i
ANNUAL REPORT
2021 Annual Report
Company Number: 1884630
Contents
About AEP
2
Financial Highlights
4
Key Information
6
Shareholder Information
7
Chairman's Statement
9
Strategic Report
12
Financial Record
52
Estate Areas
53
Location of Estates and Mills
54
Directors' Report
55
Directors' Responsibilities
59
Directors
60
Statement on Corporate Governance
61
Audit Committee Report
67
Directors' Remuneration Report
72
Auditor's Report
79
Consolidated Income Statement
90
Consolidated Statement of Comprehensive Income
92
Consolidated Statement of Financial Position
93
Consolidated Statement of Changes in Equity
95
Consolidated Statement of Cash Flows
97
Notes to the Consolidated Financial Statements
99
Company Statement of Financial Position
139
Company Statement of Changes in Equity
140
Notes to the Company Financial Statements
141
Notice of Annual General Meeting
145
Company addresses, advisers and website
Inside Back Cover
About Anglo-Eastern Plantations
Annual Report 2021 | Anglo-Eastern Plantations Plc 2
The group comprising Anglo-Eastern Plantations Plc (“AEP”) and its subsidiaries (the “Group”), is a major
producer of palm oil and to a lesser extent rubber with plantations across Indonesia and Malaysia, amounting
to some 128,000 ha.
Biogas plant in North Sumatera
Collection of fresh fruit bunches (“FFB”)
Matured plantation
• AEP has a Premium Listing on the London
Stock Exchange. The Company was listed
in 1985.
• Primary activities are the crop production
and processing of palm oil and some
rubber.
• Palm oil is an important commodity and
the industry reportedly employs millions of
workers directly and indirectly across
Indonesia and Malaysia. It is used
extensively in food, cosmetics, other
consumer products and biofuel.
• The Group is committed to the responsible
development of its plantations and
facilities with particular attention to both
the environment and society in which it
operates.
• AEP mitigates the impact on the
environment by capturing methane gas
emissions from its mills and generating
renewable energy though its biogas
plants. It also operates a biomass plant
which converts empty fruit bunches
(“EFB”) to dried long fibres.
About Anglo-Eastern Plantations
Annual Report 2021 | Anglo-Eastern Plantations Plc 3
Oil Palm Plantations
The Group has developed over 62,600 ha of mature oil palm in sixteen
plantations across Indonesia, together with one plantation in Malaysia. The
weighted average age of the trees in the Group is about 13 years. In Indonesia
the trees averaged about 12 years old while in Malaysia the trees are older at
24 years. The Group’s FFB production in 2021 reached 1.19 million mt.
Oil Palm Development
An Oil Palm tree usually takes about three years from planting to harvest of the
first crop and will reach full production after a further five years. The Group has
approximately 7,900 ha of immature plantations of which 1,701 ha were planted
in 2021.
Palm Oil Mills
The Group operates six palm oil mills processing up to a combined 310 mt of
FFB per hour. One of the mills has a biomass plant which processes EFB into
dried long fibres for export. The construction of the seventh mill in North
Sumatera is in progress with completion delayed due to the pandemic.
Completion is scheduled for the latter part of 2022, which together with the
upgrade of two other mills would increase the Group’s processing capacity to
400 mt per hour. Combined oil extraction rate (“OER”) averaged 20.5% in 2021.
Third Party Crop Purchases
In 2021 the Group purchased approximately 1.14 million mt of FFB from third
party producers, comprising small plantations and local farmers, for processing
through its mills. The total FFB throughput at the Group’s mills in 2021 was 2.31
million mt producing 473,200 mt of crude palm oil (“CPO”). The Group has the
capacity to store up to 52,400 mt of CPO at its six mills.
Rubber Plantations
In 2021 the 262 ha of established rubber plantations produced 425 mt of raw
latex and rubber lumps. The size of the rubber plantations will reduce in the
coming years as the Group replaces ageing rubber trees with oil palm. The
average age of the rubber trees is 14 years. The yield in 2021 was 1.62 mt/ha.
Biogas Plants
Four mills are equipped with biogas plants to capture the methane gas emission
to generate electricity for its own consumption, with the surplus being sold to
the Indonesian state authorities. This reduces the mills’ our reliance on fossil
fuels and improves the Group’s carbon footprint. The Group sold 20,300 MWh
of surplus electricity in 2021.
Financial Highlights
Annual Report 2021 | Anglo-Eastern Plantations Plc 4
The Group key performance indicators (“KPI”) as required in accordance with the requirements of s414C,
Companies Act 2006 are as follows:
Source: Financial Times
Continuing operations
2021
$m
2020
$m
Change
%
Revenue
433.4
263.8
+64
Profit before tax:
- before biological assets (“BA”) movement
132.7
56.9
+133
- after BA movement
137.1
58.1
+136
Basic Earnings per ordinary share (“EPS”):
- before BA movement
235.25cts
89.31cts
+163
- after BA movement
242.34cts
91.82cts
+164
Dividend (cents)
5.0cts
1.0cts
FTSE 100
Share Price
Trading volume
%
Anglo-Eastern Plantations Plc
Financial Highlights
Annual Report 2021 | Anglo-Eastern Plantations Plc 5
* Restated to exclude discontinued operations.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
2017 2018 2019 2020* 2021*
Revenue ($000)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2017 2018 2019 2020* 2021*
Profit Before Tax Before BA
($000)
0.00
50.00
100.00
150.00
200.00
250.00
2017 2018 2019 2020* 2021*
Basic Earnings Per Share
Before BA ($, cents)
0
200
400
600
800
1,000
1,200
2017 2018 2019 2020* 2021*
Asset Value Per Share
($, cents)
Key Information
Annual Report 2021 | Anglo-Eastern Plantations Plc 6
13%
42%20%
25%
(as at 31/12/20)
Immature
Young
Prime
Old
11%
40%
25%
24%
(as at 31/12/21)
Age of Palm Trees
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2017 2018 2019 2020 2021
Crude Palm Oil & Palm Kernel Production (mt)
CPO Palm Kernel
mt
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2017 2018 2019 2020 2021
Own FFB Production & Outside Purchase (mt)
Own FFB Production Outside Purchase
mt
Shareholder Information
Annual Report 2021 | Anglo-Eastern Plantations Plc 7
Market capitalisation
The market capitalisation of Anglo-Eastern Plantations Plc in the United Kingdom (“UK”) at 31 December 2021 was
£285 million (2020: £231 million), the ordinary share price at the close of business on 22 April 2022 was 808 pence
giving a market capitalisation of £320 million.
Website
https://www.angloeastern.co.uk/ contains various details and information on the Company and its operations, together
with all the key historical financial and regulatory information on the Company. The website is updated on a continuing
basis incorporating all Company announcements and other relevant developments, including environment, social and
governance matters (“ESG”) and share price movements.
The website allows shareholders and investors to select and receive e-mail alerts from the Company on selected
regulatory news. Shareholders are encouraged to use e-mail alerts to follow the development of the Company.
Investor relations
Investors requiring further information on the Company are invited to contact:
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
Anglo-Eastern Plantations Plc
Quadrant House, 6
th
Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel: 44 (0) 20 7216 4621
Fax: 44 (0) 20 7767 2602
Email: datojohnlim@angloeastern.co.uk
Registrar
Administrative queries about holdings of AEP shares can be directed to the Company's Registrar:
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY
United Kingdom
Tel: +44 (0) 370 703 0164
Email: web.corres@computershare.co.uk
Shareholders can view and update their account details via the Computershare website, details of which can be
found at https://www-uk.computershare.com/investor/.
Shareholder Information
Annual Report 2021 | Anglo-Eastern Plantations Plc 8
Annual General Meeting
With the reopening of borders, together with the lifting of quarantine requirements in the UK and in Malaysia, the 37th
Annual General Meeting (“AGM”) of the Company will be held at the offices of UHY Hacker Young LLP, 6th floor
Quadrant House, 4 Thomas More Square, London E1W 1YW on Monday, 27 June 2022 at 11 am (UK time). Notice
of the meeting is set out at the end of this Annual Report on pages 145 to 148.
Submission of proxy voting
Shareholders will not receive a hard copy of the proxy form for the 2022 AGM. Instead, shareholders will be able to
vote electronically using the link https://www-uk.computershare.com/investor/. Shareholders will need to log into their
Investor Centre account or register if shareholders have not previously done so. To register, shareholders will need
their Shareholder Reference Number (“SRN”) which is detailed on their share certificates. The SRN is also available
from the Registrar, Computershare Investor Services PLC (please see their contact details below). Proxy votes must
be received no later than 9.30 am (UK time) on Thursday, 23 June 2022. To be effective, all proxy appointments must
be lodged with the Company’s Registrars at Computershare Investor Services PLC, The Pavilions, Bridgwater Road,
Bristol BS99 6ZY.
Shareholders may request a hard copy of the proxy form directly from the Registrar, Computershare Investor Services
PLC on Tel: +44 (0) 370 703 0164. Lines are open between 9am to 5.30pm from Monday to Friday excluding public
holidays in England and Wales.
Amalgamation of accounts
Shareholders receiving multiple copies of Company mailings as a result of several accounts being maintained in their
name are invited to write to the Company's Registrar at the above address to request that their accounts be
amalgamated.
Payment of dividends
While the dividend is declared in US Dollars, shareholders can choose to receive their dividends in Pounds Sterling.
In the absence of any specific instruction up to the date of closing of the register, shareholders with addresses in the
UK will be deemed to have elected to receive their dividends in Pounds Sterling and those with addresses outside the
UK will be deemed to have elected to receive their dividends in US Dollars.
The Pounds Sterling equivalent dividend will be paid at the exchange rate prevailing at the date of closing of the
register.
Electronic communications
Computershare Investor Services PLC offers AEP shareholders the opportunity to manage their shareholding online,
through the Investor Centre.
Registration is free and can be used to manage shareholdings quickly and securely. To register for this service, please
go to https://www-uk.computershare.com/investor/ and follow the instructions.
Chairman’s Statement
Annual Report 2021 | Anglo-Eastern Plantations Plc 9
I am pleased that the UK has lifted all the restrictions relating to Covid-19 and that Malaysia is in a state of endemic
rather than pandemic resulting in its borders being open to foreign visitors and a more relaxed set of Standard
Operating Procedures (“SOPs”). All these have been made possible due to the very high fully vaccinated rate of the
adult population of both these countries, who are now focusing on vaccinating the population of children.
Indonesia is lagging slightly behind in its vaccination programme with about 76% of its adult population fully vaccinated
due to an earlier reported shortage of vaccines. There is also a stark gap in vaccination rates among the 34 provinces
in Indonesia with the population in remote and less developed regions having difficulty in reaching vaccination centres.
I am confident that the Indonesian government will achieve full vaccination for its adult population within a reasonable
time.
Many countries have witnessed the effect that the prolonged lockdown has caused on mental and financial distress
and are now adapting to coexist with Covid-19 rather than a zero tolerance strategy of eliminating Covid-19. Borders
are beginning to open with the focus on reviving the economy which in turn leads to a gradual return of international
air travel.
2021 was a year in which Indonesia and Malaysia went through either full lockdowns or partial lockdowns and the
Group was fortunate that it was allowed to continue its operations as the food industry was an essential service. During
this time management has drawn up strict SOPs for the staff to work safely and I am pleased to say that there was no
major outbreak of Covid-19 cases in any of the plantations. However, we did have 5 fatalities due to Covid-19 in four
of our plantations which must have been traumatic for the deceased loved ones and their colleagues. I and the rest of
the Board shared their grief and we have ensured that the welfare of the affected families were appropriately looked
after. The emergence of a new variant, Omicron, which is more transmissible but less deadly may, however, set back
the progress made to date. Our management remains watchful and continues to observe strict safety protocols in its
operations.
I am pleased that given the plantations have to operate within the constraints of Covid-19, the management and staff
have delivered a very good set of results, partly due to the high price of CPO for the year and I thank them for their
diligence and effort. Having said that the Group has been hampered for a number of years by three plantations in
South Sumatera which have not contributed to the profitability of the Group, notwithstanding the time and investments
incurred over the years. Accordingly, the Board has made a commercial decision to sell PT Riau Agrindo Agung, PT
Empat Lawang Agro Perkasa and PT Karya Kencana Sentosa Tiga, all in South Sumatera, as going concern at a
realistic achievable price. The Board is working with a consulting firm in Indonesia with a view to conclude the sale by
the end of 2022.
The Group’s FFB production in 2021 reached 1.19 million mt, 8% higher than last year of 1.10 million mt due to
improved weather. Other than South Sumatera, rainfalls were satisfactory in all regions that the Group operated in.
With mostly favourable weather, all regions except for Malaysia reported higher FFB production of between 1% to
28%. FFB bought-in from surrounding smallholders and plasma was 1.14 million mt (2020: 913,200 mt), 25% more
than 2020. The mills processed a combined 2.31 million mt of FFB, 17% more than last year of 1.97 million mt. CPO
production, as a result, was 17% higher at 473,200 mt, compared to 406,100 mt in 2020.
CPO prices had been on a tear for most of the year. The surge in prices was unprecedented especially when
consumption of palm oil was expected to be weaker due to the economic lockdown caused by the Coronavirus. A
combination of factors however contributed to the spectacular rise in prices. Unfavourable weather conditions in prime
soybean producing countries, which had adversely affected the supply of soybean oil, of which palm oil is the closest
substitute was a likely cause. This together with a tight supply of palm oil due to labour, fertiliser issues and improved
demand prospects for vegetable oils as global economies reopen drove CPO prices higher. A more detailed
explanation is provided in the Strategic Report under Commodity Prices. The average CPO price ex-Rotterdam ended
the year 67% higher at $1,211/mt, compared to $723/mt in 2020.
The higher FFB production and elevated CPO prices meant that the Group’s revenue from continuing operation
reached a record high of $433.4 million, 64% higher compared to $263.8 million achieved in 2020. The operating profit
for the Group from continuing operations in 2021, before biological asset (“BA”) movement more than doubled to
$129.3 million, from $54.6 million reported in 2020. The earnings per share, before BA movement from continuing
Chairman’s Statement
Annual Report 2021 | Anglo-Eastern Plantations Plc 10
operations, increased by 163% to 235.25cts, from 89.31cts in 2020. The Group’s operating profit after BA movement
from continuing operation for 2021 was at $133.7 million after an upward BA movement of $4.3 million as compared
to 2020 operating profit of $55.8 million after an upward BA movement of $1.2 million.
The mills briefly enjoyed improved processing margins as the Indonesian government lowered the CPO export tax in
July 2021 from $255/mt to $175/mt when the CPO price exceeded $1,000/mt. However, in November 2021 the export
tax was revised upwards to $200/mt when the CPO price exceeded $1,283/mt. The Indonesian government in its effort
to curb soaring prices of domestic cooking oil in February 2022 imposed a domestic market obligation (“DMO”) rule
which made it mandatory for palm oil producers to sell 20% (and then subsequently 30%) of their output to domestic
refiners at fixed prices representing a steep discount to the current CPO price, eroding the profit margin of planters.
The DMO has since been aborted and replaced by a maximum CPO export tax and levy at $575/mt. This is further
explained in the Outlook of the Strategic Report on page 50. Furthermore, on 27 April 2022 the Indonesian government
banned the export of CPO to try to stem the rising cost of cooking oil in Indonesia. News reports have generally
indicated that this is a temporary measure as CPO is one of Indonesia’s largest export revenues, and also Indonesia
cannot consume or utilise all the CPO it produces. The ban on the export of CPO, whilst it is in place, will affect the
tender price AEP will achieve as the CPO is sold locally.
The Group’s new planting for oil palm including plasma for 2021 totalled 1,701 ha compared to 2,190 ha last year.
Please see page 21 under Corporate Social Responsibility for Plasma obligation of the Group. The new planting was
mostly concentrated in the Kalimantan regions where negotiations with owners over land compensation were
concluded more efficiently. The land compensation process suffered as the pandemic restricted travel and social
contact. Many landowners also demanded better land prices due to record CPO prices. Furthermore, the local
authorities stopped all land compensation for three months in Bangka to resolve some complaints from local villages.
Replanting of some 900 ha of oil palms in Bengkulu was accelerated during the year to replace trees with poor yield.
In 2022, the Group plans to plant 2,500 ha of oil palm which includes replanting of another 1,200 ha in Bengkulu.
Plasma planting for 2022 is estimated at 400 ha.
The Group has four biogas plants with a combined capacity of slightly above five megawatts. The Group sold surplus
electricity of 20,300 MWh in 2021 compared to 18,900 MWh last year in our efforts to reduce the Group’s carbon
footprint. The biogas plants help trap and burn the more toxic methane gas emission from palm oil mill effluent
(“POME”) to generate green electricity and produce less harmful carbon dioxide. Methane has a higher heat-trapping
potential than carbon dioxide and cutting its emission can have a positive impact on reining in global warming. The
revenue from the sale of surplus electricity to the national grid was $999,000 (2020: $970,000)
EU threat to reduce the use of palm oil for biofuel in 2024 and to completely phase it out by the year 2030 remains a
potential risk. The adverse perception of palm oil as an environmentally unfriendly and non-renewable source
particularly in the EU has continued to feature in recent years, touching on issues including deforestation, emission of
greenhouse gases, planting on peatland and land rights, most of which affect climate change. AEP remains committed
to No Deforestation, No Peatland, No Exploitation (“NDPE”) policies. All supplies of FFB to our mills are traceable to
their origins of supply chains and are not linked to illegal deforestation. We are aware of growing pressure from buyers
to avoid CPO with NDPE and High Conservation Values (“HCV”) issues.
A resurgence of the Covid-19 and its variants including Omicron, remains a potential major risk to palm oil demand in
both the food and energy sectors. Inequitable access to vaccines, tests and treatments amongst the rich and poor
countries could possibly prolong the pandemic and continue to hurt the economies, risking the emergence of more
dangerous variants resulting in weaker trade and commodity prices.
The war in Ukraine has caused another round of global uncertainty. Any further escalation of the war in Ukraine will
no doubt create additional uncertainties impacting the major economies of the world which in turn could affect the
demand for palm oil in both the food and energy sectors. More comments relating to the effects on CPO prices and
fertilisers supply chain can be found in the Commodity Prices and Outlook sections of the Strategic Report on pages
19 and 50 respectively.
In determining the amount of dividends to be paid to our shareholders, the Board in previous years had been consistent
with a balanced approach to the requirement of funds in the Company in order to expand and enhance shareholders’
Chairman’s Statement
Annual Report 2021 | Anglo-Eastern Plantations Plc 11
value but at the same time cognisant of shareholders’ wishes to have dividends as a form of income. As with last year
the Board continues to have regulatory obligation to ensure that the Group has adequate funds to continue as a going
concern for the foreseeable future in a near worst-case scenario because of the uncertainty due to Covid-19 and to a
lesser extent the war in Ukraine. With the rising Coronavirus cases in Europe in early 2022, the Board felt justified in
its opinion that the pandemic is far from over especially in the region where the Group’s operations are, due to the
mutations and variants more infectious than the initial virus that the world has been combating. With this in mind the
Board continues to adopt a prudent view and in the light of the exceptional profit achieved in the year has declared a
final dividend of 5.0cts per share, in line with our reporting currency, in respect of the year to 31 December 2021 (2020:
1.0cts). In the absence of any specific instructions up to the date of closing of the register on 10 June 2022,
shareholders with addresses in the UK will be deemed to have elected to receive their dividends in Pounds Sterling
and those with addresses outside of UK will be deemed to have elected to receive their dividends in US Dollars.
Subject to the approval by shareholders at the AGM, the final dividend will be paid on 15 July 2022 to those
shareholders on the register on 10 June 2022.
On behalf of the Board of Directors, I would like to convey our sincere thanks to our management and employees of
the Group for their dedication, loyalty, resourcefulness, commitment and contribution to the preservation of the Group’s
operation as a going concern during this extremely difficult and trying period.
I would also like to take this opportunity to thank shareholders, business associates, government authorities and all
other stakeholders for their continued confidence, understanding and support for the Group.
Madam Lim Siew Kim
Chairman 29 April 2022
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 12
Introduction
The Strategic Report has been prepared to provide shareholders with information to complement the financial
statements. This report may contain forward-looking statements, which have been included by the Board in good faith
based on information available up to the time of approval of this report. Such statements should be treated with caution
going forward given the uncertainties inherent with the economic and business risks faced by the Group.
Business Model
The Group will continue to focus on its strength and expertise, which is planting more oil palms and production of CPO.
This includes replanting old palms with low yield, replacing old rubber trees with palm trees and building more mills to
process the FFB. The Group has, over the years, created value to shareholders through expansion in a responsible
manner.
The Group remains committed to use its available resources to develop the land bank in Indonesia as regulatory
constraints permit. The Indonesian government has, in recent years, passed laws to prioritise domestic investments
and to limit foreign direct investments over national interest, including a limit of 20,000 ha per province and a national
total of 100,000 ha on the licensed development of oil palms for companies that are not listed in Indonesia or with less
than a majority local ownership.
The Group’s objectives are to provide returns to investors in the long-term from its operations as well as through the
expansion of the Group’s business, to foster economic progress in localities of the Group’s activities and to develop
the Group’s operations in accordance with the best corporate social responsibility and sustainability standards.
We believe that sustainable success for the Group is best achieved by acting in the long-term interests of our
shareholders, our partners and society.
Our Strategy
One of the Group’s objectives is to provide an appropriate level of return to the investors and to enhance shareholder
value. Profitability, however, is very much dependent on the CPO price, which is volatile and is determined by supply
and demand as well as the weather. The Group believes in the long-term viability of palm oil as it can be produced
more economically than other competing oils and remains the most productive source of vegetable oil in a growing
population. Soybean crops would require up to ten times as much land to produce an equivalent weight of palm oil. It
has been reported that one hectare of land can produce up to 4 mt of CPO, much higher than rapeseed of 0.7 mt,
sunflowers of 0.6 mt or even soybeans of 0.4 mt. In this regard, palm oil is far more sustainable than other edible
vegetable oils.
The Group’s strategies, therefore, focus on maximising yield per hectare above 22 mt/ha, minimum mill production
efficiency of 110%, minimising production costs below $300/mt and streamlining estate management. For the year
under review, the Indonesian operations achieved an FFB yield of 19.8 mt/ha, 155% mill efficiency and production cost
of $296/mt. This compared favourably to 2020 where the Group achieved a yield of 18.9 mt/ha, 133% mill efficiency,
except for production cost which was lower at $280/mt. Despite stiff competition for external crops from surrounding
millers, the Group is committed to purchasing more external crops from third parties at competitive, yet fair prices, to
maximise the production efficiency of the mills. With higher throughput, the mills would achieve economies of scale in
production. A mill is deemed to achieve 100% mill efficiency when it operates 16 hours a day for 300 days per annum.
In line with the commitment to reduce its carbon footprint, the Group plans to construct, in stages, biogas plants at all
its mills to trap the methane gas emitted from the treatment of palm mill effluents to generate electricity to power its
boilers to reduce the consumption of fossil fuel. It plans to sell the surplus electricity and progressively reduce the
greenhouse gas emissions per metric ton of CPO produced in the next few years. It is commonly accepted that failure
to address growing calls to reduce greenhouse gas emissions could threaten the long-term social acceptability and
profitability of a palm oil company. The Group is looking at more biogas projects as demand for electricity recovered
after the pandemic.
The Group will continue to engage and offer competitive and fair compensation to the villagers so that land can be
cleared and be planted.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 13
Non-financial reporting statement
The Group has complied with the requirements of Section 414CB of the Companies Act 2006 by providing a wide
range of non-financial information about employees, environmental and social matters in the table below and in our
website:
Non-financial
matter
Policies and standards which govern our approach
Page
Business model
Business model and strategy
Principal risks and uncertainties
12
42 to 47
Environmental
matters
Principal risks and uncertainties: Country, regulatory and governance practices
Principal risks and uncertainties: Weather and Environmental and conservation practices
Indonesian Sustainable Palm Oil
Environmental, Social and Governance practices
Management of Climate Risks
Decarbonisation modelling and high level target setting
Carbon Reporting
Corporate Governance: Environmental and corporate responsibility
Other responsible agricultural practices and sustainable policies can be found on our website
43 to 44
47
25 to 26
26 to 29
29 to 34
35
35 to 42
66
Employees and
Health & Safety
Employees: Employment policies
Directors’ Remuneration Report: Employees engagement
Workers are protected from exposure to occupational health and safety hazards that are likely
to pose immediate risk of permanent injury, illness or fatality. Proper signages are in place at
relevant spots to alert employees of safety. Workshops and training sessions on occupational
safety and health care are regularly conducted.
48 to 50
72
Social matters
Principal risks and uncertainties: Covid-19
AEP has established clear policies and strict protocols for the control and prevention of the
spread of Covid-19 within the workplace environment. There are requirements for mask wearing,
social distancing and sanitising of the workplace regularly. AEP also privately funded vaccination
programme within its plantations and employees are required to be compulsorily vaccinated.
AEP also has strict procedures on testing at work and self isolation of its employees when
necessary, together with home support for the affected ones to ensure full recovery before they
resumed work.
46
Respect for
human rights
AEP has clear policies of no exploitation of its employees, including complying with paying
minimum wage. It does not practise child or forced labour in line with the Modern Slavery
Statement referred to on its website. In addition, a whistle blowing policy is in place to allow any
employee to raise concerns about unethical, illegal or questionable practices without the risk of
reprisal and in full confidence.
49 to 50
Anti-corruption
and anti-bribery
matters
Directors’ report: Political donations, anti-corruption and anti-bribery matters
55
Financial Review
Performance of the business during the year
For the year ended 31 December 2021, revenue for the Group from continuing operation was $433.4 million, 64%
higher than $263.8 million reported in 2020 due primarily to the higher CPO prices and higher production.
The Group’s operating profit from continuing operation for 2021, before biological asset movement, was $129.3 million,
137% better than last year of $54.6 million.
FFB production for continuing operations for 2021 reached 1.15 million mt, 7% higher than the 1.07 million mt produced
in 2020. The overall yield for the Indonesian plantations was higher at 21.1 mt/ha (2020: 20.4 mt/ha) due to more
consistent and better rainfall throughout the year coupled with an increase in matured areas to harvest. Except for
Malaysia, all regions in Indonesia in which the Group operated show improvement in crop harvest. Young matured oil
palms in North Sumatera and Kalimantan grew well and reported a 13% higher crop production. With replanting in
progress, crop production in Bengkulu region, increased marginally by 1%.
FFB bought-in from local smallholders and plasma in 2021 was 1.14 million mt (2020: 913,200 mt), 25% more
compared to 2020. As explained earlier, a more consistent weather with no extended period of dryness meant that
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 14
there was an abundance of external crops to purchase especially in the first half of the year. Crop purchases by our
mills in North Sumatera, Riau, Bengkulu and Kalimantan grew by between 9% and 64% in comparison to last year.
During the year, the Group’s mills processed a combined 2.31 million mt of FFB, 17% more than last year of 1.97
million mt. CPO production, as a result, was 17% higher at 473,200 mt, compared to 406,100 mt in 2020.
Profit before tax and after BA movement from continuing operation for the Group was $137.1 million, 136% higher
compared to a profit of $58.1 million in 2020. The BA movement was a credit of $4.3 million, compared to a credit of
$1.2 million in 2020. The BA movement was mainly due to higher FFB price in 2021. The profit before tax included a
reversal of impairment charge on plantations and impairment of land amounting to $5.0 million compared to a reversal
of impairment on land amounting to $2.2 million in 2020. Net finance income recognised in the income statement
increased from $2.6 million in 2020 to $3.2 million in 2021 due to higher time deposits and absence of interest expense.
The tax expense increased from $15.2 million in 2020 to $25.7 million in 2021 due to the increase in profit before tax.
The total loss on the discontinued operations during the year was $28.5 million, made up of operating loss of $6.7
million and a further write down of the three plantations assets net of liabilities of $21.8 million. The loss from the
discontinued operation was also impacted by the expected credit loss from Plasma receivables amounting to $1.2
million in 2021 (2020: $1.4 million) attributed to the additional amounts allocated for plasma development during the
year.
The average CPO price ex-Rotterdam for 2021 was $1,211/mt, 67% higher than 2020 of $723/mt. The ex-mill price
for 2021 averaged $776/mt, 37% higher than last year of $567/mt.
Earnings per share before BA movement from continuing operations increased by 163% to 235.25cts compared to
89.31cts in 2020. Earnings per share after BA movement from continuing operations increased from 91.82cts to
242.34cts. Earnings per share have increased mainly due to the increase in profit after tax.
There was a loss of exchange in translation of foreign operations, recognised in other comprehensive income, totalling
$6.3 million for 2021 against an exchange loss of $5.4 million in the previous year due to the slight weakening of the
Indonesian rupiah at the year end. The retirement benefits due to the employees at 31 December 2021, as calculated
by a third party actuary, decreased to $11.5 million from $13.4 million last year due to the impact from the job creation
law.
Position of the business at the end of the year
The Group’s statement of financial position remains strong, with a cash and cash equivalents balance of USD218.2
million and no external borrowing at the end of 2021. All material changes in statement of financial position and cash
flows are listed in the following table:
Note
31.12.2021
$000
31.12.2020
$000
Property, plant and equipment
i
260,532
280,831
Deferred tax assets
ii
4,324
14,389
Income tax liabilities
iii
(13,139)
(5,981)
Cash and cash equivalents
v, vi, vii
218,249
115,211
Assets in disposal groups classified as held for sale
iv
13,210
-
Net cash generated from operating activities
v
131,346
65,353
Purchase of property, plant and equipment
vi
(26,374)
(18,965)
Net cash used in financing activities
vii
(1,028)
(9,039)
i. The reduction in property, plant and equipment from $280.8 million in 2020 to $260.5 million was due to the
reclassification of the assets in South Sumatera to assets held for sale in current assets.
ii. The movement in deferred tax assets was due to the utilisation of some of the losses against taxable profits during
the year.
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Annual Report 2021 | Anglo-Eastern Plantations Plc 15
iii. The income tax liabilities are higher principally as a result of higher profits in 2021.A detailed explanation of income
tax, including other taxes, is provided in note 9.
iv. Assets in disposal groups classified as held for sale reflects the reclassification of the assets in South Sumatera,
net of an impairment adjustment.
v. As at 31 December 2021, the Group had cash and cash equivalents of $218.2 million (2020: $115.2 million). The
cash position was higher in 2021 principally due to the significant increase in profitability during the year and to a
lesser extent the recovery of $14.8 million from the over payment of VAT, together with the benefit of part of the
current year corporate income tax of $13.1 million being retained as at year end. The net cash inflow from
operating activities during the year was higher at $131.3 million by 101% compared to $65.4 million in 2020 mainly
due to the more robust CPO prices and higher production.
vi. The higher additions to development costs for property, plant and equipment (“PPE”) amounting to $26.4 million
in 2021 (2020: $19.0 million) was due to increase in construction costs.
vii. The net cash used in financing activities during the year was lower by 89% at $1.0 million compared to $9.0 million
in 2020 due to no repayment of borrowings during the year.
Viability Statement
The viability assessment considers solvency and liquidity over a longer period than for the purposes of the going
concern assessment made on pages 15 and 16. Inevitably, the degree of certainty reduces over a longer period.
The Group’s business activities, financial performance, corporate development and principal risks associated with the
local operating environment are covered under the various sections of this strategic report. In undertaking the review
of the Group’s performance in 2021, the Board considered the prospects of the Company, focusing on the strategy for
growth via the expansion of its planted area in tandem with forecasting demand for CPO, over one to five-year periods.
The process involved a detailed review of the 2022 detailed budget and the five-year income and cash flow projection.
The one-year budget has a greater level of certainty and is used to set detailed budgetary targets at all levels across
the Group. It is also used by the Remuneration Committee to set targets for the annual incentive. The five-year income
and cash flow projection contains less certainty of the outcome but provides a robust planning tool against which
strategic decisions can be made. The Board believes that to project beyond five years has more elements of
uncertainties and therefore less reliable for making informed decisions.
The Board also considered the five-year cash flow projection under various severe but plausible scenarios, including
the financial impact on the Group due to partial or total shutdown of its operations and the contraction of demand for
palm oil resulting from the Coronavirus pandemic, as outlined in the Strategic Report under Going Concern, and the
need to support if any financially loss-making newly matured estates, together with the projected capital expenditure.
The Group also factored in the impact of the price increase of materials and fertilisers primarily as a result of the conflict
in Ukraine. In arriving at the conclusion that the Group has adequate resources to continue in operation and meet its
liabilities in the next five years the Board has assumed a worst case scenario of CPO price at its lowest average of
$500/mt and that demand for CPO dropped by 50%. The Board has also factored in that half of the total plantations
could be shut down for six months due to infectious disease such as Covid19. The assumptions applied are linked to
risk of CPO price fluctuation, risk of a substitute for oil palm and a pandemic from an infectious disease. On this basis
and other matters considered and reviewed by the Board during the year, the Board has a reasonable expectation that
the Group has adequate resources to continue in operation and meet its liabilities over the five years from 2022 to
2026.
Going Concern
As the Group is still facing a period of uncertainty due to the Coronavirus pandemic, the Directors carried out stress
tests as required, to ensure that the Group has adequate resources in a worst-case scenario to remain as a going
concern for at least twelve months from the date of this report.
The Directors have a reasonable expectation, having made the appropriate enquiries, that the Group has control of
the monthly cash flows and that the Group has sufficient cash resources to cover the fixed cash flows for a period of
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 16
at least twelve months from the date of approval of these financial statements. For these reasons, the Directors
adopted a going concern basis in the preparation of the financial statements. The Directors have made this assessment
after consideration of the Group’s budgeted cash flows and related assumptions including appropriate stress testing
of identified uncertainties, specifically on the potential shut down of the entire operations from three to twelve months
if all the plantations are infected with Coronavirus as well as the impact on the demand for palm oil with decreases of
50% to 100%. Stress testing of other identified uncertainties and risks such as commodity prices and currency
exchange rates were also undertaken.
Business Review
Indonesia
The performance of the Indonesian operations is divided into six geographical regions.
North Sumatera
FFB production in North Sumatera, which aggregates the estates of Tasik, Anak Tasik, Labuhan Bilik (“HPP”),
Blankahan, Rambung, Sg Musam and Cahaya Pelita (“CPA”) produced 400,800 mt in 2021 about 13% above last year
(2020: 354,900 mt). The increase in matured areas to 18,047 ha from 16,238 ha contributed to this higher production.
A more consistent rainfall pattern with no prolonged period of dryness and better harvest from young matured palms
in Tasik also improved the annual yield to 22.2 mt/ha from the previous year of 21.6 mt/ha.
Higher production can be expected in the coming years due to new planting and recently replanted areas of 546 ha
maturing next year and starting to bear fruits.
In 2021, the two mills in North Sumatera produced 136,900 mt of CPO (2020:124,900 mt) from a throughput of
698,800 mt (2020: 629,200 mt). Tasik Raja mill had another stellar year, processing 10% more FFB in 2021 at 501,900
mt (2020: 455,000 mt) due mainly to better internal crop production, raising the mill utilization to 174% from 158% the
previous year. OER, however, was lower at 19.9% (2020: 20.0%) possibly due to the dura contamination from external
crops that made up 35% of the total crops processed. Dura crops with thinner mesocarp normally have an oil content
of 18% or lower. The Blankahan mill showed some improvement by processing 13% more FFB at 196,900 mt (2020:
174,200 mt) due to higher external crop purchases increasing mill utilization from 91% to 103% this year. Outside
crops that made up 58% of the total crops processed by the mill in the previous year increased to 61% in 2021. Internal
crop production was marginally higher as the average age of trees reached 27 years with replanting to be carried out
when necessary. Replanting in Blankahan was delayed as the yield had been consistently high in the past years
averaging 26 mt/ha due to good soil condition.
The two biogas plants in North Sumatera did not perform as expected in 2021, but are expected to perform better
going forward. The state electric company resumed the uptake of electricity from the Blankahan biogas plant in 3Q
2021 as commercial activities pick-up steam. It sold about 1,900 MWh (2020: 2,500 MWh) of surplus electricity and
generated $114,100 (2020: $151,800) in revenue. The contract to supply electricity was finally signed for two years.
As for Tasik biogas plant, the authorities are currently evaluating its power production capacity and the local
consumption. There is a realistic chance that the authorities will purchase the surplus electricity as the economy
recovers from the lockdown. It also helps that the Indonesian government is promoting the use of green energy going
forwards as part of its efforts to achieve the climate change mitigation promises.
The sales from the biomass plant were lower in 2021 at $335,800 compared to $427,100 last year, as the plant
exported 4% less dried long fibres at 4,710 mt compared to 4,930 mt last year. Average selling prices had fallen by
18% as foreign buyers had to contend with lack of containers as well as higher shipment costs. The production at the
plant was temporarily halted in the last month of the year as it ran out of storage facilities as inventory built up due to
logistic problems. This was the second time in the year where production had to stop due to high inventory and storage
constraint.
Bengkulu
FFB production in Bengkulu, which aggregates the estates of Puding Mas (“MPM”) and Alno produced 307,400 mt
(2020: 304,000 mt), 1% more than 2020. Production from Bengkulu region has improved despite some areas being
recently replanted as rainfall normalised to 3,500 mm in 2021 (2020: 4,000mm) with higher yield at 19.6 mt/ha from
18.2 mt/ha last year.
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Annual Report 2021 | Anglo-Eastern Plantations Plc 17
MPM and Sumindo mills processed a combined 807,000 mt (2020: 672,200 mt) of FFB in 2021 due to higher internal
crop production as well as higher external crop purchases. External crop purchases increased by 35% to 464,800 mt
from 344,700 mt last year due to better weather conditions increasing mill utilization to 160% from 133% in the prior
year. CPO production for the year was 19% higher at 164,300 mt (2020: 138,200 mt) with OER for the two mills
averaging 20.4%, lower from 20.6% last year. External crops made up 58% of the throughput compared to 51% in
2020. The remaining processed crop was purchased from other group companies.
900 ha palms were replanted in 2021 with good planting material. Another 3,200 ha of palms will be replanted from
2022 to 2024 as the matured palms in Alno and MPM reached the average age of 18 and 22 years respectively. The
replanting is also fast tracked as the dura palms constituted a significant portion of the planted areas. Fruits from dura
palms have thin mesocarp which ultimately produce less oil.
The MPM biogas plant sold over 10,300 MWh (2020: 9,600 MWh) of surplus electricity, 7% higher and generated
$484,900 in revenue (2020: $444,300). One of the engines in the plant was shut down for up to two months for repairs
as delivery of service parts was delayed due to Covid-19 travel restriction. Occasional breakdown of transmission lines
also meant that the biogas plant did not perform to its optimum capacity of two megawatt.
South Sumatera
FFB production in South Sumatera, which aggregates the estates of Karya Kencana (“KKST”), Empat Lawang
(“ELAP”) and Riau Agrindo (“RAA”) produced 37,200 mt (2020: 34,200 mt), 9% higher than 2020. Better rainfall and
more matured palms contributed to a higher harvest. While rainfall during the year improved in KKST and South ELAP,
low annual moisture remains a real threat in this region which retards growth as the plantations are located behind a
mountain range sheltered from the Indian Ocean. Annual rainfall in North ELAP decreased to 1,095 mm (2020: 1,861
mm) which also experienced ten months where rainfall fell below the minimum of 150 mm per month for healthy crop
production. The yield of 6.5 mt/ha in South Sumatera reflected the improved conditions from 6.3 mt/ha the previous
year.
During the year about 17,100 new palms were spot planted in South Sumatera boosting the stems per hectare to 103
trees from the target of 105 trees. It incurred higher planting cost as frequent resupply of young palms was needed
due to damage incurred by the freely roaming cattle owned by local villagers. Trenching and fencing the plantation
were explored but were deemed uneconomical. Discussions with the local villagers were not productive and to avoid
any strained relationship which can be detrimental in the long run, management decided instead to fence individual
young plants to protect them from the cattle. With higher CPO prices, more FFB thefts were reported in 2021 as the
region faced high unemployment during the pandemic. The management has also stepped-up security patrols.
With the inherent problems of rainfall, terrains, security and non productive dialogues with the local villages, the Board
arrived at a decision in the last quarter of 2021 to discontinue its operations in South Sumatera and has put the three
plantations for sale in the open market as a going concern during the 1Q of 2022. The Board has arrived at its decision
as a result of the low crop yield which is unlikely to improve and the continuing losses incurred in the region,
notwithstanding the significant investments and efforts over the years.
Riau
FFB production in the Riau region, comprising Bina Pitri estates, produced 139,600 mt in 2021 (2020: 133,200 mt) 5%
higher than 2020. Rainfall was lower at 2,620 mm (2020: 2,850 mm) but was consistently above 150 mm per month
except for February 2021. The yield for the year was slightly higher at 28.7 mt/ha from last year of 27.3 mt/ha. As 78%
of the palms are between the ages of 24 to 27 years, there is a planned replanting process of 2,800 ha of palms from
2023 to 2026.
The mill external crop purchase was higher by 18% at 266,600 mt compared to 225,300 mt last year, with the mill
utilization rate improved to 141% from 125% last year. Overall the CPO production was higher by 12% to 77,500 mt
compared to 69,100 mt in 2020. Despite the high yield, the region is contaminated by dura palms which made up 66%
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 18
of the crops processed by the mill. The mill
therefore had a low OER of 19.1%
compared to 19.3% in the previous year.
Bangka
FFB production in the Bangka region,
comprising Bangka Malindo Lestari estates,
produced 11,100 mt in 2021 (2020: 8,700
mt), 28% higher than 2020. Higher crop was
due to a larger harvestable area and more
palms having reached peak maturity.
Rainfall averaged 2,370 mm in the year
compared to 3,043 mm previous year. Yield
declined slightly from 13.5 mt/ha to 13.4
mt/ha in 2021. With new planting in 2021
totalling 160 ha (2020: 706 ha), the total
planting including plasma in Bangka has
reached 3,036 ha (2020: 2,856 ha). The
land compensation dialogue in Bangka was
briefly interrupted for three months after
local authorities requested the company to stop the process to facilitate an investigation following complaints against
the village head.
Kalimantan
FFB production in Kalimantan which comprises the Sawit Graha Manunggal (“SGM”) and Kahayan Agro Plantation
(“KAP”) estates was 281,500 mt in 2021 (2020: 249,500 mt) 13% higher than 2020 as more palms matured and
reached the peak production age. The average age of palms in SGM and KAP were nine and five years respectively.
During the year 767 ha of palms matured in SGM and KAP leading to its first harvest. The yield in Kalimantan recovered
to 19.8 mt/ha from 18.6 mt/ha last year. Wetter-than normal weather prevailed in KAP at 4,490 mm (2020: 4,350 mm)
while rainfall in SGM was lower at 2,320 mm (2020: 2,870 mm).
New planting in SGM and KAP is expected to reach 1,000 ha next year. The long-term prospect for Kalimantan remains
bright.
The purchase of external and plasma crops in
SGM reached 112,800 mt in 2021 which was
higher by 64% compared to 68,900 mt last year.
The total external and plasma crop at the SGM
mill made up 29% of the total crops processed
from 22% last year. With the throughput at the
mill reaching 393,300 mt (2020: 312,000 mt),
the mill utilization rate increased to 182% from
144% last year producing 94,500 mt of CPO,
28% more than 2020 of 73,900 mt. OER for the
mill averaged 24.0% for the year compared to
23.7% last year and continue to outperform the
rest of the mills in the Group.
The SGM biogas plant generated 19% more
electricity in 2021 at over 8,100 MWh (2020:
6,800 MWh) worth $399,900 (2020: $373,700).
Negotiation has started with the state
authorities to extend the contract to sell
electricity, which is due to expire before the 2Q
of 2022.
Harvesting of tall palms
EFB application to fertilise soil
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Annual Report 2021 | Anglo-Eastern Plantations Plc 19
As international borders remained mostly closed to non-essential travelling during the year, the Malaysian based
agronomist could not make monthly field visits to underperforming estates in Indonesia to provide advice on optimizing
field disciplines and improving crop yields.
Overall bought-in crops for Indonesian operations including plasma were 25% higher at 1.14 million mt for the year
2021 (2020: 913,200 mt). The average OER for our mills was marginally lower in 2021 at 20.5% in 2021 (2020: 20.6%).
Malaysia
The La Nina weather pattern towards the end of 2020 caused massive flooding and landslides which affected the
evacuation of crops for the 1Q 2021 as internal roads and bridges badly damaged were repaired. FFB production in
2021 was 35% lower at 12,000 mt, compared to 18,600 mt in 2020. The plantation continued to experience a
substantial shortage of workers which hampered not only field maintenance and application of fertilisers but harvesting
resulting in crop losses. Due to international border closure throughout the year the attrition of workers for the past two
years since the pandemic started could not be replaced. In addition, the under application of fertilisers at 10% of the
recommended dosage resulted in undernourished plants and poor yield. To compound the problem further, supplier
of fertilisers could not deliver for most part of the year as their manufacturing activities were forced to shut down during
the lockdown. Although there was a partial lifting of the freeze on recruitment of foreign workers in late 2021, it will still
take some time before any replacement workers can be found. In December 2021, parts of the plantation were closed
for three weeks as seven of its foreign workers were infected with the Coronavirus. The palms, with an average age
of 24 years, faced declining yield and stems per hectare steadily declined due to damage by wild elephants. The
Malaysian plantation in 2021 generated a profit before tax after BA movement of $0.4 million compared to a marginal
loss in 2020. The plantation obtained its mandatory Malaysian Sustainable Palm Oil (“MSPO”) certification in January
2021.
The financial performance of the various regions is reported in note 7 on segmental information.
Commodity Prices
The CPO ex-Rotterdam price started the year at $1,014/mt (2020: $878/mt) and trended upwards for most part of the
year. The price was lowest at the beginning of March 2021 at $900/mt and peaked in November 2021 at $1,435/mt
before ending the year at $1,305/mt (2020: $1,014/mt), averaging $1,211/mt for the year, 67% higher than last year
(2020: $723/mt).
While the FFB production in Indonesia as a country was marginally down from last year, the Malaysian’s palm oil yields
as a country dropped to nearly 40-year lows in 2021 as the plantation industry struggled with a shortage of workers
and devastating floods in several parts of the country. It was reported that the Food and Agriculture Organisation’s
global edible oil index was up 91% and is expected to climb further as economies reopen following the Covid-19
lockdowns, boosting food and fuel consumption of edible oils. Besides labour shortages, many producers at the same
time have been battling a range of impediments including heatwaves and vermin infestation that is driving collective
stocks of world’s most consumed edible oils - palm, soybean, canola and sunflower seed to their lowest levels in a
decade. The pressure on stocks led to higher consumer prices. In the last one year, India has revised downwards its
taxes on CPO, palm products and other vegetable oils several times to tame domestic inflation caused by rising prices
of edible oils.
The current market prices have been shaped by higher anticipated demand, slower growth in palm oil production and
market dynamics of vegetable oils. Ukraine and Russia are major producers of sunflower oil and jointly export up to
70% of the worldwide production. The disruption in harvesting and planting caused by the current conflict between
Ukraine and Russia would likely result in a higher demand for CPO and would sustain the current high prices.
The export and movement in CPO prices are also influenced by Indonesian government policies. This is covered
extensively in the Outlook section of the Strategic Report on page 50.
Over a period of ten years, CPO price has touched a monthly average high of $1,395/mt in November 2021 and a
monthly average low of $472/mt in November 2018. The monthly average price over the ten years is about $779/mt.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 20
CPO CIF Rotterdam
Rubber prices averaged $1,637/mt for 2021 (2020: $1,356/mt). Our small area of 262 ha of mature rubber contributed
a revenue of $0.7 million in 2021 (2020: $0.6 million). Rubber continues to struggle with low prices. Lower tappable
trees due to wind damage and dry bark were the main cause for lower rubber production.
Corporate Development
In 2021, the Group opened up new land and planted 1,701 ha (2020: 2,190 ha) of oil palm mainly in Kalimantan and
South Sumatera, boosting planted area including the smallholder cooperative scheme, known as Plasma, by 2% to
75,204 ha (2020: 73,600 ha). Another 900 ha was replanted in Bengkulu. In 2022, the Group plans to plant 2,500 ha
of oil palm which includes replanting of 1,200 ha in Bengkulu. Opening of new land for planting can be cumbersome
and requires written approval from local authorities, submission of environment impact assessments and meetings
with local communities.
Old quarters for workers throughout the plantations will be upgraded in 2022. New quarters together with recreation
facilities will be added to accommodate more workers and families at the cost of $2.3 million. A further $420,000 will
be spent to connect the plantations in Bina Pitri, MPM and SGM to the national electric grids as part of the Group’s
effort to reduce carbon emissions. This is expected to reduce fossil fuel consumed by the generators in the remote
plantations.
The construction of the seventh mill in HPP, North Sumatera has been delayed by frequent lockdowns caused by the
pandemic, affecting the deployment of manpower at the construction site, as well as fabrication of mechanical works,
interruption of supply chain and the transport of building materials. During the year, the concrete pilling has completed
together with the fabrication of a loading ramp, clarification tanks and conveyors. Cost of construction has spiralled to
about $22 million as the mill, located on peat area, has to be built according to strict specifications laid out by
environmental laws in Indonesia. The conventional anaerobic lagoon constructed from earth is not permitted on peat
land due to possible seepage of effluent and contamination of ground water. A purpose-built treatment plant is required
to treat the effluent from the mill to a quality specified for discharge to the water course. The effluent plant also includes
two 4,000 mt anaerobic digesters and two 1,200 mt aeration tanks. A decanter for solid removal and oil recovery was
also added to reduce the number of tanks required which in turn reduced the high cost of concrete piles for its
foundation. Steel, which constituted a major part of the building and equipment appreciated by 15% during the
construction period putting further pressure on project costs. The project is earmarked for completion by the 3Q of
2022.
Our feasibility study concluded that it is more profitable to build a mill in KAP in Kalimantan to support its operation
due to high logistic costs. KAP is currently transporting the FFB some 600km to SGM mill or, when this becomes too
0
200
400
600
800
1,000
1,200
1,400
1,600
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
$/mt
source IEG Vu
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 21
arduous during the monsoon season, the fruits are sold locally to third parties. The Group plans to build a 45 mt/hr mill
with two storage tanks of 4,000 mt each with minimum spare machineries at an estimated cost of $13 million. Due to
the hilly terrain and steep ravines, the choice for a mill site is limited. Nevertheless a few possible sites were identified
and geological survey and onsite inspections are in progress. Construction is expected to start next year as soon as
formal approval from the authorities is received.
To improve transport of FFB in our plantations and help deliver the FFB to the mills, the Group has budgeted to buy
more dump trucks costing more than $1 million in 2022. This is necessary amidst rising logistic cost as independent
transport companies especially in Kalimantan cannot supply adequate trucks to transport our harvest as many trucks
are diverted to carry coal which pay better transport rates. In addition, the Group is expected to spend $1.2 million to
improve the field roads and connectivity between estates and mills by building new bridges.
The two vertical sterilisers/pressure vessels in Bina Pitri mill are 12 years old and are scheduled to be replaced, for
safety reasons, at a cost of $370,000 in 2022.
The fabrication and installation of an additional 45,000 kg/hour steam boiler in SGM mill costing $980,000 is expected
to be completed in 2022 after a long delay caused by the pandemic. A second boiler is required to back-up the mill
operation and to avoid any disruption as it enters its sixth year of operation. The mill is projected to process up to
380,000 mt of FFB in 2022.
Upgrading works at SGM and Sumindo mills which started three years ago involving the addition of boilers, steam
turbines, screw press, digester, CPO and kernel storages, clarification station, water and effluent treatment plants and
sterilizer at a combined cost of $4.5 million are expected to be completed this year increasing their milling capacity to
60 mt/hr from 45 mt/hr.
The Group plans to install an oil recovery system for its MPM mill at a cost of $1 million. This system extracts oil from
its raw effluent as well as reducing the solid content of the effluent. The system, when fully operational is reportedly
able to improve the OER by 0.2% to 0.3%. As the mill processes up to 420,000 mt of FFB annually, it could potentially
recover up to 1,000 mt of CPO per year. Reducing the solids in the raw effluent will result in less silting in the ponds
after extraction of biogas in the anaerobic lagoon.
Corporate Social Responsibility
Corporate Social Responsibility (“CSR”) is an integral part of corporate self-regulation incorporated into our business
model. Law 40/2007 of the Indonesian Limited Liability Companies Article 1 Paragraph 3 defines corporate social and
environmental responsibility as the company’s commitment to participate in sustainable economic development in
order to enhance the quality of life and environment to benefit the company, local communities and the general public.
Our Group embraces this responsibility
for the impact of its activities on the
environment, consumers, employees,
communities, stakeholders and all other
members of the public sphere. In
engaging the social dimension of CSR,
the Group’s business has taken
cognizance of the contribution and
further enrichment of its employees while
continuing to make contributions to
improve the well-being of the
surrounding community.
The Group sustainability policy and
commitment to no deforestation and
development on peat land, no open
burning, no exploitation, no forced or
child labour and other best management
practices can be downloaded from the
Testing for river water pollution
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 22
website under Corporate Governance.
The Group also released a statement on
the UK Modern Slavery Act 2015 which
was published on the website under the
same section.
The majority of employees and their
dependents in the plantations and mills
are housed in self-contained
communities built by the Group. The
employees and their dependents are
provided with free housing, clean water
and electricity. The Group also builds,
provides and repairs places of worship
for workers of different religious faiths as
well as schools and sports facilities in
these communities. Over the years, the
Group has built a total of seventy-seven mosques and nineteen churches across its estates. During the fasting month,
the management team frequently broke fast with the employees from the estates and mills as well as with surrounding
villagers. The Group has also sponsored and donated cows for sacrifice to celebrate religious festivals. The Group
spent $221,300 (2020: $248,100) in 2021 to maintain these amenities and to support the communal activities.
The Group provides free education for all employees’ children in the local plantations and communities where they
work. The access to education and the spread of knowledge to hundreds of children across remote locations provide
a chance to overcome poverty, whom otherwise may be deprived and without prospect for the future. In addition, the
Group provides computers and funding to construct educational facilities including laboratories and libraries. The
salaries of teachers in the estates and the cost of buying and running the school buses to transport employees’ children
are provided by the Group. Over the years a total of thirty-nine schools, which comprised of twenty-two pre-schools,
eleven primary schools, five secondary schools and one high school were built with a combined current enrolment of
over 4,369 students. It currently employs one hundred and sixty-three teachers on the estates. The Group operated
forty-one vehicles and spent some $793,100 (2020: $691,000) in running the schools and operating the buses in 2021.
As part of the Group’s contribution to education, it provides scholarships to qualified students from the communities
as well as our employees’ children to pursue tertiary education. One hundred and twenty-nine children of our
employees were sponsored in 2021 at a cost of $160,350 (2020: $139,600) since its introduction in 1999, to study in
various universities in Indonesia. The popular courses range from Engineering, Education, Economics to Agriculture.
Sixty-two of these children have successfully graduated from the universities with a number of them now working for
the Group.
The Group continues to provide free
comprehensive health care for all its
workers as we believe that every
employee and their dependents should
have easy access to health services.
We have established twenty-three
clinics operated by qualified doctors,
nurses and hospital assistants in the
estates. The Group upgraded two of its
clinics in North Sumatera and Bengkulu
to meet the minimum standard required
by the government under the country’s
Health and Social Security Agency. The
upgraded clinics also provide health
care services to the surrounding
community without the need to travel to
Waste water treatment plant
Vaccination at mill
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Annual Report 2021 | Anglo-Eastern Plantations Plc 23
faraway cities for medical treatment. With
the pandemic on our doorsteps,
management have equipped all the
clinics, particularly those in remote
locations, with personal protection
equipment, ventilators, oxygen tanks and
oximeters. The Group also operates 16
ambulances to support emergency
transportation needs within the estates,
mills and surrounding villages. In
addition, the Group organised fogging to
prevent the spread of dengue
mosquitoes.
The world has been ravaged by the
uncertainty brought about by the Covid-
19 pandemic since the end of 2019. To
prevent the spread of its infection within
our operations, the Group has put into place stringent precautionary measures to protect all our personnel. Mass
testing was, and continues to be, conducted at the Indonesian operations to check for infection. A Standard Operating
Procedure was also established to dictate the day-to-day operations at the office which includes temperature checks,
social distancing measures and alternate working day arrangements. A specialist consultant was engaged to review
safety measures in the office and plantations and put in place additional protocols to educate workers to combat the
spread of the virus. Movements within the Group’s estates have been tightly restricted and, unless in cases of
emergency, access has been denied for external visitors. All our estates have appropriate plans to isolate and
quarantine individuals, even whole divisions or estates, including stopping all field work if situations require it. Remote
working arrangements are in place for all offices, and travel by the Group’s staff has been reduced to essential travel
only. Due to the large workforce employed in the plantations, routine retesting with rapid virus test-kits is conducted
by qualified nurses for all the office and plantation workers to ensure early detection leading to isolation. While the
Indonesian government continues to prioritise vaccine distribution to high risks populated regions, the management
continues to engage and work with relevant authorities as part of its moral and ethical responsibility to help speed up
vaccination rates for its employees and their families especially in remote locations where accessibility is a problem
and vaccination rates are low.
The Group spent a total of $987,000 (2020: $98,600) in 2021 to help surrounding communities, clinics, and public
hospitals with donations in the form of staple food, oxygen tubes, essential medicines, masks, vitamins and other items
related to Covid-19.
The Group is particularly concerned for employees in one remote location in South Sumatera where less than 20% of
its employees had completed the vaccination programme. The Group briefly participated in the government vaccine
“gotong royong” a public-private
partnership whereby private companies
could purchase the vaccine for its
employees. This programme was
however cancelled after strong objections
were raised by people over the fairness of
this practice and complaints of diverting
the vaccines to the privileged over the
poor who has little access. The Group
maintains a register of all employees who
had been vaccinated and also identified
high risk employees with comorbidities for
counselling. Given the higher risk of
contracting the Coronavirus for the
Disinfection of estate church premises
Donating oxygen tanks to hospitals
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unvaccinated employees, the Group
has restricted all business related
travel for the unvaccinated.
In remote and isolated locations
where piped water is not available,
the Group drilled tube wells to provide
clean water. Related healthcare
expenses for full and part-time field
workers including monthly
contributions to Health and Social
Security Agency in 2021 were $1.6
million (2020: $1.5 million).
A strong commitment to CSR has a
positive impact on employees’
attitudes and boosts employee
recruitment. The Group realises that
employees are valuable assets in order to run an efficient, effective, profitable and sustainable business and
operations. Selected employees are given the opportunity to attend seminars and external training to enhance their
working skills and capability. The Group constantly recruits potential field employees who are sent to the Group’s
central training facilities in Blankahan, set up in 2014, to undergo a rigorous twelve-month training programme which
includes theory and practical fieldwork. A total of five hundred and eleven employees have participated in the
programme since its inception in 1993 with 35% of participants still working for the Group. Over the years, one
employee has successfully been promoted to General Manager level with another twenty-four being employed in
various senior positions in the head office, plantations and mills.
Separately, the Group also sends their security personnel regularly to training facilities organised by the Police to be
certified.
The Group also recognises its obligations to the wider farming communities in which it operates. The Indonesian
authorities have established that not less than 20% of the newly planted areas acquired from 2007 onwards are to be
reserved for the benefit of the smallholder cooperative scheme, known as Plasma, and the Group is integrating such
smallholder developments alongside its estates. The Plasma development has commenced in stages for its estates in
Sumatera and Kalimantan. Out of the
8,382 ha plasma commitment, the
Group has planted oil palm in 4,500
ha. In 2021 the Group received 43,300
mt of FFB from Plasma schemes
compared to 37,700 mt the previous
year. Total revenue generated by
Plasma cooperatives was $6.5 million
in 2021 against $3.8 million in 2020.
In order to aid the development of
Plasma schemes, the Group provided
corporate guarantees of over $16
million through its subsidiaries to local
banks to cover loans raised by the
cooperatives. The Group also assisted
the cooperatives to obtain the proper
Donation to orphanage
Upgrade of public roads
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Annual Report 2021 | Anglo-Eastern Plantations Plc 25
land rights certification from the local
land office, in which 1,431 ha were
approved and certified until 2021.
The Group supported the Kas Desa
smallholder village development
programme to supplement the
livelihood of the villages. The Group
has to-date financed, developed and
managed twenty-three smallholder
village schemes of oil palm across
four companies. In 2021, two of
these smallholders’ village schemes
decided to self-manage and exited
from the programme.
In addition, the Group also develops
infrastructure such as the
construction and repair of bridges
and maintained over 282 km of
external roads in 2021 at a cost of
$3.7 million (2020: $5.0 million). The Group also provided initial aid and seed capital to villagers such as fruit seedlings,
fish fry, cattle and ducks to start community sustainable programs.
The Group started a vegetable farm in a one-hectare site in North Sumatera in 2018 where it planted various organic
vegetables. The produce was sold to employees at subsidized prices to reduce their cost of living as well as to promote
heathy living. It also donated some of the produce to local charitable homes.
The Group leased eight hectares of land just outside Kuala Lumpur, Malaysia and started to clear the land in 2020 to
build greenhouses for organic farming. It aims to produce organic vegetables and fruits in an environmentally
sustainable manner and make them available to consumers at affordable prices as part of its corporate social
responsibility. Substantial part of the produce is donated to orphanages and retirement homes.
Indonesian Sustainable Palm Oil (“ISPO”)
The ISPO certification is legally mandatory for all plantations in Indonesia. In March 2012, ISPO, which is fundamentally
aligned to Roundtable on Sustainable Palm Oil (“RSPO”) principles, has become the mandatory standard for
Indonesian planters. In comparison, RSPO has the most comprehensive social impact assessment requirements and
the strongest measures for biodiversity protection. Even though the Presidential Decree 8/2018 that imposed a
moratorium on forest clearance had expired in 2021, we continue to practise strict protection of primary forest areas
as outlined in our Sustainability policy.
A Steering Committee was established to work out a roadmap to support the ISPO implementation at mills and estates.
Workshops and training sessions on occupational safety and healthcare were carried out to inculcate a safety culture
in workplaces at all the estates and mills. The Group compiles and reviews statistics on work related accidents in its
operations. Any incident resulting in fatality or serious injury will be rigorously investigated to identify the cause so that
corrective action can be implemented to prevent future incident. In 2021 the Ministry of Labour awarded six of our
operating companies the Zero Accident Awards in North Sumatera in recognition of the companies’ effort to reduce
accidents at workplaces. The Group continued to upgrade its agricultural chemical stores and diesel fuel storage tanks
in various plantations and mills to meet safety and environmental standards.
Every estate under ISPO is required to have a fire team with each personnel fully trained and equipped with certificate
of competence issued by the fire departments. Our Group conducts a fire drill at least once a year. Watch towers are
constructed in every estate to monitor fire outbreaks. Standard operating procedures were refined and documented
based on sustainable oil palm best practices. The Group also conducts internal audits using an audit checklist adopted
from the above practices to determine the level of compliance.
Build river crossing
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The Group has worked closely with appointed certification consultants in the implementation of ISPO standard. To-
date twelve companies have been ISPO certified. The certification audits for the remaining four companies have
started. The second stage of the certification process however cannot proceed until the companies obtain their land
titles or Hak Guna Usaha (“HGU”). ISPO certification provides third party verification and confirmation that the
companies are operating according to national and international standards. During the year, ISPO certification in two
companies were renewed after independent audits were carried. The Group targets full ISPO compliance by 2022.
The Group intends to embark on RSPO certification once all the companies in the Group are ISPO compliant. The
Group has engaged a third-party consultant to study the feasibility, obstacles, gaps and costs towards a RSPO
compliance. Once completed the detailed report will be uploaded on our website.
At the same time the Malaysian plantation has obtained its MSPO certification in January 2021.
Environmental, Social and Governance (“ESG”) Practices
AEP believes that the responsible
stewardship of our environment is
critical in benefiting our consumers,
employees, shareholders and
society in general, thus maintaining
the industry’s long-term prospects.
The Group has a dedicated
sustainability manager based in
Medan, Indonesia within an
Environmental Health and Safety
(“EHS”) and sustainability
department overseen by our
Indonesian President Director. On
the ground, the sustainability team is
assisted by a team of staff in each of
our estates. A group sustainability
policy was published in 2019 to
underline our commitment to
sustainable practices within our estates. This policy covers responsible development, environmental protection,
conservation of biodiversity, workers’ rights and safety, emissions and business ethics, among others. The group also
participates in the Sustainable Palm Oil Transparency Toolkit (“SPOTT”) assessment by the Zoological Society of
London (“ZSL”) that uses publicly available information to annually assess palm oil producers on the transparency of
their commitments to environmental, social and governmental best practice.
The palm oil industry has
continuously received close scrutiny
in the media due to concerns on
global warming and rainforest
destruction. Realising this, the Group
has adopted a zero deforestation,
zero peat planting and zero burning
policy throughout our group. When it
comes to replanting, felled palm
trunks are chipped, shredded and left
to decompose on the site. This
mitigates the release of greenhouse
gases commonly associated with
open burning through the traditional
land-clearing method of slash-and-
burn. Chipping and shredding palm
trunks also enriches soil organic
Wildlife in and surrounding our estates
Wildlife in and surrounding our estates
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Annual Report 2021 | Anglo-Eastern Plantations Plc 27
matter and recycles nutrients back
onto the soil. Where land is sloping,
terraces are built which helps to
prevent landslides and soil erosion,
conserve the water and nutrients
and provide better accessibility for
operations. Conservation pits and
sumps are also constructed to
harvest and contain rainwater.
Legume cover crops are planted to
minimise soil erosion, preserve the
soil moisture and improve soil
chemical and physical properties,
thus reducing the use of chemical
fertilisers. In mature areas, fronds
and EFB are neatly stacked on the
inter-rows to allow for the slow
release of organic nutrients while
minimising soil erosion. Estates with
sandy areas use soft grass, Nephrolepis biserrata ferns and cut fronds to cover bare ground to increase soil moisture
and improve organic matter contents.
The effluents discharged from our mills are fully treated in anaerobic lagoons and aerobic tanks to reduce its biological
oxygen demand (“BOD”). The final discharge is applied to the estate’s land as fertilisers and the BOD is tested regularly
to ensure that it is below the legal limit for land application in Indonesia. The Group is working towards a zero-effluent
policy whereby no by-products from the production of CPO are discharged into rivers.
The Group’s four biogas plants further enhance the treatment of effluents in the mills and at the same time mitigate
greenhouse emissions. The trapped biogas is used to generate and supply power to its biomass plant, as well as to
the national grid to reduce dependency on fossil fuels. Similar undertakings for the Group’s mills are planned and shall
be implemented in stages. The Group intends to equip all our mills with biogas facilities and sell the surplus power
generated from them.
The Group is committed to
implementing good agricultural
practices as spelt out in its standard
operating procedures for all
activities. An Integrated Pest
Management system has been
adopted to control the population of
damaging pests and to improve
biological balance while reducing
dependency on chemical pesticides.
Barn owls, which are natural
predators, have been introduced to
control the rat population, replacing
the use of rat baits. Beneficial plants
such as Turnera subulata, Cassia
cobanensis and Antigonon leptopus
were planted to attract natural
predators for biological control of
bagworms and leaf-eating
caterpillars.
Staff housing/community cleaning
Health and CPR training
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We are committed to minimise the usage of toxic pesticides and herbicides and will not hesitate to phase them out
once suitable substitutes are available. Our sprayers are regularly trained in the safety and proper spraying techniques
by using judicious dosages. The chemicals are kept in designated storage and examined at regular intervals.
Employees who handle the use of chemicals are provided with on-site washing facilities and undergo medical
examination routinely. The Group enforces standard occupational safety measures like the use of protective suits and
equipment when mixing, loading and applying pesticides which is mandatory by the Manpower and Transmigration
Ministerial Decree No. 08/2010. Managers and employees risk being penalized and disciplined as safety standards
compliance is audited from time to time. ISPO certified companies are also prohibited from using 36 banned active
ingredients used in pesticides which can cause various health issues in humans and the environment. Highly toxic
pesticides such as Paraquat have been completely eliminated in our practice. Pesticides that fall under the WHO Class
1A and 1B classification, as well as those that fall under the Stockholm and Rotterdam Conventions are used only
under exceptional circumstances and under strict supervision. In the meantime, different cocktails of safer pesticides
are being evaluated as alternatives. The Group has in place a standard operating procedure that requires the
management to be informed of instances of pesticide poisoning among its pesticide applicators.
In order to minimise accidents at workplaces, regular training and refresher courses are held to instill the importance
of safe working practices. Warnings and reminders are displayed at the mills and estates to remind the workers on
their safety. Warning signs are placed at strategic locations such as speed limits in housing estates and warning
against crossing Irish bridges when river water is at a dangerous level.
The Group continues to comply and preserve High Conservative Value (“HCV”) areas recognised by the Department
of Forestry. Every development has gone through the proper environmental impact analysis. Environmental impact
assessment studies, environment management and monitoring efforts are retained under the Indonesia Omnibus Law
passed in 2020, companies are however no longer required to obtain environmental license. All HCV areas were
mapped with boundaries clearly marked by independent surveyors to ensure that the Group does not plant in these
sensitive areas. The Group patrols these protected areas to ensure no encroachment and maintain regular monitoring
and management plans to preserve the flora and fauna of these sensitive areas. The Group has identified about 7,831
ha as riparian reserves and another 5,105 ha as areas of HCV within its land. Natural vegetation on uncultivable lands
such as deep peat, very steep areas and riparian zones along watercourses and mangroves are spared from planting
in order to preserve biodiversity and wildlife corridors as well as to check erosion. Peatland is considered to be one of
the most efficient carbon sinks and any burning or drying will release the sequestered carbon dioxide into the air
contributing to global warming. The Group has a strict no-peat policy and no longer plant in peat areas since 2019.
Degradation of the mangroves on the other hand causes coastal erosion and harm biodiversity and economic losses
for communities that depend on them for a living. Progress has been made in recent years to step up environmental
protection in Indonesia, though implementation and monitoring is still weak.
In Indonesia where drought occurs regularly, an emergency response team is set up in every estate armed with the
proper equipment and gear to put out fire and prevent them from spreading during the dry months. Regular training on
fire-fighting techniques and safety is provided by the fire departments. Our estates have also invested in modern
technology by utilising drones to pinpoint areas of fire outbreak whenever they are detected by the watchtowers. These
drones are particularly useful in remote areas where accessibility is restricted. According to Indonesian Law No.
41/1999 on forestry, a deliberate act of forest burning could lead to 15 years imprisonment and a fine of up to Rp5
billion or about $350,000, while negligence act that leads to a forest fire is punishable by a 5 year imprisonment and a
fine of up to Rp1.5 billion or $105,000 for environmental crime. The government is stepping up its enforcement.
All sacred and customary lands are set aside and also preserved by the Group out of respect for the local tribes and
customs to pray and conduct their ritual ceremonies. Some of these locations are posted on the company’s websites.
The six mills in the Group are operating in compliance with criteria set by the Program for Pollution Control Evaluation
and Rating (“PROPER”) overseen by the Indonesian Department of Environment. Many of the criteria set by PROPER
are also part of the ISPO requirement. Four of the mills are officially graded Blue and rated to adhere to the criteria set
for the management of waste and compliance to environmental conservation over water resources, land development,
air and sea pollution and dangerous and toxic waste treatment which impact the environment. The certification of
another mill is currently under the review by the new head of the Indonesian Environmental department. Although no
official grading is required for the remaining one mill, it is in full compliance of the PROPER criteria. By 2022 the six
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Annual Report 2021 | Anglo-Eastern Plantations Plc 29
mills will be certified to ISO 14001:2015 (Environmental Management System) standard. Implementing an
environmental management system can provide the mills, the ability to manage environmental performance through
more efficient use of resources and will also increase the confidence of internal and external parties that the
environmental impacts of its activities have been measured, managed and continuously improved.
The International Sustainability and Carbon Certification (“ISCC”) is issued by ISCC System GmbH, a global
certification body based in Cologne, Germany. The criteria used in the certification process are:
• Implement social and ecological sustainability criteria
• Monitor deforestation-free supply chains
• Avoid conversion of biodiverse grassland
• Calculate and reduce greenhouse gas (“GHG”) emissions
• Establish traceability in global supply chains
The estates and mill in Tasik Raja were ISCC certified in 2021 and will be re-certified in 2022. A certification identifies
a company as a responsible player in the industry that has taken efforts to produce sustainable CPO.
We have continued to increase the traceability of our external FFB processed in our Group’s mills and have finally
achieved 100% traceability to farm. The Group maintains a complete database of every one of our smallholders within
our supply chain and know their precise locations, with each arrival to the Group’s mills recorded and its origin verified.
By keeping a close relationship with our suppliers, we are able to not only support them with technical and management
expertise, but also to inculcate our sustainability policies in their practices.
More details may be obtained from the Company’s website under our Sustainability dashboard which covers the
Environment, CSR, Workers’ rights and safety, Corporate Governance and Sustainability certification.
Management for Climate Risk
Global concerns about sustainability are steadily rising. Many countries are working to prevent climate change with
various targets set to minimise the effects of global warming. A report by the World Resources Institute (“WRI”)
calculates that agriculture contributes more than 11% of global greenhouse gas (“GHG”) emissions with most
agricultural emissions coming from soil erosion and land clearance.
Indonesia, where AEP predominately operates sits between the Pacific and Indian oceans, which exposes it to the
naturally occurring El Nino and La Nina climate pattern, globally the most significant cause of extreme weather. Climate
change is expected to increase the frequency of more severe weather ranging from frequent drought and severe floods
in the coming years.
In this regard the Group has expanded its climate-related disclosures and is taking initial steps towards aligning with
the recommendations of the Task Force on Climate-related Financial Disclosure (“TCFD”), for which a disclosure table
has been added on page 39.
Identifying and assessing risk
Executive staff and Directors are responsible for implementation of control procedures and for identifying and
managing business risks. The Executive Committee meets monthly to discuss the operation of the business as well
as all strategic risks, and is chaired by the Senior General Manager from Malaysia who reports to the Board of
Directors. The EHS and Sustainability Department reports to the Executive Committee on material local risks and
periodically updates on the monitoring of these risks, identified by representatives of the Department based at each of
our estates. Any plans, objectives and targets related to climate risk are discussed annually, as well as when the need
arises.
In 2021 we consulted with our external sustainability Partners, Avieco, to prioritise Group-level climate-related risks
and opportunities identified previously, as detailed in the table below. During this process, senior managers and
Directors from across the business were surveyed to understand the relative materiality of a range of physical and
transition risks. Materiality was defined by calculating a risk score based on the relative frequency or likelihood of a
risk materialising in a 12-month period, and the potential magnitude of impact based on change in operating profit. A
workshop with senior managers and Directors was facilitated by Avieco to determine how the business expects these
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Annual Report 2021 | Anglo-Eastern Plantations Plc 30
risks to change over time, with the relevant risk mitigation/adaptation measures identified. Similar assessment was
not repeated for the year 2021 as we do not believe the risks to be materially different from what was assessed
previously.
Influence of climate-related risks and opportunities on strategy
• Products
The adverse perception of palm oil as an environmentally unfriendly and non-renewable source, particularly in
EU, continues to feature in recent years, touching on issues including deforestation, emission of greenhouse
gases, planting on peatland and land rights. AEP is committed to ensuring that our products are produced in a
sustainable way. This is realised by not clearing forests (zero deforestation), not planting on peat (zero peat) going
forward, respecting and protecting human rights, and committing towards the traceability of our products.
• Supply chain
Severe adverse weather conditions, such as tropical storms, can result in extended business interruption through
disruption to our supply chain and to local transportation services. For example, FFB produced in KAP are sold to
local millers (rather than primary customers more than 600km away) during the wet season. This is because
transport time more than doubles as lorries are frequently stuck in mud as untarred public roads are easily
damaged by incessant rain and floods. The Group has completed its site selection to build the KAP mill and has
prepared to apply for the relevant approvals and permits required to build the mill in 2022.
• Operations
To progressively reduce the greenhouse gas emissions per metric ton of CPO produced in the next few years, the
Group plans to construct biogas plants at our remaining palm oil mills, on top of our four existing biogas plants.
Our plants will be used to trap the biogas from the anaerobic treatment of the palm oil mill effluent and generate
electrical power.
In addition, the Group consistently practices good agricultural practices such as zero burning, integrated pest
management, soil and water conservation and recycling of biomass. When it comes to replanting, the old palms felled
are chipped and shredded and left to decompose at the site. This mitigates the greenhouse gas emissions commonly
associated with open burning when land is cleared through the traditional method of slash-and-burn. It also enriches
the organic matter in the soil and recycles nutrients back onto the soil.
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Material Climate-Related Risks and Opportunities For AEP
Type
Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk /opportunity
Management approach
Changes from
2020 to 2021
Key = Opportunity / Risk
Policy &
Legal
Compliance
with changing
regulations
Import tariffs and taxes and
other import restrictions
imposed by importing countries
will affect the demand for CPO
and its derivative products, and
can encourage substitution by
other vegetable oils. The ISPO
certification, which requires
producers to mitigate their
environmental impacts, is
legally mandatory for all
plantations in Indonesia and
therefore noncompliance
presents a financial risk through
fines. In addition, we expect
additional climate-related
disclosure, aligned with the
recommendations of the TCFD,
to present both a risk and an
opportunity to the business by
strengthening resilience to
ongoing changes in regulatory
expectations.
All of our Indonesian
plantations are currently
certified under ISPO,
except those for which we
are awaiting land titles. Our
Malaysian plantation has
also received the Malaysian
Sustainable Palm Oil
certification. Our mill in Alno
has received The
International Sustainability
and Carbon Certification,
and we are in the process of
gaining ISO 14001
certification to improve our
PROPER rating. Through
this report we have also
begun the process of
aligning with the TCFD
recommendations.
No significant
change.
Market &
Reputation
Changes in
buyer
preferences /
Difficulty
accessing
capital
Negative perceptions about palm
oil and its links to deforestation
can affect market
access/demand and possibly
lead to changes in international
legislation or regulations. Many
large buyers have targets to
source a certain % of palm oil
from RSPO certified producers.
The loss of a major customer
through a lack of RSPO
certification may impact
profitability.
Access to capital, through
banks and investors, is also
increasingly tied to the ability to
evidence the sustainability of
palm oil products, with several
large banks and investors
RSPO members.
As tenders are performed
on a weekly basis we do not
find ourselves overly reliant
on a single customer. We
ensure transparency in our
palm oil production
practices through annual
disclosure to Sustainability
Policy Transparency Toolkit
(“SPOTT”) and certification
as detailed above.
We communicate regularly
with buyers and capital
providers, to understand
their changing
expectations, and are
investigating the value of
RSPO to the business. Our
financial position also
currently negates the need
for financing through bank
loans.
The Group has
commissioned
an external
consultant to
conduct an
RSPO gap
analysis report.
The objectives
are to
determine the
Group’s
eligibility for
certification
and costs to
close the gap.
RSPO
certification
may increase
opportunities
and reduce
reputation and
demand risks.
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Annual Report 2021 | Anglo-Eastern Plantations Plc 32
Type
Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk /opportunity
Management approach
Changes from
2020 to 2021
Products &
Services
Development
of new
products
Palm oil can be used to
produce a range of products,
including low-carbon
alternative fuels and
materials. The development
of new products can provide
both reputational and
financial opportunities,
despite in many instances
being expensive to produce.
For example, increasing
demand for biodiesel in
markets such as China offers
additional sources of
revenue. However, policies in
the EU to reduce and phase
out the use of palm oil in
biodiesel by 2030 means that
this opportunity may be
limited.
One of our mills possesses
a biomass plant which
converts “empty fruit
bunches” into dried long
fibres to be exported to
China for use in mattresses
and products such as
furniture. We are also
exploring commercial
avenues for bottled
methane gas (“Bio-CNG”),
which we can also use as a
source of renewable fuel in
boilers, or as a replacement
for diesel fuel for our FFB
carrying trucks within the
estates. This can provide a
reputational benefit,
increased operational
resilience, and new
revenue streams.
No significant
change.
Energy
Source
Use of lower
emission
sources of
energy
Palm oil mill effluent
(“POME”) is used as a
feedstock in anaerobic
digesters to produce biogas
which contains about 60%
methane. The biogas is
purified and used as a fuel in
biogas engines to generate
electrical power which
reduces our reliance on
diesel.
Four of our mills are
equipped with biogas plants
to capture biogas and
generate electricity for sale
to the state authorities. This
also reduces the need to
purchase diesel for our
estates, as they are instead
supplied power by the grid,
therefore reducing our
emissions.
The Group is
pursuing a
Clean
Development
Mechanism
(“CDM”)
project at two
mills which
have no biogas
plant. Awaiting
Indonesia
regulation on
carbon credit
trading. These
projects are
expected to
provide
significant new
opportunities
for the Group.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 33
Type
Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk /opportunity
Management approach
Changes
from 2020 to
2021
Physical
Heavy rainfall
& flooding
Excessive rainfall generally
leads to poor pollination of
palms and reduces the
effectiveness of fertilisers. High
levels of rainfall can also disrupt
estate operations and result in
harvesting delays with loss of
FFB or deterioration in fruit
quality. Where leading to a
reduction in revenues,
insurance cover may not be
available or may be
disproportionately expensive.
Periods of more intense
precipitation can also benefit
AEP, by enabling the
conservation of more water to
mediate dry periods.
Where appropriate,
bunding is built around
flood prone areas and
canals/drainage/retention
ponds and water gates are
constructed and adapted to
evacuate surplus water.
Riparian reserves are also
protected to mitigate flood
risks. Where the land is
undulating, we build
terraces for planting which
helps to prevent landslides,
ensures that water runs off
into groundwater stores,
conserves nutrients
effectively, and provides
better accessibility for
operations. Where
practical, natural disasters
are also covered by
insurance policies.
Moderate La
Nina brought
more rain to
most estates.
However no
major
flooding was
reported, and
the risks
remained
similar to
those
previously
assessed.
Droughts
Dry periods affect palm oil
yields in the short and medium
term through moisture stress
and can result in wildfires that
may damage the palms.
Drought events are localised to
our Kalimantan and South
Sumatera estates, where long
droughts (>3 months) can
affect soil quality and lead to a
lower yield the following year
(~10-15% decrease at most).
Lower rainfall provides
opportunities, however, to
repair and realign roads to
improve the transport of crops.
Legume cover crops are
planted to minimise soil
erosion, preserve soil
moisture and improve soil
chemical and physical
properties. In mature areas,
fronds and EFB are placed
inter-rows to allow the slow
release of organic nutrients
while minimising soil
erosion. Conservation pits
and sumps are constructed
to harvest and contain
rainwater, whilst the
spreading of oil mill effluent
in lines provides a water
storage medium.
‘Terracing’ also ensures
that water runs off into
groundwater stores. We are
also closely following
developments of drought-
resistant oil palm varieties.
No
significant
change.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 34
The full climate risk report can be downloaded from the AEP website.
Type
Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk /opportunity
Management approach
Changes
from 2020 to
2021
Physical
Fires
During drought season the risk
of fire is present at several
estates, especially where
neighbouring land is burnt for
crop cultivation by locals. El
Nino weather events can
indirectly drive widespread
forest fires and haze, although
the severity of El Nino events
appears to be decreasing as a
result of changing climatic
conditions. The financial
impact of fire damage is
relatively low to the Group due
to the diverse geographical
spread of plantations.
Fire response crews are
stationed in each estate,
with regular training on
firefighting techniques and
safety provided by local fire
departments. Ditches and
boundaries are created to
prevent the spread of fire,
whilst watch towers have
been built in every estate to
pinpoint outbreaks of fire as
soon as smoke is detected.
The Group has also
invested in drones to
pinpoint outbreaks of fire
where accessibility is
restricted. Where practical,
natural disasters are also
covered by insurance
policies.
No
significant
change.
Pests &
disease
Rhinoceros beetle or Oryctes
damage has been observed in
areas of large-scale replanting,
whilst plantations have
previously been detrimentally
impacted by stem rot. More
extreme fluctuations in
precipitation may drive
increased damage from
bagworms and leaf beetles.
There is evidence that
pollinating weevils, which help
to pollinate palm trees, are
showing smaller flight
capabilities and pollinating less
because of changing climatic
conditions.
Pest and disease events
are localised, with early-
warning provided by
supervision and monitoring,
and generally impact
immature palms. Outbreaks
are managed through
biological controls, such as
the planting of beneficial
plants that host natural
predators to divert
bagworms from oil palms,
and the introduction of barn
owls to control rats.
Individual estates have also
been replanted with more
resistant anti-Ganoderma
material to reduce the
threat of stem rot. A variety
of planting materials are
also being considered to
provide variability and
pollens, to mitigate changes
to pollinating insects, and
hand pollination can also be
carried out where required.
No significant
change.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 35
Carbon Reporting
AEP recognises that our global operations have an environmental impact and we are committed to monitoring and
reducing our emissions year-on-year. We are also aware of our reporting obligations under The Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018. As such, we continue to
report on our energy and carbon performance and are committed to transparent communication about our
environmental impact to our stakeholders.
2021 Performance Summary
AEP’s total carbon emissions have reduced by 15% in 2021. This is primarily due to a reduction in land clearance
activities (-26% drop in emissions). As an agricultural business our carbon footprint is closely linked to our land
management and planting practices. This is currently exacerbated by the lack of amortisation (the period over which
land clearance emissions should be distributed) of our land-based emissions.
The sequestration across our estates balances some of the increases in emissions, though the amount of carbon
dioxide sequestered has reduced by 14% in 2021. This is due to the age profile of our estates, as oil palm at the
beginning and nearing the end of its crop cycle does not have as great a sequestration potential as those in the middle
of the lifecycle.
Our operational emissions have increased by 8% in 2021, driven primarily by an increase in fuel use (diesel and
biomass) and Palm Oil Mill Effluent (“POME”) treatment. Our overall production of CPO increased by 17%, which has
driven the increase in emissions from the treatment of the effluent. Our overall transport emissions have decreased
both onsite (-44%) and for third party (-13%) transport. This comes despite an increase in FFB production, highlighting
the increases in efficiency of our transport planning.
Energy and Carbon Action
In the period covered by the report AEP has not undertaken specific emissions and energy reduction initiatives.
However, we have reviewed our past carbon footprint performance and conducted an exercise to establish specific
emissions reduction targets for the business. We are aware of upcoming changes in best practice guidance, both in
the form of the GHG Protocol land sector and removals standard and across wider target setting guidance. We will
review our approach once this guidance has been finalised and released over the course of 2022.
Metrics and Targets
AEP commits to a reduction in absolute scope 1 and 2 emissions by 20.5% by 2030 from a 2019 baseline. This target
does not include the impact of sequestration on site, as activity on this is limited by the age profile of our crop.
In 2021 our scope 1 and 2 emissions (excluding sequestration) were 6% higher than in 2019. We have identified the
key areas we need to take action as a business to achieve this target, including the conversion of our remaining mills
to biogas plants from anaerobic lagoons, limiting our land clearance levels, implementing a no new peat policy and
investigating our peat management processes, particularly regarding management of drainage depths.
We commit to reporting progress towards this target each year, and revisiting its appropriateness and ambition on a
regular basis to maintain its value to our business and stakeholders.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 36
2021 Results
Methodology
The methodology used to calculate the GHG emissions is in accordance with the requirements of the following
standards:
• World Resources Institute (“WRI”) Greenhouse Gas (GHG) Protocol (revised version)
• Defra’s Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting requirements
(March 2019).
Following an operational control approach to defining our organisational boundary, our calculated GHG emissions from
business activities fall within the reporting period of 1st January 2021 to 31st December 2021 and use the reporting
period of January 2020 to December 2020 for comparison.
Note on agricultural emissions
Emissions from agricultural cultivation form the most significant part of our carbon footprint. As such we have assessed
these emissions in line with the methodology development by the Roundtable for Sustainable Palm Oil (RSPO).
Version 4 of the RSPO’s PalmGHG application has been used to source relevant emission factors and provide a sense
check of calculations.
We include emissions from agricultural cultivation on our own estates within our direct scope 1 and estimate these
agricultural emissions from any outgrower crops processed in our mills, included within our scope 3. This is consistent
with previous years reporting and is aligned to the WRI reporting principles of completeness and relevance, whereby
scope 1 are the direct emissions sources that we own and control. As mentioned above, we will review our approach
upon the release of the new GHG Protocol guidance.
Emissions from land clearance are only reported for the land clearance occurring during the reporting year in question
due to lack of industry acknowledged guidance on amortisation. We review industry guidance each year and update
our methodology as appropriate. There has been no further guidance throughout 2021, thus the approach taken this
year is in line with our previous years reporting.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 37
Energy and carbon disclosures for reporting year
2
Emissions Source
Global Emissions tCO
2
e
Variance
UK
Emissions
tCO
2
e*
Variance
2021
2020
2021
2020
Scope 1
Fuels
25,058
19,613
28%
0
0
0%
Plantation vehicles
8,077
14,442
-44%
0
0
0%
Fertiliser use
18,531
19,719
-6%
0
0
0%
POME Treatment
142,262
124,429
14%
0
0
0%
Sequestration
(458,738)
(531,479)
-14%
0
0
0%
Land clearance
459,740
617,678
-26%
0
0
0%
Peat soil cultivation
486,436
488,858
0%
0
0
0%
Total Scope 1
681,366
753,260
-10%
0
0
0%
Total Scope 2
Electricity
2,657
2,657
0%
0
0
0%
Total Scope 1 & 2
684,023
755,917
-10%
0
0
0%
Scope 3
Electricity transmission and
distribution
211
211
0%
0
0
0%
3rd party vehicles
7,254
8,317
-13%
0
0
0%
Outgrower land clearance
441,247
510,467
-14%
0
0
0%
Outgrower peat soil cultivation
59,146
51,241
15%
0
0
0%
Outgrower sequestration
(440,333)
(439,239)
0%
0
0
0%
Total Scope 3
67,525
130,997
-48%
0
0
0%
Total (Location Based)
751,548
886,914
-15%
0
0
0%
Total Energy Usage (kWh)
1
1,465,500,566
1,289,300,798
14%
0
0
0%
Intensity ratio
tCO
2
e per hectare of planted
area
10.6
12.7
-17%
0
0
0%
Intensity ratio
tCO
2
e per tonne CPO
production
1.6
2.2
-27%
0
0
0%
Intensity ratio
tCO
2
e per tonne FFB
production
0.6
0.8
-25%
0
0
0%
* Note AEP Plc is a UK registered company. However, the business does not have any physical presence within the
UK, hence the 0% contribution of UK emissions. It is shown in the table for transparency.
1
Energy reporting includes kWh from scope 1, scope 2 and scope 3 3rd party vehicles only (as required by the SECR
regulation)
2
This work is partially based on the country-specific CO
2
emission factors developed by the International Energy
Agency, © OECD/IEA 2020 but the resulting work has been prepared by AEP and does not necessarily reflect the
views of the International Energy Agency.
AEP are required to report to the UK Streamlined Energy and Carbon Reporting (“SECR”) regulations. To provide
comparison with our reporting for 2019 and earlier the data is also provided in a similar format below.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 38
2021 vs 2020 emissions comparison
Emissions source
2021 Emissions in tCO
2
e
2020 Emissions in tCO2e
POME treatment
142,262
124,429
Fertiliser application
18,531
19,719
Fuel use
25,058
19,613
Electricity consumption
2,657
2,657
Electricity T&D
211
211
Company owned vehicles
8,077
14,442
Third party vehicle use
7,254
8,317
Total operational emissions
204,050
189,388
Own crop
Outgrower crop
Own crop
Outgrower crop
Land clearance
459,740
441,247
617,678
510,467
Carbon sequestered
(458,738)
(440,333)
(531,479)
(439,239)
Peat soils cultivation
486,436
59,146
488,858
51,241
Total land use emissions
547,498
697,526
Overall emissions
751,548
886,914
The normaliser reported within the main report is calculated using total CO
2
e emissions. In previous years the
normaliser has also been calculated on operational emissions only. This reduces the influence of the fluctuations in
agricultural emissions. As such, the operational normalisers are also reported below. The operational planted area
intensity has increased because the increase in operational emissions (8%) exceeds to increase in planted area (1%).
2021 vs 2020 Operational emissions intensity (excluding land use change emissions) (tCO
2
e)
Operational emissions reporting metric
2021 in tCO
2
e
2020 in tCO
2
e
Per hectare of planted area
2.89
2.72
Per tonne CPO production
0.42
0.47
Per tonne FFB production
0.17
0.17
-600,000
-400,000
-200,000
0
200,000
400,000
600,000
800,000
Electricity Other fuel
types
Company
owned
vehicles
Third party
vehicle use
Fertiliser
application
Own crop land
clearance
Own crop
carbon
sequestered
Own crop peat
soils
cultivation
Outgrower
land clearance
Outgrower
carbon
sequestered
Outgrower
peat soils
cultivation
POME
treatment
tCO
2
e
Comparison of 2021 and 2020 GHG emissions
2021 2020
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 39
Response to TCFD
AEP acknowledges and welcomes the TCFD and its recommendations as an effective global framework for disclosing
climate-related risks and opportunities and improving strategic resilience to companies in the face of climate change.
This year is our first year disclosing against the eleven TCFD recommended disclosures and we recognise that we are
at the beginning of this journey. The table below signposts where our disclosures currently align with the
recommendations, and the following content highlights our plans to move towards integration and alignment over the
short term (1 to 5 years). Over the next year AEP intend to conduct a TCFD gap analysis and develop a roadmap of
the steps required to further satisfy the eleven recommendations. Following on from this, AEP will conduct an initial
scope 3 emissions screening to enhance its level of disclosure on sustainability metrics. New guidance on Forest,
Land and Agriculture (“FLAG”) may have a material impact in how AEP assess risk, opportunity and wider business
performance. The business will follow the emergence of this guidance over the course of 2022. In 2023 AEP anticipate
using this guidance to close some of the alignment gaps across the relevant TCFD recommendation areas, including
conducting a climate scenario analysis of its key risks and opportunities which will build climate-related strategic
resilience.
Summary TCFD alignment table
Governance
a. Describe the Boards oversight of climate-related risks and opportunities
Page 30
b. Describe management’s role in assessing and managing climate-related risks and
opportunities
Page 30
Strategy
a. Describe the climate-related risks and opportunities the organisation has identified
over the short, medium and long term
Pages 31 to 34
b. Describe the impact of climate-related risks and opportunities on the organisations
businesses, strategy and financial planning
Page 30
c. Describe the resilience of the organisations strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower scenario
Page 40
Risk Management
a. Describe the organisations processes for identifying and assessing climate-related
risks
Pages 29 to 34
b. Describe the organisations processes for managing climate-related risks
Pages 31 to 34
c. Describe how processes for identifying, assessing, and managing climate-related risks
are integrated into the organisations overall risk management
Page 41
Metrics and Targets
a. Disclose the metrics used by the organisation to assess climate-related risks and
opportunities in line with its strategy and risk management process
Pages 35 to 38
b. Disclose Scope 1, Scope 2 and, if appropriate, Scope 3 GHG emissions and the related
risks
Pages 35 to 38
c. Describe the targets used by the organisation to manage climate-related risks and
opportunities and performance against targets
Page 35
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 40
Current and future steps on TCFD
Governance
Executive staff and Directors are responsible for the implementation of control procedures and for identifying and
managing business risks, including climate-related risk. Further information on the Executive Committee oversight and
role in climate-risk management can be found on page 29 of this report.
The Board discusses climate-related risk on at least an annual basis and considers these risks in relevant areas of the
business strategy, including major capital projects such as the decision to continue to invest in new biogas plants at
our remaining mills. This year a new carbon reduction target was approved by the Board (page 35). Progress towards
this target will be monitored and reviewed by the Board on an annual basis.
Strategy
Climate-related risks and opportunities
In last years’ Annual Report AEP published the results of a consultation with our external sustainability partners,
Avieco, to identify and prioritise Group-level climate-related risks and opportunities. Although the assessment was not
repeated for 2021, the risks identified through this work have been reviewed and remain relevant to the business. The
defined management approach continues to reflect current business practice.
The risks and opportunities identified through this assessment relate to ongoing immediate term risk (likelihood of a
risk materialising within a 12-month time frame). As AEP progresses towards full alignment with the TCFD
recommendations the next scheduled overhaul of this risk assessment will include medium and long term horizons.
However, many of AEP’s key risks relate to physical climate change impacts which are already being seen today. We
are already taking action to mitigate these within our business decision making in terms of crop variety, land
management and plantation monitoring through use of drones.
Please refer to the material climate-related risks and opportunities table on pages 31 to 34 of this report.
Impact of climate-related risks and opportunities
Climate-related risks and opportunities impact three key areas of the business: our products, our supply chain and our
operations. Details can be found on page 30 of this report.
Our sustainability policy also provides additional information on the commitments AEP has made which will reduce the
likelihood or impact in some of our key risk areas. Our sustainability policy can be found in
https://angloeastern.co.uk/sustainability/corporate-governance. As we undertake TCFD alignment the emergence of
new risks and opportunities will be reflected in our policy as relevant.
This year AEP are not disclosing the impact of climate-related issues on our financial performance due to the
complexity involved which would require further consultation with external experts. However, the Board intends to
analyse this further together with the scenario analysis exercise plan and enhance this disclosure area over the short-
term horizon. However, the action we have taken this year has improved our score in the ZSL Sustainability Policy
Transparency Toolkit (SPOTT) assessment by 6.9%. This is an external assessment that investors and buyers use to
assess their investments or purchasing decisions. This increasing score enhances AEP’s position in the market.
Resilience of our climate strategy
AEP have not yet conducted a climate scenario analysis exercise. The majority of our own climate-related impact is
driven by AEP’s use of FLAG. Over the course of 2021 and continuing into 2022 there has been new accounting and
target setting guidance under development, both from the Greenhouse Gas Protocol and the Science Based Targets
Initiative. These new standards will likely shift how our competitors and customers view and account for climate change
impact, thereby potentially changing the context in which we operate as a business.
Developments in this new FLAG guidance may impact how AEP construct a climate scenario analysis given that the
majority of our exposure is expected to be physical FLAG risks. We are keen to see the latest guidance unfold
throughout 2022, with the anticipation of integrating this into the business strategy and planning over the following year
if the timelines coalesce.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 41
Risk Management
Identifying and assessing climate-related risk
The climate-related risks and opportunities that AEP disclose on pages 31 to 34 of our report were identified through
a cross-functional working group involving senior managers and Directors from across the business. This process is
described further on page 30. Materiality was defined based on the relative frequency or likelihood of an event
occurring in a given 12-month period and the potential magnitude of impact based on change in operating profit.
AEP intend to conduct a formal re-evaluation of this climate risk assessment every 3 years, with a review and qualitative
assessment occurring in the intervening years. Regulatory changes are reviewed annually as we recognise that these
are faster moving than many of our other risks. As detailed in our Strategy disclosure above we intend to include a
view of medium and longer term risk horizons within the next review of this climate risk assessment.
Managing climate-related risks
A management approach for each of the key climate-related risks and opportunities is detailed in the table on pages
31 to 34 These management approaches, including mitigation activities, are implemented on a site-by-site basis
dictated by their individual risk (e.g. individual estate risk of flooding or drought which varies by geographic location).
Our Engineering Director has oversight of the management approach across all of our mills and our Chief Operating
Officer has oversight across all of our plantations. This ensures that any progress towards these management activities
and any change in risk profile are brought up to Group Management and integrated into Executive Committee updates.
The Executive Committee, comprising of all senior executives of the Group meets monthly to discuss any arising
issues related to climate risk and is chaired by the Senior General Manager, who in turns report to the Board of
Directors.
AEP is committed to improving the transparency of our climate risk management approach and in the short-term will
review and update this to include additional detail on how and where these management activities have been
implemented, changing the inherent risk and potentially materiality of each risk and opportunity identified.
Integration of climate-related risk into overall risk management
Climate-related risk management is not yet fully integrated into AEP’s overall risk management processes due to the
complexity involved as explained above, however the same stakeholders are involved with both processes and both
processes have Board oversight.
In the short-term AEP commit to reviewing and updating business risk management processes to fully integrate
climate-related risks. This will include agreeing a broader frequency for review and update, which will be brought to
the Board on at least an annual basis in future years.
Metrics and Targets
Metrics to assess climate-related risks and opportunities
AEP utilise a number of key metrics to manage risk and opportunity within the business. We use our annual GHG
reporting to assess the impact of business decisions (in metric tonnes CO
2
e). This is evaluated in line with the
Greenhouse Gas Protocol Corporate Accounting Standard, alongside other industry standards and guidance as
referenced in our SECR report (pages 35 to 38) Our carbon intensity metrics (metric tonnes CO
2
e per hectare of
planted area, per tonne FFB produced and per tonne CPO produced) are useful to indicate the impact on business
efficiency throughout the year. These intensity metrics also indirectly indicate the potential impact of certain physical
risks such as droughts or excessive rainfall. The Board will look at developing further metrics beyond the GHG
emissions going forward to enhance future disclosure.
We evaluate global cost premiums for RSPO certified palm oil products to evaluate the risk or opportunity of changing
market preferences.
AEP do not currently employ an internal carbon price.
Scope 1, Scope 2 and limited Scope 3 GHG emissions and related risks
AEP report our scope 1, 2 and selected scope 3 emissions in line with the SECR regulation (see page 37).
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 42
We do not yet report on our full scope 3 emissions, but intend to complete a scope 3 screening exercise with our
external consultant in 2022. Currently our scope 3 emissions include electricity transmission and distribution, 3
rd
party
vehicles and the land-related emissions from the outgrower crops that we purchase and process in our mills. The new
GHG Protocol guidance on land sector is likely to change how these land-related emissions should be reported
(including in our scope 1) so we have planned to undertake a review of our methodology following the release of the
draft guidance later this year.
Targets for climate-related risks and opportunities
This year AEP conducted an exercise to investigate different routes to setting a carbon reduction target. The target
has been reviewed by the Board and committed within our Strategic Report (Page 35). AEP will report progress towards
this target on an annual basis.
Principal and emerging risks and uncertainties
The Board members have sound knowledge of the palm oil industry, including sustainability, and are also aware of the
politics and economics of the business world, especially in the countries where AEP operates.
The Board carried out a robust assessment of the principal and emerging risks facing the Group on an annual basis.
A board paper on risk management, with contributions from Board members on emerging significant business risks, if
any, is discussed at least once a year in conjunction with the risk register. Significant emerging business risks identified
and actions agreed thereon, together with the management of other business risks will be monitored by the Executive
Director who is regularly briefed by the senior management of the Group. The Executive Director in turn briefs the
Audit Committee and the Board whenever they meet.
The Group’s business involves risks and uncertainties of which the Directors currently consider the following to be
material. There are or may be other risks and uncertainties faced by the Group that the Directors currently deem
immaterial, or of which they are unaware, that may have a material adverse impact on the Group.
Country, regulatory and
governance practices
Covid-19
Environmental &
Conservation Practice
Currency exchange rates
Produce prices
Social, community and
human rights issues
Weather and natural
disasters
Information Technology
0
3
6
9
0 3 6 9
IMPACT ON BUSINESS
LIKELIHOOD
PRINCIPAL RISKS AT A GLANCE
Low
Medium
High
Low Medium High
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 43
Nature of the risk and its origin
Circumstances under which the
risk might be most relevant to
the Company
Mitigating or other relevant
considerations
Country, regulatory and governance practices
The Group’s operations are located
substantially in Indonesia and
therefore significantly rely on
economic and political stability in
Indonesia.
Political upheaval and
deterioration in the security
situation may cause disruption on
the operation, loss of
management control and
consequently financial loss.
The country has recently benefited
from a period of relative political
stability, steady economic growth and
stable financial system. But during the
Asian financial crisis in the late 1990s,
there was civil unrest attributed to
ethnic tensions in some parts of
Indonesia. The Group’s operations
were not interrupted by the regional
security problems including occasional
racial conflicts.
Introduction of measures to rein in
the country’s fiscal deficits. This
included the exchange controls and
restriction on repatriation of profit
through payment of dividends.
Transfer of profit from Indonesia
to the UK will be restricted
affecting servicing of UK
obligations and payment of
dividends to shareholders.
The Board is not aware of any attempt
by the government to impose exchange
controls that would restrict the transfer
of profits from Indonesia to the UK. The
Board perceives that the Group will be
able to continue to extract profits from
its subsidiaries in Indonesia for the
foreseeable future.
Changes in land legislation. Based
on National Land Agency Law 2 /
1999, mandatory restriction to land
ownership by non-state plantation
companies and companies not listed
in Indonesia to 20,000 ha per
province and a total of 100,000 ha in
Indonesia. Mandatory reduction of
foreign ownership of Indonesian
plantations.
Could force divestment of
interests in Indonesia at below
market values.
The Group realises that there is a
possibility that foreign owners may be
required over time to partially divest
ownership of Indonesia oil palm
operations but has no reason to believe
that such divestment would be anything
other than at market value. If there is a
need for further divestment, the Group
intends to approach the current
minority shareholders to invest, failing
which would approach other
appropriate local partners.
Group failure to meet the standards
expected in relation to bribery and
corruption.
Reputational damage and criminal
sanctions.
The Group continues to maintain strong
controls in this area as Indonesia has
been classified as relatively high risk by
the International Transparency
Corruption Perceptions index.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 44
Nature of the risk and its origin
Circumstances under which the
risk might be most relevant to
the Company
Mitigating or other relevant
considerations
Country, regulatory and governance practices - continued
Imposition of import controls or taxes
in consuming and exporting countries.
Efforts by EU to restrict the use of
palm oil and palm biodiesel either by
trade barriers or increased tariffs
including export levy and export tax.
Reduced revenue and reduction
in cash flow and profit. The higher
import levy will raise the price of
CPO and make it less competitive
in the global oil market, thus
reducing demand. Trade barriers
and increased tariffs will make it
more difficult to export palm oil to
EU either for food or palm
biodiesel and will hurt the demand
of CPO in EU which is the third
largest consumer of CPO.
The Indonesian government allows
free export of CPO up to 80% of local
production but applies a sliding scale
of duties on exports which allows
producers economic margins. The
export levy collected to fund local
biodiesel subsidies is designed to
support the CPO prices. Higher tariffs
and trade barriers in EU will result in
higher consumption of alternative
vegetable oils despite CPO remaining
amongst the cheapest source and
most productive of vegetable oil in a
growing population.
Currency exchange rates
CPO is a US Dollar denominated
commodity and a significant
proportion of operating costs in
Indonesia (such as fertiliser and fuel)
and development costs (such as
heavy machinery and mill equipment)
are imported and are US Dollar
related.
Adverse movements of Rupiah
against US Dollar will increase
operating costs and will have a
negative effect on the profitability
and raise funding costs.
The Board has taken the view that
these risks are inherent in the
business and feels that adopting
hedging mechanisms to counter the
negative effects of foreign exchange
volatility are both difficult to achieve
and would not be cost effective.
Produce prices
CPO and palm kernel are primary
commodities and is affected by the
world economy, levels of inflation, and
availability of alternative soft oils such
as soybean oil. CPO price also moves
historically in tandem with crude oil
prices which determine the
competitiveness of CPO as a source
of biodiesel.
This may lead to significant price
swings. The profitability and cash
flow of the plantation operations
depend upon world prices of CPO
and palm kernel and upon the
Group’s ability to sell CPO and
palm kernel at price levels
comparable with world prices,
unlike soybean which is sown
annually and production can be
increased or decreased to match
demand and prevailing prices.
Directors believe that such swings
should be moderated by continuous
demand in economies like China,
India and Indonesia. Larger exports
would lead to a lower inventory of
CPO which augurs well for future
produce price. In the short term, the
prices and demand will be volatile due
to the pandemic and the ongoing
conflict in Ukraine. Indonesia
imposition for local producer to sell
20% of their output to domestic
refiners will reduce supply for export
possibility helping to sustain CPO
prices
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 45
Nature of the risk and its origin
Circumstances under which the
risk might be most relevant to
the Company
Mitigating or other relevant
considerations
Social, community and human rights issues
Any material breakdown in relations
between the Group and the host
population in the vicinity of the
operations could disrupt the Group’s
operations. The plantations hire
large numbers of people and have
significant economic importance for
local communities in the areas of the
Group’s operations. Disputes over
compensation and rights for land
allocated to the Group through
location permits granted by the
Indonesian government which were
previously used by the communities
for their livelihood.
Communication breakdown would
cause disruption on the operation
and consequently financial loss.
Access to areas in estates and
mills of disputed compensation is
restricted due to blockages and
illegal encroachment by the
communities.
The Group mitigates this risk by liaising
regularly with village representatives to
mediate on disputes including some
land compensation matters and rights.
It develops a close relationship with
villagers by improving local living
standards through mutually beneficial
economic and social interaction. The
Group, when possible, gives priority to
applications for employment from the
local population and supports specific
initiatives to encourage local farmers
and tradesmen to act as suppliers to the
Group, its employees and their
dependents. The Group spends
considerable money constructing new
roads and bridges and maintaining
existing roads used by villagers. The
Group also provides technical and
management expertise to villagers to
develop oil palm plots and Plasma
schemes surrounding the operating
estates. The returns from these plots
are used to improve villages’
community welfare.
Deterioration or disputes in
relationships with the local
shareholders in the Group’s
Indonesian subsidiaries.
Seek Indonesian courts for
enforcement of shareholders’
agreements and resolving
disputes. Uncertainties over
judicial process may result in
financial loss to the Group.
The Group endeavours to maintain
cordial relations with local shareholders
by seeking their support for decisions
affecting their interests and responding
constructively to any concerns that they
may have.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 46
Nature of the risk and its origin
Circumstances under which the
risk might be most relevant to
the Company
Mitigating or other relevant
considerations
Covid-19
The Covid-19 pandemic as we are
experiencing has affected national
and world economies, although the
pandemic seemed to be receding
because of the availability of
vaccines. Covid-19 and similar
pandemics could disrupt the Group’s
operation.
Our plantations and mills could be
seriously infected which may
require a total shut down of the
infected part of our operations to
contain and eradicate the infection.
However, as the vaccination rate
increased both in Indonesia and
Malaysia the risk of a total
shutdown is reduced.
The local governments where the
Group operates could enforce a
total lockdown requiring a total
shutdown of the Group’s
operations.
The Group continued to impose travel
restrictions, unless fully vaccinated,
and strict movement on workers
housed in our mills and estates.
Workers leaving the housing and
workplace must seek prior approval
from management and will be
subjected to quarantine upon return.
All outside casual workers hired are
assigned to different parts of the
estates isolated and with minimum
contact with our regular workers.
Wearing a face mask is mandatory.
Additional facilities are provided for
workers to wash their hands with soaps
and apply sanitizers. Temperatures of
all workers are taken daily before they
start work. Workers with high
temperature will be quarantined and
undertake necessary tests conducted
by qualified doctors to determine their
condition. Medan administration and
finance staff are divided into two teams
with each team working from home on
an alternative basis to reduce
exposure to the virus and mitigate
disruption. Routine retesting is
conducted for all workers. The Group
also stock up on essential goods and
spare parts to minimise disruption to
estate and mills operation should the
government order a lockdown or
impose further movement control.
With the reduced Covid-19 cases as a
result of the increased vaccination
rate, the Group is looking into gradually
soften the existing SOPs to reflect the
sentiments of coexisting with Covid-
19.
The Group has budgeted cash
requirements on a minimum spend
basis that would sustain the continuity
of the Group for at least twelve months.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 47
Nature of the risk and its origin
Circumstances under which the
risk might be most relevant to
the Company
Mitigating or other relevant
considerations
Weather and natural disasters
Oil palms rely on regular sunshine
and rainfall but these weather
patterns can vary and extremes
such as unusual dry periods or,
conversely, heavy rainfall leading
to flooding in some locations can
occur. Indonesia, where most of its
plantations are located, frequently
experience natural disasters like
earthquake, forest fire and
tsunami.
Dry periods, in particular, will affect
yields in the short and medium
term. It may result in wildfire that
may damage and destroy the
palms. Drought induces moisture
stress in palm trees. Conversely
high levels of rainfall can disrupt
estate operations and result in
harvesting delays with loss of FFB
or deterioration in fruit quality.
Delay in collection of harvested
FFB could raise the level of free
fatty acid (“FFA”) in the CPO. CPO
with high FFA would be sold at a
discount to market prices. Low
level of sunshine could result in
delay in formation of FFB resulting
in potential loss of revenue. Any
natural disaster could result in a
shortage of workers and incur
temporary work stoppage due to
damage to the plantation or mill.
Bunding is built around flood prone
areas. Canals/drainage/retention ponds
are constructed and adapted either to
evacuate surplus water or to maintain
water levels in areas quick to dry out.
Operations located in and near the tropic
can expect adequate amount of
sunshine regularly. Where practical,
natural disasters are covered by
insurance policies. Certain risks
(including the risk of crop loss through
fire, earthquake and flood potentially
affecting the planted areas on the
Group’s estates) if they materialise
could dent the potential revenues, for
which insurance cover is either not
available or would in the opinion of the
Directors be disproportionately
expensive, are not insured. Risks of
floods, earthquake, fires or haze are
mitigated by the geographical spread of
the plantations but an occurrence of an
adverse uninsured event could result in
material losses.
Environmental and conservation practices
Failure to comply and observe
environmental and conservation
practices in its oil palm cultivation
as detailed in the management for
Climate Risk in the Directors’
Report.
Reputational and financial damage
through criticisms by conservation
groups and boycott of the Group’s
produces.
The Group is committed to sustainable
development of oil palm and maintains
substantial conservation reserves to
safeguard biodiversity. It has obtained
ISPO and MSPO certifications for most
of its operations. The Group funds
independent environmental impact
assessment studies and complies with
its recommendation before any
development begins.
Information Technology (“IT”) security risk
The security threats faced by the
Group include threats to its IT
infrastructure, unlawful attempts to
gain access to classified
information and potential for
business disruptions associated
with IT failures.
Failure to combat cyberattack
could cause disruption to our
business operations. Potential loss
including loss of financial records
leading to error or misstatement in
financial statements.
The Group has measures in place
including appropriate tools and
techniques to monitor and mitigate this
risk. The Group through its IT Consultant
has in place antivirus, threat detection,
log analysis, Distributed denial-of-
service (“DDOS”) attacks protection and
Firewalls.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 48
Diversity
The AEP Plc Board is composed of three men and one woman with extensive knowledge in their respective fields of
experience. The Board has taken note of the recent legislative initiatives with regards to the representation of women
on the boards of Directors of listed companies and will make every effort to conform based on legislative requirement.
2021 average employed during the year
Group Headcount
Women
Men
Total
Board (Company and subsidiaries)
3
14
17
Senior Management (GM and above)
1
5
6
Managers & Executives
33
412
445
Full Time / Field Workers
273
6,877
7,150
Part-time / Field Workers *
2,408
3,783
6,191
Total
2,718
11,091
13,809
%
20%
80%
100%
2020 average employed during the year
Group Headcount
Women
Men
Total
Board (Company and subsidiaries)
3
14
17
Senior Management (GM and above)
-
5
5
Managers & Executives
33
412
445
Full Time / Field Workers
260
6,515
6,775
Part-time / Field Workers*
3,049
4,159
7,208
Total
3,345
11,105
14,450
%
23%
77%
100%
*Part-time /Field workers Headcounts based on full time equivalent of 8 hours per day
Although the Group provides equal opportunities for female workers in the plantations, the male workers make up a
majority of the field workers due to the nature of work and the remote location of plantations from the towns and cities.
The number of female part-time field workers decreased by 21% from 3,049 to 2,408 in 2021. The pandemic has
reduced the availability of female workforce in general as many prioritised domestic household demand especially with
many of their children studying online and staying at home. Overall, the number of female workers within the Group
decreased from 3,345 (23%) in 2020 to 2,718 (20%) in 2021. More details on gender diversity can be found on our
website under Workers’ rights and safety / Exploitation / Fair place to work.
The Board continues to monitor the structure and composition of the Group’s management team linking it to the
balance of age, social and ethnic backgrounds, together with relevant qualifications and experience. To date, the Board
believes that the composition of the Group’s management team is fairly balanced in respect of all the elements of
diversity as mentioned above.
Employees
Oil palm cultivation is a labour-intensive industry. In 2021, the number of full-time workers averaged 7,618 (2020:
7,242), a 5% increase while the part-time labour averaged 6,191 (2020: 7,208), a 14% reduction. Many part-timers
were promoted to full employment upon maturity of the field. The total headcount of field workers in 2021 however was
lower by 5% due to improved productivity and better supervision in Indonesia despite increased in matured area while
acute shortage of workers still persists in Malaysia. See explanation on page 19. The Group has introduced some
mechanisation in the field to boost productivity. Mechanisation though has its limits but where possible could help
relieve the acute shortage of labour and reduce the cost pressure from rising minimum wages.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 49
It was reported elsewhere that foreign workers are frequently subjected to high recruitment fees that kept them in debt
bondage and are forced to work overtime and in dangerous conditions under the threat of penalties, namely withholding
of salaries and identification documents and restricted movement. AEP adopts a zero-cost recruitment policy towards
all its local and foreign employees.
About 247 of our employees were infected by Covid-19 representing less than 2% of our overall workforce. We are
however sad to report that five of our employees succumbed to the infection since the pandemic started. The Group
will continue to do routine retesting to screen the workers for the virus. Staff were reminded to observe social distancing
and personal hygiene. During the height of the pandemic, administrative staff were further divided into two teams and
rotated between working from home and office on alternative weeks to minimise disruption and the chances of catching
the virus through travelling on public transport. At the end of 2021, 89.6% of our employees have received their first
dose of vaccine while 71.4% have completed their vaccination programme. More details are provided under CSR of
the Strategic Report.
The Group has formal processes for recruitment, particularly for key managerial positions, where psychometric testing
is conducted to support the selection and hiring decisions. Exit interviews are also conducted with departing employees
to ensure that management can address any significant issues.
Existing employees are selected on a regular basis for training programmes organised by the Group’s training centre
that provide grounding and refresher courses in technical aspects of oil palm estate and mill management. The training
centre also conducts regular programmes for all levels of employees to raise the competency and quality of employees
in general. These programmes are often supplemented by external management development courses including
attending industry conferences for technical updates. A wide variety of topics are covered including work ethics,
motivation, self-improvement, company values and health and safety. The Group spent $33,200 on staff training and
professional development in 2021 against $26,000 for the previous year.
The Group operates a cadet program where graduates from local universities are selected to undergo theory and field
training over a twelve-month period. On successful completion, they are assigned as assistants to various mills and
estates.
A large workforce and their families are housed across the Group’s plantations. The benefits provided to them were
extensively covered under CSR in the Strategic Report. On top of competitive salaries and bonuses, these extensive
benefits and privileges help the Group to retain and motivate its employees. The Group complied with the minimum
wage policy issued by the Indonesian government. It respects the rights of employees and does not exploit workers,
use child or forced labour and is not involved in human trafficking as described in the UK’s Modern Slavery Act 2015,
of which a full statement is provided on our website under Corporate Governance.
The employees are covered by Governmental mandatory personal accident scheme with death benefits covering up
to forty-eight months of workers’ monthly salaries. The spouses and children of fulltime employees are also privately
insured for death benefits by the Group.
The rights of employees and their extensive benefits covering every aspect of employment from salary review,
allowance, bonus, housing, study and training for improvement, work safety and health and code of conduct are
contained in the Company’s handbook which is available and accessible to all employees.
The Group promotes a policy for the creation of equal and ethnically diverse employment opportunities including with
respect to gender.
The Group has in place key performance-linked indicators to determine increment and bonus entitlements for its
employees. The human resources and a member of the Remuneration Committee engage members of the labour
unions representing full-time workers at least once a year on their yearly performance bonuses and grievances.
A whistle-blower policy was introduced in 2019 to allow workforce to raise concerns in confidence and if they wish
anonymously to the Board of the holding company for independent investigations and follow-up actions. The full details
of the policy can be downloaded from the Company’s website.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 50
The Group promotes and encourages employee involvement in every aspect wherever practical as it recognises
employees as a valuable asset and is one of the key contributions to the Group’s success. The employees contribute
their ideas, feedback and voice out their concerns through formal and informal meetings including meeting with the
Chairman of the Remuneration Committee annually, discussions and annual performance appraisals. In addition,
various work related and personal training programmes are carried out annually for employees to promote employee
engagement and interaction. The Group organises an annual dinner to recognise high achievers in the plantation and
mill operations. It also has an annual family gathering to foster camaraderie among its employees. Unfortunately, these
events where employees always look forward to, have to be suspended during the pandemic for the safety of the
employees and their families.
Although the Group does not have a specific policy on the employment of disabled persons, it, however, employs
disabled persons as part of its workforce. The Group welcomes disabled persons joining the Group based on their
suitability.
Outlook
FFB production for the three months to March 2022 was 5% lower against the same period in 2021 mainly due to the
drop in production from Bengkulu and Kalimantan regions. It is too early to forecast whether the production will improve
for the rest of the year.
The CPO price ex-Rotterdam opened the year at $1,320/mt and averaged about $1,592/mt for the first three months
of 2022. Despite the robust CPO prices in 1Q 2022, we expect lower prices in 2022 as tight supply normalises. We
anticipated a stronger recovery of palm oil output in second half of 2022. This is aided by the recent good rainfall
brought about by a moderate La Nina weather phenomenon. The present high prices are unlikely to be sustainable
when supply normalises. Barring any further surprises, CPO prices appeared to have peaked in early March 2022.
This was after the Indonesian government removed the mandatory domestic market obligations, about two months
after introduction whereby exporters were required to sell 20% which was then raised to 30% of their produce to
domestic markets. At the same time the Indonesian government has raised the maximum export tax and levy of CPO
from $375/mt to $575/mt to subsidise domestic cooking oil is likely to adversely affect the Group’s ex-mill prices.
The growth in palm oil production has slowed in the last few years due to a more stringent regulatory environment and
robust industry standards on new plantation development. The expiration of Indonesia’s moratorium on new plantings
is not expected to have an immediate impact on the supply of CPO in the market as the Indonesian government
balance the commitment to reduce carbon emission and the need to create jobs and investments. It was reported by
Oil World that in 2020, palm oil accounted for 32% and soya 25% of the global vegetable oil production. The outlook
on CPO prices remain positive as the increasing world population will further boost demands, while palm oil production
may remain stagnant due to strict regulatory and sustainability standards. The sharp rise in fertilisers cost may see a
reduction in its application especially for smaller plantations potentially affecting future yield and production of CPO.
The conflict between Ukraine and Russia has not only affected the demand and prices of CPO (see Commodity Prices
of Strategic Report on page 19) but also on fertilisers which have seen a sharp increase in prices. The international
sanctions have affected the supply of fertilisers from Russia which is a major producer of urea, potash and rock
phosphate, the main ingredients of fertilisers used. Any potential rise in material costs including fertilisers and wages
in Indonesia will increase the overall production costs in 2022 and offset higher earnings from better CPO prices.
A record-breaking trade surplus in Indonesia as global commodity prices rallied and strong exports numbers would
likely result in a stronger Indonesian Rupiah in the coming year.
Nevertheless, barring any unforeseen circumstances, the Group is confident that CPO demand will be sustainable in
the long-term and we can expect a satisfactory trading outturn and cash flow for 2022.
Strategic Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 51
Statement by Directors In Performance Of Their Statutory Duties In Accordance With Section 172 (1) Of The
Companies Act 2006
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in
good faith, would most likely promote the success of the company for the benefit of its members as a whole, having
regard to a range of factors set out in Section 172(1)(a) – (f) in the Companies Act 2006.
In discharging our Section 172 duty, we have regard for these factors, taking them into consideration when decisions
are made. All the directors recognise their responsibilities to promote the success of the Company for its shareholders,
other investors, its employees, customers, suppliers and the wider community. The Board acknowledges the
importance of climate change and seeks to mitigate the negative impacts of the business on the environment through
its sustainable practices, including engaging a firm of environmental and climate related expertise on this matter.
During the year the Board approved the change in land valuation policy of the Group from fair / market value to historical
cost. The reasons for the change are covered on page 68 of the Audit Committee Report. This change was made after
discussions with management and consultation with an external valuer to align AEP with its peers in the UK who adopt
the historical cost accounting convention when valuing land.
The Board, having had consultations with the minority shareholder of the plantations in South Sumatera, also approved
the appointment of an external consulting firm to advise on the disposal of operations in three loss making plantations
in South Sumatera. The three plantations have incurred a combined loss of $76.0 million since inception despite robust
CPO prices due to low rainfall and geographical constraints. Some of the operational problems were also highlighted
in the Business Review of the Strategic Report on page 16.
The Board, following a review of its industry peers and the available research data, has decided to refine the valuation
technique applied to its biological assets in order to provide a more comparable result. It now uses one-month FFB
production instead of previously 2-months to arrive at its biological assets value for reporting purposes.
This Strategic report, including the non-financial reporting statement in Page 13, which has been prepared in
accordance with these requirements of the Companies Act 2006, has been approved and signed on behalf of the
Board.
On behalf of the Board
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs 29 April 2022
Financial Record
Annual Report 2021 | Anglo-Eastern Plantations Plc 52
Income statement
2021
$000
(Restated)
2020
$000
2019
$000
2018
$000
2017
$000
Continuing operations
Revenue
433,421
263,818
219,136
250,859
291,907
Operating profit before BA
129,332
54,599
12,178
30,928
66,676
Profit attributable to shareholders after BA
96,054
36,393
16,096
11,413
36,214
Dividend proposed for year
(1,982)
(396)
(198)
(1,189)
(1,585)
Financial position
$000
$000
$000
$000
$000
Non-current assets & long-term receivables
282,581
303,067
384,391
351,387
362,038
Cash net of short-term borrowings
218,249
115,211
76,643
101,134
130,895
Long-term loans and borrowings
-
-
-
(8,203)
(19,281)
Other working capital
38,284
32,423
40,580
29,156
16,320
Deferred tax
2,994
13,607
(5,796)
(8,893)
(13,081)
542,108
464,308
495,818
464,581
476,891
Non-controlling interests
(102,078)
(88,875)
(94,661)
(92,601)
(91,799)
Net worth
440,030
375,433
401,157
371,980
385,092
Share capital
15,504
15,504
15,504
15,504
15,504
Treasury shares
(1,171)
(1,171)
(1,171)
(1,171)
(1,171)
Share premium and capital redemption reserve
25,022
25,022
25,022
25,022
25,022
Revaluation reserves
-
-
48,413
51,308
51,288
Exchange reserves
(241,907)
(237,599)
(229,026)
(245,170)
(221,435)
Retained earnings
642,582
573,677
542,415
526,487
515,884
Equity attributable to shareholders’ funds
440,030
375,433
401,157
371,980
385,092
Ordinary shares in issue (‘000s)
39,976
39,976
39,976
39,976
39,976
Basic EPS before BA movement (US cents)
235.25cts
89.31cts
35.37cts
32.50cts
91.80cts
Basic EPS after BA movement (US cents)
242.34cts
91.82cts
40.61cts
28.79cts
91.37cts
Dividend per share for year (US cents)
5.0cts
1.0cts
0.5cts
3.0cts
4.0cts
Asset value per share (US cents)
1,110cts
947cts
1,012cts
938cts
972cts
Exchange rates - year end
Rp : $
14,269
14,105
13,901
14,481
13,548
$ : £
1.35
1.36
1.32
1.28
1.35
RM: $
4.17
4.02
4.09
4.13
4.05
Exchange rates - average
Rp : $
14,312
14,572
14,146
14,246
13,383
$ : £
1.38
1.28
1.28
1.33
1.29
RM: $
4.15
4.20
4.14
4.04
4.30
Estate Areas
Annual Report 2021 | Anglo-Eastern Plantations Plc 53
GROUP INDONESIA SOUTH RIAU BANGKA
TOTAL MALAYSIA TOTAL SUMATERA SUMATERA
Mills / Biogas Plants
Number of Mills 6 - 6 2 2 - 1 - 1
Number of Biogas Plants 4 - 4 2 1 - - - 1
Combined Mills Capacities 310 mt/h 310 mt/h 100 mt/h 105 mt/h 60 mt/h 45 mt/h
Planted as at 31 Dec 2021 Ha Ha Ha Ha Ha Ha Ha Ha Ha
Oil Palm
Mature 62,582 3,453 59,129 18,047 15,463 5,742 4,836 833 14,208
Immature 7,860 - 7,860 802 1,453 895 - 1,720 2,990
Total Oil Palm 70,442 3,453 66,989 18,849 16,916 6,637 4,836 2,553 17,198
Rubber
Mature 262 - 262 262 - - - - -
Immature - - - - - - - - -
Total Rubber 262 - 262 262 - - - -
Plasma Mature 3,077 - 3,077 93 - 982 - 202 1,800
Plasma Immature 1,423 - 1,423 - - 84 - 281 1,058
Total Plasma 4,500 - 4,500 93 - 1,066 - 483 2,858
Total Planted area 75,204 3,453 71,751 19,204 16,916 7,703 4,836 3,036 20,056
Others
Plantable Reserve/Oil Palm 16,866 1,607 15,259 677 - 6,162 - 1,532 6,888
Unplantable Areas 32,688 1,236 31,452 1,492 1,016 23,314 84 3,666 1,880
Oil Palm Nursery/Mill/Infrastructure 3,229 72 3,157 1,026 593 121 75 20 1,322
Total Others 52,783 2,915 49,868 3,195 1,609 29,597 159 5,218 10,090
Total Land as at 31 Dec 2021 127,987 6,368 121,619 22,399 18,525 37,300 4,995 8,254 30,146
NORTH
BENGKULU
KALIMANTAN
Location of Estates and Mills
Annual Report 2021 | Anglo-Eastern Plantations Plc 54
Directors’ Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 55
The Directors present their annual report on the affairs of the Group, together with the financial statements and
auditor’s report, for the year ended 31 December 2021.
The Directors performance in relation to their statutory duties, together with the principal decisions taken during the
year are detailed in the Strategy Report under Statements by Directors In Performance Of Their Statutory Duties In
Accordance With Section 172 (1) Of The Companies Act 2006 on page 51.
Accountability and audit
AEP is committed to ensure that the quality of its financial reporting is of a high standard. The Board continually reviews
its internal controls and risk management systems to ensure the Group’s affairs and the Group’s financial reporting
comply with the applicable accounting standards as well as good corporate governance. The main features of the
Group’s internal controls and risk management systems are further disclosed on page 70 to 71.
The Board considers the annual report and accounts including the Strategic Report when taken as a whole, is fair,
balanced and understandable as it provides the information necessary for shareholders to assess the Group’s position
and performance, business model and strategy.
Results and dividends
The audited financial statements for the year ended 31 December 2021 are set out on pages 90 to 144 The Group’s
profit for the year on ordinary activities before taxation from continuing operations was $137,083,000 (2020: profit
$58,114,000) and the profit attributable to ordinary shareholders from continuing operations was $96,054,000 (2020:
profit $36,393,000). No interim dividend was paid. The Directors recommend a final dividend of 5.0cts (2020: 1.0cts)
to be paid to shareholders on 15 July 2022. Shareholders may elect to receive their dividend in Pounds Sterling as
described on page 57.
Future developments
The future developments of the Group are reported on page 20 to 21 of the Strategic Report under corporate
development.
Research and Development
The Group did not undertake any research and development activities. It relies on third parties to conduct research
and development of new disease resistant and higher yield oil palm seeds.
Political donations, anti-bribery and anti-corruption
The Group made no political donation during the year.
The Group has in place policies and procedures in respect of bribery and corruption, with detailed guidelines and
reporting requirements for its UK, Indonesian and Malaysian operations which may be viewed from the Company’s
website. The whistle-blowers and grievance mechanism policies which include reporting on corruption practices are
also highlighted in Company’s handbook. Management and senior staff have had training programmes and updates
as part of their responsibility to ensure that bribery and corruption do not exist in the Group’s operation. New employees
are also briefed on anti-corruption practices during their orientation. The Group has in place a communication channel
for employees reporting to the Senior Independent Non-Executive Director on incidences of bribery and corruption on
a strictly confidential basis. There are stipulated steps and procedures for the Senior Independent Non-Executive
Director to address the reported issues appropriately and to take the necessarily actions, if relevant. The Group uses
its best endeavour to ensure that its business partners are in compliance with the anti-bribery and anti-corruption
regulations.
Carbon Reporting
A comprehensive carbon report is detailed as part of the Strategic Report on page 35 to page 42.
Principal risks
The material risks faced by the Group, including any climate change related risks, and actions taken to mitigate those
risks are set out in the Principal Risks and Uncertainties section of the Strategic Report.
Directors’ Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 56
Information on financial instruments risks is set out in note 28 to the consolidated financial statements.
Property, plant and equipment
Information relating to changes in property, plant and equipment and capitalised interest, as required pursuant to
Listing Rule 9.8.4R, are given in note 13 to the consolidated financial statements.
Directors
Madam Lim Siew Kim, Dato’ John Lim Ewe Chuan, Mr. Lim Tian Huat and Mr. Jonathan Law Ngee Song will be
submitting themselves for re-appointment at the forthcoming annual general meeting.
Brief profiles of all Directors are set out on page 60 of this Annual Report.
Substantial share interests
As at 22 April 2022 and 31 December 2021, the following interests had been notified to the Company in accordance
with Chapter 5 of the Disclosure Rules and Transparency Rules of the Financial Conduct Authority, being interests in
excess of 3% of the issued ordinary share capital of the Company:
* Madam Lim Siew Kim is the controlling shareholder of Genton International Limited.
Share capital, restrictions on transfer of shares, arrangements affected by change of control and other
additional information
The Company has one class of share capital, ordinary shares. All the shares rank pari passu. The articles of association
of the Company contain provisions governing the transfer of shares, voting rights, the appointment and replacement
of Directors and amendments to the articles of association. This accords with usual English company law provisions.
There are no special control rights in relation to the Company’s shares. There are no significant agreements to which
the Company is a party which take effect, alter or terminate in the event of a change of control of the Company. There
are no agreements providing for compensation for Directors or employees on change of control.
Auditor
All of the current Directors have taken all the steps to make themselves aware of any information needed by the
Company’s auditor for the purposes of their audit and to establish that the auditor is aware of the information. The
Directors are not aware of any relevant audit information of which the auditor is unaware.
BDO LLP have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed
as Resolution 8 at the forthcoming annual general meeting.
Authority to allot shares
At the annual general meeting held on 28 June 2021 shareholders authorised the Board under the provisions of section
551 of the Companies Act 2006 to allot relevant securities within specified limits for a period of five years. Renewal of
this authority is being sought under Resolution 10 at the forthcoming annual general meeting.
The aggregate nominal value which can be allotted under the authority set out in paragraph (i) of the resolution is
limited to £3,303,031 (representing 13,212,124 ordinary shares of 25p each) which is approximately one third of the
issued ordinary capital of the Company as at 29 April 2022 (being the latest practicable date before publication of this
As at 22.4.2022
As at 31.12.2021
Name of holder
Number
% of
voting rights
held
Number
% of
voting rights
held
Genton International Limited*
20,247,814
51.08%
20,247,814
51.08%
Nokia Bell Pensioenfonds
7,015,000
17.70%
7,015,000
17.70%
Spencer Nicholas Roditi
550,000
1.39%
1,366,900
3.45%
Directors’ Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 57
notice). In accordance with guidance issued by The Investment Association, the authority in paragraph (ii) of the
resolution will authorise the Directors to allot shares, or to grant rights to subscribe for or convert any security into
shares, only in connection with a fully pre-emptive rights issue, up to a further nominal value of £3,303,031
(representing 13,212,124 ordinary shares). This amount (together with the authority provided under paragraph (a) of
the resolution) represents approximately two thirds of the Company’s issued ordinary share capital (excluding treasury
shares) as at 29 April 2022. This authority will expire at the conclusion of the next annual general meeting of the
Company. The Directors have no present intention of issuing new shares, or of granting rights to subscribe for or to
convert any security into shares.
Disapplication of pre-emption rights
A fresh authority is also being sought under the provisions of sections 570 and 573 of the Companies Act 2006 to
enable the Board to make an issue to existing shareholders without being obliged to comply with certain technical
requirements of the Companies Act, which create problems with regard to fractional entitlements and overseas
shareholders. In addition, the authority will empower the Board to make issues of shares for cash to persons other
than existing shareholders up to a maximum aggregate nominal amount of £495,454 representing 5% of the current
issued share capital. The authority will be expiring at the forthcoming annual general meeting or on 30 June 2022,
whichever is earlier. Renewal of this authority on similar terms is being sought under Resolution 11 at the forthcoming
annual general meeting. The Company does not intend to issue more than 7.5% of the issued share capital on a non
pre-emptive basis in any three-year period.
Acquisition of the Company’s own shares and authority to purchase own shares
At 29 April 2022, the Directors had remaining authority under the shareholders’ resolution of 28 June 2021, to make
purchases of 3,963,637 of the Company’s ordinary shares. This authority expires on 30 June 2022. All such purchases
will be market purchases made through the London Stock Exchange. Companies can hold their own shares which
have been purchased in this way in treasury rather than having to cancel them. The Directors would, therefore, consider
holding the Company’s own shares which have been purchased by the Company as treasury shares as this would
give the Company the flexibility of being able to sell such shares quickly and effectively where it considers it in the
interests of shareholders to do so. Whilst any such shares are held in treasury, no dividends will be payable on them
and they will not carry any voting rights.
Resolution 12 to be proposed at the forthcoming annual general meeting seeks renewed authority to purchase up to
a maximum of 3,963,637 ordinary shares of 25p each on the London Stock Exchange, representing 10% of the
Company’s issued ordinary share capital. The minimum price which may be paid for an ordinary share is 25p. The
maximum price which may be paid for an ordinary share on any exercise of the authority will be restricted to the highest
of (i) an amount equal to 5% above the average middle market quotations for such shares as derived from the London
Stock Exchange Daily Official List for the five business days before the purchase is made and (ii) the higher of price
of the last independent trade and the highest current independent bid on the London Stock Exchange. The maximum
number of shares and the price range are stated for the purpose of compliance with statutory requirements in seeking
this authority and should not be taken as an indication of the level of purchases, or the prices thereof, that the Company
would intend to make.
Dividends
The Board has declared a final dividend of 5.0cts per share (2020: 1.0cts), in line with our reporting currency, in respect
of the year to 31 December 2021. Subject to shareholders approval of Resolution 3 at the annual general meeting, the
final dividend will be paid on 15 July 2022 to those shareholders on the register on 10 June 2022.
While the dividend is declared in US Dollar, as mentioned in the Shareholders Information section of the Annual Report,
shareholders can choose to receive the dividends in Pounds Sterling. In the absence of any specific instruction up to
the date of closing of the register on 10 June 2022, shareholders with addresses in the UK are deemed to have elected
to receive their dividends in Sterling and those with addresses outside of UK in US Dollar. Shareholders who choose
to receive the dividends in Pounds Sterling will do so at the exchange rate ruling on 10 June 2022, being the dividend
record date. Based on the exchange rate at 22 April 2022 of $1.28 / £, the proposed dividend would be equivalent to
3.9p (2020: 0.8p). Shareholders are reminded that the last day to revoke a currency election is on 24 June 2022.
Directors’ Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 58
AEP operates a dividend reinvestment plan (“DRIP”). Holders of the shares may elect to reinvest their final dividend.
The latest election date is 24 June 2022.
Please note, if a holder makes a partial DRIP election for shares, then the dividend for the remaining shares will be
paid in Pound Sterling.
Liability insurance for Company officers
As permitted by the Companies Act 2006 the Company has maintained insurance cover for the Directors against
liabilities in relation to the Company which remains in force at the date of this report.
Post balance sheet events
On 27 April 2022 the Indonesian government banned the export of CPO to try to stem the rising cost of cooking oil in
Indonesia. News reports have generally indicated that this is a temporary measure as CPO is one of Indonesia’s
largest export revenues, and also Indonesia cannot consume or utilise all the CPO it produces. The ban on the export
of CPO, whilst it is in place, will affect the tender price AEP will achieve as the CPO is sold locally.
On behalf of the Board
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs 29 April 2022
Directors’ Responsibilities
Annual Report 2021 | Anglo-Eastern Plantations Plc 59
The Directors are responsible for preparing the annual report and the financial statements in accordance with UK
adopted international accounting standards and applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in accordance with UK adopted International Accounting
Standards ("IAS") and have elected to prepare the company financial statements in accordance with United Kingdom
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law) ("UK GAAP").
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and Company and of the profit or loss for the Group for that period.
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with UK adopted international accounting standards, subject
to any material departures disclosed and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group
and the Company will continue in business; and
• prepare a Directors’ Report, a Strategic Report and Directors’ Remuneration Report which comply with the
requirements of the Companies Act 2006.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the annual
report and accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary
for shareholders to assess the group’s performance, business model and strategy.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a
website. Financial statements are published on the Company’s website in accordance with the legislation in the UK
governing the preparation and dissemination of financial statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The
Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Directors’ responsibilities pursuant to Disclosure and Transparency Rules 4 (“DTR4”)
The Directors confirm to the best of their knowledge:
• The financial statements have been prepared in accordance with the applicable set of accounting standards, give
a true and fair view of the assets, liabilities, financial position and profit and loss of the Group.
• The annual report includes a fair review of the development and performance of the business and the financial
position of the Group and Company, together with a description of the principal risks and uncertainties that they
face.
On behalf of the Board
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs 29 April 2022
Directors
Annual Report 2021 | Anglo-Eastern Plantations Plc 60
Madam Lim Siew Kim
(Non-Executive Chairman, age 73).
Non-Executive Director since 29 November 1993 and was appointed as Non-Executive Chairman on 31 January 2011.
Madam Lim does not hold any directorship in other public listed company.
Dato’ John Lim Ewe Chuan
(Executive Director, Corporate Finance and Corporate Affairs, member of Audit, Nomination and Corporate
Governance and Remuneration Committees, age 72).
Appointed on 26 April 2008. On 1 September 2010 he was appointed as the Executive Director. Prior to 1 September
2010, Dato’ John Lim was the Senior Independent Non-Executive Director.
Chartered Certified Accountant; Retired as a Partner with UHY Hacker Young LLP, London on 30 April 2019 where he
was a Partner since 1998; previously he had a professional accounting career in Singapore and the UK.
Lim Tian Huat
(Senior Independent Non-Executive Director, Chairman of Audit Committee, Chairman of Nomination & Corporate
Governance Committee and member of Remuneration Committee, age 67).
Appointed on 8 May 2015.
Fellow of the Association of Chartered Certified Accountants and member of the Malaysian Institute of Accountants
and Malaysian Institute of Certified Public Accountants. He is the founding President of Insolvency Practitioners
Association of Malaysia. He holds a degree in Bachelor of Arts in Economics.
Mr. Lim is a practising Chartered Accountant with his own Corporate Restructuring and Insolvency practice, Rodgers
Reidy & Co and his Audit and Advisory practice, Lim Tian Huat & Co. He is also the Managing Director of Andersen
Corporate Restructuring Sdn. Bhd. He was previously a Partner at Arthur Andersen & Co Malaysia from 1990 to 2002
and a Partner at Ernst & Young Malaysia from 2002 to 2009.
Mr. Lim also served as the Commissioner of the United Nations Compensations Commission for a period of five years.
He co-authored a book entitled “The Law and Practice of Corporate Receivership in Malaysia and Singapore”.
Mr. Lim is a Non-Independent Non-Executive Director of Malaysia Building Society Berhad and is the Senior
Independent Non-Executive Director of Majuperak Holdings Berhad, both are listed on Bursa Malaysia. He is an
Independent Non-Executive Director of DUET Acquisition Corp, listed in Nasdaq. He is also an Independent Non-
Executive Director of PLUS Malaysia Berhad and Pacific & Orient Insurance Co. Berhad.
Jonathan Law Ngee Song
(Independent Non-Executive Director, Chairman of Remuneration Committee, member of Audit and Nomination &
Corporate Governance Committees, age 56).
Appointed on 4 July 2013.
Mr. Law graduated from Australia National University in 1989 with a Bachelor of Commerce and Bachelor of Laws. He
was admitted as an Advocate and Solicitor, to the High Court of Malaya in 1991. He is in legal practice and currently
a Partner in Messrs. Azmi & Associates handling merger and acquisitions and corporate practice. He was previously
a Partner in Messrs. Nik Saghir & Ismail (1996 to 2019) and Allen & Gledhill (1991 to 1995).
Mr. Law is the Independent Non-Executive Chairman of Evergreen Fibreboard Berhad, listed on Bursa Malaysia. He
is also the Chairman of the Remuneration Committee and a member of the Nomination Committee of Evergreen
Fibreboard Berhad. He is also a Non-Independent and Non-Executive Director of Pimpinan Ehsan Berhad (appointed
on 25 February 2021).
Statement on Corporate Governance
Annual Report 2021 | Anglo-Eastern Plantations Plc 61
I am pleased to report on the activities of the Nomination and Corporate Governance Committee for the year ended
31 December 2021. This Statement on Corporate Governance forms part of the Directors’ Report.
Compliance with the UK Corporate Governance Code
AEP is committed to business integrity, appropriately high ethical standards and professionalism in all its activities and
operations. This includes a commitment to high standards in corporate governance relating in particular to appropriate
systems and controls adopted at a senior level of management of the Group and operation of the Board. The
benchmark standards in this regard are set out in the UK Corporate Governance Code 2018 (‘the Code’), which was
published in July 2018 which forms part of the Listing Rules of the London Stock Exchange. The Code is available
from the Financial Reporting Council’s (“FRC”) website at www.frc.org.uk. The following provisions of the Code were
not met throughout the financial year ended 31 December 2021:
• Provision 19 relating to the Chairman in her role for more than nine years is fully explained on page 62;
• Provision 21 relating to a regular formal and rigorous externally facilitated board evaluation on page 65
• Provision 24 and 32 relating to the Executive Director inclusion as a member of the Audit and Remuneration
Committees is fully explained on page 65.
Monitoring compliance with the Code is the responsibility of the Nominations and Governance Committee. All
Committee terms of reference have been reviewed to reflect the requirements in the Code.
The core objective of the Board is to create and deliver the long-
term sustainable success of the Company, generating value for
shareholders and contributing to the wider society in a way that
is supported by the right culture and behaviours.
See page 12 for more details on the business model and
strategy.
The Board has agreed a clear division of responsibilities
between the running of the Board and running the business of
the Group, which is supported by the corporate governance
framework. Responsibilities are clearly defined in role
statements to ensure that no one individual has unrestricted
powers of decision-making and no small group of Directors can
dominate the Board’s decision-making.
Committee terms of reference determine the authority given to
each of the Board’s Committees.
For more details on Board composition, leadership and role
statements see pages 60, 62 to 66.
The Board, with the support of the Nominations and Governance
Committee, keeps under constant review the composition of the
Board and its Committees, succession planning, diversity,
inclusion and governance-related matters.
The Board undertakes a review of its effectiveness and that of
its Committees and Directors annually.
See page 62 for more details on Board effectiveness. The
activities of the Nominations and Governance Committee can be
found on page 65.
The Board is accountable to stakeholders for ensuring that the
Group is appropriately managed. The Board sets the Group’s risk
appetite and satisfies itself that financial controls and risk
management systems are robust, while ensuring the Group is
adequately resourced. The Board receives regular updates on
audit, risk and internal control matters with detailed oversight
undertaken by the Audit Committee and its findings are reported
to the Board.
See pages 67 to 71 for more details on audit, risk management
and internal control and the work of the Audit Committee.
The Board, supported by the Remuneration Committee, ensures
that the remuneration policies are designed to support strategy
and promote long-term sustainable success. Executive
remuneration is aligned to the successful delivery of the
Company’s long-term strategy.
See pages 74 to 75 for more details on the remuneration policy
and implementation of the policy.
Further details demonstrating how the Principles and Provisions of
the Code have been applied can be found throughout the
Corporate governance report, the Directors’ report, each of the
Board Committee reports and the Strategic report.
The Financial Reporting Council (“FRC”) is responsible for the
publication and periodic review of the UK Corporate Governance
Code and this can be found on the FRC website www.frc.org.uk.
Board leadership and company purpose.
Remuneration.
Audit, risk and internal control.
Composition, succession and evaluation.
Division of responsibilities.
Statement on Corporate Governance
Annual Report 2021 | Anglo-Eastern Plantations Plc 62
Relationship Agreement with Controlling Shareholder
The UK Listing Rules require a premium listed issuer with a controlling shareholder to have in place a relationship
agreement with the controlling shareholder. The mandatory requirement for the relationship agreement is intended to
prevent controlling shareholders from exercising their influence in a way that is improper or unfair to minority
shareholders. The requirement is not intended to prevent a controlling shareholder from engaging fairly with an issuer
or legitimately disagreeing with the issuer and neither are they intended to prevent shareholders from holding board
positions. AEP Plc has identified all controlling shareholders and regarded its major shareholder, Genton International
Limited (“Genton”) as the only controlling shareholder. In this respect, the Company entered into a relationship
agreement with Genton on 14 November 2014. The agreement is available for inspection by the shareholders upon
request from the Company Secretary. The Board has reviewed this agreement with the controlling shareholder in 2020
and concluded that AEP Plc has complied with the independence provisions included in the agreement and that, in so
far as it is aware, those independence provisions have been complied with by Genton.
The Board
The Board is responsible for the proper leadership of the Company for the long-term success of the Company and
Group. The Board is supplied with relevant, timely and accurate information for review prior to each meeting to enable
them to discharge their duties. The Audit Committee is responsible for the integrity of the financial information and this
is achieved by interacting with the management and with the internal auditors. The Board has identified and formally
adopted a schedule of key matters that are reserved for its decision, including the annual fiscal and capital budgets,
interim, preliminary and final results announcements, final dividends, the appointment of Directors and the Company
Secretary, circulars to shareholders, Group treasury policies and acquisitions. Other matters are delegated to Board
committees, the details of which are set out below.
AEP is led by a strong and experienced Board of Directors (see biographical details set out on page 60). During 2021
the Board comprised the Non-Executive Chairman, one Executive Director and two Non-Executive Directors, both of
whom are considered by the Board to be Independent.
Dato’ John Lim Ewe Chuan was appointed as the Executive Director, Corporate Finance and Corporate Affairs on 1
September 2010. Prior to 1 September 2010, Dato’ John Lim was the Senior Independent Non-Executive Director.
The Executive Director in his capacity is the de-facto Chief Executive Officer (“CEO”).
Madam Lim Siew Kim was appointed as the Non-Executive Chairman on 31 January 2011. Neither external search
consultancy nor open advertising was used for the appointment. Although Madam Lim has been the Chairman for
more than nine years which is not in compliance with Provision 19 of the Code, the Nomination and Corporate
Governance Committee, however, is of the view that Madam Lim, who indirectly owns 52% of the Company’s shares,
together with her experience in the palm oil plantation business since 1993 is an appropriate candidate for the position.
The other members of the Board are satisfied that through the specific powers reserved for the Board, and given the
presence of the Independent Non-Executive Directors, there is a reasonable balance of influence. AEP has complied
with the Provision 11 of the Code which provides that at least half the Board, excluding the Chair, should be Non-
Executive Directors whom the Board considers to be independent.
The Board ensures that the Company’s purpose, values, strategy and culture are aligned to cater for the community
at large, as fully explained in the CSR section of the Strategic Report.
The Nomination and Corporate Governance Committee will monitor continuously the future leader and talents within
the Group as well as outside the Group. This is essential to ensuring a continuous level of quality in management, in
avoiding instability by helping to mitigate the risks which may be associated with unforeseen events, such as the
departure of a key individual, and in promoting diversity and inclusion. The Company continues to have a systematic
approach to succession planning for Non-Executive Directors. The Chairman has a personal dialogue with individual
directors at least once a year to discuss the business of the Group in general and their plans, if any, to facilitate
succession planning especially where the director has served for more than nine years.
Statement on Corporate Governance
Annual Report 2021 | Anglo-Eastern Plantations Plc 63
Independence of the Non-Executive Directors
The Board has evaluated the independence of each of its Non-Executive Directors. Following this assessment, the
Board has determined that, throughout the reporting period, both of its Non-Executive Directors, who were appointed
for specified terms of office, were independent, based above all on their objectivity and integrity. The terms and
conditions relating to the appointment of the Non-Executive Directors are available from the Company Secretary.
In arriving at its conclusion, the Board considered the factors set out in Provision 10 of the UK Corporate Governance
Code including, inter alia, whether any of the Non-Executive Directors:
• has been an employee of the Group within the last five years;
• has, or had within the last three years, a material business relationship with the Group;
• receives additional remuneration from the Group apart from a Director’s fee;
• has close family ties with any of the Group’s advisors, Directors or senior employees;
• holds cross-directorships or has significant links with other Directors through involvement in other companies or
bodies;
• has served more than nine years on the Board; or
• represents a significant shareholder.
The UK Corporate Governance Code acknowledges that a Director may be regarded as independent notwithstanding
the existence of any of the above factors, provided a clear explanation is given.
The Independent Non-Executive Directors have a wide range of business interests beyond their position with the
Company and the rest of the Board agree unanimously that they have shown themselves to be fully independent.
Senior Independent Non-Executive Director
Mr. Lim Tian Huat, an experienced Chartered Accountant acted in the capacity of Senior Independent Non-Executive
Director from 8 May 2015.
Operation of the Board
A schedule of duties and decisions reserved for the Board and management respectively has been adopted. The Audit,
Nomination & Corporate Governance and Remuneration Committees have written terms of reference which are
available for inspection upon request from the Company Secretary. The terms of reference are also available for
download from the Company’s website under Sustainability - Corporate Governance section.
Unless warranted by unusual matters, the Board normally meets two to three times each year. Otherwise, all other
matters are dealt with by written resolution and telephone conference. During 2021 there were two formal Board
meetings attended as follows:
Attendance
Madam Lim Siew Kim 1/2
Dato’ John Lim Ewe Chuan 2/2
Lim Tian Huat 2/2
Jonathan Law Ngee Song 2/2
Agenda and minutes of previous meetings were circulated prior to meetings.
The Independent Non-Executive Directors met on their own during 2021. Telephone discussions between the
Chairman and the Non-Executive Directors also took place outside these meetings.
During 2021, the Board followed the Group results and the development of the activities of the various subsidiaries by
means of monthly reports prepared by the management in Malaysia and Indonesia. It deliberated on the periodic
results and measured its performance against other plantation companies. The annual budget for 2021 was tabled for
the Board discussion and subsequent approval. The Executive Director received further monthly reports and minutes
of the Executive Committee meetings in Indonesia chaired by the Group senior general manager from Malaysia and
briefed the Board accordingly. Meetings were conducted online during the year as international borders were closed
due to the Coronavirus pandemic. The objectives of the Executive Committee among others are to resolve operational
Statement on Corporate Governance
Annual Report 2021 | Anglo-Eastern Plantations Plc 64
issues and to drive the performance budget set at the beginning of every year by the Board. Besides the senior general
manager from Malaysia, the Executive Committee is made up of senior members of the management team based in
Indonesia which includes the President Director, the Chief Operating Officer, the Finance Director and the Engineering
Director. The Senior Internal Audit Manager was regularly invited to attend and briefed the Executive Committee of
significant audit findings and follow-up.
The Board deliberated on the format and the venue for the forthcoming AGM on the 27 June 2022. As in previous
years, the Board sought advice from its professional advisers and discussed several options. The Board is aware that
shareholders wish to physically interact with Board members especially after two years of online AGMs where
opportunities to discuss matters after the AGMs were limited. In order for the AEP to meet its responsibilities to
shareholders and stakeholders through effective regular engagement and participation, the Board therefore approved
to hold the up-and-coming AGM in London subject to no change in travel restrictions and international borders remain
open, especially in the UK and in Malaysia.
In addition, the Board deliberated on the dividend rate for the year. The Board was aware that some shareholders
have requested for a higher dividend in view of the substantial cash balance in the Group. The Board reiterated that
the Group should exercise prudence in these uncertain times and in view of the emergence of new virus variant which
may cause a shutdown in our Indonesian operation. The Board is conscious of its obligations in respect of the viability
statement in relation to going concern that the Group needs to have a cash buffer of at least twelve months from the
date of the Annual Report and in the context of a possible shutdown the Board has taken a prudent and contingent
view that the shutdown could be more than a year. The Board also believe that there should be a cash balance
earmarked for attractive opportunities that may come along. The Board nevertheless raised the dividend to 5.0cts
(2020: 1.0cts) in view of the better performance, together with an improved economic outlook for 2022.
The issue of share buyback was also discussed and the Board after discussion with advisors was of the consensus
that shares buyback does not necessarily improve the share price in the long term. Other contributing factors including
economic cycle and governance are equally likely to influence the share price movement. The Board was also informed
that recent market research concluded that share price of plantation companies is no longer driven by profitability due
to ESG issues.
The Board during the year also deliberated and approved a change in accounting policy to value land at historical cost
rather than at valuation. This is explained in detail in the Audit Committee Report on page 69.
The Board also approved the Audit Committee’s recommendation to dispose or discontinue the operations of the three
plantations in South Sumatera in view of the continuing losses despite record CPO prices which is detailed in page 70.
The Board during the year invited various fund managers to submit investment proposals to manage its funds, seeking
a higher return and to hedge against a potentially volatile Indonesian Rupiah. The Board deliberated on the proposals
and requested for the terms to be further refined.
The Board reviewed the risks management process and noted the probable financial impact of the Covid-19 pandemic
on the operation of the Group should the risks materialised. The Board was updated on various standard operating
procedures put in place in Indonesia and Malaysia to ensure the safety of workers.
Each Board member has access to the impartial advice and services of the Company Secretary, who is responsible
to the Board for ensuring that appropriate procedures are followed. Where necessary, the Board members may seek
independent advice from the Company’s brokers, including legal counsel at the Company’s expense. The Company
maintained Directors’ and officers’ liability insurance throughout 2021.
Non-Executive Directors are normally appointed for two-year terms renewable on the recommendation of the Board.
To maintain the vitality of the Board, the Directors specify fixed terms of office for Non-Executives. However, the Board
will review the position of each Director for the yearly re-election under the Code. The re-election of the independent
Non-Executive Directors has always been on the basis of gaining a majority of the independent shareholders vote in
addition to the total shareholders vote since this requirement was first introduced.
Statement on Corporate Governance
Annual Report 2021 | Anglo-Eastern Plantations Plc 65
Dato’ John Lim, the only Executive Director on the Board, sits on the Audit, Nomination and Remuneration Committees
for 2021. Provision 24 and 32 of the UK Corporate Governance Code provide for smaller companies like AEP to have
two independent Non-Executive Directors in the Audit and Remuneration Committees and a majority independent
Non-Executive Directors in the Nomination and Corporate Governance Committee. In practice, companies would
normally exclude the Executive Director from membership so as not to taint the independence of both the Audit and
Remuneration Committees. However, the Board felt strongly that given the small composition of the various
Committees, they would benefit from Dato’ John Lim’s wealth of commercial and audit experience. It was also felt that
Dato’ John Lim being the only Director based in London could only adequately represent the Company in any
shareholder and investor meetings if he sits in the three Committees. The Board also believes that the Non-Executive
Directors, being professionals in their own areas of expertise would maintain their impartiality and independence by
their majority presence in all three Committees.
In 2021 the Board conducted a review of its performance by discussion. It concluded that the Board was performing
effectively and that the Board members have the complementary skills appropriate to propel the Group in its strategic
direction and for challenges ahead. No other major issues arose from this review. The Company does not appoint an
external consultant to conduct a formal and rigorous evaluation of the Board’s performance as the Board believes that
it had performed commendably going by the financial results achieved over the years when compared to its peers.
Following a review of the internal control and risks management in April 2022 and in the absence of any reported
failure and weaknesses which the Board considered significant, it concluded that these remain effective and sufficient
for their purpose.
In connection with the statutory provisions regarding directors’ conflict of interest, the Directors must avoid a situation
in which the Directors have, or can have a direct or indirect interest that conflicts, or possibly may conflict with the
interests of the Company. The duty is not infringed if the matter has been authorised by the Directors. Under the
Articles, the Board has the power to authorise potential or actual conflict situations. The Board maintains effective
procedures to enable the Directors to notify the Company of any actual or potential conflict situations and of those
situations to be reviewed and, if appropriate, to be authorised by the Board. Directors’ conflicts situation if it arises is
reviewed annually and authorisation is recorded in the Board minutes.
Nomination and Corporate Governance Committee
The Nomination and Corporate Governance Committee currently comprises Mr. Lim Tian Huat (Chairman), Dato’ John
Lim Ewe Chuan and Mr. Jonathan Law Ngee Song.
The committee had two meetings during 2021, attended by all members.
The policy on diversity is described on page 48 of the Strategic Report.
During the year, the Nomination Committee reviewed and deliberated on the Statement of Corporate Governance for
inclusion in the Annual Report. It also met to recommend and extend the contract of three directors. Whilst no formal
training programme was arranged for the year, the Board received periodic briefings on legal, regulatory, operational
and political developments affecting the Group. As in the past the Board will not hesitate to arrange training on specific
matters where it is thought to be required.
Relations with shareholders
All shareholders may attend the Company’s AGM and put questions to the Board and such questions must be with at
least twenty working days’ notice. At the conclusion of the AGM, a summary of votes for each resolution is reported
and made available at the company’s website as soon as practicable after the meeting. Shareholders will not receive
a hard copy of the proxy form for the 2022 AGM. Instead shareholders will be able to vote electronically using the link
https://www-uk.computershare.com/investor/. For more details please refer to online submission of proxy voting on
page 8 of the Annual Report.
In a typical year, the Executive Director would have contacted and met certain principal shareholders during the year
to understand their concerns and views on governance and performance. The views of the shareholders are
Statement on Corporate Governance
Annual Report 2021 | Anglo-Eastern Plantations Plc 66
communicated to the Board to ensure that it is mindful of the shareholders’ sentiment and issues arising at all times.
It is the intention of the Board to engage with identifiable shareholders who have voted against Company’s resolutions
in the past. Despite the easing of the travel restriction and reopening of international borders, the Executive Director
was not able to meet any of the principal shareholders during the year other than via telephone calls and email
correspondence. Some shareholders declined to meet in person due to continuing concerns over the virus. The
Executive Director was nevertheless able to meet up with some significant shareholders during the 1Q of 2022.
The annual report, interim report and trading statements are intended to keep the shareholders informed as to the
progress in the operational and financial performance of the Group. The Company maintains a corporate website at
https://www.angloeastern.co.uk/. This website has detailed information on various aspects of the Group’s operations.
The website is updated regularly and includes latest Company announcements, information on the Company’s share
price, the price of crude palm oil, foreign currency movement of Indonesian Rupiah against US dollar and
environmental, social and governance matters.
The Company’s results and other news releases issued via the London Stock Exchange’s Regulatory News Service
are published on the “Investors Information” and “News” sections of the website and together with other relevant
information concerning the Company and the Industry, are available for downloading. The website was upgraded
recently to enable shareholders and investors to select and receive e-mail alerts from the Company on the selected
regulatory news to follow the development of the Company.
Environmental and corporate responsibility
In 2004 a group of growers, processors, retailers and wildlife and conservation groups founded the “Roundtable for
Sustainable Palm Oil”, known as RSPO, to codify and promote best practices in the industry. Although AEP is not a
member of the RSPO, the Group’s management and Directors take a serious view of their environmental and social
responsibilities and are fully committed to the principles developed by RSPO. Many of these principles overlap with
ISPO and MSPO of which compliance is mandatory for AEP. These principles cover eight headings as follows:
• Transparency;
• Compliance with local laws and regulations;
• Commitment to long-term economic and financial viability;
• Use of appropriate best practices by growers and millers;
• Environmental responsibility and conservation of natural resources and biodiversity;
• Responsible consideration of individuals and communities affected by growers and mills;
• Responsible development of new plantings; and
• Commitment to continuous improvement in key areas of activity.
Within these headings are 40 detailed principles. Among the most important are:
• Not to remove primary forest;
• Not to use fire for clearing areas designated for new or replanting;
• To follow accepted soil and water conservation practices;
• To use agrochemicals in ways that do not endanger health or the environment and to promote non-chemical
methods of pest management;
• To leave wild areas for wildlife corridors, water catchment and riparian protection;
• Provide full treatment of mill effluent water;
• Ensure the wishes of local communities and individuals are taken account of; and
• To pay to individuals with residual rights over land only freely agreed compensation, in addition to following
government land regulations.
AEP seeks to comply with these principles in all areas of its activities. Some of the measures taken for environmental
protection are disclosed and updated in the company’s website from time to time.
Lim Tian Huat
Chairman, Nomination and Corporate Governance Committee 29 April 2022
Audit Committee Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 67
Composition
The Audit Committee comprises Mr. Lim Tian Huat (Chairman), Dato’ John Lim Ewe Chuan and Mr. Jonathan Law
Ngee Song, all of whom are considered by the Directors to have relevant financial and professional experiences to
discharge their specific duties with respect to the Audit Committee. Please see their qualifications in page 60.
Mr. Lim participated in four external courses and seminars in 2021 organised by Malaysian Institute of Accountants.
Topics covered were cyber security awareness, the role of directors and senior management in maximising integrity,
anti-money laundering and counter financing for terrorism, code of ethics when exercising judgement, reporting
standards and forum for audit practitioners.
Dato’ John Lim attended several recorded webinars on IFRS and UK GAAP updates, sustainability and climate change
reporting update including streamlined energy and carbon reporting (“SECR”), FCA listing rule on TCFD disclosure
and European Single Electronic Format (“ESEF”) reporting.
Mr. Jonathan Law attended two webinar training covering topics on sustainability reporting ensuring relevance to the
financial market and rescue mechanisms for financially distressed companies facing liquidation organised jointly by
Rating Agency of Malaysia and Malaysian Investor Relations Association and a local law firm.
Both Mr. Lim and Dato’ John Lim have recent and relevant financial experience in their discharge of duties on the Audit
Committee.
Roles of the Audit Committee
Audit Committee is responsible for:
• Monitoring the integrity of the financial statements and reviewing formal announcements of financial performance
and significant reporting issues and judgements that such statements and announcements are fair, balanced and
understandable for shareholders to assess the company’s financial position and performance, business model and
strategy;
• Monitoring and reviewing the effectiveness of internal financial controls, internal controls and risk management
systems;
• Making recommendations to the Board in relation to the appointment, reappointment and removal of the external
auditor, their remuneration and terms of engagement;
• Reviewing and monitoring the independence and objectivity of the external auditor and the effectiveness of the
audit process;
• Developing and implementing policy on the engagement of the external auditor to supply non-audit services,
ensuring there is prior approval of non-audit services, considering the impact this may have on independence,
taking into account the relevant regulations and ethical guidance in this regard, and reporting to the Board on any
improvement or action required;
• Reporting to the Board on how it has discharged its responsibilities;
• Providing advice to the Board on the assessment of the principal risks facing the Group; and
• Providing advice to the Board on the form and basis underlying the longer-term viability statement and going
concern statement in the Annual Reports.
The Committee monitors the engagement of the auditor to perform non-audit work. The ethical standard of International
Standards on Auditing requires the external auditor to evaluate threats to independence and discuss this with the Audit
Committee. The external auditor will be responsible for maintaining a record of all non-audit services undertaken and
for ensuring that they do not undertake any of the prohibited services. To ensure that the external auditor satisfies
these ethical standards on auditing, the Group had decided not to engage the external auditor for non-audit services
for the Company and its affiliates except for the review of the interim report for compliance before announcement. The
Committee considered that the nature and limited scope of, and remuneration payable in respect of, this engagement
was such that the independence and objectivity of the auditor were not impaired.
The members of the Committee discharge their responsibilities by formal meetings and informal discussions between
themselves, by meeting with the external auditor, the internal auditors and management and by consideration of reports
by management and by holding at least two formal meetings in each year.
Audit Committee Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 68
It receives reports from executive management in Indonesia and Malaysia and focuses principally on reviewing reports
from management and considers whether significant risks in the Group are identified, evaluated, managed and whether
significant weaknesses are promptly remedied including, but not limited to, commodity price movements, exchange
rate movements, political and social change and government legislation. Where necessary the Committee also seek
independent advice from professionals and experts.
Overview
The Audit Committee met prior to the completion of the 2021 accounts and five times during 2021 with full attendance
in all meetings.
During the year, the Committee reviewed and discussed the 2020 Annual Report, 2021 Interim Results, 1
st
Quarter
and 3
rd
Quarter Trading Statement for 2021. The Committee also deliberated and recommended to the Board the
dividend rate for the Company.
The Committee updated the risks register chart annually and deliberated on the probability of various material risks
from occurring and the resulting financial impact should the risks materialise. The Committee concluded that produce
prices are the biggest risks with high probability of occurring and with high financial impact. The risks of Coronavirus
affecting a major part of business are low considering the geographical spread of its operations but if it does
materialised, the financial impact would be high. With the Group holding a high amount of Indonesian Rupiah, the risks
of currency exchange rates movement are high with medium financial impact. The country, regulatory and governance
practices together information technology security risks have medium likelihood of happening with medium to low
financial impacts. All other risks are generally low in financial impact. See page 42 for the map of principal risks.
The Audit Committee deliberated and set the budget targets for 2021 for the Board’s approval.
The Audit Committee have regular dialogues, both formal and informal with the senior management in Indonesia and
Malaysia and the discussions are open and constructive.
During the year the Audit Committee decided to change the current land valuation policy from fair/market value to
historical cost. An analysis was conducted of AEP's peers in the UK which showed that the majority reported their land
at historical cost therefore it was agreed that this change in policy would provide a more readily comparable result and
improve the quality of the financial information provided.
The Audit Committee evaluated the performance of the three plantations in South Sumatera and recommended to the
Board to appoint a consulting firm in Indonesia to dispose off the three plantations in South Sumatera. The three
plantations have been incurring losses since inception despite the record CPO prices due to continuous low rainfall
and geographical constraints. The performance of these plantations in South Sumatera is provided in the Business
review section of the Strategic report on page 17.
The Audit Committee streamlined the calculation and valuation methodology of biological assets (“BA”) based on
industrial practice. It now uses one-month FFB production instead of two months to arrive at its BA value for reporting
purposes.
The Audit Committee scrutinised the items in the financial statements which required management judgements,
including in the change in land value to historical cost and the assets held for sale and discontinued operations and
was satisfied that they are appropriately reflected in the financial statements.
The Senior Internal Audit Manger presented his Internal Audit plan for the year which was approved by the Audit
Committee. He also presented his audit findings and interacted with members of the Audit Committee in one of the
meetings. Internal audit reports were tabled and discussed in detail in three of the Audit Committee meetings in 2021.
Following the Quality Assurance Review on the internal audit department last year, the Board has appointed Deloitte
Indonesia to co-source the internal audit and to conduct audit workshop for our internal audit team starting from next
year. This hopefully will provide the Board with further assurance and comfort as to the effectiveness of the internal
Audit Committee Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 69
audit functions and to satisfy itself on the integrity of the financial statements. Under the co-sourcing arrangement,
Deloitte will assign experienced personnel to work with AEP internal audit team in performing audit review in five
significant component companies in Indonesia. The audit will focus on areas such as procure to pay, inventory
management, cash and bank management, fixed asset and bearer plant management and payroll. Co-sourcing allows
the Group to access specialists and industry leaders in best practice guidelines to effectively improve our internal audit
methodology and approach used in planning, execution and reporting which could enrich the internal audit team
capabilities. It will also organise an audit workshop for the internal audit team which will touch on internal audit
methodology and cycle, common mistakes in internal audit, introduction to data analytics and how to apply these tools
in executing internal audit projects and reporting management.
External Audit
BDO LLP are the external auditors. The engagement Partner who has overall responsibility for the audit is Nigel Harker
who is in his second year of engagement with the Group. The external auditor BDO LLP have been appointed as the
Company’s external auditors since the financial year ended 2001. In accordance with good governance, the audit
services were competitively tendered in 2014, whereby BDO LLP was reappointed. The Group intends to put the
statutory audit out to tender in 2023 when BDO LLP are mandated to be rotated under the independence rule after the
audit of the Group’s financial statements for the year ending 31 December 2023.
The Committee formally met online with the external auditor twice in 2021 to discuss the audit findings and to plan the
audit for 2021 financial year. The external auditor, during the audit planning, highlighted to the Audit Committee their
scope of audit and their assessment of areas of audit risks. The significant risks include impairment of bearer plants,
recoverability of plasma scheme receivables, management override of controls, revenue recognition, completeness of
related party transactions and accounting for assets held for sale and discontinued operations.
Bearer plants, held as property, plant and equipment, together with estate land are valued at historical cost (IAS 16).
Under IAS 36 - Impairment of Assets, an entity is required, at the end of each reporting period, to assess whether there
is any indication that an asset may be impaired, or if a previously recognised impairment should be reversed. The palm
oil industry is likely to be heavily impacted by climate change and sustainability which will need to be factored into any
impairment considerations. This would include the physical risks such as flooding and the impact on plantation growth
of rapid changes in weather patterns, as well as the transitional risks such as changes in government policy on the
use of palm oil. In addition, several of the Group’s land leases in Indonesia are nearing expiry and, although renewal
is expected to be granted, it will involve the Group needing to incur expenditure to support plasma programmes or
other assistance to the local community such as through education or machinery. Those costs will be incorporated into
the impairment model where appropriate. There is an inherent risk that the valuation of these assets may be materially
misstated given the significant judgement involved in assessing whether there are indicators of impairment or
impairment reversal and subsequently, the quantum of any such charge. Having considered all the factors that could
affect the carrying value of Bearer plants held as property plant and equipment, together with the estate land, the Audit
Committee is of the view that the Bearer plants are fairly stated after recognising a reversal of impairment of $5.4
million as at the year end.
AEP hold amounts due from cooperatives under the plasma programmes within non-current receivables on the
statement of financial position. In some instances where the cooperatives are granted a loan, AEP will provide the
guarantee for that loan, in which case AEP will assess the likelihood of their ability to repay this loan in order to
determine the correct accounting treatment. There is a risk that the receivables due from cooperatives may not be
recoverable and an additional risk that, where a guarantee is given against a loan and there is a default, in which case
AEP will become liable. In both cases expected credit losses (“ECL”) may be recognised in accordance with IFRS 9 -
Financial instruments.
The risk of fraud due to management override of controls and revenue recognition due potentially to performance
obligations linked to compensation or shareholders’ expectations could be achieved by manipulating judgements and
estimates or through the posting of journals in accounting records.
The Audit Committee ensured completeness of related party transactions by requiring all Directors and key personnel
to disclose any related party relationships, transactions, outstanding balances including financial commitments directly
Audit Committee Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 70
or indirectly with the Group via a signed prescribed form for this purpose. The Audit Committee may carry out third
party search, if applicable.
As explained earlier, the Board has appointed a consulting firm in Indonesia to dispose three of the Group’s lesser
performing plantations located in South Sumatera. Under IFRS 5 - Non-current assets held for sale and discontinued
operations sets out specific criteria which, if met prior to 31 December 2021, would mean that those assets and
liabilities to be transferred to a buyer would be entered into a disposal group and recognised in current assets and
current liabilities as “held for sale”. These specific considerations include effective date, cease of depreciation on
assets classified as held for sale, impairment of assets prior to reclassification and to recognise impairment loss on
plasma receivables as they are unlikely to be recovered. IFRS 5 states that, if a disposal group represents a separate
major line of business or geographical area of operations which can be clearly distinguished, operationally and for
financial reporting purposes, from the rest of the entity then it should be classified as a discontinued operation and
disclosed separately as such in the income statement for both the current and prior year. The Audit Committee
concluded that the criteria to categorise the sale of the three plantations as assets held for sale have been met, as the
Board has set a realistic achievable price for the three plantations to be sold by the end of 2022.
Other risks identified include valuation of biological assets, valuation of defined benefit obligation and recoverability of
income tax receivables. The auditor continued to stress on directors’ responsibilities under the UK Corporate
Governance Code, definition and application of materiality, impact of climate change on financial statements through
the fair value of assets, asset impairments, or reductions in the useful economic lives of assets. The auditors reiterated
the need for proper disclosure consistent with the recommendations of the TCFD for 2021. Due to the travel restriction
and quarantine requirement in Indonesia, the audit engagement team BDO LLP, from the UK reviewed the work of the
component auditors remotely.
Before finalizing the accounts, the Audit Committee conducted a stress test premise on the shutdown of the entire
Group’s estates and mills operation for a year as a result of Covid-19. Based on this scenario, the cash flow projections
showed that the Group has sufficient resources to continue operating as a going concern for the next five years.
During the year the Committee carried out an assessment of the effectiveness of the external audit process. The
assessment was led by the Chairman of the Audit Committee, assisted by the Senior General Manager and the Group
Accountant and focused on certain criteria which the Committee considered to be important factors in demonstrating
an effective audit process. These factors included the quality of audit staff, the planning and execution of the audit
according to agreed plans and timeline, provision of sound advice on technical issues and degree of independence
and professionalism displayed during the audit for 2020. The tenure of audit and extent of non-audit work that will
affect the independence of the auditor were reviewed. During 2021, the non-audit work undertaken by BDO LLP (UK)
was on the review of the interim report for compliance before the announcement. The Committee considered the
nature, limited scope of engagement and remuneration paid were such that the independence and objectivity of the
auditor were not impaired. Fees paid for audit and non-audit services are provided in note 6. The Committee considered
the key members of the audit engagement team and component auditors involved in the Group Audit. This includes
the Audit Partner and the Audit Manager from BDO LLP (UK) and the various Partners from BDO in Malaysia and
Indonesia. Broadly, the same team from last year conducted the audit except for the new Audit partner from BDO
Indonesia. Following this assessment, the Committee concluded that the external audit process remained effective,
and that the objectivity of the external auditor was not impaired and that it provides an appropriate independent
challenge of the senior management of the Group.
Internal control
The Company has followed the Code provisions on internal control since 1999 and the Guidance on Risk Management,
Internal Control and Related Financial and Business Reporting issued by the Financial Reporting Council in 2014. The
Board has overall responsibility for the Group’s systems of internal control and risk management and for reviewing its
effectiveness. Such a system is designed to manage, rather than eliminate, the risk of failure to achieve business
objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The
Audit Committee reviews and monitors specific risks and internal control procedures and reports to the Board where
appropriate. Executive staff and Directors are responsible for implementation of control procedures and for identifying
and managing business risks.
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Annual Report 2021 | Anglo-Eastern Plantations Plc 71
The Group has in-house internal auditors who visit operating sites in Indonesia regularly based on an approved Internal
Audit Plan and provide summarized internal audit reports to the Audit Committee on a regular basis. The Internal Audit
also conducts special audits throughout the year as and when required by management. The internal audit team
provides objective assurance as to the effectiveness of the Group’s systems of internal control and risk management
of the Group’s operating management to the Committee. Follow-up audits and discussions are also held to ensure
remedial actions are taken promptly. The internal audit review is a continuous and sequential process and in any one
year does not necessarily cover all risks which are significant to the Group. The process aims to provide reasonable
assurance against material misstatement or loss but cannot eliminate the risk of loss.
Lim Tian Huat
Chairman, Audit Committee 29 April 2022
Directors’ Remuneration Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 72
Overview
I am pleased to report on the activities of the Remuneration Committee for the year ended 31 December 2021. It sets
out the remuneration policy and remuneration details for the Executive and Non-Executive directors of the Group. It
has been prepared in accordance with Schedule 8 of SI 2008/410 Large and Medium-sized Companies and Groups
(Accounts and reports) Regulations 2008.
The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Directors’
Remuneration Report and to state whether, in their opinion, those parts of the report have been properly prepared in
accordance with the Regulations. The parts of the annual report on remuneration that are subject to audit are indicated
in that report. The report by the Chairman of the Remuneration Committee and the policy statement are not subject to
audit.
During the year the Remuneration Committee reviewed the annual increment and bonus entitlement of senior
management in Indonesia. In considering the bonus for 2021, the Committee took into account the achievement of the
key performance criteria related to crop production, rate of new planting, oil extraction rates and implementation of
cost reduction measures. It also made an informal comparison with other plantation companies for bonus payment. In
addition, it also took into consideration the hardship caused by the pandemic in evaluating the related incentives given
to the employees.
The Remuneration Committee also considered the impact and significance made by changes to the Indonesian
Manpower Law with the introduction of the Omnibus Law in November 2020 as majority of the Group’s operations are
based in Indonesia. According to our actuary, the impact of the new law has resulted in a reduction on the retirement
benefit liabilities of $2.2 million. The new law was introduced to stimulate the local economy and job creation in
Indonesia by increasing its competitiveness and making it easier to do business. Primarily, the Omnibus Law
streamlines complex regulatory environment and eased restrictions in critical areas which includes labour laws, capital
investment, business licensing, corporate tax and land acquisition. This new law has made labour laws in Indonesia
more flexible and investor-friendly and would impact the Group in the following areas:
• Easier to recruit and replace foreign workers/managers.
• Revokes the maximum time limit on fixed term employment contracts. The Law however requires the
employer to pay compensation to a fixed term employee upon expiry of the fixed term contract. Plantation
normally hire casual workers on short, fixed term contracts for seasonal upkeep and maintenance work to
keep payroll costs low.
• Implementation of working hours may be stipulated and agreed within the employment contract, company
regulation or collective labour agreement.
• Maximum overtime hours are increased to four hours per day and eighteen hours per week from the current
three hour per day or fourteen hours per week.
• Removes the long service leave unless agreed within the employment contract, company regulation or
collective labour agreement. Previously workers who had worked continuously for six years or more were
entitled to two months long service leave.
• Simplifies the regulation of wages through the minimum provincial wage and minimum regency wage. The
minimum sectoral wage is removed and small business are now exempted from the regulated wage tiers.
• Provides additional grounds for termination of employees on grounds of efficiency if employer has incurred
losses in operation or entered into suspension of debt payment obligation. Termination is also permitted if an
employee violates the employment agreement, company regulation or collective labour agreement without
need for warning letter if such termination for cause is specified in the relevant employment document or
employees handbook.
• Removes the employer obligation to pay 15% of the employee’s severance and long service pay in the form
of housing and medication compensation. The employer only needs to pay one times severance, regardless
of the reason for the termination. However, severance pay is maintained at two times when termination is due
to prolong illness for at least twelve months.
• Companies which do not provide annual leave to their workers may be subject to criminal sanctions.
• Introduces new social security programmes, dealing with job loss security so as to provide a decent standard
of living.
Directors’ Remuneration Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 73
In addition, the Committee deliberated and renewed the contracts of three senior management personnel and three
directors. The contracts for the directors were renewed with no change in their remuneration. None of the directors
were involved in deciding the renewal and the compensation of their own contract. Measures to avoid or manage
conflicts of interest are in the declarations of all Directors and senior managers in respect of related party transactions
as detailed on page 69. The Committee believes that the remuneration packages should continue to motivate and
reward individual performance in a way consistent with the best interest of the Company and its stakeholders. The
Committee also deliberated on the 2021 Remuneration Report and recommended to the Board for acceptance.
As part of the engagement of workforce, the Chairman of Remuneration Committee conducted two online meetings
with employees’ representatives and heads of employees’ cooperatives in Sumatera and Kalimantan to discuss and
obtain feedback on issues relating to their safety and welfare, working conditions, remuneration and ways to improve
productivity. The meetings were productive and concluded that workers were generally happy and satisfied. Several
representatives expressed their appreciation to AEP for the financial assistance provided during the period of lockdown
and pandemic. Nevertheless, several issues were raised that need to be looked into. Staffs lamented on the rate of
inflation in Indonesia and hope that AEP would pay better bonus on a timely basis with increment that matches the
industrial standards. They also requested for additional deep wells to facilitate easier access to clean water in Bengkulu
and Riau instead of buying bottled water. Staff working in mills also asked for a variety of food to be provided at staff
canteen during their overtime. Management was also asked to review the number of school buses deployed in Riau
plantation due to increasing number of students. There were also health concerns in two estates caused by dust
pollution during the dry seasons affecting their homes and schools. A representative in one estate requested additional
technical training for mill workers as well as to upgrade harvesting tools which he alleged to damage easily.
The Committee would welcome your support for our Remuneration Report.
The Remuneration Policy was previously voted and approved by the shareholders at the 2020 AGM and shall be
effective from 1 January 2020 for three years. There is no change in the policy since September 2014.
Composition
The Remuneration Committee comprises of Mr. Jonathan Law Ngee Song (Chairman), Dato’ John Lim Ewe Chuan
and Mr. Lim Tian Huat.
The Committee had two meetings in 2021, attended by all members.
Voting at Annual General Meeting
There was no change in the Remuneration policy which was last voted and approved in 2020. In that meeting, the
shareholders voted in the following manner:
Shares For
Shares Against
% Shares For
% Shares Against
To approve Remuneration policy
23,029,499
703,113
97.0%
3.0%
It is the Company’s policy to vote on the Remuneration policy once every three years or if there is a change in the
policy within the three years.
The Director’s Remuneration report was last approved at Company’s AGM on 28 June 2021. In the meeting, the
shareholders voted in the following manner:
Shares For
Shares Against
% Shares For
% Shares Against
To approve Directors’ Remuneration Report
23,645,841
170,006
99.3%
0.7%
The Company pays due attention to the results of voting. When there is substantial vote against any resolution in
relation to Directors’ Remuneration, the reasons for any such vote is sought and any action in response will be reported
in the following year.
Directors’ Remuneration Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 74
The Listing Rules require the re-election of independent directors in companies with a controlling shareholder to be
voted separately by independent minority shareholders in addition to the approval of all shareholders. The results of
the re-election of the independent directors in the 2021 AGM were:
Shares For
Shares Against
% Shares For
% Shares Against
By all shareholders:
Re-election of Mr. Lim Tian Huat
23,528,702
105,545
99.6%
0.4%
Re-election of Mr Jonathan Law Ngee Song
23,798,952
16,938
99.9%
0.1%
Shares For
Shares Against
% Shares For
% Shares Against
By independent shareholders:
Re-election of Mr. Lim Tian Huat
2,976,788
105,545
96.6%
3.4%
Re-election of Mr Jonathan Law Ngee Song
3,247,038
16,938
99.5%
0.5%
Policy of the Remuneration Committee
The Committee sets the remuneration and benefits of the Executive Director. The Executive Director’s compensation
is not linked to the profitability of the Group. It is linked to his role in respect of activities relating to corporate finance
and corporate affairs, including liaising with the Company’s advisers and regulators and interaction with shareholders.
When determining Executive Director’s remuneration, the Committee reviews the pay policy and levels for executives
below the Board, as well as pay and conditions of employees throughout the Group. Other factors considered are
individual performance, market conditions, the Company’s performance, pay and employment conditions of its other
employees in the organisation and the need to maintain an economic operation. This policy which is similar to the
previous approved policy will continue to be consistently applied in the next financial year. This policy including capping
the remuneration at £90,000 per annum as set out below will continue to be applied for any new appointment.
The table below summarises the key aspects of the Group’s Remuneration Policy for the Executive Director since
September 2014 and has remained unchanged since that date.
Type
Purpose
Maximum payment
Base salary - fixed pay.
To contain fixed costs.
Capped at £90,000. The cap is reviewed periodically. The
policy permits the cap to be changed if this is deemed
necessary to meet business, legislative or regulatory
requirements.
There is no bonus, fringe benefits, employee share option scheme or any other variable remuneration for the Executive
Director.
The table below summarises the key aspects of the Group’s Remuneration Policy for the Non-Executive Directors.
Type
Purpose
Maximum payment
Fees.
To attract and retain
individuals with suitable
knowledge and
experience.
Determined by the Board within the limits set by the
articles of association and by reference to comparable
organisations and to the time commitment expected.
The Committee periodically assesses the remuneration of the Non-Executive Directors and submits a proposal to the
Board. Non-Executive Directors’ remuneration consists exclusively of a fixed payment. The Non-Executive Directors
receive no benefit such as share options or other performance-related elements.
The Committee makes recommendations on senior management pay and conditions, after consultation with the
Chairman. In determining the remuneration policy of senior management, the Committee takes into account the need
to attract, retain and motivate employees. To promote long-term sustainable success, the Committee makes external
comparison with the current market trends and practices of equivalent roles considering the size, business complexity
Directors’ Remuneration Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 75
and relative performance. The following is a summary of the key components of remuneration packages of senior
management:
Base salary
Base salaries of senior management are reviewed on an annual basis by the Remuneration Committee or when there
is a change in the individual’s responsibilities. The Group does not seek the advice of an external consultant in
determining the salaries of senior management and directors.
Bonus
The Group operates a bonus scheme for senior executives and managers of operating units, which is determined by
weighted performance criteria including crop production, external crop purchase, increases in planted area, efficiency
of mill performance and overall profitability. There is however no bonus scheme for any of the Directors.
The operating units in Indonesia and Malaysia have in place a variable compensation policy which over the recent
years rewarded senior executives and employees with bonuses ranging from one to seven months’ pay based on the
individual’s and operating units’ performance. The key criteria used in the determination of the variable compensation
policy for the bonus was revised in 2014 following discussion and consultation with the Company’s Chairman.
Share options
The UK and overseas executive share option schemes of the Company are administered and supervised by a
committee consisting, in the majority, of Non-Executive Directors. These schemes are limited over their ten-year life
to issuing no more than 10% of the issued ordinary share capital of the Company from time to time. They provide for
options to be granted over treasury shares as well as over new shares. To avoid dilution, the Board intends generally
to follow the treasury share route.
Individual grants vest over three years. The total grant to each holder is determined by seniority and total market value
at the date of grant is normally limited to two times base salary. Exercise of options is only permitted three years after
grant, provided that the holder remains an employee of the Group throughout the period. There are no other
performance criteria for exercise of options granted so far. The Company has not issued any share options to any
Directors after 2004. No one in the Company has vested or unvested shares.
Pensions
The operating units in Indonesia participate in mandatory pension schemes for their local executives and management.
There is no company-sponsored scheme for senior executives outside of Indonesia.
No employees or shareholders are specifically consulted on the remuneration policy of the Company. If a significant
shareholder expresses a particular concern regarding any aspect of the policy, the views expressed would be carefully
weighed.
Directors’ Remuneration Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 76
Annual Report on Remuneration
Directors’ remuneration (audited)
The following part provides details of the remuneration of all the Directors for the year ended 31 December 2021. The
numerical components of these disclosures have been audited in accordance with Section 421 of the UK Companies
Act 2006.
The remuneration of all Directors who served during the year was:
Audited information
Total 2021 Fixed
Remuneration
Total 2020 Fixed
Remuneration
$000
$000
Name of Directors
Executive:
Dato' John Lim Ewe Chuan
(1)
87
103
Non-Executive:
Lim Siew Kim
(2)
58
55
Lim Tian Huat
(3)
21
21
Jonathan Law Ngee Song
(4)
21
21
Total
187
200
Directors’ remuneration comprises of directors’ fees only. There were no other benefits, pensions, bonuses or share option expenses in
respect of the Directors.
Unaudited information
Notes:
(1)
Appointed as Executive Director on 1 September 2010. Previously was the Senior Independent Non-Executive Director.
(2)
Appointed on 29 November 1993 and appointed as Non-Executive Chairman on 31 January 2011.
(3)
Appointed on 8 May 2015.
(4)
Appointed on 4 July 2013.
Executive Director’s/de-facto CEO’s Remuneration over 10 Years
Year ended 31 Dec
Salary
Benefit
Pension
Bonus
Total
% of maximum
payment cap
2021
$87,000*
-
-
-
$87,000
70%
2020
$103,000*
-
-
-
$103,000
90%
2019
$116,000*
-
-
-
$116,000
100%
2018
$123,000*
-
-
-
$123,000
100%
2017
$113,000*
-
-
-
$113,000
100%
2016
$127,000*
-
-
-
$127,000
100%
2015
$137,000*
-
-
-
$137,000
100%
2014
$133,000
-
-
-
$133,000
89%
2013
$117,000
-
-
-
$117,000
100%
2012
$105,000
-
-
-
$105,000
89%
* The Executive Director’s basic salary on renewal of contract in September 2020 was revised from £7,500 per month
(or £90,000 per annum) to £5,250 per month (or £63,000 per annum). The Executive Director’s salary from 2015 to
2019 was £90,000 per annum. The fluctuations during this period were the result of exchange translations.
Directors’ Remuneration Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 77
Relative importance of spend on pay
Directors’ interests
The interests of the Directors together with those of their immediate families in the securities of the Company were as
shown below:
The beneficial interests disclosed for Madam Lim are held by Genton International Ltd and certain other companies of
which Madam Lim is the controlling shareholder.
There has been no change in the interests of the Directors in the securities of the Company between 31 December
2021 and the date of this report. Other than Madam Lim, none of the Directors had any interest in the securities of the
Company between the date of their appointments and the date of this report. There is no requirement for Directors to
hold shares in the Company. Other than as set out in notes 8 and 25 to the consolidated financial statements, no
Director had a material interest in any contract of the Company subsisting during, or at the end of the financial year.
No directors had any share options in the current or prior year.
48,103
51,431
198
396
-
10,000
20,000
30,000
40,000
50,000
60,000
$'000
Total Group Employee Remuneration Total Dividend Paid
2020 2021 2020 2021
Directors' beneficial interests at 31 December:
2021
2020
Ordinary shares
Ordinary shares
Madam Lim Siew Kim
20,551,914
20,551,914
Dato' John Lim Ewe Chuan
-
-
Lim Tian Huat
-
-
Jonathan Law Ngee Song
-
-
Directors’ Remuneration Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 78
Percentage annual change in Directors’ remuneration and for employees over FY2021 (not subject to audit)
The Directors have service agreements with AEP Plc, the parent company. The Company has no employees other
than the directors therefore voluntary disclosure has been given based on the Group’s employee information.
The table below shows the annual change in the Directors’ pay compared with the Group’s average pay for an
employee for 2019 to 2021.
2020/2021
Annual change in pay for Directors compared with the Group’s average employees
Executive Director
Non-Executive Directors
Group’s
Average
Employees
Dato’ John Lim
Ewe Chuan
Madam Lim
Siew Kim
Lim Tian Huat
Jonathan Law
Ngee Song
Base Salary/fees
-16%
+5%
-
-
+12%
Benefits
-
-
-
-
-5%
Bonus
-
-
-
-
+32%
2019/2020
Annual change in pay for Directors compared with the Group’s average employees
Executive Director
Non-Executive Directors
Group’s
Average
Employees
Dato’ John Lim
Ewe Chuan
Madam Lim
Siew Kim
Lim Tian Huat
Jonathan Law
Ngee Song
Base Salary/fees
-11%
-4%
-
-
-6%
Benefits
-
-
-
-
+13%
Bonus
-
-
-
-
-13%
1. Directors’ remuneration comprises of Directors’ fees only.
2. All Directors fees are paid in other currencies and the annual amount remains unchanged in 2020 and 2021.
Service contracts
All Directors, Executive and Non-Executive, have formal appointment letters. The Executive and Non-Executives are
appointed normally on a one to two-year term with notice periods of one month to two months. The service contracts
are kept at the registered office and may be inspected by shareholders on request. Notice periods for all other senior
management are generally two months. Therefore, any remuneration payment for loss of office will be capped at a
maximum of two months. It is not the Company policy to include provisions in directors’ service contracts for
compensation for early termination beyond providing for an entitlement to payment in lieu of notice if due notice is not
given.
The unexpired term of the retiring Directors are:
Madam Lim Siew Kim Expiry 30 January 2023
Dato’ John Lim Ewe Chuan Expiry 31 August 2022
Lim Tian Huat Expiry 7 May 2023
Jonathan Law Ngee Song Expiry 3 July 2022
Performance Graph
The performance graph is set out on page 4 and shows the Company’s share price performance compared to the
FTSE 100 index for the period of 2012 to 2021 (last ten years) to indicate the volatility and trend of the market generally.
Except for one period, our share price had underperformed the FTSE 100 index. In determining senior management
compensation, the Remuneration Committee is influenced by the operating performance of the Company and not
directly by the share price. The FTSE 100 index has been selected for this comparison as there is no index available
that is specific to the activities of the Company. Despite reporting stellar earnings, the share performance is likely held
back by ESG concerns, reflecting a disconnection between earnings, CPO prices and company’s valuation. Investors
see plantation companies as contributing to deforestation, open burning, high carbon emissions and labour related
issues.
Jonathan Law Ngee Song
Chairman, Remuneration Committee 29 April 2022
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 79
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS 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 2021 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 UK 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 Anglo-Eastern Plantations Plc (the ‘Parent Company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2021 which comprise the consolidated income statement, the
consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated
statement of changes in equity, the consolidated statement of cash flows, notes to the consolidated financial
statements, the company statement of financial position, the company statement of changes in equity and notes to the
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 UK 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. Our audit opinion is consistent with the additional report to the audit
committee.
Independence
Following the recommendation of the audit committee, we were appointed by the Board of Directors on 14 June 2001
to audit the financial statements for the year ended 31 December 2001 and subsequent financial periods. The period
of total uninterrupted engagement including retenders and reappointments is 21 years, covering the years ended 31
December 2001 to 31 December 2021. 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 public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements. The non-audit services prohibited by that standard were not provided to the
Group or the Parent Company.
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:
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 80
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
• A review of management’s assessment of going concern, including various stress test scenarios, challenge
of the key assumptions used to make this assessment, such as Crude Palm Oil (‘CPO’) price and Fresh Fruit
Bunch (‘FFB’) production tonnage, and the impact of a potential shut down of operations related to the Covid-
19 pandemic and any potential impact of the conflict in Ukraine. These were assessed by reference to external
market forecasts, industry production trends and experience to date of the impact of Covid-19 on the Group’s
operations;
• A review of the Group’s available cash resources as at 31 March 2022; and
• A review of the adequacy and consistency of disclosures in relation to going concern in the Group financial
statements with reference to management’s going concern assessment.
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.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about
whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant
sections of this report.
Overview
Coverage
100% (2020: 100%) of Group revenue
96% (2020: 95%) of Group total assets
Key audit matters
2021
2020
1. Impairment of land and plantation assets
✓
✓*
2. Accounting for assets held for sale and discontinued operations
✓
3. Recoverability of amounts due from cooperatives under Plasma
scheme
✓
4. Valuation of leasehold land
✓
* Impairment of plantations classified as PPE is included as a key audit matter in both the
current and prior period but has been expanded to include impairment of land following the
change in accounting policy in the period to recognise land under the cost model rather than
the revaluation model. This has also resulted in the key audit matter for the valuation of
leasehold land no longer being applicable.
Recoverability of amounts due from cooperatives under Plasma scheme is no longer
considered to be a key audit matter as the balances with the most significant concerns over
their recoverability reside within the companies that are held for sale and are therefore
addressed by another key audit matter.
Materiality
Group financial statements as a whole
US$6.6m (2020: US$2.5m) based on 5% (2020: 5%) of profit before tax before biological asset
movement.
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 81
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
An overview of the scope of our audit
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.
The Group financial statements are a consolidation of twenty seven companies made up of the Parent Company, a
principal sub-holding company, three management companies, four dormant companies and eighteen operating
companies. Sixteen of the operating companies are located in Indonesia and two in Malaysia. The head office and
main accounting function is located in Kuala Lumpur, Malaysia, with a second accounting function located in Medan,
Indonesia, both at separate locations from the plantations.
Based on our risk assessment we identified five operating companies which, in our view, are significant components
and required a full scope audit of their complete financial information due to their size and a further twelve operating
companies which required audit procedures on specific areas due to their risk characteristics. These audits were
performed by BDO network firms in Indonesia and Malaysia which, together with additional procedures performed at
Group level in respect of the impairment reviews of land and plantation assets, the recoverability of amounts due from
cooperatives under the Plasma scheme and the accounting for assets held for sale and discontinued operations, gave
us the evidence we needed to form our opinion on the Group financial statements as a whole.
The audits and specific audit procedures performed on each of the operating companies identified above were
performed largely by BDO Malaysia and BDO Indonesia, with additional work on the specific risk areas identified as
Key Audit Matters, together with audit procedures over the Group consolidation and UK components, performed by
BDO UK. The remaining components of the Group were not identified as being significant to the Group and these
components were principally subject to analytical review procedures performed by the Group audit team.
As part of the audit strategy, senior members of the Group audit team attended a number of meetings with management
via video conference. The Senior Statutory Auditor met with the Executive Director in the UK and members of senior
and Board management, including the Audit Committee, in Kuala Lumpur.
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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
Our involvement with component auditors
For the work performed by component auditors, we determined the level of involvement needed in order to be able to
conclude whether sufficient appropriate audit evidence has been obtained as a basis for our opinion on the Group
financial statements as a whole. In light of the international travel restrictions imposed as a result of the Covid-19
pandemic, the Group audit team was unable to travel to Indonesia or Malaysia, however were able to communicate
effectively with component auditors and local management remotely in order to direct the component auditor’s work
and review and evaluate the results of their work as necessary. Our involvement with component auditors included the
following:
• As part of our audit planning, we issued group audit instructions to both the Indonesian and Malaysian
component teams and held remote planning meetings via video conference to discuss the Group and local
risks identified and to agree the testing approach and audit timelines. The planning documentation on the
respective audit files was also reviewed.
• We performed a remote review of the complete audit files for the five operating companies in Indonesia
considered to be significant by size and reviewed the audit work in relation to the specific areas identified for
the remaining twelve companies, in both Indonesia and Malaysia, considered to be significant due to their
risk characteristics. Following the review, any further work required by the Group audit team was performed
by the component auditors. The component auditors visit the plantation estates on a rotational basis so that
each estate is visited at least once every three years and this was still permissible for the current year audit
under local Covid-19 restrictions.
• At the completion stage, we attended closing meetings with local audit teams via video conference and
reviewed component audit teams’ reporting, addressing risks and specific procedures raised. Discussions
were held with Group management on the findings from our audit, including adjustments raised.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified, including those which had the greatest effect on: the overall audit
strategy, the allocation of resources in the audit, and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 83
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
Key audit matter
How the scope of our audit addressed the key audit
matter
Impairment of land and plantation assets
(note 2(g), note 2(j) and note 13)
Land and plantation assets (‘bearer plants’) fall within
the scope of IAS 16 Property, Plant and Equipment
and are held at historical cost less depreciation. At the
end of each reporting period, the Directors are
required to assess whether there is any indication that
an asset may be impaired, or whether there is an
indication that a previously recognised impairment
may be reversed. If any such indication exists, the
Directors shall estimate the recoverable amount of
the asset.
The Directors have identified five estates with such
indicators and, having engaged an external expert,
have carried out an impairment review for those
plantations, calculating the recoverable amount to be
the asset’s value in use. The Directors exercise
significant judgement in determining the underlying
assumptions used in this calculation, considered to be
Crude Palm Oil (‘CPO’) price and the discount rate,
for which disclosure is given around their sensitivity.
We identified the impairment of land and plantation
assets as a key audit matter due to the significant
judgement and assumptions involved in its
assessment.
We performed our own assessment for indicators of
impairment or impairment reversal across all plantations
based on performance against production budget.
We assessed the independence, capabilities, objectivity
and competence of management’s expert.
We challenged the assumptions in the underlying data
made by the expert and management, including the
possible impacts of climate change, through discussions,
corroboration to independent external data sources in
respect of CPO price and, where available, through
corroboration to supporting documentation and historical
trends.
With the use of our internal expert we recalculated the
discount rate to determine an acceptable range which was
compared to the rate calculated by management’s expert.
We performed sensitivity analysis on the CPO price and
discount rate assumptions.
The calculations to support the disclosures given in respect
of the sensitivity of CPO price, discount rate and inflation
rate were re-performed.
Key observations: Based on the procedures we performed, we found the key assumptions used by the Directors
in assessing any impairment losses to be recognised or reversed to be appropriate.
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 84
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
Key audit matter
How the scope of our audit addressed the key audit
matter
Accounting for assets held for sale and
discontinued operations
(note 2(r) and note 10)
The Directors have identified three of the Group’s
subsidiary companies for a planned disposal through
sale and have categorised the appropriate assets as
held for sale in accordance with IFRS 5 Non-current
Assets Held for Sale and Discontinued Operations.
These companies have also been deemed to meet
the criteria for discontinued operations and have been
presented as such in the consolidated income
statement.
We identified the accounting for assets held for sale
and discontinued operations as a key audit matter due
to the significant judgement involved in assessing
whether the IFRS 5 criteria for held for sale and
discontinued operations have been met and the
significant assumptions involved in determining the
fair value less costs to sell of the relevant non-current
assets immediately before initial classification as held
for sale and on subsequent remeasurement.
We reviewed the IFRS 5 criteria assessment prepared by
management and compared this with our understanding of
the facts and circumstances to determine whether the
requirements of IFRS 5 to disclose the assets as held for
sale and the operations as discontinued had been met.
We gained an understanding of the sales process through
discussion with the third party sales agent engaged by the
Group to facilitate the sale to corroborate the planned
timeline for completion and its status.
We identified all assets and liabilities within the three
subsidiary companies planned for sale at the date if initial
classification which were not included within the disposal
group and considered for completeness.
We confirmed the appropriateness of all items which were
included within the disposal group and agreed their carrying
values prior to initial classification to underlying component
records.
We checked the arithmetic accuracy of management’s
calculation of impairment losses on subsequent
remeasurement.
We considered the reasonableness of the assumptions
made by management in determining the likely proceeds
achievable from a sale of the assets held for sale and
corroborated these against valuation reports and analysis
prepared by the advisors supporting management in their
planned sale of the assets.
We confirmed the appropriate extraction of data from
financial records for disclosure as held for sale and
discontinued operations.
Key observations: Based on the procedures we performed, we found the classification of assets held for sale and
discontinued operations and the key assumptions used by the Directors in assessing any impairment losses prior
to and subsequent to initial classification to be appropriate.
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 85
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
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
2021
2020
2021
2020
Materiality
US$6,600,000
US$2,500,000
US$1,200,000
US$1,200,000
Basis for determining
materiality
5% of profit before tax before biological
asset movement
2% of total assets
Rationale for the
benchmark applied
Profit before tax before biological asset
movement was selected as the
benchmark for determining materiality
for the Group financial statements as it
is considered to be the key indicator of
the Group’s financial performance.
Total assets was selected as the
benchmark for determining materiality
for the Parent Company’s financial
statements since it is held primarily for
investment purposes.
Performance materiality
US$4,950,000
US$1,900,000
US$900,000
US$900,000
Basis for determining
performance materiality
75% of materiality having considered a number of aspects including the expected
total value of known and likely misstatements based on previous assurance
engagements and other factors.
Component materiality
We set materiality for each component of the Group based on a percentage of between 30% and 76% (2020: 21%
and 88%) of Group materiality dependent on the size and our assessment of the risk of material misstatement of that
component. Component materiality ranged from US$2,000,000 to US$5,000,000 (2020: US$500,000 to
US$2,200,000). In the audit of each component, we further applied performance materiality levels of 75% of the
component materiality to our testing to ensure that the risk of errors exceeding component materiality was appropriately
mitigated.
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 86
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of
US$132,000 (2020: US$50,000). 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.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability and
that part of the Corporate Governance Statement relating to the parent company’s compliance with the provisions of
the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained
during the audit.
Going concern
and longer-term
viability
• The Directors' statement with regards to the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set out on pages
15 and 16; and
• The Directors’ explanation as to their assessment of the Group’s prospects, the period
this assessment covers and why the period is appropriate set out on page 15.
Other Code
provisions
• Directors' statement on fair, balanced and understandable set out on page 59;
• Board’s confirmation that it has carried out a robust assessment of the emerging and
principal risks set out on page 42;
• The section of the annual report that describes the review of effectiveness of risk
management and internal control systems set out on pages 70 and 71; and
• The section describing the work of the audit committee set out on pages 67 to 71.
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 87
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(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.
Directors’
remuneration
In our opinion, the part of the Directors’ remuneration report to be audited has been properly
prepared in accordance with the Companies Act 2006.
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 and the part of the Directors’ remuneration
report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the “Directors’ Responsibilities” statement, 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 Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 88
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
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, at both the Group
and component levels is detailed below:
• We gained an understanding of the legal and regulatory framework applicable to the Group and the industry
in which it operates through enquiry of Group management and review of internal audit reports, and
considered the risk of acts by the Group that were contrary to applicable laws and regulations, including fraud.
• We considered the Group’s compliance with laws and regulations that have a direct impact on the financial
statements including, but not limited to, the Companies Act 2006, the UK Listing Rules, certain requirements
from the UK, Indonesia and Malaysia Finance Acts, the requirements of the Anti-Bribery and Corruption Acts
in the UK, Indonesia and Malaysia, taxation laws in the UK, Indonesia and Malaysia, Indonesian land laws
and the Indonesian Sustainable Palm Oil (ISPO) and Malaysian Sustainable Pail Oil (MSPO) certification
schemes, and we considered the extent to which non-compliance might have a material effect on the Group
financial statements.
• We designed audit procedures at both the Group level and at the significant component level, through specific
procedures included in the group audit instructions, to identify instances of non-compliance with such laws
and regulations. Our procedures included reviewing the financial statement disclosures and agreeing to
underlying supporting documentation where necessary, reviewing internal audit reports and minutes of all
Board and Committee meetings held throughout the year and subsequent to the year end for any indicators
of non-compliance and making enquiries of management and of the Directors as to the risks of non-
compliance and any instances thereof.
• We discussed among the engagement team and relevant internal technical experts how and where non-
compliance with laws and regulations and fraud might occur in the financial statements and any potential
indicators of fraud. The Engagement Partner satisfied himself that the engagement team have the appropriate
competence and capabilities to identify and recognise non-compliance with laws and regulations.
• We considered the valuation of land and plantation assets and the valuation of assets held for sale to be the
main areas where fraud could occur. Our audit response to these areas has been addressed in the Key Audit
Matters above.
• We addressed the risk of management override of internal controls, considered to be in connection with the
posting of inappropriate journals and bias in significant management estimates and judgements, through
testing journal entries processed during the year and subsequent to the year end which met a specific criteria,
particularly with regard to revenue postings with unusual account combinations and consolidation journals,
and evaluating whether there was evidence of bias in setting significant estimates and judgements by the
Directors that represented a risk of material misstatement due to fraud (refer to Key Audit Matters above).
Auditor’s Report
Annual Report 2021 | Anglo-Eastern Plantations Plc 89
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF ANGLO-EASTERN PLANTATIONS PLC
(continued)
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
London
United Kingdom
29 April 2022
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 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 90
(Restated)
2021
2020
Note
Result
before
BA
movement*
BA
movement
Total
Result
before
BA
movement*
BA
movement
Total
$000
$000
$000
$000
$000
$000
Continuing operations
Revenue
4
Cost of sales
(300,354 )
(296,005 )
(203,326 )
(202,123 )
Gross profit
Administration expenses
(8,764 )
(8,764 )
(7,768 )
(7,768 )
Reversal of impairment
6, 13
Impairment losses
6, 13
(585 )
(585 )
(188 )
(188 )
Reversal / (Provision) for
expected credit loss
6, 18
(102 )
(102 )
Operating profit
Exchange gains / (losses)
(269 )
(269 )
Finance income
5
Finance expense
5
(24 )
(24 )
(292 )
(292 )
Profit before tax
6
Tax expense
9
(24,784 )
(958 )
(25,742 )
(15,103 )
(55 )
(15,158 )
Profit for the year from
continuing operations
(Loss) / gain on discontinued
operation, net of tax
10
(28,471 )
(28,421 )
(5,275 )
(5,215 )
Profit for the year attributable to:
- Owners of the parent
- Non-controlling interests
Profit for the year from continuing
operations attributable to:
- Owners of the parent
- Non-controlling interests
Earnings per share attributable
to the owners of the parent
during the year
Profit
- basic and diluted
11
Profit from continuing operations
- basic and diluted
11
Earnings per share before BA movement are shown in note 11.
Consolidated Income Statement
For the year ended 31 December 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 91
* The total column represents the IFRS figures and the result before BA movement is an Alternative Performance Measure (“APM”) which reflects
the Group's results before the movement in fair value of biological assets has been applied. We have opted to additionally disclose this APM as
the BA movement is considered to be a fair value calculation which does not appropriately represent the Group’s result for the year.
The accompanying notes are an integral part of this consolidated income statement.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 92
(Restated)
2021
$000
2020
$000
Profit for the year
Other comprehensive expenses:
Items may be reclassified to profit or loss:
Loss on exchange translation of foreign operations
(5,429 )
(4,801 )
Net other comprehensive expenses may be reclassified to profit or loss
(5,429 )
(4,801 )
Items not to be reclassified to profit or loss:
Remeasurement of retirement benefits plan, net of tax
(649 )
Net other comprehensive income / (expenses) not being reclassified to profit or loss
(649 )
Total other comprehensive expenses for the year, net of tax
(4,343 )
(5,450 )
Total comprehensive income for the year
Total comprehensive income for the year attributable to:
- Owners of the parent
- Non-controlling interests
The accompanying notes are an integral part of this consolidated statement of comprehensive income.
Consolidated Statement of Financial Position
As at 31 December 2021
Company Number: 1884630
Annual Report 2021 | Anglo-Eastern Plantations Plc 93
(Restated)*
(Restated)
Note
31.12.2021
$000
31.12.2020
$000
1.1.2020
$000
Non-current assets
Property, plant and equipment
13
Investments
31
Receivables
14
Deferred tax assets
15
Current assets
Inventories
16
Income tax receivables
9
Other tax receivable
9
Biological assets
17
Trade and other receivables
18
Short-term investments
Cash and cash equivalents
19
Assets in disposal groups classified as held for sale
10
Current liabilities
Loans and borrowings
(8,203 )
Trade and other payables
20
(32,533 )
(26,310 )
(16,110 )
Income tax liabilities
9
(13,139 )
(5,981 )
(1,512 )
Other tax liabilities
9
(1,615 )
(1,089 )
(1,386 )
Dividend payables
(25 )
(24 )
(23 )
Lease liabilities
21
(240 )
(236 )
(222 )
(47,552 )
(33,640 )
(27,456 )
Net current assets
Non-current liabilities
Deferred tax liabilities
15
(1,330 )
(782 )
(442 )
Retirement benefits - net liabilities
22
(11,499 )
(13,383 )
(11,338 )
Lease liabilities
21
(110 )
(217 )
(456 )
(12,939 )
(14,382 )
(12,236 )
Net assets
Consolidated Statement of Financial Position
As at 31 December 2021
Company Number: 1884630
Annual Report 2021 | Anglo-Eastern Plantations Plc 94
(Restated)*
(Restated)
Note
31.12.2021
$000
31.12.2020
$000
1.1.2020
$000
Issued capital and reserves attributable to owners of the parent
Share capital
23
Treasury shares
23
(1,171 )
(1,171 )
(1,171 )
Share premium
Capital redemption reserve
Exchange reserves
(241,907 )
(237,599 )
(233,723 )
Retained earnings
Non-controlling interests
Total equity
The financial statements were approved and authorised for issue by the Board of Directors on 29 April 2022 and were signed on its behalf by:
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
*The details of prior year restatement are disclosed in note 3.
The accompanying notes are an integral part of this consolidated statement of financial position.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 95
Note
Share
capital
Treasury
shares
Share
premium
Capital
redemption
reserve
Revaluation
reserves
Exchange
reserves
Retained
earnings
Total
Non-
controlling
interests
Total
equity
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Balance at 31 December 2019
(1,171 )
(229,026 )
Restatement (note 3)
(48,413 )
(4,697 )
(52,795 )
(10,648 )
(63,443 )
Balance at 31 December 2019 after restatement
(1,171 )
(233,723 )
Items of other comprehensive expenses
-Remeasurement of retirement benefit plan, net of tax
22
(559 )
(559 )
(90 )
(649 )
-Loss on exchange translation of foreign operations
(3,876 )
(3,876 )
(925 )
(4,801 )
Total other comprehensive expenses
(3,876 )
(559 )
(4,435 )
(1,015 )
(5,450 )
Profit for the year
Total comprehensive (expenses) / income for the year
(3,876 )
Dividends paid
(198 )
(198 )
(160 )
(358 )
Balance at 31 December 2020 after restatement
(1,171 )
(237,599 )
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 96
Note
Share
capital
Treasury
shares
Share
premium
Capital
redemption
reserve
Exchange
reserves
Retained
earnings
Total
Non-
controlling
interests
Total
equity
$000
$000
$000
$000
$000
$000
$000
$000
$000
Balance at 31 December 2020 after restatement
(1,171 )
(237,599 )
Items of other comprehensive (expenses) / income
-Remeasurement of retirement benefit plan, net of tax
22
-Loss on exchange translation of foreign operations
(4,308 )
(4,308 )
(1,121 )
(5,429 )
Total other comprehensive (expenses) / income
(4,308 )
(3,348 )
(995 )
(4,343 )
Profit for the year
Total comprehensive (expenses) / income for the year
(4,308 )
Dividends paid
(396 )
(396 )
(381 )
(777 )
Balance at 31 December 2021
(1,171 )
(241,907 )
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 97
(Restated)
2021
$000
2020
$000
Cash flows from operating activities
Profit before tax from continuing operations
Adjustments for:
BA movement
(4,349 )
(1,203 )
Loss / (Gain) on disposal of property, plant and equipment
(20 )
Depreciation
Retirement benefit provisions
Net finance income
(3,190 )
(2,581 )
Unrealised (gain) / loss in foreign exchange
(212 )
Property, plant and equipment written off
Reversal of impairment
(4,852 )
(1,977 )
(Reversal) / Provision for expected credit loss
(177 )
Operating cash flows before changes in working capital
Increase in inventories
(2,649 )
(3,945 )
Increase in non-current, trade and other receivables
(517 )
(13,246 )
Increase in trade and other payables
Cash inflows from operations
Retirement benefits paid
(487 )
(352 )
Overseas tax paid
(12,359 )
(8,559 )
Operating cash flows from continuing operations
Operating cash flows (used in) / from discontinued operations
(821 )
Net cash generated from operating activities
Investing activities
Property, plant and equipment
- purchases
(26,374 )
(18,965 )
- sales
Interest received
Increase in receivables from cooperatives under plasma scheme
(1,985 )
(3,826 )
Investment in share equity
(49 )
Placement of fixed deposits with original maturity of more than three months
(1,439 )
(1,957 )
Withdrawal of fixed deposits with original maturity of more than three months
Cash used in investing activities from continuing operations
(24,263 )
(21,848 )
Cash used in investing activities from discontinued operations
(1,594 )
(2,990 )
Net cash used in investing activities
(25,857 )
(24,838 )
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 98
(Restated)
Note
2021
$000
2020
$000
Financing activities
Dividends paid to the holders of the parent
(395 )
(197 )
Dividends paid to non-controlling interests
(381 )
(160 )
Interest paid
(258 )
Repayment of existing long-term loans
(8,167 )
Repayment of lease liabilities - principal
(228 )
(223 )
Repayment of lease liabilities - interest
(24 )
(34 )
Cash used in financing activities from continuing operations
(1,028 )
(9,039 )
Cash used in financing activities from discontinued operations
Net cash used in financing activities
(1,028 )
(9,039 )
Net increase in cash and cash equivalents
Cash and cash equivalents
At beginning of year
Exchange losses
(1,423 )
(1,111 )
At end of year
Comprising:
Cash at end of year
19
The accompanying notes are an integral part of this consolidated statement of cash flows.
.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 99
1 Basis of preparation
AEP is a company incorporated in the UK under the Companies Act 2006 and is listed on the London Stock Exchange. The registered office
of AEP is located at Quadrant House, 6
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have
been consistently applied to all years presented, except as detailed in note 3.
Basis of preparation
The consolidated financial statements 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 those standards.
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into the UK law and became UK adopted International
Accounting Standards, with future changes being subject to endorsement by the UK Endorsement Board. The Group transitioned to UK adopted
International Accounting Standards in its consolidated financial statements on 1 January 2021. There was no impact or changes in accounting
from the transition.
The Directors have a reasonable expectation, having made the appropriate enquiries, that the Group has control of the monthly cash flows
and that the Group has sufficient cash resources to cover the fixed cash flows for a period of at least twelve months from the date of approval
of these financial statements. For these reasons, the Directors adopted a going concern basis in preparation of the financial statements. The
Directors have made this assessment after consideration of the Group’s budgeted cash flows and related assumptions including appropriate
stress testing of identified uncertainties, specifically on the potential shut down of the entire operations from three to twelve months if all the
plantations are infected with Coronavirus as well as the impact on the demand for palm oil with decreases of 50% to 100%. Stress testing of
other identified uncertainties and risks such as commodity prices and currency exchange rates were also undertaken.
Changes in accounting standards
(a) New standards, interpretations and amendments effective in the current year
There are no new and amended standards and Interpretations that apply for the first time in these financial statements.
(b) New standards, interpretations and amendments not yet effective.
The following new standards, interpretations and amendments are effective for future periods (as indicated) and have not been applied
in these financial statements:
• Annual improvements to IFRS Standards 2018-2020 (1 January 2022, not yet adopted)
• IAS 1 (amendments) Classification of liabilities as current or non-current (1 January 2023, not yet adopted
• IAS 1 (amendments) and IFRS Practice Statement 2 Disclosure of Accounting Policies (1 January 2023, not yet adopted)
• IAS 8 (amendments) Definition of Accounting Estimates (1 January 2023, not yet adopted)
• IAS 12 (amendments) Deferred Tax related to Assets and Liabilities arising from a Single Transaction (1 January 2023, not yet
adopted)
None of the above new standards, interpretations and amendments are expected to have a material effect on the Group's future financial
statements.
2 Accounting policies
(a) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its
subsidiaries) made up to 31 December each year. The Company controls a subsidiary if all three of the following elements are present;
power over the subsidiary, exposure to variable returns from the subsidiary, and the ability of the investor to use its power to affect those
variable returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control
commences until the date control ceases. In respect of cooperatives under the Plasma scheme, the Group has not consolidated these
results on the basis that the Company does not have control over those entities.
(b) Business combinations
The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated
statement of financial position, the acquiree’s identifiable assets, liabilities and contingent liabilities are initially recognised at their fair
values at the acquisition date. Acquisitions of entities that comprise principally land with no active plantation business do not represent
business combinations, in such cases, the amount paid for each acquisition is allocated between the identifiable assets/liabilities at the
acquisition date.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 100
2 Accounting policies - continued
(c) Foreign currency
The individual financial statements of each subsidiary are presented in the currency of the country in which it operates (its functional
currency), being the currency in which the majority of their transactions are denominated, with the exception of the Company and its UK
subsidiaries which are presented in US Dollar. The presentation currency for the consolidated financial statements is also US Dollar,
chosen because, as internationally traded commodities, the price of the bulk of the Group’s products are ultimately linked to the US
Dollar.
On consolidation, the results of overseas operations are translated into US Dollar at average exchange rates for the year unless
exchange rates fluctuate significantly in which case the actual rate is used. All assets and liabilities of overseas operations are translated
at the rate ruling at the balance sheet date. Exchange differences arising on re-translating the opening net assets at opening rate and
the results of overseas operations at actual rate are recognised directly in equity (the “exchange reserves”). Exchange differences
recognised in the income statement of Group entities’ separate financial statements on the translation of long-term monetary items
forming part of the Group’s net investment in the overseas operation concerned are reclassified to the exchange reserves if the item is
denominated in the presentational currency of the Group or of the overseas operation concerned.
On disposal of a foreign operation, the cumulative exchange differences recognised in the exchange reserves relating to that operation
up to the date of disposal are transferred to the income statement as part of the profit or loss on disposal.
All other exchange profits or losses are credited or charged to the income statement.
(d) Revenue recognition
The Group derives its revenue from the sale of CPO, palm kernel, FFB, shell nut, biomass products, biogas products and rubber slab.
Revenue for CPO, palm kernel, FFB, shell nut, biomass and biogas products are recorded net of sales and related taxes and levies,
including export taxes and recognised when the customer has taken delivery of the goods. The collection/delivery of the goods will not
take place until the goods are paid for. Sales of rubber slab are recognised on signing of the sales contract, this being the point at which
control is transferred to the buyer.
The transacted price for each product is based on the market price or predetermined monthly contract value. There is no right of return
nor warranty provided to the customers on the sale of products and services rendered.
Advance receipts represent the Group's obligation to transfer goods to a customer for which the Group has received consideration but
the goods have yet to be delivered to/collected by the customer.
(e) Tax
UK and foreign corporation tax are provided at amounts expected to be paid or recovered using the tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
The directors consider that the carrying amount of tax receivables approximates its fair value.
(f) Dividends
Equity dividends are recognised when they become legally payable. The Company pays only one dividend each year as a final dividend
which becomes legally payable when approved by the shareholders at the next annual general meeting.
(g) Property, plant and equipment
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the
acquisition of the items. After initial recognition, all items of property, plant and equipment except some land and construction in progress,
are stated at cost less accumulated depreciation and any accumulated impairment losses.
Plantations comprise of the cost of planting and development of oil palm and other plantation crops. Costs of new planting and
development of plantation crops are capitalised from the stage of land clearing up to the stage of maturity. The costs of immature
plantations consist mainly of the accumulated cost of land clearing, planting, fertilising and maintaining the plantation and other indirect
overhead costs up to the time the trees are harvestable and to the extent appropriate. Oil palm plantations are considered mature within
three to four years after planting and generating average annual CPO of four to six metric tons per hectare. Immature plantations are
not depreciated.
The Indonesian authorities have granted certain land exploitation rights and operating permits for the estates. The land rights are usually
renewed without significant cost subject to compliance with the laws and regulations of Indonesia therefore, the Group has classified the
land rights as leasehold land. The leasehold land is recognised at cost initially and is not depreciated except the leasehold land in
Malaysia which is depreciated over the term of the lease as its renewal cannot be guaranteed. Costs include the initial cost of obtaining
the location permits and subsequent payments to compensate existing land owners plus any legal costs incurred to acquire the
necessary land exploitation rights.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 101
2 Accounting policies - continued
(g) Property, plant and equipment - continued
Construction in progress is stated at cost. The accumulated costs will be reclassified to the appropriate class of assets when construction
is completed and the asset is ready for its intended use. Construction in progress is also not depreciated until such time when the asset
is available for use.
Plantations, buildings and oil mills are depreciated using the straight-line method. The yearly rates of depreciation are as follows:
Leasehold land in Malaysia - over the term of the lease
Plantations - 5% per annum
Buildings - 5% to 10% per annum
Oil Mill - 5% per annum
Estate plant, equipment & vehicle - 12.5% to 50% per annum
Office plant, equipment & vehicle - 25% to 50% per annum
(h) Biological assets
Biological assets comprise an estimation of the fair value less costs to sell of unharvested FFB at balance sheet date. Changes in the
fair value of biological assets are charged or credited to the income statement within the cost of sales.
(i) Leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset
and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined
as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items
of office furniture and telephones). For these leases, the Group recognises the lease payments as an operating expense on a straight-
line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic
benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date,
discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing
rate.
Lease payments included in the measurement of the lease liability comprise:
• Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable.
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective
interest method) and by reducing the carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less
accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers
ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise a purchase option, the
related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date
of the lease.
The right-of-use assets are presented together in property, plant and equipment in the consolidated statement of financial position. The
Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described
in the “Impairment” policy.
Land rights are recognised at historical cost without depreciation at the balance sheet date except for leasehold land in Malaysia is
recognised at historical cost and depreciated over the term of the lease. The details of the change in accounting policy are disclosed in
note 3.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 102
2 Accounting policies - continued
(j) Impairment
An assessment of indicators of impairment over the Group’s assets is undertaken annually on 31 December. Where the carrying value
of an asset exceeds its recoverable amount (i.e. the higher of value in use or fair value, less costs to sell), the asset is written down
accordingly. Impairment charges are included in the income statement, except to the extent they reverse gains previously recognised in
other comprehensive income. Reversal on impairment loss would be recognised if, and only if, there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment test was carried out. Reversal on impairment losses will be
immediately recognised in the income statement.
(k) Inventories
Inventories are initially recognised at cost, and subsequently at the lower of cost and net realisable value. In the case of processed
produce for sale which comprises palm oil and kernel, cost represents the monthly weighted-average cost of production and appropriate
production overheads. Estate and mill consumables are valued on a weighted average cost basis.
(l) Financial assets
The Group's financial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the
consolidated statement of financial position. All the Group's receivables and loans are non-derivative financial assets with cash flows
that are solely payments of principal and interest. They are recognised at fair value at inception and subsequently at amortised cost as
this is what the Group considers to be most representative of the business model for these assets.
Cash and cash equivalents consist of cash in hand and short-term deposits at banks with an original maturity not exceeding three
months. Bank overdrafts are shown within loans and borrowings under current liabilities on the statement of financial position.
The Group considers a trade receivable or other receivable as credit impaired when one or more events that have a detrimental impact
on the estimated cash flow have occurred. Trade and other receivables are written off when there is no expectation of recovery based
on the assessment performed. If the receivables are subsequently recovered, these are recognised in income statement.
The Group use three categories for those receivables which reflect their credit risk and how the loss provision is determined for those
categories. These include trade receivables using the simplified approach and debt instruments at amortised costs other than trade
receivables and financial guarantee contracts using the three-stage approach.
(m) Financial liabilities
All the Group's financial liabilities are non-derivative financial liabilities.
Bank borrowings and long-term development loans are initially recognised at fair value and subsequently at amortised cost, which is the
total of proceeds received net of issue costs. Finance charges are accounted for on an accruals basis and charged in the income
statement unless capitalised according to the policy as set out in the property, plant and equipment policy.
Trade and other payables are shown at fair value at recognition and subsequently at amortised cost.
(n) Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial position
differs from its tax base except for differences in the initial recognition of an asset or liability in a transaction which is not a business
combination and at the time of the transaction affects neither accounting nor taxable profit.
The Group recognises deferred tax liabilities arising from taxable temporary differences on investments in subsidiaries, except where
the Group is able to control the reversal of the temporary differences and it is probable that the temporary difference will not reverse in
the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is possible that taxable profit will be available against which
the difference can be utilised.
Deferred tax is recognised on temporary differences arising from property revaluation surpluses or deficits.
Deferred tax is determined using the tax rates that are enacted or substantively enacted at the balance sheet date. Deferred tax is
charged or credited in the income statement, except when it relates to items charged to other comprehensive income, such as
revaluations, in which case the deferred tax is also dealt with in other comprehensive income.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 103
2 Accounting policies - continued
(o) Retirement benefits
Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the consolidated income statement in the year to which they
relate.
Defined benefit schemes
The Group operates a number of defined benefit schemes in respect of its Indonesian operations. These schemes’ surpluses and deficits
are measured at:
• The fair value of plan assets at the reporting date; less
• Plan liabilities calculated using the projected unit credit method discounted to its present value using yields available on Indonesian
Government bonds that have maturity dates approximating to the terms of the liabilities; plus
• Past service costs; less
• The effect of minimum funding requirements agreed with scheme trustees.
Remeasurements of the net defined benefit obligation are recognised in other comprehensive income. The remeasurements include:
• Actuarial gains and losses;
• Return on plan assets (interest exclusive); and
• Any asset ceiling effects (interest inclusive).
Service costs are recognised in the income statement and include current and past service costs as well as gains and losses on
curtailments.
Net interest expense / (income) is recognised in the income statement, and is calculated by applying the discount rate used to measure
the defined benefit obligation / (asset) at the beginning of the annual period to the balance of the net defined benefit obligation / (asset),
considering the effects of contributions and benefit payments during the period.
Gains or losses arising from changes to scheme benefits or scheme curtailment are recognised immediately in the income statement.
Settlements of defined benefit schemes are recognised in the period in which the settlement occurs.
(p) Treasury shares
Consideration paid or received for the purchase or sale of the Company’s own shares for holding in treasury is recognised directly in
equity, where the cost is presented as the treasury shares. Any excess of the consideration received on the sale of treasury shares over
the weighted average cost of shares sold is taken to the share premium account.
Any shares held in treasury are treated as cancelled for the purpose of calculating earnings per share.
(q) Financial guarantee contracts
Where the Company and its subsidiaries enter into financial guarantee contracts and guarantee the indebtedness of other companies
within the Group and/or third party entities, these are accounted for under IFRS 9. The details of financial guarantee contracts are
disclosed in note 27.
(r) Non-current assets held for sale and disposal groups
Non-current assets and disposal groups are classified as held for sale when:
• They are available for immediate sale;
• Management is committed to a plan to sell;
• It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn;
• An active programme to locate a buyer has been initiated;
• The asset or disposal group is being marketed at a reasonable price in relation to its fair value; and
• A sale is expected to complete within 12 months from the date of classification.
Non-current assets and disposal groups classified as held for sale are measured at the lower of:
• Their carrying amount immediately prior to being classified as held for sale in accordance with the group's accounting policy; and
• Fair value less costs of disposal.
Following their classification as held for sale, non-current assets (including those in a disposal group) are not depreciated.
A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area
of operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of, has been abandoned or that meets
the criteria to be classified as held for sale.
Discontinued operations are presented in the consolidated statement of comprehensive income as a single line which comprises the
profit or loss after tax of the discontinued operation along with the gain or loss after tax recognised on the re-measurement to fair value
less costs to sell or on disposal of the assets or disposal groups constituting discontinued operations.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 104
2 Accounting policies - continued
(s) Critical accounting estimates and judgements
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based
on historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Judgements
• Assessment of de-facto control of cooperatives under Plasma scheme (see note 2(a) and note 29)
• Classification of land as leasehold with no depreciation charged (see note 13)
• Classification of assets as held for sale and discontinued operations (see note 10)
Estimates and assumptions
• Impairment of plantation assets - estimate of future cash flows and determination of the discount rate and other assumptions (see
note 13)
• Expected credit losses (“ECL”) on amounts due from cooperatives under Plasma scheme - determination of possible outcomes
and their weighted probability (see note 14)
• Carrying value of income tax receivables - determination of historic recovery rates (see note 9)
• Income taxes and deferred tax - provisions for income taxes in various jurisdictions (see note 9 and note 15)
• Valuation of assets classified as held for sale (see note 10)
• Recognition of deferred tax on losses - estimate of future profitability of respective entities (see note 15)
• Retirement benefits - actuarial assumptions (see note 22)
• Fair value measurement - a number of assets and liabilities included in the Group’s financial statements require measurement at,
and/or disclosure of, fair value. The fair value measurement of the Group’s financial and non-financial assets and liabilities utilises
market observable inputs and data as far as possible. Inputs used in determining fair value measurements are categorised into
different levels based on how observable the inputs used in the valuation technique utilised are (the ‘fair value hierarchy’):
- Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly; and
- Level 3 - unobservable inputs for the asset or liability.
The classification of an item into the above levels is based on the lowest level of the inputs used that has a significant effect on
the fair value measurement of the item. Transfers of items between levels are recognised in the period they occur.
The Group measures the following assets at fair value:
- Biological assets (note 17)
The Group measures the following assets at amortised cost, however disclosure of fair value is given in accordance with IFRS7
and IFRS 13:
- Non-current receivables due from non-controlling interests (note 14)
- Non-current receivables due from cooperatives under Plasma scheme (note 14)
For more detailed information in relation to the fair value measurement of the items above, please refer to the applicable notes.
3 Prior year restatement
With effect from 31 December 2021 and applied retrospectively, the Group have opted for a change in accounting policy in respect of the
treatment of land in the Group’s financial statements which is accounted for in accordance with IAS 16 Property, Plant and Equipment. The
Group has historically recognised land under the revaluation model however, following an analysis of the Group's peers in the UK, it was
apparent that the majority reported their land at historical cost and therefore the decision was made to change the accounting policy to make
the financial information more comparable and provide a more relevant result. Land has always been recognised in the local Indonesian
financial statements at historical cost. The Group now recognises land at cost initially and is not depreciated except for the land in Malaysia as
the possibility to renew the leasehold land in Malaysia is minimal, the details are disclosed in note 13.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 105
3 Prior year restatement - continued
The effects of the restatements are summarised as follows:
2020
$000
Impact on consolidated income statement
Profit for the year before restatement
37,943
Effect of change in restatement:
Cost of sales
(124)
Tax expense
(78)
(202)
Profit for the year after restatement
37,741
The effect of the prior year adjustments had a negative impact on the earnings per share before BA of 0.33cts and a negative impact on the
earnings per share after BA of 0.33cts for the year to 31 December 2020.
2020
$000
Impact on consolidated statement of comprehensive income
Other comprehensive expenses for the year before restatement
(4,830)
Effect of change in restatement:
Unrealised loss on revaluation of leasehold land, net of tax
(1,309)
Gain on exchange translation of foreign operations
689
(620)
Other comprehensive expenses for the year after restatement
(5,450)
The following table summarises the impact of this prior year restatement on the Consolidated Statement of Financial Position:
Balance as
reported
31 December
2020
$000
Effect of
restatement
$000
Restated
balance at
31 December
2020
$000
Impact on consolidated statement of financial position
Property, plant and equipment
365,353
(84,522)
280,831
Deferred tax assets
8,817
5,572
14,389
Deferred tax liabilities
(15,467)
14,685
(782)
Revaluation reserves
49,367
(49,367)
-
Exchange reserves
(233,534)
(4,065)
(237,599)
Retained earnings
573,493
184
573,677
Non-controlling interests
99,892
(11,017)
88,875
Balance as
reported
1 January
2020
$000
Effect of
restatement
$000
Restated
balance at
1 January
2020
$000
Impact on consolidated statement of financial position
Property, plant and equipment
367,891
(86,604)
281,287
Deferred tax assets
11,251
6,556
17,807
Deferred tax liabilities
(17,047)
16,605
(442)
Revaluation reserves
48,413
(48,413)
-
Exchange reserves
(229,026)
(4,697)
(233,723)
Retained earnings
542,415
315
542,730
Non-controlling interests
94,661
(10,648)
84,013
The restatement of land from fair value to historical cost has decreased the value of the property, plant and equipment and eliminated the
revaluation reserves. Deferred tax liabilities previously recognised on the revaluation of land have been reversed resulting in a decrease in
deferred tax liabilities, but also an increase in deferred tax assets where individual entities have moved from a net deferred tax liability position
to a net deferred tax asset position. Depreciation of the land in Malaysia recognised retrospectively and the reversal of the deferred tax liabilities
previously recognised has resulted in a small increase in retained earnings. All entities for which these adjustments relate have non-controlling
interests and therefore the impact on those non-controlling interests has also been recognised.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 106
4 Revenue
Disaggregation of Revenue
The Group has disaggregated revenue into various categories in the following table which is intended to:
• Depict how the nature, amount and uncertainty of revenue and cash flows are affected by timing of revenue recognition; and
• Enable users to understand the relationship with revenue segment information provided in note 7.
There is no right of return and warranty provided to the customers on the sale of products and services rendered.
Year to 31 December 2021
CPO, palm
kernel and
FFB
Rubber
Shell nut
Biomass
products
Biogas
products
Others
Total
$000
$000
$000
$000
$000
$000
$000
Contract counterparties
Government
-
-
-
-
999
-
999
Non-government
- Wholesalers
426,436
695
4,036
336
-
919
432,422
426,436
695
4,036
336
999
919
433,421
Timing of transfer of goods
Delivery to customer premises
4,995
695
-
-
-
-
5,690
Delivery to port of departure
-
-
-
336
-
-
336
Customer collect from our mills /
estates
421,441
-
4,036
-
-
-
425,477
Upon generation / others
-
-
-
-
999
919
1,918
426,436
695
4,036
336
999
919
433,421
Year to 31 December 2020
Contract counterparties
Government
-
-
-
-
970
-
970
Non-government
- Wholesalers
257,282
631
3,959
427
-
549
262,848
257,282
631
3,959
427
970
549
263,818
Timing of transfer of goods
Delivery to customer premises
4,052
631
-
-
-
-
4,683
Delivery to port of departure
-
-
-
427
-
-
427
Customer collect from our mills / estates
253,230
-
3,959
-
-
-
257,189
Upon generation / others
-
-
-
-
970
549
1,519
257,282
631
3,959
427
970
549
263,818
5 Finance income and expense
2021
$000
2020
$000
Finance income
Interest receivable on:
Credit bank balances and time deposits
3,214
2,873
Finance expense
Interest payable on:
Development loans
-
(257)
Interest expense on lease liabilities (note 21)
(24)
(35)
(24)
(292)
Net finance income recognised in income statement
3,190
2,581
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 107
6 Expenses by nature
2021
$000
(Restated)
2020
$000
Expenses by nature:
Purchase of FFB
191,915
110,225
Depreciation (note 13):
- continuing operations
16,994
16,177
- discontinued operations
1,978
2,090
18,972
18,267
Reversal of impairment (note 13):
- continuing operations
(5,437)
(2,165)
- discontinued operations
-
(31)
(5,437)
(2,196)
Impairment losses (note 13):
- continuing operations
585
188
- discontinued operations
716
-
1,301
188
Impairment loss on adjustment to fair value
21,772
-
Provision for expected credit loss (note 18):
- continuing operations
(177)
102
- discontinued operations
1,231
1,383
1,054
1,485
Exchange (gains) / loss
(213)
268
Legal and professional fees
945
834
Staff costs (note 8)
51,431
48,103
Remuneration received by the Group’s auditor or associates of the Group’s auditor:
- Audit of parent company
5
5
- Audit of consolidated financial statements
209
146
- Audit of consolidated financial statements (prior year)
-
-
- Audit related assurance service
7
6
- Audit of UK subsidiaries
13
13
Total audit services
234
170
Audit of overseas subsidiaries
- Malaysia
22
21
- Indonesia
116
76
Total audit services
138
97
Total auditor’s remuneration
372
267
7 Segment information
Description of the types of products and services from which each reportable segment derives its revenues
In the opinion of the Directors, the operations of the Group comprise one class of business which is the cultivation of plantation in Indonesia
and Malaysia. From the cultivation of plantation, the Group produced the crude palm oil and associated products such as palm kernel, shell
nut, biomass products, biogas products and rubber.
Factors that management used to identify reportable segments in the Group
The reportable segments in the Group are strategic business units based on the geographical spread. Operating segments are consistent with
the internal reporting provided to the Board of Directors. The Board of Directors is responsible for allocating resources and assessing the
performance of the operating segments. The Board decision is implemented by the Executive Committee, that is made up of a Senior General
Manager in Malaysia, the President Director, the Chief Operating Officer, Finance Director and the Engineering Director.
Measurement of operating segment profit or loss, assets and liabilities
The Group evaluates segmental performance on the basis of profit or loss before tax calculated in accordance with IFRS but excluding BA
movement.
Inter-segment transactions are made based on terms mutually agreed by the parties to maximise the utilisation of Group’s resources at a rate
acceptable to local tax authorities. This policy was applied consistently throughout the current and prior period.
The Group’s assets are allocated to segments based on geographical location.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 108
7 Segment information - continued
North
Sumatera
Bengkulu
Riau
Bangka
Kalimantan
Total
Indonesia
Malaysia
UK
Total from
continuing
operations
South*
Sumatera
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
2021
Total sales revenue (all external)
- CPO, palm kernel and FFB
127,216
141,070
73,827
2,178
79,470
423,761
2,675
-
426,436
7,999
- Rubber
695
-
-
-
-
695
-
-
695
-
- Shell nut
1,173
1,191
1,440
-
232
4,036
-
-
4,036
-
- Biomass products
336
-
-
-
-
336
-
-
336
-
- Biogas products
114
485
-
-
400
999
-
-
999
-
- Others
93
20
89
16
583
801
27
91
919
270
Total revenue
129,627
142,766
75,356
2,194
80,685
430,628
2,702
91
433,421
8,269
Profit / (loss) before tax
40,160
35,769
20,555
553
37,539
134,576
(517)
(1,325)
132,734
(4,786)
BA movement
1,660
700
574
111
1,273
4,318
31
-
4,349
64
Profit / (loss) for the year before tax per consolidated income
statement
41,820
36,469
21,129
664
38,812
138,894
(486)
(1,325)
137,083
(4,722)
Interest income
2,323
720
133
1
22
3,199
15
-
3,214
5
Interest expense
(15)
-
-
-
-
(15)
(9)
-
(24)
-
Depreciation
(5,270)
(4,132)
(905)
(356)
(5,660)
(16,323)
(671)
-
(16,994)
(1,978)
Reversal of impairment
-
-
-
-
5,437
5,437
-
-
5,437
-
Impairment losses
-
-
-
-
(452)
(452)
(133)
-
(585)
(716)
(Provision) / Reversal for expected credit loss
(4)
-
-
-
180
176
-
1
177
(1,231)
Inter-segment transactions
902
(2,001)
(11,754)
(282)
(1,934)
(15,069)
476
74
(14,519)
14,519
Inter-segmental revenue
42,566
2,641
-
-
9,431
54,638
-
-
54,638
7,438
Tax expense
(8,939)
(7,831)
(2,153)
(109)
(6,379)
(25,411)
(112)
(219)
(25,742)
(1,927)
Total assets
252,633
117,748
34,580
17,095
145,578
567,634
13,758
7,152
588,544
14,055
Non-current assets
77,170
42,027
8,751
14,960
108,844
251,752
8,780
-
260,532
27,425
Non-current assets - additions
8,490
4,727
608
1,600
7,072
22,497
517
-
23,014
3,424
* South Sumatera represents the operations which have been discontinued and have therefore been separated from the continuing operations. The details of discontinued operations for South Sumatera are
disclosed in note 10.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 109
7 Segment information - continued
North
Sumatera
Bengkulu
Riau
Bangka
Kalimantan
Total
Indonesia
Malaysia
UK
Total from
continuing
operations
South*
Sumatera
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
2020 (restated)
Total sales revenue (all external)
- CPO, palm kernel and FFB
81,764
82,194
46,865
1,026
43,103
254,952
2,330
-
257,282
5,066
- Rubber
631
-
-
-
-
631
-
-
631
-
- Shell nut
1,232
956
1,586
-
185
3,959
-
-
3,959
-
- Biomass products
427
-
-
-
-
427
-
-
427
-
- Biogas products
152
444
-
-
374
970
-
-
970
-
- Others
60
105
-
16
355
536
6
7
549
176
Total revenue
84,266
83,699
48,451
1,042
44,017
261,475
2,336
7
263,818
5,242
Profit / (loss) before tax
18,916
16,809
12,341
(76)
11,174
59,164
(806)
(1,447)
56,911
(6,640)
BA movement
550
130
126
36
344
1,186
17
-
1,203
71
Profit / (loss) for the year before tax per consolidated income statement
19,466
16,939
12,467
(40)
11,518
60,350
(789)
(1,447)
58,114
(6,569)
Interest income
2,121
670
34
-
25
2,850
22
1
2,873
3
Interest expense
(25)
-
-
-
(257)
(282)
(10)
-
(292)
-
Depreciation
(4,741)
(4,253)
(886)
(308)
(5,387)
(15,575)
(602)
-
(16,177)
(2,090)
Reversal of impairment
-
-
-
-
2,165
2,165
-
-
2,165
31
Impairment losses
-
-
-
-
-
-
(188)
-
(188)
-
Reversal / (Provision) for expected credit loss
65
(1)
-
(1)
(167)
(104)
1
1
(102)
(1,383)
Inter-segment transactions
4,744
(1,966)
(564)
(195)
(1,913)
106
467
168
741
(741)
Inter-segmental revenue
27,668
3,293
-
-
4,167
35,128
-
-
35,128
3,505
Tax expense
(6,734)
(3,218)
(2,742)
25
(1,665)
(14,334)
(737)
(87)
(15,158)
1,354
Total assets
194,269
83,338
25,798
15,872
135,624
454,901
14,405
5,978
475,284
37,046
Non-current assets
75,004
42,178
9,184
13,872
104,098
244,336
9,390
-
253,726
27,105
Non-current assets - additions
4,582
2,413
342
4,474
6,868
18,679
127
-
18,806
2,319
* South Sumatera represents the operations which have been discontinued and have therefore been separated from the continuing operations. The details of discontinued operations for South Sumatera are
disclosed in note 10.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 110
7 Segment information - continued
Below is an analysis of revenue from the Group’s top 4 customers, incorporating all those contributing greater than 10% of the Group’s external revenue in accordance with the requirements of IFRS 8. In year 2021,
revenue from top 4 customers of the Indonesian segment represents approximately $266.3m (2020: $130.8m) of the Group’s total revenue. Although Customer 1 to 4 made up over 10% of the Group’s total revenue,
there was no over reliance on these Customers as tenders were performed on a weekly basis. Two of the top four customers were the same as in the prior year.
North
Sumatera
Bengkulu
Riau
Bangka
Kalimantan
Total
Indonesia
Malaysia
UK
Total
South
Sumatera
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
2021
Customer 1
2,203
36,104
36,909
-
45,655
120,871
-
-
120,871
-
120,871
Customer 2
-
31,431
-
-
19,335
50,766
-
-
50,766
-
50,766
Customer 3
48,333
-
-
-
-
48,333
-
-
48,333
-
48,333
Customer 4
-
46,324
-
-
-
46,324
-
-
46,324
-
46,324
50,536
113,859
36,909
-
64,990
266,294
-
-
266,294
-
266,294
2020
Customer 1
819
22,558
7,164
-
23,075
53,616
-
-
53,616
-
53,616
Customer 2
31,556
-
-
-
-
31,556
-
-
31,556
-
31,556
Customer 3
-
-
25,042
-
-
25,042
-
-
25,042
-
25,042
Customer 4
-
15,977
-
-
4,584
20,561
-
-
20,561
-
20,561
32,375
38,535
32,206
-
27,659
130,775
-
-
130,775
-
130,775
%
%
%
%
%
%
%
%
%
%
%
2021
Customer 1
0.5
8.2
8.4
-
10.3
27.4
-
-
27.4
-
27.4
Customer 2
-
7.1
-
-
4.4
11.5
-
-
11.5
-
11.5
Customer 3
10.9
-
-
-
-
10.9
-
-
10.9
-
10.9
Customer 4
-
10.5
-
-
-
10.5
-
-
10.5
-
10.5
11.4
25.8
8.4
-
14.7
60.3
-
-
60.3
-
60.3
2020
Customer 1
0.3
8.4
2.7
-
8.6
20.0
-
-
20.0
-
20.0
Customer 2
11.7
-
-
-
-
11.7
-
-
11.7
-
11.7
Customer 3
-
-
9.3
-
-
9.3
-
-
9.3
-
9.3
Customer 4
-
5.9
-
-
1.7
7.6
-
-
7.6
-
7.6
12.0
14.3
12.0
-
10.3
48.6
-
-
48.6
-
48.6
Save for a small amount of rubber, all the Group’s operations are devoted to oil palm. The Group’s report is by geographical area, as each area tends to have different agricultural conditions.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 111
8 Employees' and Directors' remuneration
2021
Number
2020
Number
Average numbers employed (primarily overseas) during the year:
- full-time
7,618
7,242
- part-time field workers*
6,191
7,208
13,809
14,450
* Part-time field workers headcounts based on full time equivalent of 8 hours per day.
2021
$000
2020
$000
Staff costs (including Directors and discontinued operations) comprise:
Wages and salaries
47,628
43,129
Social security costs
3,342
2,921
Retirement benefit costs
- United Kingdom
-
-
- Indonesia (note 22)
411
2,003
- Malaysia
50
50
51,431
48,103
The information required by the Companies Act is contained in the Directors' remuneration report on pages 72 - 78 of which certain information
on page 76 has been audited.
2021
$000
2020
$000
Directors emoluments
187
200
2021
$000
2020
$000
Remuneration expense for key management personnel comprise:
Short-term employee benefits
1,835
1,499
Post-employment benefits
-
-
1,835
1,499
The Executive Director, Non-Executive Directors and senior management (general managers and above) are considered to be the key
management personnel. The remuneration of Executive Director and Non-Executive Directors is shown on page 76.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 112
9 Tax expense
2021
$000
(Restated)
2020
$000
Foreign corporation tax - current year
20,404
9,920
Foreign corporation tax - prior year
258
287
Deferred tax adjustment - origination and reversal of temporary differences (note 15)
5,080
4,264
Recognition of previously unrecognised deferred tax (note 15)
-
687
Total tax charge for year
25,742
15,158
Corporation tax rate in Indonesia is at 22% (2020: 22%) whereas Malaysia is at 24% (2020: 24%). The standard rate of corporation tax in the
UK for the current year is 19% (2020: 19%). The Group’s charge for the year differs from the standard Indonesian rate of corporation tax as
explained below:
2021
$000
(Restated)
2020
$000
Profit before tax from continuing operations
137,083
58,114
Profit before tax multiplied by standard rate of Indonesia corporation tax of 22% (2020: 22%)
30,158
12,785
Effects of:
Rate adjustment relating to overseas profits
(30)
(17)
Group accounting adjustments not subject to tax
(1,023)
(9)
Expenses not allowable for tax
263
640
Deferred tax assets not recognised
(10)
-
Income not subject to tax
(659)
(646)
Under provision of prior year income tax
258
287
Utilisation of tax losses not previously recognised
(3,215)
-
Under provision of prior year deferred tax
-
687
Change in tax rate
-
1,431
Total tax charge for year
25,742
15,158
The above reconciliation has been prepared by reference to the Indonesian tax rate rather than the UK tax rate as, in accordance with IAS 12,
this is the applicable tax rate that provides the most meaningful information, given this is the country in which the majority of tax arises.
The tax receivables represent the corporate income tax (“CIT”) and value added tax (“VAT”) that have yet to be refunded by the Indonesia tax
authority. The tax receivables relating to CIT arose due to over payment of tax. The tax receivables relating to VAT arose because the majority
of the Groups’ CPO was sold to bonded zones which do not attract output VAT and thus the input VAT incurred is claimable. Upon submission
of a tax return (for CIT) or a request letter (for VAT refund), a tax audit will be conducted by the tax authority and whilst every effort is made to
resolve this quickly, the process can sometimes take more than 12 months.
The breakdown of the tax receivables and tax liabilities is as follows:
2021
$000
2020
$000
Tax Receivables
Income tax
5,072
10,071
Other taxes
45,481
41,618
50,553
51,689
Transfer to assets held for sale (note 10)
(58)
-
50,495
51,689
Tax Liabilities
Income tax
(13,139)
(5,981)
Other taxes
(1,615)
(1,089)
(14,754)
(7,070)
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 113
10 Assets held for sale and discontinued operations
In October 2021, the Board approved to dispose of the operations of KKST, ELAP and RAA to cut losses. The Group has engaged Helios
Capital as our Financial Advisor for disposal of the three companies and an active programme to locate a buyer was initiated. The proposed
disposal of the operations are expected to be completed within 12 months and as a result the assets of KKST, ELAP and RAA have been
classified as held for sale in the consolidated statement of financial position from 31 December 2021.
The entire operations of the disposal group are presented within the South Sumatera operating segment disclosed in Note 7 and represent a
separate geographical area of operations. The activities for the financial years ending 31 December 2021 and 31 December 2020 have been
classified as discontinued operations in the consolidated income statement as a single line.
The post-tax loss on disposal of discontinued operations was determined as follows:
2021
2020
Result
before
BA
movement
BA
movement
Total
Result
before
BA
movement
BA
movement
Total
$000
$000
$000
$000
$000
$000
Discontinued operations
Revenue
4
8,269
-
8,269
5,242
-
5,242
Cost of sales
(11,052)
64
(10,988)
(10,168)
71
(10,097)
Gross (loss) / profit
(2,783)
64
(2,719)
(4,926)
71
(4,855)
Administration expenses
(62)
-
(62)
(366)
-
(366)
(Impairment loss) / Reversal of
impairment
13
(716)
-
(716)
31
-
31
Provision for expected credit loss
18
(1,231)
-
(1,231)
(1,383)
-
(1,383)
Operating (loss) / profit
(4,792)
64
(4,728)
(6,644)
71
(6,573)
Exchange gains
1
-
1
1
-
1
Finance income
5
-
5
3
-
3
Finance expense
-
-
-
-
-
-
(Loss) / Profit before tax
6
(4,786)
64
(4,722)
(6,640)
71
(6,569)
Tax expense
(1,913)
(14)
(1,927)
1,365
(11)
1,354
(Loss) / Profit for the year from
discontinued operations
(6,699)
50
(6,649)
(5,275)
60
(5,215)
Impairment loss on adjustment to
fair value
(21,772)
-
(21,772)
-
-
-
(28,471)
50
(28,421)
(5,275)
60
(5,215)
Attributable to:
- Owners of the parent
(27,760)
47
(27,713)
(4,746)
57
(4,689)
- Non-controlling interests
(711)
3
(708)
(529)
3
(526)
(28,471)
50
(28,421)
(5,275)
60
(5,215)
Earnings per share attributable
to the owners of the parent
during the year
- Basic and diluted EPS before BA movement
(69.92)cts
(11.83)cts
- Basic and diluted EPS after BA movement
(69.92)cts
(11.83)cts
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 114
10 Assets held for sale and discontinued operations - continued
Statement of cash flows
The statement of cash flows includes the following amounts relating to discontinued operations:
2021
$000
2020
$000
Operating activities
(821)
10,229
Investing activities
(1,594)
(2,990)
Financing activities
-
-
Net increase in cash and cash equivalents from discontinued operations
(2,415)
7,239
The following major classes of assets relating to the discontinued operations have been classified as held for sale in the consolidated statement
of financial position on 31 December:
2021
$000
Property, plant and equipment (note 13)
27,425
Impairment loss on adjustment to fair value
(21,772)
Property, plant and equipment net of impairment losses
5,653
Non-current receivables (note 14)
3,338
Deferred tax assets (note 15)
3,124
Inventories (note 16)
729
Income tax receivable (note 9)
46
Other tax receivable (note 9)
12
Biological assets (note 17)
303
Trade and other receivables (note 18)
68
Exchange differences
(63)
Total assets held for sale
13,210
An impairment loss of $21,772,000 on the measurement of the disposal group to fair value less cost to sell has been recognised and is
included in discontinued operations. The fair value less cost to sell has been determined from a valuation range obtained through the sales
marketing process, through discussion with potential buyers and review of internal forecasts. Management do not expect the final amount
realised to be materially different from this. They are categorised as level 3 non-recurring fair value measurements. The fair value
measurement is based on the above items’ highest and best uses, which do not differ from their actual use.
At 31 December 2021, the expected loss provision for receivables in assets held for sale is as follows:
Gross carrying
amount
$000
Loss
provision
$000
Net carrying
amount
$000
2021
Trade receivable
12
-
12
Other receivables (note 18)
23
-
23
Receivables: non-current (note 14)
- Due from cooperatives under Plasma scheme
12,136
(8,798)
3,338
12,171
(8,798)
3,373
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 115
11 Earnings per ordinary share (“EPS”)
2021
$000
(Restated)
2020
$000
Total operations
Profit for the year attributable to owners of the Company before BA movement
65,485
30,653
BA movement
2,856
1,051
Earnings used in basic and diluted EPS
68,341
31,704
Continuing operations
Profit for the year attributable to owners of the Company before BA movement
93,245
35,399
BA movement
2,809
994
Earnings used in basic and diluted EPS
96,054
36,393
Discontinued operations
Profit for the year attributable to owners of the Company before BA movement
(27,760)
(4,746)
BA movement
47
57
Earnings used in basic and diluted EPS
(27,713)
(4,689)
Number
Number
‘000
‘000
Weighted average number of shares in issue in the year
- used in basic EPS
39,636
39,636
- dilutive effect of outstanding share options
-
-
- used in diluted EPS
39,636
39,636
Total operations
- Basic and diluted EPS before BA movement
165.22cts
77.34cts
- Basic and diluted EPS after BA movement
172.42cts
79.99cts
Continuing operations
- Basic and diluted EPS before BA movement
235.25cts
89.31cts
- Basic and diluted EPS after BA movement
242.34cts
91.82cts
Discontinued operations
- Basic and diluted EPS before BA movement
(70.04)cts
(11.97)cts
- Basic and diluted EPS after BA movement
(69.92)cts
(11.83)cts
12 Dividends
2021
$000
2020
$000
Paid during the year
Final dividend of 1.0cts per ordinary share for the year ended 31 December 2020
(2019: 0.5cts)
396
198
Proposed final dividend of 5.0cts per ordinary share for the year ended 31 December 2021
(2020: 1.0cts)
1,982
396
The proposed dividend for 2021 is subject to shareholders’ approval at the forthcoming annual general meeting and has not been included as
a liability in these financial statements.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 116
13 Property, plant and equipment
Plantations
Mill
Leasehold
land
Buildings
Estate plant,
equipment & vehicle
Office plant,
equipment & vehicle
Right-of-use
assets
Construction
in progress
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
Cost
At 1 January 2020 (restated)
214,050
78,359
56,978
62,828
17,990
1,277
846
1,061
433,389
Exchange translations
(2,486)
(1,085)
(321)
(774)
(209)
5
(5)
(28)
(4,903)
Reclassification
-
70
-
2,572
-
-
-
(2,642)
-
Additions
167
1,946
3,821
496
816
109
-
2,263
9,618
Development costs capitalised
10,451
-
1,037
-
-
19
-
-
11,507
Disposal / Written off
(2,447)
(510)
(243)
(239)
(563)
(5)
-
(12)
(4,019)
At 31 December 2020 (restated)
219,735
78,780
61,272
64,883
18,034
1,405
841
642
445,592
Exchange translations
(2,753)
(899)
(957)
(768)
(242)
(30)
(15)
7
(5,657)
Reclassification
-
(19)
-
2,909
19
-
-
(2,909)
-
Additions
-
2,495
3,512
114
1,041
592
133
8,095
15,982
Development costs capitalised
10,456
-
-
-
-
-
-
-
10,456
Disposals / Written off
(1,684)
(700)
(379)
(208)
(814)
(5)
-
-
(3,790)
Transfer to assets held for sale (note 10)
(31,888)
-
(10,963)
(6,067)
(2,191)
-
-
(127)
(51,236)
At 31 December 2021
193,866
79,657
52,485
60,863
15,847
1,962
959
5,708
411,347
Accumulated depreciation and impairment
At 1 January 2020 (restated)
84,834
25,843
5,646
21,288
13,295
1,009
187
-
152,102
Exchange translations
(639)
(272)
(56)
(165)
(122)
3
11
-
(1,240)
Reclassification
-
-
-
-
-
-
-
-
-
Charge for the year
9,450
3,587
124
3,476
1,400
82
148
-
18,267
(Reversal of impairment) / Impairment losses
-
-
(2,196)
-
-
-
188
-
(2,008)
Disposal / Written off
(1,166)
(509)
-
(143)
(539)
(3)
-
-
(2,360)
At 31 December 2020 (restated)
92,479
28,649
3,518
24,456
14,034
1,091
534
-
164,761
Exchange translations
(1,297)
(318)
(108)
(296)
(191)
(24)
(11)
-
(2,245)
Reclassification
-
-
-
-
-
-
-
-
-
Charge for the year
9,907
3,873
125
3,523
1,309
82
153
-
18,972
(Reversal of impairment) / Impairment losses
(5,437)
-
1,168
-
-
-
133
-
(4,136)
Disposal / Written off
(1,313)
(455)
-
(155)
(798)
(5)
-
-
(2,726)
Transfer to assets held for sale (note 10)
(19,225)
-
(957)
(1,782)
(1,847)
-
-
-
(23,811)
At 31 December 2021
75,114
31,749
3,746
25,746
12,507
1,144
809
-
150,815
Carrying amount
At 31 December 2019 (restated)
129,216
52,516
51,332
41,540
4,695
268
659
1,061
281,287
At 31 December 2020 (restated)
127,256
50,131
57,754
40,427
4,000
314
307
642
280,831
At 31 December 2021
118,752
47,908
48,739
35,117
3,340
818
150
5,708
260,532
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 117
13 Property, plant and equipment - continued
The Group had changed the measurement of leasehold land from fair value to historical cost, the details are disclosed in note 3.
The capitalisation rate used to determine the amount of borrowing costs eligible for capitalisation is based on the percentage of immature area
of each estate against total planted area in the estate. The average capitalisation rate was 0% (2020: 8.6%) due to no borrowing cost in 2021.
The estates included $nil (2020: $24,000) of interest and $181,000 (2020: $64,000) of overheads capitalised during the year in respect of
expenditure on estates under development.
The Indonesian authorities have granted certain land exploitation rights and operating permits for the estates. In the case of established estates
in North Sumatera, these rights and permits expire between 2023 and 2056 with rights of renewal thereafter. As of estates in Bengkulu land
titles were issued between 1994 and 2016 and the titles expire between 2028 and 2051 with rights of renewal thereafter for two consecutive
periods of 25 and 35 years respectively. In Riau, land titles were issued in 2003 and expire in 2033 with rights of renewal thereafter. In
Kalimantan, land titles were issued between 2015 and 2020 and expire between 2049 and 2054 with rights of renewal thereafter. In Bangka,
land titles were issued in 2018 and expire in 2053. The rights and permits for South Sumatera were renewed in 2020. Some of the land is still
in application progress to obtain the land title.
Subject to compliance with the laws and regulations of Indonesia, land rights are usually renewed. The cost of renewing the land rights is not
significant. On the basis that the Group has an indefinite right to renew, leasehold land is not depreciated except leasehold land in Malaysia.
The land title of the estate in Malaysia is a long-term lease expiring in 2084.
There is an impairment of land for $1,168,000 recognised in 2021 based on the land valuation in 2020, which there is no material change within
one year. The total value of the Group’s land carried at fair value which was lower than original cost was $13,861,000 (2020: $9,584,000). The
land cost of $6,450,000 relates to the land which has been transferred to assets held for sale, the details are disclosed in note 10. The total
value of the Group’s right-of-use assets carried at value in use which was lower than original cost was $322,000 (2020: $196,000). For right-
of-use assets, the impairment is recognized for $133,000 (2020: $188,000) due to no future economic benefits.
Impairment for plantations is measured by comparing its carrying amount with its recoverable amount, which is the higher of the fair value less
cost to sell and its value in use. The impairment assessment is based on each cash generating unit (“CGU”) which is defined as each estate.
The reversal of impairment loss of $5,437,000 recognised in 2021 was primarily due to the increase in CPO price. In 2020, no impairment loss
or reversal of impairment loss of plantations had been recognised.
The recoverable amount of the Group’s plantations in 2021 was based on value in use calculations, which due to the nature of the cashflows,
will be higher than fair value less cost to sell. The total value of the Group’s plantations carried at value in use which was lower than original
cost was $12,899,000 (2020: $33,429,000). The plantations cost of $12,663,000 relates to the plantations which have been transferred to
assets held for sale, the details are disclosed in note 10.
The value in use, computed by the professional valuer MBPRU using a discounted cash flow (“DCF”) model, is the net present value of the
projected future cash flows over the expected 20-year economic life of the asset discounted at 14.8% (2020: 16.0%). Projected future cash
flows are calculated based on historical data, industry performance, economic conditions and any other readily available information including
the impact of climate change. The compliance with changing regulations, changes in buyer preferences, development of new products and
use of lower emission sources of energy will affect the FFB production, CPO price and its growth. Heavy rainfall & flooding, droughts and fires
will have an effect on company specific risk within the calculation of our discount rate as well as potential impacts on the ability of our plants to
produce FFB. Pests & disease will impact the upkeeping cost.
The sensitivity analysis below has been performed to show the reasonably possible changes in the key assumptions which would have a
material impact on the impairment losses:
2021
Assumption
applied
Increase in
impairment
$000
CPO price - decrease of 8%
$1,000/mt
1,325
Pre-tax discount rate - increase by 300 bps
14.76%
1,771
Inflation rate - increase by 200 bps
2.73%
1,152
2020
Assumption
applied
Increase in
impairment
$000
CPO price - decrease of 1%
$650/mt
-
Pre-tax discount rate - increase by 100 bps
15.98%
383
Inflation rate - increase by 100 bps
3.12%
609
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 118
14 Receivables: non-current
2021
2020
Book value
Fair value
Book value
Fair value
$000
$000
$000
$000
Due from non-controlling interests
5,459
3,042
5,493
3,050
Due from cooperatives under Plasma scheme
19,879
13,122
16,743
14,857
25,338
16,164
22,236
17,907
Transfer to assets held for sale (note 10)
(3,338)
(2,079)
-
-
22,000
14,085
22,236
17,907
The non-controlling interests in PT Chaya Pelita Andhika, PT Sawit Graha Manunggal, PT Empat Lawang Agro Perkasa, PT Karya Kencana
Sentosa Tiga, PT Riau Agrindo Agung and PT Kahayan Agro Plantation have acquired their interests on deferred terms (see note 28, Credit
risk).
Plasma scheme is an initiative by the Indonesian Government that mandated plantation owners to allocate a percentage of their land acquired
to the surrounding community and to further provide financial and technical assistance to cultivate oil palm on that land to improve the income
and welfare of the community or cooperatives. During the year, certain subsidiary companies have funded plasma with a cumulative gross
amount before ECL for $16,612,000 (2020: $24,632,000) which is recoverable from the cooperatives, the details with ECL are disclosed in
note 10 and note 18.
The fair values disclosed above are for disclosure purposes and all non-current receivables are classified as Level 3 in the fair value hierarchy.
The valuation techniques and significant unobservable inputs used in determining the fair value measurement of non-current receivables, as
well as the inter-relationship between key unobservable inputs and fair value, are set out in the table below:
Item
Valuation approach
Inputs used
Inter-relationship between key
unobservable inputs and fair value
Due from non-controlling
interests
Based on cash flows discounted using
current lending rate of 6% (2020: 6%).
Discount rate
The higher the discount rate, the lower the
fair value.
Due from cooperatives
under Plasma scheme
Based on cash flows discounted using
an estimated current lending rate of
7.00% (2020: 6.75%).
Discount rate
The higher the discount rate, the lower the
fair value.
15 Deferred tax
The movement on the deferred tax account as shown below:
2021
$000
(Restated)
2020
$000
At 1 January
13,607
17,365
Recognised in income statement from continuing operations
(7,005)
(3,597)
Recognised in other comprehensive income
(306)
130
Transfer to assets held for sale (note 10)
(3,124)
-
Exchange differences
(178)
(291)
At 31 December
2,994
13,607
The most significant movement in deferred tax was due to the utilisation of some of the losses against taxable profits during the year.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 119
15 Deferred tax - continued
The deferred tax asset and liability, together with the amounts recognised in income statement and other comprehensive income are detailed
as follows:
The Group had recognised tax assets arising from the unutilised tax losses of certain subsidiaries as the Group believes that the tax assets of
these subsidiaries can be realised in the future periods based on their budget, due to their respective plantation assets becoming more mature
and historically this resulting in the companies becoming profitable. However, the Group does not recognise the tax losses in certain companies
within the Group as tax assets as the future recoverability of losses of these companies cannot be certain. The time limit on utilisation of tax
losses is subject to the tax laws in various countries. As of 31 December 2021, the relevant time limits are 5 years in Indonesia, 7 years in
Malaysia and unlimited in UK. At 31 December 2021, all unutilised tax losses were recognised in Indonesia. The unutilised tax losses will expire
as per below:
Year
$000
2022
91
2023
651
2024
2,495
2025
476
3,713
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 $750,462,000 (2020: $689,666,000). 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. The deferred tax liability on unremitted earnings recognised at the balance sheet date was related to
the estimated dividend declared for 2021 by the subsidiaries.
Asset
$000
Liability
$000
Net
$000
(Charged)/
credited to
income
statement
$000
(Charged)/
credited
to equity
$000
2021
Impairment of land
139
-
139
100
-
Retirement benefits
2,304
-
2,304
(78)
(280)
BA movement
-
(2,819)
(2,819)
(957)
-
Unutilised tax losses
3,713
-
3,713
(4,303)
-
Unremitted earnings
-
(132)
(132)
-
-
Other temporary differences
-
(211)
(211)
158
-
Tax assets / (liabilities)
6,156
(3,162)
2,994
(5,080)
(280)
Set off of tax
(1,832)
1,832
-
-
-
Net tax assets / (liabilities)
4,324
(1,330)
2,994
(5,080)
(280)
2020 (restated)
Impairment of land
92
-
92
(468)
-
Retirement benefits
2,944
-
2,944
13
116
BA movement
-
(1,934)
(1,934)
(51)
-
Unutilised tax losses
11,360
-
11,360
(3,780)
-
Unremitted earnings
-
(343)
(343)
-
-
Other temporary differences
1,488
-
1,488
(665)
-
Tax assets / (liabilities)
15,884
(2,277)
13,607
(4,951)
116
Set off of tax
(1,495)
1,495
-
-
-
Net tax assets / (liabilities)
14,389
(782)
13,607
(4,951)
116
2021
2020
$000
$000
A deferred tax asset has not been recognised for the following items:
Unutilised tax losses
16,780
15,532
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 120
16 Inventories
2021
$000
2020
$000
Estate and mill consumables
8,433
6,873
Processed produce for sale
6,612
5,668
15,045
12,541
Transfer to assets held for sale (note 10)
(729)
-
14,316
12,541
17 Biological assets
2021
$000
2020
$000
At 1 January
8,783
7,574
Fair value gain recognised in the income statement for continuing operations
4,349
1,203
Fair value gain recognised in the income statement for discontinued operations
64
71
Transfer to assets held for sale (note 10)
(303)
-
Exchange translations
(90)
(65)
At 31 December
12,803
8,783
Following a review of its industry peers and the available research data, the Group has decided to refine the valuation technique applied to its
biological assets in order to provide a more comparable result. The refinement recognises that there is insignificant value in the FFB prior to 4
weeks before harvest and therefore the weight of FFB has been calculated based on one month’s production rather than two. The impact of
this change is immaterial and has been applied prospectively. The valuation of the unharvested FFB was carried out internally for each
plantation of the Group. It involved an estimation of the weight of unharvested FFB at balance sheet date multiplied by the sum of average
FFB selling price less average harvesting cost of the last month prior to the balance sheet date. The weight was derived from the computation
of the percentage of growth based on the data extracted from the research reference "The Reflection of Moisture Content on Palm Oil
Development during the Ripening Process of Fresh Fruits" multiplied with the estimated FFB harvested one month after the balance sheet
date. The impacts of climate change on the weather will impact the levels and quality of production of FFB so this has been taken into
consideration when determining the fair value of biological assets.
The fair value of biological assets is classified as Level 3 in the fair value hierarchy.
The valuation techniques and significant unobservable inputs used in determining the fair value measurement of biological assets, as well as
the inter-relationship between key unobservable inputs and fair value, are set out in the table below:
Item
Valuation approach
Inputs used
Inter-relationship between key unobservable inputs
and fair value
Biological assets -
Unharvested produce
Based on FFB weight
multiplied by the sum of FFB
selling price less harvesting
cost
FFB weight
FFB selling price
Harvesting cost
The higher the weight, the higher the fair value
The higher the selling price, the higher the fair value
The higher the harvesting cost, the lower the fair value
The key assumptions are considered to be FFB weight, selling price less harvesting costs and FFB production and a decrease of 1% in any of
these would result in an $131,000 decrease in the valuation.
18 Trade and other receivables
2021
$000
2020
$000
Trade receivables
1,308
1,354
Other receivables
1,457
1,551
Prepayments and accrued income
2,485
1,788
5,250
4,693
Transfer to assets held for sale (note 10)
(68)
-
5,182
4,693
The carrying amount of trade and other receivables classified as amortised cost approximates fair value.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 121
18 Trade and other receivables - continued
Trade receivables
The Group applies the IFRS 9 simplified approach to measure ECL using a lifetime ECL provision for trade receivables. To measure ECL on
a collective basis, trade receivables are grouped based on similar credit risk and age.
The expected loss rate is based on a combination of the Group’s historical credit losses experienced over the 5-year period prior to the year
end and forward-looking information on macroeconomic factors affecting the Group’s customers. The ECL has been calculated at 1% on trade
receivables balances.
Other receivables
The Group assesses the ECL associated with its debt instruments carried at amortised cost on a forward-looking basis using the three stage
approach. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
The Group considers the probability of default upon initial recognition of an asset and whether there has been significant increase in credit risk
on an on-going basis at each reporting date. To assess whether there is a significant increase in credit risk, the Group compares the risk of
default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The Group considers available,
reasonable and supportable forward-looking information, such as:
- internal credit rating;
- external credit rating (as far as available);
- actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant
change to the debtor’s ability to meet its obligation;
- significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit
enhancements; or
- significant changes in the expected performance or behaviour of the debtor, including changes in the payment status of the debtor.
There has not been a significant increase in credit risk since initial recognition on any of the group’s financial assets therefore 12-month ECL
have continued to be recognised on all balances other than trade receivables which are discussed above.
Due from cooperatives under Plasma scheme
The Group assesses the ECL on amounts due from cooperatives under Plasma scheme by considering various probability weighted outcomes.
The three possible outcomes are considered to be:
- recovery is limited to the value of the land and bearer plants on which the plantation is situated;
- recovery is limited to the future cashflows of the cooperative, being the FFB revenue less development costs; and
- recovery in full via bank financing obtained by the cooperative.
Movements on the Group’s loss provision on current and non-current other receivables and financial guarantee contracts are as follows:
2021
$000
2020
$000
At 1 January
8,011
6,273
Loss provision during the year
1,054
1,485
Transfer to assets held for sale (note 10)
(8,798)
-
Exchange difference
(87)
253
At 31 December
180
8,011
At 31 December 2021, the expected loss provision for receivables and financial guarantee contracts is as follows:
Gross carrying
amount
$000
Loss
provision
$000
Net carrying
amount
$000
2021
Trade receivable
1,301
(5)
1,296
Other receivables (note 18)
1,448
(14)
1,434
Receivables: non-current (note 14)
- Due from non-controlling interests
5,514
(55)
5,459
- Due from cooperatives under Plasma scheme
16,612
(71)
16,541
24,875
(145)
24,730
Financial guarantee contracts (note 27)
-
(35)
(35)
24,875
(180)
24,695
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 122
18 Trade and other receivables - continued
Gross carrying
amount
$000
Loss
provision
$000
Net carrying
amount
$000
2020
Trade receivables
1,363
(9)
1,354
Other receivables (note 18)
1,566
(15)
1,551
Receivables: non-current (note 14)
- Due from non-controlling interests
5,548
(55)
5,493
- Due from cooperatives under Plasma scheme
24,632
(7,889)
16,743
33,109
(7,968)
25,141
Financial guarantee contracts (note 27)
-
(43)
(43)
33,109
(8,011)
25,098
19 Notes supporting statement of cash flows
Cash and cash equivalents for purposes of the statement of cash flows comprised:
2021
2020
$000
$000
Cash at bank available on demand
43,464
41,029
Short-term deposits
174,766
74,164
Cash in hand
19
18
As reported in statement of financial position
218,249
115,211
Significant non-cash transactions from investing activities are as follows:
2021
2020
$000
$000
Property, plant and equipment purchased but not yet paid at year end
222
160
Repaid through purchase of FFB
6,374
3,849
Non-cash transactions from financing activities are shown in the reconciliation of liabilities from financing transactions as follows:
Current
loans and
borrowings
Non-current
lease
liabilities
Current
lease
liabilities
Total
$000
$000
$000
$000
At 1 January 2021
-
(217)
(236)
(453)
Cash Flows
-
167
85
252
Non-cash flows
- Effect of foreign exchange
-
4
4
8
- New lease
-
(110)
(113)
(223)
- Lease liabilities classified as non-
current at 31 December 2020
becoming current during 2021
-
46
(46)
-
- Interest accruing during the year
-
-
(24)
(24)
- Write off
-
90
90
-
(110)
(240)
(350)
Current
loans and
borrowings
Non-current
lease
liabilities
Current
lease
liabilities
Total
$000
$000
$000
$000
At 1 January 2020
(8,203)
(456)
(222)
(8,881)
Cash Flows
8,167
-
257
8,424
Non-cash flows
- Effect of foreign exchange
36
3
-
39
- New lease
-
-
-
-
- Loans and borrowings classified as non-
current at 31 December 2019 becoming
current during 2020
-
236
(236)
-
- Interest accruing during the year
-
-
(35)
(35)
-
(217)
(236)
(453)
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 123
20 Trade and other payables
2021
$000
2020
$000
Trade payables
8,821
6,254
Other payables
1,305
1,387
Advance receipts
10,237
7,070
Accruals
12,170
11,599
32,533
26,310
The carrying amount of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value. Advance
receipts from customers increased significantly due to logistic problem in Bengkulu and Kalimantan and it is expected to be recognised in full
as revenue in the subsequent year. The advance receipts at 31 December 2020 have been recognised in revenue in the current period.
21 Leases
2021
2020
$000
$000
Lease liabilities analysed as:
Non-current
(110)
(217)
Current
(240)
(236)
(350)
(453)
The weighted average incremental borrowing rate per annum was 5.5% (2020: 6.8%).
Maturity analysis for the lease liabilities has been given in note 28.
Amounts recognised in income statement:
2021
$000
2020
$000
Depreciation expense on right-of-use assets (note 13)
(153)
(148)
Interest expense on lease liabilities
(24)
(35)
Expense relating to short-term leases
(353)
(386)
Expense relating to leases of low value assets
(6)
(6)
(536)
(575)
At 31 December 2021, the Group is committed to $0.01 million (2020: $0.01 million) for short-term leases.
All the leases are fixed payments. The total cash outflow for leases amount to $0.62 million (2020: $0.65 million).
The Group leases a piece of land and office under the right-of-use assets. The lease term is between 3 to 4 years. (2020: 3 to 4 years). On
expiry the Group has the options to renew based on mutually agreed future rental. The right-of-use assets is classified as part of property,
plant and equipment in note 13.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 124
21 Leases - continued
Right-of-Use assets
Land
Building
Total
$000
$000
$000
At 1 January 2021
-
307
307
Additions
133
-
133
Amortisation
-
(153)
(153)
Impairment losses
(133)
-
(133)
Effect of foreign exchange
-
(4)
(4)
At 31 December 2021
-
150
150
Land
Building
Total
$000
$000
$000
At 1 January 2020
193
466
659
Additions
-
-
-
Amortisation
-
(148)
(148)
Impairment losses
(188)
-
(188)
Effect of foreign exchange
(5)
(11)
(16)
At 31 December 2020
-
307
307
Lease liabilities
Land
Building
Total
$000
$000
$000
At 1 January 2021
(126)
(327)
(453)
Additions
(133)
-
(133)
Interest expense
(9)
(15)
(24)
Lease payments
81
171
252
Effect of foreign exchange
4
4
8
At 31 December 2021
(183)
(167)
(350)
Land
Building
Total
$000
$000
$000
At 1 January 2020
(196)
(482)
(678)
Additions
-
-
-
Interest expense
(10)
(25)
(35)
Lease payments
84
173
257
Effect of foreign exchange
(4)
7
3
At 31 December 2020
(126)
(327)
(453)
The tables above do not include the leasehold land which is also classified as a right of use asset as this information is already presented in
Note 13.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 125
22 Retirement benefits
The Group provides Post-Employment Benefit plans to its employees in Indonesia in accordance with Job Creation Law No.11/2020,
Government Regulation No.35/2021 effective since February 2021 and Collective Labour Agreements. The impact of the implementation of
this regulation based on the calculation by actuarial is reduction in retirement benefits of $2,212,000 due to change on benefit scheme of post-
employment benefit program for non-staff employee. These are defined benefit plans and provide lump sum benefits to employees on
retirement, death, disability and voluntary resignation. There is no requirement for the Group to advance fund these benefits.
The Group has set up a separate fund with PT Asuransi Allianz Life Indonesia to fund the Post-Employment Benefit plan obligation for Staff
employees. The assets in the fund can only be used to pay the employees’ benefits.
Up until 2020, the Non-Staff employees of five of the Group’s subsidiaries in Indonesia participated in the SKU UKINDO Pension Fund, a
defined benefit plan. On retirement, death, disability or voluntary resignation, participating employees would receive the higher of the benefit
from the Pension Fund and the Post-Employment Benefit plan. In early 2020, the SKU UKINDO Pension Fund was liquidated. Its assets were
transferred to a new defined contribution plan managed by Dana Pension Lembaga Keuangan AIA Financial (“DPLK AIAF”) and allocated to
the individual participants. From 2020 onwards, these employees will receive the higher of the benefit from DPLK AIAF and the Post-
Employment Benefit plan. The liquidation of the SKU UKINDO Pension Fund led to a settlement gain of $930,000 in 2020. It also resulted in a
past service cost of $569,000 in 2020 in the Post-Employment Benefit plan for Non-Staff employees, as the DPLK AIAF plan covers a smaller
proportion of the overall Post-Employment Benefit obligation than was previously provided by the SKU UKINDO Pension Fund.
The Group provides other long-term employee benefits in the form of Long Service Awards for Staff and Non-Staff employees in Indonesia.
The Long Service Awards are for amounts of up to 2 months of basic salary, paid on completion of 10 or 20 years’ continuous service (Staff)
and on completion of 25, 30, 35, and 40 years’ continuous service (Non-Staff). These benefits are unfunded.
The defined benefit plans are valued by an actuary at the end of each financial year. The major assumptions used by the actuary were:
2021
2020
Rate of increase in wages
8.0%
8.0%
Discount rate
7.5%
7.0%
Mortality rate*
100% TMI4
100% TMI4
Disability rate
10% TMI4
10% TMI4
The reconciliation on the remeasurement of retirement benefit plan as shown below:
2021
$000
2020
$000
Included in other comprehensive income:
Continuing operations
995
(613)
Discontinued operations
91
(36)
Remeasurement of retirement benefit plan, net of tax recognised in other
comprehensive income
1,086
(649)
Included in other comprehensive income:
Remeasurement of retirement benefit plan
1,392
(779)
Deferred tax on retirement benefits
(306)
130
Remeasurement of retirement benefit plan, net of tax recognised in other
comprehensive income / (expenses)
1,086
(649)
2021
2020
$000
$000
Service cost
Current service cost
1,660
1,555
Past service cost
(2,121)
313
Settlement (gain) / loss
-
(930)
Net interest expense
735
825
Actuarial (gain) / loss
(102)
30
Total employee benefits expense
172
1,793
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 126
22 Retirement benefits - continued
(i) Reconciliation of defined benefit obligation and fair value of scheme assets including discontinued operations
Defined benefit obligation
Fair value of scheme assets
Net defined scheme liability
Funded
scheme
Unfunded
scheme
Total
Funded
scheme
Unfunded
scheme
Total
Funded
scheme
Unfunded
scheme
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
At 1 January 2020
(9,366)
(7,144)
(16,510)
5,172
-
5,172
(4,194)
(7,144)
(11,338)
Service cost - current
(393)
(1,162)
(1,555)
-
-
-
(393)
(1,162)
(1,555)
Service cost - past
256
(569)
(313)
-
-
-
256
(569)
(313)
Settlement gain
4,742
-
4,742
(3,812)
-
(3,812)
930
-
930
Interest (cost) / income
(307)
(609)
(916)
91
-
91
(216)
(609)
(825)
Actuarial loss
-
(30)
(30)
-
-
-
-
(30)
(30)
Included in income statement
4,298
(2,370)
1,928
(3,721)
-
(3,721)
577
(2,370)
(1,793)
Remeasurement (loss) / gain
Actuarial (loss) / gain from:
Adjustments (experience)
245
37
282
-
-
-
245
37
282
Demographic assumptions
89
207
296
-
-
-
89
207
296
Financial assumptions
(334)
(1,004)
(1,338)
-
-
-
(334)
(1,004)
(1,338)
Return on plan assets (exclude interest)
-
-
-
(19)
-
(19)
(19)
-
(19)
Included in other comprehensive income
-
(760)
(760)
(19)
-
(19)
(19)
(760)
(779)
Effect of movements in exchange rates
282
9
291
(198)
-
(198)
84
9
93
Benefits paid
112
322
434
-
-
-
112
322
434
Other movements
394
331
725
(198)
-
(198)
196
331
527
At 31 December 2020
(4,674)
(9,943)
(14,617)
1,234
-
1,234
(3,440)
(9,943)
(13,383)
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 127
22 Retirement benefits - continued
(i) Reconciliation of defined benefit obligation and fair value of scheme assets (continued)
Defined benefit obligation
Fair value of scheme assets
Net defined scheme liability
Funded
scheme
Unfunded
scheme
Total
Funded
scheme
Unfunded
scheme
Total
Funded
scheme
Unfunded
scheme
Total
$000
$000
$000
$000
$000
$000
$000
$000
$000
At 1 January 2021
(4,674)
(9,943)
(14,617)
1,234
-
1,234
(3,440)
(9,943)
(13,383)
Service cost - current
(439)
(1,221)
(1,660)
-
-
-
(439)
(1,221)
(1,660)
Service cost - past
(91)
2,212
2,121
-
-
-
(91)
2,212
2,121
Interest (cost) / income
(290)
(532)
(822)
87
-
87
(203)
(532)
(735)
Actuarial gain
-
102
102
-
-
-
-
102
102
Included in income statement
(820)
561
(259)
87
-
87
(733)
561
(172)
Remeasurement (loss) / gain
Actuarial (loss) / gain from:
Adjustments (experience)
452
370
822
-
-
-
452
370
822
Financial assumptions
180
450
630
-
-
-
180
450
630
Return on plan assets (exclude interest)
-
-
-
(60)
-
(60)
(60)
-
(60)
Included in other comprehensive income
632
820
1,452
(60)
-
(60)
572
820
1,392
Effect of movements in exchange rates
54
119
173
(14)
-
(14)
40
119
159
Benefits paid
239
266
505
-
-
-
239
266
505
Other movements
293
385
678
(14)
-
(14)
279
385
664
At 31 December 2021
(4,569)
(8,177)
(12,746)
1,247
-
1,247
(3,322)
(8,177)
(11,499)
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 128
22 Retirement benefits - continued
(ii) Disaggregation of defined benefit scheme assets
The fair value of the funded assets is analysed as follows:
2021
2020
$000
$000
Bonds
- Government bonds
275
-
- Corporate bonds
2
7
- Mutual fund bonds
-
282
277
289
Cash / deposits
970
945
1,247
1,234
None of the plan assets are invested in the Group’s own financial instruments, property or other assets used by the Group. All plan assets
invested in bonds which have a quoted market price in an active market.
(iii) Defined benefit obligation - sensitivity analysis
The following table exhibits the sensitivity of the Group’s retirement benefits to the fluctuation in the discount rate, wages and mortality rate:
Reasonably
Defined benefit obligation
Possible
Increase
Decrease
Change
$000
$000
Discount rate
(+ / - 1%)
(1,192)
1,384
Growth in wages
(+ / - 1%)
1,421
(1,244)
Future mortality rate
(+ / - 10%)
63
(63)
The weighted average duration of the defined benefit obligation is 11.10 years (2020: 15.57 years).
The total contribution paid into the defined contribution plan in 2021 amounted to $239,000. The Group expects to pay contributions of $202,000
to the funded plans in 2022. For the unfunded plans, the Group pays the benefits directly to the individuals; the Group expects to make direct
benefit payments of $330,000 for defined benefit plan and $246,000 for defined contribution plan in 2022.
23 Share capital and treasury shares
Authorised
Number
Issued and
fully paid
Number
Authorised
£000
Issued and
fully paid
£000
Authorised
$000
Issued and
fully paid
$000
Ordinary shares of 25p each
Beginning and end of year
60,000,000
39,976,272
15,000
9,994
23,865
15,504
Cost
Cost
2021
2020
2021
2020
Treasury shares:
Number
Number
$’000
$’000
Beginning of year
339,900
339,900
(1,171)
(1,171)
Share options exercised
-
-
-
-
End of year
339,900
339,900
(1,171)
(1,171)
Market value of treasury shares:
$’000
Beginning of year (583.0p/share)
2,705
End of year (720.0p/share)
3,298
No treasury share was purchased in 2021 (2020: Nil).
All fully paid ordinary shares have full voting rights, as well as to receive the distribution of dividends and repayment of capital upon winding up
of company.
24 Ultimate controlling shareholder
At 31 December 2021, Genton International Limited (“Genton”), a company registered in Hong Kong, held 20,247,814 (2020: 20,247,814)
shares of the Company representing 51.1% (2020: 51.1%) of the issued share capital of the Company. Together with other deemed interested
parties, Genton‘s shareholding totals 20,551,914 or 51.9%. Madam Lim Siew Kim, a Director of the Company, has advised the Company that
she is the controlling shareholder of Genton International Limited.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 129
25 Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed
in this note.
An office premises lease agreement was entered with Infra Sari Sdn Bhd, a company controlled by Madam Lim Siew Kim. The rental paid
during the year was $352,180 (2020: $345,559). There was no balance outstanding at the year end (2020: Nil).
In 2019, a land lease agreement was entered with Kuang Rong Holdings Sdn Bhd, company controlled by Madam Lim Siew Kim. The lease
agreement was terminated in 2021. The rental paid during the year was $33,589 (2020: $79,914). There was no balance outstanding at the
year end (2020: Nil).
In 2021, a land lease agreement was entered with Hana Bestari Sdn Bhd, company controlled by Madam Lim Siew Kim. The rental paid during
the year was $46,325. There was no balance outstanding at the year end.
In 2021, the final dividend paid to Genton International Limited, a company controlled by Madam Lim Siew Kim, was $202,478 for the year
ended 31 December 2020 (2020: $107,239 for the year ended 31 December 2019). The final dividend paid to other companies controlled by
Madam Lim Siew Kim was $3,041 for the year ended 31 December 2020 (2020: $1,521 for the year ended 31 December 2019). There was
no balance outstanding at the year end (2020: Nil).
26 Reserves
Nature and purpose of each reserve:
Share capital Amount of shares subscribed at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value.
Capital redemption reserve Amounts transferred from share capital on redemption of issued shares.
Treasury shares Cost of own shares held in treasury.
Revaluation reserves Gains/losses arising on the revaluation of the Group's property, net of tax.
Exchange reserves Gains/losses arising from translating the net assets of overseas operations into US Dollar.
Retained earnings Cumulative net gains and losses recognised in the consolidated income statement.
27 Guarantees and other financial commitments
2021
$000
2020
$000
Capital commitments at 31 December
Contracted but not provided - normal estate operations
979
29
Contracted but not provided – mill development
22,352
-
Authorised but not contracted - plantation and mill development
26,517
49,721
A subsidiary company, PT Sawit Graha Manunggal (“SGM”) has provided a corporate guarantee to Koperasi Bartim Sawit Sejahtera (“KBSS”),
a party under Plasma scheme as disclosed in note 14, in relation to a loan taken by KBSS from PT Bank Mandiri (Persero) Tbk. of Rp226.02
billion ($15.8 million) (2020: Rp226.02 billion, $16.0 million). The corporate guarantee remains until the loan is fully settled by 23 December
2027. The HGU (land right) that belongs to the Plasma scheme is currently held under SGM’s master title. An application to separate the HGU
was submitted to the Land Office and the land and its plantation with a total carrying amount of $11.7 million as at 31 December 2021 will be
pledged to the bank as security once the title separation approval is obtained. In addition, the terms and conditions of the loan agreement also
require KBSS to sell all its FFB produce to SGM and the plantation estate is to be managed by SGM. In view of these, the Group exposure to
this contingent liability is minimised.
On 3 February 2017, a subsidiary company, PT Alno Agro Utama and Koperasi Perkebunan Plasma Maju Sejahtera (“KPPM”) signed a
Refinancing Agreement with PT Bank Syariah Mandiri ("BSM") to fund its plasma development. The Agreement provides a loan of Rp 8.75
billion ($0.6 million) (2020: Rp8.75 billion, $0.6 million), with 10 (Ten) years maturity period effective from 24 July 2017 with an interest rate of
13.25% per annum and in 2021 decreased to 12.5% per annum. This loan is collateralized by 125.4 hectares of KPPM’s land located in Desa
Serami Baru, Kecamatan Malin Deman, Kabupaten Mukomuko, Bengkulu and its plantation with a carrying amount of $0.7 million as at 31
December 2021 as security under the agreement while the Company provides corporate guarantee amounting to Rp 8.75 billion ($0.6 million).
The Group’s loss provision on these financial guarantee contracts was $35,000 (2020: $43,000). The details of the ECL were disclosed in note
18.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 130
28 Disclosure of financial instruments and other risks
The Group's principal financial instruments comprised cash, short and long-term bank loans, trade receivables and payables excluding advance
receipts and receivables from local partners in respect of their investments.
The Group’s accounting classification of each class of financial asset and liability at 31 December 2021 and 2020 were:
Amortised
cost
$000
Financial
liabilities at
amortised cost
$000
Total carrying
value
$000
2021
Non-current receivables
22,000
-
22,000
Trade and other receivables
2,730
-
2,730
Short-term investments
1,439
-
1,439
Cash and cash equivalent
218,249
-
218,249
Trade and other payables
-
(22,296)
(22,296)
244,418
(22,296)
222,122
Amortised cost
$000
Financial
liabilities at
amortised cost
$000
Total carrying
value
$000
2020
Non-current receivables
22,236
-
22,236
Trade and other receivables
2,905
-
2,905
Short-term investments
1,957
-
1,957
Cash and cash equivalent
115,211
-
115,211
Trade and other payables
-
(19,240)
(19,240)
142,309
(19,240)
123,069
Financial instruments not measured at fair value
Financial instruments not measured at fair value include cash and cash equivalents, trade and other receivables, trade and other payables,
borrowings due within one year and non-current receivables.
Due to their short-term nature, the carrying value of cash and cash equivalents, trade and other receivables, trade and other payables
approximates their fair value. The non-current receivables were measured at cost less ECL however disclosure of fair value has been given in
note 14 for comparison purposes.
Please refer to the applicable notes for details of the fair value hierarchy, valuation techniques, and significant unobservable inputs related to
determining the fair value of the following items:
- Non-current receivables (note 14); and
The principal financial risks to which the Group is exposed are:
- commodity selling price changes; and
- exchange movements;
which, in turn, can affect financial instruments and/or operating performance.
The Company does not hedge any of its risks. Its trade credit risks are low. There are no financial assets or liabilities that are held at fair value
through the profit or loss.
The Board is directly responsible for setting policies in relation to financial risk management and monitors the levels of the main risks through
review of regular operational reports.
Commodity selling prices
The Group does not normally contract to sell produce more than one month ahead.
Currency risk
Most of the Group's operations are in Indonesia. The Company and Group accounts are prepared in US Dollar which is not the functional
currency of the operating subsidiaries. The Group does not hedge its net investment in its overseas subsidiaries and is therefore exposed to a
currency risk on that investment. The historical cost of investment (including intercompany loans) by the parent in its subsidiaries amounted to
$52,710,000 (2020: $54,573,000), while the statement of financial position value of the Group's share of underlying assets at 31 December
2021 amounted to $440,030,000 (2020: $375,433,000).
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 131
28 Disclosure of financial instruments and other risks - continued
Currency risk - continued
All the Group's sales are made in local currency and any trade receivables are therefore denominated in local currency. No hedging is therefore
necessary.
Selling prices of the Group's produce are directly related to the US Dollar denominated world prices. Appreciation of local currencies, therefore,
reduces profits and cash flow of the Indonesian and Malaysian subsidiaries in US Dollar terms and vice versa.
All remaining borrowings of the Group’s subsidiaries had been fully paid in 2020 and therefore there was no longer any currency risk for the
Group in respect of this. The average interest rate on local currency deposits was 2.74% higher (2020: 4.02% higher) than on US Dollar
deposits. The unmatched balance at 31 December 2021 is represented by the $13,504,000 shown in the table below (2020: $13,803,000).
The table below shows the net monetary assets and liabilities of the Group as at 31 December 2021 and 2020 that were not denominated in
the operating or functional currency of the operating unit involved.
Net foreign currency assets/(liabilities)
Functional currency of Group operation
US Dollar
$000
Sterling
$000
Total
$000
2021
Rupiah
12,397
-
12,397
US Dollar
-
996
996
Ringgit
1,107
-
1,107
Total
13,504
996
14,500
2020
Rupiah
12,086
-
12,086
US Dollar
-
259
259
Ringgit
1,717
-
1,717
Total
13,803
259
14,062
The following table summarises the sensitivity of the Group’s financial assets and financial liabilities to foreign exchange risk. The impact on
profit before tax and equity if Ringgit or Rupiah strengthen or weaken by 10% against US Dollar is:
2021
2020
Carrying
-10% in
+10% in
Carrying
-10% in
+10% in
Amount
US$
Rp : $ and
RM : $
Rp : $ and
RM : $
Amount
US$
Rp : $ and
RM : $
Rp : $ and
RM : $
$000
$000
$000
$000
$000
$000
Financial Assets
Non-current receivables
22,000
(1,504)
1,838
22,236
(1,522)
1,860
Trade and other receivables
2,730
(244)
298
2,905
(261)
319
Short-term investments
1,439
(131)
160
1,957
(178)
217
Cash and cash equivalents
218,249
(19,695)
24,072
115,211
(10,433)
12,752
Financial Liabilities
Trade and other payables
(22,296)
1,914
(2,339)
(19,240)
1,636
(2,000)
Total (decrease) / increase
(19,660)
24,029
(10,758)
13,148
Liquidity risk
Profitability of new sizable plantations normally requires a period of between six and seven years before cash flow turns positive. Because oil
palms do not begin yielding significantly until four years after planting, this development period and the cash requirement is affected by changes
in commodity prices.
The Group attempts to ensure that it is likely to have either self-generated funds or further loan/equity capital to complete its development plans
and to meet loan repayments. Long-term forecasts are updated twice a year for review by the Board. In the event that falling commodity prices
reduce self-generated funds below expectations and to a level where Group resources may be insufficient, further new planting may be
restricted. Consideration is given to the funds required to bring existing immature plantings to maturity.
The Group’s trade and tax payables are all due for settlement within a year. At 31 December 2021, the Group had no external loans and
facilities.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 132
28 Disclosure of financial instruments and other risks - continued
Liquidity risk - continued
The following table sets out the undiscounted contractual cashflows of financial liabilities:
Less than
1 year
Between 1
and 2 years
Between 2
and 5 years
More than 5
years
Total
$000
$000
$000
$000
$000
At 31 December 2021
Trade and other payables
(10,013)
(31)
(22)
(60)
(10,126)
Accruals
(8,450)
(135)
(243)
(3,343)
(12,171)
Lease liabilities
(252)
(81)
(34)
-
(367)
(18,715)
(247)
(299)
(3,403)
(22,664)
Financial guarantee contracts
provided to Plasma
- loan repayment by Plasma
(1,142)
(1,759)
(628)
-
(3,529)
(19,857)
(2,006)
(927)
(3,403)
(26,193)
At 31 December 2020
Trade and other payables
(7,641)
-
-
-
(7,641)
Accruals
(7,850)
(112)
(243)
(3,394)
(11.599)
Lease liabilities
(257)
(222)
-
-
(479)
(15,748)
(334)
(243)
(3.394)
(19,719)
Financial guarantee contracts provided
to Plasma
- loan repayment by Plasma
(773)
(2,535)
(928)
(107)
(4,343)
(16,521)
(2,869)
(1,171)
(3,501)
(24,062)
The figures for trade and other payables excludes accruals and advance receipts.
The Group does not face a significant liquidity risk with regard to its financial liabilities.
Interest rate risk
Both the Group's surplus cash and its borrowings are subject to variable interest rates. The Group had net cash throughout 2021, so the effect
of variations in borrowing rates is more than offset. A 1% change in the deposit interest rate would not have a significant impact on the Group’s
reported results as shown in the table below.
2021
2020
Carrying
amount
-1% in
interest rate
+1% in
interest rate
Carrying
amount
-1% in
interest rate
+1% in
interest rate
$000
$000
$000
$000
$000
$000
Financial Assets
Short-term investments
1,439
(12)
14
1,957
(18)
16
Cash and cash equivalents
218,249
(2,112)
2,135
115,211
(1,102)
1,118
Total (decrease) / increase
(2,124)
2,149
(1,120)
1,134
There is no policy to hedge interest rates, partly because of the net cash position and the net interest income position of the Group.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 133
28 Disclosure of financial instruments and other risks - continued
Interest rate risk - continued
Interest rate profiles of the Group's financial assets (comprising non-current receivables, trade and other receivables, cash and cash equivalent
and short-term investments) at 31 December were:
Total
Fixed rate
Variable rate
No interest
$000
$000
$000
$000
2021
Sterling
996
-
63
933
US Dollar
18,504
5,459
9,131
3,914
Rupiah
220,238
-
202,442
17,796
Ringgit
4,680
-
3,250
1,430
Total
244,418
5,459
214,886
24,073
2020
Sterling
259
-
21
238
US Dollar
17,805
5,493
8,782
3,530
Rupiah
119,483
-
101,089
18,394
Ringgit
4,762
-
3,546
1,216
Total
142,309
5,493
113,438
23,378
Long-term receivables of $5,514,000 (2020: $5,548,000) comprise US Dollar denominated amounts due from non-controlling interests as
described in note 14 on which interest is due at a fixed rate of 6%.
Average US Dollar deposit rate in 2021 was 0.30% (2020: 1.75%) and Rupiah deposit rate was 3.04% (2020: 5.77%).
Interest rate profiles of the Group's financial liabilities (comprising bank loans and other financial liabilities and trade and other payables
excluding advance receipts) at 31 December were:
Total
Fixed rate
Variable rate
No interest
$000
$000
$000
$000
2021
Sterling
-
-
-
-
US Dollar
(1,110)
-
-
(1,110)
Rupiah
(20,864)
-
-
(20,864)
Ringgit
(322)
-
-
(322)
Total
(22,296)
-
-
(22,296)
2020
Sterling
-
-
-
-
US Dollar
(1,109)
-
-
(1,109)
Rupiah
(17,676)
-
-
(17,676)
Ringgit
(455)
-
-
(455)
Total
(19,240)
-
-
(19,240)
Weighted average interest rate on variable rate borrowings was nil in 2021 (2020: 6.75%).
Credit risk
The Group has two types of financial assets that are subject to the ECL model:
• Trade receivables for sales of goods and services; and
• Current and non-current receivables carried at amortised cost.
The Group also has financial guarantee contracts for which the ECL model is also applicable.
While cash and cash equivalents are also subject to the impairment requirements as set out in IFRS 9, there is no impairment loss identified
given the financial strength of the financial institutions in which the Group have a relationship with. Credit risk arises from cash and cash
equivalents and deposits with banks and financial institutions. The Group has taken necessary steps and precautions in minimising the credit
risk by lodging cash and cash equivalents only with reputable licensed banks, and particularly in Indonesia, independently rated banks with a
minimum rating of “A”. The cash and cash equivalents are in US dollars, Rupiah, Ringgit and Sterling according to the requirements of the
Group. The list of the principal banks used by the Group is given on the inside of the back cover of this report.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 134
28 Disclosure of financial instruments and other risks - continued
Credit risk - continued
The Group use three categories for those receivables which reflect their credit risk and how the loss provision is determined for those categories.
(i) Trade receivables using the simplified approach
The Group applies the simplified approach under IFRS 9 to measure ECL, which uses a lifetime expected loss provision for all trade
receivables. To measure the expected losses, trade receivables have been grouped based on shared credit risk characteristics and
days past due.
The expected loss rates are based on historical payment profiles of sales and the corresponding historical credit losses experienced
during these periods. The historical loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors
(such as palm product prices and crude oil price) affecting the ability of the customers to settle the receivables. The historical loss rates
will be adjusted based on the expected changes in these factors. No significant changes to estimation techniques or assumptions were
made during the reporting period.
In determining the expected loss rates, the Group also takes into consideration the collateral or payments received in advance, as set
out below:
Receivables are generally collected within the credit term and therefore there is minimal exposure to doubtful debts. Upfront payments
are also collected for certain sales made by the Group’s subsidiaries in Indonesia.
The Group’s maximum exposure to credit risk and loss provision recognised as at 31 December 2020 is disclosed in note 18. The ECL
has been calculated at 1% on trade receivables balances while the remaining amount in which no ECL provision was recognised is
deemed to be recoverable, with low probability of default. Default is defined by the management as the non-repayment of the balance.
(ii) Debt instruments at amortised costs other than trade receivables using the three-stage approach
All of the Group’s debt instruments at amortised costs other than trade receivables are considered to have a low credit risk, except
amount due from cooperatives under Plasma scheme are considered to have higher credit risk, as these were considered to be
performing, have low risks of default and historically there were minimal instances where contractual cash flow obligations have not
been met. There has not been a significant increase in credit risk since initial recognition.
The 12-month ECL has been calculated at 1% on the majority of balances (unless it has been considered there to be no ECL), with the
exception of amounts due from cooperatives under Plasma scheme where the ECL is largely calculated, having considered various
probability weighted outcomes, as being the balance of the receivable in excess of the value of the associated land and plantation assets
on which the Plasma land resides which effectively would be returned to the Company if the receivable is not repaid.
The maximum exposure to credit risks for debt instruments at amortised cost other than trade receivables are represented by the carrying
amounts recognised in the statements of financial position.
(iii) Financial guarantee contracts using the three-stage approach
All of the financial guarantee contracts are considered to be performing, have low risks of default and historically there were no instances
where these financial guarantee contracts were called upon by the parties of which the financial guarantee contracts were issued.
Accordingly,12-month ECL have been recognised at 1% on the financial guarantee contracts and disclosed in note 27.
Information regarding other non-current assets and trade and other receivables is disclosed in notes 14 and 18 respectively. Amounts
receivable from local partners before ECL, amounting to $5,514,000 (2020: $5,548,000), in relation to their investments in operating
subsidiaries are secured on those investments and are repayable from their share of dividends from those subsidiaries.
Amounts receivable due from cooperatives under Plasma scheme, as disclosed in note 14, are unsecured and are to be repaid from FFB
supplied by the cooperatives. The provision of ECL for amounts receivable due from cooperatives under Plasma scheme had been disclosed
in note 18 and note 10.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 135
28 Disclosure of financial instruments and other risks - continued
Credit risk - continued
Deposits with banks and other financial institutions and investment securities are placed, or entered into, with reputable financial institutions or
companies with high credit ratings and no history of default.
As the Group does not hold any collateral, the maximum exposure to credit risk for each class of financial instrument is the carrying amount
presented on the statement of financial position, except in the case of the financial guarantee contracts offered by two subsidiaries to
cooperatives in order for them to obtain bank loans in 2013 and 2017, which are not held on the statement of financial position of the Group.
See note 27.
Capital
The Group defines its Capital as Share capital and Reserves, shown in the statement of financial position as "Issued capital attributable to
owners of the parent" and amounting to $440,030,000 at 31 December 2021 (2020: $375,433,000).
Group policy presently attempts to fund development from self-generated funds and loans and not from the issue of new share capital. At 31
December 2021, the Group had no borrowings (2020: Nil) but, depending on market conditions, the Board is prepared for the Group to have
net borrowings.
Plantation industry risk
Please refer to pages 43 - 47.
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 136
29 Subsidiary companies
The principal subsidiaries of the Company all of which have been included in these consolidated financial statements are as follows:
Name
Country of
incorporation and
principal place of
business
Proportion of
ownership interest at
31 December
Non-controlling
interests ownership /
voting interest at 31
December
2021
2020
2021
2020
Principal sub-holding company
Anglo-Indonesian Oil Palms Limited
United Kingdom
100%
100%
-
-
Management company
Indopalm Services Limited
United Kingdom
100%
100%
-
-
Anglo-Eastern Plantations Management Sdn Bhd
Malaysia
100%
100%
-
-
PT Anglo-Eastern Plantations Management Indonesia
Indonesia
100%
100%
-
-
Operating companies
Anglo-Eastern Plantations (M) Sdn Bhd
Malaysia
55%
55%
45%
45%
All For You Sdn Bhd
Malaysia
100%
100%
-
-
PT Alno Agro Utama
Indonesia
90%
90%
10%
10%
PT Anak Tasik
Indonesia
100%
100%
-
-
PT Bangka Malindo Lestari
Indonesia
95%
95%
5%
5%
PT Bina Pitri Jaya
Indonesia
80%
80%
20%
20%
PT Cahaya Pelita Andhika
Indonesia
90%
90%
10%
10%
PT Empat Lawang Agro Perkasa
Indonesia
95%
95%
5%
5%
PT Hijau Pryan Perdana
Indonesia
80%
80%
20%
20%
PT Kahayan Agro Plantation
Indonesia
78%
78%
22%
22%
PT Karya Kencana Sentosa Tiga
Indonesia
95%
95%
5%
5%
PT Mitra Puding Mas
Indonesia
90%
90%
10%
10%
PT Musam Utjing
Indonesia
75%
75%
25%
25%
PT Riau Agrindo Agung
Indonesia
95%
95%
5%
5%
PT Sawit Graha Manunggal
Indonesia
82%
82%
18%
18%
PT Simpang Ampat
Indonesia
100%
100%
-
-
PT Tasik Raja
Indonesia
80%
80%
20%
20%
PT United Kingdom Indonesia Plantations
Indonesia
75%
75%
25%
25%
Dormant companies
The Ampat (Sumatra) Rubber Estate (1913) Limited
United Kingdom
100%
100%
-
-
Gadek Indonesia (1975) Limited
United Kingdom
100%
100%
-
-
Mergerset (1980) Limited
United Kingdom
100%
100%
-
-
Musam Indonesia Limited
United Kingdom
100%
100%
-
-
The principal United Kingdom sub-holding company, UK management company and UK dormant companies are registered in England and
Wales and are direct subsidiaries of the Company. The Malaysian operating companies and management company are incorporated in
Malaysia and are direct subsidiaries of the Company. The Indonesian operating companies and management company are incorporated in
Indonesia and are direct subsidiaries of the principal sub-holding company. The principal activity of the operating companies is plantation
agriculture. The registered office of the principal subsidiaries are disclosed below:
Subsidiaries by country
Registered address
UK registered subsidiaries
Quadrant House, 6
th
Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Malaysia registered subsidiaries
7
th
Floor, Wisma Equity
150 Jalan Ampang
50450 Kuala Lumpur
Malaysia
Indonesia registered subsidiaries
3
rd
Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 137
30 Non-controlling interests
The Group identified subsidiaries with material non-controlling interests (“NCI”) based on the total assets in relation to the Group. A subsidiary’s NCI is material if the subsidiary contributed more than
10% of the Group’s total assets. The subsidiaries identified and their summarised financial information, before intra-group eliminations, are presented below:
Entity
PT Tasik Raja
PT Mitra Puding Mas
PT Alno Agro Utama
PT Bina Pitri Jaya
PT Sawit Graha Manunggal
18%
NCI percentage
20%
10%
10%
20%
Summarised income statement
For the year ended 31 December
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Revenue
91,945
59,166
64,374
37,492
87,259
51,944
73,827
46,865
79,728
42,782
Profit after tax
16,771
8,554
12,276
5,236
15,747
6,381
7,192
9,162
22,384
6,394
Other comprehensive (expense) / income
(1,623)
(1,845)
(878)
(960)
(695)
(1,028)
(1,722)
(1,950)
15
100
Total comprehensive income
15,148
6,709
11,398
4,276
15,052
5,353
5,470
7,212
22,399
6,494
Profit allocated to NCI
3,354
1,711
1,228
524
1,575
638
1,438
1,832
4,075
1,164
Other comprehensive (expenses) / income allocated to NCI
(325)
(369)
(88)
(96)
(70)
(103)
(344)
(390)
3
18
Total comprehensive income allocated to NCI
3,029
1,342
1,140
428
1,505
535
1,094
1,442
4,078
1,182
Dividends paid to NCI
17
3
144
35
12
2
46
24
-
-
Summarised statement of financial position
As at 31 December
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Non-current assets
73,334
102,162
64,458
69,152
51,237
50,533
123,967
127,717
80,093
81,287
Current assets
78,140
32,177
27,153
11,033
48,527
32,217
25,392
16,029
19,394
16,456
Non-current liabilities
(749)
(1,122)
(1,329)
(1,405)
(2,759)
(2,912)
(1,251)
(1,470)
(52,557)
(74,902)
Current liabilities
(7,555)
(5,395)
(6,263)
(4,801)
(9,829)
(7,670)
(5,873)
(5,593)
(9,567)
(7,896)
Net assets
143,170
127,822
84,019
73,979
87,176
72,168
142,235
136,683
37,363
14,945
Accumulated NCI
28,634
25,564
8,402
7,398
8,718
7,217
28,447
27,337
6,800
2,720
Summarised cash flows
For the year ended 31 December
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
$000
$000
$000
$000
$000
$000
$000
$000
$000
$000
Cash flows from operating activities
25,736
8,297
19,297
1,850
16,547
10,133
7,282
3,792
27,075
15,853
Cash flows (used in) / from investing activities
(1,221)
2,641
(1,707)
(996)
(3,028)
(2,559)
(587)
(344)
(4,355)
(4,145)
Cash flows from / (used in) financing activities
22,413
(13)
(1,553)
(343)
(41)
(483)
(150)
(33)
(21,689)
(11,297)
Net cash inflows
46,928
10,925
16,037
511
13,478
7,091
6,545
3,415
1,031
411
Notes to the Consolidated Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 138
31 Investments
2021
$000
2020
$000
Financial assets at fair value through profit or loss (listed)
At 1 January
-
-
Addition
49
-
Revaluation gain
-
-
Exchange differences
-
-
At 31 December
49
-
32 Events after the reporting period
On 27 April 2022 the Indonesian government banned the export of CPO to try to stem the rising cost of cooking oil in Indonesia. This export
ban will be reviewed monthly, or as often as needed, and whilst in place, will affect the tender price AEP will achieve as the CPO is sold locally.
Company Statement of Financial Position
As at 31 December 2021
Company Number: 1884630
Annual Report 2021 | Anglo-Eastern Plantations Plc 139
Note
2021
$000
2020
$000
Non-current assets
Investments in subsidiaries
4
52,673
54,536
Investments
49
-
52,722
54,536
Current assets
Receivables
5
2,154
3,681
Cash at bank and in hand
1,599
448
3,753
4,129
Current liabilities
Other payables
6
(3,544)
(3,542)
Net current assets
209
587
Net assets
52,931
55,123
Capital and reserves
Share capital
7
15,504
15,504
Treasury shares
7
(1,171)
(1,171)
Share premium
23,935
23,935
Capital redemption reserve
1,087
1,087
Exchange reserves
3,872
3,872
Retained earnings at 1 January
11,896
7,241
Profit / (Loss) for the year
(1,796)
4,853
Dividends paid
(396)
(198)
Retained earnings
9,704
11,896
Shareholders' funds
52,931
55,123
The loss after tax for the year for the Company dealt with in the consolidated financial statements of the Company was $1,796,000 (2020: profit
after tax $4,853,000).
The financial statements were approved and authorised for issue by the Board of Directors on 29 April 2022 and were signed on its behalf by:
Dato’ John Lim Ewe Chuan
Executive Director, Corporate Finance and Corporate Affairs
The accompanying notes are an integral part of this statement of financial position.
Company Statement of Changes in Equity
For the year ended 31 December 2021
Annual Report 2021 | Anglo-Eastern Plantations Plc 140
Share
capital
Treasury
shares
Share
premium
Capital
redemption
reserve
Exchange
reserves
Retained
earnings
Total
$000
$000
$000
$000
$000
$000
$000
Balance at 31 December 2019
15,504
(1,171)
23,935
1,087
3,872
7,241
50,468
Comprehensive income for the year
Profit for the year
-
-
-
-
-
4,853
4,853
Total comprehensive income for the year
-
-
-
-
-
4,853
4,853
Dividends paid
-
-
-
-
-
(198)
(198)
Balance at 31 December 2020
15,504
(1,171)
23,935
1,087
3,872
11,896
55,123
Comprehensive loss for the year
Loss for the year
-
-
-
-
-
(1,796)
(1,796)
Total comprehensive loss for the year
-
-
-
-
-
(1,796)
(1,796)
Dividends paid
-
-
-
-
-
(396)
(396)
Balance at 31 December 2021
15,504
(1,171)
23,935
1,087
3,872
9,704
52,931
The accompanying notes are an integral part of this statement of changes in equity.
Notes to the Company Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 141
1 Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 100 Application of Financial Reporting
Requirements ("FRS 100") and Financial Reporting Standard 101 Reduced Disclosure Framework ("FRS 101").
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore,
these financial statements do not include:
• certain comparative information as otherwise required by IFRS;
• certain disclosures regarding the Company's capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with other wholly owned members of Anglo-Eastern Plantations Plc group of companies.
In addition, and in accordance with FRS 101 further disclosure exemptions have been adopted because equivalent disclosures are included in
the Company's consolidated financial statements. These financial statements do not include certain disclosures in respect of:
• Share based payments;
• Financial instruments (other than certain disclosures required as a result of recording financial instruments at fair value); or
• Fair value measurement (other than certain disclosures required as a result of recording financial instruments at fair value).
2 Accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently
applied to all the years presented unless otherwise stated.
(a) Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been prepared
under the historical cost convention. The presentation currency used is US Dollar and amounts have been presented in round thousands
("$000"). The principal accounting policies are summarised below.
(b) Foreign currency
The functional currency of the Company is US Dollar, chosen to reflect the primary economic environment in which the Company
operates. Transactions in sterling are translated to US Dollar at the actual exchange rate and exchange losses recognised in income
statement. Sterling denominated assets and liabilities are converted to US Dollar at the rate ruling at the balance sheet date. Exchange
differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in income statement.
(c) Investments
Investments in subsidiaries are stated at cost less provision for any impairment.
(d) Property, plant and equipment
All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the
acquisition of the items. After initial recognition, all items of property, plant and equipment are stated at cost less accumulated
depreciation and any accumulated impairment losses.
Office plant and equipment is depreciated using the straight-line method. The yearly rate of depreciation is as follows:
Office plant, equipment & vehicle - 20% per annum
(e) Dividends
Equity dividends are recognised when they become legally payable. The Company pays only one dividend each year as a final dividend
which becomes legally payable when approved by the shareholders at the next annual general meeting.
(f) Deferred taxation
A deferred tax asset has not been recognised in relation to brought forward tax losses of $11.0m (2020: $9.8m) because it is not certain
those losses can be utilised in the foreseeable future.
(g) Treasury shares
Consideration paid or received for the purchase or sale of the Company’s own shares for holding in treasury is recognised directly in
equity, where the cost is presented as the treasury shares. Any excess of the consideration received on the sale of treasury shares over
the weighted average cost of shares sold is taken to the share premium account. Any shares held in treasury are treated as cancelled
for the purpose of calculating earnings per share.
(h) Financial guarantee contracts
Where the Company enters into financial guarantee contracts and guarantees the indebtedness of other companies within the Group,
these are accounted for under IFRS 9. The details of financial guarantee contracts are disclosed in note 27 of the consolidated financial
statements.
Notes to the Company Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 142
2 Accounting policies – continued
(i) Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated
based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Estimates and assumptions
Recoverability of investments and ECL on intercompany balances - estimate of future cash flows and liquid assets (note 5)
3 Income statement
As permitted by section 408 of the Companies Act 2006, a separate income statement dealing with the results of the Company has not been
presented. The loss before tax for the year for the Company dealt with in the consolidated financial statements of the Company was $1,792,000
(2020: profit before tax $4,855,000) and loss after tax for the year was $1,796,000 (2020: profit after tax $4,853,000).
The remuneration of the directors of the Company is disclosed in note 8 to the consolidated financial statements. Auditor's remuneration is
disclosed in note 6 to the consolidated financial statements.
4 Investments in subsidiaries
Investments in
subsidiaries
undertakings
Loans to
subsidiaries
undertakings
Total
$000
$000
$000
At 1 January 2020
12,253
37,720
49,973
Movements during the year
Repayment
-
(1,224)
(1,224)
Reversal of loss provision
-
5,787
5,787
At 31 December 2020
12,253
42,283
54,536
Movements during the year:
Repayment
-
(1,863)
(1,863)
Loss provision
-
-
-
At 31 December 2021
12,253
40,420
52,673
2021
2020
$000
$000
Net carrying amount
At 31 December
52,673
54,536
Loans to subsidiary companies do not have fixed repayment terms and are repayable on demand. In practice, they are effectively long-term in
nature and therefore classified as investments in subsidiaries. The details of the ECL is disclosed in note 5.
The details of the subsidiaries are disclosed in note 29 of the consolidated financial statements.
5 Receivables
2021
$000
2020
$000
Amounts owed by group undertakings:
Anglo-Eastern Plantations Management Sdn Bhd
2,092
2,612
PT Hijau Pyran Perdana
-
183
PT Sawit Graha Manunggal
-
831
PT Anglo-Eastern Plantations Management Indonesia
17
17
2,109
3,643
Other receivables
45
38
2,154
3,681
The amounts owed by group undertakings arise as a result of advances to subsidiary companies and expenses paid on their behalf. The
amounts are unsecured, interest free and do not have fixed repayment terms.
Notes to the Company Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 143
5 Receivables - continued
For intercompany balances that are repayable on demand, the Company’s ECL is based on the following assumptions:
- If the borrower has sufficient accessible highly liquid assets in order to repay the loan if demanded at the reporting date, the ECL is likely
to be immaterial.
- If the borrower could not repay the loan if demanded at the reporting date, the Company considers the expected manner of recovery to
measure the ECL. The recovery manner could be either through ‘repayment over time’ or a fire sale of less liquid assets by the borrower.
- If the recovery strategies indicate that the Company would fully recover the outstanding balance of the loan, the ECL would be limited to
the effect of the discounting of the amount due on the loan, at the loan’s effective interest rates, over the period until the amount is fully
recovered.
The details of other receivables related to ECL were disclosed in note 18 and note 28 of the consolidated financial statements.
Movements on the Company’s loss provision on both current and non-current other receivables were as follows:
2021
$000
2020
$000
At 1 January
1,515
6,649
Loss provision / (Reversal of loss provision) during the year
634
(5,134)
At 31 December
2,149
1,515
At 31 December 2021, the expected loss provision for receivables was as follows:
Gross
carrying
amount
$000
Loss
provision
$000
Net carrying
amount
$000
2021
Amounts owed by group undertakings
4,213
(2,104)
2,109
Other receivables
Investments in subsidiaries (note 4)
53
(8)
45
- Loans to subsidiaries undertakings
40,457
(37)
40,420
44,723
(2,149)
42,574
Gross carrying
amount
$000
Loss provision
$000
Net carrying
amount
$000
2020
Amounts owed by group undertakings:
5,113
(1,470)
3,643
Other receivables
Investments in subsidiaries (note 4)
46
(8)
38
- Loans to subsidiaries undertakings
42,320
(37)
42,283
47,479
(1,515)
45,964
6 Other payables
2021
$000
2020
$000
Amounts owed to group undertakings:
Mergerset (1980) Limited
2,163
2,163
Musam Indonesia Limited
246
246
2,409
2,409
Accruals
1,135
1,133
3,544
3,542
The amounts owed to group undertakings arise as a result of advances from subsidiary companies and expenses paid on our behalf. The
amounts are unsecured, interest free and do not have fixed repayment terms.
7 Share capital and treasury shares
The details of the share capital and treasury shares are disclosed in note 23 of the consolidated financial statements.
Notes to the Company Financial Statements
Annual Report 2021 | Anglo-Eastern Plantations Plc 144
8 Related party transactions
An office premises lease agreement was entered with Infra Sari Sdn Bhd, a company controlled by Madam Lim Siew Kim. The rental paid
during the year was $262,237 (2020: $255,616). There was no balance outstanding at the year end (2020: Nil). This has been classified as a
short term lease and therefore lease payments have been recognised directly as an operating expense in the income statement.
The details of the dividend payment to the related parties controlled by Madam Lim Siew Kim are disclosed in note 25 of the consolidated
financial statements.
Transactions between the Company and its subsidiaries are disclosed below:
Nature of transactions
Name
2021
$000
2020
$000
Management fees from
Anglo-Eastern Plantations Malaysia Sdn Bhd
57
20
Commissioner services income
PT Anglo-Eastern Plantations Management Indonesia
17
17
Corporate guarantee fees from
PT Sawit Graha Manunggal
-
131
Receivable from
Subsidiaries (note 5)
4,213
5,113
Payable to
Subsidiaries (note 6)
2,409
2,409
The details of the intercompany receivables and payables are disclosed in note 5 and note 6 of the Company financial statements respectively.
9 Employees' and Directors' remuneration
2021
Number
2020
Number
Average numbers employed during the year
- directors
4
4
- staff
-
-
4
4
2021
$000
2020
$000
Staff costs
Wages and salaries
-
-
Social security costs
-
-
Retirement benefits
-
-
-
-
The information required by the Companies Act and the Listing Rules of the Financial Conduct Authority are contained in the Directors'
remuneration report on pages 72 - 78 of which certain information on page 76 has been audited.
2021
$000
2020
$000
Directors' emoluments
187
200
10 Dividends
The details of the dividends are disclosed in note 12 of the consolidated financial statements.
11 Guarantees and other financial commitments
The Company has provided nil guarantees for loans to subsidiaries (2020: nil) as set out in note 27 of the consolidated financial statements.
Notice of Annual General Meeting
Annual Report 2021 | Anglo-Eastern Plantations Plc 145
Notice is hereby given that the thirty-seventh Annual General Meeting of Anglo-Eastern Plantations Plc will be held at the office of UHY Hacker
Young LLP, 6
th
Floor, Quadrant House, 4 Thomas More Square, London E1W 1YW on Monday 27 June 2022 at 11.00am (UK time) for the following
purposes:
1 To receive and consider the accounts and the reports of the directors and auditor thereon for the year ended 31 December 2021.
2 To approve the Directors' Remuneration Report (excluding the part containing the remuneration policy) as set out in the Company’s annual
report and accounts for the year ended 31 December 2021.
3 To declare a final dividend.
4 To re-elect Madam Lim Siew Kim, a Non-Executive Director, who has served more than nine years.
5 To re-elect Dato’ John Lim Ewe Chuan as a director.
6 To re-elect Mr Lim Tian Huat as a Non-Executive Director.
7 To re-elect Mr Jonathan Law Ngee Song as a Non-Executive Director
8 To re-appoint BDO LLP as auditor.
9 To authorise the directors to fix the remuneration of the auditor.
10 To consider the following resolution as an ordinary resolution:
That the directors be generally and unconditionally authorised in accordance with section 551 of the Companies Act 2006, in substitution for
all existing authorities to the extent unused, to exercise all the powers of the Company to allot:
(i) shares in the Company up to an aggregate nominal amount of £3,303,031 (representing 13,212,124 ordinary shares of 25p each)
which is equal to one third of the issued ordinary share capital (excluding treasury shares) at the date of this resolution: and in addition
(ii) equity securities of the Company (within the meaning of section 560(1) of the Companies Act 2006) in connection with an offer of such
securities by way of a rights issue up to an aggregate nominal amount of £3,303,031
provided that this authority shall expire on the date of the next annual general meeting after the passing of this resolution or 30 June 2023
whichever is earlier save that the Company may before such expiry make an offer or agreement which would or might require relevant
securities to be allotted after such expiry and the directors may allot relevant securities in pursuance of such an offer or agreement as if the
authority conferred hereby had not expired.
"rights issue" means an offer of equity securities open for acceptance for a period fixed by the directors to holders of equity securities (other
than the Company) on the register on a fixed record date in proportion to their respective holdings of such securities or in accordance with
the rights attached thereto (but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation
to fractional entitlements or legal or practical problems under the laws of, or the requirements of any recognised regulatory body or any stock
exchange in, any territory).
11 To consider the following resolution as a special resolution:
That subject to and conditional on the passing of Resolution 10, the directors be empowered pursuant to section 570 of the Companies Act
2006) to allot equity securities (within the meaning of section 560 of that Act) for cash pursuant to the authority conferred by Resolution 10
and/or by way of sale of treasury shares as if section 561(1) of that Act did not apply to any such allotment or sale, provided that this
authorisation shall be limited to:
(i) the allotment of equity securities and sale of treasury shares for cash in connection with an offer or issue of, or invitation to apply for,
equity securities made to (but in the case of the authority granted under paragraph (ii) of Resolution 10 by way of a rights issue only);
(a) ordinary shareholders in proportion (as nearly may be practicable) to their existing holdings: and
(b) holders of other equity securities, as required by the rights of those securities, or as the directors otherwise consider necessary,
and permitting the directors to impose any limit or restrictions and make any arrangements which they consider necessary or
appropriate to deal with treasury shares, fractional entitlement, record dates, legal regulatory or practical problems in, or under, the
laws of any territory, or any other matter; and
Notice of Annual General Meeting
Annual Report 2021 | Anglo-Eastern Plantations Plc 146
(ii) in the case of the authority granted under paragraph (i) of Resolution 10 and/or the sale of treasury shares for cash, to the allotment
of equity shares or sale of treasury shares up to an aggregate nominal amount of £495,454.
Such power shall apply during the period expiring on the date of the next annual general meeting or on 30 June 2023 (whichever shall
be earlier) but the directors may during such periods make offers or agreements which would or might require equity securities to be
allotted (and treasury shares to be sold) after the expiry of such period.
12 To consider the following as a special resolution:
That the Company be generally and unconditionally authorised to make market purchases (within the meaning of section 693(4) of the
Companies Act 2006) of ordinary shares of 25p each in the capital of the Company on such terms as the directors think fit, provided that:
(a) the maximum number of ordinary shares hereby authorised to be purchased is 3,963,637 (representing 10% of the issued ordinary
share capital);
(b) the minimum price (exclusive of expenses) which may be paid for each ordinary share is 25p;
(c) the maximum price (exclusive of expenses) which may be paid for each ordinary share is the higher of:
(i) an amount equal to 105% of the average of the middle market quotations for such share as derived from the Daily Official List
of the London Stock Exchange for the five business days immediately preceding the date of purchase; and
(ii) the price of the last independent trade and the highest current independent bid on the London Stock Exchange; and
(d) the authority hereby conferred shall expire on 30 June 2023 or, if earlier, at the conclusion of the next annual general meeting of the
Company save that the Company may before the expiry of this authority make a contract of purchase which will or may be executed
wholly or partly after such expiry and may make a purchase of shares pursuant to any such contract.
13 To consider and if thought fit to pass the following resolution as a special resolution:
That a general meeting of the Company other than an annual general meeting may be called on not less than 14 clear days’ notice.
By order of the Board
CETC (Nominees) Limited
Company Secretary
24 May 2022
Notice of Annual General Meeting
Annual Report 2021 | Anglo-Eastern Plantations Plc 147
Notes:
1. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company has specified that only those shareholders on the register of
members of the Company at close of business on 23 June 2022 shall be entitled to vote in respect of the number of shares registered in their name at that
time. Changes to the register of members after 23 June 2022 or, if the meeting is adjourned, in the register of members at close of business on the date which
is two days before the day of the adjourned meeting shall be disregarded in determining the rights of any person to vote at the meeting by proxy.
2. As at 20 May 2022 (being the latest practicable date prior to the publication of this notice), the Company’s issued share capital comprised 39,976,272 Ordinary
Shares of 25p each. Each share carries one vote except 339,900 shares held as treasury shares and therefore the total number of voting rights in the
Company as at 9.00 am on 20 May 2022 is 39,636,372.
3. A member of the Company may appoint one or more proxies to vote at the meeting. Where more than one proxy is appointed in relation to the meeting, each
proxy must be appointed to exercise rights attaching to a different share or shares. You may not appoint more than one proxy to exercise rights attached to
any one share. A proxy need not be a member of the Company. Members are encouraged to appoint the Chairman of the meeting as their proxy and all
4. The instrument appointing a proxy must be deposited at the office of the Registrar by 9.30 a.m. (UK time) on 23 June 2022 not less than forty-eight hours
before the time appointed for holding the meeting (or any adjournment thereof).
5. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder
will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company’s register of members in respect of the
joint holding (the first-named being the most senior).
6. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for the annual general meeting
to be held on 27 June 2022 and any adjournment thereof by using the procedures described in the CREST Manual on the Euroclear website
(www.euroclear.com/CREST). CREST personal members or other CREST sponsored members and those CREST members who have appointed a voting
service provider should refer to their CREST sponsor or voting service provider, who will be able to take the appropriate action on their behalf. In order for a
proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly
authenticated in accordance with Euroclear’s specifications and must contain the information required for such instructions, as described in the CREST
Manual. All messages relating to the appointment of a proxy or an instruction to a previously appointed proxy must be transmitted so as to be received by
Computershare Investor Services PLC [CREST ID: 3RA50] by 9.30 a.m. on 23 June 2022. It is the responsibility of the CREST member concerned to take
such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings. The Company may treat a CREST Proxy Instruction as invalid in the circumstances set out
in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.
7. You may submit your proxy electronically using the link https://www-uk.computershare.com/investor/. If not already registered, you will need your Shareholder
Reference Number (“SRN”) which is detailed on your share certificates.
8. The statement of the rights of shareholders in relation to the appointment of proxies does not apply to a person who receives this notice of general meeting
as a person nominated to enjoy “information rights” under section 146 of the Companies Act 2006. If you have been sent this notice of meeting because you
are such a nominated person the following statements apply: (i) you may have a right under an agreement between you and the registered shareholder by
whom you were nominated to be appointed (or to have someone else appointed) as a proxy for this general meeting and (ii) if you have no such a right, or do
not wish to exercise it, you may have a right under such an agreement to give instructions to that registered shareholder as to the exercise of voting rights.
Nominated persons should contact the registered member by whom they were nominated in respect of these arrangements.
9. A member of the Company which is a corporation may authorise a person or persons to act as its representative(s) at the meeting. In accordance with the
provisions of the Companies Act 2006, each such representative may exercise (on behalf of the corporation) the same powers as the corporation could
exercise if it were an individual member of the Company, provided that they do not do so in relation to the same shares. It is no longer necessary to nominate
a designated corporate representative.
10. Members satisfying the requirements of section 527 of the Companies Act 2006 may require the Company to publish on a website a statement by them (at
the Company’s cost) relating to the audit of the Company’s accounts which are being laid before this meeting (including the auditor’s report and the conduct
of the audit) or, where applicable, any circumstances connected with an auditor of the Company ceasing to hold office since the previous general meeting at
which accounts were laid. Should such a statement be received, it will be published on the Company’s website at https://www.angloeastern.co.uk/. In those
circumstances the Company would be under an obligation to forward a copy of the statement to the auditor forthwith and the statement would form part of the
business which may be dealt with at this meeting.
11. Shareholders are welcomed to submit questions to the Board by email to datojohnlim@angloeastern.co.uk by 23 June 2022 and they will be answered after
the AGM or at the AGM for those shareholders who are in attendance. The Company must cause to be answered any such questions relating to the business
being dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the preparation of the meeting or involve the
disclosure of confidential information, (b) the answer has already been given on a website in the form of an answer to a question, or (c) it is undesirable in the
interests of the Company or the good order of the meeting that the question be answered.
12. A copy of this notice and the other information required by section 311A of the Companies Act 2006 can be found at https://www.angloeastern.co.uk/.
Notice of Annual General Meeting
Annual Report 2021 | Anglo-Eastern Plantations Plc 148
13. If you are in any doubt as to any aspect of Resolutions 10 to 13 or as to the action you should take, you should immediately take your own advice from a
stockbroker, solicitor, accountant or other independent financial advisor authorised under the Financial Services and Markets Act 2000. The Board believes
that these Resolutions are in the best interests of the Company and shareholders as a whole.
14. If you have sold or otherwise transferred all your shares in the Company, please hand this document and the accompanying form of proxy to the purchaser
or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. If
you sell or have sold or otherwise transferred only part of your holding of existing shares please consult the bank, stockbroker or other agent through whom
the sale or transfer was effected.
15. The following documents are available for inspection by members at the registered office of the Company during normal business hours (except Bank Holidays)
and at the place of the meeting not less than 15 minutes prior to and during the meeting. The documents can also be obtained by email to
datojohnlim@angloeastern.co.uk:
(a) a copy of the Executive Director’s service agreement;
(b) copies of Non-Executive Directors’ letters of appointment;
(c) relationship agreement with the majority shareholder; and
(d) a copy of the Company’s Articles of Association.
Company addresses
London Office
Anglo-Eastern Plantations Plc
Quadrant House, 6
th
Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel: 44 (0)20 7216 4621
Fax: 44 (0)20 7767 2602
Malaysian Office
Anglo-Eastern Plantations Management Sdn Bhd
7
th
Floor, Wisma Equity
150 Jalan Ampang
50450 Kuala Lumpur
Malaysia
Tel: 60 (0)3 2162 9808
Fax: 60 (0)3 2164 8922
Indonesian Office
PT Anglo-Eastern Plantations Management Indonesia
3
rd
Floor, Wisma HSBC, Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
Tel: 62 (0)61 452 0107
Fax: 62 (0)61 452 0029
Secretary and registered office
Anglo-Eastern Plantations Plc
(Number 1884630)
(Registered in England and Wales)
CETC (Nominees) Limited
Quadrant House, 6
th
Floor
4 Thomas More Square
London E1W 1YW
United Kingdom
Tel: 44 (0)20 7216 4600
Fax: 44 (0)20 7767 2602
Company website
https://www.angloeastern.co.uk/
Company advisers
Auditor
BDO LLP
55 Baker Street
London W1U 7EU
United Kingdom
Principal Bankers
National Westminster Bank Plc
Liverpool Street Station
216 Bishopsgate
London EC2M 4QB
United Kingdom
The Hong Kong and Shanghai Banking Corporation
Limited
Wisma HSBC
Jalan Diponegoro, Kav 11
Medan 20152
North Sumatera
Indonesia
PT Bank DBS Indonesia
Uniplaza Building
Jalan Letjen MT Haryono A-1
Medan 20231
North Sumatera
Indonesia
RHB Bank Bhd
Podium Block, Plaza OSK
Jalan Ampang
50450 Kuala Lumpur
Malaysia
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY
United Kingdom
Solicitors
Withers LLP
20 Old Bailey
London EC4M 7AN
United Kingdom
Broker
Panmure Gordon (UK) Limited
One New Change
London EC4M 9AF
United Kingdom