M.P. Evans Group plc Annual Report 2023

FY2023 Annual Report · M.P. Evans Group plc

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Annual Report &
Financial Statements
for the year ended
31 December 2023

2023

M.P. EVANS GROUP PLC
ANNUAL REPORT 2023

From the chairman

The Group has made further significant progress in
delivering its strategy in 2023. We increased the amount of
crop that was processed and, importantly, almost all that
crop is processed in a Group mill now that our sixth mill is
up and running.

We have secured a substantial increase in planted hectarage during the
year, which will support our continuing growth, and we remain focused
on opportunities for further sustainable development, both at our existing
estates and as we continue to review additional acquisition prospects.

Profit and cash generation remain strong and form a sound foundation
for the board’s proposal to increase the final dividend for 2023 to 32.5p
per share. This brings total dividends for the year up to 45p per share,
another step forward in the Group’s long-standing progressive approach
to shareholder returns.

Peter Hadsley-Chaplin

Contents

Group financial highlights

Operational highlights

Chairman’s statement

Map of estates

Market information

Financial statements

Independent auditors’ report

Consolidated income statement

Consolidated statement of comprehensive income

Consolidated balance sheet

The Group’s business model

Consolidated statement of changes in equity

Strategic report

Strategy

Section 172 statement

Results and financial position

Operations: Indonesian palm oil

Operations: Malaysian property

Risk management

Sustainability

TCFD disclosure summary

Communities

Report of the directors

Board of directors

Corporate governance

Directors’ remuneration report

Consolidated cash-flow statement

Notes to the consolidated accounts

Parent Company

Parent-company balance sheet

Parent-company statement of changes in equity

Notes to the parent-company accounts

Other information

Subsidiary and associated undertakings

Analysis of Indonesian plantation land areas

Analysis of Group equity value

Five-year summary

Notice of meeting

Officers, professional advisers & representatives

Glossary

100

101

102

104

Group financial highlights
For the year ended 31 December 2023

Revenue
6%
decrease
2023 US$307.4m
2022 US$326.9m

Total
equity
3%
increase
2023 US$505.1m
2022 US$488.8m

Gross
profit
28%
decrease
2023 US$78.5m
2022 US$109.2m

Operating
profit
26%
decrease
2023 US$75.3m
2022 US$101.6m

Profit for
the year
28%
decrease
2023 US$56.4m
2022 US$78.4m

Operating
cash
generated
17%
decrease
2023 US$107.0m
2022 US$129.5m

Basic
earnings
per share
28%
decrease
2023 78.1 pence
2022 108.0 pence

Normal
dividend
per share
6%
increase
2023 45.0 pence
2022 42.5 pence

Net gearing
3%

2023 Net debt US$14.8m
2022 Net funds US$33.5m

Note on 2023 results

The results for the current year are, whilst robust by historic standards,
somewhat lower than those achieved in 2022 as a result of the exceptionally
high palm-oil price prevailing for much of that year. Further details are included
in the strategic report on pages 12 to 25.

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.

Chairman’s statement

In the year of the Group’s 150th
anniversary, we processed over 1.6
million tonnes of crop and operated six
palm-oil mills, delivering over 20% more
production from our own milling facilities.
Furthermore, we continued to invest for
the Group’s long-term growth, purchasing
10,000 planted hectares close to our
existing operations.

Peter Hadsley-Chaplin, Chairman

RESULTS
The Group achieved a commendable gross profit of
US$78.5 million in 2023, a gross margin of 26%. This
was, inevitably, lower than the record highs seen in the
previous year, caused by the exceptionally strong palm-
oil price environment prevailing, particularly during the
first half of 2022. However, the Group was able, yet again,
to increase both crop and production during the course
of the year and this, combined with a stable pricing
environment, at healthy levels by historic standards,
enabled the Group to deliver another strong result.

The Group achieved a commendable
gross profit of US$78.5 million in 2023,
a gross margin of 26% and was able
to increase both crop and production
during the course of the year.

As part of its long-term investment strategy, the Group
opened its sixth palm-oil mill, at its expanding Musi
Rawas estate in South Sumatra, in early 2023. The new
mill has been a great success in its first year of operation,
processing 250,000 tonnes of crop and achieving an
oil-extraction rate of over 24%. It has already completed

Operational
highlights

• Total crop processed up 7% to

1.6 million tonnes

• 95% of total crop processed
in Group mills, with Group
operating six palm-oil mills for
almost entire year

• CPO production in Group mills

up 22% to 362,000 tonnes

• Further increase in certified

sustainable CPO, up to 233,000
tonnes

• All six Group mills producing

certified output by end of 2023

• Acquisition of more than 10,000
planted hectares during the year
to support future growth

• Further development at Musi
Rawas with 10,000-hectare
planting target exceeded, and
mill processing 250,000 tonnes
of crop in first year

M.P. EVANS GROUP PLCANNUAL REPORT 2023CHAIRMAN’S STATEMENT

its RSPO audit, and confirmation of certification was
received in early 2024. Across the whole Group, the crude
palm oil (“CPO”) output generated by the Group’s own
milling facilities increased by more than 20% and, whilst
the increase in certified sustainable output was smaller
due to the necessary time lag between mill opening,
sustainability audit, and subsequent certification, the
Group can look forward to further increases in certified
sustainable output in the coming years.

The Group remains committed to acting as a responsible
palm-oil producer and continues to provide more
information on its environmental, social and governance
(“ESG”) activities. The Group’s first report in accordance
with the requirements of the Taskforce on Climate-related
Financial Disclosures (“TCFD”) was published in 2023,
and a new ESG report was published in February 2024. In
addition, in their 2023 assessment of public disclosure
on ESG, the Zoological Society of London (ZSL) gave
the Group a score of 86.7%, an increase of 6.5% on the
previous year.

Earnings per share were 78.1p, lower than the 108.0p
recorded in 2022. The higher crop and production in the
year was more than offset by the lower price environment
when compared to the exceptional circumstances in the
previous period. However, Group operations continue to
be significantly cash generative and, over the course of
2023, net operating cash of US$83.6 million was produced.
The Group has successfully deployed funds on strategic
acquisitions during the year, with a focus on long-term
growth. Notwithstanding this, the Group continues to
recognise the importance of progressive dividends.

DIVIDEND
An interim dividend of 12.5p per share (2022 – 12.5p per
share) was paid on 3 November 2023 and the board
is recommending a final dividend of 32.5p per share
(2022 – 30p per share). The total figure of 45p per share
represents, once again, an increase in the normal, annual
dividend payable to shareholders and continues the
Group’s unbroken track record, which can be traced back
for more than thirty years, of maintaining or increasing
normal dividends.

The continuing increase in dividend distributions
indicates the board’s ongoing confidence in the long-
term prospects for the Group. Both crop and production
increased in 2023 in accordance with the Group’s

expectations and, in particular, with an increased
proportion of production coming from Group milling
facilities. The anticipated trend of further increases,
supported by the investments made in the year, forms a
sound basis for the proposed dividend.

SHARE BUYBACK
In addition to dividend distributions, during 2023, the
Group operated a share-buyback programme, deploying a
total of US$9.7 million (2022 US$4.9 million) to purchase,
and subsequently cancel, 991,198 (2022 - 495,365) of the
Company’s 10p shares. This represented 1.8% (2022 -
0.9%) of the issued share capital. This served to enhance
earnings per share and the programme has continued
in 2024.

150-YEAR ANNIVERSARY
The Group is proud to be able to trace is origins back to
the early 1870s and celebrated its 150-year anniversary
over the course of 2023. Several events took place to
mark this special milestone, with a focus on the Group’s
employees, its shareholders and other supporters.
During the year, the Group held a dinner in Jakarta,
attended by the board, the Jakarta office staff,
representatives from all estate locations, and the
Group’s minority Indonesian shareholders.

Group operations continue to be
significantly cash generative and,
over the course of 2023, net operating
cash of US$83.6 million was produced.

Additionally, events were held on Group estates attended
by directors, other senior staff, estate staff and their
family members. In June 2023, following the Group’s
annual general meeting, a celebratory lunch was held
at Mansion House in London attended by many of the
Group’s shareholders, advisors, employees (including
several visiting from Indonesia) and former employees.
A short video of this and other aspects of the 150-year
celebration remains available on the Group website.

OPERATIONAL DEVELOPMENTS
The total crop processed by the Group increased once
again in 2023, by 7%, to over 1.6 million tonnes. Crop
from Group-owned areas increased by 2% to 922,900
tonnes (2022 – 905,400 tonnes) and crop from related

Chairman’s statement continued

scheme-smallholder areas was up by 5% to 278,500
tonnes (2022 – 265,700 tonnes). The Group benefited from
its geographical diversity, with decreases in some areas
more than offset by increases elsewhere. The Group’s
largest estate, Kota Bangun, performed particularly well in
the year, with a combined crop from Group and scheme-
smallholder areas of almost 350,000 tonnes, and there
was another increase at Musi Rawas – up to a combined
crop of 189,100 tonnes – as planting goes on and areas
continue to mature. There was a large increase across the
Group in crop purchased from outside suppliers, up to a
total of 421,500 tonnes (2022 – 340,600 tonnes) following
the opening of the mill at Musi Rawas, and this helped to
keep Group mills well utilised during the year.

The total crop processed by the Group
increased once again in 2023, by 7%,
to over 1.6 million tonnes.

With six mills operational for almost the entire year (the
Musi Rawas mill opened in February 2023), the Group
was able to process 95% of the 1.6 million tonnes of total
crop in its own facilities. As a result, whilst total CPO
production increased by 11% to 378,500 tonnes (2022 –
341,700 tonnes), the increase in production in Group mills
was 22% to 362,100 tonnes (2022 – 297,400 tonnes).

Extraction rates in Group mills increased, on average,
during the year to 23.4% (2022 – 22.9%). This was a
commendable result and demonstrated the dedication
and hard work of the Group’s mill management team
during the year, including their careful liaison with
estate management. It is particularly notable given the
increase in independent crop, normally of a lower quality,
processed by Group mills in the year. The opening of
the Musi Rawas mill, delivering an extraction rate of
24.1% in its first year of operation, shows the benefits of
processing the Group’s high-quality crop in-house rather
than sending it for processing to third-party mills.

By the end of 2023, the Group managed over 65,000
hectares of planted oil palm from its own and associated
scheme-smallholder areas and was continuing to invest
for future growth with both new planting in its developing
areas and replanting in its more mature estates. The yield
per hectare from mature areas held for the whole year
was in excess of 23 tonnes and the crop from acquired
areas is expected to provide an increasing contribution
to Group harvests.

STRATEGIC DEVELOPMENTS
The Group is focused on its four strategic pillars of
responsibility, excellence, growth and yield, and all
operational management and development is centred
around these themes. Further details are set out on page
11 of this report.

Over the course of 2023, the Group invested in its Jakarta-
based sustainability team and continued to work with
specialist consultants, both in the UK and in Indonesia,
to provide expert input both on the ground and on
key reporting matters. In a similar way, as the Group
continues to grow, it has worked to develop its estate and
mill management teams to strive towards its commitment
to excellence, both by recruiting and by offering training,
development and promotion to the Group’s own
experienced staff.

The Group has delivered on its growth commitment
during 2023, with a particular focus on the Group’s
long-term prosperity. Over the course of the year, the
Group has made a significant step forward by acquiring
over 10,000 planted hectares, the majority of which
are relatively young, and with some of the remainder
scheduled for replanting in the near future. At this stage,
the crop from these new areas is relatively small but
is expected to grow significantly in the coming years
as areas mature, and they are brought up to the same
standards as the Group’s existing high-quality plantings.
This new growth, alongside the Group’s established
estates, gives the Group confidence in its ongoing ability
to deliver an increasing yield for its shareholders.

PROSPECTS
The Group has embarked on 2024 positively and,
in the first two months of the year, has already achieved
a total crop processed of 245,700 tonnes, 16% higher
than the 213,000 tonnes in the same period in 2023. Crop
is higher across almost all the Group’s estates and the
contribution from the new hectarage acquired in 2023 will
increase as this year progresses. Management teams at
the Group’s new estates are working on clearly defined
replanting and improvement programmes to make the
most of the purchased areas including, if possible,
adding further planted hectarage. The Group’s long-term
trend of crop increases is expected to persist for several
years to come.

M.P. EVANS GROUP PLCANNUAL REPORT 2023CHAIRMAN’S STATEMENT

Production, including certified sustainable production, is
expected to continue increasing as the Group will have
six mills operational throughout 2024, all of which will
be accredited to produce certified sustainable output for
the entire year. Over time, the proportion of sustainable
output should continue to rise as the Group’s own crop,
and that from its scheme smallholders, continues to
increase. The Group is working to secure its first mill
certification to produce 100% certified output during 2024.
CPO pricing has continued in early 2024 at similar levels
to 2023 and the Group has achieved ex-mill-gate (“EMG”)
pricing of approximately US$750 per tonne during the first
two months of the year, with some recent tenders a little
over US$800 per tonne. This compares favourably with
the average price achieved in 2023 of US$729 per tonne
and, on this basis, the Group continues to be confident
that it will remain profitable and cash generative in the
coming year.

Whilst the Group is working hard to integrate the
acquisitions made in 2023, given the ongoing strength of
its balance sheet and its financial strength, management
remains focused on opportunities for future growth. Both
of the acquisitions in 2023 were of planted areas close
to existing Group properties and management remains
of the view that adding incremental hectarage near to
current projects provides both strategic and financial
benefits. A number of prospects of this nature remain
under review.

BOARD AND SENIOR MANAGEMENT CHANGES
As already reported in both the 2022 annual report
and the 2023 interim report, there were a number of
changes to board and senior management appointments
over the course of 2023. We were pleased to welcome
Lee Yuan Zhang on 1 February 2023 as a non-executive
director and, on 1 August 2023, Luke Shaw was promoted
to the board as its chief financial officer. In addition,
Philip Fletcher retired from the board on 31 July 2023,
having worked with the Group for over 40 years, and
everyone at M.P Evans sends their best wishes to Philip
in his retirement.

Also, on 31 July 2023, K Chandra Sekaran retired as
president director of PT Evans Indonesia, the Group’s
Indonesian management company, and at the same
time transitioned from an executive to a non-executive
role on the Group board. Chandra is also continuing in a
part-time advisory role at PT Evans. Following Chandra’s

retirement, Ravichandran Krisnapillay, who had previously
been serving as director of operations, was promoted to
president director of the Group’s Indonesian operations
with effect from 1 August 2023.

Turning to my own role, I have, for some time,
served as the Group’s executive chairman. Whilst
relatively unusual to have a chairman serve in an
executive capacity, the approach taken by the Group
has received the support of our shareholders, and I have
received the unanimous support of my board colleagues
and senior management, enabling me to fulfil this role
to the best of my abilities. In addition, as a board, we
operate within the corporate governance requirements
of the QCA Code. With a well-established strategy, a
strong executive team in place both in the UK and in
Indonesia, and in discussion with my board colleagues,
I have concluded that the time is right for me to
transition my role from that of an executive chairman
to a non-executive chairman. Whilst my new role will
naturally be a less hands-on one, I nonetheless plan
to maintain my strong and close links with my colleagues,
with our shareholders, principal advisers and other
key stakeholders. Steps are already in place to begin
this transition, which will officially be effective from
1 July 2024.

ACKNOWLEDGEMENTS
The Group has delivered on its stated strategy once again
in 2023. Group-managed hectarage has increased by
20%, which bodes well for its long-term prosperity, and
crop and production continue to increase, with almost
all production coming from our own mills. We continue
to prioritise our commitment to being a responsible
producer and demonstrate this commitment in everything
that we do. None of our achievements would be possible
without the hard work, loyalty and dedication of the many
thousands who are employed by the Group, whether in
the head offices in the UK and Jakarta, or in the estates
across Indonesia. On behalf of the board, I would like to
thank all of them, and we look forward together to the
Group’s exciting future.

Peter Hadsley-Chaplin
Chairman
19 March 2024

Map and locations

1 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.

Group planted area: 4,500 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: 2,300 hectares

Group minority share: 38%

Medan

Kuala
Lumpur

Sumatra

Singapore

Bangka
Island

Jakarta

Kalimantan

Samarinda

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.

Group planted area: 6,100 hectares

Scheme-smallholder planted area: 3,900 hectares

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 subsequently acquired
or planted (Bilah and Sennah).

Group planted area: 7,000 hectares

Scheme-smallholder planted area: 1,100 hectares

4 MUSI RAWAS

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

Group planted area: 7,500 hectares

Scheme-smallholder planted area: 2,900 hectares

Indonesia

Group operation

Malaysia

Minority interest

M.P. EVANS GROUP PLCANNUAL REPORT 2023

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. The remaining developable area is
201 hectares.

Bertam Properties: 313 hectares

Group minority share: 40%

Medan

Kuala

Lumpur

Singapore

Sumatra

Bangka

Island

Jakarta

Kalimantan

6
Samarinda

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.

Group planted area: 7,500 hectares

Scheme-smallholder planted area:
1,400 hectares

NUSANTARA

Oil-palm estate in East Kalimantan, acquired
in November 2023, near to the Group’s Kota
Bangun estates. Majority of planting took
place between 2017-20. Ffb currently being
supplied to a third-party mill for processing.

Group planted area: 2,700 hectares

Scheme-smallholder planted area:
600 hectares

KOTA BANGUN ESTATES

Located in East Kalimantan, close to Kota
Bangun and next to the Mahakam river.
There are two mills on site: a 60-tonne mill
commissioned in December 2012, and a
45-tonne mill commissioned in September
2020. A further 5,000 planted hectares were
acquired in November 2023 to increase mill
utilisation with Group crop.

Group planted area: 14,300 hectares

Scheme-smallholder planted area:
5,700 hectares

1-0027-06-000-00

Market information

PALM OIL
Palm oil is, by the amount produced and consumed each
year, the largest of the world’s vegetable oils. It is also
significantly the most productive of the major vegetable-
oil crops. Based on data from Oil World, globally each
hectare of land cultivated to oil palm produces 3.3 tonnes
of CPO per annum (plus 0.3 tonnes of palm-kernel oil).
The Group’s high-quality estates under management
throughout 2023 produced more than five tonnes of CPO
per hectare, demonstrating the Group’s high operating
standards both in its estates and mills.

World production of palm oil continued to increase
in 2023, up by 3% to 81.5 million tonnes. Once again,
Indonesia dominated global output, accounting for
59% of total production. There continues to be evidence
that the pace of growth in palm-oil production is slowing,
both in Indonesia and Malaysia, which between them
account for more than 80% of world supplies. There
is a slowing down in the growth in mature hectarage,
combined with a deteriorating age profile of planted
palms due to a lack of replanting, and as a result yields
per hectare are below potential levels. By contrast, the
Group continues both to plant new areas and to replant
when appropriate, and has invested in new areas during
the year which reduce the combined average age of the
Group’s planted portfolio.

Whilst palm-oil production levels were seasonally low
in the early months of 2023, demand started to grow
for the world’s major vegetable oils as there was a clear

recovery in global food-based demand, combined with an
increase in vegetable-oil usage in biofuels, particularly in
Indonesia, Brazil and the USA. Unusually, whilst often the
cheapest oil, for some parts of the year CPO traded at a
small premium to some other vegetable oils. Moving into
the second half of the year, an El Niño weather pattern
was declared, although the impact on rainfall patterns,
and hence water stress on oil palms, was mixed across
the islands of Sumatra and Kalimantan. Whilst there
was a small impact on crops in the second half of 2023
during dry periods, the more significant effect will be
felt in the latter part of 2024, and possibly into 2025.
Any production deficit may bring with it a corresponding
increase in pricing.

The Group does not receive the full benefit of cif
Rotterdam prices (shown in the graph on page 9)
when selling its output. Rather, it receives a ‘mill-gate’
price based on local tenders and contracts, which allows
for transport and insurance costs, and also the export
taxes and levies charged by the Indonesian government.
The Rotterdam price moved within a relatively narrow
band during the course of 2023, significantly less
changeable than in the previous year. As a result, the
export tax and levy structure remained unchanged,
and the level of taxation charged by the Indonesian
government did not vary significantly. The Group’s average
mill-gate price for CPO was US$729 per tonne in 2023,
15% lower than the exceptionally high US$854 recorded
in the previous year.

Harvester, Bangka

M.P. EVANS GROUP PLCANNUAL REPORT 2023THE PALM-OIL MARKET

MAIN PRODUCERS
OF PALM OIL
2023
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
2023
24%
24%
13%
12%
8%
7%

Other Asia

China

Africa

India

Main consuming countries
Remaining 11% consists of
Americas (8%), other countries (3%)

Source: Oil World 2023 data

PALM-KERNEL OIL
The Group’s palm-oil mills produce
both CPO and palm kernels (“PK”), typically
in a ratio of approximately one tonne of PK
for every five tonnes of CPO. The Group’s
PK is sold to outside crushing facilities
which then produce palm-kernel oil (“PKO”).
Therefore, the price that the Group achieves
for its output of PK is connected to the price
for PKO.

During the early part of 2023, there was
in increase in PKO production, whilst
coconut-oil production was relatively weak.
Coconut oil and PKO are often substituted
for each other in similar products. However,
as the year progressed, and coconut-oil
production picked up, demand, both in the
food and oleochemical sectors, remained
relatively weak. For much of the year,
unusually, PKO traded at similar prices to
CPO where previously it had commanded
a premium. Looking into 2024, there are
some expectations of a slowdown in world
production which may help to strengthen
prices. During 2023, the Group’s average
price for PK was US$354 per tonne, 42%
lower than the US$611 per tonne in the
previous year.

CRUDE-PALM-OIL PRICE

2,000

1,800

1,600

1,400

1,200

1,000

800

600

400

US$ per tonne
cif Rotterdam

2019

2020

2021

2022

2023

2024

The Group’s business model

Our main resources

49,600 hectares of

Group oil palm

Plantation land
The Group’s plantation land is used to grow oil palms and harvest their fresh
fruit bunches.

15,900 hectares of

smallholder oil palm

Community relationships
The Group engages with the local communities living on and near its operations
and manages smallholder schemes to the same standard as Group areas.

12,800

employees

People
The Group’s employees are fundamental to its success, and the Group is
committed to their welfare, training and development.

net gearing

Stable funding
The Group has a robust capital structure with a market capitalisation of more
than US$500 million* and modest levels of net debt.

The Group is committed to the responsible management of both its own areas of Indonesian oil palm, and
those managed on behalf of associated scheme smallholders. The Group’s employees are dedicated to
continual improvement and are backed by ongoing investment that comes from many years of sound financial
management. As a result, the Group is able to deliver increasing amounts of sustainable production on a cost-
effective basis, leading to progressive shareholder returns.

Outcomes

Growing
production
378,500

tonnes of CPO

Sustainable
production
62%

certified
sustainable CPO

Cost
efficiency
US$427

per tonne own
palm product

Improving
returns
45p

normal dividend
for 2023

* Based on a share price of 740p on 31 December 2023

M.P. EVANS GROUP PLCANNUAL REPORT 2023GROUP BUSINESS MODEL

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.

Responsibility

Excellence

Acting responsibly is at the heart of what we do and

Excellence comes from investing for the long term.

who we are. We are active members of the RSPO, we

Our investment is not only in plantation assets

do not deforest, and are good stewards of the land

but also in our employees, their diversity and

we cultivate. We provide high-quality housing along

inclusion, and in their training and development.

with medical, educational and leisure facilities for

In this way, we are consistently able to deliver both

our workers and their families.

high yields and high oil-extraction rates from our

estates and mills.

Kota Bangun primary school

Fire training, Musi Rawas

Growth

Yield

GROWTH IN CROPS PROCESSED (‘000 TONNES)

GROWTH IN DIVIDENDS (PENCE)

Group
Scheme smallholders
Independent

1,800

1,600

1,400

1,200

1,000

800

600

400

200

Normal dividends

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

We seek to grow and develop the business. Growth

The Group’s investment strategy has already led

continues to come from the increasing maturity of

to a significant improvement in shareholder

the Group’s young estates, from the ongoing focus

returns. In line with its growth programme, the

on improving yields, and from the acquisition and

Group aims to deliver increasing returns to

sustainable development of new areas of land.

shareholders.

Strategic report

The Group’s strategy is to be a responsible producer of certified sustainable
Indonesian palm oil. During the year, it maintained steady expansion of its majority-
owned Indonesian palm-oil areas in a sustainable and cost-effective manner.

STRATEGY

During the course of 2023, the Group successfully
deployed its long-standing strategy to be a responsible
producer of certified sustainable Indonesian palm oil. The
Group developed and expanded its operations in several
ways during the year in furtherance of its growth strategy,
with continuing investment in its existing estates, and by
acquiring further planted hectarage to support its longer-
term ambitions.

The planted area at the Group’s existing estates
continued to increase in 2023, and the initial target of
10,000 planted hectares at the Musi Rawas estate in
South Sumatra was achieved by the middle of the year.
By the year end, 10,300 hectares had been planted there,
and the management team is confident that they can
work towards an expanded total area of 11,000 planted
hectares by the end of 2024.

The increased hectarage at Musi Rawas will, as it matures,
provide additional crop to the newly opened Group mill
on site, which began operation in February 2023. This is
the Group’s sixth palm-oil mill, representing a substantial
strategic investment in recent years. As a result of this
investment, 95% of the Group’s 1.6 million tonnes of total
crop were processed in Group mills in 2023.

The Group has also increased its total planted hectarage
through acquisition during the year, making good
use of its accumulated funds and financial strength
to make strategic investments, securing additional
planted areas close to its existing estates. In March
2023, the Group acquired 2,100 planted hectares close
to its Simpang Kiri estate in Aceh Province of northern
Sumatra and, in November 2023, the Group acquired a
further 8,350 planted hectares in East Kalimantan, near
to the Group’s existing Kota Bangun property. In both
cases, the acquisition cost was below US$10,000 per
planted, Group-owned, hectare. Whilst, on acquisition,
the properties were not of the same high standards as
existing Group areas, management are confident that they
will be able to improve yields and add substantial value
over time.

The Group remains committed to working in partnership
with the smallholder co-operatives that are associated

with Group estates. In 2023, for the first time, there were
mature scheme-smallholder areas connected to all Group
estates, and the Group purchased crop in all locations.
There is a continuing focus on developing smallholder
areas in northern Sumatra and, by the end of the year,
there were smallholder members accounting for 1,350
hectares. The Group is supporting those smallholders
with initial funding for replanting, and by the end of
2023, over 400 hectares within these schemes were
mature, and crop is increasing. Additionally, the 8,350
planted hectares acquired in East Kalimantan during
2023 were inclusive of 1,700 scheme-smallholder
hectares and, as with the Group-owned areas,
management are working to ensure that smallholder
yields are improving post acquisition.

By the end of 2023, the planted area of the Group’s
majority-held Indonesian estates had increased to 49,600
hectares (2022 – 40,200 hectares), an increase of 23%,
whilst the planted area of the scheme smallholders
associated with Group estates had expanded to 15,900
hectares (2022 – 13,900 hectares), a 14% increase.

The Group’s sustainability team supervises all new
planting, takes an active role in the review of any new
estates being considered for acquisition, and will work
to include them in Group certification schemes if
acquired. In addition, the sustainability team, supported
by senior management, is responsible for monitoring
and reporting on all Group conservation areas, and for
identifying opportunities to increase the Group’s land
areas set aside for conservation, both in existing and
newly acquired estates.

As part of its ongoing commitment to responsible
operation and development, the Group has continued to
support the wellbeing of its workforce across Indonesia,
including through the implementation of several new
employee-development initiatives in the year. In addition,
the Group continues to invest in new and improved
housing, along with recreational and community facilities
on its estates. Educational and medical facilities on site
have been expanded, and this investment will continue as
a priority for the Group.

M.P. EVANS GROUP PLCANNUAL REPORT 2023STRATEGIC REPORT
STRATEGY

Harvester path, Kota Bangun

1313

Celebrating
150 years
of M.P. Evans

150-year celebration event in Jakarta

Directors visit to school at Bumi Mas

Musi Rawas mill official opening ceremony

AGM followed by 150-year celebratory lunch at
Mansion House on Friday 9 June 2023

M.P. EVANS GROUP PLCANNUAL REPORT 2023STRATEGIC REPORT
STRATEGY

palm-oil production as sustainable, based on adherence
to strict ESG criteria. The review process for potential
new areas includes checking that local communities
around them have been properly compensated where
applicable, and that there are no grievances which cannot
be resolved.

The location of any new hectarage is also given careful
consideration. The Group acquired two new planted
areas during the year, one of which is in close proximity
to the existing Simpang Kiri estate in Aceh Province,
northern Sumatra. The other is in East Kalimantan, and
the majority of the crop from the newly acquired area
is already being sent to the Group’s milling facilities
at its Kota Bangun estate. The board is confident that
productivity of the additional hectares will be improved
through strict application of the Group’s sustainable
operating procedures, and that this will be of long-term
benefit to both shareholders and local communities, as
well as the environment.

Board members are aware that the Group has invested
in and has earned itself a strong reputation for being a
sustainable producer of palm oil in an industry which,
rightly, comes under scrutiny. The discussions and
decisions of the board are infused with the ethos of
integrity, a desire to preserve the Group’s reputation
as a sustainable operator, good employer and trusted
business partner, and with a forward-looking approach to
making decisions which are designed to generate long-
term value for shareholders.

NON-FINANCIAL AND SUSTAINABILITY
INFORMATION
The Group has provided climate-related financial
disclosures within the sustainability section of this report
on pages 32 to 39.

Strategic report continued

‘SECTION 172’ STATEMENT: IMPLEMENTING THE
STRATEGY
The board understands that, in meeting its obligation
under section 172 of the Companies Act 2016 to
promote the success of the Company for the benefit
of its members, it must also have regard to wider
considerations, including the likely consequences of any
decisions in the long term, the impact of the company’s
operations on the community, the environment and its
reputation. It must consider the interests of stakeholders
and it must act fairly between members of the Company.
Each member of the board is aware of their individual
obligations under section 172, and the need to apply the
broader considerations referred to in section 172 to their
decision making.

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 Group’s current stakeholders are shown below, and
further details on how the Group engages with them
are shown on the Group’s website. The regular review
of this list undertaken by board members acts as a
prompt to consider and, where appropriate, engage with
stakeholders as part of the decision-making process.

During the year, the directors considered a number of
possible opportunities to increase the Group’s planted
hectarage, in line with strategic objectives. As a producer
of sustainable palm oil operating in Indonesia, the
directors are well aware of the concerns expressed by
various stakeholder groups, including shareholders,
regarding the impact of land use for palm cultivation on
the environment and local communities. Any land offered
for sale is thoroughly reviewed to ensure that it meets, or
can be rehabilitated to meet, the requirements set out by
the RSPO, which has developed standards for certifying

STAKEHOLDERS
During their most recent review, the board identified eight separate groups of stakeholders whose interests
should be considered. They were: (i) shareholders in M.P. Evans Group PLC, (ii) employees of the Company and
its subsidiaries, (iii) local communities on and around the Group’s operational locations, (iv) co-investors in the
Group’s Indonesian activities, (v) certain key suppliers to the Group, (vi) European plantation companies with
operations similar to those of the Group, (vii) government and regulatory bodies relevant to the Group, and (viii)
industry certification bodies including the RSPO. The corporate governance section of this report on pages 46 to
52 includes examples of the way the board engages with stakeholders.

Results & financial position

CPO EMG
sale price
US$729
per tonne
2022 US$854 per tonne

Palm-kernel
EMG
sale price
US$354
per tonne
2022 US$611 per tonne

Revenue
US$307.4
million
2022 US$326.9m

Gross
profit
US$78.5
million
2022 US$109.2m

REVENUE AND GROSS PROFIT
The Group’s revenue in 2023 was US$307.4 million,
down by 6% from the US$326.9 million recorded in the
previous year. Whilst the total amount of crop processed
continued to rise, and Group production of both CPO and
PK increased once again in the year, the price per tonne
achieved for both CPO and PK was lower in 2023. The
average ex-mill-gate price for the CPO sold by the Group
in the year was US$729 per tonne, 15% lower than in
2022. However, as can be seen in the ‘market information’
section on pages 8 and 9, pricing remained relatively
stable throughout the year and, whilst lower than in 2022,
remained robust by historic standards.

In addition, the Group is benefiting from its long-term
mill-investment programme and, after opening its sixth
palm-oil mill, at the Musi Rawas estate in South Sumatra,
in early 2023, almost all the Group’s crop is processed
in-house, and so the Group is able to sell CPO and PK,
rather than selling fresh fruit bunches (“ffb”) for other
millers to process.

The Group seeks to keep tight control over its unit costs,
and measures the cost per tonne of production, being the
cost associated with each tonne of ‘palm product’, both
CPO and PK. That cost is calculated on a fully absorbed
basis, and includes all direct costs, estate overheads,
central costs recharged from the Group’s Jakarta
head office, and an appropriate allocation of UK head
office costs. The Group continued to feel the effects of
inflationary pressure on unit costs in the year, notably on
fertiliser inputs, although this abated significantly in the
second half of the year. Cost per tonne in relation to crop
harvested from Group-owned areas was up 6% to US$427
in 2023 (2022 US$402).

The total cost per tonne, after taking account of
crop purchases from both scheme smallholders and

independent suppliers, reduced during the year. This
reflects the fact that ffb purchase costs are related to the
CPO price environment. The total cost per tonne for 2023
was US$498 (2022 US$527). More detail on Group costs is
included on page 22.

Now that the Group processes almost all its own crop, the
contribution to profit from locations supplying outside
mills has reduced, now predominantly derived from
Simpang Kiri (with small contributions from Musi Rawas at
the start of the year prior to the mill opening there, and
from some of the newly acquired areas toward the end
of the year). The total profit from these activities in 2023
was US$3.4 million (2022 US$9.6 million).

Taking the above into account, and with the CPO price
change being the largest influence, the Group’s gross
profit reduced in the year by 28% to US$78.5 million
(2022 US$109.2 million).

ADMINISTRATIVE EXPENSES AND OTHER INCOME
Group administrative expenses in 2023 were US$5.4
million, (2022 US$4.6 million), higher than the amount
incurred in the previous year as the Group incurred some
additional professional fees in the year. Other income
has increased to US$2.9 million (2022 US$1.9 million) as
the Group continues to prioritise electricity generation
at the biogas facilities attached to its palm-oil mills and
the sale of palm-kernel shells. More detail on the Group’s
electricity generation, including the significant cost
savings made alongside the income generated, is included
on page 38.

NET FINANCE COSTS
The Group has continued to repay existing loans during
2023, and towards the end of the year took on new
loans of US$22.5 million as part of its acquisition in East

M.P. EVANS GROUP PLCANNUAL REPORT 2023Kalimantan. Total borrowing costs were higher
than last year at US$3.8 million (2022 US$2.7
million), mainly reflecting the higher interest-rate
environment prevailing during the year.

TAXATION
The Group’s total tax charge for the year was
US$18.8 million (2022 US$24.1 million), lower
than in the prior year on lower overall profits, but
a slightly higher effective tax rate. A reconciliation
of the tax charge is included in note 9 to the
accounts. The Group continues to pay a significant
amount of corporation tax in Indonesia, its
principal operating location, and remains
committed to paying appropriate taxation on
profits generated.

ASSOCIATED COMPANIES
The Group’s Indonesian associate, PT Kerasaan
Indonesia (38% owned), contributed US$1.1
million (2022 US$1.7 million) to Group profit in
the year, and the Group received dividends of
US$2.5 million (2022 US$1.5 million). The Group’s
Malaysian associate, Bertam Properties Sdn Bhd
(40% owned), contributed US$1.3 million (2022
US$0.5 million) to Group profit in the year, and
the Group received dividends of US$1.1 million
(2022 US$1.2 million).

PROFIT FOR THE YEAR
As a result of the above, the Group’s profit for the
year was US$56.4 million (2022 US$78.4 million).

NET ASSETS AND BORROWING
At the end of the year, the Group’s net assets had
increased to US$505.1 million (2022 US$488.8
million). Current assets exceeded current
liabilities by US$45.2 million (2022 US$97.4
million). The Group had cash and liquid resources
of US$39.6 million (2022 US$82.5 million). The
Group has continued to be significantly cash
generative during the year and has taken the
opportunity to invest approximately US$75
million in new planted areas to support its
continuing long-term growth. Net debt at the
end of the year was US$14.8 million (2022 net
funds US$33.5 million), and as a result, the Group
had net gearing of 3% (2022 – 0%), whilst gross
gearing was 10% (2022 – 9%).

STRATEGIC REPORT
RESULTS & FINANCIAL POSITION

Ffb on oil palm, Bangka

1717

Operations: Indonesian palm oil

CROPS
The Group has three sources of ffb crop available to it,
and almost all the Group’s crop is processed in Group-
owned palm-oil mills. Firstly, the Group owns high-quality
planted areas at its oil-palm estates in Indonesia and
seeks to maximise the harvest from those areas through
the application of experienced and knowledgeable
plantation management. Secondly, community-owned
co-operatives (known as scheme smallholders) have
planted areas connected to Group estates, and these
are managed and harvested to the same high standards
as Group-owned plantings. Finally, following a period of
significant investment in the Group’s milling capacity, as a
result of which the Group now has six palm-oil mills, the
Group has some spare milling capacity, and purchases
additional crop from independent suppliers to maximise
mill utilisation.

The total crop processed during 2023 increased to
1,622,900 tonnes (2022 – 1,511,700 tonnes), an increase
of 7%. This was consistent with the Group’s expectations,
with the largest part of the increase coming from
independent purchases following the opening of the Musi
Rawas mill in the early part of the year.

Crop from the Group’s majority-owned areas increased
by 2% in the year, up to 922,900 tonnes (2022 – 905,400
tonnes). The average age of the Group’s plantings,
excluding the new areas acquired in the year, increased to
eleven during 2023, and the Group is continuing to enjoy
the long period, which can last for up to a decade, during
which palms are at their most productive. Once the new
areas are taken into account, the average age falls to ten
years, and the Group will continue to exert downward
pressure on this average as it invests in both new
planting and replanting of some of the areas acquired
during 2023. Crop from scheme-smallholder plantings
increased at a slightly quicker rate in the year, by 5%
to 278,500 tonnes (2022 – 265,700 tonnes) as palms in
these areas tend to have a marginally younger profile.

The Group expanded its independent crop purchasing
programme to South Sumatra in the year, following the
opening of its Musi Rawas mill in February 2023, and
was able to purchase 68,800 tonnes there, making a
significant difference to mill utilisation. This accounted
for the largest part of the 24% increase in crop purchases
from independent suppliers, from 340,600 tonnes in
2022 to 421,500 tonnes in 2023. Independent purchases
increased in almost all locations during the year,

following a more cautious approach to purchasing in part
of 2022 to manage storage capacity during the temporary
export ban in the first half of that year. The only exception
was at Kota Bangun where there was, and continues to
be, significant competition for crop of sufficient quality
for processing.

The Group acquired a further 8,350 planted hectares
close to Kota Bangun in November 2023, and this
hectarage is made up of two estates, Agro Bumi Kaltim
(“ABK”) and Nusantara Agro Sentoso (“Nusantara”). The
crop from ABK is already being sent to Kota Bangun for
processing in a Group mill, and so this estate, and its
crop, is being treated as an extension of Kota Bangun.
Nusantara, being slightly further away from Kota Bangun
is, for the time being, sending its crop to a third-party
mill, and is therefore being treated as a separate property
for reporting purposes.

In Kota Bangun, Group crops increased by 14% in
the year, with crops from scheme smallholders up by
10%, bringing the total crop from Group-managed
areas to almost 350,000 tonnes. The crop from ABK
from acquisition in November to the end of the year
accounted for only 1% of this total, partly because of
the short time period, but also as the Group begins work
to rehabilitate the acquired area. Crop from the existing
Kota Bangun area increased as the Group continued
to see the benefit of its investment in innovative water
management measures, along with a number of other
new management initiatives during the year.

In Bangka, the Group experienced a crop decrease
during the year, albeit with some recovery in the second
half of the year from a particularly low-cropping period
in the early part of 2023. The Group’s long-term
experience is that Bangka, as a fully mature estate,
appears to have a multi-year crop pattern, and that 2023
was more of a ‘resting’ year for some of the plantings
there, and the Group expects to see higher yields return
there in future years.

The Group’s Pangkatan estates continued to perform well
in 2023, achieving an average yield of almost 29 tonnes
per mature Group-owned hectare. There was a small
increase in the number of immature hectares during the
year, as the Group continued with its routine replanting
programme, and this was the main cause of the slight
decrease in total crop from the Group’s own areas. The
Group has continued to work with local communities

M.P. EVANS GROUP PLCANNUAL REPORT 2023STRATEGIC REPORT
OPERATIONS

2023
Tonnes

Increase/
(decrease)
%

2022
Tonnes

249,100

138,200

185,000

156,400

128,900

64,500

800

922,900

100,400

85,200

2,600

29,700

60,200

300

100

278,500

132,000

108,600

52,600

59,500

68,800

421,500

1,622,900

(17)

(4)

(6)

—

(7)

189

(3)

—

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

(31)

191,700

—

62,800

39,100

47,000

—

340,600

1,511,700

to increase the scheme-smallholder
hectarage around Pangkatan. Whilst the
majority of those areas remain immature
and the crop is small, it is increasing,
and will form a valuable source of
additional input to the Pangkatan mill.

On the coast of East Kalimantan, the
Group’s Bumi Mas estate saw a small
decrease in crop in 2023, but the estate
has continued to produce a yield of
more than 21 tonnes per mature planted
hectare. The estate went through a
period of transformation and crop
growth following acquisition by the
Group at the end of 2017, and having
reached almost full maturity and good
yields, estate management are working
on intensive programmes in specific
areas to deliver further increases
in yield.

Crop from Musi Rawas continues to
increase as the planted area at that
estate continues to grow and, more
specifically, further areas come into
harvest. The estate remains young, with
an average age of only six years, and
planting is ongoing. As a result, crop
growth is expected to continue as areas
mature. This will enable the Group to
continue increasing the utilisation of its
new mill at Musi Rawas with high-quality
Group-harvested crop.

At Simpang Kiri, the crop reported
includes that from the new areas
acquired there in March 2023. Given that
some of the acquired areas have been
replanted during the year, or are due
for replanting next year, or were not of
the same high quality as existing Group
areas upon acquisition, their initial
contribution to crop, as expected, was
lower than from the existing plantings.
Total crop from the new hectarage was
13,700 tonnes. Crop from the pre-
existing Simpang Kiri Group area was
50,800 tonnes, similar to the 52,000
tonnes in the previous year.

CROP

Own crops

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

Simpang Kiri

Nusantara

Scheme-smallholder crops

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

Simpang Kiri

Nusantara

Independent crops purchased

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

TOTAL CROP

CROP HISTORY
tonnes (‘000)

Group
Scheme smallholders
Independent

1,800

1,600

1,400

1,200

1,000

800

600

400

200

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Strategic report continued

PRODUCTION
Over recent years, the Group has made a substantial
investment in its own production facilities, so much so
that the number of Group mills has doubled, from three
at the start of 2020, to six by the end of 2023. As a result
of this investment, of the 378,500 tonnes of palm oil
produced from the Group’s total crop processed in the
year, 362,100 tonnes, or 96%, came from Group-owned
mills, with only 4% from outside mills, and up from
87% in the previous year. This brings with it significant
strategic and financial benefits.

As has been the case in previous years, the Group sells
crop from its Simpang Kiri estate to outside mills for
processing. This also applied in the early part of 2023 at
Musi Rawas prior to opening the Group mill there, and
at the end of the year for the newly acquired Nusantara
estate. Crops are sold for processing with a selling price
based on the CPO price and an assumed extraction rate.
However, to be consistent with the majority of Group
locations, CPO and PK produced from these estates’ crops
are reported as part of the Group total but subtotalled
separately in the production table.

A combination of increasing crop available for processing
and an increase in the average extraction rate achieved
in Group mills resulted in an overall 11% increase in CPO
output in the year to 378,500 tonnes (2022 – 341,700
tonnes) and a 9% increase in PK production to 80,600
tonnes (2022 – 73,800 tonnes).

As a responsible producer of certified sustainable palm
oil, the Group is committed to obtaining accreditation
for its mills as soon as possible once they have
been commissioned. By the end of the year, all six of
the Group’s mills had been certified to sell CPO as
sustainable in accordance with the requirements of the
International Sustainability and Carbon Certification
(“ISCC”) scheme and, as a result, was in receipt of
sustainability credits at all its milling locations. As a
long-standing member of the RSPO, the Group also seeks
to obtain RSPO certification at all mills. At the end of
2023, four mills had obtained accreditation, and since the
end of the year, confirmation of accreditation has been
received for a fifth mill. The Group is aiming to complete
the RSPO audit and certification process at its final mill
during 2024.

The Group has continued to purchase ffb from
independent suppliers as part of its objective to
maximise the efficient running of its milling facilities.
Crop from these sources tends to be of a significantly

lower quality than that harvested from areas managed by
the Group. With this in mind, the improvement in overall
oil-extraction rates in Group mills, despite the increase
in independent crop purchases, is a particular credit to
the hard work and skilful management of the Group’s mill
teams during the year.

Following the recent expansion of milling capacity,
independent purchases made up 26% of total crop
processed, up from 23% in the previous year. The Group
will continue to buy in crop for processing, but its longer-
term objective is to increase the crop supply from Group-
owned areas and reduce its reliance on bought-in ffb. The
Group has made progress on this longer-term objective
during 2023, as it continues to plant new areas in Musi
Rawas, but also following the acquisition of new planted
hectarage, particularly in East Kalimantan.

Group mills are designed and constructed as efficient
and low-carbon operating units. Opening the Musi
Rawas mill in South Sumatra during the year has made
a further contribution to reducing the Group’s total
carbon emissions. See the sustainability section on
pages 32 to 39 for more details. In addition, like other
Group facilities, the new mill is equipped with both
composting and biogas facilities. Compost is produced
from empty fruit bunches and applied as a nutritious
organic fertiliser. Biogas plants take mill effluent, treat
it to significantly reduce greenhouse gas emissions, and
at the same time produce renewable electricity. Over the
course of 2023, the Group generated 32 million kWh in
its five biogas plants, approximately half of which was
sold to the Indonesian energy grid, with the other half
used to support the Group’s own energy needs. The
Group’s engineering team estimate that, notwithstanding
the saving in emissions, during the year the Group
saved approximately US$3.2 million by using internally
generated electricity.

MILL-GATE PRICE
The environment into which the Group sold its CPO was
considerably more stable in 2023 than in the prior year,
when it was significantly influenced by the outbreak of
the Russia Ukraine war. More details are included in the
‘palm-oil market’ section on pages 8 to 9. Most notably,
when expressed in cif Rotterdam terms, the CPO price
per tonne moved in a US$255 range between US$855
and US1,110, averaging US$964. This compared to the
previous year when the range between the highest and
lowest prices was substantially larger, at US$1,095 and the
average was US$1,345, 28% higher than the current year.

M.P. EVANS GROUP PLCANNUAL REPORT 2023STRATEGIC 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

Musi Rawas

Third-party mills1

Musi Rawas

Simpang Kiri

Nusantara

EXTRACTION RATES
Group mills

Kota Bangun – Bumi Permai

Kota Bangun – Rahayu

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

Third-party mills1

Musi Rawas

Simpang Kiri

Nusantara

2023

Tonnes

112,000

76,800

54,500

58,600

60,200

362,100

1,600

14,600

200

16,400

378,500

24.4

21.3

23.1

22.7

23.9

24.1

23.4

20.5

22.5

20.0

Increase/
(decrease)

2022

2023

Increase/
(decrease)

2022

Tonnes

(1)

—

(95)

—

(63)

—

(1)

—

112,800

75,100

53,300

56,200

—

297,400

32,600

11,700

—

44,300

24,200

19,000

12,400

10,300

11,400

77,300

400

2,900

—

3,300

341,700

80,600

23.3

21.2

23.4

22.9

23.0

—

22.9

20.4

22.5

—

5.5

4.3

5.7

5.2

4.2

4.5

5.0

4.7

4.5

—

(95)

—

(66)

—

23,800

18,400

12,200

9,600

—

64,000

7,500

2,300

—

9,800

73,800

5.1

4.2

5.7

5.2

3.9

—

4.9

4.7

4.5

—

1. 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 Indonesian government charges taxes and levies
on the export of palm oil and related products. The
Group sells its output directly from mills and so is not
responsible for paying these amounts, but they influence
the amount that buyers are willing to offer to the Group.
The taxes and levies chargeable by the government
increase as the underlying CPO price increases and are
published regularly. The lower CPO-price environment
resulted in lower average taxes and levies during the

course of 2023, and therefore the average gap between
the Rotterdam price and the price achieved by the
Group was also smaller. The average CPO mill-gate price
achieved by the Group during 2023 was US$729 per
tonne, compared to the US$854 per tonne in 2022, a 15%
decrease. The lower tax and levy environment meant that
the gap from the average mill-gate price to the average
Rotterdam price reduced from US$491 per tonne to
US$235 per tonne.

Strategic report continued

COSTS
The Group is focused on being a low-cost producer of
sustainable palm oil. At the same time, management is
committed to maintaining high operational standards,
and this includes investing in the training and
development of its workforce, ensuring that all estates
are run responsibly with high-quality living and working
conditions, and with planted areas maintained properly
so that they can continue to deliver increasing yields.

The Group monitors its cost per tonne of palm product
for all its output (see more about key performance
indicators on pages 24 and 25). This cost per tonne is at
its lowest when the Group develops its own hectarage,
harvests the crop, and processes that high-quality crop
in its own mills. The cost per tonne increases when the
Group buys in crop for processing, as the purchase cost
is typically higher than the Group’s own estate costs.
The production cost also increases when the purchased
crop is of lower quality, as a smaller amount of CPO
and PK can be extracted from each tonne of ffb. This is
particularly so for crop purchased from outside suppliers.
However, this is not the case for crop purchased from the
Group’s associated scheme smallholders, as those areas
are managed by the Group to the same high standards as
Group-owned areas and the crop is of the same quality.

The Group’s cost per tonne is designed to capture the
substantial majority of the Group’s costs. It includes
all direct costs of operating the Group’s estates and
mills, plus the related overheads and depreciation. In
addition, all Jakarta office costs are allocated to the
operating units, along with an appropriate proportion of
UK costs, and these are included as part of the cost per
tonne figure. In 2023, the cost per tonne for production

COMPONENTS OF COST PER TONNE (PERCENT)

relating to crop from the Group’s own areas was US$427
(2022 US$402), an increase of 6%. The Group continued
to feel the effects of inflation, notably on fertiliser, one
of its main inputs. This was particularly true in the first
half of the year, when the Group was applying fertiliser
to its planted areas that had been purchased at the
end of 2022, when costs remained high. However, there
was a significant decrease in the purchase costs for the
fertiliser applied in the second half, helping to reduce
unit costs in the latter part of the year, along with rising
production, and the Group expects this trend to continue
into 2024.

The total cost per tonne in 2023, after taking account
of all sources of crop, was US$498, 6% lower than
the US$527 recorded in 2022. Whilst the total cost of
production is influenced by the same upward pressures
as for the Group cost per tonne, the overall decrease
reflects the lower average cost to purchase crop for
processing during the year. The purchase cost is
formulaically linked to the CPO selling price.

As a Group committed to operational excellence,
management makes investment decisions for the long
term, to ensure that the Group is able to continue
enjoying the high yields that it has become known for.
During the period of elevated fertiliser costs, the Group
continued to apply both organic and inorganic fertiliser
to its fields in accordance with the recommendations of
its agronomic consultants, to ensure that areas would
remain productive in the longer term. The Group takes a
similar long-term view on spending in other areas which
it considers to be a core part of its operations, including
its sustainability team, and its education and training
programmes.

75%

Field
31%
Labour
Fertiliser
18%
Depreciation 14%
12%
Other

15%

Other
Head office 7%
8%
Other

10%

Mill
Labour
3%
Depreciation 4%
3%
Other

M.P. EVANS GROUP PLCANNUAL REPORT 2023STRATEGIC REPORT
OPERATIONS

As previously reported, the price for palm kernels had
been particularly high during the first half of 2022,
reflecting a combination of high demand for certain
products in which palm-kernel oil is used, notably in the
healthcare sector, and a shortage of competing coconut oil.
In the second half of 2022 and throughout 2023, demand,
and therefore price, has returned to more normal levels
and, as a result, the average price for the Group’s PK during
2023 was US$354 per tonne (2022 US$611 per tonne).

The Group acquired 2,100 planted hectares at Simpang
Kiri in early 2023, and has made significant progress since
the acquisition in improving the quality of those areas.
As part of its investment for the long term, the Group
expects to replant approximately half of the acquired
area. During 2023, 300 hectares were replanted, and
the Group has invested in sufficient nursery material to
replant the remainder. Management expects to complete
the remaining replanting during 2024 and 2025.

In addition to the acquisition at Simpang Kiri, the Group
acquired 8,350 planted hectares in East Kalimantan
towards the end of 2023. The Group expects to have the
opportunity for further planting alongside the acquired
areas, and is working with environmental consultants to
review what may be achievable.

In its more mature Pangkatan plantations in North
Sumatra, the Group has continued its replanting
programme, and 170 hectares were replanted during
the year. Furthermore, the Group has continued to work
in North Sumatra to support the formation of new co-
operative schemes, and more members joined those
schemes during the year. A further 200 hectares were
replanted, bringing the total area included in the North
Sumatran smallholder schemes up to 1,350 hectares.

ASSOCIATED COMPANY: KERASAAN
The Group continues to own a 38% share in PT Kerasaan
Indonesia (“Kerasaan”), which, in turn, owns a 2,300
hectare oil-palm estate in North Sumatra. The estate
achieved a crop of 48,200 tonnes in 2023, 7% lower
than the 51,900 tonnes harvested in the previous year.
However, Kerasaan invested in new planting during the
year, adding a further 80 hectares, which will come into
harvest in future years.

The Group is committed, wherever possible, to selling
its output as certified sustainable production, and both
CPO and PK are sold with RSPO and ISCC certifications
depending on demand and where the best premia can
be achieved. During 2023, the Group received total
sustainability premia of US$6.5 million, a slight reduction
on the US$7.5 million in the previous year. There were
two reasons for the decrease. Firstly, for both CPO and PK
there was a decrease in premia per tonne in the second
half of the year. The average premium per tonne for CPO
sold as certified decreased in the year to US$14.20 (2022
US$16.90). The average PK premium for the whole year was
similar to the previous year at US$90.60 (2022 US$91.80)
but reflected an increase in the first half followed by a
decrease in the second half. The second reason for the
decrease was that, whilst the volume of CPO sold as
sustainable increased, there was a small decrease in the
volume of PK sold as sustainable during 2023 as some
sales were held over to 2024.

PLANTING
The Group recognises the value in planting every
available hectare at its estates, to maximise yield
and to ensure that its mills are utilised as far as
possible by its own high-quality crop. Nonetheless,
the Group only plants land that is environmentally
appropriate, is compliant with the requirements of the
RSPO, and where land compensation has been paid and
fully documented based on the principles of free, prior
and informed consent.

At its Musi Rawas estate in South Sumatra, the Group
opened its sixth palm-oil mill in early 2023 and, in the
interests of future milling utilisation, planting continued
throughout the year. The initial target of 10,000 planted
hectares was achieved by the middle of the year and,
by the year end, the Group had planted a total of 690
hectares to bring the total planted area up to 10,332
hectares. Planting is continuing in 2024, with a revised
target of 11,000 hectares.

Strategic report continued

Performance evaluation

65,500

hectares, Group &
scheme smallholders

23.3

tonnes per
hectare

1.6m

tonnes

23.4%

oil-extraction
rate

2022: 54,100 hectares

2022: 23.2 tonnes

2022: 1.5m tonnes

2022: 22.9%

Planted
hectarage
The total planted
hectarage managed
by the Group is a good
indicator of its ability
to continue producing
strong crop.

Ffb yield per
hectare
The rate at which the
Group is able to generate
ffb from the mature
planted hectarage it
manages is the most
important measure of
agricultural efficiency.

Ffb crop
The total crop available
for milling, whether
harvested or purchased,
is the key input in
determining CPO and PK
production.

Extraction rates
The efficient running of
the Group’s own mills
increases the output of
CPO available for sale.

The Group continues to use a number of different
indicators to monitor the performance of its operations
and to enable it to ensure that activities are supervised
effectively, in accordance with Group strategy and with
Group values. Inevitably, there is a significant focus on
operational and financial metrics, but both the board and
senior management are also kept informed of other key
information, including in relation to environmental and
sustainability data, employee and safety information, and
the Group’s commitments to social engagement and local
communities. Further information is included throughout
this report, on the Group’s website, and in the standalone
TCFD and ESG reports published by the Group over the last
twelve months.

In this section, for consistency, the Group has continued
to report on the five operational and financial metrics
previously reported, but has added two further indicators
to broaden reporting in this area.

Over the course of 2023, the Group continued to invest a
substantial amount in its planted hectarage, to maintain
its crop levels and to ensure that it has the opportunity
for future crop growth. In particular, the Group acquired
more than 10,000 planted hectares during the year in

both Aceh and in East Kalimantan, focusing its attention
on areas close to existing Group properties. Whilst the
contribution to Group crop from these areas was relatively
small in 2023, it is expected to grow significantly in the
coming years. As a result of this, and the ongoing planting
programme at Musi Rawas in South Sumatra, by the end of
the year the total planted area managed by the Group had
increased to 65,500 hectares.

The managers on each estate remain focused on
improving yields, and work to ensure that each area is
maintained, fertilised, and harvested in such a way to
maximise crop. The yield per hectare increased notably
at the Group’s existing Kota Bangun project during the
year, following a period of intensive work by the estate
team, and there was evidence of payback on some of
the Group’s water management projects. Taking this into
account, yield per hectare (excluding newly acquired
properties which did not contribute for the full year)
increased to 23.3 tonnes in 2023. This, along with an
increase in purchases of crop from independent suppliers,
helped to push up total crop available for processing
to 1.6 million tonnes in the year. Now that there are
six palm-oil mills in operation, 95% of that crop was
processed in a Group mill.

M.P. EVANS GROUP PLCANNUAL REPORT 2023STRATEGIC REPORT
OPERATIONS

US$ 427

per tonne of
palm product

5.9 tCO2e

per tonne
CPO produced

7.5
injuries

2022: US$402 per tonne

2022: 7.2tCO2e

2022: 4.2 injuries

Cost per tonne
of palm product
Managing unit costs,
particularly for
production from the
Group’s own areas, is
a key determinant of
profitability.

Carbon intensity
The carbon intensity
of Group operations
provides a single-figure
indicator of progress
towards the Group’s net-
zero targets.

Injury frequency
The Group’s injury
frequency rate (expressed
using a standard
multiplier of 200,000)
provides an indicator of
the Group’s commitment
to health and safety at its
estates.

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

Mill management focuses on the performance of each
Group mill, working to ensure that any oil losses are mini-
mised at each stage in the production process. Extraction
rates inevitably vary depending on mill performance and
on crop quality, which can be heavily influenced by the
proportion of independent crop purchases. Despite an
increase in the tonnage and proportion of independent
crop processed in Group mills during 2023, there was a
notable increase in average extractions in Group mills to
an oil-extraction rate of 23.4%.

As reported in the ‘costs’ section above, the Group
maintains careful control over its input costs to ensure
that both estate and milling operations are run efficiently.
The Group’s unit cost, in relation to crop harvested from
its majority-owned hectarage, increased in the year by 6%
to US$427 per tonne.

The Group is committed to acting responsibly, and this
includes its approach on carbon reduction. Summary
information is included in the sustainability section
of this report, and the Group continues to follow the
guidelines of the Taskforce on Climate-related Financial
Disclosures. A key indicator of the Group’s performance,
and particularly its year-on-year progress, is its carbon

intensity measure, which shows the level of carbon
emissions (both directly within the Group and indirectly in
the supply chain) per tonne of CPO output. The Group has
continued to make progress, particularly by increasing the
proportion of crop processed in efficient, in-house milling
facilities, and in 2023 its carbon intensity reduced to 5.9
tonnes CO2 per tonne CPO.

The wellbeing of the Group’s workforce and those
living on Group estates is a priority, and the Group has
a health-and-safety team who are active in all Group
estates delivering training and working to ensure that safe
working practices are embedded across the organisation.
The Group measures several health-and-safety statistics
on a location-by-location basis and responds accordingly.
In 2023, the Group’s injury frequency rate was 7.5
(measured using a standard multiplier of 200,000). This
means that for every 200,000 hours worked at Group
locations, there were 7.5 reportable incidents during the
year. Whilst there was a small increase, importantly the
incident severity rate had decreased and, crucially, there
were no fatalities in 2023 (2022 nil). In addition, the
Group is committed to providing high-quality facilities to
the communities living on its estates. Further details are
included on page 39.

Strategic report continued

Current trading and prospects

The total crop processed by the Group for the first two months of 2024 was 245,700 tonnes,
an increase of 16% from the same period in 2023. Whilst the Group had experienced a
relatively low-cropping period in the early months of 2023, the current year has started
more strongly, and almost all Group locations are ahead of the prior year. The Group may
experience some delayed effect of the extended dry-weather, El Niño-type, conditions, that
were seen in the latter part of 2023, on cropping levels in the second half of 2024. However,
the Group’s geographic diversity across Sumatra and East Kalimantan helps to mitigate
against this risk.

Independent crop purchases are a little lower than in the same period of 2023. This is partly a
reflection of the Group being able to increase mill utilisation with its own crop and that from
associated scheme smallholders, but also a sign of increasing competition for independent
ffb in some locations.

The details are set out in the following table:

Own crops

Scheme-smallholder crops

Independent crops purchased

2 months
ended
29 February
2024
Tonnes

143,600

43,200

58,900

245,700

Increase/
(decrease)

(4)

2 months
ended
28 February
2023
Tonnes

116,300

35,100

61,300

212,700

As reported above, CPO prices were relatively stable during 2023, with the Group achieving
an average mill-gate price of US$729 per tonne. This price stability has continued into the
early part of 2024, with some price strengthening as the period continued. In early March, the
Group has achieved some tender prices of a little over US$800 per tonne.

The Group continues to make progress on the integration of the estates in East Kalimantan
acquired towards the end of 2023. On acquisition, some of the planted area had been
neglected and was not immediately available for harvest. Whilst work remains ongoing,
significant progress has been made on clearing those areas and bringing them into harvest.
In addition, the Group is working with external consultants to assess the potential to plant
additional hectarage in the acquired areas.

Since the year end, the Group’s sustainability team has continued to work on securing Group
certifications and, in February 2024, the Musi Rawas mill received its certification for the
production of RSPO-certified palm oil.

The board continues to be 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 very positive.

M.P. EVANS GROUP PLCANNUAL REPORT 2023
STRATEGIC REPORT
OPERATIONS

Operations:
Malaysian
property

ASSOCIATED COMPANY:
BERTAM PROPERTIES
The Group’s 40%-owned associate,
Bertam Properties Sdn Bhd (“Bertam
Properties”) continued to develop
and sell high-quality residential
properties during 2023. The company’s
development area is located close to
the town of Kepala Batas in the state
of Penang, Malaysia, in an attractive
location. During the course of the year,
the company agreed the sale of a further
164 properties (2022 – 176). Following
an increase in transaction completions,
consolidated revenue, including from
Bertam Properties’ subsidiary, Penang
Golf Resort Berhad, was US$24 million,
41% higher than the US$17 million in
the previous year, and back to the pre-
pandemic levels of 2019.

Bertam Properties continues to hold
a land bank, which at the year end
amounted to 200 hectares, a small
amount of which was under current
development. This does not include
the 103-hectare area occupied by the
Penang Golf Resort.

Newly built housing at
Bertam Properties

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 2023, the Group has continued to develop its approach to the identification and management of risks. The
Group’s head of risk management, based in the Jakarta head office, held quarterly risk review meetings with all
operational departments, and the output from those meetings has been discussed with the chief executive during
his regular visits to Indonesia. Further work has been performed, supported by the Group’s third-party specialist
consultants, to assess climate-related risks, and the output of this work is being embedded into the Group’s risk
register. Where appropriate, as a result of this work, updates have been made to the disclosure of principal risks. Risk
summaries are presented to, and reviewed by, the Group’s audit committee. As a result of the work performed this
year, three risks, relating to workforce sufficiency, security of land rights and IT system robustness, have been removed
from the list of principal risks. One new principal risk, relating to the international regulatory environment, has been
added to the list. Details are given below of the Group’s assessment of the Group’s net exposure to the principal risks
identified, after the mitigating actions described. As in the previous year, the board remains of the view that the most
significant risk to the Group is a significant fall in the commodity prices for CPO and PK.

KEY

Likelihood of occurrence

LOW MED HIGH

Impact on the business

LOW MED HIGH

Risk change from prior year

INCREASE


DECREASE

NO CHANGE





NEW

s
s
e
n
i
s
u
b
e
h
t
n
o
t
c
a
p
m

HIGH

10 11

MED

138

LOW

4 6

MED

HIGH

Likelihood of occurrence

RISK

IMPACT

MITIGATION

OPERATIONAL

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

HIGH 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, and this
may include extended periods of dry weather caused by weather phenomena
such as El Niño. 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, and has assessed climate risk over the medium to
long term (up to 2050) and over climate-warming pathways of over 3°C. Further
information on the assessment of climate risks is included in the sustainability
section of this report on page 32, and this has been assessed as the Group’s
principal physical risk associated with climate change.

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.

MED MED



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.

M.P. EVANS GROUP PLCANNUAL REPORT 2023

STRATEGIC REPORT
RISK MANAGEMENT

RISK

IMPACT

MITIGATION

OPERATIONAL (CONTINUED)

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

MED LOW



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

PRODUCTION AND SALES

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.

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

HIGH HIGH



FINANCIAL

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

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 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 benefit from increasing yields, whilst inflationary pressure
on key inputs such as fertiliser can feed 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.

MED LOW



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

LOW HIGH 

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

MED MED



PEOPLE

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

LOW MED 

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 is 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

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. Given the increasing importance placed on this area by a number
of stakeholders, this has been identified as the Group’s principal climate-
related transition risk, see page 33.

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, which
are associated with all Group estates, 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. Over the
course of the last 12 months the Group has published separate TCFD and ESG
reports, and plans are in place for further reporting.

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, but the Group monitors these and reports them to shareholders as
required. Indonesia has, in early 2024, elected a new president, and the Group
will monitor the political and regulatory environment during the transitionary
period.

Whilst Indonesia is the largest producer of palm oil in the world, the majority
of production is exported. As a result, the Indonesian palm-oil industry is
reliant, to a degree, on continuing demand from, and access to, international
markets. Lawmakers and regulators in some countries are introducing
new requirements which are affecting, or will impact on, palm oil (e.g. EU
Deforestation Regulation). The Group continues to monitor changes in
international regulations, and seeks to ensure that, through its commitment to
responsible and sustainable production, it can demonstrate compliance with
international regulations.

10 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



11 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



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

LOW MED



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

13 Indonesian regulatory environment
A change in the
The Indonesian
legal or regulatory
government introduces
environment in
new laws or regulations
Indonesia could
which adversely affect
result in a reduction
Group operations.
in Group profitability
due to lower pricing,
higher taxes, or some
other impact.

MED MED



14 International regulatory environment
New laws or regulations
are introduced by
governments or
regulatory bodies
outside Indonesia which
adversely affect Group
operations.

A change in the global
legal or regulatory
environment could
result in a reduction
in Group profitability
due to lower export
demand, increased
regulatory burden, or
some other impact.

MED LOW N

M.P. EVANS GROUP PLCANNUAL REPORT 2023STRATEGIC REPORT
RISK MANAGEMENT

RISK

IMPACT

MITIGATION

POLITICAL AND REGULATORY (CONTINUED)

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

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

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 an
independently operated whistleblowing hotline to facilitate anonymous
reporting of any issues.

LOW MED



16 Land rights dispute

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

MED MED



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’s 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

17 Information security
Group IT systems are not
sufficiently secure.

LOW LOW 

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.

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

Matthew Coulson
Chief executive
19 March 2024

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.

INTRODUCTION
A core part of the Group’s strategy is to be a responsible
and sustainable business. As part of that strategy, the
Group recognises the importance of making long-term
decisions which seek to protect the environment and
reduce the impact of climate change. As a responsible
producer of sustainable palm oil, the Group supports
the UK’s commitment to avoid dangerous climate change
and to limit global warming to 1.5°C as set out in the
Paris Agreement. The Group has committed to increasing
the level of disclosure provided in this area, both within
this report and in separate, standalone documents. This
section should be read in conjunction with the Group’s
2022 TCFD report, the 2023 ESG report, and the relevant
parts of the Group website.

The Group has complied with the disclosure requirements
of TCFD and, in addition, for the first time this year,
is providing disclosures consistent with the Climate-
related Financial Disclosure obligations as set out in
the Companies Act. In providing these disclosures,
information is provided in this section on climate and
sustainability governance, strategy, risk management, and
metrics and targets.

CLIMATE GOVERNANCE
The board continues to promote the success of the Group,
considering the interests of all stakeholders, and focuses
on acting responsibly when considering the Group’s
strategic priorities. Climate-change evaluation has been
integrated into existing sustainability governance, which
has been developing alongside sustainability strategy.
The board has overall responsibility for monitoring
climate-related risks and opportunities. To support board
members in fulfilling their responsibilities, three training
sessions were undertaken with the board in 2023,
facilitated by our third-party ESG advisors. These sessions
covered TCFD and its recommendations, the Group’s near-
term and net-zero targets, and a deep dive into land use
and land-use-change emissions, respectively.

After careful consideration, the board has decided not
to create a separate board-level ESG committee, as it
is felt that the board, as a whole, should be present for
all key climate-related discussions. Climate change and
sustainability is discussed at all main board meetings.
The board communicates with management through the
chief executive, who takes the lead on climate-change

and sustainability at an executive level, and who shares
information with the wider management team and the
head of risk management during regular online meetings,
and in his quarterly visits to Indonesia. Members of
the sustainability team are present at each estate and
advise the Jakarta-based sustainability team on climate
issues. These are shared with the chief executive during
weekly meetings. The head of risk management also
shares relevant information with the chief executive.
Progress against climate targets is managed by the chief
executive with the help of the sustainability team. The
board signs off on all external reporting, which contains
progress against targets. Additionally, the board considers
climate change and emissions when making strategic
decisions, particularly taking into account physical risks
when looking to expand planted hectarage through the
acquisition of new land. Climate change continues to be
assessed as a principal risk for the business, based on
the ongoing review by management.

STRATEGY
The Group’s strategy is set out in the strategic report
on pages 12 to 31. A core part of that strategy is to act
responsibly and maintain a sustainable business. The
Group’s strategy guides its approach to environmental
management, sustainable practices, and minimising
climate impact. Using existing methodologies including
the Group’s RSPO membership requirements, its stated
commitments on no deforestation and no burning, and
its zero-waste mentality, as well as newer approaches
inspired by recent initiatives such as TCFD and net-zero
targets, the Group continues to strive for excellence in
this area. This approach influences all areas of operation,
from strategic decision-making by the board to agronomic
practices on Group estates.

RISK MANAGEMENT
The Group has a well-established process for
identification, evaluation and management of risk across
the organisation. See pages 28 to 31 within the strategic
report for more detail in this area. Whilst climate-related
risks continue to be an emerging and priority area, the
Group is working to integrate climate-risk management
into its wider risk process. This is ongoing and will
continue in 2024.

M.P. EVANS GROUP PLCANNUAL REPORT 2023SUSTAINABILITY

Identification
The Group holds regular workshops to discuss new and
emerging areas of risk, and this includes climate-related
risks. In addition, information and education sessions
were facilitated by the Group’s third-party specialist
ESG consultants to ensure that latest guidance was
considered, as well as all aspects of climate-related risks
and opportunities. Risks can be ‘transitional’ or ‘physical’
in nature. Physical risks arise from climate events, whilst
transitional risks from the need for action to move away
from fossil-fuel reliance.

Evaluation
Climate-related risks have been evaluated to assess
both their likelihood and their impact. In doing so,
management considered different timescales and the
most recent available climate-scenario modelling. As had
been the case in the previous year, the most significant
physical risk was identified to be in relation to rising
mean temperatures (included as risk 2 on page 28), and
the most significant transitional risk to be the failure
to comply with changing environmental obligations
(included as risk 10 on page 30). For the purposes of this
report, where appropriate, climate-related risks have
been included in the list of Group principal risks on pages
28 to 31.

Management
Mitigating actions have been identified, as far as possible,
for each of the identified climate-related risks, and these
will be kept under review as part of an ongoing process.

Mitigating actions in relation to the Group’s principal
climate risks are described in the risk management
section on pages 28 to 31, and as a result of these actions,
the Group’s underlying business model remains resilient
to climate change. The Group’s dedicated sustainability
team has an important role to play in either managing
these risks, or in monitoring the appropriate mitigating
actions being taken elsewhere within the business. In
some of its estate locations, the Group experienced some
challenges with water management and associated flood
risk during 2023. Continuing to deploy mitigating actions
will be an area of focus for 2024.

METRICS AND TARGETS
The Group is committed to operating sustainably and
doing what it can to protect the environment. It assesses
a range of metrics, notably carbon intensity based on
emissions per tonne of CPO produced, to measure the
impact of its operations, and it has already reported on
a detailed carbon balance sheet. An ultimate goal of
achieving net zero by 2050 has been set, with an interim
target at 2030. The Group’s net-zero target has been set
with reference to Science-Based Targets, and includes
a 90% reduction in industrial emissions and a 72%
reduction in FLAG emissions (i.e. those associated with
forestry, land use and agriculture).

In addition, the Group is diligent in ensuring that it is
not responsible for any deforestation, nor any burning
on the land that it cultivates. We believe that producing

Conservation area at Kota Bangun

Sustainability continued

palm oil does not have to come at the expense of
tropical rainforests, reduced biodiversity or threatened
endangered species. Adhering to RSPO standards means
we assess the suitability of all land for planting using
the High Carbon Stock Approach (HCSA) and have a
commitment not to develop on High Conservation Value
(HCV) land. The Group participates each year in the
SPOTT assessment undertaken by the Zoological Society
of London, which provides an indicator of the quality of
ESG disclosures provided by a sample of 100 palm-oil
companies. In 2023, the Group increased its score by
6.5% to 86.7% and its ranking to 13th.

Reducing our greenhouse gas emissions
The Group has continued to work during 2023, supported
by specialist sustainability consultants, to measure
and analyse its carbon balance sheet, based on TCFD
guidelines. This is made up of three main categories,
scopes 1, 2 and 3. Scope 1 emissions arise from the
Group’s direct operations, and scope 2 emissions from
electricity used to power those operations. Scope 3
emissions are indirect, and occur outside the Group,
for example in products purchased or, as is far more
significant for the Group, in the onward processing of
products sold. Not all emissions arise as carbon dioxide
(CO2), but for simplicity of reporting and comparability
purposes, all are converted, based on agreed conversion
rates, to CO2 equivalent amounts and reported as tonnes
of CO2 equivalent, or ‘tCO2e’.

In its first year of reporting a carbon balance sheet, the
Group captured the substantial majority of emissions
data. Subsequently, as part of the work performed in
2023, the Group has been able to measure the annual
emissions associated with land-use change, and with
the land application of treated palm-oil mill effluent
(“POME”). These figures are included in the table, but
are shown separately as restatements of the figures for
the previous years’ data as reported in the 2022 annual
report and TCFD report.

The Group identified 2021 as its ‘baseline’ year for carbon
reporting, and from which carbon-reduction targets
have been set. By the end of 2023, total emissions had
reduced by 19% from the baseline amount, and the
Group is on track to achieve its interim target of reducing
total industrial emissions by 28% by 2030 as part of its
overall 2050 net-zero targets. Whilst scope 1 emissions
have increased by a small amount from the baseline year,
this reflects the continued growth of Group operations,

and the focus on increasing the proportion of crop
processed in Group mills, and is more than compensated
for by a reduction in scope 3 emissions relating to
processing in outside mills. More detail on progress
against targets will be included in the 2023 TCFD report.

2023
tCO2e

2022
tCO2e

2021
tCO2e

Scope 1 as previously
reported

Land-use change

Application of POME

203,900

116,800

124,500

37,500

39,900

36,000

27,500

Scope 1 updated

203,900

194,200

188,000

Scope 2

Scope 3

Total

600

500

400

2,046,700

2,275,200

2,594,400

2,251,200

2,469,900

2,782,800

The Group is continuing to review carbon metrics and,
whilst not included in TCFD categories, is working to
assess the carbon sequestration benefits associated with
the significant hectarage managed as conservation areas.

Intensity measures
The Group continues to monitor carbon-intensity
measures as a way of analysing emissions, whilst
acknowledging the fact that its activities continue to grow.
Carbon intensity is measured per tonne of CPO produced
and per tonne of palm product. Using the updated carbon
data for the Group’s baseline year of 2021, the Group’s
carbon intensity (across scopes 1, 2 and 3) was 8.9tCO2e
per tonne of CPO and 7.3tCO2e per tonne of palm product.
By the end of 2023 these figures had reduced
to 5.9 and 4.9 respectively.

NEXT STEPS
The Group is working to embed climate-risk management
within its broader risk-management framework. Reporting
on all aspects of ESG has taken a significant step forward
over the last year, and the Group will be providing regular,
standalone, reporting in this area to expand upon the
summarised disclosures given in the annual report.
Operationally, management are continuing to embed
sustainable, and low-carbon, initiatives within the Group,
and are engaging with key customers and suppliers to
understand in more detail the work being done in the
Group’s supply chain.

M.P. EVANS GROUP PLCANNUAL REPORT 2023SUSTAINABILITY

FOCUS ON

Conservation
The Group is committed to ensuring
that the palm oil we produce does
not cause or contribute to the
conversion of forests or any other
natural ecosystems (including
peatland, riparian ecosystems, and
wetlands). We only develop land that
is suitable for agriculture and is not
forested.

Where viable, we carry out restoration and
rehabilitation to support the regrowth of natural
vegetation and restore the functions of natural
ecosystems. This supports increased levels of
biodiversity, promotes flood regulation,
helps to reduce soil erosion
and improve water quality.
Native tree species are
planted as part of an ongoing
regeneration programme. We
also seek to conduct habitat
enrichment in estate areas
to increase the diversity
of natural vegetation and
improve connectivity between
HCV areas.

Kingfisher, Bangka

Conservation nursery, Bangka

3535

Communities

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

Since the early 2000s, the Group has grown substantially in Indonesia. At that
point, its only majority-held Indonesian estates were relatively small areas
in Sumatra, comprising a total of some 10,000 planted hectares. By 2023, the
Group had expanded, such that it managed over 65,000 hectares of oil palm.
The significant number of local communities on and around Group estates are
important stakeholders in Group operations, and local communities benefit
from the Group’s continuing success.

The Group actively supports the formation of smallholder co-operatives
associated with all its estates. Due to the long-term nature of oil-palm
production, capital costs are high, and the Group is willing to provide initial
funding to support scheme-smallholder planting costs. In addition, the Group
works with smallholder co-operatives to ensure that they are able to obtain
full title to their land, and provides other administrative support. By the end
of 2023, scheme-smallholders associated with Group estates owned 15,900
hectares of oil palm, a very valuable asset.

The Group continues to be a major employer in its areas of operation, which
is of particular significance in some of the Group’s more remote locations,
where it may be one of the largest local employers. The Group provides direct
employment for a growing workforce, up to almost 13,000 in 2023, but also
to a significant number of contracted workers, including construction and
transportation workers.

Facilities for the large communities living on Group estates are maintained
to a high standard (see page 39), and during the year the Group invested in
new housing, medical, educational and recreation facilities for employees and
their families.

Health clinic and ambulance, Bangka

Mangrove, Bumi Mas

M.P. EVANS GROUP PLCANNUAL REPORT 2023SUSTAINABILITY
COMMUNITIES

CASE STUDY

Sustainability reporting
The Group recognises the importance of providing
clear and useful information to its shareholders and
other stakeholders on all aspects of sustainability
and ESG, and seeks to provide balanced information
throughout the annual report, and particularly in this
sustainability section.

In addition, as regulatory expectations
evolve, the Group has published two
reports over the last 12 months: the
2022 TCFD (Taskforce on Climate-related
Financial Disclosures) report and the
2023 ESG (environmental, social and
governance) report, both of which can be
downloaded from the Group website.

The Group expects to publish a new TCFD
report in 2024 and an updated ESG report
in 2025.

View both reports at
mpevans.co.uk/sustainability/sustainability-reports

For more
information visit
the sustainability
section of the
Group website.

3737

brighten back image,

enlarge biogas facility

image

Communities continued

CASE STUDY

Biogas facilities
The Group, as part of its commitment to zero waste, and reducing its carbon
emissions, has established biogas plants connected to its palm-oil mills.

Following the opening, in 2023, of biogas facilities at both the Rahayu mill at Kota Bangun and the Musi Rawas
mill in South Sumatra, the Group now has plants connected to five of its six mills.

These plants take the waste water from the mill (known as palm-oil-mill effluent or ‘POME’) and store it in
covered ponds, capturing the methane that is emitted. This methane is used to generate renewable electricity
in biogas engines, giving the double benefit of a significant reduction in harmful greenhouse gases, and a
valuable power source for the Group.

Wherever
possible,
electricity
generated is
distributed
and used
within Group
estates, with
any excess
being sold
to the local
grid.

Biogas processing facility, Rahayu mill

The Group opened a new biogas facility connected to the Rahayu mill
at Kota Bangun during 2023. This increases the Group’s total electricity
generating capacity at Kota Bangun, resulting in an increase in renewable
energy sales to the local supplier.

383838

M.P. EVANS GROUP PLCANNUAL REPORT 2023Commitment 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 2023, the Group built 170 new
housing units, and approximately 18,000 people live on the Group’s
oil-palm estates.

Education
The Group offers crèche facilities for young children, has developed both
primary and secondary schools on its estates, and now has over 1,200
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 13 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 45,000 consultations completed in 2023.

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
Gathering as estate communities is important, and the Group has provided
both community halls and estate clubhouses to make this possible. The
Group’s new clubhouse at Bumi Mas is due for opening in early 2024.

Report of the Directors

Peter Hadsley-
Chaplin

Matthew Coulson

Luke Shaw

Bruce Tozer

Executive chairman

Chief executive

Chief financial officer

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.

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.

Appointed to the board
on 1 August 2023 having
joined the Group in July
2022 as chief financial
officer. Qualified
chartered accountant with
previous experience of
working with a wide range
of companies, including
international groups and
AIM-listed businesses, as
an audit manager at BDO
LLP. Prior to joining the
Group, held CFO position
at Servomex, a division
of Spectris plc, and has
significant experience in
financial and commercial
management.

Senior 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 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.

M.P. EVANS GROUP PLCANNUAL REPORT 2023

REPORT OF THE DIRECTORS

K Chandra
Sekaran

Michael Sherwin

Tanya Ashton

Lee Yuan Zhang

Non-executive
director

Independent
non-executive director

Non-executive
director

Appointed director in
2021 and was president
director of PT Evans
Indonesia for over
15 years until 31 July
2023. Role changed
from executive to non-
executive director in
August 2023. Began career
in Malaysia with Harrisons
and Crosfield, and from
1995 worked in Indonesia
as chief operating officer
for Sinarmas Plantations
before joining the
Group. Has a profound
understanding of the
Indonesian plantation
industry and the
agronomic and social
issues related to it.

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.
A non-executive director
of Williams Motor Co.
(Holdings) Limited.
Was CFO of Games
Workshop plc for ten
years, followed by nine
years as CFO at Vertu
Motors plc. Held non-
executive directorships
at both Plusnet plc and
at Sumo Group plc where
he chaired their audit
committees.

Joined the board in
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 is a board
member of global not-for
profit organisation The
Sustainability Consortium.
A non-executive director
of AIREA plc since May
2023. Previously held
senior positions at Silver
Spoon British Sugar plc,
part of Associated British
Foods. Is recognised
for her commitment to
increasing sustainability
in consumer products.

Joined the board in
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.

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 2023.

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 2 to
5) and in the strategic report (pages 12 to 31) and is
incorporated in this report by reference.

RESULTS AND DIVIDEND
Details of the results for the year are given in the
consolidated income statement on page 64.

An interim dividend of 12.5p (2022 – 12.5p) per share
in respect of 2023 was paid on 3 November 2023. The
board recommends a final dividend of 32.5p (2022 – 30p)
per share. This dividend will be paid on or after 19 June
2024 to those shareholders on the register at the close
of business on 26 April 2024. 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:

M H Coulson

L A Shaw

B C J Tozer

P E Hadsley-Chaplin

Issued (fully-paid and voting)
at 1 January 2023

Issued in respect of options

Bought back and cancelled

Issued (fully-paid and voting)
at 31 December 2023

Shares of
10p each

54,230,888

50,000

(991,198)

53,289,690

The Company operated a share-buyback programme

during the year. Under that programme the Company

bought back and cancelled 991,198 (2022 – 495,365) 10p

shares, representing 1.8% (2022 – 0.9%) of the issued

share capital, for a total cost of US$9.7 million (2022

US$4.9 million).

DIRECTORS AND DIRECTORS’ INTERESTS
The present membership of the board is detailed on
pages 40 and 41. In addition to the board’s current
membership, Philip Fletcher served as a non-executive
director from the start of the year until his retirement
on 31 July 2023. Luke Shaw, who joined the board on
1 August 2023, will offer himself for election at the
forthcoming annual general meeting. In addition, in

accordance with the Company’s articles of association,
Peter Hadsley-Chaplin will retire from the board at the
annual general meeting and, being eligible, offer himself
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 2023

P E Hadsley-Chaplin

M H Coulson

L A Shaw

B C J Tozer

K Chandra Sekaran

M Sherwin

T Ashton

Lee Y Z

1,561,717

20,000

—

145,181

4,750

—

At 1 January 2023 (or later date of appointment)

1,561,717

17,000

—

142,181

2,250

—

K Chandra Sekaran

M Sherwin

T Ashton

Lee Y Z

—

83,933

6,215

—

35,000

—

49,234

—

32,000

—

Further details of the directors’ interests in share options

are disclosed in the directors’ remuneration report, on

page 56.

None of the directors holds any beneficial interest
in, or holds options to buy shares in, any subsidiary
undertaking of the Company as at the date of this report.

Other than the advisory fee to K Chandra Sekaran referred
to in the remuneration table on page 53, 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.

As permitted by the Company’s articles of association,
there was throughout the year to 31 December 2023,
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.

M.P. EVANS GROUP PLCANNUAL REPORT 2023
REPORT 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:

Nature

Kuala Lumpur Kepong
Berhad

Nokia Bell Pensioenfonds
ofp

Direct

12,685,357

23.84

Direct

5,683,226

10.68

Abrdn plc

Indirect

3,333,625

6.26

Schroder Investment
Management

The estate of
MM Hadsley-Chaplin

Indirect

2,327,120

4.37

Direct

1,928,254

3.62

AUTHORITY TO MAKE MARKET PURCHASES
OF SHARES
The directors propose to seek authority under resolution
7 for the Company to purchase its own shares on the
AIM market of the London Stock Exchange until 30 June
2025 or, if earlier, the date of the Company’s 2025 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 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 7 set out in the notice of the annual general
meeting will accordingly be proposed to authorise the
purchase of up to a maximum of 5,321,983 shares, on the
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
any exercise of the authority will be restricted to 5%
above 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
before the purchase is made. The maximum number of
shares and the price range are stated for the purpose
of compliance with statutory requirements in seeking
this authority and should not be taken as an indication
of the level of purchases, or the prices thereof, that the
Company would intend to make.

The authority conferred by resolution 7 will lapse on
30 June 2025 or, if earlier, the date of the Company’s 2025
annual general meeting.

OUTSTANDING OPTIONS TO SUBSCRIBE
As at the date of this report, there were options to
subscribe for 20,000 shares outstanding under the 2012
executive share-option scheme, and options to subscribe
for 252,348 shares outstanding under the 2017 long-
term incentive scheme. 28,837 shares have already
been issued to the Company’s Employee Benefit Trust in
anticipation of the exercise of these options. If all of the
options were exercised, the resulting number of shares
would represent 0.51% of the enlarged issued share
capital at that date and 0.57% of the enlarged issued
equity share capital at that date if the proposed authority
to purchase shares under resolution 7 was exercised in
full (excluding any share capital which may be purchased
and held in treasury).

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
During the year, the Company used 56MWh (2022 –
62MWh) of energy, predominantly on electricity and
gas, in its Tunbridge Wells head office, giving rise to 11
tonnes (2022 – 11 tonnes) of CO2 equivalent emissions,
calculated in accordance with the government’s 2023
conversion factors, or 2 tonnes (2022 – 2 tonnes) per full-
time equivalent employee. More information on Group
emissions, and on carbon-reduction plans, is included in
the sustainability section on pages 32 to 39.

Report of the Directors continued

STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE FINANCIAL STATEMENTS
The directors are responsible for preparing the annual
report and the financial statements in accordance with
applicable law and regulations.

The directors are responsible for the maintenance
and integrity of the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.

Company law requires the directors to prepare financial
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
accordance with United Kingdom Generally Accepted
Accounting Practices (United Kingdom Accounting
Standards, comprising Financial Reporting Standard
101 ‘Reduced Disclosure Framework’ (“FRS101”) and
applicable law). Under company law the directors must
not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of
affairs of the Group and the Company and of the profit
or loss of the Group and Company for that period. In
preparing these financial statements, the directors are
required to:

• select suitable accounting policies and then apply

them consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• state whether 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

• prepare the financial statements on the going-concern
basis unless it is inappropriate to presume that the
Company will continue in business.

The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
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
to ensure that the financial statements and the directors’
remuneration report comply with the Companies Act
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.

In the case of each director in office at the date the
report of the directors is approved:

• 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

•

they have each taken all the steps that they ought to
have taken as a director in order to make themselves
aware of any relevant audit information and to
establish that the Group and parent-Company’s
auditors are aware of that information.

GOING CONCERN
The Group’s operations are funded through a
combination of cash resources, loan finance, and long-
term equity. The board has undertaken a recent review of
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.

INDEPENDENT AUDITORS
The auditors, BDO LLP, have expressed their willingness to
continue in office and a resolution to re-appoint them will
be proposed at the forthcoming annual general meeting.

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

Katya Merrick
Company secretary
19 March 2024

M.P. EVANS GROUP PLCANNUAL REPORT 2023
REPORT OF THE DIRECTORS

The Group’s Rahayu mill

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 and complies
with the QCA Code’s principles is
set out in this corporate governance
report and in the chairman’s
statement on corporate governance
that follows. An index of corporate
governance disclosures can be
found on the Group’s website*.

* www.mpevans.co.uk/about/

corporate-governance/index-of-
compliance

At M.P. Evans, we firmly believe
that good corporate governance
underpins the success of the Group.
It supports decision-making in the
board room, as well as the Group-
wide culture that engenders trust in
the way we operate and conduct our
business.

As chairman, in addition to setting
the Group’s strategy in conjunction
with the board, one of my primary
responsibilities is to ensure that
an effective corporate governance
framework exists, and that clear
policies, which have been approved
and endorsed by the board, are
embedded throughout all levels
of the organisation. I am also
responsible for ensuring the
effective operation of the board.
The composition of the board, the
breadth and depth of its skill set,
the diversity of its members to
facilitate insight and perspective on
matters being considered, and the
inclusive environment within which
constructive debate is enabled, are
hugely important to the effectiveness
of the board in its strategy setting
and decision-making. 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.

Following a period during which
we welcomed new members to the
board and prepared for further
changes to some key roles within
the board and senior management,
it has been a great pleasure to see
how smoothly these transitions have
occurred and have benefited the
Group during 2023. I am confident
that we have a very strong and fully
engaged board which has a good
balance of skills, experience and
diversity to support and further

the Group’s strategy, as well as a
culture of which we are proud. More
information on our non-executive
board members, including whether
they are considered independent,
can be found in the following
corporate governance report. The
success of these transitions has not
been by accident, but the result of
taking seriously our commitment to
good corporate governance, a major
element of which is focused on
board composition and succession
planning. Ensuring that we have
the right people in the right roles
is something to which we regularly
dedicate time as a whole board, and
whilst we carry out our own board
evaluation annually, an exercise
which board members welcome
as an opportunity to reflect and
provide constructive feedback, in
truth we are constantly challenging
and developing ourselves. Where
necessary, we bring in external
specialists to support the board and
senior management in their decision-
making, and access to training is
available to ensure knowledge is up
to date.

I am particularly proud of the
great strides we have made
in understanding our carbon
balance sheet this year, which has
enabled us to set a sensible zero-
emissions target based on scientific
analysis. Importantly, the work we
have accomplished in this area,
spearheaded by our chief executive
Matthew Coulson together with
our expanded sustainability team
and our specialist ESG consultants,
has enabled us to establish
baseline metrics which will inform
our approach to the risks and
opportunities associated with climate
change. In preparing and, in 2023,
publishing our first TCFD report
(covering data from 2021 and 2022),

M.P. EVANS GROUP PLCANNUAL REPORT 2023REPORT OF THE DIRECTORS
CORPORATE GOVERNANCE

we have had the opportunity to build
on our data-gathering processes,
reflecting on ways to improve our
own practices further whilst giving
confidence to our stakeholders that
we are committed to, and are already
a significant way along, our carbon-
reduction journey. As a producer of
sustainable palm oil operating to the
RSPO’s strict guidelines, we have long
been committed to the ESG agenda.
Practices, such as our utilisation
of byproducts in the production of
energy and compost, already help
to reduce our carbon balance sheet,
and we are constantly seeking new
ways to make further reductions.
One of our next opportunities will
be to engage with our supply chain
to understand more about what
our suppliers and customers are
doing to achieve carbon reduction.
During the early part of 2024, the
Group also published a stand-
alone ESG report which is available
on our website (www.mpevans.
co.uk). This clearly describes
our approach and performance
relating to environmental, social,
and governance matters for the
years 2021, 2022 and, where
applicable, 2023. The development of
increasingly sophisticated metrics in
relation to ESG enables us to provide
high-quality information to our
shareholders and wider stakeholders.
It is testimony to the importance the
board places on building trust with
our stakeholders. During the year,
we also rebuilt our website, a project
which will give us further tools to
enhance the way we communicate
with our stakeholders. Further details
of the ways in which the board
engages with shareholders is set out
in the corporate governance section
of this annual report.

Stakeholder engagement and
promotion of the Group’s values

were also very much at the forefront
of the 150-year celebratory lunch
that followed the AGM in June 2023.
This event was open to all our
shareholders. It was also attended
by several members of senior
management from Indonesia, as
the climax to a week they had spent
with us in the Tunbridge Wells
office, taking part in workshops
designed to promote the exchange
of ideas, and in social events that
provided an opportunity to deepen
relationships with UK colleagues
and the board. This followed a board
visit to Indonesia in April, where the
newest non-executive directors were
able to meet local staff and visit the
Group’s Bumi Mas plantation in East
Kalimantan.

During the latter part of the year,
awareness of the Group’s zero
tolerance of bribery and corruption
was refreshed by online ‘ABC’ training
completed by over 340 members
of staff, including board members
and the most senior managers
in Indonesia and the UK. This
supplemented ongoing training and
socialisation of the Group’s policies
throughout the workforce, led by the
Indonesian human resources team.
The Group sees ethical behaviour as
a competitive advantage to building
trust with suppliers and attracting
and retaining high-performing staff.

At least annually, the board considers
who the Group’s stakeholders are,
and how the board engages with
them. This helps to embed into the
board’s decision-making process
the practice of considering wider
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, any
grievances reported are treated as an
opportunity to see if improvements
need to be made in the way we
do things.

The board, supported by the
audit committee, has continued
to make progress on the areas of
risk identification, management,
mitigation, and disclosure. As well as
reviewing matters reported by the
internal audit team, and monitoring
the internal controls over financial
reporting, there is regular dialogue
between the Group’s head of risk in
Indonesia and executive directors,
to ensure that mitigation strategies
are being developed, deployed and
are effective, and that any newly
identified risks are assessed.

The corporate governance
information and QCA compliance
index on our website is updated
annually following the board’s review
and was last updated in September
2023. I am pleased to report that
the latest review affirmed our full
compliance with the QCA Code. The
board has already been briefed
on the recent updates to both the
QCA Code and the UK Corporate
Governance Code and has decided
that the QCA Code continues to
provide an appropriate and robust
framework to support the growth of
the Group and its ability to deliver
returns to its shareholders that also
benefit wider stakeholders, and will
seek to implement the updated QCA
Code at the earliest opportunity.

Peter Hadsley-Chaplin
Chairman
19 March 2024

Corporate governance continued

OPERATION OF THE BOARD

Directors
Details of the Company’s board, together with those of
the audit and remuneration committees, are set out
on pages 40 and 41. For the first month of the year, the
board comprised an executive chairman, two executive
directors, and four non-executive directors. From 1
February 2023 to 31 July 2023, the number of non-
executive directors increased to five. From 1 August
2023, following the retirement of one board member, the
transition of one executive board member to become a
non-executive, and the appointment of a new executive
board member, the board comprised an executive
chairman, two executive directors and five non-executive
board members. 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 works on a part-time basis.

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 nine board meetings held in 2023, with the exception
of Matthew Coulson, who was unable to attend the
meeting held on 8 February 2023, K Chandra Sekaran who
recused himself from the meeting held on 16 May 2023
and Tanya Ashton who was unable to attend the meeting
on 27 July 2023. Lee Yuan Zhang, who joined the board
on 1 February 2023, attended all nine board meetings in
the year. Philip Fletcher, who served as a non-executive
director for the first seven months, attended all of the
six meetings which took place until then. Luke Shaw, who
joined the board for the last five months of the year,
attended all of the three meetings held in that period.

The board is collectively responsible to shareholders for
the success of the Company and understands the need
for robust corporate governance structures in achieving
this. The personal attributes of each of the directors
facilitates rigorous but constructive debate, informed and
considered decision-making and effective monitoring of
progress in achieving the Group’s strategic objectives.
The board, with input from stakeholders as appropriate,

regularly engages in reviewing and developing policies
which support the Group’s values. It actively promotes
a culture founded on its values of integrity, teamwork
and excellence and actively monitors the strength of
this culture. Members of the board lead by example
during their frequent interactions with staff and they
promote the clear policies which are set by the board.
They insist that policies are promulgated throughout the
workforce, including training on key areas such as anti-
bribery and corruption, modern slavery and the Group’s
independently administered whistleblowing hotline.
Remuneration of all staff rewards those who display the
desired behaviours. The Group dismisses staff found
to have breached the value of integrity and in those
circumstances any unexercised awards under the long-
term incentive scheme would be forfeited.

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 objective and key decisions
are subject to periodic review, most recently in December
2023. 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.

The board, and board committees, have access to
independent professional advice at the Group’s expense
when the board, or board committee, deems it necessary
for it to carry out its responsibilities. The board has
recently appointed Cavendish Capital Markets Limited 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. In 2023, the
board again worked with its appointed specialist ESG
consultancy firm to assist with its disclosure obligations
under the non-financial and sustainability reporting
regime, building on the initial data first reported in its
2022 annual report. The company secretary provides
support on matters of corporate governance, working with
the chair to embed regular review by the board of key
Group policies and corporate governance developments.
The company secretary is responsible for the induction
process for new board members, receives the feedback
given by board members when a board evaluation
is conducted, and can also be a point of contact for
shareholders and stakeholders.

M.P. EVANS GROUP PLCANNUAL REPORT 2023REPORT OF THE DIRECTORS
CORPORATE GOVERNANCE

Composition of the board and independence and
re-election of directors
During the year, in compliance with the QCA’s corporate
governance code, the board has maintained a balance
of executive and non-executive directors. Throughout
the year, the board comprised three executive directors
and five non-executive directors, other than during
the month of January when there were three executive
directors and four non-executive directors. In further
compliance with the QCA’s corporate governance
code, at least three of the five non-executives serving
during 2023 were independent. The current audit and
remuneration committee members are all independent
non-executive directors. Philip Fletcher, who retired from
the board at the end of July 2023 and was a member
of the audit committee, was not considered to be an
independent director due to his long service and previous
executive role within the Group. However, the depth of his
understanding of the Group, coupled with his commitment
to, and track record of, conducting his role with an
independent mindset, enabled him to bring significant
value to the board and its audit committee, and his
contribution over the years has been greatly appreciated
by board members and shareholders alike. Neither K
Chandra Sekaran nor Lee Yuan Zhang is considered to be
independent. However, the vast sector experience, both
operational and commercial, that they bring to the board
is of great benefit. Neither of these board members serves
on the audit or remuneration committees.

A description of the roles and responsibilities of the
directors is set out on pages 40 and 41. 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. The
chief executive, Matthew Coulson, is responsible for
implementing the strategy set by the board. He must set
an example of the Group’s culture and ensure that the
Group is complying with its regulatory obligations and its
self-imposed standards. None of the executive directors
holds any external directorships or offices, and the board
is confident that any external roles held by non-executive
directors (for details see the board biographies on the
website www.mpevans.co.uk) do not compromise their
ability properly to carry out their respective roles for the
Company. Bruce Tozer, whose background is in commodity
finance, environmental markets, and agri-business project
finance, including palm oil, keeps himself well informed
of commercial issues and trends, and he is able to
contribute valuable insight from the finance sector. The
extensive corporate experience of Michael Sherwin, gained

through years in executive and non-executive roles,
and across a range of areas including M&A, corporate
governance and accounting, enables him to identify
essential issues in board and committee discussions,
particularly around risk and internal control. Tanya Ashton
has 20 years of experience in ESG roles and through her
insightful contributions supports the board’s awareness
of ESG-related considerations in board discussions.
Having joined the board in February 2023, Lee Yuan
Zhang has enhanced the board’s perspective through
his extensive experience, derived from the roles he has
held and continues to hold in KLK and its associated
companies, in the agronomic as well as corporate aspects
of the business. During the year, K Chandra Sekaran
made the transition from executive to non-executive
board member, which coincided with a successfully
managed handover of his role as president director
in charge of operations in Indonesia, to Ravichandran
Krisnapillay. The board will therefore continue to benefit
from K Chandra Sekaran’s unparallelled knowledge of the
Group’s operations. Board discussions during the year,
especially around the new acquisitions, benefited from
his valuable insights. All board members engage fully
and constructively in board discussions, demonstrating
independent mindsets and willingness to challenge and
hold the executives to account.

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
effective in this role and building strong relationships
with shareholders, as well as presiding over a well-
functioning board. As he refers to in the chairman’s
statement, he will be transitioning from an executive to a
non-executive role from July 2024.

The perceived governance concern around having an
executive chairman is mitigated by having, in Bruce Tozer,
a robust senior independent non-executive director. The
senior independent non-executive director’s role is to be
a sounding board for the chairman and an intermediary
for other directors. Shareholders can, and do, engage with
the senior independent non-executive director to express
their views on specific matters.

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.

Corporate governance continued

Directors’ remuneration
As set out in the report on pages 53 to 56, 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 2023 comprised
Bruce Tozer, Michael Sherwin and Tanya Ashton, met five
times and all meetings were attended by all members.

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.

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 and is aware that
board diversity, including gender diversity, is likely to
enhance the board’s range.

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. As in
previous years, there was significant consensus among

board members, with encouraging and constructive
feedback given.

Progress was made during the year in addressing the
outputs from the previous evaluation. Twice yearly board
discussions on succession planning are now standing
items on the board’s agenda and topics include periodic
assessment of board skills and diversity. In response,
to a recommendation that the board improve its ESG
awareness, management arranged board briefing sessions
led by its specialist ESG consultants during the year,
including sessions in which board members and the
Group’s senior local management and sustainability
team took part. These sessions covered both general
environmental themes relating to the impact of climate
change and carbon emissions, as well as providing
specific analysis around the Group’s own data and carbon
accounting. Board members found the sessions valuable
in furthering their ESG awareness, and in re-emphasising
the importance of considering ESG risks and opportunities
as they relate to the business. Additional work on risk, and
particularly disclosure of risk, was also carried out during
the year in response to the 2022 board evaluation.

Following the outcomes of the 2023 evaluation, the
board plans to undertake work to assess the ongoing
appropriateness of its plans for the delivery of the
Group’s strategic objectives. In addition, assessing the
effectiveness of stakeholder engagement was identified
as an area of focus, including information flows to the
board. Management has also been asked to look at
identifying additional key performance indicators which
might provide additional insights for investors on the way
the Group operates.

Relations with shareholders and the 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. The chairman or members of the
board, as appropriate, aim to respond personally to
communications received from individuals. The annual
general meeting provides an excellent opportunity for
smaller shareholders to meet executive and non-executive
members of the board in person, to raise any issues and
discuss the development of the business with them. The
Company’s annual general meetings have always been
well attended by its shareholders, but for those who are
unable to attend, the proceedings have in recent years

M.P. EVANS GROUP PLCANNUAL REPORT 2023REPORT OF THE DIRECTORS
CORPORATE GOVERNANCE

been broadcast live via the IMC platform and a recording
is made available on the website after the event.

2023 was a special year in which the Group celebrated
its 150-year anniversary. The occasion was marked by
a formal lunch at Mansion House, following the AGM
held there on the same day. The lunch was open to all
shareholders, subject to application and availability, and
was very well attended and received.

During 2023, the executive directors took part in a
number of online presentations, the recordings of which
are available on the Group’s website (www.mpevans.
co.uk). These included two freely accessible live webinars
by the executive directors following the 2022 results
and the 2023 interim results, with the opportunity
for questions and feedback from participants. The
board intends to continue to use online forums,
including certain social media channels, as a means of
communicating the Company’s investment case.

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 44 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 28 to 31.

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 also
has an independently administered whistleblower hotline
service. By the beginning of 2023, the regular trips by
the executive directors to the Group’s operations had
resumed to their pre-covid pattern. This is a valuable
way for directors to monitor the Group’s operations and
they use these opportunities to promote the Group’s
values. Additional engagement is achieved through virtual
meetings with operational teams, and the executive
directors make the most of technology to enhance
oversight. The non-executive directors, three of whom
were new to the board, joined the executives on their
trip to Indonesia in April 2023, visiting the Group’s Bumi
Mas estate in East Kalimantan. The 150-year celebration
hosted in Jakarta by Indonesian colleagues provided a
great opportunity for the directors to meet many of the
Group’s operational staff.

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 44.

Viability
The board considers the Group’s longer-term viability on
a regular basis. 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$39.3 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 28 to 31.
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 acceptable. Financially,

Corporate governance continued

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.

• Monitored progress of the Group’s process for risk

identification, management and disclosure;

• Reviewed acquisition accounting in relation to PT

Dharma Agung and PT Teunggulon Raya.

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. The other members are Michael Sherwin and Tanya
Ashton and during the period up to 31 July 2023 Philip
Fletcher was also a member of the audit committee. 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 five times during 2023
and each meeting was attended by all the members
appointed at the time of the meeting. 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.

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
2023 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 2023 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

During the year the audit committee has:

report; and

• 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;

• 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.

M.P. EVANS GROUP PLCANNUAL REPORT 2023REPORT 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 the most senior management, and
recommends such remuneration and terms to the board.
Throughout the whole year the committee comprised
Bruce Tozer (chair of the remuneration committee),
Michael Sherwin and Tanya Ashton. The committee met
five times during 2023 and each meeting was attended by
all the committee members.

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. During the year, until 31 July 2023, the executive
director based overseas had 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.

TOTAL DIRECTORS’ REMUNERATION FOR THE YEAR ENDED 31 DECEMBER 2023

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
2023
£

Total
remuneration
2022
£

Executive directors

P E Hadsley-Chaplin

210,400

96,433

—

M H Coulson

350,600

160,692

K Chandra Sekaran4

319,353

375,942

—

29,215

37,649

—

L A Shaw5

97,917

37,593

44,878

6,768

32,343

31,041

—

8,500

47,568

—

20,940

12,240

—

368,391

796,742

716,235

199,396

478,048

785,336

1,086,871

—

978,270

670,660

205,570

73,632

63,384

20,740

68,508

2,080,764

2,350,255

Non-executive directors

J M Green-Armytage

P A Fletcher

B C Tozer

D M McBain

M Sherwin

T Ashton

Lee Y Z

—

23,100

46,300

—

39,600

36,300

K Chandra Sekaran4

146,488

331,388

—

23,100

46,300

—

39,600

36,300

146,488

331,388

30,813

37,350

40,850

9,338

18,675

15,563

—

152,589

Total

1,309,658

670,660

205,570

73,632

63,384

20,740

68,508

2,412,152

2,502,844

1. In line with the Group remuneration policy, half of the bonus for the year to Mr M H Coulson and Mr L A Shaw (being in each case
11 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. In relation to Mr L A Shaw, his deferred-bonus element is pro-rated to reflect his
board appointment on 1 August 2023.

2. The pension costs for Mr M H Coulson are the contributions made by the Company to a Company-sponsored self-invested personal
pension whilst those for Mr L A Shaw are the contributions made by the Company to the Company’s defined contribution pension
scheme.

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 2023 is shown in the executive director remuneration table for the period in which he
was an executive director. K Chandra Sekaran received a fee as a non-executive director from 1 August 2023. In addition, from that
date, he received an advisory fee from the Group’s Indonesian subsidiary, PT Evans Indonesia.

5. Mr L A Shaw was appointed to the board as chief financial officer on 1 August 2023.

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 5.9 (2022 – 6.0). The equivalent ratio for the percentage increase in annual total
remuneration was 0.5 (2022 – 3.9).

Remuneration report continued

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.

For several years, this has been delivered by
remuneration packages comprising a salary and a bonus
related to current results and personal performance. For
the UK executive directors, half of the bonus is payable
in cash and half is deferred into 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, as already reported in the 2022 annual
report, 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) 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.

Since the grant of the initial award to Matthew Coulson
in January 2023, Luke Shaw was appointed to the board
on 1 August 2023 as the Group’s chief financial officer.
Consistent with providing an incentive that aligns with the
long-term interests of shareholders, the remuneration
committee extended eligibility for UK executive tailored
LTIS awards to Luke Shaw, with a view to awarding him a
set number of share options relative to his base salary.

Key aspects of the January 2023 share awards to the chief
executive (which will also apply to future awards made
to UK executive directors under the scheme) 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 was
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.

• 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
Group’s core strategic pillars of Responsibility,
Excellence, Growth, and Yield.

• 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
shares, although this will be reviewed for continuing
appropriateness before each award is made.

• 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.

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

M.P. EVANS GROUP PLCANNUAL REPORT 2023REPORT OF THE DIRECTORS
REMUNERATION REPORT

shares to senior staff. It also provides the awards made
to our UK-based chief executive in January 2023, as
described above, 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 2023 took
into account, inter alia, another record year of crop and
production, including production from the Group’s own
mills with its sixth mill opened in early 2023, addition
of over 10,000 planted hectares to the Group’s portfolio,
successfully managed changes to senior management
and the board, significant steps made on ESG capacity
building and reporting, and appropriate marking of the
Group’s 150-year anniversary. Where appropriate, the
absolute value of these measures was assessed, as was
their outturn against budget.

Also, for our chief executive, from January 2023, and for
our chief financial officer, from January 2024, 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 2023, 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 2023, options over 20,000
shares (2022 – 20,000) granted to K Chandra Sekaran
under this scheme remained outstanding. During the year,
no options were exercised by him (2022 - none) and none
(2022 - 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 over 22,256 fully-
paid shares were awarded in 2023 (2022 – 19,880),
representing half of the 2023 bonus awarded to him.

During the year, Luke Shaw was also 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 over 6,215 fully paid
shares were awarded in 2023 (2022 – none), representing
a pro-rated amount of his bonus since joining the board
during the year.

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

At 31 December 2023, the middle-market quotation for
the Company’s shares, as derived from the London Stock
Exchange Daily Official List, was 740p, as compared with
the high and low quotations for the year of 900p and
670p respectively.

Remuneration report continued

OPTIONS HELD OVER SHARES OF THE COMPANY BY THE EXECUTIVE DIRECTORS
DURING THE YEAR ENDED 31 DECEMBER 2023

Balance
at 1 Jan
2023

Granted
in the
year

Exercised
in the
year

Balance
at 31 Dec
2023

Exercise
price
pence

Date
granted

Date from
which
normally
exercisable

Expiry
date

Executive share-option scheme

K Chandra Sekaran

20,000

Total

20,000

Long-term incentive scheme

M H Coulson

K Chandra Sekaran

L A Shaw

5,557

10,049

13,748

19,880

—

49,234

3,000

—

12,000

—

18,000

22,256

40,256

—

3,000

6,000

6,215

—

20,000

412.50

27 Apr 15

27 Apr 18

27 Apr 25

5,557

—

5,557

3,000

—

10,049

13,748

19,880

18,000

22,256

83,933

—

3,000

15,000

—

6,215

0.00

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

16 Jan 23

16 Jan 26

15 Jan 33

12 Dec 23

12 Dec 26

11 Dec 33

1 Jul 20

1 Jul 21

23 Mar 22

1 Jul 22

6 Jan 23

1 Jul 23

1 Jul 24

7 Jan 25

1 Jul 25

6 Jan 26

30 Jun 30

30 Jun 31

6 Jan 25

30 Jun 32

5 Jan 33

1 Jul 26

30 Jun 33

0.00

12 Dec 23

12 Dec 26

11 Dec 33

Total

81,234

52,471

8,557

125,148

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
19 March 2024

M.P. EVANS GROUP PLCANNUAL REPORT 2023Checking temperatures at the
Musi Rawas mill compost facility

5757

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 2023 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 2023 which
comprise 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.

• 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.

M.P. EVANS GROUP PLCANNUAL REPORT 2023INDEPENDENT AUDITORS’ REPORT

OVERVIEW

COVERAGE

KEY AUDIT MATTERS

75% (2022 – 77%) of
Group profit before tax

85% (2022 – 85%) of
Group revenue

77% (2022 – 70%) of
Group total assets

Impairment of goodwill

Revenue recognition

2023



2022



Impairment of goodwill is no longer considered to be a
key audit matter in the current year because adequate
headroom exists in the current year due to the strong
performance of the key cash generating units to which
goodwill is attributable.

MATERIALITY

Group financial
statements
as a whole

US$3.63 million (2022:
US$5.0 million) based
on 5% (2022: 5%) of
profit before tax.

AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The Group financial statements are a consolidation of
twenty five companies consisting the parent Company,
three UK-incorporated subsidiary companies, seventeen
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 (2022
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 ten (2022 seven)
companies (“material but not significant components”).

Where these components were located overseas, the
audit procedures were performed by component auditors
who were members of the BDO International 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.

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:
• The Senior Statutory Auditor and other senior

members of the Group audit team in the component
auditor’s engagement team conducted a discussion,
via videoconference. We discussed the Group and
local risks identified and agreed the testing approach
with the component auditor.

• 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 visited and 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.

independent auditors’ report continued

Climate change
Our work on the assessment of potential impacts of
climate-related risks on the Group’s operations and
financial statements included:
• Enquiries and challenge of management to understand
the actions they have taken to identify climate-related
risks and their potential impacts on the financial
statements and adequately disclose climate-related
risks within the annual report;

• Our own qualitative risk assessment taking into

consideration the sector in which the Group operates
and how climate change affects this particular sector;
• Review of the minutes of board and audit committee
meetings and other papers related to climate change
and a risk assessment as to how the impact of the
Group’s commitment as set out in the sustainably
section in the report may affect the financial
statements and our audit.

We challenged the extent to which climate-related
considerations, including the expected cash flows from
the initiatives and commitments have been reflected,

where appropriate, in the directors’ going concern
assessment. We also assessed the consistency of
managements disclosures included as other Information
within the financial statements and with our knowledge
obtained from the audit. Based on our risk assessment
procedures, we did not identify a significant risk arising
from climate-related risks and related commitments.

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

Revenue recognition

How the scope of our audit addressed
the key audit matter

We:

Refer to the accounting policies of the Group on pages 69-73 for further

• Performed a test over the operating effectiveness

detail together with Note 4a

The Group generates revenue predominantly from the sale of crude

palm oil (‘CPO’) and palm kernel (‘PK’) from processed fresh fruit

bunches (‘ffb’). Revenue is calculated as the quantity of CPO or PK

multiplied by the CPO or PK price (tender price as agreed during the

tender process). Estates that do not have mills sell ffb directly to third

parties.

The “ideal price” is the price for which the Group expects to sell the

CPO and PK, and is calculated by the tender committee. Customers

negotiate their own price with this committee which might be different

from the ideal price. The price agreed by both the customer and the

tender committee becomes the tender price which is used to sell to

the customers.

Members of this committee could collude with customers to

manipulate the price. Having considered the potential for fraud in

relation to revenue recognition, the most significant risk of material

misstatement identified is fraudulent manipulation of the tender price.

This is likely to have the highest magnitude as the tender process is

centrally controlled so manipulation could ultimately affect the ‘tender

price awarded’ for all sales made during the year.

of controls by selecting a sample of tenders

awarded during the year across all estates and

confirmed that the tender form was approved

and signed by the tender committee and head of

marketing.

• Obtained the ideal price calculations throughout

the year for all estates and customers approved

by the tender committee and compared these to

tender prices awarded per invoices.

• Compared the tender prices awarded per invoices

to the ideal price calculation and obtained

explanations for any variances over 15%. The

threshold of 15% was considered reasonable

based on our materiality level and the risk of

material misstatement occurring on this financial

statement balance.

Key observations: Based on our procedures

performed, we did not identify any control issues

or unexplained significant variances between the

tender prices and the ideal prices.

M.P. EVANS GROUP PLCANNUAL REPORT 2023
INDEPENDENT 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

2023

2022

2023

2022

Materiality

US$3.6 million

US$5.0 million

US$2.1 million

US$2.0 million

Basis for determining materiality

5% of 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.

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

US$2.5 million

US$3.5 million

US$1.5 million

US$1.4 million

Basis for determining performance
materiality

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 significant component of
the Group based on a percentage of between 60% and
40% (2022: between 70% and 19%) of Group materiality
dependent on the size and our assessment of the risk of
material misstatement of that component. Component
materiality ranged from US$2.15m to US$1.45m (2022:
US$3.7m to US$1.0m). 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$72,600 (2022:US$106,000), 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 auditor’s 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, 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.

independent auditors’ report continued

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 and
directors’
report

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

the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and

•

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 report of the directors,
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 auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in

the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.

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:

Non-compliance with laws and regulations
Based on:
• Our understanding of the Group and the industry in

which it operates;

• Discussion with management and those charged with

governance and component auditors; and

• Obtaining and understanding of the Group’s policies
and procedures regarding compliance with laws and
regulations;

we considered the significant laws and regulations to be
the applicable accounting framework, UK company law,
UK tax legislation, AIM Rules and the component auditors
considered compliance with Indonesian tax law, the
Indonesian Sustainable Palm Oil (ISPO) regulations and
Indonesian land laws.

M.P. EVANS GROUP PLCANNUAL REPORT 2023INDEPENDENT AUDITORS’ REPORT

The Group is also subject to laws and regulations
where the consequence of non-compliance could have
a material effect on the amount or disclosures in the
financial statements, for example through the imposition
of fines or litigation. We identified such laws and
regulations to be anti-bribery legislation, the health and
safety legislation and local Indonesian labour laws.

Our procedures in respect of the above included:
• Review of correspondence with regulatory and tax

authorities for any instances of non-compliance with
laws and regulations;
Involvement of tax specialists in the audit;

•
• Review of legal expenditure accounts to understand

the nature of expenditure incurred;

• Reviewing the financial statement disclosures and
agreeing to underlying supporting documentation
where necessary.

• Review 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.

Fraud
We assessed the susceptibility of the financial statements
to material misstatement, including fraud. Our risk
assessment procedures included:
• Enquiry with management and those charged with

governance including the audit committee, regarding
any known or suspected instances of fraud;

• Obtaining an understanding of the Group’s policies

and procedures relating to:
– Detecting and responding to the risks of fraud; and
– Internal controls established to mitigate risks

related to fraud.

• Review of minutes of meeting of those charged with
governance for any known or suspected instances of
fraud;

• Discussion amongst the engagement team as to

how and where fraud might occur in the financial
statements;

• Performing analytical procedures to identify any

unusual or unexpected relationships that may indicate
risks of material misstatement due to fraud;

• Considering remuneration incentive schemes and
performance targets and the related financial
statement areas impacted by these.

Based on our risk assessment, we considered the areas
most susceptible to fraud to be journals posted by super
users, journals with no description and revenue journals.

Our procedures in respect of the above included:
• Testing a sample of journal entries throughout the

year, which met a defined risk criteria, by agreeing to
supporting documentation;

• Assessing significant estimates made by management

for bias.

We also communicated relevant identified laws and
regulations and potential fraud risks to all engagement
team members including component engagement teams
who were all deemed to have appropriate competence
and capabilities and remained alert to any indications
of fraud or non-compliance with laws and regulations
throughout the audit. For component engagement teams,
we also reviewed the result of their work performed 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 auditor’s 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 auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than
the parent Company 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
19 March 2024

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

Consolidated income statement
For the year ended 31 December 2023

Continuing operations

Revenue

Cost of sales

Gross profit

Gain/(loss) on biological assets

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

Note

2023
US$’000

2022
US$’000

307,368

(228,915)

78,453

551

(1,188)

(5,443)

2,923

75,296

1,348

(3,810)

72,834

(18,826)

54,008

2,390

56,398

52,487

3,911

56,398

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

US Cents

97.6

97.2

133.9

133.4

Pence

78.1

108.0

M.P. EVANS GROUP PLCANNUAL REPORT 2023Consolidated statement of comprehensive income
For the year ended 31 December 2023

FINANCIAL STATEMENTS

Profit for the year

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 for the year

Total comprehensive income

Attributable to:

Owners of M.P. Evans Group PLC

Non-controlling interests

2023
US$’000

56,398

2022
US$’000

78,361

(940)

(1,528)

(366)

(1,306)

55,092

51,203

3,889

55,092

986

(542)

77,819

72,449

5,370

77,819

Consolidated balance sheet
As at 31 December 2023

Company number: 1555042

Note

2023
US$’000

2022
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

Current-asset investments

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

17,083

1,012

486,915

10,003

1,138

8,875

525,085

3,788

24,155

23,853

8,673

270

39,324

100,063

625,148

21,009

27,547

6,279

54,835

45,228

33,413

19,398

12,429

65,240

120,075

505,073

9,062

53,263

422,748

485,073

20,000

505,073

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

The financial statements on pages 64 to 91 were approved by the board of directors on 19 March 2024 and signed on its
behalf by

Peter Hadsley-Chaplin
Executive chairman

Matthew Coulson
Chief executive

M.P. EVANS GROUP PLCANNUAL REPORT 2023

FINANCIAL STATEMENTS

Consolidated statement of changes in equity
For the year ended 31 December 2023

Share
capital
US$’000

Other
reserves
US$’000

Retained
earnings
US$’000

Total
US$’000

Note

Non-
controlling
interests
US$’000

Total
equity
US$’000

Profit for the year

Other comprehensive
expense 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 2023

At 31 December 2023

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

—

(123)

—

(117)

9,179

9,062

—

(57)

—

(53)

9,232

9,179

2,390

50,097

52,487

3,911

56,398

(515)

(769)

(1,284)

(22)

(1,306)

1,875

49,328

51,203

3,889

55,092

(6)

—

(3,566)

123

294

(3,155)

54,543

53,263

—

(28,188)

(1,551)

(29,739)

3,566

(9,678)

—

(9,678)

260

(34,040)

407,460

422,748

554

(37,312)

471,182

485,073

—

(1,551)

17,662

20,000

—

(9,678)

554

(38,863)

488,844

505,073

2,184

70,876

73,060

5,301

78,361

(677)

(611)

(542)

1,507

70,942

72,449

5,370

77,819

187

—

(2,656)

—

191

—

191

(28,500)

(1,232)

(29,732)

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

Consolidated cash-flow statement
For the year ended 31 December 2023

Note

Net cash generated by operating activities

Investing activities

Acquisition of subsidiaries, net of cash acquired

Purchase of property, plant and equipment

Purchase of intangible assets

Interest received

(Increase)/decrease in receivables from smallholder co-operatives

Bank deposits treated as current asset investments

Proceeds on disposal of property, plant and equipment

Net cash used by 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 (decrease)/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

2023
US$’000

83,642

(34,516)

(38,282)

(25)

600

(6,161)

(266)

6,997

(71,653)

(17,405)

—

(28,188)

(155)

—

(9,678)

(55,426)

(43,437)

82,503

258

39,324

2022
US$’000

102,288

—

(33,714)

(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

M.P. EVANS GROUP PLCANNUAL REPORT 2023FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

Notes to the consolidated accounts
For the year ended 31 December 2023

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 12 to 31. 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 profit for the year of US$46,102,000 (2022 – loss of US$3,657,000). 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 2023. 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 17 Insurance contracts
IAS 1 Disclosure of accounting policies
IAS 8 Definition of accounting estimates
IAS 12 Deferred tax related to assets and liabilities arising from a single transaction

(b) New standards, amendments and interpretations issued but not effective for the year beginning 1 January 2023 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 16 Liability in a sale and leaseback
IAS 1 Classification of liabilities as current or non-current
IAS 1 Non-current liabilities with covenants
IAS 7 Supplier finance arrangements

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 2025, 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 planting, 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 consideration due for CPO, PK and ffb 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) Business combinations and 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.

M.P. EVANS GROUP PLCANNUAL REPORT 2023

FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

3 Accounting policies continued

(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.

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 2023. 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.

Notes to the consolidated accounts continued

3 Accounting policies continued

(n) Taxation continued

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.

(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.

Current-asset investments – these include bank deposits with maturities expected to be within twelve months.

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.

Deferred income – this represents payments made by customers in advance of delivery of the related products.

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.

M.P. EVANS GROUP PLCANNUAL REPORT 2023

FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

3 Accounting policies continued

(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(b).

(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);
• Depreciation of leasehold land (note 14); and
•

Treatment of acquisitions in the year (note 12).

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);
Valuation of biological assets – growing produce (note 17); and
Fair values on business combinations (note 12).

4 Revenue and segment information

(a) Revenue

2023

Sales of crude palm oil

Sales of palm kernels

Sales of fresh fruit bunches

Other

2022

Sales of crude palm oil

Sales of palm kernels

Sales of fresh fruit bunches

Other

Plantation
Indonesia
US$’000

Other
US$’000

Total
US$’000

266,493

28,637

12,190

—

307,320

247,429

40,147

39,296

—

326,872

—

266,493

28,637

12,190

307,368

247,429

40,147

39,296

326,917

The Group sells some crop (fresh fruit bunches) to outside mills for processing, with a selling price based on the CPO market
and an assumed rate of extraction. Crude palm oil and palm kernels are sold through volume-based contracts or as spot sales
following a tender from a customer.

Notes to the consolidated accounts continued

4 Revenue and segment information continued

(b) 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.

2023

Continuing operations

Revenue

Gross profit

Gain on biological assets

Foreign-exchange loss

Other administrative expenses

Other income

Operating profit

Finance income

Finance costs

Profit before tax

Tax

Profit after tax

Plantation
Indonesia
US$’000

Property
Malaysia
US$’000

Other
US$’000

Total
US$’000

307,320

78,405

551

(833)

(458)

2,913

564

(298)

(17,721)

—

(355)

(4,985)

784

(3,512)

307,368*

78,453

551

(1,188)

(5,443)

2,923

75,296

1,348

(3,810)

72,834

(1,105)

(18,826)

54,008

2,390

56,398

515,082

100,063

10,003

625,148

9,819

8,853

—

18,672

32,890

120,075

—

42,724

24,102

180

Share of associated companies’ profit after tax

1,107

1,283

—

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

505,263

91,210

5,821

602,294

87,185

42,672

24,090

180

—

4,182

—

* US$160.5 million of revenue (52.2%) was from sales to 2 customers (34.3% and 17.9% respectively).

M.P. EVANS GROUP PLCANNUAL REPORT 2023FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

Plantation
Indonesia
US$’000

Property
Malaysia
US$’000

Other
US$’000

Total
US$’000

326,872

109,165

(1,431)

(2,402)

(402)

1,845

—

(1,042)

(4,212)

617

(64)

—

778

(2,667)

(23,386)

—

(687)

424,736

85,878

7,183

517,797

—

4,612

10,052

57,797

—

67,849

51,186

—

50,228

101,414

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

4 Revenue and segment information continued

(b) Segment information continued

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

Profit for the year

Consolidated total assets

Non-current assets

Current assets

Investments in associates

Consolidated total liabilities

Liabilities

Other information

Share of associated companies’ profit after tax

1,677

507

—

Additions to property, plant and equipment

Additions to intangible assets

Depreciation

Amortisation

33,708

116

21,924

171

—

33,714

116

21,931

171

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

Notes to the consolidated accounts continued

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

Average monthly number of people employed (including executive directors)

Estate manual

Local management

United Kingdom head office

2023
US$’000

2022
US$’000

47,417

3,517

1,770

437

554

44,553

3,319

1,879

207

420

53,695

50,378

2023
Number

2022
Number

12,701

11,560

102

107

12,810

11,674

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 £2.4 million (2022 £2.5
million). Emoluments for the highest paid director were £0.9 million (2022 £1.1 million). The total gain on exercise of share options
by the directors was £0.1 million (2022 £0.2 million). The total gain on exercise of share options by the highest paid directors
was £nil (2022 £0.2 million). The total number of directors for whom contributions were made to defined contribution pension
arrangements was 2 (2022 – 1), in the current year the highest paid director did not (2022 did not) receive contributions to defined
contribution pension arrangements. In addition to amounts paid to directors, other key management personnel received a further
£0.3 million (2022 £0.1 million) 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

2023
US$’000

2022
US$’000

—

600

748

282

622

491

1,348

1,395

2023
US$’000

3,810

2022
US$’000

2,731

M.P. EVANS GROUP PLCANNUAL REPORT 2023
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

FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

2023
US$’000

2022
US$’000

24,102

21,931

180

451

171

411

53,695

50,378

198

191

425

—

176

177

386

—

* In addition to the above, US$26,000 (2022 US$25,400) were payable to other firms for the audit for the subsidiary companies.

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)

2023
US$’000

2022
US$’000

857

(857)

—

15,851

2,539

18,390

436

18,826

549

(549)

—

19,617

—

19,617

4,456

24,073

The standard rate of tax for the year, based on the weighted average of standard tax rates applied in the United Kingdom during
2023 (being 19% to 31 March 2023 and 25% for the remainder of the year), was 23.52% (2022 - 19%). The standard rate of
Indonesian tax was 22% (2022 – 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

Profits taxed at lower standard tax rate

Expenses not deductible

Lower rate on fixed asset disposals

Withholding tax on overseas dividends and interest

Adjustment relating to intercompany loan relationships

Unrelieved losses

Other differences

Adjustment to tax charge in respect of prior periods

Total tax charge

2023
US$’000

72,834

17,131

—

(1,039)

1,407

(22)

247

737

(345)

(1,829)

2,539

18,826

2022
US$’000

100,250

19,048

3,189

—

1,075

(8)

152

335

293

(11)

—

24,073

In addition to the above, the Group recognised a tax credit of US$0.1 million (2022 – charge of US$0.3 million) on retirement
benefit obligation remeasurement losses (2022 – gains), recorded in other comprehensive income.

Notes to the consolidated accounts continued

10 Dividends paid and proposed

2023 interim dividend – 12.5p per 10p share (2022 interim dividend 12.5p)

2022 final dividend – 30p per 10p share (2021 final dividend 25p)

2021 special dividend – 5p per 10p share

2023
US$’000

2022
US$’000

8,153

20,035

—

28,188

7,611

17,227

3,662

28,500

Following the year end, the board has proposed a final dividend for 2023 of 32.5p per 10p share, amounting to US$22.0 million.
The dividend will be paid on or after 19 June 2024 to shareholders on the register at the close of business on 26 April 2024.

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*

2023
US$’000

2023
No. of shares

2022
US$’000

2022
No. of shares

52,487

73,060

53,753,331

53,981,990

54,579,591

54,754,110

* 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 Acquisitions

During the course of 2023, the Group made two acquisitions.

On 6 March 2023, the Group acquired 100% of the shares in two Indonesian companies, PT Dharma Agung (“DA”) and PT
Teunggulon Raya (“TR”). On acquisition, DA and TR had 2,100 hectares planted with oil palm, and all planted areas were fully titled,
with long leaseholds already established. The planted land is close to the Group’s Simpang Kiri estate in Aceh province, northern
Sumatra. Net consideration of US$11.0 million was paid, with gross assets acquired of US$15.5 million and liabilities assumed of
US$4.5 million. The gross assets acquired included US$15.3 million relating to the plantation assets and US$0.2 million of other
assets. The transaction has been treated as an asset acquisition in accordance with the concentration test guidelines in IFRS 3
‘Business Combinations’.

On 23 November 2023, the Group acquired 100% of the shares in two further Indonesian companies, PT Agro Bumi Kaltim (“ABK”)
and PT Nusantara Agro Sentosa (“NAS”). On acquisition, ABK and NAS had 8,350 hectares planted with oil palm, and all planted
areas were fully titled, with long leaseholds already established. All the planted land is in East Kalimantan, relatively close to the
Group’s Kota Bangun estate.

The provisional fair value amounts recognised in respect of the identifiable assets acquired and liabilities assumed as are set out
in the table below:

Property, plant and equipment

Current assets

Deferred tax assets

Cash and cash equivalents

Current liabilities

Liabilities due to related parties

Retirement benefit obligations

Bank loans

Deferred tax liabilities

Net assets acquired

Goodwill

Gross consideration

Adjustment for cash and cash equivalents acquired

Net cash outflow relating to business combinations

Fair value
US$’000

57,199

6,213

109

1,713

(449)

(5,504)

(275)

(22,488)

(5,605)

30,913

5,316

36,229

(1,713)

34,516

M.P. EVANS GROUP PLCANNUAL REPORT 2023
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

12 Acquisitions continued

Critical judgement
The directors have reviewed the acquisitions made during the year and, under the optional concentration test
permitted by IFRS3(B7A), have concluded that for the purchase of DA and TR, substantially all the fair value of the
gross assets acquired is concentrated in a single identifiable asset, being the planted hectarage purchased. As a result,
this transaction has been treated as asset acquisition. The directors made a similar assessment of the subsequent
purchase of ABK and NAS, initially forming the view that substantially all of the fair value of the assets acquired was
also concentrated in a single identifiable asset. However, on further reflection, the Group has, on a provisional basis,
accounted for the acquisition of ABK and NAS as a business combination in accordance with IFRS3. Therefore, in
accordance with the requirements of IFRS, the directors considered whether there were any identifiable intangible assets
as part of the acquisition of ABK and NAS. The directors concluded there were no such assets and that a fair-value
adjustment should be made to the plantation land. As a result of the fair-value adjustment to the plantation land, a
deferred tax liability has been recognised in accordance with the requirements of IAS12. This, and the related goodwill,
is shown in the table above.

Key estimate
The directors have made an estimate of the fair value of the assets and liabilities acquired through business
combinations (reflected in the table above). Accounting for the acquisition of ABK and NAS has been undertaken using
provisional amounts at 31 December 2023.

13 Intangible assets

Cost

At 1 January 2023

Acquisitions (see note 12)

Additions

At 31 December 2023

Accumulated amortisation

At 1 January 2023

Charge for the year

At 31 December 2023

Goodwill
US$’000

Software
US$’000

Total
US$’000

11,767

5,316

—

17,083

—

1,789

—

1,814

622

180

802

13,556

5,316

18,897

622

180

802

Net book value at 31 December 2023

17,083

1,012

18,095

Cost

At 1 January 2022

Additions

At 31 December 2022

Accumulated amortisation

At 1 January 2022

Charge for the year

At 31 December 2022

11,767

—

11,767

—

1,673

116

1,789

451

171

622

13,440

116

13,556

451

171

622

Net book value at 31 December 2022

11,767

1,167

12,934

Goodwill is carried at cost. Of the balance above at 1 January 2023, 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 seven estates as described on pages 6 and 7, with their value in use. Value in use has been obtained by
reference to independent valuations of the Group’s property assets conducted at the end of 2023 (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%
(2022 – 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 (2022 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 (2022 nil impairment) of the goodwill
relating to Bumi Mas. Goodwill relating to the business combination in the year has not been included in the scope of
impairment testing due to the timing of the acquisition.

14 Property, plant and equipment

Cost or valuation

At 1 January 2023

Additions

Acquisition (see note 12)

Re-classification

Disposals

Leasehold
land
US$’000

Planting
US$’000

Buildings
US$’000

Plant,
Equipment
& Vehicles
US$’000

Construction
in progress
US$’000

114,438

214,786

124,890

82,079

15,062

31,488

—

8,989

21,897

—

(3)

414

2,367

16,339

(814)

At 31 December 2023

160,988

245,669

143,196

Accumulated depreciation

At 1 January 2023

Charge for the year

Disposals

At 31 December 2023

187

—

218

Net book value at 31 December 2023

160,770

64,893

9,810

(2)

74,701

170,968

44,366

7,438

(427)

51,377

91,819

Cost or valuation

At 1 January 2022

Additions

Re-classification

Disposals

111,907

212,880

114,777

2,552

—

(21)

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

56,145

9,618

(870)

64,893

149,893

37,974

6,694

(302)

44,366

80,524

Total
US$’000

560,309

42,724

57,199

—

(2,155)

24,116

14,671

(29,484)

—

9,333

658,077

—

9,333

12,742

24,217

(12,843)

—

148,651

24,102

(1,591)

171,162

486,915

529,928

33,714

—

(3,333)

24,116

560,309

—

24,116

128,923

21,931

(2,203)

148,651

411,658

3,588

1,417

13,145

(1,338)

98,891

39,205

6,823

(1,162)

44,866

54,025

77,622

3,514

2,128

(1,185)

82,079

34,649

5,587

(1,031)

39,205

42,874

Included in planting is immature planting with a cost of US$15,008,000 (2022 US$7,337,000).

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$159,615,000 (2022 US$113,308,000).

M.P. EVANS GROUP PLCANNUAL REPORT 2023FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED ACCOUNTS

14 Property, plant and equipment continued

As at 31 December 2023, the Group had entered into contractual commitments for the acquisition of property, plant and
equipment of US$1,884,000 (2022 US$8,162,000).

Depreciation and amortisation is charged to cost of sales, other than US$12,000 (2022 US$7,000) charged to other administrative
expenses.

Property, plant and equipment additions for 2023 includes US$15.3 million of assets acquired in the year as set out in note 12.

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

2023
US$’000

2022
US$’000

22,494

(708)

2,390

(3,566)

20,610

(10,607)

10,003

23,981

(1,015)

2,184

(2,656)

22,494

(10,699)

11,795

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

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

2023

Kerasaan
US$’000

Bertam
Properties
US$’000

Total
US$’000

Kerasaan
US$’000

Bertam
Properties
US$’000

2022

Total
US$’000

7,417

2,916

10,145

2,104

(811)

(792)

10,646

(38%)

2,818

1,108

3,855

799

(308)

(301)

4,045

23,793

3,206

46,554

27,026

(13,497)

(18,671)

41,412

(40%)

9,517

1,282

18,622

10,810

(5,399)

(7,468)

16,565

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

12,335

2,390

22,477

11,609

(5,707)

(7,769)

20,610

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

2023
US$’000

2022
US$’000

(2)

(4)

2023
US$’000

2022
US$’000

3,788

3,089

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$3.4 million and US$33.0 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

2023
US$’000

2022
US$’000

11,040

11,221

1,894

24,155

13,155

8,789

1,168

23,112

M.P. EVANS GROUP PLCANNUAL REPORT 202319 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

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

2023
US$’000

2022
US$’000

1,799

12,181

—

285

7,714

1,874

23,853

8,875

22,313

10,302

111

32,728

5,537

6,020

6,798

662

9,643

4,021

32,681

9,146

23,984

10,633

410

6,800

41,827

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 2023 there was no provision for impairment of trade receivables
(2022 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$60.8 million (2022 US$55.4 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

2023
US$’000

2022
US$’000

4,989

7,192

12,181

—

12,181

3,084

2,936

6,020

—

6,020

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$9,160,000 (2022 US$9,808,000).

Notes to the consolidated accounts continued

20 Cash and other liquid resources

Cash and cash equivalents

Current-asset investments

2023
US$’000

39,324

270

39,594

2022
US$’000

82,503

—

82,503

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three
months or less. Current-asset investments are bank deposits acquired during the year, which have been pledged as security
against bank loans. It is expected that the deposits will be returned within twelve months. The carrying value of these assets
approximates their fair value.

21 Trade and other payables

Current liabilities

Trade payables

Payable to smallholder co-operatives

Deferred income

Other payables

2023
US$’000

2022
US$’000

7,160

4,001

4,356

12,030

27,547

8,598

2,488

5,198

8,126

24,410

The average credit period taken for trade purchases is 32 days (2022 – 37 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

2023
US$’000

2022
US$’000

54,422

49,039

21,009

12,279

21,134

33,413

54,422

31,674

22,748

54,422

24,441

14,207

25,876

64,524

17,364

20,640

11,035

31,675

49,039

—

49,039

20,268

22,158

11,155

53,581

Bank loans have been provided from lenders in Malaysia and Indonesia 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$112.4 million (2022 US$114.9 million). At the
year end, the Group had undrawn available credit facilities of US$30 million (2022 US$30 million).

Certain of the Group’s loans are subject to financial and other covenants, all of which have continued to be met throughout the
year. The weighted-average interest rate paid on bank loans in the year was 8.2% (2022 – 4.4%).

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 2023FINANCIAL 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:

At 1 January 2023

Arising on acquisitions

Charge to income statement

Credit to other comprehensive income

Accelerated
tax
depreciation
US$’000

Retirement-
benefit
obligations
US$’000

Other
timing
differences
US$’000

(9,523)

(316)

(1,116)

—

2,194

158

386

103

(5,220)

294

—

Total
US$’000

(12,549)

(5,378)

(436)

103

At 31 December 2023

(10,955)

2,841

(10,146)

(18,260)

At 1 January 2022

Charge to income statement

Credit to other comprehensive income

At 31 December 2022

(8,779)

(744)

—

(9,523)

2,835

(363)

(278)

2,194

(1,871)

(3,349)

—

(7,815)

(4,456)

(278)

(5,220)

(12,549)

Other timing differences relate to losses, with the exception of the deferred tax liability of US$8.5 million (2022 US$8.5 million)
that arose in 2017 on the acquisition of PT Bumi Mas Agro, and the deferred tax liability of US$5.3 million (2022 US$nil) that
arose during the year on the acquisition of PT Agro Bumi Kaltim and PT Nusantara Agro Sentosa. 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

2023
US$’000

1,138

(19,398)

(18,260)

2022
US$’000

989

(13,538)

(12,549)

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$517,604,000 (2022 US$511,464,000).
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$21,370,000 (2022 US$23,238,000).
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$49,935,000 (2022 US$49,458,000) 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$16,618,000 (2022 US$14,848,000) of such losses. No deferred-tax asset has been recognised
in respect of the remaining US$33,317,000 (2022 US$34,610,000) 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$868,000 (2022 US$1,689,000). 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 loss/(gain)

Less: Benefits paid out

Movement in the year

At 1 January

Exchange differences

At 31 December

2023
%

2022
%

6.75-7.00

6.75-7.25

7.00

2023
US$’000

2022
US$’000

1,770

203

705

469

3,147

(776)

2,371

9,972

12,429

1,879

(2,242)

842

(1,264)

(785)

(1,065)

(1,850)

12,886

(1,064)

9,972

* In relation to the 2022 past service cost, 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$0.9-1.2 million.

M.P. EVANS GROUP PLCANNUAL REPORT 2023
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

54,230,888

8,700

—

50,000

(991,198)

—

87,000,000

53,289,690

8,700

87,000,000

54,696,253

8,700

—

30,000

(495,365)

—

87,000,000

54,230,888

8,700

9,179

(123)

9,062

9,232

(57)

9,179

25 Share capital

At 1 January 2023

Issued

Redeemed

At 31 December 2023

At 1 January 2022

Issued

Redeemed

At 31 December 2022

During the year, in anticipation of the exercise of share options, the Company issued 50,000 10p shares for US$6,000 cash
consideration.

The Company continued its share-buyback programme during the year. Under that programme the Company bought back and
cancelled 991,198 10p shares, representing 1.8% of the issued share capital, for a total cost of US$9.7 million. In 2022, 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.

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

2023
Number
of share
options

183,934

91,521

(42,207)

233,248

32,299

2023
Weighted-
average
exercise price
(pence)

44.9

0.0

35.4

255.4

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

The weighted-average share price at the date of exercise for share options exercised during the year was 751p. The options
outstanding at 31 December 2023 had a weighted-average remaining contractual life of 8.0 years and exercise prices in the
range of 0 to 412p. The Group recognised total expenses of US$554,000 related to equity-settled share-based payments
(2022 US$420,000), 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 3-6%, and a risk-free rate of approximately 3%. The
fair value of options granted in the year was between 583p and 771p. Details of the directors’ share options are set out in the
directors’ remuneration report on pages 53 to 56.

Notes to the consolidated accounts continued

27 Reserves

Share-
premium
account
US$’000

Revalu-
ation
Reserve
US$’000

Capital-
redemp
tion
reserve
US$’000

Merger
reserve
US$’000

Treasury
shares
US$’000

Share-
option
reserve
US$’000

Share of
asso-
ciates’
reserves
US$’000

Foreign-
exchange
reserve
US$’000

Total
US$’000

Retained
earnings
US$’000

At 1 January
2023

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
2023

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

32,579

540

4,358

766

—

(5)

—

123

—

(2)

—

(2)

—

(6)

—

941

15,277

54,543

407,460

2,390

—

2,390

50,097

(483)

(25)

(515)

(425)

—

(3,566)

294

—

(6)

—

(344)

—

(28,188)

(3,566)

3,566

294

123

260

(9,678)

32,579

535

4,481

766

(10)

1,235

13,618

53,263

422,748

32,392

548

4,301

766

(6)

960

16,451

55,467

366,825

—

187

—

(8)

—

2,184

—

2,184

70,876

(702)

(681)

(851)

—

(2,656)

(19)

—

191

917

—

(28,500)

(2,656)

2,656

(19)

439

(4,902)

32,579

540

4,358

766

(2)

941

15,277

54,543

407,460

—

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

M.P. EVANS GROUP PLCANNUAL REPORT 2023FINANCIAL 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 (charged)/credited to other comprehensive income

At 31 December

2023
US$’000

2022
US$’000

17,662

3,911

(1,551)

(22)

20,000

13,524

5,301

(1,232)

17,662

The Group has a minority partner in the majority 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 (gain)/loss

Loss 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

2023
Profit
US$’000

2023
Equity
US$’000

2022
Profit
US$’000

2022
Equity
US$’000

817

1,351

817

410

388

128

4,178

9,198

3,256

3,499

212

(343)

949

2,205

928

848

222

149

3,360

7,858

3,771

3,088

(167)

(248)

3,911

20,000

5,301

17,662

2023
US$’000

2022
US$’000

75,296

101,586

(551)

259

(92)

24,102

180

905

554

1,431

845

(40)

21,931

171

(586)

420

Operating cash flows before movements in working capital

100,653

125,758

Decrease/(increase) in inventories

Decrease in receivables

Decrease in payables

Cash generated by operating activities

Dividends from associated companies

Income tax paid

Interest paid

Net cash generated by operating activities

1,023

11,814

(6,460)

107,030

3,566

(23,144)

(3,810)

83,642

(1,358)

11,864

(6,752)

129,512

2,656

(27,149)

(2,731)

102,288

Notes to the consolidated accounts continued

30 Analysis of movements in net (debt)/funds

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

At 1 January 2023

82,503

—

(17,364)

(31,675)

33,464

Net decrease in cash and cash
equivalents

New borrowings

Repayment of borrowings

Reclassification

Foreign-exchange movements

At 31 December 2023

At 1 January 2022

Net increase in cash and cash
equivalents

Repayment of borrowings

Reclassification

Foreign-exchange movements

At 31 December 2022

31 Financial instruments

(43,437)

—

258

39,324

65,609

18,469

—

(1,575)

82,503

—

266

—

(267)

17,405

(20,780)

(3)

270

(21,009)

—

(22,221)

—

20,780

(297)

(33,413)

(43,437)

(22,222)

17,405

—

(38)

(14,828)

—

(20,531)

(50,517)

(5,439)

—

22,009

(18,842)

—

(17,364)

—

18,842

—

(31,675)

18,469

22,009

—

(1,575)

33,464

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 debt, see note 30, of US$14,828,000 (2022 - net cash surplus US$33,464,000) and equity
attributable to the owners of the parent Company of US$485,073,000 (2022 US$471,182,000). 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 2023.

M.P. EVANS GROUP PLCANNUAL REPORT 2023FINANCIAL 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

2023
US$’000

2022
US$’000

25,770

13,385

342

51,433

30,015

886

169

39,594

82,503

The currency profile of the Group’s monetary liabilities, excluding trade and other payables, is shown in note 19.

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$2.2 million (2022 US$5.4 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 SOFR and the Bank of Indonesia base rate, 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 (2022 US$0.4 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 53. The directors’ participation in the executive share-option schemes and long-term incentive scheme is disclosed
on pages 54 to 56.

In July 2023, the Group received a final payment in relation to the consideration received for the Group’s disposal in October 2021
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 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.

Parent-company balance sheet
As at 31 December 2023

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

2023
US$’000

2022
US$’000

vii

viii

885

15,799

89,842

106,526

1,240

1,520

2,760

845

15,799

79,982

96,626

1,231

2,616

3,847

109,286

100,473

845

1,915

845

108,441

9,062

39,528

59,851

108,441

820

3,027

820

99,653

9,179

39,119

51,355

99,653

The Company recorded a profit for the year of US$46,102,000 (2022 – loss of US$3,657,000).

The financial statements on pages 92 to 97 were approved by the board of directors on 19 March 2024 and signed on its
behalf by

Peter Hadsley-Chaplin
Executive chairman

Matthew Coulson
Chief executive

M.P. EVANS GROUP PLCANNUAL REPORT 2023

PARENT-COMPANY
FINANCIAL STATEMENTS

Parent-company statement of changes in equity
For the year ended 31 December 2023

Profit for the year

Other comprehensive expense for the year

Total comprehensive income 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 2023

At 31 December 2023

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

Share
capital
US$’000

Other
reserves
US$’000

Retained
earnings
US$’000

—

(123)

—

(117)

9,179

9,062

—

(57)

—

(53)

9,232

9,179

—

(2)

(6)

—

123

294

411

39,119

39,528

—

191

—

(19)

229

38,890

39,119

46,102

—

46,102

—

(28,188)

(9,678)

260

(37,606)

51,355

59,851

(3,657)

—

(28,500)

(4,902)

439

(32,963)

87,975

51,355

Total
US$’000

46,102

(2)

46,100

—

(28,188)

(9,678)

554

(37,312)

99,653

108,441

(3,657)

195

(28,500)

(4,902)

420

(32,787)

136,097

99,653

Notes to the parent-company accounts
For the year ended 31 December 2023

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
12. 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 44.

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 73. 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 2023PARENT-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 profit for the year ended 31 December 2023 of US$46,102,000 (2022 - loss of
US$3,657,000). The Company’s main source of income is dividends from subsidiary companies.

The auditors’ remuneration for audit services was US$36,000 (2022 US$33,000).

iii Employees

Employee costs during the year

Wages and salaries

Social security costs

Pension costs

Share-based payments

2023
US$’000

2022
US$’000

2,035

269

241

2,618

1,881

266

169

2,369

As recorded in the directors’ remuneration report on page 53, wages and salary costs include bonuses paid to the directors in
respect of 2023 and 2022.

Average monthly number of people employed

Staff

Directors

iv Property, plant and equipment

Cost

At 1 January 2023

Additions

At 31 December 2023

Accumulated depreciation

At 1 January 2023

Charge for the year

At 31 December 2023

Net book value at 31 December 2023

Net book value at 31 December 2022

2023
number

2022
number

Land and
buildings
US$’000

Plant,
equipment
& vehicles
US$’000

Total
US$’000

834

—

834

—

834

130

182

119

131

964

1,016

119

131

885

845

Notes to the parent-company accounts continued

Investments in subsidiaries

Subsidiary undertakings

At 1 January and 31 December 2023

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

Country of
operation

Holding
%

100

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.

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

Other creditors

viii Share capital

See note 25 to the consolidated financial statements.

2023
US$’000

2022
US$’000

1,185

1,240

1,208

1,231

89,842

79,982

2023
US$’000

2022
US$’000

845

820

M.P. EVANS GROUP PLCANNUAL REPORT 2023PARENT-COMPANY
NOTES TO THE PARENT-COMPANY ACCOUNTS

ix Reserves

Share-
premium
account
US$’000

Capital-
redemption
reserve
US$’000

Merger
reserve
US$’000

Treasury
shares
US$’000

Other
reserves
US$’000

Total
US$’000

Retained
earnings
US$’000

At 1 January 2023

Issue of shares

Share-based payments

Share buyback

Profit for the year

Dividends*

Exchange differences

32,579

4,167

1,434

—

123

—

(2)

(6)

—

(2)

941

—

294

—

39,119

51,355

(6)

294

123

—

(2)

—

260

(9,678)

46,102

(28,188)

—

At 31 December 2023

32,579

4,290

1,434

(10)

1,235

39,528

59,851

At 1 January 2022

Issue of shares

Share-based payments

Share buyback

Loss for the year

Dividends*

32,392

187

—

4,110

1,434

—

At 31 December 2022

32,579

4,167

1,434

* See note 10 to the consolidated financial statements.

(6)

—

(2)

38,890

87,975

960

—

(19)

—

187

(15)

—

941

39,119

—

439

(4,902)

(3,657)

(28,500)

51,355

Subsidiary and associated undertakings
As at 31 December 2023

SUBSIDIARY UNDERTAKINGS
Details of the Group’s subsidiary undertakings as at 31 December 2023 are as follows:

% of
shares
held

Country of
incorporation

Country of
operation

Field of activity

Indonesia

100

Indonesia

Name of subsidiary

PT Prima Mitrajaya Mandiri

PT Teguh Jayaprima Abadi

PT Agro Bumi Kaltim

PT Gunung Pelawan Lestari

PT Pangkatan Indonesia

PT Bilah Plantindo

PT Sembada Sennah Maju

PT Bumi Mas Agro

PT Evans Lestari

PT Simpang Kiri Plantation Indonesia

PT Dharma Agung

PT Teunggulon Raya

PT Nusantara Agro Sentosa

PT Perusahaan Pertanian Perkebunan
Perindustrian dan Perdagangan Surya
Makmur

PT Aceh Timur Indonesia

PT Evans Indonesia

Sunrich Plantations Pte Ltd

Bertam Consolidated Rubber
Company Limited

M.P. Evans & Co. Limited*

Sungkai Holdings Limited*

100

Indonesia

Production at Kota Bangun

Production at Bangka

Production at Pangkatan

Production at Bumi Mas

Production at Musi Rawas

Production at Simpang Kiri

Production at Nusantara

Holding company

Provision of agronomic and
management consultancy services

Singapore

Holding company

England and Wales Malaysia

Holding company

England and Wales

United Kingdom Holding company

England and Wales

United Kingdom 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 2023 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 Gedung 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 2023OTHER INFORMATION

Analysis of Indonesian plantation land areas
As at 31 December 2023

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

PLANTED HECTARAGE

Subsidiaries – oil palm

Kota Bangun

Bangka

Pangkatan group

Bumi Mas

Musi Rawas

Simpang Kiri

Nusantara

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

5,652

3,881

383

1,351

2,537

588

708

332

193

5,687

3,881

1,091

1,438

2,869

254

648

14,453

1,415

15,868

100

13,844

6,151

6,427

7,278

5,537

4,019

2,225

45,481

43,275

1,994

758

443

539

215

1,925

486

505

4,113

3,969

328

124

14,287

6,151

6,966

7,493

7,462

4,505

2,730

49,594

47,244

2,322

882

44,033

4,093

48,126

46,239

4,237

50,476

1. The Group works to obtain final land licences (HGUs) as soon as possible for its planted areas. The only areas for which the Group is
still working to obtain HGUs is in relation to some of the newer planting at Musi Rawas (approximately 1,600ha) and at Kota Bangun
(approximately 1,000ha, some of which relates to the additional land acquired during 2023).

2. The Group supports its associated scheme smallholders to obtain HGUs. In total, smallholder HGUs are in the process of being

obtained for approximately 4,000ha, some of which relates to newer planting or areas brought into Group association for the first
time during 2023.

Analysis of Group equity value
As at 31 December 2023

The information in the following table provides a directors’ estimate of the Group equity value at 31 December 2023
utilising, except where indicated, an independent valuation of the Group’s properties performed at the end of 2023.

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

Nusantara2

Smallholders

Kota Bangun

Bumi Mas

Bangka

Musi Rawas

Pangkatan group

Simpang Kiri

Associates

Kerasaan3

Total Indonesia

MALAYSIAN PROPERTY

Bertam Properties

Total Malaysia

Net debt4

Other assets and liabilities5

Total equity value

Equity value (£ per share6)

Notes

100

14,287

7,493

6,151

7,462

6,966

4,505

2,730

49,594

4,646

1,438

3,881

2,868

1,091

253

14,177

253,400

165,600

123,300

184,100

118,400

48,400

18,900

912,100

28,200

7,400

17,600

19,400

4,700

600

77,900

17,700

22,100

20,000

24,700

17,000

10,700

6,900

18,400

6,100

5,100

4,500

6,800

4,300

2,400

5,500

2,322

33,100

14,300

n/a

242,645

157,320

110,970

174,895

112,480

46,755

18,900

863,965

26,790

7,030

15,840

18,430

4,465

570

73,125

12,578

949,668

46,728

(16,991)

7,818

987,223

14.59

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

2. Nusantara, and the other acquisitions during the year, was not included in the independent valuation at 31 December 2023.
The amounts included in the table above are stated at cost. No amount has been included in the Group equity valuation at
31 December 2023 for the smallholder hectares at Nusantara and ABK.

3. The Group’s only oil-palm associate, Kerasaan, was not included in the independent valuation at 31 December 2023. The value in the

table above has been carried forward from the independent valuation performed at 31 December 2019.

4. Net debt is taken as cash and other liquid resources less borrowings from the 31 December 2023 balance sheet, attributable to the

owners of M.P. Evans Group PLC.

5. Other assets and liabilities are taken as net assets minus plantation and property-related assets, minus net debt from the

31 December 2023 balance sheet, attributable to the owners of M.P. Evans Group PLC.

6. 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 2023OTHER INFORMATION

Five-year summary

Production

Crude palm oil

Palm kernels

Crops

Oil-palm fresh fruit bunches

Own crops

Scheme-smallholder crops

Independent crop purchased

Indonesian associated-company estates

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

2023
Tonnes

2022
Tonnes

2021
Tonnes

2020
Tonnes

2019
Tonnes

378,500

80,600

341,700

73,800

312,900

67,100

271,700

60,400

231,900

53,000

922,900

278,500

421,500

1,622,900

48,200

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

51,900

55,200

54,800

54,200

US$

964

729

15,236

15,397

4.56

4.60

1.25

1.27

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

US$’000

307,368

78,453

72,834

326,917

109,210

100,250

276,592

103,613

112,502

174,510

34,755

28,440

119,341

17,044

12,780

Basic continuing earnings per share

97.6

133.9

158.4

37.4

11.6

US cents

Basic continuing earnings per share

Dividends per share:

Normal

Special

Total

Pence

78.1

45.00

—

45.00

Pence

108.0

42.50

—

42.50

Pence

115.6

35.00

5.00

40.00

Pence

29.2

22.00

—

22.00

Pence

9.0

17.75

—

17.75

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

Net cash generated by operating activities

485,073

83,642

471,182

102,288

431,524

92,272

364,111

39,598

358,724

32,002

US$’000

101

Notice of meeting

NOTICE IS HEREBY GIVEN that the annual general meeting of M.P. Evans Group PLC will be held at Tallow Chandlers’ Hall,
4 Dowgate Hill, London, EC4R 2SH on Friday 14 June 2024 at 12 noon. The Company also aims to make the proceedings
available to view online. Further details, where necessary, 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 2023.

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 2023.

3 To elect Luke Shaw as a director.

4 To re-elect Peter Hadsley-Chaplin as a director.

5 To declare a final dividend.

6 To appoint BDO LLP as auditors and to authorise the directors to determine their remuneration.

No 3

No 4

No 5

No 6

AS SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolution, as a special resolution:

Resolution on
form of proxy

7 That the Company is hereby generally and unconditionally authorised to make market purchases

No 7

(within 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 5,321,983;

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 the higher of:

i) 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;

ii) the higher of the price of the last independent trade of a 10p share and the highest current
independent bid for a 10p share of the trading venue where the purchase is carried out; and

d) the authority hereby conferred shall expire at the conclusion of the next annual general meeting of
the Company or on 30 June 2025, 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
19 March 2024

102

M.P. EVANS GROUP PLCANNUAL REPORT 2023

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 or other instrument appointing a
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 12pm on 12 June 2024 (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 form of proxy and more detailed instructions posted
on the AGM page of the Group’s website (www.mpevans.co.uk/
investors/agm).

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 12 June 2024 (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 19 March 2024, the Company’s issued share capital
consisted of 53,219,833 shares carrying one vote each.
Therefore, the total number of voting rights in the Company
as at that date was 53,219,833.

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 14 June
2024 at 12 noon

VENUE
Tallow Chandlers’ Hall
4 Dowgate Hill, London EC4R 2SH

TALLOW
CHANDLERS’
HALL

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)

103

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 enquiries@mpevans.co.uk
w www.mpevans.co.uk

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

INDONESIAN REGIONAL OFFICE
PT Evans Indonesia
Gedung Graha Aktiva, Suite 1001,
Jl HR Rasuna Said Blok X-1 Kav 03, Jakarta 12950

NOMINATED ADVISER AND BROKER
Cavendish Capital Markets Ltd
One Bartholomew Close
London EC1A 7BL

SOLICITORS
Hogan Lovells International LLP
Atlantic House, 50 Holborn Viaduct
London EC1A 2FG

PUBLIC RELATIONS ADVISERS
Hudson Sandler LLP
25 Charterhouse Square
London EC1M 6AE

MANAGING AGENT IN MALAYSIA
Straits Estates Sdn. Berhad
Loke Mansion, 147 Lorong Kelawei
10250 Penang

INDEPENDENT AUDITORS
BDO LLP
2 City Place, Beehive Ring Road, Gatwick,
West Sussex RH6 0PA

REGISTRARS
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
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

M.P. EVANS GROUP PLCANNUAL REPORT 2023

Bangka mill

105

CBP023814

This report is printed on paper
certified in accordance with the FSC®
(Forest Stewardship Council®).

Woodrow Press Ltd aims to reduce at
source the effect its operations have
on the environment and is committed
to continual improvement, prevention
of pollution and compliance with any
legislation or industry standards.

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