues.

MAINTAIN STRONGLY
INCREASING CROP
Having young plantations underpins

strong projected crop growth to the

end of the 2020s because of the way

oil palms increase yield as they

mature. New planting or acquisition

of young estates helps keep the

average age low.

CONTROL OUR OPERATIONS
The Group makes the most of its

mature areas and maximises the

potential of new areas by being in

control of its operations. It makes

use of the expertise concentrated

in its Jakarta regional office.

We regard sustainable

production as integral to

our operations.

MAKE SMALLHOLDER CO-OPERATIVES
A SUCCESS
The Group treats associated smallholder

ENSURE BEST PRACTICE IN
EVERYTHING WE DO
Even our most senior agronomic managers are

co-operatives equally, planting, maintaining and

resident in our operations, controlling a system of

harvesting land to the same standard as its own

supervision and support that focuses on

areas. As a result, smallholders own a valuable

high agronomic and engineering standards.

asset and identify their own success with the

Staff in Jakarta and the UK are frequent visitors

Group’s success.

to the operations.

A growing and responsible Company
producing sustainable Indonesian palm oil
for the benefit of all its stakeholders.

STRATEGIC REPORT 2022

The Group’s strategy is to maintain steady expansion of its majority-owned
Indonesian palm-oil areas in a sustainable and cost-effective manner.

STRATEGY

During 2022, the Group continued

ensuring no deforestation and that

scheme smallholders, a total planted

to execute its principal activity,

only land suitable for cultivation is

hectarage of 56,200 hectares.

being the responsible ownership,

developed. The total planted area at

management and development

Musi Rawas, including that planted

of sustainable oil-palm estates

on behalf of the Group’s associated

in Indonesia. Alongside its own

scheme smallholders, was 9,600

projects, the Group also manages

hectares, and management are

and develops scheme-smallholder

confident that the initial target of a

areas attached to those estates.

total of 10,000 planted hectares

The Group’s objective is to continue

will be exceeded during the course

increasing both its own crop and

of 2023.

that from its scheme smallholders,

whilst also increasing its own milling

capacity, thereby increasing its output

of certified sustainable palm oil. As

Group areas mature, its strategy is

to increase the planted hectarage

controlled by it. Milling its own crop

and that of its scheme smallholders

in its own mills enables the Group

to deploy its operational expertise

to greatest effect with the aim of

generating stronger returns, allowing

shareholders to receive sustained

increases in dividends.

Scheme-smallholder areas associated

with Group estates expanded in the

year to 13,900 hectares. This followed

a significant project promoted by the

Group in northern Sumatra to attract

independent smallholders to join

new co-operative schemes. Under

these schemes, the Group is providing

initial funding for replanting, and crop

from the newly planted areas close

to Pangkatan will become a valuable

new source of input to the Group’s

mill there. By the end of 2022, 1,100

planted hectares had been added

The Group designs its procedures

as part of the new co-operative

to address the risks of operating in

arrangements.

After the acquisition at Simpang Kiri,

the Group remains committed to its

growth strategy, and a number of

further projects remain under review.

The Group had five palm-oil mills

operating throughout the year and

was able to raise the proportion of

crop processed in its own efficiently

and sustainably run facilities. This

will increase further in 2023 as

the Group’s sixth mill opened just

after the year end at Musi Rawas. In

addition, following the acquisition of

further hectarage close to Simpang

Kiri referred to above, the Group will

review plans to build a mill there. If

constructed, the Group would then

achieve 100% ‘in-house’ processing

of its own crop, and the output from

that crop would all qualify as certified

sustainable CPO.

As part of its commitment to

responsible operation and

development, the Group has

continued to support the well-being

of its workforce across Indonesia.

Further investment has been made

Indonesia. The Group has confidence

in both the palm-oil sector and

Indonesia as an area of operation

to provide a basis for successfully

delivering its strategy.

Following the year end, the Group

has been successful in acquiring an

additional 2,100 planted hectares

during the year in estate development

close to its estate at Simpang Kiri in

including new and upgraded housing,

Aceh Province in northern Sumatra.

more school places and more

The planted area of the Group’s

This is in line with the Group’s stated

teachers, and additional recreational

majority-held Indonesian estates

strategy of continuing to increase its

and community facilities on site.

increased during 2022 to 40,200

planted area through the acquisition

The Group is also seeking to increase

hectares, as planting continued at

of further hectarage, initially within

the hectarage within its estates

Musi Rawas in South Sumatra. All

the vicinity of its existing projects.

that is specifically designated for

planting is supervised by the Group’s

After taking these additional hectares

conservation, and is expanding its

sustainability team, and takes place in

into consideration, the Group now

sustainability team to support

full compliance with RSPO standards,

has, in conjunction with its associated

this effort.

M.P. EVANS GROUP PLCANNUAL REPORT 2022STRATEGIC REPORT
STRATEGY

CPO storage tanks at the Bangka mill

1515

STRATEGIC REPORT continued

‘‘SECTION 172’ STATEMENT:
IMPLEMENTING THE STRATEGY

way of operating. Further details

business. The recommendations of

demonstrating how the principles

the audit committee, in turn, fed into

The board acknowledges that working

productively with all stakeholders is

a key factor in ensuring the Group’s

long-term success. In formulating

and implementing its strategy, the

board meets its obligations under

section 172 (1) of the Companies

Act 2006 (“section 172”) to promote

the success of the Company for

the benefit of its members, whilst

of section 172 are aligned with how

the board’s decisions around risk

the Group makes strategic decisions

disclosure in the annual report.

concerning its operations can be

found in the “Sustainability” section

of this report on pages 34 to 41.

The board, through media articles

and discussions with its professional

communications advisers, regularly

The Group has analysed carbon data

informs itself on public sentiment

on its operations, in order to provide

in relation to the palm-oil industry

a baseline against which targets

can be set. It acknowledges the

importance of net-zero targets as

and its products, taking note of

concerns around industry practices

and environmental impacts linked

having regard to wider stakeholders

part of the changes that stakeholders

to deforestation. The board has

and the impact of decisions over

the long term. Each member of the

board is aware of their obligations,

and due consideration is given to

stakeholders’ interests, as well as the

other matters listed in section 172,

when strategic decisions are taken.

The board reviews at least annually

which organisations or individuals

it considers to have a reasonable

expectation of being significantly

affected by, or of affecting, the

activities of the Group including

assessing the best means of engaging

with those stakeholders. The current

list, together with a summary of how

it engages with its stakeholders, is

published on the Group’s website

(www.mpevans.co.uk).

expect, amid concerns about the

effects of climate change. The Group

will use this data to make public

disclosures in accordance with new

non-financial reporting standards

which are being introduced. It

welcomes the prospect of increasingly

widespread standardised information,

providing context for the Group’s

own disclosures which will not only

benefit the Group in its own decision-

making, but will give stakeholders

greater insights into these

increasingly important areas and how

they might impact on the business.

The board values stakeholder

engagement as an essential tool

in its risk-management strategy.

In response to feedback from its

employees, the board refined its

Pages 12 and 13 of this report set out

the Group’s business model and how

existing risk-identification process

and tasked the chief executive to

again this year responded to

these concerns by reaffirming the

Group’s commitment to operating

to the highest of standards and in

accordance with the requirements

of the RSPO, designed to provide

assurance of industry good practice

that protects environments and

communities. This imperative to act

responsibly is integral to the Group’s

strategy and includes taking into

account the interests of the Group’s

employees when contemplating

future growth. The board receives

input from its executive members

who are in frequent contact with

senior management in Indonesia,

both via video link and in person,

now that travel restrictions have been

lifted. Recognising the value of its

existing management expertise and

skilled workforce as one of the bases

it operates. In addition, the Group’s

carry out the first of a programme of

on which to continue to focus on the

core strategic pillars are shown on

stakeholder engagement exercises

production of sustainable Indonesian

page 17. The nature of oil-palm

in which he, together with the head

palm oil, the board remains of the

plantations is that they, by necessity,

of risk in Indonesia, met with small

view that new project acquisitions

require decisions to be made for

groups of senior staff across all

should, where possible, be additive to

the long term. This encompasses

operational divisions to discuss

existing projects, take account of staff

the health and well-being of the

their insights on the potential risks

resource, and ensure maintenance

environment in which the Group

that the Group faces. The audit

of the Group’s high operational

operates, as well as that of the people

committee used the data gathered

standards. The Group has for some

living in and around its operations.

to update the Group’s risk register,

time been investing in workforce

Such considerations are intrinsic

which it then reviewed to identify and

recruitment and developing its

to the Group’s long-established

classify the principal risks facing the

management resources.

M.P. EVANS GROUP PLCANNUAL REPORT 2022STRATEGIC REPORT
STRATEGY

STRATEGY PILLARS

M.P. Evans is a responsible producer of sustainable Indonesian palm oil, striving for
excellence in all its operations, with a focus on continuing growth and offering an
increasing yield.

The Group maintains conservation areas
and does not plant near water courses

Morning briefing to promote safe
and efficient working practices

Acting responsibly is at the heart of what we do and
who we are. We are active members of the RSPO, we
do not deforest, and are good stewards of the land
we cultivate. We provide housing along with medical,
educational, religious and leisure facilities for our
workers and their families.

Excellence comes from investing for the long term.
Our investment is not only in plantation assets but
also in our employees, their diversity and inclusion,
and in their training and development. In this way, we
are consistently able to deliver both high yields and
high oil-extraction rates from our estates and mills.

Responsibility

Growth

Strategy
pillars

Excellence

Yield

GROWTH IN CROPS PROCESSED (‘000 TONNES)

GROWTH IN DIVIDENDS (PENCE)

Group
Scheme smallholders
Independent

1,600

1,400

1,200

1,000

800

600

400

200

Normal dividends

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

We seek to grow and develop the business.
Growth continues to come from the increasing
maturity of the Group’s young estates, from the
ongoing focus on improving yields, and from the
planned acquisition and sustainable development
of new areas of land.

The Group’s investment strategy has already led
to a significant improvement in shareholder
returns. In line with its growth programme, the
Group plans to deliver increasing returns to
shareholders.

RESULTS & FINANCIAL POSITION

5%
INCREASE
IN CRUDE-PALM-OIL
EMG SALE PRICE

15%
INCREASE
IN PALM-KERNEL
EMG SALE PRICE

18%
INCREASE
IN REVENUE

2022 US$854 per tonne
2021 US$810 per tonne

2022 US$611 per tonne
2021 US$533 per tonne

2022 US$326.9m
2021 US$276.6m

REVENUE AND GROSS PROFIT
Group revenue increased to US$326.9

from US$350 per tonne to US$402

Limited. There is no corresponding

per tonne, caused predominantly

amount in 2022. At the time of

million in 2022, up by 18% from the

by inflationary pressure on fertiliser

the disposal, US$9.3 million of

US$276.6 million recorded in 2021.

inputs in the year. Cost per tonne,

the proceeds were deferred, and

Group crops continued to rise, and

production of both CPO and PK

reached new highs as a result, as

explained in more detail in the later

crop and production sections of this

report. Sales prices were up for both

CPO and PK, and average ex-mill-

gate (“EMG”) prices were US$854

and US$611 per tonne in the year,

increases of 5% and 15% respectively

on the previous year. The Group also

benefited from directly selling an

increasing proportion of its output

as CPO and PK rather than selling

ffb for processing in outside mills.

This was particularly significant at

Bumi Mas, where the Group mill was

operational throughout 2022.

The Group’s cost of production

is reported as a combined cost

per tonne, measuring the costs

associated with each tonne of ‘palm

product’, being both CPO and PK. It

after taking into consideration

crops purchased from scheme

smallholders and independent

suppliers, increased in the year

to US$527 per tonne (2021 US$465

per tonne) as ffb purchase prices

increased along with the higher CPO

price during 2022. Further analysis of

Group costs is included on page 24.

since then, US$2.5 million has been

received during 2022. The final

instalment of US$6.8 million is due to

be received by the Group in July 2023.

ADMINISTRATIVE EXPENSES
AND OTHER INCOME
Group administrative expenditure

in 2022 was US$4.6 million

The Group does not measure cost

(2021 US$5.4 million), a little lower

per tonne in the same way for its

than the amount incurred in the

estates supplying outside mills, but

previous year. Group other income

continues to maintain careful estate

increased to US$1.9 million (2021

cost control in those locations. At the

US$1.4 million) on sales of electricity

end of 2022, the only Group locations

from the Group’s biogas facilities

supplying outside mills were Musi

Rawas and Simpang Kiri, and this

reduced to only Simpang Kiri in early

2023 once the mill at Musi Rawas had

opened. As there were fewer of them,

the gross profit achieved by locations

without mills reduced in 2022 to

US$9.6 million (2021 US$12.6 million).

and sale of surplus kernel shells.

The Group continues to work on

identifying new opportunities for

electricity generation and supply

agreements to maximise the use

of available capacity at its milling

locations.

is designed to be a fully absorbed

Allowing for the above, the

cost, which includes all estate

Group’s gross profit in 2022 was

overheads along with the significant

US$109.2 million, 5% higher than the

majority of central costs recharged

US$103.6 million achieved in 2021.

from the Group’s Jakarta head office

plus an appropriate element of

costs recharged from the UK head

PROFIT ON SALE OF LAND
In 2021, the Group recorded a one-off

NET FINANCE COSTS
The Group’s finance costs were

similar to the prior year at

US$2.7 million, reflecting the impact

of increasing interest rates over the

course of the year, offset by reduced

borrowings as the Group continues

office. The Group’s cost per tonne

profit on the disposal of 70 hectares

to pay down outstanding term loans.

in relation to crop harvested and

of land in Malaysia owned by

Finance income increased to

processed from the Group’s majority-

its subsidiary company, Bertam

US$1.4 million (2021 US$0.6 million)

owned areas increased in the year,

Consolidated Rubber Company

as cash balances rose in the year.

M.P. EVANS GROUP PLCANNUAL REPORT 2022

5%
INCREASE
IN GROSS PROFIT

2022 US$109.2m
2021 US$103.6m

TAXATION
The Group tax charge for the year was US$24.1

million (2021 US$23.2 million). The Group pays a

significant amount of corporate tax in Indonesia,

its principal operating location, and remains

committed to operating transparently and paying

appropriate taxation on the profits generated.

ASSOCIATED COMPANIES
The Group’s Indonesian associate, PT Kerasaan

Indonesia (38% owned) contributed US$1.7 million

(2021 US$1.5 million) to Group profit in the year,

and the Group received dividends of US$1.5

million (2021 US$1.2 million). The Group’s

Malaysian associate, Bertam Properties Sdn Bhd

(40% owned), contributed US$0.5 million

(2021 US$1.0 million) to Group profit in the year,

and the Group received dividends of

US$1.2 million (2021 US$1.2 million).

PROFIT FOR THE YEAR
As a result of the above, the Group’s profit for the

year was US$78.4 million (2021 US$91.8 million),

lower than the previous year mainly due to the

one-off profit on land sale in 2021 referred to above.

NET ASSETS AND BORROWING
At the end of the year, the Group’s net

assets had increased to US$488.8 million

(2021 US$445.0 million). Current assets exceeded

current liabilities by US$97.4 million (2021 US$72.3

million). The Group had cash and liquid resources

of US$82.5 million (2021 US$65.6 million). As a

result of the further cash generation in the year,

net debt had been eliminated, and year-end net

funds were US$33.5 million (2021 net debt

US$5.4 million). As a result, the Group had no

net gearing (2021 – 1%), whilst gross gearing was

9% (2021 – 14%).

STRATEGIC REPORT
RESULTS & FINANCIAL POSITION

Harvester with ripe ffb at Kota Bangun estate

19
19

OPERATIONS: INDONESIAN PALM OIL

CROPS
The crop processed by the Group is

Crop from the Group’s majority-

up 23% (2021 – 24%) of total crop

owned areas was up by 12%, from

processed by the Group. This

made up of three component parts:

809,700 tonnes in 2021 to 905,400

proportion may increase in the short

Group crops harvested from its

majority-owned areas, scheme-

tonnes in 2022. Plantings have

term as the Group’s Musi Rawas mill

continued to mature during the

is commissioned, but is ultimately

smallholder crops harvested from

course of the year, and the average

planned to decrease as Group and

community-owned smallholder

co-operatives areas attached to

age of majority-owned areas is now

scheme-smallholder crops utilise a

ten years, approximately the point

larger amount of milling capacity.

some of the Group’s estates, but

at which palms reach a lengthy

The increase in independent crop

managed by the Group on behalf of

period (up to a decade) of maximum

processed was restricted to 4% in

the smallholder co-operatives, and

productivity. However, that average

2022 as purchases were temporarily

independent crops purchased from

age is made up of estates at different

scaled back during the palm-oil

third-party suppliers to utilise spare

points in their planting lifecycle, and

export ban in April and May to

capacity in Group mills. The majority

some are notably younger, particularly

mitigate against the risk of Group

of crop is processed in Group mills,

Musi Rawas in South Sumatra, where

storage facilities becoming full. This

with a small part currently being

the Group is continuing to plant

secured the continued operation of

processed by third-party mills where

new palms and crop is increasing

Group mills and processing of Group

Group milling facilities have not yet

more rapidly. The crop from scheme

and scheme-smallholder crops.

been built.

smallholders increased by 16% in

The total crop processed by the

Group increased in the year to

the year, from 229,300 tonnes to

As reported in last year’s annual

265,700 tonnes, following a similar

report, there was a period of

pattern to crop from the Group’s own

particularly wet weather towards

1,511,700 tonnes (2021 – 1,366,200

areas, but with a slightly younger

the end of 2021 at Kota Bangun,

tonnes), an overall increase of 11%.

planting profile leading to a larger

creating some challenging conditions

This was in line with the Group’s

proportionate increase in the year.

on the estate. The wet weather

growth plans, and a result of both

persisted into the early part of

the long-term investment made by

Purchasing crop from independent

2022, making harvesting conditions

the Group in Indonesian oil palm

suppliers continues to be important

difficult in some areas, as well as

and the commitment to operational

to the Group to ensure that mill

adding operational challenges in

excellence by the Group’s agronomic

capacity is utilised as much as

transporting the harvested ffb for

management teams.

possible. Independent input made

mill processing on a timely basis.

Nursery at Simpang Kiri estate

M.P. EVANS GROUP PLCANNUAL REPORT 20222021
TONNES

194,300

152,300

179,000

165,700

69,400

49,000

809,700

86,300

80,800

—

29,900

32,300

229,300

—

(9)

(20)

1,780

210,600

78,200

35,900

2,500

327,200

1,366,200

STRATEGIC REPORT
OPERATIONS

Despite the relatively slow start to the year,

CROP

2022
TONNES

INCREASE/
(DECREASE)
%

conditions improved as it progressed, and

the pattern of long-term crop growth at

Kota Bangun reasserted itself, such that

by the end of the year total crop from the

estate was over 300,000 tonnes, with growth

of 13% and 5% from Group and scheme-

smallholder areas respectively. The estate

sits close to the Mahakam river in East

Kalimantan, and due to the topographical

conditions on site, some of the planted

areas are relatively low-lying, increasing

flood risk in times of high rainfall. The Group

has, for several years, invested in innovative

water-management and water-defence

projects, mitigating this risk, and in 2022

a water-catchment area was constructed,

with a capacity of 1 million cubic metres

which will enable estate management to

moderate the flow of water through some of

the affected area. A further water-catchment

area, with a 1.5 million cubic-metre capacity,

is planned for construction in 2023. As

part of its ongoing review process, the

Group identified a small planted area of

152 hectares which had been badly flood

damaged and for which there was no cost-

effective water-defence plan, and these

hectares were written off during the year.

In a similar way to Kota Bangun, crop at the

Group’s Bangka estate got off to a relatively

slow start in 2022. This was partly weather

related, but also a reflection of natural

seasonality of oil-palm cropping, which does
not necessarily follow a 12-month cycle. Unlike

2021, when crop was very heavily weighted

towards the first half of the year in Bangka, a

more even split was established during 2022,

with the crop peak occurring around the

middle of the year. Crop for the full year was

up by 10% for the Group’s own areas and 13%

for scheme smallholders, whilst there was a

20% (15,400 tonne) reduction in outside crop

purchases, a combination of managing mill

capacity as Group and scheme-smallholder

crops continued to increase, and the

cautious approach adopted during the

palm-oil export ban.

219,400

167,200

192,500

166,700

107,600

52,000

905,400

91,000

91,200

900

30,600

52,000

265,700

191,700

62,800

39,100

47,000

340,600

1,511,700

Own crops

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

Simpang Kiri

Scheme-smallholder crops

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

Independent crops purchased

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

TOTAL CROP

CROP HISTORY
tonnes

Scheme smallholders

Group

1,200,000

1,000,000

800,000

600,000

400,000

200,000

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

STRATEGIC REPORT continued

The Pangkatan estates in North

independent suppliers, with 47,000

PK. As before, during 2022, the

Sumatra continued to deliver high

tonnes of outside crop sourced for

Group sold its crop at Musi Rawas

crop levels in 2022, with an average

processing in the Group mill. As local

and Simpang Kiri to outside mills

yield of 29 tonnes in Group-owned

supplier relationships develop and

for processing, with a selling price

areas. There was a small amount of

strengthen, the Group’s objective is

based on the CPO market and an

replanting during the year amounting

to increase independent purchases

assumed rate of extraction. However,

to 64 hectares, as part of the Group’s

in the coming year.

commitment to maintaining the

to be consistent with other locations,

CPO and PK produced from these

long-term productivity of these

The Group’s largest crop increase

estates’ crops are reported as part

well-established estates. During

was at Musi Rawas, its youngest

of the Group total but subtotalled

the year, the Group continued to

estate, with an average planting age

separately in the production table.

work with local communities to

of less than five years at the end of

develop independent smallholder

2022. Crop from Group-owned areas

The Group is committed to increasing

co-operatives and to replant those

increased by 55%, whilst that from

its CPO and PK production capacity

areas to a high standard. By the end

scheme smallholders was up by 61%

as much as possible. The Group’s

of 2022, 894 smallholder hectares

in the year, putting the Group in a

crops and those of its scheme

had been developed. The majority of

strong position as it starts to supply

smallholders are of a high standard,

these remained immature at the end

its newly constructed mill on site,

and the Group seeks to maximise

of the year, but a small crop of 900

operational from February 2023.

the margins available to it by milling

tonnes has been recorded.

At Bumi Mas, the Group has seen

At Simpang Kiri, crop increased

by 6% to 52,000 tonnes, as the

that crop and selling the oil and

kernels for itself. With the benefit of

having five Group mills operational

significant crop increases in recent

Group continues to benefit from

years following the acquisition of the

the replanting that has taken place

throughout the year, total CPO

production increased by 9% to

estate and subsequent improvement

there and the higher quality planting

341,700 tonnes, and PK production

to agronomic standards. By 2021,

material that has been used during

was up by 10% to 73,800 tonnes.

the estate was achieving a yield of

that programme.

23 tonnes per mature hectare. After

several years of larger steps forward,

the estate delivered a smaller

PRODUCTION
The Group continues to prioritise

All the Group’s palm-oil mills are

accredited as certified sustainable

producers as soon as possible after

increase in 2022, 1% and 2% up on

processing crop through its own

commissioning, although it can take

crops from Group and scheme-

smallholder areas respectively.

milling facilities, given both the

strategic and financial benefits

time to complete the necessary

independent audit and approval

Also, being in East Kalimantan, the

involved. Throughout the course of

checks. All of the Group’s ffb, and

estate experienced similar weather-

2022, the Group had five operational

that of its scheme smallholders, are

related harvesting and operational

palm-oil mills, with a sixth under

grown to the same high standards

challenges to Kota Bangun in the

construction at Musi Rawas. The mill

and in a sustainable way. The

early part of the year. The harvesting

at Musi Rawas opened in February

Group’s certified sustainable output

challenge was compounded by the

2023 and will now process all of

increased to 64% in the year

departure of some inexperienced

the crop from that estate and start

(2021 – 55%) as the Group benefited

harvesting workers during these

to take in additional crop from

from the increase in milling capacity.

difficult working conditions, but the

independent suppliers to maximise

This figure will rise further as the

management team have worked

its utilisation.

diligently to address this issue and

mill-building and certification

programme continues, but will also

ensure that the estate workforce

As crops available for processing

benefit from mill capacity being

is robust to future challenges.

continued to increase in 2022, so the

taken up increasingly by the Group’s

Crop at Bumi Mas was enhanced

Group was able to record another

own crop and that of its scheme

by a full year of purchasing from

rise in production of both CPO and

smallholders.

M.P. EVANS GROUP PLCANNUAL REPORT 2022
STRATEGIC REPORT
OPERATIONS

PRODUCTION AND EXTRACTION RATES
GROUP AND THIRD-PARTY MILLS

CRUDE PALM OIL

PALM KERNELS

PRODUCTION

Group mills

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Third-party mills

Bumi Mas

Musi Rawas

Simpang Kiri

EXTRACTION RATES

Group mills

Kota Bangun – Bumi Permai

Kota Bangun – Rahayu

Bangka

Pangkatan group

Bumi Mas

Third-party mills

Bumi Mas

Musi Rawas

Simpang Kiri

2022

TONNES

112,800

75,100

53,300

56,200

297,400

—

32,600

11,700

44,300

341,700

23.3

21.2

23.4

22.9

23.0

22.9

—

20.4

22.5

INCREASE/
(DECREASE)

2021

2022

INCREASE/
(DECREASE)

TONNES

(1)

170

—

(19)

(2)

(6)

(2)

—

114,400

74,200

48,600

20,800

258,000

23,100

20,800

11,000

54,900

23,800

18,400

12,200

9,600

64,000

—

7,500

2,300

9,800

312,900

73,800

23.8

22.5

23.8

22.6

22.8

23.3

21.6

20.4

22.5

5.1

4.2

5.7

5.2

3.9

4.9

—

4.7

4.5

182

—

(18)

—

(2)

—

2021

TONNES

22,700

17,800

11,300

3,400

55,200

5,000

4,700

2,200

11,900

67,100

4.9

4.2

5.7

5.3

3.7

5.0

4.7

4.6

4.5

The Group sells some crop to outside mills for processing, with a selling price based on the CPO market and an

assumed rate of extraction. However, to be consistent with other locations, CPO and PK produced from these estates’

crops are reported as part of the Group total but subtotalled separately above.

The Group continues to purchase
ffb from independent suppliers

and in Bangka and this is an area of
continuing focus for mill management.

At all other locations, compost is
produced and applied to the Group’s

in order to maximise the capacity

Mill staff go through a detailed

planted areas as a nutritious organic

utilisation of its milling facilities.

grading process to review incoming

fertiliser, and biogas facilities are

Supplies purchased from independent

supplies with the objective of sorting

used both to treat mill effluent in

sources tend to be of noticeably

and rejecting poor-quality bunches.

covered ponds, significantly reducing

lower quality than ffb grown and

greenhouse gas emissions, and to

harvested either from the Group’s

Group mills are developed on a fully

generate green electricity. Electricity

own areas or from those belonging

integrated basis and on a zero-

generated is used either for the

to scheme smallholders, which are

waste principal. All mills have both

Group’s own power needs (reducing

planted and managed by the Group

composting and biogas facilities

the requirement for diesel generators

to the same high standards as

on site, with the exception of the

on site or for power drawn from

majority-owned hectarage. Over the

Group’s oldest mill at Pangkatan,

the domestic grid, much of which

course of 2022, maintaining quality

where it has not been possible to

is dependent on coal-fired power

standards for independent crop was
a particular challenge in Kota Bangun

reach a power supply agreement
with the state electricity company.

stations) or to sell as excess power to
the state electricity company.

STRATEGIC REPORT continued

74%
Field

30%
Labour
Fertiliser
17%
Depreciation 15%
12%
Other

15%

Other Head office

Other

7%
8%

11%
Mill

Labour
3%
Depreciation 4%
4%
Other

COSTS
Cost per tonne of palm product is

in maintaining and enhancing crop

yields. Unit costs do also vary by

usually at its lowest when the Group

location, depending on a number

processes crop from its majority-

of factors including maturity, yield

owned areas in its own mills.

patterns, upkeep requirements, and

Production costs increase when the

experience of the local workforce.

Group purchases crop for processing,

The Group’s location with the lowest

whether from its associated scheme

production cost continues to be

smallholders, or from independent

Pangkatan in North Sumatra, which

suppliers. This is partly due to

benefits from being a mature,

replacing its own estate costs with

well-established estate with a

an ffb purchase cost, but also in

low-cost mill.

the case of ffb from independent

suppliers, due to the lower extraction

The total cost of production, allowing

rates achieved. The variance

for all sources of crop, increased

increases at times of higher prices,

from US$465 in 2021 to US$527

as purchase costs are linked by

in 2022, an increase of 13%, the

formula to the prevailing CPO price.

rise being a combination of cost

increases and the higher CPO price

The Group’s long-standing policy

prevailing during the year. Purchasing

has been to include all depreciation,

crop to maximise capacity utilisation

general charges and estate

in Group mills remains worthwhile

administrative and overhead costs

even with the higher cost involved

in its analysis of cost per tonne. In

not least as the Group benefits from

addition, all central costs incurred at

the higher CPO selling price after

its Jakarta head office are allocated

processing, and the Group continues

to its operating units and included

to make profitable use of the

as part of cost per tonne, as are an

additional capacity available to it.

appropriate proportion of UK costs.

During 2022, cost per tonne for

The Group continually monitors

production sourced from the Group’s

costs on its estates, at its mills, and

own areas increased to US$402

in relation to its management and

(2021 US$350), an increase of 15%.

administrative activities. Inflationary

The main upward pressure during the

pressures remain, particularly in

year was a sharp increase in fertiliser
costs, which in some cases more

relation to fertiliser, but to a lesser
extent for other inputs such as wage

than doubled. Russia is a significant

costs and fuel, caused by world

producer of fertiliser, and the Group

events over which the Group has no

took the decision to avoid purchases

control, most notably the ongoing

originating from that country, adding

conflict in Ukraine. A continuing

to some cost increases in the year.

period of relatively high commodity

Nonetheless, management took the

prices, along with rising production,

strategic decision that maintaining

act as mitigating factors, but at the

fertiliser application based on

same time the Group continues to

recommendations from our expert

work on operational innovation,

agronomic consultants remained in

seeking wherever possible to reduce

the Group’s best long-term interests

unit costs.

M.P. EVANS GROUP PLCANNUAL REPORT 2022STRATEGIC REPORT
OPERATIONS

MILL-GATE PRICE
The Group benefited from a high CPO

reflecting both the demand for

certified sustainable production and

price environment during the course

the Group’s ability to deliver more

ASSOCIATED COMPANY:
KERASAAN
The Group’s 38%-owned oil-palm

of 2022. As explained in more detail in

of its own certified output. CPO and

associate in North Sumatra,

the ‘palm-oil market’ section on pages

PK are sold with both RSPO and ISCC

PT Kerasaan Indonesia (“Kerasaan”),

10 and 11, the price per tonne for

certifications depending on demand

achieved a crop of 51,900 tonnes

CPO, when expressed in cif Rotterdam

and where the best premia can be

in 2022, 6% lower than the 55,200

terms, ranged between US$895 and

achieved. The average premia for

tonnes in 2021. Replanting continued

US$1,990 and averaged US$1,345, 13%

CPO when sold as certified oil was

at the estate in 2022, with a total

higher than the US$1,195 in 2021. In

US$16.90 per tonne (2021 US$17.40),

of 145 hectares planted in the year,

Indonesia, the government charges

whilst demand for sustainable PK

bringing up the total planted area

taxes and levies on the export of

was particularly strong in 2022

to 2,242 hectares. The average age of

palm oil and related products. Whilst

with average premia for PK sold as

planting at Kerasaan is now 13 years.

these are not borne directly by the

certified up to US$91.80 per tonne

Group, as sales are made at mill-gate

(2021 US$55.20).

for onward shipment and processing,

they influence the amount buyers

are willing to pay. As also discussed

PLANTING
At Musi Rawas, planting continued

PERFORMANCE EVALUATION
The Group uses key performance

indicators at all levels, both in

Indonesia and in the UK, in assessing

in the ‘palm-oil market’ section of

throughout 2022. As part of any new

its plantation operations and

this report, there were some changes

development, the Group works with

directing management effort in

to taxes and levies in 2022, but as

local communities and any local

supervising those operations. In this

a general rule, the gap between

land-rights holders on the basis of

year’s annual report, the Group is

quoted cif Rotterdam prices and

free, prior informed consent. Fully

continuing to provide, in this section,

available mill-gate prices widens as

agreed, documented, and witnessed

the key operational metrics as

prices increase due to the graduated

land compensation is paid prior to

previously reported.

taxation system in place. Despite this,

any planting taking place. All planting

the Group achieved an average mill-

is performed in compliance with the

The planted hectarage managed by

gate price for CPO sales from its own

environmental standards published

the Group continued to increase

mills of US$854 per tonne in the year,

by the RSPO. The Group planted

in the year, with ongoing planting

5% higher than the US$810 per tonne

585 hectares at Musi Rawas in 2022,

at Musi Rawas, as well as the

in 2021.

bringing the total planted area there

development of new co-operative

to 9,600 hectares, and the Group

schemes in northern Sumatra. All

Pricing for palm kernels was

expects to achieve its initial target

activity takes place in line with the

particularly strong in the early

of achieving a total planted area of

RSPO planting requirements, and the

part of 2022, with prices peaking in
March at US$980 per tonne, based

10,000 hectares during 2023.

Group is committed to the highest
sustainability standards. At the end

on a combination of high demand

In North Sumatra and Aceh, the

of the year, the total planted area of

for certain products and a deficit

Group has made significant progress

the Group and its associated scheme

of coconut-oil supplies. Since then,

during the year on the formation

smallholders was 54,100 hectares.

pricing has abated, returning to more

of new co-operative schemes and

Planted hectarage increased further

familiar levels. The average selling

financing replanting of areas of oil

after the year end following the

price for the year was US$611 per

palm for members of those schemes.

acquisition of 2,100 planted hectares

tonne, 15% higher than the US$533

By the end of 2022, a total of 1,147

close to the Simpang Kiri estate.

per tonne achieved in 2021.

hectares had been replanted as part

The Group anticipates introducing an

of these schemes, both at Pangkatan

accelerated replanting programme in

Included in the above sales figures,

and Simpang Kiri. In addition, 64

some of the acquired area to

the Group received sustainability

hectares of the Group’s own oil palm

work towards bringing them up

premia of US$7.5 million (2021

were replanted at Pangkatan during

to the expected excellent Group

US$4.3 million), another increase

the year.

standards.

M.P. EVANS GROUP PLC
ANNUAL REPORT 2022

STRATEGIC REPORT continued

PERFORMANCE
EVALUATION
The Group uses key
performance indicators
at all levels, both in
Indonesia and in the
UK, in assessing its
plantation operations
and directing
management effort
in supervising those
operations.

2626

54,100

HECTARES, GROUP
AND SCHEME
SMALLHOLDERS

PLANTED HECTARAGE
Planting new hectarage and replanting

hectarage that has reached the end

of its economic life determines the

Group’s capacity to produce crop

2021: 52,600 hectares

growth in the future.

23.2

TONNES PER
HECTARE

2021: 21.1 tonnes
per hectare

FFB YIELD PER HECTARE
The rate at which the Group is able to

generate ffb from its mature planted

hectarage is the most important

measure of its agricultural efficiency.

1,171,100

TONNES

FFB CROP
The volume of ffb crop is the

primary determinant of the

2021: 1,039,000 tonnes

Group’s ability to generate CPO

and PK for sale.

22.9%

OIL-EXTRACTION
RATE

2021: 23.3%

EXTRACTION RATES
The rate at which the Group is able to

convert its ffb into CPO, quantified as the
oil-extraction rate, is the most important

measure of its processing efficiency.

US$402

PER TONNE PALM
PRODUCT

2021: US$350 per tonne
palm product

COST PER TONNE OF PALM
PRODUCT
The Group’s long-term profitability

depends on its success in minimising

the unit cost of production that is

summarised in this measure.

STRATEGIC REPORT
OPERATIONS

The crop yield per hectare is

Mill management monitor the

Cost control is central to the

monitored carefully by management.

performance of each of the Group’s

success of the Group’s operations,

For each year of planting on each

oil-palm mills, and as part of their

and management monitors the

estate it is budgeted, reported and

monitoring will regularly record and

efficiency of both its plantation and

reviewed. The yield per hectare can

review the percentages of free fatty

its milling operations by reviewing

be significantly different as a result

acids, dirt and moisture in mill output,

their unit costs in comparison

of a number of agronomic factors

as well as oil losses at various stages

to agreed budgets, and as well

including soil, weather, and the

of the production process. Extraction

as benchmarking against other

natural yield cycle. However, the most

rates can vary depending on both the

operating units. A significant

important determining factor in yield

performance of the mill itself and

proportion of costs in both the field

is the age of the palm. In 2022, the

the type and quality of the ffb that is

and the mill are fixed and so vary

average yield per mature hectare

supplied to the mill for processing.

little with levels of utilisation. Field

across all of the Group’s plantings,

Mill throughput is also measured

costs in particular can vary from

including scheme smallholders,

daily as an efficiency indicator. An

location to location depending on

increased to 23.2 tonnes, an

average oil-extraction rate of 22.9%

local conditions, including terrain,

encouraging increase on the

was achieved across all the Group’s

weather conditions, infrastructure

21.1 tonnes recorded in 2021.

mills in 2022. This is slightly lower

and age of plantings. As a result,

Local estate management work

than the rate achieved in the previous

costs are monitored on an individual

diligently to control field standards,

year but compares well with industry

estate basis. During 2022, the Group

fertiliser application, harvester

standards. The main reason for

achieved a cost of US$402 per

numbers and productivity as well as

the reduction was identified to be

tonne for production from its own

the quality of estate infrastructure,

some challenges associated with the

areas. The Group experienced some

including estate roads and drains.

quality of independent crop supplied

significant inflationary pressure

Senior management monitor estate

to Group mills, and this has been

on certain input costs in 2022,

activities and obtain independent

prioritised for follow up and review

most notably in fertiliser prices.

advice if required. Overall, the

by mill management. The Group’s

Maintaining recommended fertiliser

combined crop from the Group’s

engineering team supervises all mill

inputs is key to achieving ongoing

own areas and from the associated

construction. This work is undertaken

high yields, and the Group has, to

scheme smallholders was

by independent contractors, but is

date, accepted this cost increase, but

1,171,100 tonnes.

based on agreed tenders, budgets

continues to keep this, and all other

and timetables.

costs, under continual review.

The chief executive in discussion
with the senior Kalimantan mill
manager during a visit to the
Rahayu mill at Kota Bangun

STRATEGIC REPORT continued

CURRENT TRADING AND PROSPECTS

The total crop processed by the Group for the first two months of 2023 is 8% higher than

for the same period in 2022. The Group’s own crops and those of its associated scheme

smallholders have been a little subdued during the early part of the year, mainly due to

normal seasonal variances, as was the case in early 2022. As a result, the Group’s own crop

and that of its associated scheme smallholders has been very similar to that achieved in

the first two months of 2022, being 1% down and the same respectively. A review of bunch

formation and bunch counts on Group and smallholder palms indicates that crop is expected

to increase as the Group moves further into 2023. Purchases of outside crop increased more

significantly, with a 38% year-on-year rise, helping to keep Group mills occupied during

the period.

The details are set out in the following table:

Own crops

Scheme-smallholder crops

Independent crops purchased

2 MONTHS ENDED
28 FEB 2023
TONNES

116,300

35,100

61,300

212,700

INCREASE/
(DECREASE)

(1)

—

2 MONTHS ENDED
28 FEB 2022
TONNES

116,900

35,000

44,300

196,200

As reported above, CPO prices were high during 2022, and cif Rotterdam prices averaged

US$1,345 per tonne for the year, whilst the Group’s average mill-gate prices for its sales were

US$854 per tonne. Prices stabilised at a somewhat lower level in the latter part of the year and

into early 2023, with the Group able to achieve mill-gate prices of approximately US$750 per

tonne, although there have been some recent positive signs with sales prices moving above

US$800 per tonne in recent sales contracts. Encouragingly, there have been no significant

changes to the regulatory environment for the sale of palm oil and related products within

Indonesia over several months, providing some welcome stability within the market.

The Group made another step forward in delivering its strategy in February 2023 by opening

its sixth palm-oil mill, located at the Musi Rawas estate in South Sumatra. The 60-tonne-per-

hour capacity mill is now processing all of the crop from the Group’s own planted areas at
Musi Rawas as well as those of its associated scheme smallholders, offering an immediate

uplift to the extraction rates available to the Group from that crop. In addition, after a short

proving period, the mill will soon start to take in crop from outside suppliers, to increase its

capacity utilisation and to add further to the total crop processed by the Group.

Now that the Musi Rawas mill has been commissioned, the Group is milling for itself

approximately 96% of the crop that it processes, with only the crop at Simpang Kiri being

sent to an outside facility. As announced in early March 2023, the Group has just acquired a

further 2,100 planted hectares close to the Simpang Kiri estate, in line with its growth strategy.

Management will now review plans to develop a further mill there which, if constructed, would

enable the Group to mill 100% of the crop that it processes.

The board remains firmly of the view that sustainable palm oil, as a high yielding and

low-cost product, will continue to offer attractive returns, and that the prospects for the

Group remain bright.

M.P. EVANS GROUP PLCANNUAL REPORT 2022
STRATEGIC REPORT
OPERATIONS

OPERATIONS:
MALAYSIAN
PROPERTY

ASSOCIATED COMPANY:
BERTAM PROPERTIES
Properties developed by the Group’s

40%-owned associate, Bertam Properties

Sdn Bhd (“Bertam Properties”) continued

to be of a high quality, and appealing to

buyers, during 2022. Total consolidated

revenue at Bertam Properties, including

from its own subsidiary, Penang Golf

Resort Berhad, was 77 million Malaysian

Ringgit (US$17 million) in 2022, a little

lower than the 84 million Malaysian

Ringgit (US$20 million) in 2021. Bertam

Properties sold 176 properties from its

developments during the year (2021

– 146 properties), with some of the

housing launches in the second half of

2022 being in particularly high demand.

Because of the related accounting rules,

some of the benefit of those agreed

sales will not be recorded until 2023.

Bertam Properties continues to hold

a land bank available for future

development, and its total development

area, including that currently under

construction, but not including the

103-hectare golf course, amounts to 210

hectares. The Bertam Properties land

continues to be a valuable asset whose

value has increased as development

of the projects has progressed towards

completion and the new town attracts

more residents and businesses.

Artist’s impression of new housing
at Bertam Properties, with already
developed houses in background

RISK MANAGEMENT

The Group regularly considers its principal risks. They are reviewed and assessed by the
audit committee at least annually and reported to the board for approval.

During 2022, an updated and refreshed approach to the identification and management of risks was introduced. A new

‘head of risk management’ was appointed, based in the Group’s Jakarta office, responsible for maintaining the Group

risk register and for working closely with operational management across Indonesia as well as with the UK head office

team. Risks are classified within one of seven areas, being: operational, production and sales, financial, people, ESG

(Environmental, Social and Governance), political and regulatory, and information systems. Regular risk review meetings

take place to discuss the development of existing risks, their mitigation, as well as to identify new and emerging risks

to the Group. Risk summaries are presented to, and reviewed by, the audit committee. As a result of this updated

approach, a number of new principal risks have been identified, as disclosed in this section. However, the board

remains of the view that the most significant risk to the Group is a reduction in the commodity prices for CPO and PKO.

KEY

Likelihood of occurrence

LOW MED HIGH

Impact on the business

LOW MED HIGH

Risk change from prior year

INCREASE


DECREASE

NO CHANGE





NEW

e
c
n
e
r
r
u
c
c
o
f
o
d
o
o
h
i
l
e
k
i
L

HIGH

MED

LOW

MED

HIGH

Impact on the business

RISK

IMPACT

MITIGATION

OPERATIONAL

1 Adverse weather
One or more of the
Group’s operational
locations suffers
from adverse weather
conditions.

MED MED



2 Climate change
Group estates start to
feel the impact of long-
term changes in climate
patterns.

MED HIGH



Yields may be lower than
anticipated if weather
conditions are too wet or too
dry, causing lower crops or
difficulties in harvesting.

The Group accepts that weather patterns can vary over the short term,
but its experience of developing and managing oil-palm estates in
Indonesia over several decades shows that any crop deficits tend to be
made up over the longer term. In addition, the Group benefits from the
geographical diversity of its operations within Indonesia.

Changing weather patterns
may result in changing yield
profiles on the Group’s oil-
palm estates.

There has been no evidence of significant changes to weather patterns
on the Group’s estates to date. However, the Group is not complacent
and continues to monitor the situation. A more detailed assessment of
climate risk has been performed and is included in the TCFD section of
this report on pages 34 to 37.

3 Flood and water incursion
One or more of the
Group’s planted areas
suffer a significant flood.

Depending on the severity,
flooded areas are difficult
or impossible to harvest,
reducing yield from those
areas.

Some of the Group’s estates are more prone to flood risk than others,
due to their location and topographical conditions. The Group has
invested in water management systems, including bunding and
drainage systems, as well as water pumps to evacuate excess water.

Whilst a remarkably hardy
plant, the oil palm can still
be subject to attack from
pest and disease, reducing
yield from affected areas.

The Group employs experienced agronomic managers in all its estates
and takes advice from external consultants when appropriate. Effective
management is designed to identify issues when they occur, and to
ensure that they do not become widespread. Senior staff remain up to
date in latest agronomic practices.

MED MED



4 Pests and disease
Group planted areas
are attacked by pests or
infected by disease.

LOW LOW



M.P. EVANS GROUP PLCANNUAL REPORT 2022

STRATEGIC REPORT
RISK MANAGEMENT

RISK

IMPACT

MITIGATION

PRODUCTION AND SALES

5 Change in prices
There is a significant fall
in commodity pricing for
CPO and PKO.

HIGH HIGH



A fall in commodity prices
would result in a reduction
in mill-gate prices received
by the Group for its output.

FINANCIAL

The Group accepts that it is dependent on its ability to sell its output
into a world market over which it has no control. However, oil palm
is a permanent tree crop and is the cheapest major vegetable oil to
produce, with Indonesia being the lowest cost producing country. The
Group employs a dedicated marketing team to monitor developments
in the market and to ensure that it receives the best available prices for
its sales tenders and other supply agreements.

6 Exchange-rate fluctuation
There is an adverse
impact in the Indonesian
Rupiah exchange rate.

Adverse exchange rate
movements can impact upon
Group costs and the value of
locally held assets.

Exchange rate risk is mitigated at least in part as the Group’s functional
currency is USD and both its revenue and significant proportion of its
costs are USD related. Local costs denominated in Indonesian Rupiah
(“IDR”) are lower in USD terms when the IDR weakens, but at the same
time assets held in IDR devalue, whilst the opposite holds when the
IDR strengthens against USD. Management have concluded that, other
than seeking to hold surplus cash balances in USD as far as possible,
any other formal hedging mechanisms would be difficult to achieve and
unlikely to be cost effective.

Increasing input costs
adversely affect cost per
tonne and, by extension,
operating margins.

The Group operates a centralised purchasing team, based in Jakarta,
that is responsible for all major procurement, supported by regional
offices dealing with local suppliers. Tenders are well-controlled and
subject to multiple reviews. Unit costs have benefited from increasing
yields, but recent inflation, particularly on fertiliser caused by the
Russia Ukraine conflict, has inevitably fed through to cost per tonne.

The Group is subject to an
additional tax liability.

In all cases, the Group is committed to complying with relevant tax
legislation and to paying taxes that are due. The Group employs a
dedicated tax specialist team and works with external tax consultants
where necessary to advise on complex areas.

9 Sufficiency of workforce
The Group is unable to
attract, train, or retain a
sufficient workforce at its
oil-palm estates.

A lack of workers may lead
to key operational tasks not
being performed to a Group
standard or not performed
at all, resulting in lost crop,
production and revenue.

The Group has a clearly defined management structure across all its
operating locations in Indonesia from senior management through
to managers and assistants responsible for individual estates and
divisions. Regular reviews are conducted including a discussion of
current and anticipated workforce requirements. Steps are taken where
necessary to recruit additional workers, and the pay rates, working and
living conditions are monitored to ensure that they are in accordance
with Group standards.

MED LOW



7 Inflation
There is a significant
increase in Group costs
due to inflationary
pressures.

MED HIGH N

8 Taxation
The Group is unable to
agree its tax accounting
with local tax authorities.

LOW MED N

PEOPLE

MED HIGH N

10 Succession planning
The Group fails to
focus on development of
its management team and
planning for succession
in key roles.

MED MED N

The Group relies on the
experience and expertise
of its senior management
Group, without whom the
Group risks a reduction in its
high operating standards.

Succession planning for senior staff has been identified as a priority
area and is discussed on a regular basis by the Group board. Wherever
possible, early discussions are held with staff members to discuss their
plans along with opportunities for future development. The continuing
growth of the Group has allowed for scope to provide new learning and
development for staff.

STRATEGIC REPORT continued

RISK

IMPACT

MITIGATION

ENVIRONMENTAL, SOCIAL AND GOVERNANCE

11 Environmental obligations
The Group fails to
comply with its own
policies, or with legal or
regulatory obligations, on
environmental protection.

A failure to comply with
environmental obligations
may lead to environmental
loss, reputational damage,
remediation costs and
potential fines.

LOW HIGH



12 Relationship with local populations
Operations are disrupted
by a breakdown in
relations with local
populations around
Group estates.

Disruption around Group
estates, including workforce
problems or transport
difficulties, could lead to a
slowdown or even stoppage
in Group production.

LOW HIGH



13 Reporting obligations
The Group fails to comply
with obligations to
provide external reporting
on ESG data and analysis.

LOW MED N

The Group may be subject
to regulatory challenge,
or have concerns raised
by investors if necessary
ESG data is missing from
reporting.

POLITICAL AND REGULATORY

14 Indonesian regulatory environment
The Indonesian
government introduces
new laws or regulations
which adversely affect
Group operations.

A change in the legal or
regulatory environment
could result in a reduction
in Group profitability due to
lower pricing, higher taxes, or
some other impact.

MED MED



15 Bribery and corruption
Operations in Indonesia
are deemed to be at risk
of bribery and corruption.

Inappropriate activities could
lead to both legal sanction
and a loss of reputation.

LOW MED



16 Security of land rights
The Group fails to secure
or renew the land
rights over its operating
locations.

Without valid title to the
land on which it operates,
estate operations may be
significantly disrupted or, at
worst, result in loss of the
land.

LOW MED



The Group applies its well-established policies on the development
and operation of sustainable oil-palm estates. It has a separate
sustainability team, including staff members resident at all its operating
sites. The Group is a long-standing member of the RSPO and is subject
to their independent audit and scrutiny.

Careful attention is paid to the Group’s relationship with local
populations around Group estates, including communication with
local government, mayors and village representatives. The smallholder
co-operative schemes attached to the majority of the Group’s planted
areas play an important part in aligning the interests of the Group
and the local community, and the Group works hard to ensure that the
mutual benefits of co-operative participation are well understood.

There have been, and continue to be, significant changes in the
regulatory environment around ESG in recent years, and the obligations
to capture and report data are only expected to increase. The Group
works with advisors, monitors guidance, and plans disclosure in
annual reports, standalone documents and through the website with
the objectives of meeting its obligations and to providing useful
information to its shareholders.

The Group has a very long history of operating in Indonesia, and during
that time the country has benefited from a period of political stability
and economic growth. Inevitably some changes occur which influence
the Group’s operations, for example the CPO export tax changes during
2022, but the Group monitors these and reports them to shareholders
as required.

The Group has a robust policy on bribery and corruption, completes
risk assessments and conducts training of senior management and
staff in all locations. It requires all its business partners to complete
questionnaires on their respective anti-bribery and anti-corruption
activities and policies. The Group has experienced staff at its Jakarta
head office and has employed independent consultants to maintain a
whistleblowing reporting channel to monitor any issues that arise.

The Group’s legal department in Jakarta maintain close control over
all of the Group’s land titles across Indonesia. Land is held under
25- or 30-year leases (HGUs) which are legally renewable at the end of
their term. The Group’s experience has been that renewal of HGUs has
been a straightforward process. For newer projects and estates under
development, a process of initial application takes place, which again
is controlled by the legal department. Prior to obtaining the HGU, all
necessary development and operating licences are obtained.

M.P. EVANS GROUP PLCANNUAL REPORT 2022STRATEGIC REPORT
RISK MANAGEMENT

RISK

IMPACT

MITIGATION

POLITICAL AND REGULATORY (continued)

17 Land rights dispute
There is a dispute over
land rights between
the Group and another
interested party.

LOW MED N

If the Group is unable to
defend its land rights, a loss
of planted hectarage would
have a knock-on effect to
crop and production.

At times, the Group is subject to claims from others who seek to
demonstrate an interest in the Group’s planted areas. This can be more
prevalent when commodity prices are high, not just for CPO, but other
competing commodities when claimants see other potential uses for
Group land. The Group legal team, supported by advisors as necessary,
robustly defend the Group’s land rights, and in all cases the Group is
satisfied that it holds the proper title to its planted areas.

INFORMATION SYSTEMS

18 Information security
Group IT systems are not
sufficiently secure.

MED LOW N

Proprietary or sensitive
information is shared
outside the Group, either as
a result of accidental loss or
malicious cyber attack.

A Group-wide information management and reporting system has
been deployed, and an in-house IT team works closely with retained IT
consultants to ensure that Group data remains secure. Access controls
have been established, and core data is stored in a secure ‘cloud’
environment.

19 System robustness
IT systems critical to the
Group are found to be
unreliable or inconsistent.

LOW LOW N

Group decision-making and
reporting is based on system
output, and unreliable data
could lead to poor decisions
or incorrect analysis.

The Group’s management system is made up of several modules
covering different aspects of operations and reporting. It is well-
established and outputs are reviewed by management across the
Group. Reports are discussed and challenged appropriately. A change
management protocol has been developed to ensure that system
updates are tested rigorously before being deployed into the
‘live’ environment.

Approved by the board of directors and signed on its behalf.

Matthew Coulson

Chief executive

21 March 2023

SUSTAINABILITY

The Group is committed to the production of certified sustainable palm oil, and has
sustainability at the core of its strategic and operational decision making

SUMMARY OF TASKFORCE ON
CLIMATE-RELATED FINANCIAL
DISCLOSURES
The Group recognises that developing

active members of the RSPO, we

focused specifically on environmental,

do not deforest, and we are good

social and governance (“ESG”) matters.

stewards of the land we cultivate. We

provide housing, along with medical,

The management of climate risks

a sustainable business means making

educational and leisure facilities

and opportunities takes place

long-term decisions, including

protecting the environment for

the benefit of all. Concerns about

along with places of worship for our

throughout the business. The board

workers and their families.

has delegated executive responsibility

for the Group’s climate action to the

global warming, and in particular

The board proactively takes into

chief executive. In his role, the chief

the destruction of tropical rainforest,

consideration stakeholder feedback in

executive takes the lead in setting

have rightly received, and continue to

the development of its sustainability

policy on sustainability and managing

receive, close scrutiny. As a producer

strategy, including the Group’s

the Group’s climate risk register. The

of sustainable palm oil, the Group

response to climate change. Through

Group has a dedicated sustainability

supports the UK’s commitment to

previous stakeholder engagement, we

department, which, along with the

limiting global warming to well below

identified six material topics which

dedicated head of risk management,

2°C, as set out by the Paris Agreement.

helped us to define strategic focus

support the chief executive in

areas. Those topics are greenhouse

identifying, assessing and addressing

For the first time, in this annual

report, on a voluntary basis, the

gas emissions, forest protection,

climate risks and opportunities

traceability, water, fair labour and

impacting Group operations.

Group has followed the guidance

communities.

of the Taskforce on Climate-related

Financial Disclosures (“TCFD”), covering

The board has overall responsibility

STRATEGY
Our strategy is to maintain expansion

the four key areas of governance,

for monitoring climate-related risks

of palm-oil production, and hectarage,

strategy, risk management and

and opportunities. We understand

in a sustainable and cost-effective

metrics and targets, and is reporting

that climate change may present

manner. Whilst this is our first

its progress on integrating the 11

challenges which could impact our

TCFD disclosure, we have, for many

TCFD recommendations into Group

ability to deliver the Group’s strategy,

years, published a wide range of

processes. Summary information is

and climate-related risks and

information, in our annual report,

provided in this section of the annual

opportunities are considered during

standalone reporting and on our

report, whilst more detailed analysis

strategic decision making by the

website, showing how we approach

will be provided in a standalone report

board where appropriate. To support

sustainability in practice. We have

due for publication later in 2023.

them in fulfilling their responsibilities,
a training session was held for the

utilised the recommendations of TCFD
as a tool to strengthen our developing

CLIMATE GOVERNANCE
The board continues to promote the

board, facilitated by the Group’s third-

sustainability programme and

party sustainability advisors, providing

ensure awareness of climate change

success of the Group, considering

them with an overview on climate

influences strategic and financial

the interests of all its stakeholders,

change and how both governments

decisions made by the board. By

and focuses on acting responsibly

and individual organisations are

identifying and assessing the climate-

when considering the Group’s

setting ‘net zero’ emissions targets.

related risks which may impact our

strategic priorities. Climate change

This session also included a

business directly over time, we can

evaluation has been integrated into

facilitated discussion around how to

actively work to mitigate potential

existing sustainability governance,

account for the Group’s greenhouse

damage. This also enables us to

which has been developing alongside

gas emissions, or ‘carbon balance

identify and capitalise on climate-

our sustainability strategy. Acting

sheet’. As part of its governance

related opportunities which may

responsibly is at the heart of what

development, the board is reviewing

support the Group when delivering on

we do and who we are. We are

the need for a separate committee

its business strategy.

M.P. EVANS GROUP PLCANNUAL REPORT 2022

SUSTAINABILITY

Conservation area at Bumi Mas

RISK MANAGEMENT
The board acknowledge their

Evaluation

Management

Using climate-scenario analysis,

After assessing each risk, potential

responsibility for the Group’s system

we assessed each risk, considering

management strategies have

of risk management. A review of

the process of risk identification,

evaluation and management is

different timescales and global

been discussed, with an objective

warming forecasts, leading to risk

to implement the most effective

classifications of low, medium or

framework and actions for each

carried out regularly and presented

high for likelihood and impact. The

relevant risk. Throughout the process

to the board for discussion and

results of this analysis were presented

we engaged with internal stakeholders

approval. We have worked to integrate

at a climate-risk workshop, which

across the business to identify

an awareness of climate change into

was attended by representatives

information about existing mitigation

this existing process to form a

from operations, sustainability, risk

processes. We applied a ‘climate

climate-risk-management framework,

management, finance and the board.

lens’ where possible to existing

as detailed below.

Risks can also be categorised as

mitigation strategies across all parts

Identification

‘transition’ or ‘physical’ in nature.
Physical risks arise from climate events,

of the business. We will introduce
new management processes where

We launched a data collection process

whilst transition risks from action

appropriate. We have developed a

in 2022 to identify the climate-related

taken to transition away from fossil-

climate-risk register which will be

risks which are applicable for our

fuel reliance. The analysis identified

maintained internally by our

business. Through this process we

the Group’s most significant physical

chief executive and reviewed at

engaged with internal stakeholders

risk to be in relation to rising mean

least annually.

to perform a review of current

temperatures, and the most significant

processes and operations. Education

transition risk to be the costs

sessions on TCFD and climate change

associated with transitioning to lower

were facilitated by our specialist

emissions technologies. Further details

sustainability consultant and current

of these and the other risks identified

guidance was considered throughout

will be included in the Group’s

this process.

standalone sustainability report.

SUSTAINABILITY continued

METRICS AND TARGETS
The Group is committed to operating

100 palm oil companies. In 2022, the

all Group operations. Emissions from

Group increased its score by 3.9% to

scope 1 and 2 account for 5% of the

sustainably and doing what it can

80.2% and its ranking to 15th.

Group total in 2021, and relate to

to protect the environment. A range

of metrics is used to measure our

impact and we aim to establish

reduction targets to manage

our climate-related risks and

Reducing our greenhouse
gas emissions

In 2022, the Group conducted a

energy consumption (electricity, gas

and biomass) as well as transport

fuels used in Group operations.

thorough data collection process,

The Group’s scope 1 and 2 emissions

opportunities. We are working to

working with its specialist

for 2022, and total emissions for its

minimise our emission of greenhouse

sustainability consultants, to

baseline year in 2021 are as reported

gases and are diligent in ensuring

calculate its full carbon footprint

in the following table. Given the

the Group is not responsible for any

comprising of scope 1, 2 and 3

complexity of collecting all scope

deforestation. We will report on our

greenhouse gas emissions. In

3 data, we anticipate reporting the

environmental performance annually

accordance with TCFD guidance,

2022 information in our forthcoming

in the future.

scope 1 relates to the Group’s direct

standalone sustainability report.

operations and scope 2 relates to

In order to reduce our impact on

emissions from fuel used to power

the environment, we first must

those operations. Scope 3 emissions

understand and measure it. Reducing

are indirect, occurring outside of the

our greenhouse gas emissions is a

Group, for example in the products

material topic for our stakeholders

purchased for use by the Group, or in

and therefore, in 2022, we initiated

the onward processing of the Group’s

a robust data collection process to

output. It is common for scope 3 to

calculate our full carbon footprint for

account for the significant majority

the first time.

of total emissions. Not all emissions

are from CO2, for example some may

Additional environmental indicators

arise from methane, but for simplicity

are used to reflect our commitment

all are converted to CO2 equivalent

to acting responsibly. We believe that

amounts, and reported as tonnes of

producing palm oil does not have

CO2 equivalent, or ‘tCO2e’. As this is a

to come at the expense of tropical

complex process, we used 2021 data

rainforests, reduced biodiversity

to calculate a ‘baseline’ year. The

or threatened endangered species.

creation of our carbon balance sheet

Adhering to RSPO standards means

allows us to understand the impact

we assess the suitability of land for
planting using the High Carbon Stock

associated with our operations, both
direct and indirect, while identifying

Scope 1
(direct)

Scope 2
(indirect)

Scope 3
(indirect)

2022
TONNES

2021
TONNES

116,800

124,500

500

400

117,300

124,900

tbc

2,594,400

2,719,300

The Group’s scope 1 and 2 emissions

reduced by 6% in 2022 and the Group

is committed to making further

reductions. The biogas facilities

installed at our operating locations

are already helping to make a

positive difference. Further detailed

SECR information will be included in
the Group’s standalone sustainability

Approach (HCSA), have a policy of

opportunities for future reduction.

report.

zero-burning and a commitment not

The Group’s total greenhouse gas

to develop high conservation value

emissions (scopes 1, 2 and 3) were

(HCV) land. We prevent any burning

2.7 million tCO2e for 2021, with scopes

of land for subsequent cultivation,

1 and 2 being 5% and scope 3 being

we seek to identify and conserve

95% of the total.

high-carbon-stock areas, and we

promote biodiversity. The Group

The Group started to report scope

also participates each year in the

1 and 2 data for the UK business in

SPOTT assessment undertaken by the

2019 for compliance with streamlined

Zoological Society of London, which

energy and carbon reporting (“SECR”)

provides an indicator of the ESG

requirements. We have widened our

disclosures provided by a sample of

data collection, and now report on

Calculating the Group’s indirect

scope 3 emissions enables it

to identify the main sources of

greenhouse gases outside its

own operations. This process also

provides a baseline for making

decisions about carbon neutrality

and net zero. Within scope 3, the

largest component comes from the

further processing of the products

that the Group sells, accounting for

M.P. EVANS GROUP PLCANNUAL REPORT 202285% of the Group total. A large part

of this is from processing of crop in

outside mills, and the Group should

benefit from a reduction as its own

milling capacity increases from its

baseline year.

Intensity measures

The Group uses intensity measures

as a way of monitoring emissions

whilst also taking account of the

growth in activities and supporting the

measurement of year-on-year progress.

The main intensity measure used is

tCO2e per tonne of CPO produced. For

the Group’s baseline year, the total

intensity measure for scopes 1, 2 and

3 was 9.3, whilst in 2022 the intensity

measure for scopes 1 and 2 was 0.4.

NEXT STEPS
The Group is committed to working on

climate risk and carbon reduction. The

Group has continued to invest in its

own efficient milling capacity, and while

this will increase scope 1 emissions,

they will be more than offset by a fall

in scope 3 emissions as the Group will

not rely in the same way on outside

mills. Data gathering is taking place for

2022 scope 3 analysis, and the plan is

to publish this as part of the detailed

sustainability report due for publication

later this year. The Group is also

working with its external consultants
on carbon analysis, including carbon

sequestration, associated with the

Group’s planted hectarage and its

conservation areas, as these are

not included in the scope 1, 2 and 3

categories.

Having completed baseline analysis,

plans for carbon reduction are being

assessed. The Group is holding a net-

zero strategy workshop in the first half

of 2023 to review its carbon footprint,

decarbonisation opportunities, and

potential targets.

SUSTAINABILITY

INSPECTION OF OWL-NESTING BOX AT KOTA BANGUN

As part of its work to maintain healthy and productive

palms on its estates, and to mitigate against the risk of

significant damage to fresh fruit bunches prior to harvest,

the Group seeks to keep rat populations under control

within its planted areas.

As part of its strategy to control rats, the Group builds

barn-owl boxes amongst its oil palms, and encourages barn

owls, which are natural rat predators, to nest within them.

CASE STUDY

ESTATE SCHOOLS

The Group works to ensure education is
accessible for children of workers living
on its oil-palm estates, providing both
schooling and transportation.

A number of the Group’s estates are in relatively

remote areas, particularly those located in East

Kalimantan on the island of Borneo. Attracting and

retaining a high-quality workforce is important to

the Group, and encouraging workers to join our more

remote estates is difficult when they bring their

families, if there is no easy access to local schools.

As part of the Group’s commitment as a responsible

operator, a significant and ongoing investment is

being made in school building in East Kalimantan,

and at the end of 2022, across the Group’s estates

in that region, 640 school places had been taken

up by pupils across three schools staffed by over

40 teachers. A further school is currently under

construction at Kota Bangun estate, due to be

opened in 2023.

COMMUNITIES

The Group takes an active
interest in the welfare of the
communities living on and
around its operations promoting
trust and mutual support.

Over the last twenty years, the Group

has expanded substantially in Indonesia,

investing over half a billion US dollars

in its oil-palm projects. In each of its

key development areas, whether in East

Kalimantan, in Sumatra or on Bangka

Island, the Group has always worked

carefully and sensitively with local

communities. The Group’s strategy

anticipates further growth, and as part

of that strategy recognises that local

communities are important stakeholders

in Group operations.

Following the formation of smallholder

co-operative schemes connected

to the Group’s estates at Pangkatan

and Simpang Kiri, the Group now has

smallholder schemes connected to all

its estates. By the end of 2022, these

schemes had over 10,000 individual

members. Those smallholder schemes

owned 13,900 hectares of oil palm, a very

valuable asset.

Given the remote nature of some of the

Group’s estates, it is often one of the

largest, if not the largest, employer in

the area, providing a valuable source of

income helping to raise living standards.

During the course of 2022, the Group

increased its permanent workforce to

over 11,500, with its economic impact felt

far more widely.

The Group is committed to providing

high-quality facilities for the

communities living on its estates (see

page 41 for details).

M.P. EVANS GROUP PLCANNUAL REPORT 2022Transportation to and from estate schools is provided by

the Group in dedicated school buses. In other regions where

government schools are more easily accessible, Group school

buses take children to and from their classes.

SUSTAINABILITY
COMMUNITIES

Primary school at Kota Bangun

For younger children, estate crèches are

available, providing a safe and supportive

pre-school learning and development

environment.

COMMUNITIES continued

CASE STUDY

FIRE SAFETY MONITORING

Group estates have dedicated and
trained fire marshals. High-risk areas
are monitored, and fire-fighting
equipment can be deployed quickly

The Group recognises the risk of fire on its

oil-palm estates and surrounding areas and its

environmental obligation to remain vigilant in

monitoring that risk, both in its own estates and

in those adjoining its areas of operation. Fire risk

includes danger to life, environmental damage

associated with uncontrolled release of stored

greenhouse gases, and loss of physical assets

including planted areas.

Training is

conducted

regularly by the

Group’s health and

safety team, and

risk assessments

are reviewed and

updated.

Mobile water tank and
pump unit at Kota Bangun

Fire watch-towers have been built on Group

estates and patrols take place. The Group has

a zero-tolerance approach to burning as a

method for clearance, and makes a report of

any observed instances in surrounding areas.

Where any instances occur on Group land, they

can be dealt with swiftly using fire-fighting

equipment available to trained personnel

on site.

M.P. EVANS GROUP PLCANNUAL REPORT 2022
COMMITMENT TO THE GROUP’S ESTATE COMMUNITIES

SUSTAINABILITY
COMMUNITIES

HOUSING
Developing high-quality housing is a core part of the commitment to

our workforce and their families. During 2022, the Group built 350 new

housing units, and approximately 16,000 people live on the Group’s

oil-palm estates.

EDUCATION
The Group offers crèche facilities for young children and has developed

both primary and secondary schools on its estates, and now has

over 1,000 school places available. School buses are provided by

the Group.

RECREATION
The Group supports and encourages a wide range of sporting activities at

its estates. Infrastructure is in place to enable participation by both our

workforce and the wider community, with sports programmes in place for

young people through to more senior age groups.

HEALTH
There are 12 medical facilities at Group estates, and the doctors and

medical staff employed by the Group are able to offer support and

care on a wide range of issues, with 41,000 consultations completed

in 2022.

RELIGION
Religion plays an important part in community life on Group estates,

and this is supported by the Group through the provision of

places of worship.

COMMUNITY
Finally, gathering as estate communities is important, and the Group
has provided both community halls and estate clubhouses to make

this possible. The Group started construction during the year on a new

clubhouse at Bumi Mas, due for completion in 2023.

M.P. EVANS GROUP PLC
ANNUAL REPORT 2022

REPORT OF THE DIRECTORS

6. Michael Sherwin
INDEPENDENT NON-EXECUTIVE DIRECTOR

Appointed a director and member of the audit and
remuneration committees in July 2022. Has over
40 years’ experience in finance and leadership roles,
having originally trained and qualified as a chartered
accountant with Price Waterhouse. Was CFO of Games
Workshop plc for ten years, followed by nine years as
CFO at Vertu Motors plc. Has also worked as a non-
executive director at both Plusnet plc and at Sumo
Group plc where he chaired their audit committees.

7. Tanya Ashton
INDEPENDENT NON-EXECUTIVE DIRECTOR

Joined the board on 1 August 2022. Member of audit
and remuneration committee. Has over 18 years’
experience working in ESG roles. Currently head of
sustainability at Walgreens Boots Alliance, Global
Sourcing, Europe and a board member of global
not-for profit organisation The Sustainability Consortium.
Previously held senior positions at Silver Spoon British
Sugar plc, part of Associated British Foods. Recognised
for her commitment to increasing sustainability in
consumer products.

8. Lee Yuan Zhang
NON-EXECUTIVE DIRECTOR

Joined the board on 1 February 2023. Regional Director
(Plantations) of Kuala Lumpur Kepong Berhad (“KLK”),
Malaysia. Former President Director of PT KLK
Agriservindo, Indonesia, responsible for the management
of 140,000 hectares of oil-palm plantations across
five Indonesian provinces. Has also held a number of
senior head office roles, including senior marketing and
sales roles, within the KLK Group.

1. Peter Hadsley-Chaplin
EXECUTIVE CHAIRMAN

Appointed a director in 1989, chairman in 2010.
Former executive chairman of Bertam Holdings PLC
and Lendu Holdings PLC. Former chairman of The
Association of the International Rubber Trade. Prior to
joining the Group in 1988, he was a commodity broker
with C Czarnikow Limited.

2. Matthew Coulson
CHIEF EXECUTIVE

Appointed chief executive in 2022 having been finance
director since 2017. Joined the Group as chief finance
officer in 2016 with previous experience as an audit
director of Deloitte LLP, including work on companies in
the agricultural sector and in the technical policy team.

3. K Chandra Sekaran
EXECUTIVE DIRECTOR, ASIA

PRESIDENT DIRECTOR, PT EVANS INDONESIA

Appointed a director in 2021. Took up position of PT Evans
Indonesia’s president director in 2008. Began working
in Indonesia in 1995, with experience in Sumatra and
Kalimantan where he was chief operating officer for
Sinarmas Plantations. Began career with Harrisons and
Crosfield (later known as Golden Hope Plantations and
today part of the Sime Darby group). Has a profound
understanding of the Indonesian plantation industry and
the social issues related to it.

4. Bruce Tozer
INDEPENDENT NON-EXECUTIVE DIRECTOR

Appointed a director and member of the audit and
remuneration committees in 2016, and chairman of
those committees since 2022. Has held senior roles at
JP Morgan, Rabobank International, and Credit Agricole.
Non-executive director of the Real Wild Estates Limited,
and Canadian-listed Base Carbon Corp. He consults
in environmental markets, commodities, agribusiness
investment and ESG. Advisory roles include lead adviser
on carbon at Singapore-regulated Abaxx Exchange.

5. Philip Fletcher
NON-EXECUTIVE DIRECTOR

Retired as managing director in June 2016, having been
appointed director in 1987 and managing director in
1991. He was executive chairman between 1999 and 2005.
Former executive director of Bertam Holdings PLC and
Lendu Holdings PLC. Joined the Group in 1982 after an
initial career in accountancy with KPMG in London and
Sydney and in industry with the Rio Tinto plc group.
Member of the audit committee.

REPORT OF THE DIRECTORS

Board of directors at UK head office
for December 2022 board meeting

REPORT OF THE DIRECTORS continued

The directors present the audited consolidated and
parent-Company financial statements of M.P. Evans
Group PLC for the year ended 31 December 2022.

REVIEW OF BUSINESS AND FUTURE DEVELOPMENTS
A review of the year and future prospects (including the
principal risks and uncertainties facing the Company) is
included in the chairman’s statement (pages 4 to 7) and
in the strategic report (pages 14 to 33) and is incorporated
in this report by reference.

RESULTS AND DIVIDEND
Details of the profit for the year are given in the

consolidated income statement on page 66.

An interim dividend of 12.5p (2021 – 10p) per share
in respect of 2022 was paid on 4 November 2022. The
board recommends a final dividend of 30p (2021 – 25p)
per share. This dividend will be paid on or after 16 June
2023 to those shareholders on the register at the close
of business on 28 April 2023. This final dividend is not
provided for in these financial statements.

SHARE CAPITAL
The Company has one class of share. Details of the issued
share capital of the Company are as follows:

from the start of the year until their resignations on

31 March 2022 and 30 September 2022 respectively.

Michael Sherwin, Tanya Ashton and Lee Yuan Zhang

will offer themselves for election at the forthcoming

annual general meeting. In addition, in accordance with

the articles of association, Philip Fletcher, Bruce Tozer

and Matthew Coulson will retire from the board at the

forthcoming annual general meeting and, being eligible,

will offer themselves for re-election.

The directors serving at the end of the year, together

with their interests at the beginning, or later date of

appointment, and end of the year in the 10p shares

in the Company were as follows:

BENEFICIAL

OPTIONS

At 31 December 2022

P E Hadsley-Chaplin

M H Coulson

K Chandra Sekaran

P A Fletcher

B C J Tozer

M Sherwin

T Ashton

1,561,717

17,000

142,181

1,048,171

2,250

1,561,717

13,900

123,181

1,048,171

–

49,234

32,000

–

35,180

59,000

–

Issued (fully-paid and voting)
at 1 January 2022

Issued in respect of options

Bought back and cancelled

Issued (fully-paid and voting)
at 31 December 2022

SHARES OF
10P EACH

54,696,253

30,000

(495,365)

54,230,888

At 1 January 2022 (or later
date of appointment)

P E Hadsley-Chaplin

M H Coulson

K Chandra Sekaran

P A Fletcher

B C J Tozer

M Sherwin

T Ashton

The Company introduced a share-buyback programme

during the year. Under that programme the Company

bought back and cancelled 495,365 shares, representing

0.9% of the issued share capital, for a total cost of

Further details of the directors’ interests in share options

are disclosed in the directors’ remuneration report, on

page 58.

US$4.9 million. There was no share-buyback programme

None of the directors holds any beneficial interest

in operation in the prior year.

DIRECTORS AND DIRECTORS’ INTERESTS
The present membership of the board is detailed on

pages 42 and 43. All of those directors served throughout

the year apart from Michael Sherwin, who joined the

board on 1 July 2022, Tanya Ashton, who joined on

1 August 2022, and Lee Yuan Zhang, who was appointed

in, or holds options to buy shares in, any subsidiary

undertaking of the Company as at the date of this report.

No director has had a material interest in any contract

of significance in relation to the business of the

Company, or any of its subsidiary undertakings, during the

financial year or had such an interest at the end of the

financial year.

after the year end on 1 February 2023. In addition, Darian

As permitted by the Company’s articles of association,

McBain and Jock Green-Armytage both served as directors

there was throughout the year to 31 December 2022,

M.P. EVANS GROUP PLCANNUAL REPORT 2022
REPORT OF THE DIRECTORS

and is at the date of this report, a qualifying third-

party indemnity provision, as defined in section 234 of

the Companies Act 2006 in force for the benefit of the

directors.

SIGNIFICANT INTERESTS
As far as the Company is aware, the significant interests
in the Company as at the date of this report are:

been purchased by the Company as treasury shares as
this would give the Company the flexibility of being able to
sell such shares quickly and effectively where it considers
it in the interests of shareholders so to do. Whilst any such
shares are held in treasury, no dividends will be payable
on them and they will not carry any voting rights.

Resolution 11 set out in the notice of the annual general

meeting will accordingly be proposed to authorise the

NATURE

purchase of up to a maximum of 5,401,372 shares, on the

Kuala Lumpur Kepong
Berhad

Nokia Bell Pensioenfonds
ofp

Direct

12,685,357

23.49

AIM market of the London Stock Exchange, representing

10% of the Company’s current issued share capital.

The maximum price which may be paid for a share on

Direct

5,683,225

10.52

any exercise of the authority will be restricted to 5%

Abrdn plc

Indirect

2,983,902

5.52

Schroder Investment
Management

Canaccord Genuity Wealth
Management

MM Hadsley-Chaplin

Direct

1,928,254

Indirect

1,960,000

Indirect

2,102,120

3.89

the London Stock Exchange for the five business days

above the average of the middle-market quotations for

such shares as derived from the Daily Official List of

before the purchase is made. The maximum number of

3.63

3.57

shares and the price range are stated for the purpose

of compliance with statutory requirements in seeking

OUTSTANDING OPTIONS TO SUBSCRIBE
As at the date of this report, there were options to
subscribe for 20,000 shares outstanding under the
executive share-option scheme, and options to subscribe
for 182,577 shares outstanding under the 2017 long-term
incentive scheme. If all of the options were exercised,
the resulting number of shares would represent 0.37%
of the enlarged issued share capital at that date and
0.41% of the enlarged issued equity share capital at that
date if the proposed authority to purchase shares was
exercised in full (excluding any share capital which may
be purchased and held in treasury).

AUTHORITY TO MAKE MARKET PURCHASES
OF SHARES
The directors propose to seek authority under resolution
11 for the Company to purchase its own shares on the
AIM market of the London Stock Exchange until 30 June
2024 or, if earlier, the date of the Company’s 2024 annual
general meeting. The authority will give the directors
flexibility to purchase the Company’s shares as and when
they consider it appropriate. The board will only exercise
the power of purchase when satisfied that it is in the best
interests of the Company so to do and all such purchases
will be market purchases made through the AIM market
of the London Stock Exchange. The directors would only
consider making purchases if they believed that the
earnings or net assets per share of the Company would
be improved by such purchases. The directors would
consider holding the Company’s own shares which had

this authority and should not be taken as an indication

of the level of purchases, or the prices thereof, that the

Company would intend to make.

The authority conferred by resolution 11 will lapse on

30 June 2024 or, if earlier, the date of the Company’s 2024

annual general meeting.

PAYMENTS TO SUPPLIERS
It is the Group’s normal practice to make payments to
suppliers in line with agreed terms, provided that the
supplier has performed in accordance with the relevant
terms and conditions. The Group’s average creditor days
calculated as at 31 December 2022 amounted to 37 days
(2021 – 50 days).

FINANCIAL INSTRUMENTS
Details of the Group’s financial instruments, and the
board’s policy with regard to their use, are given in note
31 to the consolidated accounts on pages 90 and 91.

SUBSIDIARY COMPANIES
Details of the Group’s subsidiary companies, including
their country of operation, are given on page 98.

ENERGY USE
The Group has provided disclosures in accordance with
the requirements of the Taskforce on Climate-related
Financial Disclosures in the sustainability section of this
annual report on pages 34 to 37. Energy use is included
as part of the ‘scope 1 and 2’ disclosures in that analysis.

REPORT OF THE DIRECTORS continued

STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE FINANCIAL STATEMENTS
The directors are responsible for preparing the annual

and integrity of the Company’s website. Legislation in

the United Kingdom governing the preparation and

dissemination of financial statements may differ from

report and the financial statements in accordance with

legislation in other jurisdictions.

applicable law and regulations.

In the case of each director in office at the date the

Company law requires the directors to prepare financial

report of the directors is approved:

statements for each financial year. Under that law the

directors have prepared the Group financial statements

in accordance with UK-adopted International Accounting

Standards and the Company financial statements in

• so far as the director is aware, there is no relevant

audit information of which the Group and parent-

Company’s auditors are unaware; and

accordance with United Kingdom Generally Accepted

•

they have each taken all the steps that they ought to

Accounting Practices (United Kingdom Accounting

have taken as a director in order to make themselves

Standards, comprising Financial Reporting Standard 101

aware of any relevant audit information and to

‘Reduced Disclosure Framework’ (“FRS101”) and applicable

establish that the Group and parent-Company’s

law). Under company law the directors must not approve

auditors are aware of that information.

the financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of the

Group and the Company and of the profit or loss of the

GOING CONCERN
The Group’s operations are funded through a

Group and Company for that period. In preparing these

combination of cash resources, loan finance, and long-

financial statements, the directors are required to:

term equity. The board has undertaken a recent review of

• select suitable accounting policies and then apply

them consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• state whether UK-adopted International Accounting

Standards and applicable United Kingdom accounting

standards, including FRS101, have been followed,

subject to any material departures disclosed and

explained in the Group’s and Company’s financial

statements respectively; and

the Group’s financial position, including forecasts, risks

and sensitivities. The review has considered the Group’s

plans for further development in Indonesia, along with

the required funding for that development. Based on

that review, the board has concluded that the Group is

expected to be able to continue in operational existence

for the foreseeable future, being at least the next

12 months from the date of approval of these financial

statements. As a result, the board has concluded that

the going-concern basis continues to be appropriate in

preparing the financial statements.

• prepare the financial statements on the going-concern

basis unless it is inappropriate to presume that the

Company will continue in business.

POST BALANCE-SHEET EVENT
As described in note 33, the Group acquired a further

2,100 planted hectares close to its Simpang Kiri estate in

The directors are responsible for keeping adequate

March 2023. Total costs associated with the acquisition

accounting records that are sufficient to show and explain

are estimated to be US$14.3 million.

the Group’s and the Company’s transactions and disclose

with reasonable accuracy at any time the financial

position of the Company and the Group and enable them

INDEPENDENT AUDITORS
The auditors, BDO LLP, have expressed their willingness to

to ensure that the financial statements and the directors’

continue in office and a resolution to re-appoint them will

remuneration report comply with the Companies Act

be proposed at the forthcoming annual general meeting.

2006. They are also responsible for safeguarding the

assets of the Company and the Group, and hence for

taking reasonable steps for the prevention and detection

of fraud and other irregularities.

Approved by the board of directors and signed by its order.

Katya Merrick

Company secretary

The directors are responsible for the maintenance

21 March 2023

M.P. EVANS GROUP PLCANNUAL REPORT 2022REPORT OF THE DIRECTORS

Peter Hadsley-Chaplin officiating
at the opening of the new Kota
Bangun clubhouse

CORPORATE GOVERNANCE

The Group’s recognised corporate governance code is the Quoted Companies Alliance’s 2018 Corporate Governance

Code (“QCA Code”). The board is committed to following the principles set out in the QCA Code, to review, disclose and

report on the corporate-governance structures and processes operated by the Group and to develop these further, to

continue to meet the appropriate standards. An explanation of how the Group has applied the principles, including an

index of corporate governance disclosures, is included on the Group’s website (www.mpevans.co.uk). The chairman’s

statement on corporate governance is set out here.

The first of the Group’s four strategic pillars is

objectives and the Group’s strategy. Secondly, a robust

“Responsibility”. At M.P. Evans, acting responsibly is at

and transparent recruitment process was carried

the heart of what we do and, as a board, we believe

out with the assistance of specialist recruitment

that a strong governance framework plays a vital role

consultants. As a result, we have been very pleased

in ensuring that business is conducted responsibly

during the year, to welcome firstly Michael Sherwin, a

at every level. This, in turn, benefits the Group’s

very experienced non-executive director and former

shareholders. The board embraced the QCA’s Corporate

listed company executive, coming from an accountancy

Governance Code (the “Code”) in 2018, recognising this

and finance background, and then Tanya Ashton, who

as a valuable tool to help the Group achieve its goals.

is a leader in sustainability and ESG. At the beginning

As a board, we dedicate significant time to developing

of February 2023, we also welcomed Lee Yuan Zhang

and reviewing codes and policies which support our

to the board who, due to his roles within the Kuala

values of acting responsibly, and have promoted these

Lumpur Kepong Berhad Group, has valuable experience

throughout the organisation. Our compliance with the

in the Indonesian oil-palm plantation sector, as well as

Code is monitored annually by the board, which also

wider corporate experience. We are delighted already

serves as an opportunity to remind ourselves of the

to be benefiting from the various perspectives brought

corporate governance standards we aspire to and to

by our new directors, and are confident that we are in

keep up to date with any developments. The corporate

strong shape, with a dynamic board equipped to face

governance information and QCA compliance index on

challenges and to identify opportunities, particularly

our website is updated annually following the board’s

those presented by climate change, and to continue to

review, and was last updated in September 2022.

deliver returns to shareholders.

As chairman, in addition to setting the Group’s strategy

With the appointment of Michael and Tanya at

in conjunction with the board, one of my primary

the beginning of July and August respectively,

responsibilities is to ensure that an effective corporate

we rebalanced the ratio of independent to non-

governance framework exists, and that clear policies,

independent non-executive directors where, for a very

which have been approved and endorsed by the board,

short period in June, the remuneration committee

are embedded within all levels of the organisation. I am

had comprised two non-executive directors, one of

also responsible for ensuring the effective operation of
the board. The composition of the board, the breadth

whom, Jock Green-Armytage, was deemed not to be
independent, having at that point reached nine years

and depth of its skill set, the diversity of its members

of continuous service as a director for the Group. We

to facilitate insight and perspective on matters being

were grateful to Jock for remaining in post until his

considered, and the inclusive environment within which

retirement at the end of September, as this greatly

constructive debate is enabled, are hugely important to

supported the transitions on the board. With the most

the effectiveness of the board in its strategy setting and

recent appointment of Yuan Zhang to the board, we

decision making. Board composition was a particular

now have three independent non-executive directors

focus during 2022 due to a number of changes arising

and two non-executive directors who are not considered

during the course of the year. My colleagues and I

to be independent. The board acknowledges that

dedicated significant time, firstly in evaluating the

Yuan Zhang is associated with the Group’s significant

current performance, skills and attributes of the board

shareholder, KLK. However, after taking external advice,

and identifying areas which could be enhanced to

it has concluded that existing safeguards are sufficient

ensure that the board is equipped to deliver on its

and it would be alert to any conflicts of interest should

M.P. EVANS GROUP PLCANNUAL REPORT 2022REPORT OF THE DIRECTORS
CORPORATE GOVERNANCE

these occur. I am confident that those deemed not to

At least annually, the board considers who the Group’s

be independent understand their responsibilities to

stakeholders are, and how the board engages with

shareholders and that they will conduct their duties

them. This helps to embed into the board’s decision-

with an independent mindset.

making process the practice of considering wider

From the beginning of 2022, when Matthew Coulson

took up the role of chief executive, I was pleased to

relinquish my temporary responsibilities as chief

executive. Whilst my role as executive chairman is not

strictly in line with the Code, feedback received via

the formal board evaluation process and, from time

to time, directly from shareholders leads me to feel

stakeholder issues. The whistleblower hotline continues

to be effective as a channel for stakeholders to report

potential wrongdoing, and whilst we are pleased that

no serious whistleblower issues have been identified to

date, grievances reported are treated as an opportunity

to see whether improvements need to be made in the

way we do things.

comfortable that I have the support of my colleagues

The board, supported by the audit committee, has

and shareholders alike, in continuing in this role.

continued to make progress on the areas of risk

The board continues to evaluate itself. Lines of

communication are always open between board

members and me, the senior independent non-

executive director and chair of the remuneration

and audit committees, Bruce Tozer, and the company

secretary, and a formal board evaluation is normally

conducted towards the end of each year. It has been

especially helpful, at the most recent formal evaluation,

to receive reassuring feedback from the newest board

members on such matters as the induction process,

initial impressions on how board discussions are

identification, management and mitigation, and

disclosure. Stakeholder engagement has proved to

be a valuable tool in the risk identification strategy.

Matthew Coulson, as tasked by the board, held a series

of risk review meetings during the year both in the UK

and Indonesia, assisted in Indonesia by the Indonesian

head of risk. In these meetings Matthew gathered

insights from head office staff, estate management,

engineering management and the legal department,

with the information feeding into an updated risk

conducted and decisions made, including the quality of

As I have stated previously, we believe compliance

board information and the functioning of committees.

with the QCA Code provides a valuable support in

We note all feedback and agree on actions, in an

strengthening our ability to grow and so deliver

endeavour continually to improve the way we work

returns to our shareholders that also benefit our wider

together and achieve the best results for the business.

stakeholders. The Group sees ethical behaviour as a

The focus of training for the board during the year,

and which is ongoing, has been on ESG, both in

understanding the requirements of the emerging

regulatory and disclosure environment, and evaluating

the associated risks to the business of climate change.

Because we are committed to acting responsibly, we

competitive advantage to building trust with suppliers

and attracting and retaining high-performing staff. This

too is emphasised in the QCA Code. The Group operates

in a sector where timelines are long and hence where
there is a premium on boards in which shareholders

can place their long-term trust.

have engaged specialist ESG consultants to assist

My colleagues on the board and I are committed

us with collating and evaluating the data needed to

to ensuring that the Group’s corporate-governance

fulfil our disclosure obligations and support good

structures are robust and are keeping these under

decision making across the organisation. In this

frequent review. There have been no significant changes

ongoing process it has been gratifying to note that the

to the Group’s corporate governance framework during

requirements of our RSPO membership, which we have

the year.

adhered to and been audited on for many years, has

expedited the data-gathering process. Board members

Peter Hadsley-Chaplin

are encouraged to develop and keep all their skills up

Chairman

to date, and training is available as needed.

21 March 2023

CORPORATE GOVERNANCE continued

OPERATION OF THE BOARD
Directors

Remuneration of all staff rewards those who display these

behaviours; access to the Group’s long-term incentive

Details of the Company’s board, together with those of

scheme is likewise offered to senior staff who qualify on

the audit and remuneration committees, are set out on

grounds of length of service and who promote the Group’s

pages 42 and 43. For the first three months of the year,

values. The Group dismisses staff found to have breached

the board comprised an executive chairman, two executive

the value of integrity.

directors and four non-executive directors. The number

of non-executive directors reduced to three at the end of

March, but on appointment of two non-executives in July

and August respectively there were five non-executive

directors on the board until the end of September, when

the number reduced again to four. Since February 2023

the number of non-executive directors has increased to

five. The audit and remuneration committees are chaired

by the senior independent non-executive director. The

maximum number of directors permitted under the

articles of association is eight. Executive directors work

on a full-time basis apart from the chairman who, for the

The board reserves to itself a range of key decisions

(which can be found at www.mpevans.co.uk) to ensure

it retains proper direction and control of the Company,

whilst delegating authority to individual executive directors

who are responsible for its day-to-day management.

The board’s objectives are subject to periodic review,

most recently in December 2022. All major and strategic

decisions of the Company are made in the United Kingdom.

The executive and non-executive directors discuss progress

against budgets and other business issues, both during

board meetings and at other times.

second half of the year, worked on a part-time basis.

The board has access to independent professional

This structure is designed to ensure that there is a clear

balance of responsibilities between the executive and

the non-executive functions. Non-executive directors

are expected to contribute two to three days’ service per

month to the Company, including attendance at board

meetings and the AGM. The board meets at least quarterly

and is provided with information at least monthly. It

receives operating summaries, executive operating reports,

management accounts and budgets. Of the executive

directors and non-executive directors serving throughout

the whole year, all attended each of the six full board

meetings held in 2022. Of the other directors, each of

whom only served for part of the year, only one director

was not able to attend one of the meetings during the

period in which they served on the board.

advice at the Group’s expense when the board deems

it necessary in order for them to carry out their

responsibilities. Currently, the board retains Peel

Hunt LLP as the Company’s nominated adviser. The

board additionally receives advice from independent

professionals on legal matters, corporate public relations,

taxation, and valuation of the Group’s property assets.

The company secretary provides support on matters

of corporate governance. During 2022 the Group

also engaged the services of executive remuneration

consultants to assist with developing a long-term

incentive plan for UK-based executives, within the

context of the Group as a whole, as well as comparable

companies. In addition, the Group has engaged a

specialist ESG consultancy firm to assist with the

disclosure obligations to which it will become subject

The board is collectively responsible for the success

under the non-financial and sustainability reporting

of the Company. The personal attributes of each of the

regime for its 2023 accounts. This will provide a solid

directors facilitates rigorous but constructive debate,

benchmark against which the Group’s subsequent

informed and considered decision-making and effective

progress can be assessed.

monitoring of progress in achieving the Group’s strategic

objectives. The board as a whole actively engages in

Independence and re-election of long-serving directors

reviewing and developing Group policies. It promotes

During the year, the board has sought to maintain a

a culture founded on its values of integrity, teamwork

balance of executive and non-executive directors.

and excellence. Members of the board lead by example

A description of the roles and responsibilities of the

during their frequent interactions with staff and the clear

directors is set out on page 42. For most of the year,

policies which are discussed, set by the board with input

other than for a period between 1 April and 1 July, more

from stakeholders where appropriate, and promulgated

than half of the directors were non-executive and, in

throughout the workforce, including training and refresher

accordance with the QCA Code, at least two of the non-

training on key areas such as anti-bribery and corruption.

executives serving during 2022 were independent, other

M.P. EVANS GROUP PLCANNUAL REPORT 2022REPORT OF THE DIRECTORS
CORPORATE GOVERNANCE

than for a very short period during June when Jock Green-

Armytage was no longer deemed independent due to his

length of service on the board. The board acknowledges

that Philip Fletcher is not independent. However, the

depth of his understanding of the Group, coupled with his

commitment and track record of conducting his role with

an independent mindset enables him to bring significant

value to the board and its audit committee.

The board is satisfied that its composition covers a broad

range of relevant skills and experience to enable effective

formulation and execution of the Group’s strategy. Jock

Green-Armytage, who served on the board until

30 September 2022 has chaired FTSE-listed companies

and brought significant industry knowledge as well as

experience in both corporate finance and corporate

governance. Bruce Tozer’s background is in commodity

finance, environmental markets, and agri-business project

finance, including palm oil, and he is able to contribute

valuable insight from the finance sector. Philip Fletcher, as

former managing director and finance director of the Group

with a background in accountancy, has extensive specific

knowledge of both the sector, operations in Indonesia

and the evolution of the Group. The extensive corporate

experience of Michael Sherwin, gained over many years in

both executive and non-executive roles, and across a range

of areas from M&A to corporate governance, is especially

welcome following Jock’s retirement. Tanya Ashton’s nearly

20 years of experience in ESG roles is proving invaluable

as the board intensifies its understanding of ESG issues

including climate-change impacts and net-zero targets,

having sadly lost the ESG expertise of Dr Darian McBain,

who stood down from the board at the end of March 2022

due to conflicts of interest with her new role. Since their

appointments, Michael and Tanya have demonstrated

their willingness to contribute to board discussions with

independent mindsets, participating fully and presenting

constructive challenges to the executive team. At the

beginning of 2023, Lee Yuan Zhang also joined the board.

His perspective, derived from the roles he has held and

continues to hold in KLK and its associated companies,

where he has experience in the agronomic as well as

corporate aspects of the business, promises to enhance

the board’s expertise in these areas.

effective in this role and building strong relationships with
shareholders, as well as presiding over a well-functioning
board. The perceived governance concern around having
an executive chairman is mitigated by having, in Bruce
Tozer, a robust senior independent non-executive director.

Each director retires and must seek re-election at least
every three years. Non-executive directors who have served
on the board continuously for a period of nine years or
more will offer themselves for re-election at each year’s
annual general meeting.

Directors’ remuneration
As set out in the report on pages 55 to 58, the
remuneration of the executive directors is determined
by the remuneration committee, whilst that of the
non-executives is determined by the whole board. The
committee, which during the course of 2022 comprised
Bruce Tozer throughout the year, Jock Green-Armytage
(until September 2022), Darian McBain (until March 2022),
Michael Sherwin (from July 2022) and Tanya Ashton (from
August 2022) met three times and all meetings were
attended by all members appointed to the committee at
the date of each meeting.

Succession planning
The Company does not currently have a nominations
committee. The chairman maintains a strong individual
relationship with all the directors and any changes to the
board are managed collaboratively. The board reviewed
succession planning during the year, including the merits
of establishing a nominations committee, and remained
of the view that it, led by the chairman, is competent to
deal with any new appointments to the board. Any new
appointments are discussed at a full board meeting, taking
into account an assessment of the skills and experience
required for the board successfully to formulate and
execute the Group’s strategy, the current skills and
experience of board members and those of the candidate,
an assessment of board diversity, as well as feedback from
the board evaluation process. Professional consultants
may be engaged to assist in identifying appropriate
candidates. Each member of the board is given the
opportunity to meet the individual concerned before an
appointment is made.

The board has an executive chairman, Peter Hadsley-

Chaplin. Given the time that he has served the Company

both as a director and chairman, as well as the size of

his shareholding in the Company, he is not considered

independent. However, he has a long track record of being

It is considered that the board would be resilient to any
unplanned changes and be able to recruit or promote
suitable, well-qualified, candidates within a reasonable
time period. The board has committed to regular reviews of
succession planning.

CORPORATE GOVERNANCE continued

Board performance evaluation

The board undertook a performance evaluation of itself and

its committees during the year. Following the format used in

the previous year, board members were invited to provide

anonymous feedback to the company secretary within topic

areas including board composition and structure, skills,

induction, areas of responsibility, conduct of meetings,

decision-making, committees, culture, risk management,

stakeholder engagement, board evaluation and effectiveness

of the chair. These comments were then analysed and

compiled into a report by the company secretary, forming

the basis of a board discussion. Once again, there was

significant consensus among board members, with

encouraging and constructive feedback given. Progress had

been made during the year in addressing areas identified

during the last evaluation process, with additional focus

having been given to succession planning, executive pay and

risk management. The 2022 evaluation process highlighted

a need for the board to increase its understanding of

ESG issues. This might include setting up a separate ESG

committee and reviewing those areas of most importance to

the Group’s stakeholders.

Relations with shareholders and AGM

The board attaches great importance to communications

with both institutional and private shareholders. The

executive directors regularly engage with shareholders to

update them on the progress of the Group and discuss any

areas of interest that they may have. Any significant issues

raised by major shareholders are discussed by the board

as a whole. Whilst this is not always possible with smaller

shareholders, the chairman aims personally to respond to

communications received from individuals.

Following a two-year period in which the Covid-19

pandemic necessitated restricted in-person attendance at

the Company’s AGM, the board was very pleased to resume

business as usual in 2022, with an AGM at Tallow Chandlers

Hall, which was also available to watch via a live weblink.

The AGM was attended by all but one director, with Jock

Green-Armytage, who had already declared his intention

to step down from the board, sadly unable to be there.

Bruce Tozer attended in his capacity as remuneration and

audit committee chair, having newly taken over these roles

on the board. The board was delighted to see so many

shareholders, comprising many familiar and some new

faces, at the 2022 AGM, and the directors were pleased

to answer questions both during the meeting and, more

informally, afterwards.

During 2022, the executive directors took part in a
number of online presentations, including two events
hosted through the Investor Meet Company platform.
These were live webinars following, respectively,
the announcement of the 2021 results and interim
results for 2022, available to existing and prospective
shareholders, and providing an opportunity for questions
to be posed to the directors after the presentation. The
board acknowledges the important role that technology
can play in facilitating shareholder engagement and will
host further online events, including those specifically
providing a forum for engaging with greater numbers of
smaller shareholders.

The board uses the Group’s website (www.mpevans.
co.uk) to make available details of the AGMs, the results
of the votes cast at those meetings, and reports and
presentations given at meetings with investors.

ACCOUNTABILITY
Financial reporting
A detailed review of the performance and financial
position of the Group is included in the chairman’s
statement and the strategic report. The board uses these
and the report of the directors to present a balanced
and understandable assessment of the Group’s position
and prospects. The directors’ responsibility for the
financial statements is described on page 46 of the
report of the directors.

Risk management
The directors acknowledge their responsibilities for the
Group’s system of risk management. Such a system can
provide reasonable, but not absolute, assurance against
material misstatement or loss. A review of the process of
risk identification, evaluation and management is carried
out by the audit committee. The committee considers
the Group’s principal risks, and a summary is presented
to the board for discussion and approval. The review
process considers the control environment and the
major business risks faced by the Group. In summary,
this is reported on pages 30 to 33.

Important control procedures, in addition to the day-to-
day supervision of parent-Company business, include
regular executive visits to the areas of operation of the
Group and of its associates, comparison of operating
performance and monthly management accounts with
plans and budgets, application of authorisation limits,
internal audit of subsidiary undertakings and frequent
communication with local management. The Group

M.P. EVANS GROUP PLCANNUAL REPORT 2022REPORT OF THE DIRECTORS
CORPORATE GOVERNANCE

also has an independently administered whistleblower
hotline service. During the first half of 2022, supervision
of operations continued to be maintained through a
series of ‘virtual visits’ using digital technology, enabling
executive directors, and from time-to-time non-executive
directors, to engage in discussions with field managers to
review detailed operational reports, photographs and video
and drone footage of operations, and other head office
departments, including the sustainability department.
However, following easing of Covid-19 travel restrictions,
physical visits to operations by the UK executives resumed.
It is planned for the full board to visit the Group’s
operations during the first half of 2023.

Going concern
The board has assessed and concluded on the going-
concern status of the Group, and further information is
included in the directors’ report on page 46.

Viability
The board considers the Group’s longer-term viability on a
regular basis. In order to do this, both short-term budgets
and longer-term projections are prepared and reviewed
by the board. Due to the long-term nature of the industry
within which the Group operates, the board has concluded
that projections should be prepared, and therefore viability
considered, over a 10-year period.

At the year end, the Group held a cash balance of over
US$80 million. Furthermore, as disclosed in note 22, at the
year end the Group had available undrawn finance facilities
of up to US$30 million. The Group’s plans for further
development of its Indonesian operations have been
taken into consideration, as set out in the strategic report,
including development of existing projects, investment in
new hectarage, and appropriate financing where necessary.

Principal areas of risk, and their mitigation, are included
in the section on risk management on pages 30 to 33.
As noted, whilst legislative changes in Indonesia could
adversely impact on the viability of the Group in its current
form, the board monitors the situation carefully and
considers the risk to be low. Financially, the main risk to
the Group’s results is commodity-price fluctuation, and as
has been demonstrated previously, the Group is able to
continue delivering returns even during periods of lower
crude-palm-oil prices.

The Group’s prospects remain sound, in particular given the
relatively young average age of its palms, at approximately
10 years. In light of this, and the resources available to

the Group, the board intends, where possible, to maintain
or increase, normal dividends in future years from their
current levels.

The board has not identified any significant concerns
regarding the Group’s longer-term viability.

AUDIT COMMITTEE REPORT
The audit committee is formally constituted with written
terms of reference (which are available on the Company’s
website www.mpevans.co.uk) and is chaired by Bruce Tozer.
During the year the committee comprised Bruce Tozer,
Philip Fletcher, Darian McBain (until 31 March 2022),
Jock Green-Armytage (until 30 September 2022), Michael
Sherwin (from 1 July 2022) and Tanya Ashton (from 1 August
2022). The directors who are not members of the committee
can be invited to attend its meetings. The auditors of the
Group may also attend part or all of each meeting and
they have direct access to the committee for independent
discussions, without the presence of the executive directors.
The committee met six times during 2022 and each meeting
was attended by all the members appointed at the time of
the meeting, other than the meeting on 9 June 2022 which
Jock Green-Armytage was unable to attend. The external
auditors attended two of the meetings.

The audit committee may examine any matters relating
to the financial affairs of the Group or the Group’s
audit; this includes reviews of the annual accounts and
announcements, accounting policies, compliance with
accounting standards, reviewing the Group’s principal risks,
the appointment of and fees of auditors and such other
related matters as the board may require.

During the year the audit committee has:

• Reviewed the Group’s external financial reporting,

including receiving a report from the external auditors

on the audit work they have performed;

• Assessed critical accounting judgements and key

estimates made during the year;

• Reviewed findings of the internal audit team and the

work they have performed;

• Reviewed the quality and effectiveness of the external

audit and considered points arising from it;

• Reviewed the Group’s whistleblower policy and

implementation, including assessment of briefings of

reports made to the independent hotline;

• Reviewed and strengthened the Group’s process for risk

identification, management and disclosure.

CORPORATE GOVERNANCE continued

Auditors

The auditors were appointed, following a tender

exercise, in 2019. The audit partner changes at least

every five years in accordance with professional and

regulatory standards in order to protect independence

and objectivity. Nigel Harker was the audit partner for

the 2022 audit.

The audit committee meets the external auditors to
consider audit planning and the results of the external
audit. The committee specifically considered the scope
of the Group auditors’ engagement and agreed the
significant risks for the audit of the 2022 results. The
external auditors have provided only audit services
during the current year. Accordingly, the board does not
consider there to be a risk that the provision of non-
audit services may compromise the external auditors’
independence.

To assess the effectiveness of the auditors, the
committee reviews their fulfilment of the agreed audit
plan and variations from it, and the auditors’ report on
issues arising during the course of the audit.

Financial reporting and review of financial statements
The committee is able to ensure it has a full
understanding of business performance through its
receipt of regular financial and operational reporting,
its review of the budget and long-term plan and its
discussion of key accounting policies and judgements.
It has specifically addressed the:

• Existing control environment over internal controls

in financial reporting;

• Group’s equity valuation, as disclosed in the annual

report; and

• Ongoing validity of key judgements in the financial

statements.

After reviewing presentations and reports from
management and consulting with the auditors,
the audit committee is satisfied that the financial
statements properly present the critical judgements
and key estimates for both the amounts reported
and relevant disclosures. The committee is also
satisfied that the significant assumptions used for
determining the value of assets and liabilities have
been appropriately scrutinised, challenged and are
sufficiently robust.

Palms and surrounding
flora in Pangkatan

M.P. EVANS GROUP PLCANNUAL REPORT 2022REPORT OF THE DIRECTORS
REMUNERATION REPORT

REMUNERATION REPORT

REMUNERATION COMMITTEE
The remuneration committee, which is formally
constituted with written terms of reference (available on
the Company’s website at www.mpevans.co.uk), keeps
under review the remuneration and terms of employment
of the executive directors and senior managment and
recommends such remuneration and terms to
the board. The committee comprised Bruce Tozer,
Jock Green-Armytage (until 30 September 2022),
Darian McBain (until 31 March 2022), Michael Sherwin
(from 1 July 2022), and Tanya Ashton (from 1 August 2022).
It was chaired by Jock Green-Armytage until 9 June 2022
and thereafter by Bruce Tozer. The committee met three
times during 2022 and each meeting was attended by all
the members appointed at the time of the meeting.

an award of options on fully-paid shares which vest three

years after their grant, subject to continued employment

by the Group.

In January 2023, a new element of remuneration was

introduced for the Group’s UK-based chief executive.

This was a share award made under the long-term

incentive scheme (see below) which is designed further

to align the chief executive’s remuneration package with

the long-term interests of shareholders. This share award,

which is intended to be repeated each year, maintains the

Group’s outlook of offering remuneration packages which

are designed to be broadly comparable with those offered

by similar businesses, such as European plantation and

AIM-listed companies.

SERVICE CONTRACTS
All of the UK executive directors have service contracts with
the Company. These contracts continue until terminated
by either party giving not less than one year’s notice in
writing. The executive director based overseas has a service
contract with a subsidiary company with a notice period
of less than one year. The non-executive directors do not
have service contracts or provisions for pre-determined
compensation on termination of their appointment.

REMUNERATION POLICY
The Group’s remuneration committee recognises that the
Group’s success depends, in part, on the performance
of the directors and senior management, and the
importance of ensuring that employees are incentivised.
Its philosophy is to offer a transparent and simple
remuneration package to the executive directors. To
deliver this, the structure for remuneration:

•

is designed to be easily understood by both executives

and shareholders.

• aims to encourage the executive directors to work

collegiately, focus their efforts on making decisions

that are in the Group’s best long-term interests, and,

to some extent, share in the benefits that accrue to

shareholders from a higher future share price.

Key aspects of the January 2023 share awards to the

chief executive, and the rationale for those awards are

summarised below:

• The type of award made could be classified as a

‘restricted-stock’ award, where vesting is dependent

on continued employment at the end of a three-year

vesting period from the date of award.

•

Importantly for M.P. Evans, this form of award is

already used for the Group’s Indonesia-based

executive and senior management and there is a

strong benefit in consistency of approach across our

executive team (see the section “Long-term incentive

scheme” below).

• The award is straightforward and aligns to the Group’s

business outlook. The remuneration committee

considered and discounted introducing a Performance
Share Plan, where the vesting of awards would be

dependent on attaining three-year Group performance

conditions. In a very long-term business like that of

M.P. Evans, three-year cycles would not necessarily

reflect the Group’s investment and development

profile, and vesting could be heavily influenced by

macro-factors such as commodity prices.

For several years, this has been delivered by

remuneration packages comprising a salary and a bonus

related to current results and personal performance

(including significant additional contribution in terms of

time and expertise). For the UK executive directors, half

of the bonus is payable in cash and half is deferred into

• The vesting of the share awards made to the chief
executive is, however, subject to the remuneration

committee being satisfied regarding the attainment

of ‘underpin’ performance conditions in the period

to vesting which will consider the general financial

performance of the Group and adherence to the

DIRECTORS’ REMUNERATION REPORT continued

Group’s core strategic pillars of Responsibility,

shares, although this will be reviewed for continuing

Excellence, Growth, and Yield.

appropriateness before each award is made.

• The quantum of awards for the chief executive was
set at a level which the remuneration committee

regards as meaningful and appropriate but still

relatively modest, aligning to the Company’s overall

outlook on pay levels which remains mindful of costs.

At the date of award on 16 January 2023, the 18,000

shares subject to the awards made were equal in

value to approximately 45% of the chief executive’s

2022 base salary. In future years, for simplicity and

for consistency with how award levels are set for

colleagues in Indonesia, it is intended to maintain

the chief executive’s annual award level at 18,000

• The awards to the chief executive also contain features

which we believe will make the awards genuinely

long-term:

– After the three-year vesting period, vested shares

(after any sales for UK income taxes and National

Insurance) must be retained by the chief executive

for a further two years.

– Beyond that period, the chief executive is encouraged

to hold shares and build his personal shareholding.

TOTAL DIRECTORS’ REMUNERATION FOR THE YEAR ENDED 31 DECEMBER 2022

SALARY
AND FEES
£

BONUS
PAID
£

1BONUS
DEFERRED
£

OTHER
BENEFITS
£

SALARY
IN LIEU OF
PENSION
£

2 PENSION
COSTS
£

3 GAIN ON
EXERCISE
OF SHARE
OPTIONS
£

TOTAL
REMUNERATION
2022
£

TOTAL
REMUNERATION
2021
£

Executive directors

P E Hadsley-Chaplin

264,640

132,320

T R J Price

M H Coulson

—

40,641

40,447

—

330,800

165,400

39,117

32,613

4,000

48,006

K Chandra Sekaran4

534,613

350,481

—

201,777

1,130,053

648,201

165,400

79,758

73,060

4,000

249,783

Non-executive directors

J M Green-Armytage

P A Fletcher

B C Tozer

D M McBain

M Sherwin

T Ashton

30,813

37,350

40,850

9,338

18,675

15,563

152,589

—

478,048

—

785,336

1,086,871

2,350,255

435,270

637,003

576,615

198,062

1,846,950

30,813

37,350

40,850

9,338

18,675

15,563

42,350

36,250

—

152,589

151,100

Total

1,282,642

648,201

165,400

79,758

73,060

4,000

249,783

2,502,844

1,998,050

1. In line with the Group remuneration policy, half of the bonus for the year to Mr M H Coulson (being 12 months’ salary) has

been deferred into an award of options over fully-paid shares of equal value which vest after three years subject to continued
employment by the Group.

2. The pension costs for Mr M H Coulson are the contributions made by the Company to a Company-sponsored self-invested personal

pension.

3. The gain on share options for Mr M H Coulson includes amounts already reported in previous years as remuneration under “Bonus

deferred”.

4. The remuneration for K Chandra Sekaran in 2021 relates to the period from his appointment on 1 August 2021, and does not

include the bonus paid to him earlier in that year.

The annual ratio for total remuneration of the chief executive in relation to the median of the Group’s UK payroll

excluding this individual was 6.0 in 2022 (2021 – 5.3). The equivalent ratio for the percentage increase in annual total

remuneration was 3.9 (2021 – 1.4).

M.P. EVANS GROUP PLCANNUAL REPORT 2022

REPORT OF THE DIRECTORS
REMUNERATION REPORT

LONG-TERM INCENTIVE SCHEME
The long-term incentive scheme established in 2017

governs the grant of deferred-bonus awards to UK-based

executive directors and annual awards of fully-paid

shares to senior staff, including, as described above, the

awards made to our UK-based chief executive in January

2023 and which are intended to be an annual element of

UK executive remuneration in the future.

The award of fully-paid shares has the advantage of
being substantially less dilutive than market-priced share
options, whilst continuing to provide an adequate level of
incentive to the recipient.

No additional performance criteria attach to the deferred-
bonus awards since the original bonus will have been
performance related.

In respect of senior staff who are not UK-based executive
directors, the Group aims annually to grant options in a
limited number of fully-paid shares which vest after three
years subject to continued employment by the Group.
This is designed to retain valued individuals in a growing
and competitive sector. No performance criteria attach to
these awards.

EXECUTIVE DIRECTORS
When determining the remuneration of the executive
directors, the remuneration committee considers the pay
and conditions across the Group, particularly those of
the senior management of the operations in Indonesia.
The Group aims to provide remuneration packages for the
directors and senior management which are a fair reward
for their contribution to the business, having regard
to the complexity of the Group’s operations and the
need to attract, retain and motivate high-quality senior
management.

Non-pensionable bonuses may be awarded annually in
arrears at the discretion of the committee, taking account
of the Group’s performance during the period and other
targeted objectives. Bonuses do not exceed twelve
months’ salary, half payable in cash and half deferred
into an award of fully-paid shares which vest three years
after their grant, subject to continued employment by
the Group (as described above). The bonuses for 2022
took into account, inter alia, another record year of
crop and production supporting strong profitability and
shareholder returns; significant work on recruitment to
senior positions in the Company and management of
smooth transitions of both executive roles and changes

within the wider board; significant initiatives undertaken
in relation to ESG awareness and development of
reporting strategy including work with ESG consultants
on carbon accounting and TCFD reporting; also good
progress on risk management and disclosure. The
absolute value of these measures was assessed, as was
their outturn against budget.

Also, for our UK-based chief executive, from January 2023 we
have introduced the annual share award described above.

NON-EXECUTIVE DIRECTORS
The fees of the non-executive directors are determined by
the board having regard to the complexity of the Group’s
operations and the need to attract, retain and motivate
high-quality non-executive directors and the level of fees
paid for similar roles in equivalent companies.

EXECUTIVE SHARE-OPTION SCHEME
During 2022, K Chandra Sekaran was a member of the
executive share-option scheme which was established in
2012. Options granted under this scheme gave K Chandra
Sekaran the right to purchase shares on a future date
at the market price of the shares on the date that the
options were granted. As such, the value of any option is
closely tied to the performance of the Group as reflected
in its share price. There will be no gain on exercise
unless the share price on the exercise date exceeds the
share price on the date the options were granted. On
31 December 2022, options over 20,000 shares (2021 –
50,000) granted to K Chandra Sekaran under this scheme
remained outstanding. During the year, 30,000 options
were exercised by him (2021 - none) and none (2021 -
none) lapsed.

During the year, Matthew Coulson was a member of
the long-term incentive scheme established in 2017
described above, under which half of any discretionary
bonus is deferred into options over fully-paid shares.
Under this arrangement options on 19,880 fully-
paid shares were awarded in 2022 (2021 – 13,748),
representing half of the bonus awarded to
Matthew Coulson.

No options are held by either the chairman or non-
executive directors.

At 31 December 2022, the middle-market quotation for
the Company’s shares, as derived from the London Stock
Exchange Daily Official List, was 810p, as compared with
the high and low quotations for the year of 1,085p and
784p respectively.

M.P. EVANS GROUP PLC
ANNUAL REPORT 2022

OPTIONS HELD OVER SHARES OF THE COMPANY BY THE EXECUTIVE DIRECTORS
DURING THE YEAR ENDED 31 DECEMBER 2022

BALANCE
AT 1 JAN
2022

GRANTED
IN THE
YEAR

EXERCISED
IN THE
YEAR

BALANCE
AT 31 DEC
2022

EXERCISE
PRICE
PENCE

DATE FROM
WHICH
NORMALLY
EXERCISABLE

DATE OF
GRANT

EXPIRY
DATE

Executive share-option scheme

K Chandra Sekaran

30,000

Total

20,000

50,000

Long-term incentive scheme

M H Coulson

K Chandra Sekaran

Total

5,826

5,557

10,049

13,748

—

35,180

3,000

—

9,000

44,180

—

19,880

—

3,000

6,000

25,880

30,000

—

30,000

5,826

—

5,826

3,000

—

3,000

8,826

—

20,000

—

5,557

10,049

13,748

19,880

49,234

—

3,000

12,000

61,234

483.21

412.50

19 Jun 12

19 Jun 15

19 Jun 22

27 Apr 15

27 Apr 18

27 Apr 25

0.00

11 Jan 19

11 Jan 22

10 Jan 29

9 Jan 20

9 Jan 23

8 Jan 30

22 Dec 20

22 Dec 23

21 Dec 30

14 Dec 21

14 Dec 24

13 Dec 31

13 Dec 22

13 Dec 25

12 Dec 32

1 Jul 19

1 Jul 20

1 Jul 21

23 Mar 22

1 Jul 22

1 Jul 23

1 Jul 24

7 Jan 25

1 Jul 25

30 Jun 29

30 Jun 30

30 Jun 31

6 Jan 32

30 Jun 32

PENSIONS
The Company sponsors self-invested personal pensions (“SIPPs”) for the UK executive directors. Contributions made by
the Company to the SIPPs and to a life-assurance company give the executives a pension at retirement, a pension to a
spouse payable on death whilst in the employment of the Company, and life-assurance cover based on a multiple of
salary. No element of a director’s remuneration package, other than basic salary, is pensionable. Individuals may elect
to forgo contributions to the SIPP, in which case they receive an additional salary paid in lieu of the employer’s pension
contributions at the same cost to the Company.

Approved by the board of directors and signed by its order.

Katya Merrick

Company secretary

21 March 2023

Bangka estate community vegetable garden

INDEPENDENT AUDITORS’ REPORT

To the members of M.P. Evans Group PLC

OPINION ON THE FINANCIAL STATEMENTS
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 as

at 31 December 2022 and of the Group’s profit for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK-adopted International

Accounting Standards;

• 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.

We have audited the financial statements of M.P. Evans Group PLC (the ‘parent Company’) and its subsidiaries (the

‘Group’) for the year ended 31 December 2022 which comprise the consolidated income statement, consolidated

statement of comprehensive income, consolidated and parent-Company balance sheets, consolidated and parent-

Company statements of changes in equity, consolidated cash-flow statement and notes to the consolidated and parent-

Company financial statements, including a summary of significant accounting policies.

The financial reporting framework that has been applied in the preparation of the Group financial statements is

applicable law and UK-adopted International Accounting Standards. The financial reporting framework that has

been applied in the preparation of the parent-Company financial statements is applicable law and United Kingdom

Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom

Generally Accepted Accounting Practice).

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 financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.

Independence

We remain independent of the Group and the parent Company in accordance with the ethical requirements that are

relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed

entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

CONCLUSIONS RELATING TO GOING CONCERN
In auditing the financial statements, we have concluded that the directors’ use of the going-concern basis of accounting

in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the Group

and the parent Company’s ability to continue to adopt the going concern basis of accounting included:

• A review of the directors’ assessment of going concern and consideration of the key assumptions used in the

forecasts, including:

– Comparing the CPO price used to historical data and price forecasts.

– Corroborating the historically achieved oil-extraction rate (“OER”) to supporting documentation and considering

the reasonableness of forecast extraction rates for each estate.

– Considering forecast production by comparing to historical results along with taking into account the age of

planted areas in each estate.

M.P. EVANS GROUP PLCANNUAL REPORT 2022INDEPENDENT AUDITORS’ REPORT

• Consideration of the directors’ sensitivity analysis along with performing further sensitivities on the revenue and

gross profit margin assumptions.

• An assessment of the appropriateness and accuracy of cash-flow forecasts by comparing prior year forecasts to

current year results.

• A review of whether the disclosures are appropriate for the circumstances of the entity and provide sufficient

information about the Group and its subsidiaries and the directors’ consideration of their ability to continue as a

going concern.

Based on the work we have performed, we have not identified any material uncertainties relating to events or

conditions that, individually or collectively, may cast significant doubt on the Group and the parent Company’s ability to

continue as a going concern for a period of at least twelve months from when the financial statements are authorised

for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant

sections of this report.

OVERVIEW

COVERAGE

KEY AUDIT MATTERS

MATERIALITY

77% (2021 – 78%) of
Group profit before tax

85% (2021 – 84%) of
Group revenue

70% (2021 – 77%) of
Group total assets

2022

2021

Impairment of goodwill



Valuation of biological assets



Valuation of biological assets is no longer
considered to be a key audit matter because the
valuation is below our materiality threshold.

Group financial statements
as a whole

US$5.0 million (2021 US$4.9
million) based on 5% of profit
before tax (2021 5% of adjusted
profit before tax).

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

The Group financial statements are a consolidation of twenty one companies consisting of the parent Company,

three UK-incorporated subsidiary companies, thirteen Indonesian subsidiary companies, one Singapore-incorporated

subsidiary company and three associate entities. The majority of the Group’s operations are located in Indonesia with

the head office and main Group accounting function located in the United Kingdom.

Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s

system of internal control, and assessing the risks of material misstatement in the financial statements. We also

addressed the risk of management override of internal controls, including assessing whether there was evidence of bias

by the directors that may have represented a risk of material misstatement.

Based on our assessment, we identified five (2021 five) operating plantation companies which, in our view, required an

audit of their complete financial information due to their financial significance to the Group (“significant components”).

The audit procedures for these components were performed by component auditors who were members of the BDO

International network. It was considered appropriate to perform audit procedures on specific audit areas where

their balance was material to the Group for a further seven (2021 seven) companies (“material but not significant

components”). Where these components were located overseas, the audit procedures were performed by component

auditors who were also members of the BDO Global network whilst the audit procedures for components located in the

UK were performed by the Group audit team. For the other components that were not identified as being significant to

the Group, we performed analytical review procedures at the Group level.

As part of the audit strategy, senior members of the Group audit team attended a number of the board’s remote

quarterly review meeting with estate management.

INDEPENDENT AUDITORS’ REPORT continued

Our involvement with component auditors

For the work performed by component auditors, we determined the level of involvement needed in order to be able

to conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group

financial statements as a whole. Our involvement with component auditors included the following:

• As part of our audit planning, the senior statutory auditor and other senior members of the Group audit team visited
Indonesia to attend the engagement team discussion where we discussed the Group and local risks identified and

agreed the testing approach. Those team members then visited the Musi Rawas estate with management.

• Senior members of the Group audit team visited Indonesia to perform a review of the component team audit files
for the Indonesian operating units and requested the component auditors to perform any further procedures

required.

• At the completion stage senior members of the Group audit team attended the clearance meeting with local audit

and local management teams and reviewed component audit teams’ reporting, addressing risks and specific

procedures raised. We held discussions with component and Group management to discuss the findings from our

audit, including local adjustments raised.

KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the

financial statements of the current period and include the most significant assessed risks of material misstatement

(whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit

strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were

addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and

we do not provide a separate opinion on these matters.

KEY AUDIT MATTER

HOW THE SCOPE OF OUR AUDIT ADDRESSED
THE KEY AUDIT MATTER

Impairment of goodwill

Our procedures have focused on the goodwill impairment test

Refer to the accounting policies of the Group (note 3) for

further detail on the policies impacting goodwill valuation

together with note 13 detailing the key estimates over

goodwill impairment and the financial disclosure of

goodwill.

Goodwill is a significant balance in the consolidated balance

sheet and is subject to an annual impairment review.

The goodwill balance at 31 December 2022 was US$11.8

million, of which US$10.6 million related to the Bumi Mas

estate.

for the Bumi Mas estate. We have:

• Assessed management’s impairment model for compliance

with applicable accounting standards and tested its

computational accuracy;

• Assessed management’s identification and allocation of

cash generating units with reference to the estates;

• With the assistance of our internal valuation experts we

tested the discount rate assumptions to assess their

reasonableness through corroboration to external sources;

The recoverability of goodwill is dependent on

• Performed sensitivity analysis over the key assumptions

management’s identification and allocation of cash

(discount rate, CPO price, production, forecast length

generating units, estimating both cash flows and appropriate

and extraction rates) and agreed their reasonableness

discount rates to apply in the value in use calculation.

through corroboration to external sources and historical

Given the size of the goodwill balance, and the complexity of

performance.

estimating both cash flows and discount rates we consider

goodwill impairment to be an area of material estimation.

Hence there is a risk that the valuation of goodwill is

Key observations: We did not identify any indicators to

suggest that the estimates made by the directors in the

calculation of the goodwill impairment assessment were

inappropriate. Due to the judgements involved we consider

inappropriate.

this to be a key audit matter.

M.P. EVANS GROUP PLCANNUAL REPORT 2022INDEPENDENT AUDITORS’ REPORT

OUR APPLICATION OF MATERIALITY

We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of

misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could

influence the economic decisions of reasonable users that are taken on the basis of the financial statements.

In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a

lower materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements

below these levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified

misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial

statements as a whole.

Based on our professional judgement, we determined materiality for the financial statements as a whole and

performance materiality as follows:

Group financial statements

Parent-Company financial statements

2022
US$

2021
US$

2022
US$

2021
US$

Materiality

5.0 million

4.9 million

2.0 million

2.8 million

Basis for determining
materiality

5% of profit
before tax

5% of adjusted profit
before tax

2% of total assets

Rationale for
benchmark
applied

We consider profit to be a key performance
measure to a user for the purpose of evaluating
financial performance.
Materiality for 2022 was based on 5% of profit
before tax (2021 - 5% of adjusted profit before
tax to exclude the profit on sale of Malaysian
land which was non-recurring in nature).

Calculated as 2% of total assets restricted to
95% percent of Group materiality
(if lower) for Group reporting purposes
given the assessment of aggregation risk.

Performance
materiality

Basis for determining
performance
materiality

3.5 million

3.4 million

1.4 million

2.0 million

70% of
materiality

70% of materiality based on our experience and knowledge of the Group and parent Company, Group
structure, planned testing approach, and history of errors.

Component materiality

We set materiality for each component of the Group based on a percentage of between 70% and 19% (2021 between

82% and 20%) of Group materiality dependent on the size and our assessment of the risk of material misstatement of

that component. Component materiality ranged from US$3.7 million to US$1.0 million (2021 US$4.0 million to US$1.0

million). In the audit of each component, we further applied performance materiality levels of 70% of the component

materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately mitigated.

Reporting threshold

We agreed with the audit committee that we would report to them all individual audit differences in excess of

US$106,000 (2021 US$98,000), being 2% of materiality. We also agreed to report differences below this threshold that,

in our view, warranted reporting on qualitative grounds.

OTHER INFORMATION
The directors are responsible for the other information. The other information comprises the information included in

the annual report other than the financial statements and our auditors’ report thereon. Our opinion on the financial

statements does not cover the other information and, except to the extent otherwise explicitly stated in our report,

INDEPENDENT AUDITORS’ REPORT continued

we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or our

knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such

material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a

material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude

that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

OTHER COMPANIES ACT 2006 REPORTING
Based on the responsibilities described below and our work performed during the course of the audit, we are required

by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.

Strategic report

In our opinion, based on the work undertaken in the course of the audit:

and directors’

report

•

the information given in the strategic report and the directors’ report for the financial year for

which the financial statements are prepared is consistent with the financial statements; and

•

the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.

In the light of the knowledge and understanding of the Group and parent Company and its

environment obtained in the course of the audit, we have not identified material misstatements in

the strategic report or the directors’ report.

Matters on

which we

are required

to report by

exception

We have nothing to report in respect of the following matters in relation to which the Companies

Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent Company, or returns adequate

for our audit have not been received from branches not visited by us; or

•

the parent Company financial statements are not in agreement with the accounting records and
returns; or

• certain disclosures of directors’ remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF DIRECTORS
As explained more fully in the statement of directors’ responsibilities, the directors are responsible for the preparation

of the financial statements and for being satisfied that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation of financial statements that are free from material

misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and the parent Company’s

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to

cease operations, or have no realistic alternative but to do so.

AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with

ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

M.P. EVANS GROUP PLCANNUAL REPORT 2022
INDEPENDENT AUDITORS’ REPORT

Extent to which the audit was capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line

with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

• We gained an understanding of the legal and regulatory framework applicable to the Group and the industry
in which it operates, and considered the risk of acts by the Group that were contrary to applicable laws and

regulations, including fraud.

• We considered the Group’s compliance with laws and regulations that have a direct impact on the financial

statements including, but not limited to, UK company law, UK tax legislation, AIM Rules and the component auditors

considered compliance with Indonesian tax law, Indonesian Sustainable Palm Oil (“ISPO”) standard and Indonesian

land laws, and we considered the extent to which non-compliance might have a material effect on the Group

financial statements.

• We designed audit procedures at both the Group and significant component levels to identify instances of non-

compliance with such laws and regulations. Our procedures included reviewing the financial statement disclosures

and agreeing to underlying supporting documentation where necessary. We reviewed internal audit reports

throughout the year and subsequent to the year-end and we reviewed minutes of all board and committee meetings

held during and subsequent to the year for any indicators of non-compliance and made enquiries of management

and of the directors as to the risks of non-compliance and any instances thereof.

• We addressed the risk of management override of internal controls, including testing journal entries processed

during and subsequent to the year end where the audit believe the accounts could be misstated due to fraud. We

assessed journals posted by super users, journals with no description and revenue journals. We then evaluated

whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

• We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team

members, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout

the audit. We also instructed all component auditors and reviewed the work performed by the component audit

team in this regard.

Our audit procedures were designed to respond to risks of material misstatement in the financial statements,

recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting

one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or

through collusion. There are inherent limitations in the audit procedures performed and the further removed non-

compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less

likely we are to become aware of it.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: www.frc.org.uk/

auditorsresponsibilities. This description forms part of our auditors’ report.

USE OF OUR REPORT
This report is made solely to the parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the parent Company’s members

those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the parent Company and the parent

Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Nigel Harker (Senior Statutory Auditor)

for and on behalf of BDO LLP, Statutory Auditor

Gatwick, United Kingdom

21 March 2023

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)

CONS0LIDATED INCOME STATEMENT
For the year ended 31 December 2022

Note

2022
US$’000

2021
US$’000

Continuing operations

Revenue

Cost of sales

Gross profit

(Loss)/gain on biological assets

Profit on sale of land

Foreign-exchange loss

Other administrative expenses

Other income

Operating profit

Finance income

Finance costs

Profit before tax

Tax on profit on ordinary activities

Profit after tax

Share of associated companies’ profit after tax

Profit for the year

Attributable to:

Owners of M.P. Evans Group PLC

Non-controlling interests

Continuing operations

Basic earnings per 10p share

Diluted earnings per 10p share

Basic earnings per 10p share

Continuing operations

326,917

(217,707)

109,210

(1,431)

—

(3,444)

(4,614)

1,865

101,586

1,395

(2,731)

100,250

(24,073)

76,177

2,184

78,361

73,060

5,301

78,361

276,592

(172,979)

103,613

1,771

13,946

(820)

(5,380)

1,426

114,556

645

(2,699)

112,502

(23,228)

89,274

2,508

91,782

86,406

5,376

91,782

US cents

133.9

133.4

158.4

157.9

Pence

108.0

115.6

M.P. EVANS GROUP PLCANNUAL REPORT 2022CONS0LIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022

FINANCIAL STATEMENTS

Other comprehensive (expense)/income (net of tax)

Items that may be reclassified to the income statement

Exchange loss on translation of foreign operations

Items that will not be reclassified to the income statement

Remeasurement of retirement-benefit obligations

Other comprehensive (expense)/income for the year

Profit for the year

Total comprehensive income

Attributable to:

Owners of M.P. Evans Group PLC

Non-controlling interests

2022
US$’000

2021
US$’000

(1,528)

(780)

986

(542)

78,361

77,819

72,449

5,370

77,819

814

91,782

91,816

86,380

5,436

91,816

CONS0LIDATED BALANCE SHEET
As at 31 December 2022

COMPANY NUMBER: 1555042

Note

2022
US$’000

2021
US$’000

Non-current assets

Goodwill

Other intangible assets

Property, plant and equipment

Investments in associates

Investments

Deferred-tax asset

Trade and other receivables

Current assets

Biological assets

Inventories

Trade and other receivables

Current-tax asset

Cash and cash equivalents

Total assets

Current liabilities

Borrowings

Trade and other payables

Current-tax liability

Net current assets

Non-current liabilities

Borrowings

Deferred-tax liability

Retirement-benefit obligations

Total liabilities

Net assets

Equity

Share capital

Other reserves

Retained earnings

Equity attributable to the owners of M.P. Evans Group PLC

Non-controlling interests

Total equity

11,767

1,167

411,658

11,795

989

9,146

446,583

3,089

23,112

32,681

2,290

82,503

143,675

590,258

17,364

24,410

4,455

46,229

97,446

31,675

13,538

9,972

55,185

101,414

488,844

9,179

54,543

407,460

471,182

17,662

488,844

11,767

1,222

401,005

13,242

3,602

16,618

447,521

4,520

21,754

41,892

2,522

65,609

136,297

583,818

20,531

31,200

12,219

63,950

72,347

50,517

11,417

12,886

74,820

138,770

445,048

9,232

55,467

366,825

431,524

13,524

445,048

The financial statements on pages 66 to 91 were approved by the board of directors on 21 March 2023 and signed on its

behalf by

Peter Hadsley-Chaplin
Executive chairman

Matthew Coulson
Chief executive

M.P. EVANS GROUP PLCANNUAL REPORT 2022

FINANCIAL STATEMENTS

CONS0LIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022

SHARE
CAPITAL
US$’000

OTHER
RESERVES
US$’000

RETAINED
EARNINGS
US$’000

Note

NON-
CONTROLLING
INTERESTS
US$’000

TOTAL
US$’000

TOTAL
EQUITY
US$’000

Profit for the year

Other comprehensive
(expense)/income for
the year

Total comprehensive income
for the year

Issue of share capital

Dividends paid

Dividends from associates

Share buyback

Credit to equity for
equity-settled share-based
payments

Transactions with owners

At 1 January 2022

At 31 December 2022

Profit for the year

Other comprehensive
(expense)/income for
the year

Total comprehensive income
for the year

Issue of share capital

Dividends paid

Dividends from associates

Credit to equity for
equity-settled share-based
payments

Transactions with owners

At 1 January 2021

At 31 December 2021

—

(57)

—

(53)

9,232

9,179

2,184

70,876

73,060

5,301

78,361

(677)

(611)

(542)

1,507

70,942

72,449

5,370

77,819

—

191

—

191

(28,500)

(1,232)

(29,732)

187

—

(2,656)

2,656

(4,902)

—

(4,902)

—

(4,902)

420

(19)

439

420

(2,431)

(30,307)

(32,791)

(1,232)

(34,023)

55,467

54,543

366,825

407,460

431,524

471,182

13,524

17,662

445,048

488,844

—

2,508

83,898

86,406

5,376

91,782

—

9,204

9,232

(404)

378

(26)

2,104

84,276

86,380

5,436

91,816

799

—

827

—

827

(20,527)

(1,641)

(22,168)

(2,424)

2,424

—

(102)

(1,727)

55,090

55,467

535

(17,568)

300,117

366,825

433

(19,267)

364,411

431,524

—

(1,641)

9,729

13,524

—

433

(20,908)

374,140

445,048

CONS0LIDATED CASH-FLOW STATEMENT
For the year ended 31 December 2022

Note

Net cash generated by operating activities

Investing activities

Purchase of property, plant and equipment

Purchase of intangible assets

Interest received

Decrease in bank deposits treated as current-asset investments

Decrease in receivables from smallholder co-operatives

Proceeds on disposal of property, plant and equipment

Net cash (used by)/from investing activities

Financing activities

Repayment of borrowings

Lease liability payments

Dividends paid to Company shareholders

Dividends paid to non-controlling interest

Issue of Company shares

Buyback of Company shares

Net cash used by financing activities

Net increase in cash and cash equivalents

Net cash and cash equivalents at 1 January

Effect of foreign-exchange rates on cash and cash equivalents

Cash and cash equivalents at 31 December

2022
US$’000

102,288

2021
US$’000

92,272

(33,714)

(32,510)

(116)

622

—

1,714

3,055

(28,439)

(22,009)

(38)

(28,500)

(124)

191

(4,902)

(55,382)

18,467

65,609

(1,573)

82,503

(8)

316

334

17,630

15,125

887

(34,636)

(218)

(20,527)

(164)

827

—

(54,718)

38,441

27,222

(54)

65,609

M.P. EVANS GROUP PLCANNUAL REPORT 2022FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

NOTES TO THE CONSOLIDATED ACCOUNTS
For the year ended 31 December 2022

1 General information

M.P. Evans Group PLC is a public limited company incorporated in the United Kingdom under the Companies Act 2006 and listed
on the London Stock Exchange’s Alternative Investment Market (“AIM”), Company number 1555042. The Company is registered
in England and Wales, and the address of its registered office is given on page 104. The nature of the Group’s operations and its
principal activities are set out in note 4 and in the strategic report on pages 14 to 33. The Group is domiciled in the UK.

The functional currency of M.P. Evans Group PLC, determined under IAS 21, is the US Dollar. Likewise, the functional currency of
subsidiaries operating in the palm-oil sector is the US Dollar, reflecting the primary economic environment in which the Group
operates. The presentational currency for the Group accounts is also the US Dollar.

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own income statement for the
year. M.P. Evans Group PLC reported a loss for the year of US$3,657,000 (2021 US$3,492,000). The Company’s separate financial
statements are set out on pages 92 to 97.

By virtue of Section 479A of the Companies Act 2006, the Company’s subsidiary Bertam Consolidated Rubber Company Limited is
exempt from the requirement to have an audit and prepare individual accounts. Details of all subsidiary companies are shown on
page 98.

2 Adoption of new and revised accounting standards

(a) New and amended standards adopted by the Group

There have been a number of new and amended standards issued by the International Accounting Standards Board (“IASB”) that
became effective for the first time during the year ended 31 December 2022. The Group has assessed each of them and concluded
that the following standards and amendments have not had a material impact on the Group’s results or financial position.

IFRS 3 (amendments) Reference to the conceptual framework
IAS 16 (amendments) Proceeds before intended use
IAS 37 (amendments) Cost of fulfilling a contract
Annual improvements to IFRS Standards 2018-2020

(b) New standards, amendments and interpretations issued but not effective for the year beginning 1 January 2022 and not

adopted early
At the date of authorisation of these financial statements, a number of new and revised IFRSs have been issued by the
IASB but are not yet effective, as listed below. The directors have performed an initial review of each of the new and revised
standards and, based on the Group’s current operations and accounting policies, are of the view that their adoption will not
lead to any material change in the Group’s financial reporting.

IFRS 17 (amendments) Insurance contracts
IAS 1 (amendments) Classification of liabilities as current or non-current
IAS 1 (amendments) Disclosure of accounting policies
IAS 8 (amendments) Definition of accounting estimates
IAS 12 (amendments) Deferred tax arising from a single transaction
IFRS 16 (amendments) Leases: lease liability in a sale and leaseback

3 Accounting policies

(a) Accounting convention and basis of presentation

The consolidated financial statements of M.P. Evans Group PLC have been prepared in accordance with UK-adopted
International Accounting standards and with the requirements of the Companies Act 2006 as applicable to companies
reporting under International Financial Reporting Standards (IFRS). They have been prepared under the historical cost
convention, except for items that are required by IFRS to be measured at fair value, principally biological assets. The Group’s
financial statements therefore comply with the AIM rules.

(b) Going concern

The financial statements have been prepared on a going-concern basis. The directors have conducted a review of projected
cash flows from operations, investing and financing considering in detail the period up to the end of 2024, including risks and
sensitivities, concluding that the Group has sufficient projected funds to carry on its business and its planned investment
programme in the medium term. Furthermore, the Group has control over its main cash expenditure, investment in its new
estates and mills, which it can manage according to the resources available. Further details are given in the report of the
directors on page 42.

NOTES TO THE CONSOLIDATED ACCOUNTS continued

3 Accounting policies continued

The Group financial statements consolidate the financial statements of the Company and all of its subsidiaries, and equity
accounts for its associated undertakings. The Group treats as subsidiaries those entities in which it has power over the
investee, has the rights or exposure to variable returns, and has the ability to affect those returns. All subsidiary and
associated undertakings prepare their financial statements to 31 December.

Where necessary, the financial statements of subsidiary and associated companies are adjusted prior to consolidation or

equity accounting to bring them into line with the Group’s accounting policies. All intra-Group transactions, balances, income
and expenses are eliminated on consolidation. The results of subsidiaries or associated companies acquired or disposed of
during the year are included in the consolidated income statement from or up to the effective point of gaining or losing either
control or significant influence as appropriate.

Non-controlling interests in the net assets of subsidiaries are separately identified. They consist of non-controlling interests at
the date of business combination, and the non-controlling interest’s share of subsequent changes in equity.

On disposal of a subsidiary or associated company, the gain or loss on disposal is calculated as the difference between the
fair value of the proceeds received and the Group’s consolidated carrying value of the assets and liabilities of the subsidiary
or associated undertaking, including goodwill where relevant. If required by IFRS 5, results (including comparative amounts) of
the disposed of subsidiary or associated undertaking are included within discontinued operations.

(d) Revenue

Revenue represents the fair value of crops and produce sold during the year, excluding sales taxes. Income is recognised at
the point of delivery, which is deemed to be the point at which the performance obligation is satisfied. Payment terms are
cash on delivery. However, in some circumstances credit is offered to selected customers, on up to 10-day terms.

(e) Retirement benefits

In the UK, the Group operates a defined-contribution pension scheme. The pension charge represents the contributions
payable by the Group under the rules of the scheme.

In Indonesia, as required by law, a lump sum is paid to employees on retirement or on leaving the Group’s employment.
This terminal benefit is unfunded, but the expense is accrued by the Group based on an annual actuarial review using the
projected unit credit method and charged to the income statement on the basis of individuals’ service at the balance-sheet
date. Remeasurement by the actuary is included in equity, whilst all other movements in the liability, other than benefits paid,
are recognised in profit or loss.

(f ) Share-based payments

The Group issues equity-settled, share-based payments to certain employees. Such share-based payments are measured at fair
value (excluding the effect of any non-market-based vesting conditions) at the date of grant. The fair value determined at the grant
date of the equity-settled, share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s
estimate of shares that will eventually vest. Fair value is measured by application of the Black-Scholes model, using management’s
best estimates assuming that: options are exercised in the middle of the exercise period for market-priced options and at the
start of the exercise period for options issued under the long-term incentive scheme; dividend yield is the latest annual dividend
divided by the share price on the date the options are granted; share-price volatility is assessed as the average standard
deviation over one year using share prices since 1 January 1993. At each balance-sheet date the Group estimates the number of
options it expects to vest. Any changes from the previous estimate are recognised in the income statement.

(g) Goodwill

On acquisition of shares in subsidiary companies or associated undertakings, the directors compare the fair value of the
consideration given for the shares with the fair value of the identifiable net assets acquired, including an estimation of the fair
value of property, plant and equipment, intangible fixed assets and biological assets. This comparison is used to establish the
value of goodwill or the excess of fair value of the identifiable net assets and liabilities acquired over their cost.

Goodwill arising on acquisition is ascribed to an operating subsidiary and capitalised, with provision being made for any
impairment. Goodwill is tested for impairment at least annually but provisions, once made, are not reversed. Inputs to the fair
value measurement of goodwill fall into ‘Levels 2 and 3’ in the IFRS categories.

(h) Biological assets

For internal reporting and decision-making, the Group’s policy is to recognise fresh fruit bunches (“ffb”) at the point of harvest.
For the purposes of statutory reporting, the Group’s policy is to include an estimate of the fair value of ffb prior to harvest as
a biological asset in the Group’s financial statements (see note 17). The impact of initial valuations and subsequent changes in
value are included in the Group’s income statement. The valuation falls into the IFRS category ‘Level 3’, since sales of ffb prior
to harvest are never transacted.

M.P. EVANS GROUP PLCANNUAL REPORT 2022

FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

3 Accounting policies continued

Biological assets continued
Deferred tax is recognised at the relevant local rate on the difference between the estimated cost of biological assets and
their carrying value determined under IAS 41.

(i)

Intangible assets
Intangible assets (other than goodwill) are stated at historical cost less amortisation. Software is written off over its estimated
useful life on a straight-line basis at 10% per annum. Estimated useful lives are reviewed at each balance-sheet date.

(j) Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes all expenditure incurred
in acquiring the asset, including directly-attributable borrowing costs. Leasehold land in Indonesia is held on 25- or 30-year
leases and initial costs are not depreciated as the leases can be renewed without significant cost. Perpetual-leasehold land
in Malaysia is classified as freehold land, which is not depreciated. Oil-palm plantings are recognised at cost and depreciated,
once they reach maturity, over 20 years.

Land and buildings, plant, equipment and vehicles, are written off over their estimated useful lives on a straight-line basis at
rates which vary between 0% and 50% per annum. Estimated useful lives are reviewed at each balance-sheet date. Where the
board judges the residual value of an asset to exceed its carrying value, as in the case of the UK office, no provision is made
for depreciation.

Construction in progress is measured at cost and is not depreciated. Depreciation commences once assets are complete and
available for use.

(k) Leases

All leases are accounted for by recognising a right-of-use asset and a lease liability, except for leases of low-value assets and
leases with a duration of 12 months or less. Lease liabilities are measured at the present value of lease payments over the
term of the lease, and the right-of-use asset is measured at a corresponding amount. The asset is depreciated on a straight-
line basis over the lease term, and the lease payments are allocated to the lease liability and the interest implicit in the lease.

(l) Investments in associated companies

Undertakings over which the Group has the ability to exert significant influence, but not control, through shareholdings
and board membership, are treated as associated undertakings. Investments in associated undertakings are held in the
consolidated financial statements under the equity method of accounting. The consolidated income statement includes the
Group’s share of the profit or loss on ordinary activities after taxation based on audited financial information for the year
ended 31 December 2022. In the consolidated balance sheet, the investments in the associated undertakings are shown as
the Group share of net assets at the balance-sheet date less any profits deferred on sales made to associated companies.

(m) Inventories

Inventories are valued at the lower end of cost and net realisable value. In the case of palm oil, cost represents the weighted-
average cost of production, including appropriate overheads. Other inventories are valued on the basis of first in, first out.
Young seedlings are included within nurseries as part of inventory, and their cost is transferred to immature planting within
property, plant and equipment when they are planted out in the field.

(n) Taxation

The tax charge for the year comprises current and deferred tax. The Group’s current-tax asset or liability is calculated using tax
rates that have been enacted or substantively enacted by the balance-sheet date.

Deferred tax is accounted for using the balance-sheet-liability method, calculated at the tax rates that are expected to apply
in the period when the liability is settled, or the asset is realised. Liabilities are generally recognised for all taxable temporary
differences; deferred-tax assets are recognised if it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Deferred tax is not provided for on initial recognition of goodwill.

The Group recognises deferred-tax liabilities arising from taxable temporary differences on investments in subsidiaries and
associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. The carrying amount of deferred-tax assets is reviewed at each
balance-sheet date.

Deferred-tax assets and liabilities are offset when there is a legally-enforceable right to set off current-tax assets against
current-tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current-tax assets and liabilities on a net basis.

NOTES TO THE CONSOLIDATED ACCOUNTS continued

3 Accounting policies continued

(o) Financial instruments

Financial assets and financial liabilities are initially recognised on the Group’s balance sheet at fair value when the Group
becomes a party to the contractual provisions of the instrument and, other than the Group’s investments in unlisted shares,
are carried at amortised cost.

Financial assets at fair value through profit or loss – the Group’s investments in unlisted shares (other than associated
undertakings) are classified as fair value through profit or loss and stated at fair value, with gains and losses recognised
directly in the income statement. Fair value is the directors’ estimate of sales proceeds at the balance-sheet date.

Trade and other receivables – these represent both amounts due from customers in the normal course of business,
recoverable VAT, and financing made available to related parties and smallholder co-operatives. Balances are initially stated
at their fair value, and subsequently measured at amortised cost, using the effective-interest-rate method, as reduced by
appropriate allowances for estimated expected credit losses, which are charged to the income statement.

Cash and cash equivalents – these include cash at hand, and bank deposits with original maturities of three months or less.

Bank borrowings – interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs.
Finance charges are accounted for on an accruals basis in the income statement using the effective-interest-rate method.

Trade and other payables – these are initially measured at fair value, and are subsequently measured at amortised cost, using
the effective-interest-rate method.

Equity instruments – equity instruments issued by the Company are recorded at the proceeds received, net of direct issue
costs.

(p) Foreign currencies

As set out in note 1, the functional currency of the parent Company and of subsidiaries operating in the palm-oil sector is the
US Dollar. The functional currency of Group companies operating in the property-development sector is the local currency,
the Malaysian Ringgit. Where relevant, results of all Group companies are translated for the purposes of consolidation into
the Group’s presentation currency, the US Dollar. The monetary assets and liabilities of the Group’s foreign operations are
translated at exchange rates on the balance-sheet date. Items in the income statement are translated at the average exchange
rate for the period.

Exchange differences are recognised as a profit or loss in the period in which they arise, except for exchange differences
on monetary items payable to foreign operations where settlement is neither planned nor likely to occur, in which case the
difference is recognised initially in other comprehensive income. In addition, exchange differences arising from translating
the results of Group companies that do not have the US Dollar as their functional currency are also recognised in other
comprehensive income.

(q) Segmental reporting

Operating segments are consistent with the internal reporting provided to the chief operating-decision maker. The chief
operating-decision maker, which is responsible for allocating resources and assessing performance of the operating segments,
is the board of directors. The Group’s reportable operating segments are included in note 4.

(r) Critical accounting judgements and key sources of estimation uncertainty

The preparation of consolidated financial statements under IFRS requires the Group to make estimates and assumptions that
affect how its policies are applied and hence the amounts reported in the financial statements. Estimates and judgements are
periodically evaluated. They are based on historical experience and other factors including expectations of future events that
are believed to be reasonable under the circumstances. Actual results may differ from estimates.

The critical judgements and key estimates which have the most significant impact on the carrying amount of assets and
liabilities are identified below and discussed further in the relevant notes to the accounts.

Critical judgements
• Deferred tax on unremitted earnings (note 23); and
• Depreciation of leasehold land (note 14).

Carrying value of deferred-tax assets relating to losses (note 23);

Key estimates
•
• Determination of retirement-benefit obligations (note 24);
•
•

Carrying value of goodwill (note 13); and
Valuation of biological assets – growing produce (note 17).

M.P. EVANS GROUP PLCANNUAL REPORT 2022

FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

4 Segment information

The Group’s reportable segments are distinguished by location and activity: palm-oil plantations in Indonesia and property
development in Malaysia. The ‘other’ segment relates in the main to the Group’s UK head office.

PLANTATION
INDONESIA
US$’000

PROPERTY
MALAYSIA
US$’000

OTHER
US$’000

TOTAL
US$’000

2022

Continuing operations

Revenue

Gross profit

Loss on biological assets

Foreign-exchange loss

Other administrative expenses

Other income

Operating profit

Finance income

Finance costs

Profit before tax

Tax

Profit after tax

326,872

109,165

(1,431)

(2,402)

(402)

1,845

—

617

(64)

—

(1,042)

(4,212)

778

(2,667)

(23,386)

—

(687)

Share of associated companies’ profit after tax

1,677

507

—

Profit for the year

Consolidated total assets

Non-current assets

Current assets

Investments in associates

Consolidated total liabilities

Liabilities

Other information

Additions to property, plant and equipment

Additions to intangible assets

Depreciation

Amortisation

424,736

85,878

7,183

517,797

—

4,612

10,052

57,797

—

67,849

51,186

—

50,228

101,414

33,708

116

21,924

171

—

33,714

116

21,931

171

326,917*

109,210

(1,431)

(3,444)

(4,614)

1,865

101,586

1,395

(2,731)

100,250

(24,073)

76,177

2,184

78,361

434,788

143,675

11,795

590,258

* US$194.9 million of revenue (59.6%) was from sales to 2 customers (34.3% and 25.3% respectively).

276,592*

103,613

1,771

13,946

(820)

(5,380)

1,426

114,556

645

(2,699)

112,502

(23,228)

89,274

2,508

91,782

434,279

136,297

13,242

583,818

NOTES TO THE CONSOLIDATED ACCOUNTS continued

4 Segment information continued

PLANTATION
INDONESIA
US$’000

PROPERTY
MALAYSIA
US$’000

OTHER
US$’000

TOTAL
US$’000

2021

Continuing operations

Revenue

Gross profit

Gain on biological assets

Profit on sale of land

Foreign-exchange (loss)/gain

Other administrative expenses

Other income

Operating profit

Finance income

Finance costs

Profit before tax

Tax

Profit after tax

276,485

103,605

1,771

—

(966)

(325)

1,405

292

(280)

(21,161)

—

107

—

13,946

146

(5,055)

353

(2,419)

(2,067)

Share of associated companies’ profit after tax

1,460

1,048

—

Profit for the year

Consolidated total assets

Non-current assets

Current assets

Investments in associates

Consolidated total liabilities

Liabilities

Other information

Additions to property, plant and equipment

Additions to intangible assets

Depreciation

Amortisation

416,748

107,438

5,247

58,202

32,510

20,627

167

—

7,995

17,531

28,859

—

80,568

138,770

—

32,510

20,641

167

* US$94.1 million of revenue (34.0%) was from sales to 3 customers (12.4%, 11.2% and 10.4% respectively).

5 Employees

Employee costs during the year

Wages and salaries

Social security costs

Current service cost of retirement benefit (see note 24)

Other pension costs

Share-based payment charge

2022
US$’000

44,553

3,319

1,879

207

420

2021
US$’000

35,092

2,857

2,347

491

433

50,378

41,220

M.P. EVANS GROUP PLCANNUAL REPORT 2022FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

5 Employees continued

Average monthly number of people employed (including executive directors)

Estate manual

Local management

United Kingdom head office

2022
Number

11,560

107

11,674

2021
Number

8,115

105

8,228

Included in the table above are costs relating to key management personnel, those persons having authority and
responsibility for planning, directing and controlling the activities of the Group. Total directors’ emoluments for the year
were £2.5 million (2021 £2.0 million). Emoluments for the highest paid director were £1.1 million (2021 £0.6 million). The
total gain on exercise of share options by the directors was £0.2 million (2021 £0.1 million). The total gain on exercise of
share options by the highest paid director was £0.2 million (2021 £0.1 million). The total number of directors for whom
contributions were made to defined contribution pension arrangements was 1 (2021 - 2), in the current year the highest
paid director did not (2021 did) receive any contributions to defined contribution pension arrangements. In addition to
amounts paid to directors, other key management personnel received a further £0.1 million (2021 £nil) in short-term
employee benefits during the year.

6 Finance income

Unwinding of discounting of receivables

Interest receivable on bank deposits

Interest receivable on related party loans

7 Finance costs

Interest payable on bank loans and overdrafts

8 Profit before tax

Profit before tax is stated after charging:

Depreciation of property, plant and equipment

Amortisation of intangible assets

Auditors’ remuneration

Employee costs (note 5)

The analysis of auditors’ remuneration is as follows:

Audit of UK parent Company

Audit of consolidated financial statements

Audit of overseas subsidiaries

Total audit services*

Taxation advisory services

Total non-audit services

2022
US$’000

282

622

491

1,395

2022
US$’000

2,731

2021
US$’000

—

316

329

645

2021
US$’000

2,699

2022
US$’000

2021
US$’000

21,931

20,641

171

411

167

363

50,378

41,220

176

177

386

—

150

160

337

—

* In addition to the above, US$25,400 (2021 US$26,000) were payable to other firms for the audit for the subsidiary companies.

NOTES TO THE CONSOLIDATED ACCOUNTS continued

9 Tax on profit on ordinary activities

United Kingdom corporation tax charge for the year

Relief for overseas taxation

Overseas taxation

Adjustments in respect of prior years

Total current tax

Deferred taxation – origination and reversal of temporary differences (see note 23)

2022
US$’000

549

(549)

—

19,617

—

19,617

4,456

24,073

2021
US$’000

508

(508)

—

21,124

—

21,124

2,104

23,228

The standard rate of tax for the year, based on the United Kingdom standard rate of corporation tax, was 19% (2021 – 19%). The
standard rate of Indonesian tax was 22% (2021 – 22%). The actual tax charge is higher than the standard rate for the reasons set
out in the reconciliation below.

Profit on ordinary activities before tax

Tax on profit on ordinary activities at the standard rate

Factors affecting the charge for the year

Profits taxed at higher standard tax rate

Expenses not deductible

Reinstatement of losses

Lower rate on fixed asset disposals

Withholding tax on overseas dividends and interest

Adjustment relating to intercompany loan relationships

Utilisation of losses brought forward

Unrelieved losses

Other differences

Total tax charge

2022
US$’000

100,250

19,048

3,189

1,075

—

(8)

152

335

—

293

(11)

2021
US$’000

112,502

21,375

2,886

918

(1,003)

(1,352)

122

335

(254)

533

(332)

24,073

23,228

In addition to the above, the Group recognised a tax charge of US$0.3 million (2021 US$0.2 million) on retirement benefit
obligation remeasurement gains, recorded in other comprehensive income.

10 Dividends paid and proposed

2022 interim dividend – 12.5p per 10p share (2021 interim dividend 10p)

2021 special dividend – 5p per 10p share

2021 final dividend – 25p per 10p share (2020 final dividend 17p)

2022
US$’000

7,611

3,662

17,227

28,500

2021
US$’000

7,377

—

13,150

20,527

Following the year end, the board has proposed a final dividend for 2022 of 30p per 10p share, amounting to US$19.8 million.
The dividend will be paid on or after 16 June 2023 to shareholders on the register at the close of business on 28 April 2023.

M.P. EVANS GROUP PLCANNUAL REPORT 2022FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

11 Basic and diluted earnings per share

The calculation of earnings per 10p share is based on:

Profit for the year attributable to the owners of
M.P. Evans Group PLC

Average number of shares in issue

Diluted average number of shares in issue*

2022
US$’000

73,060

2022
NUMBER OF
SHARES

54,579,591

54,754,110

2021
US$’000

86,406

2021
NUMBER OF
SHARES

54,564,864

54,710,139

* The difference between the number of shares in issue and the diluted number of shares relates to unexercised share options held by directors and
key employees of the Group.

12 Disposal

As announced on 15 October 2021, the Group completed the disposal of 70 hectares of land owned by its wholly-owned
subsidiary Bertam Consolidated Rubber Company Limited to Bertam Properties Sdn Berhad, its 40%-owned associated company.
The total sale consideration is 99.9 million Malaysian Ringgit, or US$24.0 million based on the 2021 year-end exchange rate. In
accordance with the agreement, 60% of the consideration had been received before the end of the 2021, 10% had been received
in January 2022 and the remainder is due in July 2023. This outstanding amount is included in current receivables in note 19.
An initial profit on disposal of US$13.9 million was recognised in 2021. However, accounting standards require that 40% of the
profit on disposal be deferred and recognised at the point when Bertam Properties has developed and sold the land. The deferred
profit has been deducted from the carrying value of the associated company, as shown in note 15.

13 Intangible assets

Cost

At 1 January 2022

Additions

At 31 December 2022

Accumulated amortisation

At 1 January 2022

Charge for the year

At 31 December 2022

GOODWILL
US$’000

SOFTWARE
US$’000

11,767

—

11,767

—

1,673

116

1,789

451

171

622

TOTAL
US$’000

13,440

116

13,556

451

171

622

Net book value at 31 December 2022

11,767

1,167

12,934

Cost

At 1 January 2021

Additions

At 31 December 2021

Accumulated amortisation

At 1 January 2021

Charge for the year

At 31 December 2021

11,767

—

11,767

—

1,665

1,673

284

167

451

13,432

13,440

284

167

451

Net book value at 31 December 2021

11,767

1,222

12,989

Goodwill is carried at cost. Of the balance above, US$10.6 million relates to the Group’s project at Bumi Mas, with the remainder
relating to the Group’s projects at Kota Bangun, Bangka, and at Sennah Estate (part of the Pangkatan group).

NOTES TO THE CONSOLIDATED ACCOUNTS continued

13 Intangible assets continued

Key estimate
A review for goodwill impairment has been undertaken by comparing the carrying value of the relevant cash generating
units, being the six estates as described on pages 8 and 9, with their recoverable amount. Recoverable amount has been
obtained by reference to independent valuations of the Group’s property assets conducted at the end of 2022 (see page
100). These cash-flow valuations used a 30-year forecast period, to reflect the nature and growth profile of the asset and
its long-term resilience to variations in climate and weather patterns, pre-tax inflation-adjusted discount rates of
16-19% (2021 – 16-19%), and a mill-gate price for CPO of US$666 for two years before reverting to US$642 as a long-
term average (2021 two years at US$666 followed by US$642 for the long term). A decrease in any of the CPO price,
yield or extraction assumptions of up to 10% would not result in any impairment (2021 nil impairment) of the goodwill
relating to Bumi Mas.

14 Property, plant and equipment

Cost or valuation

At 1 January 2022

Additions

Re-classification

Disposals

LEASEHOLD
LAND
US$’000

111,907

2,552

—

(21)

PLANTING
US$’000

BUILDINGS
US$’000

212,880

114,777

3,431

—

(1,525)

—

10,715

(602)

At 31 December 2022

114,438

214,786

124,890

Accumulated depreciation

At 1 January 2022

Charge for the year

Disposals

At 31 December 2022

155

—

187

Net book value at 31 December 2022

114,251

Cost or valuation

At 1 January 2021

Additions

Re-classification

Exchange differences

Disposals

110,133

1,724

504

(7)

(447)

56,145

9,618

(870)

64,893

149,893

209,769

4,017

—

(906)

37,974

6,694

(302)

44,366

80,524

99,136

—

16,560

(17)

(902)

At 31 December 2021

111,907

212,880

114,777

Accumulated depreciation

At 1 January 2021

Charge for the year

Exchange differences

Disposals

At 31 December 2021

146

—

(10)

155

Net book value at 31 December 2021

111,752

47,507

9,270

—

(632)

56,145

156,735

32,335

6,353

(6)

(708)

37,974

76,803

PLANT,
EQUIPMENT
& VEHICLES
US$’000

CON-
STRUCTION
IN PROGRESS
US$’000

TOTAL
US$’000

529,928

33,714

—

(3,333)

12,742

24,217

(12,843)

—

24,116

560,309

—

24,116

19,687

22,255

(28,938)

—

(262)

128,923

21,931

(2,203)

148,651

411,658

501,422

32,510

—

(26)

(3,978)

12,742

529,928

—

12,742

110,780

20,641

(8)

(2,490)

128,923

401,005

77,622

3,514

2,128

(1,185)

82,079

34,649

5,587

(1,031)

39,205

42,874

62,697

4,514

11,874

(2)

(1,461)

77,622

30,792

4,999

(2)

(1,140)

34,649

42,973

Included in planting is immature planting with a cost of US$7,337,000 (2021 US$9,381,000).

M.P. EVANS GROUP PLCANNUAL REPORT 2022FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

14 Property, plant and equipment continued

Critical judgement
Included in leasehold land is land in Indonesia which is not being depreciated. Land is held on 25- or 30-year leases,
and as those leases can be renewed without significant cost and the Group has previous experience of successful lease
renewals, the directors have concluded that the land should not be depreciated. The carrying value of the land at the end
of the year is US$113,308,000 (2021 US$110,983,000).

As at 31 December 2022, the Group had entered into contractual commitments for the acquisition of property, plant and
equipment of US$8,162,000 (2021 US$16,847,000).

Depreciation and amortisation is charged to cost of sales, other than US$7,000 (2021 US$11,000) charged to other administrative
expenses.

At 31 December 2022, the Group accounted for no right-of-use assets with no net book value (2021 – one asset with net book
value of US$nil) as a lease under IFRS 16.

15 Investments in associates

Details of the Group’s subsidiary and associated undertakings are given on page 98. The Group’s associated companies are both
unlisted.

Share of net assets

At 1 January

Exchange differences

Profit for the year

Dividends received

At 31 December

Unrealised profit - deferral on land sales to associate

2022
US$’000

2021
US$’000

23,981

(1,015)

2,184

(2,656)

22,494

(10,699)

11,795

24,600

(703)

2,508

(2,424)

23,981

(10,739)

13,242

A separate reserve is maintained for the share of profit or loss in the associates. As a result, dividends received are reclassified
from the share of associates reserves to retained earnings.

The summarised results of the Group’s associated undertakings and the Group’s aggregate share of their summarised results are
shown below:

2022

KERASAAN
US$’000

BERTAM
PROPERTIES
US$’000

TOTAL
US$’000

KERASAAN
US$’000

BERTAM
PROPERTIES
US$’000

2021

TOTAL
US$’000

Total

Revenue

Profit after tax

Non-current assets

Current assets

Current liabilities

Non-current liabilities

Net assets

Group share

Revenue

Profit after tax

Non-current assets

Current assets

Current liabilities

Non-current liabilities

Carrying value at 31 December

9,582

4,414

4,486

11,645

(1,131)

(769)

14,231

(38%)

3,641

1,677

1,705

4,425

(430)

(292)

5,408

17,429

1,266

47,529

28,996

(9,012)

(24,797)

42,716

(40%)

6,972

507

19,012

11,598

(3,605)

(9,919)

17,086

10,613

2,184

20,717

16,023

(4,035)

(10,211)

22,494

8,676

3,843

4,291

11,846

(1,585)

(743)

13,809

(38%)

3,297

1,460

1,631

4,501

(603)

(282)

5,247

20,256

2,620

50,053

27,702

(9,027)

(21,894)

46,834

(40%)

8,102

1,048

20,021

11,081

(3,612)

(8,756)

18,734

11,399

2,508

21,652

15,582

(4,215)

(9,038)

23,981

NOTES TO THE CONSOLIDATED ACCOUNTS continued

16 Investments

Financial assets at fair value through profit or loss (unlisted)

At 1 January

Exchange differences

At 31 December

17 Current biological assets

Ffb prior to harvest

2022
US$’000

2021
US$’000

(4)

(2)

2022
US$’000

3,089

2021
US$’000

4,520

Oil palms are harvested continuously, many times throughout the year, and, at any given time, each palm will be at a different
point in its production cycle. It is not possible to undertake a full census of all palms, and so it is necessary to measure the
volume of growing ffb indirectly. The gain or loss shown in the consolidated income statement represents the net movement
in the fair value of ffb prior to harvest during the year. During the year, all of the opening balance of ffb prior to harvest was
harvested whilst all of the closing balance arose in the year due to gains in fair value less costs to sell.

Key estimate
The estimation in respect of ffb prior to harvest is based on the market price of ffb in each of the Group’s locations on
31 December, less the cost of harvesting and transport to mill. The market price is applied to a weight of ffb. This weight
derives from the assumption that value accrues exponentially to ffb from the increase in oil content in the four weeks
prior to harvest: in terms of tonnage at any given month end, equivalent to 32% of the following month’s crop.

The chosen valuation methodology determines the value presented for ffb prior to harvest. Changes to the assumed
tonnage will have a directly equivalent proportional effect on the reported valuation. Different defensible valuation
methods will give widely differing answers. Changes to both tonnage and methodology lead to a range of valuations
between US$3.1 million and US$34.6 million. The Group has never included ffb prior to harvest in its internal reporting
and decision-making.

18 Inventories

Processed produce for sale

Estate stores

Nurseries

2022
US$’000

13,155

8,789

1,168

23,112

2021
US$’000

11,319

9,238

1,197

21,754

M.P. EVANS GROUP PLCANNUAL REPORT 202219 Trade and other receivables

Current assets

Trade receivables

Receivable from smallholder co-operatives

Due from associate company

Loans to related parties

Other receivables

Prepayments and accrued income

Non-current assets

Due from associate company

Loans to related parties

Trade and other receivables analysed by currency of receivable:

Indonesian Rupiah

US Dollar

Sterling

Malaysian Ringgit

FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

2022
US$’000

5,537

6,020

6,798

662

9,643

4,021

32,681

—

9,146

23,984

10,633

410

6,800

41,827

2021
US$’000

6,492

7,734

2,396

697

22,398

2,175

41,892

6,890

9,728

16,618

38,566

10,523

9,337

58,510

The majority of palm-oil sales are made for cash payment in advance of delivery. The Group makes full provision against invoices
outstanding for more than 30 days. At 31 December 2022 there was no provision for impairment of trade receivables
(2021 US$nil). The directors consider that the carrying amount of trade and other receivables approximates their fair value.

The Group makes finance available to its associated smallholder co-operatives, both during the immature stage of initial
plantings, and as working capital facilities for mature areas. It also provides financial guarantees for some bank loans of US$55.4
million (2021 US$60.0 million) provided to its associated smallholders. All balances due from smallholders, including those for
immature areas, are repayable on demand. However, the Group may allow a longer period of finance at its discretion. At an
early stage in the development of a new project, costs are incurred but not yet allocated to a specific smallholder, awaiting the
completion of further development.

The Group’s expected credit loss on its trade and other receivables and financial guarantees is not material. The Group applies
the simplified approach in IFRS 9 in determining expected credit losses on trade receivables, taking account of their similar risk
characteristics and the Group’s experience. In assessing expected credit losses on non-trade receivables and financial guarantees
under IFRS 9, the Group considers the long-standing relationship with its stakeholders, the ongoing trading of its associated
smallholders, and its ability to continue to recover balances in a planned and controlled manner.

Given the above, receivables from smallholders have been classified as current assets with the exception of those balances not
yet allocated to a specific smallholder co-operative which are expected to take greater than 12 months to recover. An analysis of
the balance is as follows:

Immature areas - allocated

Mature areas

Current asset

Non-current asset – immature areas – not allocated

2022
US$’000

3,084

2,936

6,020

—

6,020

2021
US$’000

4,317

3,417

7,734

—

7,734

The Group previously made finance available to enable its new minority partner to acquire a 5% interest in a number of the
Group’s Indonesian subsidiary companies. The balance is repayable on demand. However, the Group, at its discretion, anticipates
recovering the balance over a longer period based on profit distribution from the subsidiary companies, and has classified the
majority of the balance as non-current accordingly. At the end of the year, the balance outstanding on the related party loans was
US$9,808,000 (2021 US$10,425,000).

NOTES TO THE CONSOLIDATED ACCOUNTS continued

20 Cash and other liquid resources

Cash and cash equivalents

2022
US$’000

82,503

2021
US$’000

65,609

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three
months or less.

21 Trade and other payables

Current liabilities

Trade payables

Payable to smallholder co-operatives

Lease liabilities

Other payables

2022
US$’000

8,598

2,488

—

13,324

24,410

2021
US$’000

15,857

5,428

9,877

31,200

The average credit period taken for trade purchases is 37 days (2021 – 50 days). The Group has processes in place to ensure
payables are settled within the agreed terms. The amounts above also reflect the Group’s anticipated cash outflows for these
financial liabilities.

22 Borrowings

Secured borrowing at amortised cost

Bank loans

Total borrowings

Amount due for settlement within one year

Due for settlement in one to two years

Due for settlement in two to five years

Amount due for settlement after one year

Analysis of borrowings by currency:

US Dollar

Indonesian Rupiah

Analysis of anticipated cash outflows:

Within one year

Due within one to two years

Due within two to five years

2022
US$’000

2021
US$’000

49,039

71,048

17,364

20,640

11,035

31,675

49,039

—

49,039

20,268

22,158

11,155

53,581

20,531

17,998

32,519

50,517

71,048

68,936

2,112

71,048

22,384

19,290

33,236

74,910

Bank loans have been provided from lenders in Malaysia to support the Group’s Indonesian operations. They are secured against
certain assets within subsidiary companies, comprising share certificates, land titles and fixed assets. The net book value of
property, plant and equipment used as security for bank loans is US$114.9 million (2021 US$121.3 million). At the year end, the
Group had undrawn available credit facilities of US$30 million (2021 US$20 million).

The weighted-average interest rate paid on bank loans in the year was 4.4% (2021 – 3.3%).

The analysis of anticipated cash outflows above is based on interest and exchange rates in force at the balance-sheet date.

M.P. EVANS GROUP PLCANNUAL REPORT 2022FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

23 Deferred tax

The following are the major deferred-tax liabilities and assets recognised by the Group and movements thereon:

ACCELERATED
TAX
DEPRECIATION
US$’000

RETIREMENT-
BENEFIT
OBLIGATIONS
US$’000

OTHER TIMING
DIFFERENCES
US$’000

At 1 January 2022

Charge to income statement

Credit to other comprehensive income

At 31 December 2022

At 1 January 2021

Charge to income statement

Credit to other comprehensive income

At 31 December 2021

(8,779)

(744)

—

(9,523)

(8,093)

(686)

—

(8,779)

2,835

(363)

(278)

2,194

3,090

(27)

(228)

2,835

TOTAL
US$’000

(7,815)

(4,456)

(278)

(1,871)

(3,349)

—

(5,220)

(12,549)

(480)

(1,391)

—

(1,871)

(5,483)

(2,104)

(228)

(7,815)

Other timing differences relate to losses, with the exception of the deferred tax liability of US$8.5million (2021 US$8.5 million)
that arose in 2017 on the acquisition of PT Bumi Mas Agro. Certain deferred-tax assets and liabilities have been offset. The
following is the analysis of deferred-tax balances (after offset) for financial reporting purposes:

Deferred-tax assets

Deferred-tax liabilities

2022
US$’000

989

(13,538)

(12,549)

2021
US$’000

3,602

(11,417)

(7,815)

Critical judgement
At the balance-sheet date, the aggregate amount of temporary differences associated with undistributed earnings of
subsidiaries for which deferred-tax liabilities have not been recognised was US$511,464,000 (2021 US$426,090,000). No
liability has been recognised in respect of these differences because either the Group is in a position to control the timing
of the reversal of the temporary differences, or such a reversal would not give rise to an additional tax liability.

At the balance-sheet date, the aggregate amount of temporary differences associated with undistributed earnings of
associates for which deferred-tax liabilities have not been recognised was US$23,238,000 (2021 US$24,777,000). No
liability has been recognised in respect of these differences because the reversal would not give rise to an additional tax
liability.

Key estimate
At the balance-sheet date, the Group had unused tax losses of US$49,458,000 (2021 US$62,089,000) available for
offset against future profits. The directors have reviewed estimates of future profits and a deferred-tax asset has been
recognised in respect of US$14,848,000 (2021 US$30,070,000) of such losses. No deferred-tax asset has been recognised
in respect of the remaining US$34,610,000 (2021 US32,018,000) due to the unpredictability of future profit streams. In the
normal course of business, both in the UK and Indonesia, the Group has a number of matters under discussion with local
tax authorities. The Group is satisfied, based on external tax advice, that appropriate tax treatments have been applied.
The likely impact of any change in treatment would be to restrict the availability of the Group’s unused tax losses.

The directors have considered the sensitivity of the deferred-tax asset recognised in respect of losses to changes in
estimated future profits, particularly with regard to changes in the price of CPO. If CPO prices were to fall by 10% from
those initially estimated, there would be no impact on the deferred-tax asset.

At the balance-sheet date, the aggregate amount of temporary differences associated with outstanding executive share
options for which deferred-tax assets have not been recognised was US$1,689,000 (2021 US$1,675,000). No asset has been
recognised in respect of these differences due to the unpredictability of parent-Company future profit streams.

NOTES TO THE CONSOLIDATED ACCOUNTS continued

24 Retirement-benefit obligations

The Group’s only obligation relates to an unfunded, non-contributory, post-employment statutory benefit scheme in Indonesia. A
lump sum is paid to employees on retirement or on leaving the Group’s employment. This terminal benefit is accrued by the Group
based on an annual actuarial review and charged in the income statement on the basis of individuals’ service at the balance-
sheet date. Retirement is assumed at the age of 55 years. Standard Indonesian mortality assumptions are used, and no allowance
is made for internal promotion. A range of different discount rates are used for each of the Indonesian subsidiary companies,
based on actuarial advice.

The main assumptions used to assess the Group’s liabilities are:

Discount rate

Salary increase per annum

Reconciliation of scheme liabilities:

Current-service cost

Past-service cost*

Interest cost

Actuarial gain

Less: Benefits paid out

Movement in the year

At 1 January

Exchange differences

At 31 December

2022
%

2021
%

6.75-7.25

5.25-7.50

7.00

2022
US$’000

1,879

(2,242)

842

(1,264)

(785)

(1,065)

(1,850)

12,886

(1,064)

9,972

7.00

2021
US$’000

2,347

(2,117)

902

(1,043)

(1,055)

(966)

14,051

(199)

12,886

* At its meeting in April 2021, the IFRS Interpretations committee (“IFRIC”) decided to finalise an agenda decision that would
include material explaining how the applicable principles and requirements in IFRS standards apply to attributing benefit to
periods of service. The result of the decision capped the number of years that benefits start to accrue to 24 years. In April 2022,
the Indonesian Financial Accounting Standards Board implemented the agenda decision. With Indonesian company regulations
mandating a retirement age of 55, benefits therefore only start to accrue from the age of 31. Previously benefits were calculated
regardless of age and as such there is a credit of US$2.2 million arising in the year following the adjustment to future benefits
following the IFRIC decision.

Key estimate
The main assumptions used to assess the Group’s liabilities are shown in the table above. Changing one of them by 1% in
either direction would have the effect of increasing or decreasing the Group’s liabilities by US$0.8-1.1 million.

M.P. EVANS GROUP PLCANNUAL REPORT 2022
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

AUTHORISED
NUMBER

ALLOTTED,
FULLY PAID
AND VOTING
NUMBER

AUTHORISED
£’000

ALLOTTED,
FULLY PAID
AND VOTING
US$’000

87,000,000

54,696,253

8,700

—

30,000

(495,365)

—

87,000,000

54,230,888

8,700

87,000,000

54,490,253

—

206,000

87,000,000

54,696,253

8,700

—

8,700

9,232

(57)

9,179

9,204

9,232

25 Share capital

At 1 January 2022

Issued

Redeemed

At 31 December 2022

At 1 January 2021

Issued

At 31 December 2021

During the year, in anticipation of the exercise of share options, the Company issued 30,000 10p shares for US$4,000 cash
consideration. Furthermore, certain share options were exercised in the year giving rise to the share premium shown in note 27.

The Company introduced a share-buyback programme during the year. Under that programme the Company bought back and
cancelled 495,365 10p shares, representing 0.9% of the issued share capital, for a total cost of US$4.9 million. There was no
share-buyback programme in operation in the prior year.

26 Share-based payments

The Group has equity-settled share-option schemes in place for directors and selected employees of the Group. Under the
scheme established in 2012, options are exercisable at a price equal to the quoted market price of the Company’s shares on the
date of grant. Under the Group’s long-term incentive scheme established in 2017, options are exercisable at nil cost. For both
schemes, the vesting period is three years and if the options remain unexercised after a period of ten years from the date of grant,
the options lapse. Options may be forfeited if the employee leaves the Group before the options vest. Details of the share options
outstanding during the year are as follows:

At 1 January

Granted during the year

Exercised during the year

At 31 December

Exercisable at the end of the year

2022
NUMBER
OF SHARE
OPTIONS

176,080

64,380

(56,526)

183,934

25,250

2022
WEIGHTED-
AVERAGE
EXERCISE PRICE
(PENCE)

129.2

0.0

256.5

44.9

326.7

2021
NUMBER
OF SHARE
OPTIONS

326,402

46,248

(196,570)

176,080

50,750

2021
WEIGHTED-
AVERAGE
EXERCISE PRICE
(PENCE)

253.5

0.0

305.1

129.2

448.2

The weighted-average share price at the date of exercise for share options exercised during the year was 950p. The options
outstanding at 31 December 2022 had a weighted-average remaining contractual life of 7.9 years and exercise prices in the
range of 0 to 412p. The Group recognised total expenses of US$420,000 related to equity-settled share-based payments (2021
US$433,000), with options granted in the year valued using a Black-Scholes pricing model based on exercise after three years,
share volatility over the last year of 24%, assumed dividends of 3-5%, and a risk-free rate of approximately 1%. The fair value
of options granted in the year was between 725p and 882p. Details of the directors’ share options are set out in the directors’
remuneration report on pages 55 to 58.

NOTES TO THE CONSOLIDATED ACCOUNTS continued

27 Reserves

SHARE-
PREMIUM
ACCOUNT
US$’000

REVALU-
ATION
RESERVE
US$’000

CAPITAL-
REDEMPTION
RESERVE
US$’000

MERGER
RESERVE
US$’000

TREASURY
SHARES
US$’000

SHARE-
OPTION
RESERVE
US$’000

SHARE OF
ASSOCIATES’
RESERVES
US$’000

FOREIGN-
EXCHANGE
RESERVE
US$’000

TOTAL
US$’000

RETAINED
EARNINGS
US$’000

32,392

548

4,301

766

(6)

960

16,451

55,467

366,825

—

187

—

(8)

—

(2,656)

(19)

—

2,184

—

2,184

70,876

(702)

(681)

(851)

—

917

191

—

(28,500)

(2,656)

2,656

(19)

439

(4,902)

32,579

540

4,358

766

(2)

941

15,277

54,543

407,460

31,582

553

4,301

766

(5)

1,072

16,856

(35)

55,090

300,117

—

810

—

(5)

—

(11)

—

2,508

(489)

—

(2,424)

(112)

—

2,508

83,898

(404)

(376)

—

754

799

—

(20,527)

(2,424)

2,424

(102)

535

32,392

548

4,301

766

(6)

960

16,451

55,467

366,825

At 1 January
2022

Profit for the
financial year

Exchange
differences

Retirement-
benefit
obligations

Issue of
shares

Dividends
paid

Dividends from
associates

Share-based
payments

Share buybacks

At 31 December
2022

At 1 January
2021

Profit for the
financial year

Exchange
differences

Retirement-
benefit
obligations

Issue of
shares

Dividends
paid

Dividends from
associates

Share-based
payments

At 31 December
2021

The nature and purpose of each reserve is described by its title shown in the table above.

M.P. EVANS GROUP PLCANNUAL REPORT 2022FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

28 Non-controlling interests

At 1 January

Share of profit in the year

Dividends paid

Share of retirement benefit credited to other comprehensive income

At 31 December

2022
US$’000

13,524

5,301

(1,232)

17,662

2021
US$’000

9,729

5,376

(1,641)

13,524

The Group has a minority partner in each of its plantation operations. The minority share of profit for the year and Group equity,
allocated by operation, is shown in the following table:

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

Simpang Kiri

29 Note to the consolidated cash-flow statement

Operating profit

Biological loss/(gain)

Loss/(gain) on disposal of property, plant and equipment

Release of deferred profit

Depreciation of property, plant and equipment

Amortisation of intangible assets

Retirement-benefit obligations

Share-based payments

Dividends from associated companies

PROFIT
US$’000

949

2,205

928

848

222

149

2022
EQUITY
US$’000

3,360

7,858

3,771

3,088

(167)

(248)

PROFIT
US$’000

1,121

2,292

975

663

132

193

2021
EQUITY
US$’000

2,598

5,825

3,244

2,337

(285)

(195)

5,301

17,662

5,376

13,524

2022
US$’000

2021
US$’000

101,586

114,556

1,431

845

(40)

21,931

171

(586)

420

2,656

(1,771)

(13,538)

(64)

20,641

167

(351)

433

2,424

Operating cash flows before movements in working capital

128,414

122,497

Increase in inventories

Decrease/(increase) in receivables

(Decrease)/increase in payables

Cash generated by operating activities

Income tax paid

Interest paid

Net cash generated by operating activities

(1,358)

11,864

(6,752)

(10,137)

(8,461)

5,341

132,168

109,240

(27,149)

(2,731)

102,288

(14,269)

(2,699)

92,272

NOTES TO THE CONSOLIDATED ACCOUNTS continued

30 Analysis of movements in net funds/debt

At 1 January 2022

Net increase in cash and cash
equivalents

Repayment of borrowings

Reclassification

Foreign-exchange movements

At 31 December 2022

CASH AND
CASH
EQUIVALENTS
US$’000

CURRENT-ASSET
INVESTMENTS
US$’000

BORROWINGS
DUE WITHIN
ONE YEAR
US$’000

BORROWINGS
DUE AFTER
ONE YEAR
US$’000

TOTAL
US$’000

65,609

18,469

—

(1,575)

82,503

—

(20,531)

(50,517)

(5,439)

—

22,009

(18,842)

—

(17,364)

—

18,842

—

(31,675)

18,469

22,009

—

(1,575)

33,464

At 1 January 2021

27,222

334

(39,605)

(66,079)

(78,128)

Net increase in cash and cash
equivalents

Repayment of borrowings

Change in deposits

Reclassification

Foreign-exchange movements

At 31 December 2021

31 Financial instruments

38,441

—

(54)

65,609

—

(334)

—

34,636

—

(15,562)

—

15,562

—

38,441

34,636

(334)

—

(54)

(20,531)

(50,517)

(5,439)

Capital-risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising
returns to shareholders. The capital structure of the Group consists of debt (see note 22), cash and cash equivalents, current-
asset investments and equity attributable to the owners of the parent Company, comprising issued capital, reserves and retained
earnings. The Group is not subject to any externally-imposed capital requirements.

The Group’s board continues to monitor the capital structure based on the funding requirements of the Group. At the balance-
sheet date the Group had net cash surplus, see note 30, of US$33,464,000 (2021 net debt US$5,439,000) and equity attributable
to the owners of the parent Company of US$471,182,000 (2021 US$431,524,000). The board intends to fund its continuing
Indonesian expansion and maximise returns to shareholders by a combination of the Group’s cash and other liquid resources,
debt finance, and considering the sale of further non-core assets where appropriate.

Categories of financial instruments
All of the Group’s financial assets (other than cash and other liquid resources) are classified as held at amortised cost, with the
exception of its other investments shown in note 16, which are classified as financial assets at fair value through profit or loss.
All of the Group’s financial liabilities are measured at amortised cost. In the opinion of the directors, there was no significant
difference between the carrying values and estimated fair values of the Group’s primary financial assets and liabilities at either
the current, or preceding, financial year end.

Financial-risk management objectives
The majority of the Group’s main risks arising from the Group’s financial instruments are foreign-currency, interest-rate, credit and
liquidity. The board reviews and agrees the policies for managing these risks. The policies and the impact of these risks on the
Group’s balance sheet at the end of the financial year are summarised below.

Foreign-currency risk
The majority of the Group’s operations are undertaken in Indonesia and Malaysia. The Group does not have significant
transactional currency exposures arising from sales or purchases by its operating units, but the Group’s balance sheet can be
significantly affected by movements in exchange rates. Whilst the Group’s trading takes place in local currencies in South East Asia,
relevant commodity prices are determined in US Dollars in a world market which reduces the Group’s currency risk. The Group
makes limited use of forward-currency contracts; there were no contracts open at 31 December 2022.

M.P. EVANS GROUP PLCANNUAL REPORT 2022FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

31 Financial instruments continued

The currency profile of the Group’s monetary assets, excluding trade and other receivables (the currency profile of which is given
in note 19), are as follows:

US Dollar

Indonesian Rupiah

Sterling

Malaysian Ringgit

2022
US$’000

51,433

30,015

886

169

82,503

2021
US$’000

18,439

39,349

7,562

259

65,609

The Group is exposed to changes in foreign-currency exchange rates. This is in relation to the impact of movements on its non-US
Dollar monetary assets and in relation to the consolidation of its non-US Dollar-functional-currency subsidiary and associated
undertakings. The most significant sensitivity arises in respect of movements in the Indonesian Rupiah. Management estimates
that a 10% weakening of the US Dollar against the Indonesian Rupiah would result in a fall in profit for the year and net assets of
US$5.4 million (2021 US$7.6 million).

Interest-rate risk
In order to optimise the income received on its cash deposits, the Group continuously reviews the terms of these deposits to take
advantage of the best market rates. UK funds are passed to banks who have a credit rating of at least A minus. The Group’s only
financial liabilities other than short-term trade and other payables are the borrowings referred to in note 22. Group borrowings
are at variable rates of interest linked to LIBOR (subsequently changed to SOFR in early 2023), and so is exposed to changes in
underlying interest rates. Based on current borrowing, management estimates that for every 1% decrease or increase in interest
rates, Group profit for the year and net assets would increase or decrease by US$0.4 million (2021 US$0.6 million).

Credit risk
The Group’s credit risk on cash deposits is described above. Regarding trade receivables, the Group performs a credit evaluation
before extending credit to customers. The Group does not have any significant concentrations of credit risk (defined by
management as more than 10% of gross-monetary assets), other than in relation to bank deposits which management seeks to
mitigate through the use of banks with high-credit ratings, and loans extended to the smallholder-co-operative schemes attached
to the Group’s new projects. The Group’s maximum exposure to credit risk is represented by the carrying amount of financial
assets in the financial statements.

Liquidity risk
The Group manages liquidity risk by maintaining adequate cash reserves and banking facilities, and through actively monitoring
the Group’s forecast and actual cash flows. All of the Group’s monetary financial assets and liabilities have a maturity profile of
less than ten years. The maturity profile for financial liabilities is shown in note 22.

32 Related-party transactions

Remuneration of key management personnel
The remuneration of the directors, who are the key management personnel of the Group, is set out in the directors’ remuneration
report on page 56. The directors’ participation in the executive share-option schemes and long-term incentive scheme is disclosed
on page 58.

On 15 October 2021, the Group completed the disposal of 70 hectares of land owned by its wholly-owned subsidiary Bertam
Consolidated Rubber Company Limited to Bertam Properties Sdn Berhad, its 40%-owned associated company. Further details are
in note 12.

The Group received dividends from its associated companies during the year. These are set out in note 15.

The Group continued to make finance available to one of its minority partners during the year. This is set out in note 19.

33 Post balance-sheet events

On 2 March 2023, the Group acquired 100% of the shares in two Indonesian companies, PT Teunggulon Raya and PT Dharma
Agung, which between them own 2,100 hectares planted with oil palm. The planted land is close to the Group’s Simpang Kiri estate
in Aceh Province, northern Sumatra. Total costs associated with the acquisition, including the assumption of liabilities within the
companies acquired, are estimated to be US$14.3 million.

PARENT-COMPANY BALANCE SHEET
As at 31 December 2022

COMPANY NUMBER: 1555042

Non-current assets

Property, plant and equipment

Investments in subsidiaries

Trade and other receivables

Current assets

Trade and other receivables

Cash and cash equivalents

Total assets

Current liabilities

Trade and other payables

Net current assets

Total liabilities

Net assets

Equity

Share capital

Other reserves

Retained earnings

Total equity

Note

vii

viii

2022
US$’000

845

15,799

79,982

96,626

1,231

2,616

3,847

2021
US$’000

846

15,799

115,588

132,233

746

8,926

9,672

100,473

141,905

820

3,027

820

99,653

9,179

39,119

51,355

99,653

5,808

3,864

5,808

136,097

9,232

38,890

87,975

136,097

The Company recorded a loss for the year of US$3,657,000 (2021 US$3,492,000).

The financial statements on pages 92 to 97 were approved by the board of directors on 21 March 2023 and signed on its

behalf by

Peter Hadsley-Chaplin

Executive chairman

Matthew Coulson

Chief executive

M.P. EVANS GROUP PLCANNUAL REPORT 2022

PARENT-COMPANY
FINANCIAL STATEMENTS

PARENT-COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2022

Loss for the year

Total comprehensive expense for the year

Issue of share capital

Dividends

Share buyback

Credit to equity for equity-settled
share-based payments

Transactions with owners

At 1 January 2022

At 31 December 2022

Loss for the year

Total comprehensive expense for the year

Issue of share capital

Dividends

Credit to equity for equity-settled
share-based payments

Transactions with owners

At 1 January 2021

At 31 December 2021

SHARE
CAPITAL
US$’000

—

(57)

—

(53)

9,232

9,179

—

9,204

9,232

OTHER
RESERVES
US$’000

—

191

—

(19)

229

38,890

39,119

—

799

—

(102)

697

38,193

38,890

RETAINED
EARNINGS
US$’000

(3,657)

—

(28,500)

(4,902)

439

(32,963)

87,975

51,355

(3,492)

—

(20,527)

535

(19,992)

111,459

87,975

TOTAL
US$’000

(3,657)

195

(28,500)

(4,902)

420

(32,787)

136,097

99,653

(3,492)

827

(20,527)

433

(19,267)

158,856

136,097

NOTES TO THE PARENT-COMPANY ACCOUNTS
For the year ended 31 December 2022

i Significant accounting policies

Basis of accounting
M.P. Evans Group PLC is a public limited company incorporated in the United Kingdom and registered in England and Wales, and
the address of its registered office is given on page 104. The Group’s principal activities are shown in the strategic report on page
14. The financial statements of the Company are presented as required by the Companies Act 2006. The financial statements have
been prepared in accordance with Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (“FRS 101”). The financial
statements have been prepared on a going-concern basis under the historical-cost convention, in accordance with applicable
accounting standards in the United Kingdom. The Company is domiciled in the UK.

The principal accounting policies have been consistently applied and are summarised below. The directors have concluded
that the functional currency is the US Dollar, reflecting the primary economic environment in which the Company operates. The
presentational currency for the Company accounts is also the US Dollar.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation
to share-based payment, financial instruments, capital management, presentation of comparative information in relation to
certain assets, and certain related party transactions.

Pursuant to Section 408 of the Companies Act 2006, the Company’s own income statement and statement of other comprehensive
income are not presented separately in the Company financial statements, but they have been approved by the board.

The Company has assessed the impact of new and revised accounting standards as described in note 2 to the consolidated
financial statements, and has concluded that none have a material impact on the Company’s results or financial position.

Going concern
The financial statements have been prepared on a going-concern basis. The directors have conducted a review of projected cash
flows, concluding that the Company has sufficient projected funds to continue its business in the medium term. Further details are
given in the report of the directors on page 46.

Cash-flow statement
The Company has not included a cash-flow statement as part of its financial statements since the consolidated financial
statements of the Group, of which the Company is a member, include a cash-flow statement and are publicly available.

Property, plant and equipment
Property, plant and equipment are stated at the historic purchase cost less accumulated depreciation. Plant, equipment and
vehicles are depreciated over their estimated useful lives at 25%. Estimated useful lives are reviewed at each balance-sheet date.
Where the board judges the residual value of an asset to exceed its carrying value, no provision is made for depreciation.

Investments in subsidiaries
Investments in subsidiaries are shown at cost less provision for impairment.

Trade and other receivables
These represent amounts due from Group companies in the normal course of business, are repayable on demand, unsecured and
are not interest-bearing. These are measured at amortised cost, reduced by appropriate allowances for expected credit losses.
Balances are classified as non-current if they are not expected to be recovered in less than one year.

Cash and cash-equivalents
These include cash in hand and deposits held with banks with original maturities of three months or less.

Trade and other payables
Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost. Borrowings are
recorded at the proceeds received, net of direct issue costs.

Critical accounting judgements and key sources of estimation uncertainty
The critical judgements and accounting estimates relevant to the consolidated financial statements are shown in note 3 to the
consolidated financial statements on page 74. The directors have concluded that there are no critical judgements and accounting
estimates in the preparation of the parent-Company accounts.

M.P. EVANS GROUP PLCANNUAL REPORT 2022PARENT-COMPANY
NOTES TO THE PARENT-COMPANY ACCOUNTS

ii Result for the year

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its own profit and loss account
for the year. M.P. Evans Group PLC reported a loss for the year ended 31 December 2022 of US$3,657,000 (2021 US$3,492,000). The
Company’s main source of income is dividends from subsidiary companies.

The auditors’ remuneration for audit services was US$33,000 (2021 US$27,000).

iii Employees

Employee costs during the year

Wages and salaries

Social security costs

Pension costs

Share-based payments

2022
US$’000

2021
US$’000

1,881

266

169

2,369

2,349

502

195

3,098

As recorded in the directors’ remuneration report on page 55, wages and salary costs include bonuses paid to the directors in
respect of 2022 and 2021.

Average monthly number of people employed

Staff

Directors

iv Property, plant and equipment

Cost

At 1 January 2022

Additions

At 31 December 2022

Accumulated depreciation

At 1 January 2022

Charge for the year

At 31 December 2022

Net book value at 31 December 2022

Net book value at 31 December 2021

2022
NUMBER

2021
NUMBER

LAND AND
BUILDINGS
US$’000

PLANT,
EQUIPMENT
& VEHICLES
US$’000

TOTAL
US$’000

834

—

834

—

834

124

130

112

119

958

964

112

119

845

846

NOTES TO THE PARENT-COMPANY ACCOUNTS continued

Investments in subsidiaries

Subsidiary undertakings

At 1 January and 31 December 2022

The following companies are the principal direct subsidiary companies of M.P. Evans Group PLC:

M.P. Evans & Co. Limited

Sungkai Holdings Limited

US$’000

15,799

HOLDING
%

100

COUNTRY OF
OPERATION

Holdings are all of ordinary shares. The directors believe the carrying value of investments is supported by their underlying net
assets. Details of all subsidiary companies are shown on page 98.

2022
US$’000

2021
US$’000

1,208

1,231

691

746

79,982

115,588

2022
US$’000

—

820

2021
US$’000

5,000

808

5,808

vi Trade and other receivables

Current assets

Other debtors

Prepayments and accrued income

Non-current assets

Amounts owed by subsidiary undertakings

vii Trade and other payables

Borrowings

Other creditors

viii Share capital

See note 25 to the consolidated financial statements.

M.P. EVANS GROUP PLCANNUAL REPORT 2022NOTES TO THE PARENT-COMPANY ACCOUNTS continued

PARENT-COMPANY
NOTES TO THE PARENT-COMPANY ACCOUNTS

CAPITAL-
REDEMPTION
RESERVE
US$’000

MERGER
RESERVE
US$’000

TREASURY
SHARES
US$’000

OTHER
RESERVES
US$’000

TOTAL
US$’000

RETAINED
EARNINGS
US$’000

ix Reserves

At 1 January 2022

Issue of shares

Share-based payments

Share buyback

Loss for the year

Dividends*

SHARE-
PREMIUM
ACCOUNT
US$’000

32,392

187

—

4,110

1,434

—

At 31 December 2022

32,579

4,167

1,434

At 1 January 2021

Issue of shares

Share-based payments

Loss for the year

Dividends*

31,582

810

—

4,110

1,434

—

At 31 December 2021

32,392

4,110

1,434

* See note 10 to the consolidated financial statements.

(6)

—

(2)

(5)

(11)

—

(6)

960

—

(19)

—

1,072

—

(112)

—

38,890

87,975

—

439

(4,902)

(3,657)

(28,500)

51,355

941

39,119

38,193

111,459

187

(15)

—

799

(102)

—

960

38,890

—

535

(3,492)

(20,527)

87,975

SUBSIDIARY AND ASSOCIATED UNDERTAKINGS
As at 31 December 2022

SUBSIDIARY UNDERTAKINGS
Details of the Group’s subsidiary undertakings as at 31 December 2022 are as follows:

% OF
SHARES
HELD

COUNTRY OF
INCORPORATION

COUNTRY OF
OPERATION

FIELD OF ACTIVITY

NAME OF SUBSIDIARY

PT Prima Mitrajaya Mandiri

PT Teguh Jayaprima Abadi

PT Bumi Mas Agro

PT Gunung Pelawan Lestari

PT Evans Lestari

PT Pangkatan Indonesia

PT Bilah Plantindo

PT Sembada Sennah Maju

PT Simpang Kiri Plantation Indonesia

Indonesia

PT Evans Indonesia

100

Indonesia

Production at Kota Bangun

Production at Bumi Mas

Production at Bangka

Production at Musi Rawas

Production at Pangkatan

Production at Simpang Kiri

Provision of agronomic and
management-consultancy services

Bertam Consolidated Rubber
Company Limited

M.P. Evans & Co. Limited*

Sungkai Holdings Limited*

Sunrich Plantations Pte Ltd

PT Perusahaan Pertanian Perkebunan
Perindustrian dan Perdagangan Surya
Makmur

100

England and Wales

Malaysia

Holding company

100

England and Wales

United Kingdom

Holding company

England and Wales

United Kingdom

Holding company

Singapore

Indonesia

Singapore

Indonesia

Holding company

PT Aceh Timur Indonesia

Indonesia

Holding company

The shareholdings in the above companies represent ordinary shares. Other than the companies marked *, all shareholdings are held
indirectly.

The registered offices for all Indonesian companies is Graha Aktiva, Suite 1001, Jl HR Rasuna Said Blok X-1 Kav 03, Jakarta 12950
Indonesia, for Sunrich Plantations Pte Ltd is 25 North Bridge Road, Level 7 Singapore 179104, and for all UK companies is the Group’s
registered office as shown on page 104.

ASSOCIATED UNDERTAKINGS
Details of the associated undertakings as at 31 December 2022 are as follows:

UNLISTED

ISSUED,
FULLY-PAID
SHARE CAPITAL

%
HELD

COUNTRY OF
INCORPORATION

COUNTRY OF
OPERATION

FIELD OF ACTIVITY

PT Kerasaan Indonesia

Rp 138.07m

Bertam Properties Sdn. Berhad.

RM 60.00m

Indonesia

Malaysia

Indonesia

Production of CPO and PK

Malaysia

Property development

The registered office of PT Kerasaan Indonesia is Forum Nine Building, 10th Floor, Suite 1-11 Jl. Imam Bonjol No.9, Medan-20112, North
Sumatra, Indonesia and the registered office of Bertam Properties Sdn. Berhad is 1st Floor, Standard Chartered Bank Chambers, Lebuh
Pantai, 10300 Pulau Pinang, Malaysia.

M.P. EVANS GROUP PLCANNUAL REPORT 2022OTHER INFORMATION

ANALYSIS OF INDONESIAN PLANTATION LAND AREAS
As at 31 December 2022

The information on pages 99 to 104 does not form part of the audited financial statements.

PLANTED HECTARAGE

Subsidiaries – oil palm

Kota Bangun

Bumi Mas

Bangka

Musi Rawas3

Pangkatan group

Simpang Kiri

Total

Group share of subsidiaries’ land

Associates – oil palm

Kerasaan

Group share of associates’ land

Memorandum:

Group share of subsidiaries’ land and
share of associates’ land

Subsidiaries’ land and Group share of
associates’ land

Notes

GROUP

SCHEME SMALLHOLDERS

OWNERSHIP
%

MATURE
HA

IMMATURE
HA

TOTAL1
HA

MATURE
HA

IMMATURE
HA

TOTAL2
HA

4,596

1,351

3,881

2,537

269

814

253

4,648

1,438

3,881

2,806

894

253

12,445

1,475

13,920

10,210

7,278

6,135

5,538

6,600

2,241

38,002

35,797

1,994

758

140

215

1,297

366

179

2,213

2,101

247

10,350

7,493

6,151

6,835

6,966

2,420

40,215

37,898

2,241

852

36,555

2,195

38,750

38,760

2,307

41,067

1. All of the Group’s areas, other than at Kota Bangun, have a final land license, as does all of the associate’s area at Kerasaan. At Kota

Bangun, the Group has all HGUs except for approximately 500 hectares for which the HGU is currently being obtained.

2. All the scheme-smallholder areas at Bangka and Musi Rawas have an HGU. At Kota Bangun, HGUs have been granted over 3,300 of

the planted hectares. The Group is assisting the smallholders in obtaining the HGUs for the remaining areas at Kota Bangun and at
Bumi Mas. At the newer smallholder areas in near Pangkatan and Simpang Kiri, approximately 700 planted hectares are fully titled.

3. The board’s current estimate is that, between Group and scheme-smallholder areas it will be possible to plant a minimum of 10,000

hectares at Musi Rawas, and that this may be extendable to between 11,000 – 12,000 hectares as a final total.

ANALYSIS OF GROUP EQUITY VALUE
As at 31 December 2022

The information in the following table provides a directors’ estimate of the Group equity value at 31 December 2022

utilising, except where indicated, an independent valuation of the Group’s properties performed at the end of 2022.

OWNERSHIP
%

PLANTED
AREA
HA

TOTAL MARKET
VALUE
US$’000

MARKET VALUE
PER PLANTED
HECTARE
US$

MARKET VALUE
ATTRIBUTABLE
TO GROUP
US$’000

INDONESIAN OIL PALM
PLANTATIONS

Group

Kota Bangun1

Bumi Mas1

Bangka1

Musi Rawas

Pangkatan group1

Simpang Kiri

Smallholders

Kota Bangun

Bumi Mas

Bangka

Musi Rawas

Pangkatan group

Simpang Kiri

Associates

Kerasaan2

Total Indonesia

MALAYSIAN PROPERTY
Bertam Properties3

Total Malaysia

Net funds3

Other assets and liabilities4

Total equity value

Equity value (£ per share5)

Notes

10,350

7,493

6,151

6,835

6,966

2,420

40,215

4,648

1,438

3,881

2,806

894

253

13,920

225,400

168,800

128,000

153,700

122,900

33,000

831,800

29,700

7,500

18,200

20,700

3,700

500

80,300

21,800

22,500

20,800

22,500

17,600

13,600

20,700

6,400

5,200

4,700

7,400

4,100

2,000

5,800

2,241

33,100

14,800

n/a

214,130

160,360

115,200

146,015

116,755

31,350

783,810

28,215

7,125

16,380

19,665

3,515

475

75,375

12,578

871,763

49,312

31,743

22,147

974,965

14.98

1. Market value per planted hectare includes value of mills on the related estates.

2. The Group’s only oil-palm associate, Kerasaan, was not included in the independent valuation at 31 December 2022. The value in the

table above has been carried forward from the independent valuation performed at 31 December 2019.

3. Net funds is taken as cash and other liquid resources less borrowings from the 31 December 2022 balance sheet, attributable to the

owners of M.P. Evans Group PLC.

4. Other assets and liabilities are taken as net assets minus plantation and property-related assets, minus net cash from the 31

December 2022 balance sheet, attributable to the owners of M.P. Evans Group PLC.

5. Amount per share is calculated using the year-end exchange rate and year-end shares in issue (see note 25).

100

M.P. EVANS GROUP PLCANNUAL REPORT 2022Indonesian associated-company estates

51,900

55,200

54,800

54,200

FIVE-YEAR SUMMARY

Production

Crude palm oil

Palm kernels

Crops

Oil-palm fresh fruit bunches

Own crops

Scheme-smallholder crops

Independent-smallholder crop purchased

Average sale prices

Crude palm oil – cif Rotterdam per tonne

Crude palm oil – ex-mill-gate per tonne

Exchange rates

US$1 = Indonesian Rupiah

– average

– year end

US$1 = Malaysian Ringgit

– average

– year end

£1 = US Dollar

– average

– year end

Revenue

Gross profit

Profit before tax

Basic continuing earnings per share

Dividends per share:

Normal

Special

Total

OTHER INFORMATION

2022
Tonnes

2021
Tonnes

2020
Tonnes

2019
Tonnes

2018
Tonnes

341,700

73,800

312,900

67,100

271,700

60,400

231,900

53,000

192,500

43,500

905,400

265,700

340,600

809,700

229,300

327,200

724,300

193,000

289,700

663,300

172,100

166,100

1,511,700

1,366,200

1,207,000

1,001,500

US$

1,345

854

14,853

15,568

4.40

4.41

1.24

1.20

1,195

810

14,295

14,253

4.14

4.17

1.37

1.35

US$

716

591

14,541

14,050

4.20

4.02

1.28

1.37

US$

566

480

14,142

13,883

4.14

4.09

1.28

1.32

573,000

149,600

106,500

829,100

51,700

US$

598

504

14,234

14,380

4.04

4.13

1.34

1.27

US$’000

326,917

109,210

100,250

276,592

103,613

112,502

174,510

34,755

28,440

119,341

17,044

12,780

108,553

26,525

18,348

US cents

133.9

Pence

108.0

42.50

—

42.50

158.4

Pence

115.6

35.00

5.00

40.00

37.4

Pence

29.2

22.00

—

22.00

11.6

Pence

9.0

17.75

—

17.75

9.9

Pence

7.4

17.75

—

17.75

US$’000

Equity attributable to the owners of
M.P. Evans Group PLC

Net cash generated by operating activities

488,844

102,288

431,524

92,272

364,111

39,598

358,724

32,002

377,033

21,297

101

NOTICE OF MEETING AND INVITATION TO POST-AGM
150 YEAR CELEBRATION LUNCH

MESSAGE FROM THE CHAIRMAN

The chairman, Peter Hadsley-Chaplin, is delighted to invite all shareholders, as usual, to the Group’s annual

general meeting, which this year is taking place at 11am on Friday 9 June, at Mansion House in London. In

addition, to mark the Group’s 150-year history, the AGM will be followed by a celebratory lunch, held at the

same venue. To register for attendance at the lunch, shareholders should log on to the investor section of the

Group’s website (www.mpevans.co.uk) where registration information will be made available. Registration

is required by 21 April 2023 at the latest. Shareholders may also contact Harriette Pike with any questions at

harriette.pike@mpevans.co.uk. Places at the lunch must inevitably be limited, but we hope to see as many

shareholders in attendance as possible.

NOTICE IS HEREBY GIVEN that the annual general meeting of M.P. Evans Group PLC will be held at Mansion House, London
EC4N 8BH on 9 June 2023 at 11am BST. The Company also aims to make the meeting available to view online. Further details
will be provided in advance of the meeting on the Company’s AGM website page. The meeting will be for the following
purposes, and unless a poll is validly demanded, voting will be decided on a show of hands:

AS ORDINARY BUSINESS

RESOLUTION ON
FORM OF PROXY

1 To receive and consider the report of the directors and the audited consolidated financial statements

No 1

for the year ended 31 December 2022.

2 To receive and consider the directors’ remuneration report as set out in the annual report and accounts

No 2

for the financial year ended 31 December 2022.

3 To elect Michael Sherwin as a director.

4 To elect Tanya Ashton as a director.

5 To elect Lee Yuan Zhang as a director.

6 To re-elect Philip Fletcher as a director.

7 To re-elect Bruce Tozer as a director.

8 To re-elect Matthew Coulson as a director.

9 To declare a final dividend.

No 3

No 4

No 5

No 6

No 7

No 8

No 9

10 To appoint BDO LLP as auditors and to authorise the directors to determine their remuneration.

No 10

AS SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolution, as a special resolution:

RESOLUTION ON
FORM OF PROXY

11 That the Company is hereby generally and unconditionally authorised to make market purchases (within

No 11

the meaning of section 693 of the Companies Act 2006) of shares of 10p each in the capital of the
Company provided that:

a) the maximum number of shares hereby authorised to be purchased is 5,401,372;

b) the minimum price which may be paid for each share is 10p (exclusive of expenses);

c) the maximum price (exclusive of expenses) which may be paid for each share is an amount equal
to 105% of the average of the middle-market quotations for such shares as derived from the Daily
Official List of the London Stock Exchange for the five business days immediately preceding the day
of purchase; and

d) the authority hereby conferred shall expire at the conclusion of the next annual general meeting of
the Company or on 30 June 2024 whichever shall be the earlier save that the Company may, before
the expiry of this authority, make a contract of purchase which will or may be executed wholly or
partly after such expiry and may make a purchase of shares pursuant to any such contract.

By order of the board

Katya Merrick
Company secretary

102

21 March 2023

M.P. EVANS GROUP PLCANNUAL REPORT 2022
OTHER INFORMATION

NOTES

1) A member of the Company entitled to attend, speak and vote
at the meeting convened by this notice may appoint a proxy
to exercise all or any of his or her rights to attend, speak and
vote at the meeting on his or her behalf. A proxy need not be
a member of the Company. Appointment of a proxy will not
subsequently preclude a member from attending and voting
at the meeting in person if he or she so wishes. A member
may appoint more than one proxy provided that each proxy is
appointed to exercise the rights attached to different shares held
by the member. The form of proxy contains instructions on how
to appoint more than one proxy.

2) A form of proxy for use at the meeting is enclosed. Please return
the form of proxy as soon as possible. To be valid, it must be
received by post or (during normal business hours only) by hand
at the office of the registrars, Computershare Investor Services
PLC, at The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ no later
than 11am on 7 June 2023 (or, if the meeting is adjourned, no
later than 48 hours before the time for holding the adjourned
meeting, or, if a poll is taken otherwise than at or on the same
day as the meeting at which it is demanded, no later than 24
hours before the time appointed for the taking of the poll).
Alternatively, you may appoint a proxy electronically.

If you wish to submit your form of proxy via the internet, you
will need your Control Number, Shareholder Reference Number
(“SRN”) and Personal Identification Number (“PIN”) which
are printed on the Form of Proxy. To appoint a proxy via the
internet you should log on to the Computershare website at
www.investorcentre.co.uk/eproxy. You will be asked to agree to
the terms and conditions for electronic proxy appointment. It
is important that you read these terms and conditions as they
set out the basis on which proxy appointment via the internet
shall take place. This electronic address is provided only for the
purpose of communications relating to electronic appointment
of proxies.

CREST members wishing to appoint a proxy or proxies through
the CREST electronic proxy appointment service should refer to
the more detailed instructions posted on the AGM page of the
Group’s website (www.mpevans.co.uk).

3) The right to appoint a proxy does not apply to persons whose

shares are held on their behalf by another person and who have
been nominated to receive communications from the Company
in accordance with section 146 of the Companies Act 2006
(“nominated persons”). Nominated persons may have a right
under an agreement with the registered shareholder who holds
the shares on their behalf to be appointed (or to have someone
else appointed) as a proxy.

Alternatively, if nominated persons do not have such a
right, or do not wish to exercise it, they may have a right
under such an agreement to give instructions to the person
holding the shares as to the exercise of voting rights.

4) Pursuant to regulation 41 of the Uncertificated Securities
Regulations 2001, the Company has specified that only
those shareholders registered on the register of members of
the Company at 11.00 p.m. on 7 June 2023 (or, if the meeting
is adjourned, 48 hours before the time of the adjourned
meeting) 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 that
time will be disregarded in determining the rights of any
person to attend and vote at the meeting.

5) As at 21 March 2023, the Company’s issued share capital
consisted of 54,013,727 shares carrying one vote each.
Therefore the total number of voting rights in the Company
as at that date was 54,013,727.

6) Copies of the directors’ service contracts and terms and

conditions of appointment will be available for inspection at
the registered office of the Company during normal business
hours and at the place of the meeting from 15 minutes prior
to the meeting until its conclusion.

7) Any corporation which is a member can appoint one or more
corporate representatives who may exercise on its behalf
all of its powers as a member, but powers purported to be
exercised by more than one authorised representative in
respect of the same shares will be treated as not exercised.

8) Save as provided below, members who wish to communicate
with the Company in relation to the meeting should do so by
writing to the Registrars at The Pavilions, Bridgwater Road,
Bristol BS99 6ZZ. No other methods of communication will
be accepted. In particular, no person may use any electronic
address to communicate with the Company for any purposes
other than those expressly stated in the relevant document.

9) Members have the right to require notice of a resolution to
be moved or a matter to be included in the business of the
meeting.

Any addressee of this notice who has sold or transferred all
of the shares of the Company held by him or her, should pass
the annual report, of which this notice forms part (including
the form of proxy enclosed herewith), to the person through
whom the sale was effected for transmission to the transferee
or purchaser.

THE ANNUAL GENERAL MEETING WILL BE
HELD ON FRIDAY 9 JUNE 2023 AT 11AM

VENUE
Mansion House, London EC4N 8BH

Mansion
House

CLOSEST TRANSPORT LINKS
Mansion House (District and Circle Lines)
Cannon Street (District and Circle Lines, National Rail Services)
Bank (Central, Northern and Waterloo & City Lines)

ORDER OF EVENTS
10am
11am
12pm
1pm

Registration/coffee
AGM
Drinks reception
Lunch (by prior registration)

103

M.P. EVANS GROUP PLC
ANNUAL REPORT 2022

PROFESSIONAL ADVISERS & REPRESENTATIVES

SECRETARY AND REGISTERED OFFICE
Katya Merrick

M.P. Evans Group PLC

3 Clanricarde Gardens, Tunbridge Wells, Kent TN1 1HQ

Company number: 1555042

t +44 (0)1892 516 333

e katya.merrick@mpevans.co.uk

w www.mpevans.co.uk

INDONESIAN REGIONAL OFFICE
PT Evans Indonesia

Gedung Graha Aktiva, Suite 1001,

Jl HR Rasuna Said Blok X-1 Kav 03, Jakarta 12950

PRINCIPAL BANKERS
OCBC Bank

18 Jalan Tun Perak, 50050 Kuala Lumpur, Malaysia

AmBank Group

55 Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia

NatWest

89 Mount Pleasant Road, Tunbridge Wells, Kent TN1 1QJ

NOMINATED ADVISER AND JOINT BROKER
Peel Hunt LLP

7th Floor, 100 Liverpool Street, London EC2M 2AT

MANAGING AGENT IN MALAYSIA
Straits Estates Sdn. Berhad

JOINT BROKER
finnCap

Loke Mansion, 147 Lorong Kelawei, 10250 Penang

One Bartholomew Close, London EC1A 7BL

INDEPENDENT AUDITORS
BDO LLP

SOLICITORS
Hogan Lovells International LLP

2 City Place, Beehive Ring Road, Gatwick,

Atlantic House, 50 Holborn Viaduct, London EC1A 2FG

West Sussex RH6 0PA

REGISTRARS
Computershare Investor Services PLC

PUBLIC RELATIONS ADVISERS
Hudson Sandler LLP

The Pavilions, Bridgwater Road, Bristol BS99 6ZZ

25 Charterhouse Square, London EC1M 6AE

t +44 (0)3707 071 176

w www.computershare.com

GLOSSARY

Crude palm oil

Palm-kernel oil

Ex mill gate

Round Table on Sustainable Palm Oil

Fresh fruit bunches

Palm kernels

RSPO’s Independent Smallholder Standard

International Sustainability & Carbon Certification

Hak guna usaha: land lease granted by Indonesian government

CPO

PKO

EMG

RSPO

Ffb

RISS

ISCC

HGU

104

The Group’s palm-oil mill at Bumi Mas

M.P. Evans is a responsible producer of
sustainable Indonesian palm oil, striving
for excellence in all the Group’s operations,
with a focus on continuing growth and
offering an increasing yield.

3 Clanricarde Gardens
Tunbridge Wells
Kent TN1 1HQ
United Kingdom

t +44 (0)1892 516 333
e enquiries@mpevans.co.uk
w mpevans.co.uk

CBP017914

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