MAJORITY HELD 900 ha
MINORITY HELD 580 ha
MAJORITY HELD 46,000 ha
MINORITY HELD 25,000 ha
MAJORITY HELD 31,000 ha
MINORITY HELD 6,000,000 ha
Oil-palm plantations
and property development
in Malaysia
Oil-palm plantations
in Indonesia
Beef-cattle farming
in Australia
Location of the Group’s properties
and those of its associates as at 30 April 2008
 BERTAM
 SUNGEI KRUIT
 KUALA LUMPUR
 SINGAPORE
SUMATRA
BANGKA
ISLAND
KALIMANTAN
JAVA
KERASAAN  SENNAH  BILAH
 PANGKATAN
 MUKO MUKO
 SIMPANG KIRI
 MEDAN
 PADANG
 BENGKULU
   
SAMARINDA
 JAKARTA
BRISBANE  SYDNEY  MELBOURNE
 AREA OF NAPCo
BREEDING AND
GROWING-OUT
PROPERTIES
WOODLANDS AGGREGATION
  DARWIN
 MOUNT ISA
NEW PROJECTS 1
ANNUAL REPORT 2007
EXISTING PORTFOLIO
AS AT 30 APRIL 2008
 10,000 hectares of majority-held, mature
oil-palm plantations in Sumatra, Indonesia
 25,000 hectares of minority-held
(equivalent to 8,000 hectares) mature
oil-palm plantations in Sumatra, Indonesia
 36,000 hectares of majority-held new
land in Bangka and Kalimantan, Indonesia
suitable for oil-palm development - over
4,500 hectares planted to date
 31,000 hectares of cattle-backgrounding
land in southern Queensland, Australia
 30% interest in a leading Australian
cattle company, NAPCo, owning
six million hectares in Queensland
and Northern Territory
 900 hectares of plantation land in
Peninsula Malaysia, with real-estate-
development premium of which
828 hectares are contracted to be sold
 40% share of a substantial property-
development company, Bertam Properties,
near Penang Island, Malaysia with a land
bank of some 580 hectares
 Net current assets of some US$32 million
as at 31 December 2007
KEY
OBJECTIVES
 To establish 70,000 hectares of
environmentally-sustainable oil-palm
plantations in Indonesia in order
to produce 400,000 tonnes of crude
palm oil
 To expand the Group’s existing beef-cattle
operations in Australia to represent
approximately 30% of the Group’s assets
 To dispose of the remainder of the Group’s
high-value property and plantation interests
in Malaysia in order, together with
borrowings, to fund the expansionary
objectives in Indonesia and Australia
LAND ASSETS BY VALUE
 INDONESIA
 AUSTRALIA
 MALAYSIA
31 DECEMBER 2007 TARGET
40%
30%
28%
32%
70% 2
Record profit for the year US$46,630,000
(2006 US$26,102,000)
Final dividend for the year increased to 5.00p
(2006 – 4.50p) per share – 2.00p (2006 – 2.00p)
interim already paid
First year of results being reported in US Dollars and
under International Financial Reporting Standards
Palm-oil prices surged strongly during 2007 and
increased further in early 2008 before easing from
record highs
Crops of oil palm fresh fruit bunches lower
than in 2006
Biological-asset gain arising from firmer palm-oil
prices and development of new projects
Reduced loss on Australian property following
improved cropping and similar cattle results.
Higher profits from the associate, NAPCo, resulting
from firmer cattle valuations and property disposal
Significant profits earned by the associate, Bertam
Properties, from land disposals
Strategy of developing and planting new Indonesian
plantation areas continues apace, although delays
experienced on the Bangka project
Australian cereal prices remain robust, whilst
beef-cattle prices have been volatile, albeit
within an historically-high range, as drought
has continued in some areas
Australian rural property values have continued
to increase
Strategy of disposing of Malaysian estates at premium,
real-estate levels continues successfully
Highlights
1 Existing portfolio and key objectives
2 Highlights
3 Summary of results and joint chief
executives’ statement
4 Market information – palm oil
5 Market information – beef cattle
6 Chairman’s statement
8 Review of operations
11 – Indonesian palm oil
18 – Australian beef cattle
22 – Malaysian property disposals and
remaining plantation operations
26 Environmental, corporate and social
responsibility
28 Board of directors
29 Report of the directors
33 Corporate governance
34 Report of the board to the shareholders
on directors’ remuneration
37 Statement of directors’ responsibilities
38 Independent auditors’ report on
the consolidated financial statements
39 Consolidated income statement
40 Consolidated statement of recognised
income and expense
40 Reconciliation of movements in
shareholders’ consolidated funds
41 Consolidated balance sheet
42 Consolidated cash-flow statement
43 Notes to the consolidated accounts
70 Independent auditors’ report on the
parent-Company financial statements
71 Parent-Company balance sheet
72 Notes to the parent-Company
balance sheet
75 Subsidiary and associated undertakings
76 Analysis of land areas
77 5-year summary
78 Notice of meeting
81 Professional advisers
and representatives
contents Net assets 235,359 192,304
Net cash outflow from operating activities (4,850) (9,234)
3
ANNUAL REPORT 2007
2007 significantly exceeded 2006’s record result and, if palm-oil prices and crops continue
as favourably as they have proved so far this year, 2008 should turn in another excellent result.
Good progress continues to be achieved in the implementation of the Group’s strategy of
diversifying out of Malaysian plantations and real estate and into Indonesian palm oil and
Australian beef cattle. The prospects for both palm oil and beef cattle continue to look positive
for the foreseeable future.
2007
Summary of results
For the year ended 31 December 2007
2007 2006
Revenue 23,597 20,425
Gross profit before biological-asset adjustment 10,632 6,345
Group-controlled profit before taxation 17,427 8,211
Profit for the year 46,630 26,102
US$’000 US$’000
US Cents US Cents
Pence Pence
49.75
Dividend per 10p share in respect of the year 7.00 6.50
Joint chief executives’ statement
* Details concerning the restatement of the comparative figures are dealt with in note 32 to the financial statements on pages 65 to 69.
Basic earnings per 10p share –
continuing and discontinued operations 82.32 4
Market
information
Palm-oil prices rose sharply
in 2007 following increased
demand, especially from
China and India.
Australian beef-cattle prices
were generally robust, but
volatile, as both seasonal
conditions and the
Australian Dollar fluctuated.
Rotterdam c.i.f.
PALM-OIL PRICE US$ PER TONNE
Palm oil
20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360 380 400
163
213
223
228
214
356
365
335
336
320
2007
2006
2005
2004
2003
2007
2006
2005
2004
2003
CROP OF OIL-PALM FRESH FRUIT BUNCHES (“F.F.B.”)  ‘000 TONNES
MAJORITY-OWNED ESTATES (INDONESIA AND MALAYSIA)
ASSOCIATED-COMPANY ESTATES (INDONESIA AND MALAYSIA)
 The Group’s crops of oil palm fresh fruit
bunches (“f.f.b.”) were below 2006 as a
result of both severe flooding on one estate
and a strike which affected production.
 Palm oil is used mainly as a cooking oil
but also in margarine, shortenings (cakes,
biscuits), soap, cosmetics, lubricants and
increasingly in bio-diesel. 5
ANNUAL REPORT 2007
A$ per kg carcass weight
Eastern Young Cattle Indicator (EYCI)
AUSTRALIAN CATTLE PRICE
Beef cattle
MAIN PRODUCERS OF PALM OIL - 2007
SOURCE: OIL WORLD
Thousand tonnes
 INDONESIA 16,700  (44%)
 MALAYSIA 15,820  (41%)
 THAILAND 1,020  (3%)
 NIGERIA 840  (2%)
 COLOMBIA 780  (2%)
 OTHER COUNTRIES
3,000  (8%)
TOTAL 38,160
MAIN USERS OF PALM OIL - 2007
SOURCE: OIL WORLD
Thousand tonnes
 CHINA 5,540  (14%)
 EU 4,740  (12%)
 INDONESIA 4,100  (11%)
 INDIA 3,790  (10%)
 MALAYSIA 2,170  (6%)
 PAKISTAN 1,650  (4%)
 NIGERIA 1,040  (3%)
 THAILAND 730  (2%)
 OTHER COUNTRIES
14,460  (38%)
TOTAL 38,220
3,000
16,700
15,820
780
840
1,020
5,540
4,740
4,100
3,790
2,170
1,650
1,040
730
14,460 Steers (grain-fed) Heifers (grain-fed) Cows
AVERAGE “DRESSED” (CARCASS) WEIGHT
PRICES RECEIVED BY NAPCo FOR MAJOR
PRODUCT LINES   A$/KG
 Palm oil has the lowest cost of production
and is the most productive of all the major
vegetable oils. Over 5 tonnes per hectare per
annum are produced, compared with around
0.5 tonnes for its main rival, soybean oil.
 Palm oil is now the world’s largest vegetable
oil, with annual production of 38.2 million
tonnes and 31.3% of production of major
vegetable oils. (Soya oil is the second largest
with a 30.7% share of global production).
Palm-kernel oil accounts for a further
4.4 million tonnes (3.6%).
 The palm-oil price rose very substantially
in 2007 and into 2008, further to continuing
strong demand for cooking oil, in particular,
from China and India. The increasing
demand for palm oil, together with other
vegetable oils, as a bio-diesel, has further
underpinned demand.
 Australia is the world’s largest beef
exporter with some 20% of global trade.
 Australia is well placed geographically
to serve Asia – the world’s fastest-growing
beef consumer.
 NAPCo (29.64% held) is one of
Australia’s leading beef-cattle companies
with fifteen properties covering an area
of six million hectares. 6
OVERALL RESULTS
I am pleased to report a record result for a
second consecutive year. Profit for the year rose
to US$46,630,000, compared with US$26,102,000
in 2006. Earnings per share (continuing and discontinued
operations) increased to 82.32 cents from 49.75 cents.
The increase was largely attributable to the robust
palm-oil price, to the increase in value of the biological
assets in accordance with International Financial
Reporting Standards (“IFRS”), to exceptional gains
related to property disposals and to increases in
associated-company profits.
The plantation associates benefited from the high palm-
oil prices. With regard to the other associates there was
a significant non-recurring gain from the sale of some
sizeable parcels of land owned by the 40%-held
Bertam Properties Sdn. Berhad (“Bertam Properties”),
and a sharply-improved result by the 29.64%-held
The North Australian Pastoral Company Pty. Limited
(“NAPCo”). Offsetting these gains were a decline in
the Group’s f.f.b. crop, a small loss recorded on the
Group’s Australian property, Woodlands, and net
exchange losses arising primarily in Indonesia where
the Rupiah has weakened against the US Dollar.
The accounts have, this year, been drawn up in a
different way from previous years, with the comparative
figures for 2006 re-stated accordingly. As explained in
more detail on pages 8 and 9, IFRS has been adopted
and, in addition, the accounts are now presented
in US Dollars, the currency in which the majority
of the Group’s earnings and a significant proportion
of costs are denominated.
DIVIDEND
The board is pleased to recommend a final dividend
of 5.00p per share, which, together with the interim
dividend of 2.00p paid in November 2007, makes 7.00p
for the year, compared with 6.50p in respect of 2006.
The dividend will continue to be paid in Sterling.
STRATEGIC PROGRESS
It remains the board’s target to achieve a total area
under oil palms in Indonesia of some 70,000 hectares
and to continue to add value to, and expand, the
Australian beef-cattle portfolio. In order to fund these
expansionary objectives, the Group will continue to
raise cash by disposing of its remaining Malaysian
plantation and property investments, as well as by
securing additional bank finance.
In Indonesia, the Group now owns some 10,000
hectares of mature oil-palm plantations, together with
a minority holding in 25,000 hectares - equivalent to
8,000 hectares - in Sumatra. In addition, a land bank of
12,000 hectares on Bangka Island and 24,000 hectares in
East Kalimantan has been secured. Of this new land, over
2,000 hectares on Bangka and over 2,500 hectares in
East Kalimantan have been planted to date. Some delays
in the planting programme have been experienced
either for weather-related reasons or, in the case of
Bangka, as a result of protracted negotiations relating
to smallholder land-compensation issues. The Group’s
aim is to clear and plant, in an environmentally and
socially responsible manner, the balance of the land
bank as quickly as possible. The aim is also to acquire
additional land of 15,000 - 20,000 hectares, preferably
also in East Kalimantan, thereby achieving the target of
70,000 hectares and ultimately enabling some 400,000
tonnes of crude palm oil per annum to be produced.
In Australia, the Group’s acquisition of Springmount,
a 7,581-hectare beef-cattle and arable property,
for a total of A$9.30 million (US$8.16 million) was
completed in March 2007. Springmount adjoins the
Group’s existing properties, known as the Woodlands
aggregation. The addition of Springmount has increased
the size of the aggregation to 31,000 hectares and has
enabled further economies of scale to be achieved
both in the fattening of cattle and in the cultivation
of grain crops for commercial sale. Greater emphasis
than hitherto is being placed on the latter option in
Chairman ’s
statement
A record result for
a second consecutive year.
The increase was largely
attributable to the robust
palm-oil price, to the increase
in value of the biological
assets, to exceptional gains
related to property disposals
and to increases in associated-
company profits. 7
ANNUAL REPORT 2007
view of the current high world price for grain – up to
8,000 hectares can be utilised for grain production. I am
pleased to report not only a sharp increase in the Group’s
share of NAPCo’s post-tax earnings, to US$2.84 million
from last year’s loss of US$0.41 million, but also a
significant increase in Australian rural property values.
This has impacted favourably on NAPCo’s net asset
value which increased to US$15.10 per share from
US$10.47 per share at the end of 2006.
In Malaysia, two important sales were agreed during
the year. First, the balance of Perhentian Tinggi Estate
(745 hectares) was sold for RM66.27 million
(approximately US$21.00 million). Completion has
recently occurred and the whole transaction will therefore
be accounted for in 2008. Second, the sale of Sungei
Kruit Estate (828 hectares) was agreed for a total of
RM72.28 million (approximately US$22.90 million).
Completion is expected to occur in mid-2008 and
should, consequently, be brought into the 2008 accounts.
Thereafter, there will only be two remaining assets of
significant value in the Group’s Malaysian portfolio;
the 40% share of Bertam Properties and the remaining
74 hectares of Bertam Estate. The board believes
that these assets command a combined value of
US$55 million and it is planned for these two to be sold
in due course to contribute to the funding of the Group’s
continued expansion into Indonesia and Australia.
PALM-OIL ACTIVITIES AND MARKET
The palm-oil industry enjoyed a very successful year
in 2007 with the average Rotterdam cif price increasing
to US$781 per tonne, compared with US$475 in 2006.
Continuing strong demand from the emerging Asian
economies combined with competition for land
use arising out of the increase in the production 
of bio-fuels have resulted in low vegetable-oil stocks
and upward pressure on prices.
The Group’s crops of oil palm f.f.b. were lower than
in 2006. This arose from the loss of crop from the
Malaysian estates which had been sold in 2006, from
the damage caused by the unusually severe flooding
on Simpang Kiri Estate in Sumatra at the end of 2006
and from the effects of the labour strike on the estates
in North Sumatra (since settled).
BEEF-CATTLE ACTIVITIES AND MARKET
As has been the case in recent years in Australia,
beef-cattle prices in 2007 were predominantly
influenced by seasonal and currency fluctuations.
Given the volatility of these two factors, the cattle
market fluctuated accordingly but prices ended the
year around the middle of the year’s range.
Woodlands benefited from substantially better rainfall
in 2007 than in 2006 and, as a consequence, was able
to grow a wheat crop. This, together with similar cattle-
fattening profits to 2006, resulted in a reduced loss this
year. Good progress was also achieved on the farm’s
pasture-development programme, which will enable
considerably more cattle to be grazed in future years.
NAPCo recorded a pleasingly sharp increase in its profit,
resulting from an increase in the value of the company’s
herd by some US$10.05 million, which is a product
of higher cattle prices, heavier cattle and the 7.6%
growth of the company’s herd to a record 198,000
head. One of the company’s growing-out properties
was also profitably disposed of during the year.
CURRENT TRADING AND PROSPECTS
Palm-oil prices continued to strengthen into 2008
reaching a high of around US$1,395 per tonne in March
before retreating to the current level of around US$1,200,
which is, nevertheless, somewhat higher than the
year-end level of US$1,000. A progressive export-tax
has been imposed by the Indonesian Government but,
despite this, the fundamentals in the palm-oil market
remain strong, helped by the recent abolition of the
previously high import tax imposed by India.
F.f.b. crops on the majority-owned estates have started
the year strongly and are ahead of the same period
last year and in line with budget. Crops on the
associated-company estates have been ahead of both
the same period last year and budget. It is too early
to make accurate predictions as to the outturn for the
whole year but it is hoped that the full year’s crop will
be in excess of that for 2007.
Conditions on Woodlands have continued favourably
following beneficial rainfall and NAPCo’s backgrounding
properties, in central Queensland, have been enjoying
a similarly good season. However, NAPCo’s breeding
and growing-out properties in the Northern Territory
and more northerly parts of Queensland have been
suffering from a severe drought which means that a
significant number of young cattle will have to be sold
before time. Cattle prices – in particular for grass-fed,
“pre-feedlot” cattle, such as are produced by Woodlands
– have continued to be as volatile as in 2007, largely
in response to seasonal fluctuations, whilst the market
for grain-fed cattle – as produced by NAPCo – has on
average traded at historically-high levels.
The board is of the view that, in the light of the ever-
growing global demand for vegetable oils, bio-fuels,
food and protein, the prospects for both the palm-oil
and beef-cattle markets remain favourable and that
2008 will prove to be another excellent year.
ACKNOWLEDGEMENTS
On behalf of the board, I should like to express our
appreciation to the managers, staffs and workforces in
all of the Group’s areas of operation for their dedication
and hard work, often in trying circumstances.
Richard Robinow
Chairman
2 May 2008 8
Review of the 2007 results
The overall result for the year was another record
for the Group. It reflected:
PLANTATIONS
 palm-oil prices at robust levels - 64% higher
at average of US$781 per tonne (Rotterdam cif)
(2006 US$475), resulting in higher profits from
both majority-owned and associated companies
 significant increase in valuation of biological
assets in both the majority-owned and
associated companies
 lower f.f.b. crops on majority-owned Indonesian
estates, resulting from severe flooding on Simpang
Kiri Estate and strike action on the other North
Sumatran estates
CATTLE
 similar cattle-trading results to 2006
 harvesting of a wheat crop on the Woodlands
aggregation, resulting in the reduction of the
gross loss
 higher profits from the 29.64% associated
company, NAPCo, including the profitable
disposal of one of its growing-out properties
PROPERTY ACTIVITIES
 Further significant and profitable land sales
by the associated company, Bertam Properties 
The various aspects of the Group’s operations are
reviewed in more detail in the ensuing report.
IFRS AND US DOLLAR REPORTING
Presentation of the Group’s results has been brought
fully into line with the requirements of IFRS. These
changes take effect from 1 January 2006, the Group’s
“transition date”. Hence both the results for the year
under review and comparative figures are stated in
accordance with IFRS. These changes have affected
the way in which the Group results and balance sheet
are set out and the substance of both the results and
financial position of the Group.
The most immediately noticeable change is that the
Group has chosen to present its results in US Dollars.
After careful analysis of the Group’s operations,
it was concluded that revenues and a proportion of
the costs in its plantation operations were dependent
on movements in the US Dollar. Borrowings too are
in US Dollars. Given the weight of these businesses
in the Group’s current operations, and the prospect
of their increasing share over the coming years, the
board believes that presenting its results in US Dollars
rather than Sterling paints a more accurate picture
of its operations. In time, this approach is expected
to reduce the level of exchange differences reported
by the Group although this benefit will not be felt until
the divestment of its holdings in Malaysia is complete.
The immediate consequence of this change is that the
Group’s reported results reflect its exposure to movements
in the US Dollar rather than, as previously, Sterling.
The exchange rates used are set out on page 77.
The introduction of a new category of asset (“biological
assets”) is the single largest change flowing from the
application of IFRS, adding some US$50 million to net
assets at 1 January 2006 after providing for potential tax.
The increase comes from two sources: the plantations
controlled by the Group (US$37 million) and its share
of the increased value in the biological assets of its
associated plantation companies (US$13 million).
The new biological assets replace the depreciated cost
of plantings on the Group’s estates previously shown
in the balance sheet under land. The increase in net
assets arising from the introduction of biological assets
is partly offset (US$4 million at 1 January 2006) by the
Review
of operations
The very good results
for 2007 underpin the
board’s confidence
in its strategic plans.
STERLING -V- US DOLLAR
£1 = US$ 9
removal of plantings from fixed assets. Whilst this
change in the balance sheet is a better reflection of the
future cash-earning potential of the Group’s plantings,
changes in the value of biological assets will directly
affect the income statement through a new line:
gain/(loss) on biological assets. This is likely to make
the Group’s reported results more volatile in future,
as changes are inevitably made to the assumptions
underlying the valuation.
Under IFRS, the Group has maintained its accounting
policy in relation to its plantation land in Indonesia.
However, following the introduction of biological
assets, the board decided to include this land in the
balance sheet at fair value (without any planting)
at the IFRS transition date. Previously, the value
of land included an amount in respect of planting.
This decision results in a reduction in net assets of
some US$12 million, but this should be considered
in conjunction with the increase in net assets arising
from the inclusion of biological assets.
The full impact of IFRS on the Group can be seen
in note 32 on pages 65 to 69. Further explanation
of its impact on the year under review is given below
in the comment on the results for the period.
GROSS PROFIT
In Indonesia, significantly higher palm-oil and palm-
kernel prices, partly offset by lower crops and higher
costs (see further comments under “Crops and
production” and “Operating costs” on pages 12 and 13
respectively), resulted in a gross profit before biological-
asset adjustment of US$11,127,000, a 62% increase
over the US$6,883,000 achieved in 2006. In Australia,
fewer sales were offset by increased values of stock
on hand, leaving cattle-trading profit about the same
as for 2006. The Woodlands aggregation achieved
a wheat crop in 2007 and, as a result, the gross loss
for 2007, at US$580,000, was some 21% lower than
2006’s US$731,000. In Thailand, despite higher rubber
prices, lower throughput resulted in a reduction
in gross profit to US$99,000 (2006 US$200,000)
at the rubber factory.
As a result of all of the above, the Group gross profit
before biological-asset adjustment for the year amounted
to US$10,632,000, compared with US$6,345,000 in
2006, an increase of some 68%. Gross profit (before the
impact of the gain on biological assets of US$18,747,000
(2006 US$3,410,000), but after expenditure on planting
and depreciation of US$8,550,000 (2006 US$5,264,000)
has been accounted for) amounted to US$2,082,000
compared with 2006’s US$1,081,000. A detailed
breakdown of this is provided in note 3 to the accounts
on pages 46 and 47. The results of the Group’s palm-
oil, cattle and asset-disposal activities are reviewed
in more detail in the reports on pages 12 to 25.
BIOLOGICAL-ASSET ADJUSTMENT
The value of the biological bearer assets increased
markedly, partly as a result of the increase in the price
of palm oil and kernels and partly reflecting the new
plantings that got under way on the new projects
during 2007, particularly in Kalimantan. These benefits
were partially offset by the increase in the cost base
of the Indonesian operations. As referred to earlier,
increases (or decreases) in the value of biological
assets from one year to the next are reflected in the
consolidated income statement. In order to provide
additional information to readers of the accounts,
the consolidated income statements and balance
sheet include additional columns to show the
Group’s results and assets prior to the adjustments
for biological bearer assets.
FOREIGN-EXCHANGE LOSSES
A foreign exchange loss of US$1,434,000 arose during
the year. This was largely due to continuing operations
in Indonesia, where the Rupiah weakened against the
US Dollar, outweighing gains arising from cash balances
held by Group companies in Sterling. This overall loss
was in fact off-set by corresponding gains accruing
to cash held in Malaysian Ringgit by discontinued
operations but this is included in the consolidated
income statement under the heading of “Discontinued
operations”. The Group is exposed to exchange-rate
movements to the extent that it holds monetary assets
and liabilities in currencies other than its functional
currency, mostly the US Dollar.
ANNUAL REPORT 2007
US DOLLAR -V- INDONESIAN RUPIAH
US$1 = Indonesian Rupiah
US DOLLAR -V- MALAYSIAN RINGGIT
US$1 = RM
US DOLLAR -V- AUSTRALIAN DOLLAR
US$1 = A$ 10
OTHER ADMINISTRATIVE EXPENSES
Other administrative expenses increased in 2007.
This arose primarily from the inclusion of the costs
of the expanding Jakarta head office and those
administrative (largely management) costs on the
new projects which are not able to be added to
the cost of development. In addition, the increase
in the Company’s share price from 303p at the end
of 2006 to 394p at the end of 2007 gave rise to
the necessity to increase the provision for potential
national insurance on the potential gain on the
remaining unexercised share options.
EXCEPTIONAL CREDITS
As in previous years, Group profits (US$3.86 million)
which had been deferred when land was originally
sold by Group companies to an associated company,
Bertam Properties, have been recognised when
Bertam Properties sold that land to third parties.
ASSOCIATED COMPANIES
The Group’s share of its associated companies’
profits/(losses) for the year compared with last year
were as follows:
The Indonesian plantation companies similarly
benefited from the robust palm-oil, kernel and rubber
prices experienced during the year and reported
markedly higher profits. As with the majority-owned
Indonesian plantations, a significant uplift in the
biological asset value of the plantations owned by the
associated companies was recorded in 2007, with the
Group’s share amounting to US$7.09 million post-tax.
This arose primarily from the increase in the palm-oil
price, partially offset by the increased cost base. 
NAPCo’s improved result was attributable to a
stronger cattle market, an increase in the company’s
herd size and a profitable disposal of one of its
growing-out properties during the year.
Bertam Properties made further profitable land disposals
during the year. Kennedy, Burkill & Company Berhad
and Asia Green Environmental Sdn. Bhd. ceased to
be regarded as associated companies with effect from
1 January 2007. The results and operations of the
Indonesian, Australian and Malaysian associated
companies are reviewed in more detail in the reports
on pages 11 to 25.
DISCONTINUED OPERATIONS
As referred to in the “Review of operations” in the
2006 annual report, sale agreements were signed in
2006 regarding two small pieces of Perhentian Tinggi
Estate. These related to 101 hectares (RM9.97 million,
US$2.90 million) and 81 hectares (RM7.97 million,
approximately US$2.50 million). The 101-hectare sale
was completed in 2007 and the 81-hectare sale in
2008 - the profits arising were, or will be, recognised
in these respective years.
The sales of Sungei Kruit Estate (828 hectares) and the
remainder of Perhentian Tinggi Estate (745 hectares)
for RM72.28 million (approximately US$22.90
million) and RM66.27 million (approximately
US$21.00 million) respectively were agreed during
2007. The Perhentian Tinggi Estate sale has already
been completed in early 2008 and the profit will be
recognised in that year. The sale of Sungei Kruit Estate
is expected to be completed in the middle of the year.
As a consequence of these sales, the profits arising
from the plantation operations of these two estates
have been classified under “Discontinued operations”.
The comparative 2006 discontinued operations include
not only the 2006 results of Perhentian Tinggi and
Sungei Kruit Estates, as referred to above, but also the
gains on disposal and operating profits up to the date
of sale of Beradin, Sungei Reyla and Lendu Estates,
the sales of which were completed during 2006.
The sharply increased palm-oil and kernel prices
referred to above resulted in the increased profits
recorded by Perhentian Tinggi and Sungei Kruit
Estates in 2007 despite lower crops.
PROFIT FOR THE YEAR
As a result of all of the above, the Group profit for
the year amounted to US$46,630,000 compared with
US$26,102,000 in 2006.
2007 2006
Pre-tax Tax Post-tax Pre-tax Tax Post-tax
% held US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
PT Agro Muko 31.53 17,991 (5,535) 12,456 2,657 (1,128) 1,529
PT Kerasaan Indonesia 38.00 3,525 (1,081) 2,444 1,215 (397) 818
NAPCo 29.64 3,588 (748) 2,840 (488) 74 (414)
Bertam Properties 40.00 13,938 (1,066) 12,872 9,050 (1,095) 7,955
Kennedy, Burkill & Company Bhd. 20.01 ——— 234 (31) 203
Asia Green Environmental Sdn. Bhd. 30.00 ——— (138) — (138)
39,042 (8,430) 30,612 12,530 (2,577) 9,953
REVIEW OF OPERATIONS continued 11
ANNUAL REPORT 2007
Young oil palms in one of the nurseries
on the East Kalimantan project: there is
currently a sufficient number to plant
some 12,000 hectares.
Tractor and trailer in front of
contract workers’ accommodation
on the East Kalimantan project.
Indonesian palm oil
BELOW: Young seedlings
in the pre-nursery on the
East Kalimantan project. 12
The fall in the crop arose primarily from two factors.
First, a very severe flood occurred on Simpang Kiri Estate
at the end of 2006 causing considerable damage to
infrastructure and also to some of the immature
plantings. The crop was set back as a result of this.
Second, the strike by some of the workers on the
three estates in the Labuhan Batu area, Pangkatan,
Bilah and Sennah, continued throughout the year,
although the matter has recently been resolved.
Although harvesting continued during the strike,
undertaken by contract workers, the normal standards
were inevitably not able to be completely maintained
and the level of crop suffered. The strike and its cost
ramifications are referred to in more detail on page 13
under “Review of agricultural operations”.
Management monitors and assesses the efficiency of
operations with regard to crops and production by
means of key performance indicators. The assessment
of crops is measured for each year’s planting on each
estate in terms of yield per hectare. The yield per
hectare on each individual estate, indeed on each
year’s planting on each estate, is recorded and
monitored. Yields can vary widely because of factors
such as soil type, terrain, sunshine hours, rainfall,
distribution of rainfall and the fertility cycle of the
palms. Because of this, monitoring is not carried out
on a Group basis but rather takes into account the
conditions on each estate. Factors which are under
management’s control are husbandry standards,
fertiliser application, the quality of infrastructure
(estate roads, for example) and these are monitored
by management on the ground and, in some cases,
independently verified and advised upon. Decisions,
such as when and how to replant, are taken based
on local conditions.
With regard to mill production, the key performance
indicator is the extraction rate of palm oil and palm
kernels per tonne of f.f.b. Again, extraction rates vary
according to factors such as the type and quality of
planting material, the age profile of plantings, rainfall,
etc. Rates of up to 25% for palm oil and over 5.5%
for palm kernels can be achieved in some parts of
Indonesia although in the Labuhan Batu area, where
the Pangkatan mill is located, 23% and 5% respectively
is more likely to be the top level. As referred to below
under “Review of agricultural operations”, a significant
proportion of the f.f.b. coming into Pangkatan is of
a low standard and, as a consequence, the mill’s
composite palm-oil extraction rate has been between
20 and 21%. This is expected to improve as Sennah
Estate’s oil-palm areas are replanted and the new
areas on Pangkatan and Bilah Estates mature. All of
these aforementioned areas have been replanted with
modern, high-quality hybrid material.
PALM-OIL MARKET
As can be seen from the graph on page 4, the palm-oil
price strengthened from around US$600 per tonne
(Rotterdam cif) at the beginning of the year to around
US$1,000 at the end. Continuing strong demand from
the emerging economies of China, India (where the
previously high rate of import tax has also recently
been abolished) and Indonesia, as well as the mature
markets of Europe and, increasingly, the USA, for the
traditional uses of palm oil as a cooking oil and for
use in processed food has put upward pressure on
the price. The price has been further underpinned
by demand for bio-fuels which has benefited from
the recent high price of mineral oil. World vegetable-
oil stocks are at low levels and competition for land
has resulted, for example in the USA, in areas which
have in the past been used for soybean cultivation
being planted with maize for use in the production
of bio-ethanol.
The sharp rise in palm-oil prices has given rise to
the fear of potential political problems in Indonesia.
Cooking oil is regarded as part of the staple diet of
the country and the steep increase in the retail price
of cooking oil arising from the increase in vegetable-
oil (particularly palm-oil) prices has engendered
Indonesian palm oil
2007 2006
Tonnes Tonnes
Crops – f.f.b. 129,900 155,100
Production – crude palm oil 19,500 24,000
– palm kernels 5,400 6,200
% %
Extraction rate – crude palm oil 20.40 20.90
– palm kernels 5.70 5.40
CROPS AND PRODUCTION
REVIEW OF OPERATIONS continued
MAJORITY-OWNED MATURE ESTATES 13
opposition. Consequently, the Indonesian Government
has introduced an export tax at various rates up to
25% on selling prices over US$1,300 per tonne
(Rotterdam cif) with a view to subsidising the local
cost of cooking oil and protecting local consumers
from the full impact of the increases experienced
on world markets.
OPERATING COSTS
There was continuing upward pressure on costs partly
from the high price of mineral oil, which affects a
number of the Group’s activities, and partly from the
worldwide inflation of virtually all types of commodity.
The strike on the Labuhan Batu estates had a
negative impact on operational costs during 2007.
Under Indonesian employment regulations, employers
are required to continue to pay the minimum wage
(plus some benefits) to workers who are under
suspension pending a decision from the courts.
Accordingly, the Group was required, throughout
2007, not only to pay the minimum wage to the
strikers but also to pay the cost of the contract
workers, albeit that the cost of the contract workers
is not as high as the wage packages paid to fully-
employed harvesters. As referred to above under
“Crops and production”, the strikes have, since the
year end, been resolved and the termination payments
have been provided for in the 2007 accounts.
The additional cost recognised in 2007, including
the continuing payment of basic wages, legal and
other costs but net of accrued retirement benefits
to date, amounted to some US$1.46 million.
At the beginning of 2007, there was a change
in legislation in Indonesia with regard to the
deductibility of VAT on costs. Whereas, up to that
date, all VAT incurred on costs could either be offset
against VAT charged on sales or recovered, the new
legislation prevented estates without mills (Bilah,
Sennah and Simpang Kiri) from recovering this VAT.
As a result, some US$290,000 of irrecoverable VAT
was not able to be offset or otherwise recovered
during 2007. However, with effect from the beginning
of 2008, a new tolling arrangement has been put in
place which, the Group has been advised, will enable
such VAT to be offset or recovered.
Management monitors and assesses the efficiency
of plantation operations in terms of cost by means
of key performance indicators which identify field
costs per hectare and per kilogramme of f.f.b. and
factory costs per tonne of palm products (palm oil
plus palm kernels). A significant proportion of costs
both in the field and in the factory are fixed and
therefore vary little with different levels of throughput.
Field costs also vary from estate to estate depending
upon such factors as terrain and rainfall pattern
and the key performance indicators are monitored
by management for each individual estate.
Turnover and the results from the Indonesian
plantation operations are set out in note 3 to the
accounts on pages 46 and 47.
REVIEW OF AGRICULTURAL OPERATIONS
The large proportion of immature areas referred to
in previous years is gradually reducing as the earlier
plantings mature. The replanting of the ex-rubber
areas on Pangkatan Estate and the eventual replanting
of the whole of Sennah Estate should, over the next
few years, result in an increase in both f.f.b. crops
and the palm-oil extraction rate. Routine replanting
will continue on the mature estates as the older areas
mature or below-par plantings are identified and
replanted earlier than would normally be the case.
The effect of the Labuhan Batu strike on crops and
costs has already been set out above on page 12
under “Crops and production” and on this page
under “Operating costs”. The board was strongly
of the view that the Group must stand firm on the
course of action that it undertook. The remuneration
package offered to employees compares very
favourably with comparator companies in the
area and in the industry. The strike was called
in contravention of the regulations laid down
by Indonesian employment legislation and, as
a consequence of this, the strikers were suspended.
Despite the Group making a goodwill gesture to
reinstate the strikers, this was turned down and
the Group then sought clearance from the court
to dismiss them. In the event, the workers accepted
the termination package offered.
ANNUAL REPORT 2007 14
EAST KALIMANTAN
Significant progress has been achieved in the
development of the new East Kalimantan project since
24,000 hectares of plantable land were secured some
eighteen months ago. Approximately 4,500 hectares
have been cleared, of which over 2,500 have
been planted. The programme for both planting
and clearing is a little behind schedule, substantially
for weather-related reasons, but it is hoped that the
programme can be accelerated as the year progresses.
There are sufficient seedlings in the nursery to plant
some 12,000 hectares and it is hoped that the
majority of these will have been planted by the
end of next year.
As shareholders will recall, in order to fund the new
Indonesian oil-palm developments, the Group plans
to rely partly on funds arising from the proceeds from
the Malaysian land sales and partly on loan finance.
Negotiations are in hand with various banks regarding
the establishment of suitable loan finance in relation
to the project.
The search continues for an additional area of land,
of 15,000 to 20,000 hectares, located, ideally, near
the Group’s East Kalimantan project. Once these have
been obtained, the Group will have achieved its stated
target of owning 70,000 hectares of oil-palm land, and
with a production capacity of some 400,000 tonnes
of crude palm oil. As before, the procurement of any
new land will be subject to a rigorous, independent
social and environmental-impact assessment.
BANGKA
Since the project’s inception in 2005, approximately
2,500 hectares have been cleared, of which over
2,000 hectares have been planted. The rate of clearing
and planting has been disappointing as the programme
has been hampered by protracted negotiations
principally relating to smallholder-land compensation
issues. It appears as though a significant breakthrough
in such negotiations has recently occurred and
it is hoped that it will soon therefore be possible
to accelerate the programme to a considerable extent.
There are sufficient seedlings in the nursery to plant
5,000 hectares but it is hard to estimate how long
it will take to plant these.
The Group has now started to draw down on the
US$19.8 million loan provided by DEG (the German
development bank) in relation to the project.
Management monitors and assesses the performance
of the development of the new projects by means of
key performance indicators which identify the area to
be planted in a given year and also the cost per hectare
of that planting. Programmes for planting are set, with
sufficient planting material in place in the previous
year. This type of activity is normally undertaken by
contractors and management monitors the progress
achieved on the contracted areas. As with other
plantation activities, costs per hectare are determined
by such factors as the weather pattern, the soil type
and the terrain and key performance indicators are
monitored by management for each individual estate.
New projects
2007 2006
Tonnes Tonnes
F.f.b. crops - PT Agro Muko - own 293,900 294,600
- outgrowers 5,100 33,800
- PT Kerasaan Indonesia 53,300 56,200
352,300 384,600
Production (PT Agro Muko) - crude palm oil 65,500 72,500
- palm kernels 14,600 16,400
% %
Extraction rate - crude palm oil 21.90 22.10
- palm kernels 4.90 5.00
Tonnes Tonnes
Rubber crops (PT Agro Muko) - own 2,070 1,852
- outgrowers 360 1,172
Crops and production from the estates owned by
PT Agro Muko (31.53%) and PT Kerasaan Indonesia
(38.00%) were as follows:
REVIEW OF OPERATIONS continued
ASSOCIATED-COMPANY ESTATES
PT Agro Muko’s f.f.b. crop was similar to that of 2006
and the company continued its policy of not pursuing
unprofitable outgrowers’ crop in the light of intense
competition for fruit in the area. The rubber crop was
higher than the previous year but, as with f.f.b., there
was keen competition in the area for outgrowers’
crops, resulting in a lower offtake in 2007. 15
The planting of the company’s estates was completed
in 2007 with some 17,100 hectares of oil palms and
2,200 of rubber trees in the ground as at the end of
the year. The programme of replanting some of the
older and poorer-quality areas of both oil palm and
rubber continues.
During 2007, PT Agro Muko increased its dividend
payments significantly. The Group’s 31.53% share
amounted to US$5.05 million (gross), compared with
US$0.95 million in 2006.
Kerasaan Estate continues to perform as a first-class
plantation. The f.f.b. crop, which is sold to the
neighbouring Bukit Maradja Estate owned by the SA
SIPEF NV group, was, in 2007, some 5% below that
for 2006, having reduced more quickly than expected
in the second half of the year. The company’s policy
is to distribute surplus funds by way of dividend. These
dividends increased markedly during 2007 and the
Group’s 38.00% share amounted to US$2.09 million
(gross), compared with US$0.19 million in 2006.
As referred to in the 2006 annual report, funds were
held back with the agreement of all of the shareholders
in 2006, so part of the 2007 distributions would, under
normal circumstances, have been made in 2006.
SENNAH ESTATE LAWSUIT
As announced on 14 August 2007, DR H. Rahmat Shah’s
appeal to the Indonesian Supreme Court seeking to
overturn the ruling, in the Group’s favour, of the Medan
High Court was unsuccessful. DR H. Rahmat Shah
has been attempting to obtain judicial sanction to
cancel the sale-and-purchase agreement signed by
both parties in March 2002. Under this agreement,
the Group, through its 80% subsidiary, PT Pangkatan
Indonesia, acquired 80% of PT Sembada Sennah
Maju, the company owning Sennah Estate. Under the
Indonesian legal system, there is one further avenue
of appeal which is, on the production of new
evidence not submitted at any earlier court hearings,
to request a judicial review by the Supreme Court.
Against expectations, DR H. Rahmat Shah has filed
such an application. The Group will, through its
Indonesian lawyers, robustly confront any issues
raised in the Supreme Court but, given the high
volume of unheard cases in this court, it may be
some time before this issue is resolved.
ANNUAL REPORT 2007
RISKS AND EVALUATION AND
CONTROL OF RISKS
COUNTRY
The Group relies heavily on political stability in
Indonesia, given the substantial investments that
have been made, and will continue to be made in
greater measure, in the country. Although the Group
has not encountered any security problems over the
years, except to a minor extent for a period of up to
some three years ago at Simpang Kiri Estate in Aceh,
there have been outbreaks of social unrest in the
country, particularly during the monetary crisis of
1997/98. These problems have, however, tended
to be restricted to the larger towns and cities.
Indonesia has recently benefited from a period
of political stability, economic growth and exchange-
rate stability under the presidency of Mr Susilo
Bambang Yudhoyono.
The Pangkatan palm-oil mill, commissioned in 2005. 16
Security of land tenure is an important consideration
for plantation operators. The Group holds its land under
25 or 30-year renewable leases (HGU’s) which were
renewed, where relevant, without problem in 1998.
PALM-OIL AND KERNEL SELLING PRICES
The Group relies on its ability to sell its palm oil,
palm kernels and f.f.b. through a world market over
which it has no control. The price of palm oil is
determined by both disposable income around the
world generated by economic activity and by the
supply, pricing and demand for competing vegetable
oils. These factors can result in fluctuations in the price.
Palm oil is a permanent tree crop with f.f.b. being
harvested every day of the year. Palm oil and palm
kernels are sold on a weekly basis by open tender and
f.f.b. are sold on a day-by-day basis under contract
at a price derived from the quoted world price. Over
a year, by selling on a “spot” basis, an average price
is therefore achieved although forward contracts are
entered into when conditions are deemed appropriate.
As with any commodity, oversupply does occur
in the vegetable-oil market which exerts downward
pressure on prices. The competing oils, the main ones
of which are soybean, oilseed rape and sunflower,
are annual crops and producers tend to react to low
prices by switching to other crops which has, in the
past, quickly reduced oversupply and restored upward
pressure on prices as demand returns.
The board is satisfied that the fundamental structure
of the vegetable-oil market, and particularly the palm-
oil market, is sound. Continuing strong demand from
the fast-developing economies, such as China and
India, as well as from more established markets in
Europe, for vegetable oil for human consumption
has supported prices. In addition to this, the recent
strength of the mineral-oil price, following concerns
about dwindling supply and global warming, has
focused attention on vegetable oil as a bio-fuel. Many
bio-fuel processing plants have been set up around
the world and the demand for feedstock for these
plants (vegetable oil) has had, and will continue to
have, an underpinning effect on vegetable-oil prices.
Palm oil is the vegetable oil with the highest
production in the world and is the cheapest and the
most productive, by a wide margin, in terms of yield
per hectare.
Very high palm-oil prices have, in the past, caused
problems in Indonesia. The oil is widely used as a
cooking medium in the country and high prices have
given rise to protests which have led to the Government
imposing high temporary export taxes or other restrictions
on the sale of palm oil. This is the case at the moment
with export tax coming into play at levels ranging
from 2.5% when the palm-oil price (Rotterdam cif)
is between US$550 to US$650 per tonne to 25%
when the price is over US$1,300 per tonne.
EXCHANGE RATES
Palm oil is a US-Dollar-denominated commodity and
a significant proportion of revenue costs in Indonesia
(such as fertiliser and fuel) and development costs
(such as heavy machinery and fuel) are US-Dollar
related. Adverse movements in the Rupiah against the
US Dollar can have a negative effect on earnings and
assets in US-Dollar terms. The board has taken the
view that these risks are part of the business and feels
that adopting hedging mechanisms to counter the
negative effects of exchange movements are both
difficult to achieve and would not be cost effective.
WEATHER AND NATURAL DISASTERS
Oil palms rely on regular sunshine and rainfall but
these patterns can vary and extremes such as unusual
dry periods or, conversely, heavy rainfall leading in
some locations to flooding, can occur. Dry periods,
in particular, will affect yields in the short and medium
terms but any deficits so caused tend to be made up
at a later date. Where appropriate, bunding is built
around flood-prone areas and drainage constructed
and adapted either to evacuate surplus water or
to maintain water levels in areas quick to dry out.
As far as possible, insurance cover for natural
disasters is purchased.
Whilst a remarkably hardy plant, the oil palm can
be subject to attack from such pests as caterpillars
and other insects. Proper management and husbandry
should identify and prevent these attacks from
becoming widespread.
REVIEW OF OPERATIONS continued 17
ENVIRONMENTAL
Concerns about global warming and particularly the
destruction of tropical rainforest are subjects which
have received, and are continuing to receive, close
scrutiny in the media. The palm-oil industry, unfairly
in many cases, is closely associated with cutting
down rainforest and destroying the habitat of
endangered species such as the orang-utan, elephant,
tiger and rhinoceros. The Group is therefore likely
to receive attention from the many organisations
connected with climate change and South East Asian
tropical rainforests.
The estates in Sumatra are all long established.
Management follows industry best-practice guidelines
and abides by Indonesian law with regard to such
matters as fertiliser application and health and safety.
With regard to the mill at Pangkatan, the Group has
installed a composting system which utilises both the
empty fruit bunches (after the fruit has been removed
from them) and the liquid effluent from the mill.
The resulting nutritious compost is applied in the field
and reduces the requirement for inorganic fertiliser.
No effluent reaches external water courses.
The Group is a member of the Round Table on
Sustainable Palm Oil (“RSPO”). The RSPO is in the
process of instituting strict guidelines which members
must abide by in order to be able to state that they are
producing sustainable palm oil. The Group endorses
the General Principles which have so far been produced.
With regard to the new projects on Bangka and
Kalimantan, the Group has a clear policy that only open
or lightly-timbered land will be acquired and developed.
It is the board’s policy to have an environmental-
impact assessment undertaken by an independent
consultant for any new project. The study undertaken
for the new land in Kalimantan has been made public
on the Group’s website. Implicit in these studies is the
requirement to abide by, for example, riparian buffer
zones and nature-conservation areas.
DEVELOPMENT OF NEW PROJECTS
There are a number of operational risks associated
with the development of new land into an oil-palm-
plantation project. These cover a wide range, from
delays caused by the inability to agree appropriate
compensation terms with local people, to weather
disruptions, to unavailability of suitable contractors.
The Group aims to mitigate these risks by ensuring
that there is a strong, professional management team
on the ground that is able, as far as is practicable, to
anticipate such problems and take pre-emptive steps
to avoid difficulties.
ANNUAL REPORT 2007
UK directors’ and auditors’ visit to the East Kalimantan project. 18
Australian beef cattle
NAPCo cattle enjoying
the lush pastures on
its fattening property,
Cungelella, in central
Queensland.
Review of operations
Mustering NAPCo cattle. Generally this 
is done on horseback, but sometimes
also by the use of motorbikes or helicopters,
with the emphasis on minimal stress for
the animals.
A ‘jillaroo’ at work. 30-40% of the 
workforce on the NAPCo properties,
in line with much of the Australian 
pastoral industry, now comprises females. 19
ANNUAL REPORT 2007
NAPCo properties
A gross loss of US$580,000 was recorded on
Woodlands, compared with a loss of US$731,000 in
2006. The dry conditions which affected the property
in 2006 considerably restricted the number of cattle
that could be purchased and fattened during the first
half of 2007. However, further to the beneficial rainfall
received during 2007, both the existing and new
pastures grew well and forage crops were planted.
This enabled more cattle to be acquired during the
year and will permit the further expansion of the
herd in 2008. Unlike 2006, a wheat crop was grown
and harvested in 2007. In view of the very sharp rise
in the price of many grains, it is planned to continue
to deploy some of the farm’s arable areas for the
production of grain, rather than forage, crops.
The major emphasis will nonetheless continue to
be on the increase of the property’s cattle-carrying
capacity. The acquisition of Springmount during the
year, which increased the size of the Woodlands
aggregation to 31,000 hectares, has enabled further
economies of scale to be achieved both in the
fattening of cattle and the cultivation of arable crops.
Management monitors and assesses the efficiency of
operations with regard to cattle fattening by means of
key performance indicators. This assessment involves
the establishment of weight gain per beast per day.
Depending upon the weather and pasture/forage-crop
conditions, management would generally aim for
0.6 kg per day for grass-fed steers and 1.00 kg per
day for forage-crop-fed steers.
The ability to maximise the weight gain in any one
year will be determined by the amount of rainfall.
This, in turn, determines both the quality of the
existing pastures and what areas of forage crops can
be planted. Whilst rainfall is clearly not a factor under
management’s control, the area of forage crops that
can be both planted and brought ahead to a state that
can sustain cattle is crucial to the operations of the
company. The area planted, and the cost, is therefore
a key performance indicator that is under constant
review by management.
With regard to cropping, management monitors and
assesses the efficiency of operations by means of key
performance indicators which involve yield per hectare
and cost per tonne. Yield is particularly susceptible
to rainfall over which management has no control.
MAJORITY-OWNED OPERATIONS 20
During the year, the Group marginally increased
its holding in NAPCo to 29.64% from 29.29%.
The Group’s share of NAPCo’s profit after tax rose
sharply to US$2,840,000, compared with a loss
in 2006 of US$414,000. The improvement was
largely attributable to a significant gain in the
value of the herd and to the results of the beneficial
rainfall enjoyed by the company’s principal
breeding properties. The increased herd value was,
in turn, a product of an increase in the herd size,
by 14,000 head, to a record 198,000 head.
The average value per head at the end of the year
was A$539 (US$473), compared with A$515
(US$406) at the end of 2006.
The company achieved record brandings of
65,500 new calves, an increase of 8,000 on the
previous year. This increase reflects the significant
investment in fencing and water infrastructure
which has been made in recent years across the
company’s properties. Even more pleasing is that
this record was achieved at a time when, because
of the continuing drought on the growing-out
properties, the breeder properties had to hold back
young cattle which were due to be transferred to
those growing-out properties. During 2007, a total
of 49,500 cattle were sold, compared with 41,900
in 2006. This increase arose partly as a result of
better seasonal conditions in 2007 but also because
of herd rebuilding in 2006 which restricted sale
numbers in that year.
The total value of NAPCo’s properties increased by
A$56,950,000 (US$49,956,000) to A$299,643,000
(US$262,845,000) during 2007, despite the sale
of one property for A$10,000,000 (US$8,333,000).
The increase in value reflects both the improvement
in infrastructure, referred to above, and the general
rise in Australian rural property values. This resulted
in a marked increase in NAPCo’s net asset value
per share to US$15.10 from US$10.47 at the end
of 2006.
BEEF MARKET 
As in recent years, the market in 2007 was
predominantly influenced by seasonal conditions,
the fluctuations of the Australian Dollar versus the
US Dollar and Asian currencies and market-access
issues affecting US beef supply. In view of the
volatility of both the seasonal conditions and the
currency markets, the cattle and beef markets
were similarly volatile. The Australian “grain-fed”
cattle market, i.e. of the type largely produced
by NAPCo, traded on average during the year
at historically-high levels and was influenced by
the worldwide increase in the demand for, and
consequent price of, grain. This, coupled with
lower-than-expected domestic grain production
resulting from a poor winter crop, led to record-high
domestic grain prices in Australia.
Despite the currency fluctuations, Australia continued
to enjoy a dominant share of both the Japanese and
Korean import markets in 2007, with the US
remaining largely locked out as a result of continuing
access restrictions; a consequence of the 2003
outbreak of BSE in that country. The domestic beef
market, however, continues to be Australia’s single
largest and most stable source of demand, with
consumption up by 3% in 2007. Beef’s improved
image has been helped by the “Red Meat, Feel Good”
nutritional campaign mounted by the industry body,
“Meat and Livestock Australia”.
ASSOCIATED COMPANY – NAPCo
(29.64% OWNED)
RISKS AND EVALUATION AND
CONTROL OF RISKS
WEATHER
As referred to above, rainfall is of crucial importance
to cattle farming in Australia and is unpredictable.
The level of rainfall will determine the ability of
existing pastures to be maintained and of management
to plant forage and grain crops. In turn, the quality
and quantity of feed will determine the carrying
capacity of the property. Clearly management is not
in a position to control rainfall but the board has
taken the view that acceptance of this risk is part
of the business.
REVIEW OF OPERATIONS continued 21
CATTLE PRICES
The price that the Group achieves for the sale of its
fattened cattle is determined by a world market over
which the Group has no control. The price of live
cattle and beef is determined by economic activity
around the world, giving the wherewithal for demand
for red meat to be created. This activity fluctuates,
as does the beef price. Australia is a high-quality,
efficient producer free of BSE and foot-and-mouth
disease, whose markets are mainly in South East Asia
and the United States with its principal competitors
being South America and the United States itself.
The board accepts price fluctuation as a risk of the
business and has concluded that the structure of the
Australian cattle industry is sound and that its proximity
to its main markets in South East Asia gives the business
a competitive advantage over its rivals.
EXCHANGE RATES
The strengthening of the Australian Dollar against
the US Dollar has a positive effect in US-Dollar
terms when Australian earnings and assets are
translated. The board accepts this risk as part of the
business and has concluded that adopting hedging
mechanisms to counter the negative effects of
exchange movements is both difficult to achieve
and would not be cost effective.
ANNUAL REPORT 2007
2002 2003 2004 2005 2006 2007
0
180,000
200,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
56,309
49,619
171,145
60,550
61,575
184,620
50,019
53,768
184,971
41,868
57,408
184,309
49,010
51,727
183,364
49,725
65,510
198,262
NAPCo cattle sales and brandings 2002 - 2007 Head
Sales Brandings Closing stock
Black Angus cattle on Woodlands, feeding on
pasture (above) and forage sorghum (below),
both of which benefited from excellent rainfall. 22
Review of operations
Malaysian property disposals
and remaining
plantation operations
Industrial Training
Institute located on the
Bertam Properties project.
Bertam Properties two-
storey houses, each selling
for US$115,000.
Part of the Bertam Properties 36-hole golf complex. 23
LAND DISPOSALS
Further progress was achieved during 2007 in
implementing the Group’s strategy of selling its
portfolio of plantation and property assets.
This can be summarised as follows:
Perhentian Tinggi
Agreements were signed in 2006 regarding the sale
of two small pieces of the estate, 101 hectares
(RM9.97 million (US$2.90 million)) and 81 hectares
(RM7.97 million (approximately US$2.50 million)).
The 101-hectare sale was completed in 2007 and
the 81-hectare sale in 2008. The profits were,
or will be, recognised in these respective years.
A sale agreement was signed in 2007 in respect of
the balance of the land, 745 hectares, at a price of
RM66.27 million (approximately US$21.00 million).
The sale was completed in 2008 and the profit will 
be recognised in that year.
Sungei Kruit
A sale agreement was signed in 2007 in respect of
this 828-hectare estate at a price of RM72.28 million
(approximately US$22.90 million). The sale is
expected to be completed, and the profit recognised,
during 2008.
Bertam
This 74-hectare piece of land, which was excluded
from the sale of Bertam Estate to Bertam Properties in
the 1990’s, has appreciated substantially since then,
chiefly as a result of the Bertam Properties
development itself. The land was valued at a total of
RM23.8 million (now approximately US$7.50 million)
for the purposes of the 2005 merger and is believed to
have risen further in value since then. The land is not
being actively marketed for sale as, in view of the rate
at which the other estates have been sold, there is no
immediate cash requirement. It is also considered
likely that raw-land values in this area will continue
to escalate over the next year or so.
Bertam Properties
Further significant sales of land were made, and
profits recorded, in 2007.
As referred to in the 2006 annual report, 339 hectares
were sold to Naza Motor Sdn. Bhd. at a price of
RM376,750 per hectare, totalling RM127.79 million
(approximately US$36.00 million). Because of
the timing of possession and other aspects of the
completion arrangements, 50% of the transaction
was recognised in 2006 with the remainder in
2007. Accordingly, a profit of RM47.78 million
(US$13.89 million) was recorded in 2007.
Also referred to in the 2006 annual report was
the sale of 46 hectares to the Malaysian Ministry
of Higher Education at a price of RM727,000 per
hectare, totalling RM33.17 million (approximately
US$9.50 million). Given the nature of the agreement,
35% of the profit was recognised in 2006, 55% in
2007 with the remaining 10% likely to be recognised
in 2008. Accordingly, a profit of RM11.06 million
(US$3.22 million) was recorded in 2007.
In 2007, 92 hectares were sold to the Malaysian
Ministry of Higher Education in respect of Universiti
Teknologi Mara at a price of RM704,700 per hectare,
totalling RM65.00 million (approximately US$19.40
million). 67% of the profit was recognised in 2007,
amounting to RM32.76 million (US$9.52 million).
In addition, 20 hectares were compulsorily acquired
by the Malaysian Government for the purposes of
building a nursing college at a price of RM969,000
per hectare, totalling RM19.60 million (US$5.70 million).
All of the profit of RM17.60 million (US$5.12 million)
was recognised in 2007.
The total profit from land sales in 2007 amounted to
RM110.01 million (US$31.98 million). The Group’s
share therefore amounted to US$12.79 million.
Bertam Properties paid a dividend in 2007 to the
extent that it was able to utilise available tax credits.
ANNUAL REPORT 2007
Shop and office buildings in new Bertam Properties town.  The crops on Perhentian Tinggi and Sungei Kruit
Estates (31,000 tonnes) were lower than the previous
year (35,300 tonnes) following the flush yields
experienced in 2006. The discontinued operations
in 2006 included the crops up to the date of disposal
of 21,100 tonnes relating to Sungei Reyla, Beradin
and Lendu Estates which were sold in 2006.
As with the Indonesian plantations, management
monitors and assesses the efficiency of operations
with regard to crops and production by means of key
performance indicators. The assessment of crops is
measured for each year’s planting on each estate in terms
of yield per hectare. The yield per hectare on each
individual estate, indeed on each year’s planting on
each estate, is recorded and monitored. Yields can vary
widely because of factors such as soil type, terrain,
sunshine hours, rainfall, distribution of rainfall and
the fertility cycle of the palms and, because of this,
monitoring is not carried out on a Group basis but rather
takes into account the conditions on each estate.
Factors which are under management’s control are
husbandry standards, fertiliser application, the quality
of infrastructure (f.f.b. evacuation roads, for example)
and these are monitored by management on the
ground. Decisions, such as when and how to replant,
are taken based on local conditions.
24
“Discontinued operations” in the consolidated income
statement. The f.f.b. crops were as follows:
2007 2006
Tonnes Tonnes
Continuing operations 1,600 1,900
Discontinued operations 31,000 56,400
32,600 58,300
The Group’s share of this dividend amounted
to RM11.78 million (gross) (US$3.42 million).
The dividend received by the Group in 2006
amounted to RM29.06 million (US$7.92 million).
The level of dividend payments by Bertam Properties
is constrained by the availability of franking credits.
Straits Beach Properties Sdn. Bhd.
Agreement was reached during 2007 to sell the company
(on the basis of its land valued at RM5.90 million).
The proceeds of the sale of the Group’s 78%
shareholding and shareholder-loan repayments
amounted to some RM4.60 million (US$1.46 million).
The transaction was completed in early 2008 and
a modest profit of some RM0.40 million
(US$0.13 million) will be recorded in that year.
OPERATIONS
In line with the Group’s strategy, all of the Malaysian
plantations (except the small Bertam Estate) have
been, or are in the process of being, sold. It is the
intention to sell the remaining Malaysian investments
at the opportune time.
MAJORITY-OWNED ESTATES
F.f.b. crops declined as the various estates were sold.
Both Perhentian Tinggi and Sungei Kruit Estates were
part of the Group throughout 2007 but, as referred to
above under “Land disposals”, have been sold, or are
in the course of disposal, during 2008. The results of
these two estates have accordingly been treated as
REVIEW OF OPERATIONS continued
Bertam Properties two-storey shop buildings,
each selling for US$93,000. 
Bertam Properties two-storey houses,
each selling for US$177,000.  25
RUBBER MANUFACTURING
Because of adverse weather conditions, throughput at
the Thai rubber factory was some 11% lower in 2007
at 1,593 tonnes (2006 - 1,798 tonnes), resulting in a
profit of US$99,000 (2006 US$200,000). It is the
board’s intention to sell the factory and discussions
with a prospective buyer are under way.
BERTAM PROPERTIES (40% OWNED)
The majority of Bertam Properties’ profits arose from
land sales which have been reviewed in detail above
under “Land disposals” on page 23. In addition,
satisfactory results were achieved from the company’s
property-development activities. As the company’s
land is either sold or developed, the oil-palm
plantation has reduced in size and, as a result, the
f.f.b. crop declined to 8,600 tonnes in 2007 compared
with 13,800 tonnes in 2006. However, as with the
Group’s other plantation activities, Bertam Properties
benefited from the robust palm-oil price and reported
similar profits in 2007 from this source when
compared with 2006.
ANNUAL REPORT 2007
Two-storey terraced houses on Bertam Properties project,
each selling for US$83,000.
KENNEDY, BURKILL & COMPANY BERHAD (“KB”)
(20.01% OWNED) AND ASIA GREEN ENVIRONMENTAL
SDN. BHD. (“AGE”) (30.00% OWNED)
The Group has representation on the boards of KB
and AGE but, following the relocation of one of the
executive directors, David Wilkinson, from Malaysia
to Indonesia, the directors have concluded that the
Group does not now exercise significant influence.
Accordingly, neither KB nor AGE has been treated
as an associated company with effect from 1 January
2007. Credit will now therefore be taken by the
Group for dividends as they are received. It is the
intention to dispose of these two investments and
discussions are under way with potential buyers.
RISKS AND EVALUATION AND
CONTROL OF RISKS
PALM-OIL AND KERNEL SELLING PRICES
The remaining three Malaysian estates that were in
the Group during 2007 were at risk, in the same way
as the Indonesian estates, from fluctuating palm-oil
and kernel prices. This is described under “Palm-oil
and kernel selling prices” on page 16.
Large three-storey shop building on Bertam Properties project,
selling for US$447,000.
EXCHANGE RATES
With the remainder of the Malaysian assets in the
process of being sold or available for sale, adverse
exchange movements will reduce the value of these
disposals in US-Dollar terms. Given the uncertainty
of the timing of the asset disposals, it would be
difficult to adopt hedging mechanisms to counter
exchange movements and this would be unlikely
to be cost effective. When funds are raised from
asset sales, it is the board’s policy to keep the
funds on deposit chiefly in US Dollars but partly
in Sterling and Ringgits. 26
Environmental,
corporate and
social
responsibility
 The Group is committed to producing
environmentally-sustainable palm oil
 The Group is a member of the Roundtable
for Sustainable Palm Oil (“RSPO”).
The membership covers a wide variety
of interests from plantation owners to non-
governmental organisations to supermarkets.
The Group endorses the General Principles
in the process of being adopted by the
RSPO in relation to environmental, social
and ethical plantation practices
 The Group ensures that any new
plantation development is undertaken
only in open or lightly-timbered areas
which will not be suitable habitats for
orang-utans. Full environmental-impact
assessments are conducted on new project
areas by internationally-recognised,
independent environmental consultants.
The assessment of the Kalimantan project
has been posted on the Group’s website,
www.mpevans.co.uk
 At the Group’s Pangkatan palm-oil mill,
liquid effluent is applied to empty bunches
to create nutritious compost which,
in turn, is applied in the field, reducing
the requirement for inorganic fertilisers.
No effluent reaches rivers or water courses
A company’s success is
measured not solely by
its financial performance
but also by its social and
environmental performance
KEY FEATURES
Lake and wildlife reserve area on the Agro Muko project. 27
ANNUAL REPORT 2007
 The Group gives priority to the health
and safety of its employees and those
affected by its activities
 The Group undertakes to train and
motivate its workforce, to help employees
build on skill levels and to extend their
education and qualifications
 In Indonesia, the Group provides, inter
alia, medical care, free housing, clean
water and sanitation to its workforce as
well as kindergartens and school transport
 In Australia, besides its commitment
to the health and safety of its employees,
the Group adopts the highest standards
of animal welfare in relation to its cattle.
Through NAPCo, which has won
a number of environmental awards,
it is also involved in the preservation,
and rehabilitation, of indigenous flora
and fauna
Estate workers’ houses provided by the company.
Estate health clinic.
Estate kindergarten.
NAPCo dedicates significant areas of several of its
properties for nature conservation schemes. This does
not, however, interfere with its cattle operations.
NAPCo uses solar energy across many of its properties.
Visit by local school children to NAPCo’s cattle feedlot. 28
Richard M Robinow
Chairman
Independent non-executive
Appointed a director in 1999 and chairman in
February 2005. Chairman of R.E.A. Holdings PLC
and a non-executive director of the Belgian
plantation group, SA SIPEF NV. Member of the
audit and remuneration committees.  (Age 62)
Philip A Fletcher, FCA
Joint chief executive and finance director
Appointed a director in 1987, managing director
in 1991 and executive chairman between 1999
and 2005. Former executive director of Bertam
Holdings PLC and Lendu Holdings PLC. Joined
the Group in 1982 after initial career in accountancy
with KPMG in London and Sydney and in industry
with The RTZ Corporation PLC group.  (Age 58)
Peter E Hadsley-Chaplin, MA MBA
Joint chief executive
Appointed a director in 1989. Former executive
chairman of Bertam Holdings PLC and Lendu
Holdings PLC. A director of The North Australian
Pastoral Company Pty Limited. Former chairman
of The Association of the International Rubber
Trade. Prior to joining the Group in 1988 he was
a commodity broker with C Czarnikow Limited.
(Age 50)
O David Wilkinson, BSc
Executive
Appointed a director in 2005. Now based in
Jakarta as the executive director in charge of the
new Indonesian projects whilst continuing to
oversee the remaining Malaysian operations.
Former executive director of Bertam Holdings PLC.
Formerly a planter with Harrisons Malaysian
Plantations Berhad (subsequently Golden Hope
Berhad and now Sime Darby Berhad) before
involvement in the retail and property-development
sectors in Malaysia.  (Age 49)
Konrad P Legg
Senior independent non-executive
Appointed a director in 1987. A non-executive director
of Coburg Group PLC. A former non-executive director
of Lendu Holdings PLC. Chairman of the audit and
remuneration committees.  (Age 64)
J Derek Shaw, FRAgS
Independent non-executive
Appointed a director in 2005. A director of
The North Australian Pastoral Company Pty Limited.
Former chairman of Linden Foods Limited and
former chairman and founder of the Australian
cotton producer, Colly Farms Cotton Limited.
Former non-executive deputy chairman of
Lendu Holdings PLC. Member of the audit and
remuneration committees.  (Age 67)
Board of
directors
LEFT TO RIGHT 29
ANNUAL REPORT 2007
Report of the directors
For the year ended 31 December 2007
PRINCIPAL ACTIVITIES
At 31 December 2007, the Company, through
its subsidiary and associated undertakings,
has interests in oil-palm and rubber plantations
in Indonesia, beef-cattle operations in Australia
and oil-palm plantations and property development
in West Malaysia.
A review of the year and future prospects
(including the principal risks and uncertainties
facing the Company) is included in the chairman’s
statement on pages 6 and 7 and in the review of
operations on pages 8 to 25 and is incorporated
in this report by reference.
RESULTS AND DIVIDEND
Details of the profit for the year are given in the
consolidated income statement on page 39.
An interim dividend of 2.00p (2006 - 2.00p) per
share was paid on 2 November 2007. The board
recommends a final dividend of 5.00p (2006 - 4.50p)
per share. This dividend will be paid on or after
18 June 2008 to those shareholders on the register
at the close of business on 16 May 2008.
Shares of 10p each
Authorised capital
(from 1 January 2007 to 1 May 2008) 87,000,000
Issued (fully-paid and voting) capital
at 1 January 2007 50,961,432
Share options exercised
15 January 2007 6,750
25 January 2007 12,887
15 June 2007 96,979
22 June 2007 587,710
24 October 2007 25,000
Issued (fully-paid and voting) capital
at 31 December 2007 and 1 May 2008 51,690,758
SHARE CAPITAL
Details of the authorised and issued share capital
of the Company are as follows: 30
DIRECTORS AND DIRECTORS’ INTERESTS
The present membership of the board, all of whom
served through the year, is set out on page 28.
Messrs Robinow, Wilkinson & Shaw will retire from the
board at the forthcoming annual general meeting in
accordance with the articles of association and, being
eligible, offer themselves for re-election. None of these
directors has a service contract with the Company.
The directors serving at the end of the year, together
with their interests at the beginning and end of
the year, in the shares of 10p each in the Company,
were as follows:
Pursuant to the Company’s articles of association,
there was throughout the year to 31 December 2007,
and is at the date of this report, a qualifying indemnity
provision as defined in section 236 of the Companies
Act 2006 (or qualifying third-party indemnity provision
as defined in section 309 of the Companies Act 1985
in respect of the period before 1 October 2007) in
force for the benefit of the directors.
SUBSTANTIAL INTERESTS
The following substantial interests have been disclosed
to the Company as at the date of this report:
At 31 December 2007 Beneficial Non- Options
beneficial
R M Robinow 42,086 — —
P A Fletcher 568,453 51,361 1,108,235
P E Hadsley-Chaplin 773,865 91,279 1,200,000
O D Wilkinson —— 159,476
K P Legg 584,389 22,412 —
JDShaw 266,170 ——
At 1 January 2007
R M Robinow 42,086 ——
P A Fletcher 392,842 51,361 1,508,235
P E Hadsley-Chaplin 719,766 91,279 1,343,235
O D Wilkinson —— 228,951
K P Legg 584,389 22,412 —
JDShaw 266,170 ——
Further details of the directors’ interests in share
options are disclosed in the report of the board to the
shareholders on directors’ remuneration on page 36.
Messrs Fletcher and Hadsley-Chaplin are beneficially
interested in 4,500 (0.51%) and 3,600 (0.41%) shares
respectively of M. P. Evans (Malaysia) Sdn. Berhad,
a company now in members’ voluntary liquidation.
Apart from these shareholdings, none of the directors
holds any beneficial interest in, or holds options
to buy shares in, any subsidiary undertaking of the
Company as at the date of this report.
Messrs Fletcher and Hadsley-Chaplin received
distributions from the liquidator of M. P. Evans
(Malaysia) Sdn. Berhad in respect of their personal
shareholdings during the year. Apart from these
no director has had a material interest in any
contract of significance in relation to the business
of the Company, or any of its subsidiary undertakings,
during the financial year or had such an interest at
the end of the financial year.
Shares %
Direct interests
Alcatel Bell Pensioenfonds VZW 5,733,497 11.09
JPMorgan Fleming Mercantile
Investment Trust Plc 3,517,103 6.80
M M Hadsley-Chaplin 2,342,254 4.53
Indirect interest
Amvescap Plc 3,186,368 6.16
LAND AND BUILDINGS
In the opinion of the directors the open-market
value of the Group’s interests in land and buildings
(including related biological assets) at the year end
was not less than US$170 million compared to
US$126 million in 2006 as shown in notes 10, 14
and 15 to the accounts on pages 50, 52 and 53.
The Group’s liability to taxation if the land and
buildings were sold at their estimated value would
be approximately US$19 million.
AUTHORITY TO ALLOT SHARES
At the annual general meeting a general authority
is being sought, under resolution 7, for the directors
to allot shares up to a maximum nominal amount
of £1,722,853, which represents 33.33% of the
Company’s issued share capital. The Company does
not currently hold any shares as treasury shares within
the meaning of section 162A of the Companies Act 1985.
The directors do not have any present intention of
issuing any shares other than in respect of shares allotted
to the holders of share options as and when they are
exercised. It is also proposed, under resolution 8,
to empower the directors to allot equity securities
for cash pursuant to this general authority (and to sell
REPORT OF THE DIRECTORS continued 31
any treasury shares which it may acquire for cash)
otherwise than in accordance with shareholders’
statutory pre-emption rights so as to deal with practical
problems arising in connection with rights issues or
otherwise up to an aggregate nominal amount of
£258,454, representing 5% of the Company’s issued
share capital. The authorities conferred by resolutions
7 and 8 will lapse on 30 June 2009 or, if earlier, the
date of the Company’s next annual general meeting.
AUTHORITY TO MAKE MARKET PURCHASES OF SHARES
The directors propose to seek authority for the
Company to purchase its own shares on the
Alternative Investment Market of the London Stock
Exchange until 30 June 2009 or, if earlier, the date
of the Company’s next annual general meeting.
The authority will give the directors flexibility to
purchase the Company’s shares as and when they
consider it appropriate. The board will only exercise
the power of purchase when satisfied that it is in the
best interests of the Company so to do and all such
purchases will be market purchases made through
the Alternative Investment Market of the London
Stock Exchange. The directors would only consider
making purchases if they believed that the earnings
or net assets per share of the Company would be
improved by such purchases. Companies are now
allowed to 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
had been purchased by the Company as treasury
shares as this would give the Company the flexibility
of being able to sell such shares quickly and effectively
where it considers it in the interests of shareholders
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 9 set out in the notice of the annual
general meeting will accordingly be proposed to
authorise the purchase of up to a maximum of
5,169,075 shares, on the Alternative Investment
Market of the London Stock Exchange, representing
10% of the Company’s current issued share capital.
The maximum price which may be paid for a share
on any exercise of the authority will be restricted to
5% above the average of the middle-market quotations
for such shares as derived from the Daily Official List
of the London Stock Exchange for the five business
days before the purchase is made. The maximum
number of shares and the price range are stated for
the purpose of compliance with statutory requirements
in seeking this authority and should not be taken as
an indication of the level of purchases, or the prices
thereof, that the Company would intend to make.
As at the date of this report there were options to
subscribe for 2,622,711 shares outstanding under the
executive share-option schemes. If all of the options
were exercised, the resulting number of shares would
represent (a) 4.83% of the enlarged issued share
capital at that date; and (b) if the proposed authority
to purchase shares was exercised in full 5.34% of the
enlarged issued equity share capital at that date
(excluding any share capital which may be purchased
and held in treasury).
AMENDMENT OF THE ARTICLES OF ASSOCIATION
It is proposed that the Company amends its articles
of association to reflect certain provisions of the
Companies Act 2006 currently in force. As the
proposed changes affect various provisions in the
current articles, it is considered more practical to
replace the current articles in full, by resolution 10
set out in the notice of the annual general meeting,
rather than to seek approval for numerous individual
amendments. Details of the changes introduced in the
new articles are given in the appendix to the notice
of the annual general meeting, which also states where
the full text of the new articles may be inspected.
PAYMENTS TO SUPPLIERS
It is the Group’s normal practice to make payments
to suppliers in accordance with agreed terms provided
that the supplier has performed in accordance with
the relevant terms and conditions. The Group’s
average creditor days calculated as at 31 December
2007 amounted to 47 days (2006 - 28 days).
FINANCIAL INSTRUMENTS
Details of the Group’s financial instruments, and the
board’s policy with regard to their use, are given
in note 28 to the accounts on page 63.
ANNUAL REPORT 2007 32
CHARITABLE AND POLITICAL DONATIONS
The Group made cash donations for charitable
purposes in the year of US$18,029 (2006 US$26,656).
Of this US$10,945 was donated to Indonesian
environmental charities with the balance being
donated to UK health and educational charities.
No political donations were made during the year
(2006 nil).
DISCLOSURE OF INFORMATION TO AUDITORS
Each of the persons who is a director at the date
of approval of this report confirms that:
 so far as the director is aware, there is no relevant
audit information of which the Company’s auditors
are unaware; and
 the director has taken all the steps that he ought
to have taken as a director in order to make himself
aware of any relevant audit information and to
establish that the Company’s auditors are aware
of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of section 234ZA
of the Companies Act 1985.
INDEPENDENT AUDITORS
Deloitte & Touche LLP have expressed their willingness
to continue in office and a resolution to re-appoint
them will be proposed at the forthcoming annual
general meeting.
SIGNIFICANT POST-YEAR-END EVENTS 
The sale of 81 hectares of Perhentian Tinggi Estate,
for a total consideration of RM7.79 million
(approximately US$2.50 million) was completed in
February 2008. The sale of the remaining 745 hectares
of the estate, for a total consideration of RM66.27 million
(approximately US$21.00 million) was completed
in March 2008. The gains arising from both of these
disposals will be recorded in the 2008 accounts.
Further details of the above transactions are set out in
the review of operations on pages 8 to 25 of this report.
Approved by the board of directors
and signed on its behalf
J F Elliott
Secretary
2 May 2008
REPORT OF THE DIRECTORS continued 33
ANNUAL REPORT 2007
The board recognises the importance of a sound system
of internal control and of continuing to conduct the
Group’s affairs according to good corporate-governance
principles. An explanation of how the Group has
applied the principles appears below.
1 DIRECTORS
The details of the Company’s board, together with
the audit and remuneration committees, are set out
on page 28. The board comprises a non-executive
chairman, three executive and two further non-
executive directors, one of whom chairs the audit
and remuneration committees. This structure
is designed to ensure that there is a clear balance
of responsibilities between the executive and the
non-executive functions. The board meets at least
quarterly and is provided with information which
includes executive operating reports, management
accounts and budgets. Each director retires and must
seek re-election at least every three years.
The board considers Messrs Robinow, Legg and Shaw
to be independent, notwithstanding their length of
service and Mr Robinow’s position as chairman, on
account of the nature and extent of their relationships
with the Company.
The board reserves to itself a range of key decisions
to ensure it retains proper direction and control of the
Company, whilst delegating authority to individual
directors who are responsible for the day-to-day
management of the business. All major and strategic
decisions of the Company are made in the United
Kingdom. The executive officers and the non-
executive directors have discussions on an informal
yet frequent basis to discuss progress against budget
and other business issues.
2 DIRECTORS’ REMUNERATION AND APPOINTMENT
As set out in the report on pages 34 to 36, the
remuneration of the executive directors is determined
by the remuneration committee whilst that of the
non-executives is determined by the whole board.
The committee met three times during 2007 and
each meeting was attended by all of the members.
The Company does not currently have a nominations
committee. Owing to the size of the board, it is
considered inappropriate to establish such a committee
at this time. Any new appointments to the board will
be discussed at a full board meeting and each member
of the board will be given the opportunity to meet
the individual concerned prior to an appointment
being made.
3 RELATIONS WITH SHAREHOLDERS
The Company attaches importance to effective
communications with its institutional and private
shareholders. All shareholders have at least twenty
working days’ notice of the annual general meeting
at which all of the directors, including the
chairman of the committees, are normally available
for questions. Comments and questions from
shareholders are encouraged at the meeting.
4 ACCOUNTABILITY AND AUDIT
a) FINANCIAL REPORTING
A detailed review of the performance and financial
position of the Group is included in the chairman’s
statement and the review of operations. The board
uses these and the report of the directors to present
a balanced and understandable assessment of the
Group’s position and prospects. The directors’
responsibility for the financial statements is described
on page 37.
b) INTERNAL CONTROL
The directors acknowledge their responsibility for the
Group’s system of internal control. Such a system can
provide reasonable, but not absolute, assurance
against material misstatement or loss. A review of
the process of risk identification, evaluation and
management is carried out annually and presented
to the board for approval.
The review process considers the control environment
and the major business risks faced by the Group.
Such risks include, but are not limited to:
 the effect of palm-oil price fluctuations
on profitability;
 the effect of beef-cattle price fluctuations
on profitability;
 the effect of exchange-rate fluctuations
on profitability and assets;
 political instability and social unrest in Indonesia;
 weather and natural disasters; and
 environmental damage.
Important control procedures, in addition to the
day-to-day supervision of holding-company business,
include regular executive visits to the areas of operation
of the Group and of its associates, comparison
of operating performance and monthly management
accounts with plans and budgets, application
of authorisation limits, internal audit of subsidiary
undertakings and frequent communication with
local management.
Corporate governance 34
c) GOING-CONCERN BASIS
After making enquiries, the directors have formed
a judgement, at the time of approving the financial
statements, that there is a reasonable expectation
that the Group has adequate resources to continue
in operational existence for the foreseeable future.
For this reason the directors continue to adopt the going-
concern basis in preparing the financial statements.
5 AUDIT COMMITTEE
The audit committee is formally constituted with written
terms of reference and is chaired by Mr K P Legg; the
other members are Messrs R M Robinow and J D Shaw.
All served throughout the year. The executive directors
are not members of the committee but can be invited
to attend its meetings. The auditors of the Group may
also attend part or all of each meeting and they have
direct access to the committee for independent
discussions, without the presence of the executive
directors. The committee met three times during 2007
and each meeting was attended by all of the members
with the exception that Mr Robinow was absent from
one meeting.
The audit committee may examine any matters relating
to the financial affairs of the Group or to the Group’s
audit; this includes reviews of the annual accounts
and announcements, accounting policies, compliance
with accounting standards, the appointment and fees
of auditors and such other related matters as the
board may require.
The Group’s auditors did not provide non-audit
services during 2006 or 2007.
The remuneration committee keeps under review the
remuneration and terms of employment of the executive
directors and recommends such remuneration and terms,
and changes therein, to the board. The committee
comprises all of the non-executive directors and
is chaired by Mr K P Legg.
SERVICE CONTRACTS
The executive directors, Messrs Fletcher, Hadsley-
Chaplin and Wilkinson, have service contracts with
the Company, or a wholly-owned subsidiary
undertaking, which continue until terminated by
either party giving not less than one year’s notice
in writing but not, in any event, beyond their normal
retirement dates. The non-executive directors do not
have service contracts or provisions for pre-determined
compensation on termination of their appointment.
REMUNERATION POLICY
EXECUTIVE DIRECTORS
The remuneration of Messrs Fletcher and Hadsley-
Chaplin is determined in accordance with both the
level of responsibility undertaken and equivalent
remuneration of executives of a similar standing
in the U.K., where their responsibilities are
undertaken. The remuneration committee does not
attach a performance-related element to the annual
remuneration of Messrs Fletcher and Hadsley-Chaplin
but rather provides appropriate incentives by means
of share options with a view to aligning the interests
of these two executive joint managing directors with
those of the shareholders.
Mr Wilkinson’s remuneration is determined in
accordance with both the level of responsibility
undertaken and equivalent remuneration of executives
of a similar standing in Indonesia, where his
responsibilities are undertaken and where he resides.
He participates in a discretionary bonus scheme
related to the committee’s evaluation both of his
performance and of the progress achieved during
the year on the Group’s new Indonesian projects.
Report of the board to
the shareholders on
directors’ remuneration
CORPORATE GOVERNANCE continued 35
ANNUAL REPORT 2007
NON-EXECUTIVE DIRECTORS
The fees of the non-executive directors are determined
by the board. The total amount of directors’
remuneration for the year ended 31 December 2007
was as follows:
The details of the remuneration of the directors for the
year ended 31 December 2007 are set out below:
2007 2006
US$ US$
Emoluments 1,225,462 1,032,038
Gains on exercise
of share options 3,750,299 535,852
Money-purchase
pension contributions 156,790 151,064
5,132,551 1,718,954
Salary Bonus Pension Benefits Total Total
and fees costs in kind
2007 2007 2007 2007 2007 2006
US$ US$ US$ US$ US$ US$
Executive directors
P A Fletcher 288,550 — 84,187 37,993 410,730 378,935
P E Hadsley-Chaplin 288,550 — 56,870 30,113 375,533 352,365
O D Wilkinson 266,053 70,408 15,733 91,559 443,753 309,114
843,153 70,408 156,790 159,665 1,230,016 1,040,414
Non-executive directors
R M Robinow 54,228 ——— 54,228 50,960
K P Legg 43,780 ——— 43,780 40,768
J D Shaw 54,228 ——— 54,228 50,960
152,236 ——— 152,236 142,688
995,389 70,408 156,790 159,665 1,382,252 1,183,102
NOTES
1. In addition to the above, the gains in respect of options exercised during the year were as follows:
2. Apart from the discretionary bonus paid to Mr Wilkinson referred to above, no performance-related bonuses were awarded to
the directors during the year.
3. The pension costs for Messrs Hadsley-Chaplin and Fletcher set out above are the contributions made by the Company to company-
sponsored Self-Invested Personal Pensions (SIPPs) as described below. The pension costs for Mr Wilkinson are contributions made
by a subsidiary undertaking to the Employees’ Provident Fund in Malaysia.
4. No long-term incentives, other than the share options described below, have been awarded to directors.
5. Fees included in respect of Mr K P Legg, and for Mr R M Robinow for the period 1 January to 31 March 2007, were paid to third parties.
EXECUTIVE SHARE-OPTION SCHEMES
The executive directors are members of executive
share-option schemes which were established in
2001 under which options to subscribe for shares in
the Company may be granted to selected employees.
As at 31 December 2007 options over 2,467,711
(2006 – 3,080,421) shares which were granted to
the executive directors between 17 July 2001 and
2 February 2005 remain outstanding. During the year
612,710 (2006 – 165,000) options granted to directors
were exercised and none (2006 none) lapsed.
No performance criteria are attached to the options,
as approved by the shareholders. No options are held
by the non-executive directors. At 31 December 2007
the middle-market quotation for the Company’s shares,
as derived from the London Stock Exchange Daily
Official List, was 394.50p, as compared with the
high and low quotations for the year of 399.00p
and 292.75p respectively.
2007 2006
US$ US$
P A Fletcher 2,464,000 nil
P E Hadsley-Chaplin 882,328 535,852
O D Wilkinson 403,971 nil 36
The details of the options held over shares of the Company by the executive directors during the year ended
31 December 2007 are set out in the table below:
Number of shares under option
Market
Balance at Balance at Exercise price when Date from
1 January Exercised 31 December price exercised Date which normally Expiry
2007 in the year 2007 pence pence of grant first exercisable date
P A Fletcher 400,000 400,000 — 75.50 386.00 17 July 2001 17 July 2004 17 July 2011
200,000 — 200,000 96.50 1 May 2002 1 May 2005 1 May 2012
200,000 — 200,000 126.50 2 May 2003 2 May 2006 2 May 2013
358,600 — 358,600 85.05 2 Feb 2005* 2 Feb 2005 17 July 2011
179,300 — 179,300 101.78 2 Feb 2005* 1 May 2005 1 May 2012
143,440 — 143,440 138.04 2 Feb 2005* 2 May 2006 2 May 2013
26,895 — 26,895 158.95 2 Feb 2005* 4 May 2007 4 May 2014
1,508,235 400,000 1,108,235
P E Hadsley-Chaplin 235,000 143,235 91,765 75.50 386.00 17 July 2001 17 July 2004 17 July 2011
200,000 — 200,000 96.50 1 May 2002 1 May 2005 1 May 2012
200,000 — 200,000 126.50 2 May 2003 2 May 2006 2 May 2013
358,600 — 358,600 85.05 2 Feb 2005* 2 Feb 2005 17 July 2011
179,300 — 179,300 101.78 2 Feb 2005* 1 May 2005 1 May 2012
143,440 — 143,440 138.04 2 Feb 2005* 2 May 2006 2 May 2013
26,895 — 26,895 158.95 2 Feb 2005* 4 May 2007 4 May 2014
1,343,235 143,235 1,200,000
O D Wilkinson 25,000 25,000 — 96.50 378.50 1 May 2002 1 May 2005 1 May 2012
25,000 — 25,000 126.50 2 May 2003 2 May 2006 2 May 2013
44,475 44,475 — 85.05 386.00 2 Feb 2005* 2 Feb 2005 17 July 2011
67,238 — 67,238 101.78 2 Feb 2005* 1 May 2005 1 May 2012
53,790 — 53,790 138.04 2 Feb 2005* 2 May 2006 2 May 2013
13,448 — 13,448 158.95 2 Feb 2005* 4 May 2007 4 May 2014
228,951 69,475 159,476
PENSIONS
The Company sponsors Self-Invested Personal
Pensions (“SIPPs”) for the UK executive directors.
Contributions made by the Company to the SIPPs
and to a life-assurance company give the executives
a pension at retirement, a pension to a spouse
payable on death and life-assurance cover based
on a multiple of salary. The members contribute
a minimum of 5% of their pensionable salary to
their SIPPs. No element of a director’s remuneration
package, other than basic salary, is pensionable.
Approved by the board of directors
and signed on its behalf
J F Elliott
Secretary
2 May 2008
REPORT OF THE BOARD TO THE SHAREHOLDERS ON DIRECTORS’ REMUNERATION continued
* Transferred from the Bertam Holdings PLC executive share-option scheme in 2005.  37
ANNUAL REPORT 2007
The directors are responsible for preparing the annual
report and the financial statements in accordance with
applicable law and regulations.
The directors are required to prepare financial
statements for the Group in accordance with
IFRS as adopted by the European Union (“EU”).
Company law requires the directors to prepare
such financial statements in accordance with IFRS
and the Companies Act 1985 and article 4 of the
International Accounting Standard regulation.
International Accounting Standard 1 requires that
IFRS financial statements present fairly for each
financial year the Group’s financial position,
financial performance and cash flows. This requires
the faithful representation of the effects of transactions,
other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities,
income and expenses set out in the International
Accounting Standards Board’s “Framework for the
Preparation and Presentation of Financial Statements”.
In virtually all circumstances, a fair presentation will
be achieved by compliance with all applicable IFRSs.
Directors are also required to:
 select properly and apply accounting policies;
 present information, including accounting policies,
in a manner that provides relevant, reliable,
comparable and understandable information; and
 provide additional disclosures when compliance
with the specific requirements in IFRS’s is
insufficient to enable users to understand the
impact of particular transactions, other events
and conditions on the entity’s financial position
and financial performance.
The directors have elected to prepare the parent-
company financial statements in accordance with
United Kingdom Generally Accepted Accounting
Practice (United Kingdom Accounting Standards
and applicable law). The parent-Company financial
statements are required by law to give a true and
fair view of the state of affairs of the Company.
In preparing these financial statements, the directors
are required to:
 select suitable accounting policies and then apply
them consistently;
 make judgments and estimates that are reasonable
and prudent;
 state whether applicable UK Accounting Standards
have been followed; and
 prepare the financial statements on the going-
concern basis unless it is inappropriate to presume
that the Company will continue in business.
The directors are responsible for keeping proper
accounting records that 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 1985.
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 the maintenance
and integrity of the corporate and financial
information included on the Group’s website.
Legislation in the United Kingdom governing the
preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Statement of directors’ responsibilities 38
We have audited the group financial statements of
M. P . Evans Group PLC for the year ended 31 December
2007 which comprise the consolidated income statement,
the consolidated balance sheet, the consolidated cash-
flow statement, the consolidated statement of recognised
income and expense, the reconciliation of movements
in shareholders’ consolidated funds and the related notes
1 to 32. These Group financial statements have been
prepared under the accounting policies set out therein.
We have reported separately on the parent-Company
financial statements of M. P. Evans Group PLC for the
year ended 31 December 2007.
This report is made solely to the Company’s members,
as a body, in accordance with section 235 of the
Companies Act 1985. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to
them in an auditors’ report and for no other purpose.
To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than
the Company and the Company’s members as a body,
for our audit work, for this report, or for the opinions
we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS
AND AUDITORS
The directors’ responsibilities for preparing the
annual report and the group financial statements
in accordance with applicable law and International
Financial Reporting Standards (IFRS’s) as adopted
by the European Union are set out in the statement
of directors’ responsibilities.
Our responsibility is to audit the Group financial
statements in accordance with relevant legal and
regulatory requirements and International Standards
on Auditing (UK and Ireland).
We report to you our opinion as to whether the Group
financial statements give a true and fair view, whether
the Group financial statements have been properly
prepared in accordance with the Companies Act 1985
and article 4 of the IAS Regulation. We also report to
you whether in our opinion the information given in the
directors’ report is consistent with the Group financial
statements. The information given in the directors’
report includes that specific information presented
in the chairman’s statement and the review of
operations that is cross referred from the principal
activities section of the directors’ report.
In addition we report to you if, in our opinion, we
have not received all the information and explanations
we require for our audit, or if information specified
by law regarding directors’ remuneration and other
transactions is not disclosed.
We read the other information contained in the annual
report as described in the contents section and consider
whether it is consistent with the audited Group financial
statements. We consider the implications for our report
if we become aware of any apparent misstatements
or material inconsistencies with the Group financial
statements. Our responsibilities do not extend to any
further information outside the annual report.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with
International Standards on Auditing (UK and Ireland)
issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence
relevant to the amounts and disclosures in the Group
financial statements. It also includes an assessment
of the significant estimates and judgments made by
the directors in the preparation of the Group financial
statements, and of whether the accounting policies are
appropriate to the Group’s circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain
all the information and explanations which we
considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that
the Group financial statements are free from material
misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation
of information in the Group financial statements. 
OPINION
In our opinion:
 the Group financial statements give a true and fair
view, in accordance with IFRS’s as adopted by the
European Union, of the state of the Group’s affairs
as at 31 December 2007 and of its profit for the
year then ended;
 the Group financial statements have been properly
prepared in accordance with the Companies Act
1985 and article 4 of the IAS Regulation; and
 the information given in the directors’ report is
consistent with the Group financial statements.
DELOITTE & TOUCHE LLP
Chartered Accountants and Registered Auditors,
Crawley, United Kingdom
2 May 2008
Independent auditors’ report on the
consolidated financial statements
TO THE MEMBERS OF M. P. EVANS GROUP PLC ANNUAL REPORT 2007
39
Consolidated income statement
FOR THE YEAR ENDED 31 DECEMBER 2007
RESULT BEFORE RESULT BEFORE
BIOLOGICAL BIOLOGICAL YEAR ENDED BIOLOGICAL BIOLOGICAL YEAR ENDED
BEARER-ASSET BEARER-ASSET 31 DECEMBER BEARER-ASSET BEARER-ASSET 31 DECEMBER
ADJUSTMENT ADJUSTMENT 2007 ADJUSTMENT ADJUSTMENT 2006
Note US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Continuing operations
Revenue 3 23,597 — 23,597 20,425 — 20,425
Cost of sales (12,965) (8,550) (21,515) (14,080) (5,264) (19,344)
Gross profit 3 10,632 (8,550) 2,082 6,345 (5,264) 1,081
Gain on biological assets 14 — 18,747 18,747 — 3,410 3,410
Foreign-exchange (losses)/gains (1,434) — (1,434) 6,363 — 6,363
Other administrative expenses (5,152) — (5,152) (4,324) — (4,324)
Group operating profit 4,046 10,197 14,243 8,384 (1,854) 6,530
Exceptional credit 5 3,641 — 3,641 1,558 — 1,558
Profit on ordinary activities
before interest 7,687 10,197 17,884 9,942 (1,854) 8,088
Investment revenue 6 1,306 — 1,306 887 — 887
Finance costs 7 (1,763) — (1,763) (764) — (764)
Group-controlled profit
before taxation 8 7,230 10,197 17,427 10,065 (1,854) 8,211
Tax charge on profit on
ordinary activities 9 (3,928) (3,185) (7,113) (1,442) 713 (729)
Group-controlled profit
after taxation 3,302 7,012 10,314 8,623 (1,141) 7,482
Share of associated companies’
profit after tax 3, 16 23,525 7,087 30,612 11,039 (1,086) 9,953
Profit after tax and before
discontinued operations 26,827 14,099 40,926 19,662 (2,227) 17,435
Discontinued operations 3, 10 5,317 387 5,704 16,883 (8,216) 8,667
Profit for the year 32,144 14,486 46,630 36,545 (10,443) 26,102
Attributable to:
Equity holders of
M. P . Evans Group PLC 30,328 11,936 42,264 35,546 (10,245) 25,301
Minority interests 1,816 2,550 4,366 999 (198) 801
32,144 14,486 46,630 36,545 (10,443) 26,102
US Cents US Cents
Basic earnings per 10p share 12
Continuing operations 71.21 32.71
Discontinued operations 11.11 17.04
Continuing and discontinued
operations 82.32 49.75
Diluted earnings per 10p share 12
Continuing operations 68.83 31.42
Discontinued operations 10.74 16.38
Continuing and discontinued
operations 79.57 47.80 Consolidated statement of recognised
income and expense
FOR THE YEAR ENDED 31 DECEMBER 2007
Reconciliation of movements in
shareholders’ consolidated funds
FOR THE YEAR ENDED 31 DECEMBER 2007
2007 2006
US$’000 US$’000
Profit attributable to members of the Company 42,264 25,301
Dividends paid (note 11) (6,655) (5,846)
35,609 19,455
Issue of shares 1,095 279
Share-based payments 11 69
Sale of own shares by subsidiary — 2,715
Other recognised gains and losses relating to the year 3,002 128
Net addition to shareholders’ funds 39,717 22,646
Opening shareholders’ funds 183,695 161,049
Closing shareholders’ funds 223,412 183,695
40
2007 2006
US$’000 US$’000
Unrealised share of movements in associated undertakings’ reserves (1,780) 4,000
Previously unrealised profit on sale of land to associated undertaking
released through the income statement on sale of land by associate (3,855) (2,514)
Exchange differences on foreign-currency net investments 8,637 (1,358)
Net income recognised directly in equity 3,002 128
Profit for the year 46,630 26,102
Total recognised income and expense for the year 49,632 26,230
Attributable to:
Equity holders of M. P . Evans Group PLC 45,266 25,429
Minority interest 4,366 801
49,632 26,230 ANNUAL REPORT 2007
41
Consolidated balance sheet
AT 31 DECEMBER 2007
BEFORE BEFORE
BIOLOGICAL BIOLOGICAL BIOLOGICAL BIOLOGICAL
BEARER-ASSET BEARER-ASSET 31 DECEMBER BEARER-ASSET BEARER-ASSET 31 DECEMBER
ADJUSTMENT ADJUSTMENT 2007 ADJUSTMENT ADJUSTMENT 2006
Note US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Non-current assets
Goodwill 13 1,008 — 1,008 902 — 902
Biological assets 14 — 54,553 54,553 — 43,017 43,017
Property, plant and equipment 15 70,086 (17,443) 52,643 64,527 (9,312) 55,215
Investments 16 90,363 19,782 110,145 70,347 14,050 84,397
Deferred tax asset 22 1,010 — 1,010 332 — 332
162,467 56,892 219,359 136,108 47,755 183,863
Current assets
Assets held for sale 10 15,922 7,694 23,616 —— —
Biological assets 17 2,893 — 2,893 868 — 868
Inventories 18 9,522 — 9,522 3,233 — 3,233
Trade and other receivables 19 5,256 — 5,256 7,693 — 7,693
Current tax asset 1,130 — 1,130 745 — 745
Cash and cash equivalents 19 31,765 — 31,765 33,114 — 33,114
66,488 7,694 74,182 45,653 — 45,653
Total assets 3 228,955 64,586 293,541 181,761 47,755 229,516
Current liabilities
Liabilities related to
assets held for sale 10 — 2,308 2,308 —— —
Bank loans and overdrafts 21 24,391 — 24,391 15,605 — 15,605
Trade and other payables 20 13,339 — 13,339 6,888 — 6,888
Current tax liability 1,724 — 1,724 334 — 334
39,454 2,308 41,762 22,827 — 22,827
Net current assets 27,034 5,386 32,420 22,826 — 22,826
Non-current liabilities
Borrowings 21 2,003 — 2,003 —— —
Deferred tax liability 22 1,909 11,133 13,042 2,730 10,113 12,843
Long-term provisions 23 1,375 — 1,375 1,542 — 1,542
5,287 11,133 16,420 4,272 10,113 14,385
Total liabilities 44,741 13,441 58,182 27,099 10,113 37,212
Net assets 184,214 51,145 235,359 154,662 37,642 192,304
Equity
Share capital 24 8,728 — 8,728 8,582 — 8,582
Other reserves 25 78,276 19,782 98,058 51,615 15,130 66,745
Retained earnings 25 91,903 24,723 116,626 89,947 18,421 108,368
Equity attributable to members
of M. P . Evans Group PLC 178,907 44,505 223,412 150,144 33,551 183,695
Minority interest 26 5,307 6,640 11,947 4,518 4,091 8,609
Total equity 184,214 51,145 235,359 154,662 37,642 192,304
These financial statements were approved by the board of directors
on 2 May 2008 and signed on its behalf
Philip Fletcher
Peter Hadsley-Chaplin
Directors 42
Consolidated cash-flow statement
FOR THE YEAR ENDED 31 DECEMBER 2007
YEAR ENDED YEAR ENDED
31 DECEMBER 31 DECEMBER
2007 2006
Note US$’000 US$’000
Net cash outflow from operating activities 27 (4,850) (9,234)
Investing activities
Interest received 1,244 632
Dividends from associated undertakings 11,396 7,638
Dividends from trading investments 206 144
Proceeds on disposal of property, plant and equipment 4,091 31,544
Purchase of property, plant and equipment (14,955) (13,781)
Re-organisation expenses — (50)
Investment in subsidiary undertaking (106) —
Investment in associated undertaking (1,414) (1,651)
Disposal of subsidiary — 3,771
Net cash from investing activities 462 28,247
Financing activities
Dividends paid (6,655) (5,845)
Repayment of borrowings (1,004) (997)
Proceeds on issue of shares 1,095 279
New bank loans raised 10,130 10,687
Dividend paid to minorities (498) (10)
Net cash from financing activities 3,068 4,114
Net (decrease)/increase in cash and cash equivalents (1,320) 23,127
Cash and cash equivalents at beginning of the year 33,114 9,972
Effect of foreign exchange rates (29) 15
Cash and cash equivalents at end of the year 31,765 33,114 ANNUAL REPORT 2007
43
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
M.P. Evans Group PLC is incorporated in the United Kingdom under Companies Act 1985. The address of its registered office is given on
page 81. The nature of the Group’s operations and its principal activities is set out in note 3 and in the review of operations on pages 8 to 25.
The functional currency of M.P. Evans Group PLC, determined under IAS 21, is the US Dollar. Likewise, the functional currency of
subsidiaries operating in the palm-oil sector is the US Dollar. The functional currency of Group companies operating in the beef-cattle
and property-development sectors is the local currency.
At the date of authorisation of these financial statements the following new and revised standards and interpretations, which were in issue
but not yet effective, have not been applied in these financial statements:
IAS 1 (revised) Presentation of financial statements
IAS 23 (revised) Borrowing costs
IAS 27 (revised) Consolidated and separate financial statements
IFRS 3 (revised) Business combinations
IFRS 8 Operating segments
IFRIC 12 Service concession arrangements
IFRIC 13 Customer loyalty programmes
IFRIC 14 IAS 19 The limit on a defined benefit asset, minimum funding requirements, and their interaction
The directors do not anticipate that adoption of these standards and interpretations in future periods will have a material impact on the
financial statements.
NOTE 1 GENERAL INFORMATION
The Group has adopted IFRS from 1 January 2006 (‘the date of transition’). The effect of the transition from UK GAAP as previously
reported by the Group to IFRS as at 1 January 2006 and 31 December 2006, and for the financial year ended 31 December 2006,
is included in note 32.
(a) Accounting convention
These financial statements have been prepared under the historical-cost convention, except for the valuation of biological assets and
available-for-sale investments, and in accordance with International Financial Reporting Standards (“IFRS’s”) adopted by the European
Union. The Group financial statements therefore comply with article 4 of the EU IAS Regulation.
(b) Basis of consolidation
The Group financial statements consolidate the financial statements of the Company and all of its subsidiary and associated undertakings.
All subsidiary and associated undertakings prepare their financial statements to 31 December.
Where necessary, the financial statements of subsidiary and associated companies are adjusted prior to consolidation to bring them into
line with the Group’s accounting policies. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from or up to the
effective point of acquisition or disposal.
(c) Revenue
Revenue represents the invoiced value of crops, livestock and produce sold during the year, excluding sales taxes. Income is recognised
at the point of delivery.
(d) Investment income
Investment income is taken into account by reference to the date on which it is declared payable.
(e) Operating profit and exceptional items
The Group separately identifies gains and losses arising from asset disposals outside the ordinary course of business and restructuring
costs as exceptional items, falling outside operating profit.
NOTE2ACCOUNTING POLICIES 44
(f) Goodwill
Goodwill arising on acquisition, representing any excess of the fair value of the consideration given over the fair value of the identifiable
assets and liabilities acquired, is capitalised, with provision being made for any impairment. Negative goodwill, where the fair value of
the assets acquired exceeds the fair value of the consideration given, is written to the income statement during the period in which it arises.
Goodwill arising on acquisitions before the IFRS transition date has been retained at the amount determined under UK-GAAP and is
subjected to impairment testing. Negative goodwill on the acquisition of shares in the Group’s Australian associated undertaking was
eliminated on transition to IFRS.
(g) Property, plant and equipment
Leasehold land in Indonesia is held on 25 and 30-year leases and is not depreciated as the leases can be renewed without significant
cost. Perpetual-leasehold land in Malaysia and freehold land in Australia is treated in the same way. Property, plant and equipment,
other than construction in progress which is not depreciated, are written off over their estimated useful lives at rates which vary between
3% and 50% per annum. 
The Group follows transitional arrangements made available under IFRS1 “First-time Adoption of International Financial Reporting Standards”.
The fair value of Indonesian leases (hak guna usaha) held by the Group on 1 January 2006 are taken to be their deemed cost.
(h) Investments
Undertakings over which the Group exerts significant influence via shareholdings and its membership on the board are treated as
associated undertakings. Investments in associated undertakings are dealt with in the consolidated financial statements under the
equity method of accounting. The consolidated income statement includes the Group’s share of the profit or loss on ordinary activities
after taxation based on audited financial statements for the year ended 31 December 2007. In the consolidated balance sheet, the
investments in the associated undertakings are shown as the Group share of net assets at the balance-sheet date, as adjusted for any
associated goodwill.
(i) Inventories
Inventories are valued at the lower of cost and net realisable value. In the case of rubber stocks, cost represents the average cost
of production, including appropriate overheads.
(j) Taxation
The tax charge for the year comprises tax currently payable and deferred tax. The Group’s current tax liability is calculated using tax
rates that have been enacted or substantively enacted by the balance-sheet date.
Deferred tax is accounted for using the balance-sheet-liability method, calculated at the tax rates that are expected to apply in the period
when the liability is settled or the asset is realised. Liabilities are generally recognised for all taxable temporary differences; deferred tax
assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences
can be utilised. Deferred tax is not recognised on initial recognition of goodwill.
The Group recognises deferred tax liabilities arising from taxable temporary differences on investments in subsidiaries and associates,
except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will
not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance-sheet date.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
(k) Biological assets
Biological gain or loss is measured in accordance with IAS 41 on two groups of bearer assets (oil-palm and rubber plantations),
and two consumer biological assets (beef cattle and grain crops). The Group’s only interest in rubber is through its associate company,
PT Agro Muko. Bearer-assets, the Group’s plantations, are non-current assets. Consumer biological assets are classified as current assets
since the Group generally sells or consumes these assets within one year of the balance-sheet date.
(i) Plantation
The Group has valued its biological assets on the basis of the discounted net present value of the cash flows arising in producing fresh
fruit bunches from oil palms, or latex from rubber trees. It values its biological assets on the basis of discounted cash flows covering
the assets expected 25-year economic life. Areas are included in the valuation once they are planted. The valuation assumes that
the concessions granted to exploit the land in which the biological assets are planted will be renewed when they expire. No account
is taken in the valuation of future re-planting. The Group estimates the future sales value of its crop production using a long-term
(20-year) average price. Costs associated with the planting and upkeep of the Group’s estates are considered to be revenue in nature
and appear as part of cost of sales.
NOTE2ACCOUNTING POLICIES CONTINUED
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007 ANNUAL REPORT 2007
45
(ii) Beef cattle
Cattle are recorded as assets at the year end at fair value less selling costs, taking into account the location of the cattle. The herd
comprises breeding and non-breeding cattle. The breeding cattle comprise females and bulls. The non-breeding cattle comprise
steers and heifers mainly between the age of 9 and 36 months that will be grown and sold on as either grain-fed or grass-fed cattle.
Bulls are included in the balance sheet at a directors’ valuation. All other cattle are valued at average weight multiplied by market
price per kilogram.
(iii) Crops
The Group recognises revenue on grain crops at fair value at the point of harvest. The cost of forage crops is released to the income
statement over the period during which they are consumed.
(iv) Deferred tax
Deferred tax is recognised at the relevant local rate on the difference between the cost of biological assets and their carrying value
determined under IAS 41.
(l) Perpetual leasehold land
The Group has taken advantage of the exemption under IFRS 1 to bring its Indonesian plantation leasehold land onto its 1 January 2006
IFRS balance sheet at fair value and to treat this valuation as its deemed cost. The Group does not depreciate Indonesian plantation land
held under renewable long-term leases.
(m) Non-current assets held for sale
The Group treats assets as held for sale once they are covered by an unconditional sale and purchase agreement with a completion date
within 12 months of the balance-sheet date.
(n) Pension
The Group operates a defined-contribution pension scheme. The pension charge represents the contributions payable by the Group
under the rules of the scheme. In Indonesia, as required by law, a lump sum is paid to employees on retirement or on leaving the Group’s
employment. This terminal benefit is accrued by the Group and charged in the income statement on the basis of the individuals’ service
at the balance-sheet date.
(o) Share-based payments
The Group issues equity-settled share-based payments to certain employees. Such share-based payments are measured at fair value
(excluding the effect of any non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the
equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares
that will eventually vest. Fair value is measured by use of the Black-Scholes model, based on management’s best estimates.
(p) Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet at fair value when the Group becomes a party
to the contractual provisions of the instrument.
AVAILABLE-FOR-SALE FINANCIAL ASSETS – the Group’s investments in unlisted shares (other than associated undertakings) are classified
as available-for-sale and stated at fair value, with gains and losses recognised directly in equity.
TRADE AND OTHER RECEIVABLES – these represent amounts due from customers in the normal course of business, are not interest bearing,
and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts, which are charged
to the income statement.
CASH AND CASH EQUIVALENTS – these include cash at hand and deposits held with banks with original maturities of three months or less.
BANK BORROWINGS – interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Finance
charges are accounted for on an accruals basis in the income statement using the effective interest-rate method.
TRADE AND OTHER PAYABLES – these are initially measured at fair value, and are subsequently measured at amortised cost, using the
effective interest-rate method.
EQUITY INSTRUMENTS – equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(q) Critical accounting judgements
The assumptions underlying the valuation of biological assets have a material influence on the results and net assets of the Group.
These are set out in note 14. In addition, as described above in note 2(g), the directors have concluded that leasehold land in Indonesia
should not be depreciated.
NOTE2ACCOUNTING POLICIES CONTINUED 46
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
2007
PRIMARY SEGMENT: PLANTATION CATTLE PROPERTY MANUFACTURING OTHER TOTAL
SECONDARY SEGMENT: INDONESIA MALAYSIA TOTAL AUSTRALIA MALAYSIA THAILAND
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Total revenue 19,417 4,989 24,406 1,284 — 2,332 45 28,067
Total gross profit/(loss) 2,577 2,929 5,506 (580) — 99 45 5,070
Continuing operations
Revenue 19,417 519 19,936 1,284 — 2,332 45 23,597
Gross profit before biological
bearer-asset adjustment 11,127 (59) 11,068 (580) — 99 45 10,632
Adjustment (8,550) — (8,550) —— — — (8,550)
Gross profit/(loss) 2,577 (59) 2,518 (580) — 99 45 2,082
Gain on biological assets 18,747
Foreign-exchange losses (1,434)
Other administrative expenses (5,152)
Group operating profit 14,243
Exceptional credit 3,641
Profit before interest 17,884
Net interest and financial income (457)
Group-controlled profit before tax 17,427
Taxation (7,113)
Group-controlled profit after tax 10,314
Share of associated companies’
profit after tax 14,900 — 14,900 2,840 12,872 — 30,612
Discontinued operations:
Revenue — 4,470 4,470 —— — 4,470
Gross profit — 2,988 2,988 —— — 2,988
Other income and expenses 2,716
5,704
Profit for the year 46,630
Minority interests (4,366)
42,264
Assets 96,915 34,702 131,617 33,300 1,542 2,816 169,275
Interests in associates 31,406 — 31,406 46,202 29,436 — 107,044
128,321 34,702 163,023 79,502 30,978 2,816 276,319
Unallocated assets 17,222
Consolidated total assets 293,541
Liabilities 20,196 8,032 28,228 22,199 323 135 50,885
Unallocated liabilities 7,297
Consolidated total liabilities 58,182
Other information
Capital additions 5,118 7 5,125 9,808 19 3 14,955
Depreciation and amortisation 1,607 114 1,721 249 71 41 2,082
NOTE 3 BUSINESS AND GEOGRAPHICAL SEGMENTS ANNUAL REPORT 2007
47
2006
PRIMARY SEGMENT: PLANTATION CATTLE PROPERTY MANUFACTURING OTHER TOTAL
SECONDARY SEGMENT: INDONESIA MALAYSIA TOTAL AUSTRALIA MALAYSIA THAILAND
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Total revenue 14,127 4,751 18,878 1,840 — 4,053 38 24,809
Total gross profit/(loss) 1,619 2,277 3,896 (731) — 200 38 3,403
Continuing operations
Revenue 14,127 367 14,494 1,840 — 4,053 38 20,425
Gross profit before biological
bearer-asset adjustment 6,883 (45) 6,838 (731) — 200 38 6,345
Adjustment (5,264) — (5,264) —— — — (5,264)
Gross profit/(loss) 1,619 (45) 1,574 (731) — 200 38 1,081
Gain on biological assets 3,410
Exchange gains 6,363
Other administrative expenses (4,324)
Group operating profit 6,530
Exceptional credit 1,558
Profit before interest 8,088
Net interest and financial income 123
Group-controlled profit before tax 8,211
Taxation (729)
Group-controlled profit after tax 7,482
Share of associated companies’
profit/(loss) after tax 2,347 65 2,412 (414) 7,955 —— 9,953
Discontinued operations:
Revenue — 4,470 4,470 —— — 4,470
Gross profit — 2,322 2,322 —— — 2,322
Other income and expenses 6,345
8,667
Profit for the year 26,102
Minority interests (801)
25,301
Assets 50,978 28,900 79,878 18,877 1,445 1,223 101,423
Interests in associates 24,484 3,025 27,509 38,716 18,017 — 84,242
75,462 31,925 107,387 57,593 19,462 1,223 185,665
Unallocated assets 43,851
Consolidated total assets 229,516
Liabilities 12,074 4,500 16,574 12,116 303 139 29,132
Unallocated liabilities 8,080
Consolidated total liabilities 37,212
Other information
Capital additions 1,089 2 1,091 12,042 86 16 13,235
Depreciation and amortisation 1,080 121 1,201 108 37 56 1,402
NOTE 3 BUSINESS AND GEOGRAPHICAL SEGMENTS CONTINUED 48
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
2007 2006
US$’000 US$’000
Employee costs during year
Wages and salaries 5,174 4,646
Social security costs 217 213
Past-service liabilities 233 388
Other pension costs 499 611
6,123 5,858
2007 2006
Number Number
Average number of persons employed
Estate manual 1,677 1,425
Staff 150 183
United Kingdom directors 6 6
1,833 1,614
Details of directors’ remuneration required by the Companies Act 1985 are shown within the report of the board to the shareholders
on directors’ remuneration on page 35 and form part of these audited financial statements.
NOTE 4 EMPLOYEES
2007 2006
US$’000 US$’000
Group profit/(loss) on sale of tangible fixed assets 33 (911)
Sale of fixed-asset investments — 5
Previously unrealised profit on sale of land to associated undertaking
released to the income statement on sale of that land to third party 3,855 2,514
Restructuring (247) (50)
Total net exceptional credit 3,641 1,558
There was no material impact on the tax charge resulting from the exceptional credit in either year.
NOTE 5 EXCEPTIONAL CREDIT
Interest receivable on bank deposits 1,100 548
Dividends from equity investment 206 339
1,306 887
NOTE 6 INVESTMENT REVENUE ANNUAL REPORT 2007
49
Profit on ordinary activities before taxation is stated after charging:
Depreciation of property, plant and equipment 2,082 1,402
Auditors’ remuneration - audit fee 518 381
The analysis of auditors’ remuneration is as follows:
Fees payable to the Company’s auditors and their associates for other services to the Group:
Audit of UK parent company 20 18
Audit of UK subsidiaries 204 236
IFRS transitional cost 90 —
Audit of overseas subsidiaries 204 127
518 381
NOTE 8 GROUP-CONTROLLED PROFIT BEFORE TAXATION
United Kingdom corporation tax charge for the year 4,868 755
Relief for overseas taxation (4,868) (755)
— —
Overseas taxation 5,187 2,111
Adjustments in respect of prior periods (20) (4)
Total current tax 5,167 2,107
Deferred taxation - origination and reversal of timing differences 1,946 (1,378)
7,113 729
The standard rate of tax for the year, based on the United Kingdom standard rate of corporation tax, is 30% (2006 - 30%). This was also
the standard rate of Indonesian tax for the current and previous years. The actual tax charge is higher (2006 lower) than the standard rate
for the reasons set out in the following reconciliation.
NOTE 9 TAX CHARGE ON PROFIT ON ORDINARY ACTIVITIES
2007 2006
US$’000 US$’000
Interest payable on bank loans and overdrafts 1,763 764
NOTE 7 FINANCE COSTS 50
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
2007 2006
US$’000 US$’000
Profit on ordinary activities before tax 17,427 8,211
Tax on profit on ordinary activities at standard rate 5,228 2,463
Factors affecting the charge for the year
Expenses not deductible for tax purposes 203 158
Unrelieved losses 1,825 1,032
Utilisation of losses brought forward (41) (453)
Exchange differences 616 (850)
Differences on overseas dividends 565 127
Lower rate applicable to disposals of tangible fixed assets (1,157) (1,694)
Other differences (126) (54)
Total actual amount of tax 7,113 729
In addition to the above, the Group incurred tax charges on discontinued operations as set out in note 10. 
NOTE 9 TAX CHARGE ON PROFIT ON ORDINARY ACTIVITIES CONTINUED
The sale of land, planting and buildings on Perhentian Tinggi and Sungei Kruit Estates was agreed during 2007. At the balance-sheet date
these sales were expected to complete during 2008 and so they have been treated as discontinued operations, with those assets covered
by the sales contracts treated as assets held for sale. (See also note 30.)
2007 2006
US$’000 US$’000 US$’000 US$’000
Revenue 4,470 4,384
Other income and expenses 280 (1,290)
Profit before tax 4,750 3,094
Attributable tax expense (969) (558)
3,781 2,536
Gain on asset disposals by discontinued operations 2,062 7,523
Attributable tax expense (139) (1,392)
1,923 6,131
5,704 8,667
The effect of discontinued operations on segment results is shown in note 3. The following assets on the two estates in question were
classified as held for sale at the balance-sheet date:
Freehold land 1,542 —
Leasehold land, non depreciable 14,205 —
Biological assets 7,694 —
Buildings 115 —
Plant, equipment, vehicles 60 —
23,616 —
Deferred tax liability (2,308) —
21,308 —
During the year discontinued operations contributed US$1.9 million to the Group’s net operating cash flows, received US$4.9 million
in respect of investing activities and made no payment in respect of financing activities.
NOTE 10 DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE ANNUAL REPORT 2007
51
2007 2006
US$’000 US$’000
2007 interim dividend - 2.00p per 10p share (2006 interim dividend - 2.00p) 2,067 1,982
2006 final dividend - 4.50p per 10p share (2005 final dividend - 4.25p) 4,588 3,864
6,655 5,846
Following the year end the board has proposed a final dividend for 2007 of 5.00p per 10p share. If confirmed at the annual general
meeting, it will be paid on or after 18 June 2008 to those shareholders on the register at the close of business on 16 May 2008.
NOTE 11 DIVIDENDS PAID AND PROPOSED
The calculation of earnings per 10p share is based on:
2007 2007 2006 2006
NUMBER OF NUMBER OF
US$’000 SHARES US$’000 SHARES
Profit for the year
Continuing operations 36,560 16,634
Discontinued operations 5,704 8,667
Continuing and disontinued operations 42,264 25,301
Average number of shares in issue 51,341,761 50,852,202
Diluted average number of shares in issue * 53,118,232 52,925,754
* The difference between the number of shares in issue and the diluted number of shares is due solely to the presence of unexercised
share options held by directors and key employees of the Group.
NOTE12BASIC AND DILUTED EARNINGS PER SHARE
2007 2006
US$’000 US$’000
At 1 January 902 502
Additions 106 400
At 31 December 1,008 902
The directors have tested goodwill for impairment, concluding that the carrying amounts are recoverable. The goodwill has arisen
in respect of the Group’s new projects in Indonesia on Bangka Island and in Kalimantan. Given the size of the goodwill balance,
the directors do not consider it necessary to provide detailed disclosures regarding the impairment review.
NOTE 13 GOODWILL 52
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
The Group values its plantation assets using a discounted cash flow over the expected 25-year economic life of the asset. The discount rate
used in this valuation is 14%. The price of the crop (fresh fruit bunches) is taken to be a 20-year average based on actual selling prices or,
where the plantation has its own mill, an inference based on the widely-quoted commodity price for crude palm oil delivered c.i.f. Rotterdam.
The directors have concluded that using a 20-year average provides their best estimate of the prices to be achieved over the valuation period.
The long-term average price and exchange rates used in determining the valuations based on cash flows were as follows:
31 DECEMBER 31 DECEMBER
2007 2006
Price of crude palm oil (US$/t, cif Rotterdam) 455 433
Exchange rate (Rupiah per US dollar) 9,419 8,994
For palm oil, changes in the price assumption have a more than proportionate impact on the valuation of oil palm plantings.
2007 2006
PLANTATION PLANTATION
US$’000 US$’000
Non-current assets
Gain in fair value – initial recognition 6,088 5,512
Gain/(loss) in fair value – current period 13,212 (2,697)
Total gain in fair value * 19,300 2,815
Decreases due to disposal and reclassification (7,764) (10,974)
Change in carrying value of biological assets 11,536 (8,159)
Brought forward 1 January 43,017 51,176
Carried forward 31 December 54,553 43,017
* Included in the total gain in fair value US$18,747,000 (2006 US$3,410,000) relates to continuing operations.
MATURE IMMATURE TOTAL MATURE IMMATURE TOTAL
Oil palm
Planted area (hectares)
Subsidiary undertakings 7,544 37,710 45,254 9,571 3,769 13,340
Associated companies (Group share) 6,098 887 6,985 6,023 854 6,877
13,642 38,597 52,239 15,594 4,623 20,217
Production (tonnes) (f.f.b.) 162,559 190,208
Fair value of production (US$’000) 11,783 13,124
The only restrictions over biological assets are described in note 2(k) (i). The Group’s financial risk management strategy for agricultural
activity is described in the review of operations on pages 8 to 25.
Within the Group income statement and balance sheet additional, non-statutory, columns have been inserted to show the impact of
the recognition of the valuation of biological bearer assets. The biological bearer-asset adjustment column shows the impact of recording
the valuation of the Group’s biological bearer assets, as well as its share of the equivalent asset recognised by associates and the related
deferred taxation.
In the balance sheet the adjustment column shows that the recognition of the biological asset valuation replaces the planting costs
of US$17,443,000 (2006 US$9,312,000) which were previously included in the carrying value of property, plant and equipment.
These costs are now replaced by the biological bearer-asset adjustment which, including the Group’s share of the asset recognised
by associates together with the related deferred tax, amounts to US$68,588,000 (2006 US$46,954,000).
NOTE 14 BIOLOGICAL ASSETS ANNUAL REPORT 2007
53
PLANTING
LEASEHOLD LEASEHOLD PLANT,
LAND NON- LAND EQUIPMENT CONSTRUCTION
FREEHOLD LAND DEPRECIABLE DEPRECIABLE BUILDINGS AND VEHICLES IN PROGRESS TOTAL
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Cost or valuation
At 1 January 2007 16,965 20,845 — 14,248 5,704 4,510 62,272
Transfers from work in progress — 2,757 ——— (2,757) —
Additions 7,668 2,876 — 1,638 2,773 — 14,955
Exchange differences 1,798 356 — 381 314 — 2,849
Reclassified as held for sale
(see Note 10) (1,542) (14,205) — (590) (537) — (16,874)
Disposals — (827) —— (39) (1,658) (2,524)
At 31 December 2007 24,889 11,802 — 15,677 8,215 95 60,678
Accumulated depreciation
At 1 January 2007 ——— 3,546 3,511 — 7,057
Charge for the year ——— 1,240 842 — 2,082
Exchange differences ——— 54 73 — 127
Reclassified as held for sale
(see Note 10) ——— (475) (477) — (952)
Disposals ——— (264) (15) — (279)
At 31 December 2007 ——— 4,101 3,934 — 8,035
Net book value
At 31 December 2007 24,889 11,802 — 11,576 4,281 95 52,643
At 1 January 2006 5,706 32,058 379 13,087 5,368 4,006 60,604
Additions 10,835 —— 879 1,017 504 13,235
Exchange differences 424 222 — 1,263 532 — 2,441
Disposals — (11,435) (379) (981) (1,213) — (14,008)
At 31 December 2006 16,965 20,845 — 14,248 5,704 4,510 62,272
Accumulated depreciation
At 1 January 2006 —— 158 3,065 3,705 — 6,928
Charge for the year ——— 903 499 — 1,402
Exchange differences ——— 242 340 — 582
Disposals —— (158) (664) (1,033) — (1,855)
At 31 December 2006 ——— 3,546 3,511 — 7,057
Net book value
At 31 December 2006 16,965 20,845 — 10,702 2,193 4,510 55,215
NOTE 15 PROPERTY, PLANT AND EQUIPMENT 54
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
2007 2006
US$’000 US$’000
Investments in associated undertakings 107,044 84,242
Other investments 3,101 155
110,145 84,397
Details of the principal subsidiary and associated undertakings are given on page 75.
(a) Associated undertakings SHARE OF
NET ASSETS
UNLISTED
US$’000
Share of net assets
At 1 January 2007 84,062
Exchange differences 7,126
Purchases 999
Transfer to other investments
1
(2,936)
Share of reserves (2,038)
Profit for the year 30,612
Net dividends received from associated undertakings (11,396)
At 31 December 2007 106,429
Positive goodwill
At 1 January 2007 180
Additions 435
At 31 December 2007 615
Net book value
At 31 December 2007 107,044
At 31 December 2006 84,242
2007 2006
US$’000 US$’000
At valuation
Unlisted (directors’ valuation) 140,000 113,000
NOTE 16 NON-CURRENT INVESTMENTS ANNUAL REPORT 2007
55
The Group’s aggregate share of the summarised results of its associated undertakings is shown below:
THE NORTH
AUSTRALIAN
PASTORAL BERTAM KENNEDY, ASIA GREEN
PT AGRO PT KERASAAN COMPANY PROPERTIES BURKILL & CO ENVIRONMENTAL
MUKO INDONESIA PTY LIMITED SDN. BHD. BHD. SDN. BHD TOTAL
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
2007
Revenue 15,465 2,961 11,953 17,753 —— 48,132
Profit after tax 12,456 2,444 2,840 12,872 —— 30,612
Assets 29,656 5,562 80,520 37,035 —— 152,773
Liabilities (3,240) (572) (34,318) (7,599) —— (45,729)
Net assets 26,416 4,990 46,202 29,436 —— 107,044
2006
Revenue 10,722 1,820 10,785 9,452 272 806 33,857
Profit/(loss) after tax 1,529 818 (414) 7,955 203 (138) 9,953
Assets 25,563 6,143 57,964 26,353 2,673 1,123 119,819
Liabilities (5,703) (1,697) (19,071) (8,336) (25) (745) (35,577)
Net assets 19,860 4,446 38,893 18,017 2,648 378 84,242
(b) Other investments (unlisted) 2007 2006
US$’000 US$’000
At 1 January 155 148
Exchange differences 10 13
Disposals — (6)
Transfer from associated undertakings
1
2,936 —
At 31 December
2
3,101 155
1
As referred to in the review of operations on page 25, the Group ceased to recognise Kennedy, Burkill & Company Berhad
and Asia Green Environmental Sdn. Berhad as associated companies with effect from 1 January 2007.
2
The directors have reviewed the fair values of the Group’s available for sale investments and concluded that there has been
no increase in valuation during the year.
NOTE 16 NON-CURRENT INVESTMENTS CONTINUED 56
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
2007 2006
LIVESTOCK CROPS TOTAL LIVESTOCK CROPS TOTAL
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
Gain in fair value; initial recognition — 1,057 1,057 ———
Increase due to purchases 1,636 — 1,636 1,013 — 1,013
Decreases due to disposal and reclassification (767) — (767) (1,551) — (1,551)
Net exchange differences 99 — 99 93 — 93
Change in carrying value of biological assets 968 1,057 2,025 (445) — (445)
At 1 January 868 — 868 1,313 — 1,313
At 31 December 1,836 1,057 2,893 868 — 868
Livestock
Head sold (number)
Subsidiary undertakings 1,266 2,659
Cattle revenue (US$’000)
Subsidiary undertakings 988 1,370
Grain crops
Crops harvested (tonnes)
Subsidiary undertakings 935 —
Crop revenue (US$’000)
Subsidiary undertakings 296 —
NOTE 17 CURRENT BIOLOGICAL ASSETS
2007 2006
US$’000 US$’000
Processed produce for sale 3,118 964
Estate stores 1,768 561
Nurseries 4,636 1,708
9,522 3,233
NOTE 18 INVENTORIES ANNUAL REPORT 2007
57
2007 2006
US$’000 US$’000
Amount falling due within one year
Trade receivables 1,416 809
Amounts owed by associated undertakings 3 12
Other receivables 3,284 3,912
Prepayments and accrued income 553 2,960
5,256 7,693
Cash and cash equivalents 31,765 33,114
Trade and other receivables are shown net of any allowance for bad and doubtful debts.
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months
or less. The carrying value of these assets approximates their fair value.
NOTE 19 TRADE AND OTHER RECEIVABLES,
AND CASH AND CASH EQUIVALENTS
Trade payables 4,050 1,187
Amounts owed to associated undertakings 163 138
Other payables 9,126 5,563
13,339 6,888
NOTE 20 TRADE AND OTHER PAYABLES
Secured borrowing
Bank overdrafts 24,391 14,602
Bank loans 2,003 1,003
26,394 15,605
Total borrowings
Amount due for settlement within 12 months 24,391 15,605
Amount due for settlement after 12 months 2,003 —
The secured borrowings on bank overdraft are treasury bills which are payable within one year but can be rolled over within the limits
of the facility.
NOTE 21 BORROWINGS Analysis of borrowings by currency:
AUSTRALIAN
DOLLARS US DOLLARS TOTAL
AS$’000 US$’000 US$’000
31 December 2007
Bank overdrafts 24,391 — 24,391
Bank loans — 2,003 2,003
24,391 2,003 26,394
31 December 2006
Bank overdrafts 14,602 — 14,602
Bank loans — 1,003 1,003
14,602 1,003 15,605
The other principal features of the Group’s borrowings are as follows:
(i) Bank overdrafts are repayable on demand. Overdrafts of US$24 million (2006 US$13 million) have been secured by a charge over
certain Group assets.
(ii) The Group has one outstanding bank loan:
(a) Deutsche Investitions- und Entwicklungsgesellschaft (“DEG”), secured on the assets of the subsidiary developing the Group’s
project on Bangka Island
2007 2006
US$’000 US$’000
In five years 2,003 —
(b) A bank loan was taken out in Indonesia by the 80% subsidiary, PT Pangkatan Indonesia, to finance the development of a new
mill which is now operational. The loan was secured against the assets of the aforementioned subsidiary and of PT Bilah Plantindo,
and is now fully repaid.
Within one year — 1,003
Undrawn borrowing facilities
At 31 December 2007, the Group had available US$17.8 million (2006 US$19.8 million) of undrawn committed borrowing facilities
in respect of which all conditions precedent had been met in addition to an undrawn overdraft facility of A$500,000 (2006 A$500,000).
The weighed average interest rates paid during the year were as follows:
2007 2006
% %
Bank overdrafts 9.60 9.10
Bank loans 6.70 6.90
NOTE 21 BORROWINGS CONTINUED
58
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007 ANNUAL REPORT 2007
59
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current
and prior reporting period:
ACCELERATED
TAX REVALUATION BIOLOGICAL PAST-SERVICE OTHER TIMING
DEPRECIATION OF LAND ASSETS LIABILITIES DIFFERENCES TOTAL
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
At 1 January 2007 300 3,220 10,113 (464) (658) 12,511
Charge/(credit) to income 226 — 3,328 20 (1,628) 1,946
Exchange differences (44) —— 29 (102) (117)
Transfer relating to assets held for sale —— (2,308) —— (2,308)
At 31 December 2007 482 3,220 11,133 (415) (2,388) 12,032
Certain deferred tax assets and liabilities have been offset.  The following is the analysis of the deferred tax balances (after offset)
for financial reporting purposes:
2007 2006
US$’000 US$’000
Deferred tax liabilities 13,042 12,843
Deferred tax assets (1,010) (332)
12,032 12,511
At the balance-sheet date, the Group had unused tax losses of US$20,455,000 (2006 US$14,535,000) available for offset against future
profits. A deferred tax asset has been recognised in respect of US$8,371,000 (2006 US$3,040,000) of such losses. No deferred tax asset
has been recognised in respect of the remaining US$12,084,000 (2006 US$11,495,000) due to the unpredictability of future profit streams.
These losses may be carried forward indefinitely.
At the balance-sheet date, the aggregate amount of temporary differences associated with undistributed earnings of subsidiaries for
which deferred tax liabilities have not been recognised was US$126,250,000 (2006 US$113,325,000). No liability has been recognised
in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences and
it is probable that such differences will not reverse in the foreseeable future.
At the balance sheet date, the aggregate amount of temporary differences associated with undistributed earnings of associates for which
deferred tax liabilities have not been recognised was US$39,019,000 (2006 US$29,486,000). No liability has been recognised in respect
of these differences because either the Group is in a position to control the timing of the reversal of the temporary differences or such
a reversal would not give rise to an additional tax liability.
At the balance sheet date, the aggregate amount of temporary differences associated with outstanding executive share options for which
deferred tax assets have not been recognised was US$14,669,000 (2006 US$13,036,000). No asset has been recognised in respect of
these differences due to the unpredictability of future profit streams.
NOTE 22 DEFERRED TAX 60
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
The Group’s only long-term provision relates to an unfunded, non-contributory, post-employment benefit scheme in Indonesia.
A lump sum is paid to employees on retirement or on leaving the Group’s employment. This terminal benefit is accrued by the
Group and charged in the income statement on the basis of individuals’ service at the balance-sheet date. Retirement is assumed
at the earlier age of 55 or 30 years’ service. No allowance is made for mortality or internal promotion.
The main assumptions used to assess the Group’s liability are:
2007 2006
% %
Discount rate 10.00 10.00
Salary increase per annum 7.5 7.5
US$’000 US$’000
Reconciliation of scheme liabilities:
Current service cost 156 99
Interest cost 162 178
Actuarial gains and losses (40) 136
Less: Benefits paid out (380) (228)
Movement in the year (102) 185
At 1 January 1,542 1,237
Exchange differences (65) 120
At 31 December 1,375 1,542
NOTE 23 LONG-TERM PROVISIONS ANNUAL REPORT 2007
61
ALLOTTED, ALLOTTED,
FULLY PAID FULLY PAID
AUTHORISED AND VOTING AUTHORISED AND VOTING
NUMBER NUMBER £’000 US$’000
Shares of 10p each
At 1 January 2007 87,000,000 50,961,432 8,700 8,582
Issued during the year — 729,326 — 146
At 31 December 2007 87,000,000 51,690,758 8,700 8,728
At 1 January 2006 87,000,000 50,776,153 8,700 8,548
Issued during the year — 185,279 — 34
At 31 December 2006 87,000,000 50,961,432 8,700 8,582
During the year, 729,326 (2006 – 185,279) 10p shares were issued as a result of the exercise of share options. Total cash proceeds
received by the Company were US$1,095,000 (2006 US$279,000).
Under the Company’s share-option scheme, directors and employees held options at 31 December 2007 as follows:
NUMBER OF OPTION PRICE OPTIONS
SHARES PER SHARE PERIOD
PENCE ENDING
Granted:
17 July 2001 121,765 75.50 17 July 2011
1 May 2002 400,000 96.50 1 May 2012
2 May 2003 475,000 126.50 2 May 2013
2 February 2005 717,200 85.05 17 July 2011
2 February 2005 425,838 101.78 1 May 2012
2 February 2005 340,670 138.04 2 May 2013
2 February 2005 67,238 158.95 4 May 2014
16 November 2007 75,000 385.00 16 Nov 2017
At 31 December 2007 2,622,711
The details of the directors’ share options are set out in the report of the board to the shareholders on directors’ remuneration on page 36.
NOTE 24 CALLED-UP SHARE CAPITAL 62
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
SHARE CAPITAL SHARE OF FOREIGN
PREMIUM REVALUATION REDEMPTION MERGER OTHER ASSOCIATES’ EXCHANGE RETAINED
ACCOUNT RESERVE RESERVE RESERVE RESERVES RESERVES RESERVE TOTAL EARNINGS
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
At 1 January 2007 17,403 16,184 3,896 (7,620) 492 36,616 (226) 66,745 108,368
Exchange differences — 1,002 ——— 6,255 86 7,343 1,294
Issue of shares 949 —————— 949 —
Share-based payments ———— (9) —— (9) 20
Disposal of subsidiaries — 7,092 — 8,676 ——— 15,768 (15,768)
Released to income
statement — (7,304) ————— (7,304) 3,449
Unrealised share of
movements in associated
undertakings’ reserves ————— (1,780) — (1,780) —
Dividends from
associated undertakings ————— (11,396) — (11,396) 11,396
Transfer to other
investments ————— (923) — (923) 923
Write-off of negative
goodwill ————— (1,947) — (1,947) 1,947
Profit for the year ————— 30,612 — 30,612 11,652
Dividend paid (see note 11) ——————— — (6,655)
At 31 December 2007 18,352 16,974 3,896 1,056 483 57,437 (140) 98,058 116,626
At 1 January 2006 17,158 32,145 3,896 (7,646) 423 31,705 — 77,681 74,819
Exchange differences — (229) ——— (907) (226) (1,362) 5
Issue of shares 245 —————— 245 —
Share-based payments ———— 69 —— 69 —
Disposal of subsidiaries — 235 — 26 ——— 261 (261)
Released to income
statement — (15,967) ————— (15,967) 13,453
Unrealised share of
movements in associated
undertakings’ reserves ————— 4,000 — 4,000 —
Dividends from
associated undertakings ————— (8,135) — (8,135) 8,135
Sale of own shares
by subsidiary
* ——————— — 2,715
Profit for the year ————— 9,953 — 9,953 15,348
Dividend paid (see note 11) ——————— — (5,846)
At 31 December 2006 17,403 16,184 3,896 (7,620) 492 36,616 (226) 66,745 108,368
* During 2006 a subsidiary sold its investment in the shares of M. P. Evans Group PLC. The Group’s share of the gain arising
was US$2,715,000.
NOTE 25 RESERVES ANNUAL REPORT 2007
63
2007 2006
NOTE US$’000 US$’000
Opening balanace 1 January 8,609 7,430
Share of profit in the year 4,366 801
Dividends paid (498) (10)
Sale of subsidiary (794) —
Acquisition of subsidiary 264 388
Closing balance 31 December 11,947 8,609
NOTE 26 MINORITY INTEREST
Operating profit –  continuing operations 14,243 6,530
–  discontinued operations 4,406 3,010
Biological gain 14, 17 (21,325) (2,970)
Depreciation of property, plant and equipment 15 2,082 1,402
Past service liabilities 23 (102) 185
Share-based payments 11 69
Operating cash flows before movements in working capital (485) 8,226
Increase in inventories (6,187) (4,280)
Decrease/(increase) in receivables 2,492 (5,266)
Increase in payables 6,413 (1,739)
Cash generated from operating activities 2,233 (3,059)
Income tax paid (5,320) (5,411)
Interest paid (1,763) (764)
Net cash from operating activities (4,850) (9,234)
NOTE 27 NOTE TO THE CONSOLIDATED CASH-FLOW STATEMENT
Capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the
return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt,
which includes the borrowings disclosed in note 21, cash and cash equivalents and equity attributable to equity holders of the parent,
comprising issued capital, reserves and retained earnings. The Group is not subject to any externally imposed capital requirements.
The Group’s board continues to monitor the capital structure based on the funding requirements of the Group. At the balance-sheet
date the Group had net funds of US$5,371,000 (2006 US$17,509,000) being the net of cash and cash equivalents as shown in note 19
and borrowing as shown in note 21, and equity attributable to equity holders of the parent of US$223,412,000 (2006 US$183,695,000).
The Board intends to fund the planned Indonesian expansion by a combination of the disposal of its remaining Malaysian interests
and by securing additional borrowings.
Categories of financial instruments
All of the Group’s financial assets are classified as loans and receivables, with the exception of its other investments shown in note 16
which are classified as available-for-sale financial assets. All of the Group’s financial liabilities are measured at amortised cost.
In the opinion of the directors, there was no significant difference between the carrying values and estimated fair values of the Group’s
primary financial assets and liabilities at either the current, or preceding, financial year end.
NOTE 28 FINANCIAL INSTRUMENTS 64
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
Financial risk management objectives
The main risks arising from the Group’s financial instruments are foreign-currency risk, interest-rate risk, credit risk and liquidity risk.
The board reviews and agrees the policies for managing these risks. The policies and the impact of these risks on the Group’s balance
sheet at the end of the financial year are summarised below.
Foreign-currency risk
The majority of the Group’s operations are undertaken in Indonesia, Australia and Malaysia. The Group does not have transactional
currency exposures arising from sales or purchases by an operating unit but the Group’s balance sheet can be significantly affected
by movements in exchange rates. Whilst the Group’s trading takes place in local currencies in South East Asia, commodity prices
are determined by a world market which reduces the Group’s currency risk. The Group has no hedging policy and does not make
use of forward-currency contracts.
The currency profile of the Group’s monetary assets, excluding trade and other receivables, are as follows:
2007 2006
US$’000 US$’000
US Dollar 19,609 17,174
Sterling 2,637 6,459
Indonesian Rupiah 720 931
Malaysian Ringgit 7,671 8,215
Australian Dollar 858 140
Thai Baht 270 195
31,765 33,114
The currency profile of the Group’s monetary liabilities, excluding trade and other payables, is shown in note 21.
The Group is exposed to changes in foreign-currency exchange rates, both in relation to the impact of movements on its non-US Dollar
monetary assets and also in relation to the consolidation of its non-US Dollar functional subsidiary and associated undertakings.
The most significant sensitivities arise within movements in the Australian Dollar and Malaysian Ringgit. Management estimate that
a 10% strengthening of the US Dollar against these currencies would have the following impact on the profit and net assets:
Australian Dollar
Profit for the year (53) 158
Net assets (4,701) (4,129)
Malaysian Ringgit
Profit for the year (1,297) (1,235)
Net assets (7,187) (5,744)
Interest-rate risk
In order to optimise the income received on its cash deposits the Group continuously reviews the terms of these deposits to take
advantage of the best market rates. UK funds are passed through a broker with banks who have a credit rating of at least AA.
The Group’s only financial liabilities other than short-term trade and other payables are the borrowings referred to in note 21.
The overdraft is denominated in Australian Dollars and interest is charged at a variable rate linked to the Australian base rate.
The loan is denominated in US Dollars and interest is charged at a floating rate linked to US Dollar LIBOR.
The Group’s net position means it is not materially exposed to changes in interest rates on its floating-rate financial assets and liabilities.
Credit risk
The Group’s credit risk on cash deposits is described above. Regarding trade receivables, the Group performs a credit evaluation before
extending credit to customers. The Group does not have any significant concentrations of credit risk (defined by management as more
than 5% of gross monetary assets), other than in relation to bank deposits which management seeks to mitigate through the use of banks
with high credit ratings. Management determines concentrations based on individual counterparties.
The Group’s maximum exposure to credit risk is represented by the carrying amount of financial assets in the financial statements.
NOTE 28 FINANCIAL INSTRUMENTS CONTINUED ANNUAL REPORT 2007
65
Remuneration of key management personnel
The remuneration of the directors, who are the key management personnel of the Group, is set out in the report of the board to the
shareholders on directors’ remuneration on pages 34 to 36. The directors’ participation in the executive share-option scheme is disclosed
on page 36. Apart from this, no director had an interest in any transaction with the Group at any time during the year.
During the year, the Group undertook the following transactions with related parties:
2007 2006
US$’000 US$’000
Sale of livestock to The North Australian Pastoral Company Pty Limited — 565
NOTE 29 RELATED-PARTY TRANSACTIONS
Sale of properties
The Group completed the sale of its shares in Straits Beach Properties Sdn. Bhd. on 8 February 2008 which, together with a repayment of a loan
provided by the Group, gave rise to a receipt of Ringgit 4.6 million (approximately US$1.46 million). On 25 January and 27 March 2008
the sales were completed of the remaining 826 hectares of Perhentian Tinggi Estate for a combined sum of Ringgit 74.24 million.
NOTE 30 SIGNIFICANT POST-BALANCE-SHEET EVENTS
In March 2002, the Group’s 80% subsidiary, PT Pangkatan Indonesia (“Pg”) entered into a sale and purchase agreement with
DR H Rahmat Shah to acquire from him 80% of PT Sembada Sennah Maju, the company owning Sennah Estate. On 9 September 2003,
DR H Rahmat Shah initiated a lawsuit in Indonesia seeking to overturn this agreement. On 12 May 2004, the District Court of Medan
found in his favour but Pg immediately appealed against the implementation of the District Court’s decision. The appeal was successful
and, at the same time, Pg appealed to the Medan High Court to have the District Court’s decision overturned. This appeal was successful.
DR H Rahmat Shah appealed to the Supreme Court to have the Medan High Court decision overturned. As announced on 14 August
2007, this appeal was unsuccessful. Against expectations, DR Shah has filed an application to the Supreme Court for a judicial review.
Given the volume of cases before the Supreme Court, it may be some time before this review will be carried out.
NOTE 31 CONTINGENT LIABILITY
The reconciliations between previously-reported results prepared under UK-GAAP and as re-stated under IFRS follow on pages 66 to 69.
The results and financial position as previously reported have been reclassified to follow an IFRS presentation.
NOTE32TRANSITION FROM UK-GAAP TO IFRS 
Liquidity risk
The Group manages liquidity risk by maintaining adequate cash reserves and banking facilities through active monitoring of the Group’s
forecast and actual cash flows. The Group has undrawn borrowing facilities as described in note 21.
All of the Group’s monetary financial assets and liabilities have a maturity profile of less than one year with the exception of the Group’s
bank loans. Certain of the Group’s short-term borrowings are made under longer-term facility agreements. The maturity profile for those
financial liabilities is shown in note 21.
NOTE 28 FINANCIAL INSTRUMENTS CONTINUED Consolidated income statement
31 DECEMBER 2006
31 DECEMBER
2006 31 DECEMBER 31 DECEMBER
AS PREVIOUSLY 2006 CHANGE DUE 2006
REPORTED AS TRANSLATED TO IFRS UNDER IFRS
NOTE £’000 US$’000 US$’000 US$’000
Continuing operations (b)
Revenue 11,100 20,425 — 20,425
Cost of sales (c,i) (7,617) (14,016) (5,328) (19,344)
Gross profit 3,483 6,409 (5,328) 1,081
Gain on biological assets (c) — — 3,410 3,410
Foreign-exchange (losses)/gains (b) (1,435) (2,640) 9,003 6,363
Other administrative expenses (g) (1,364) (2,510) (1,814) (4,324)
Group operating profit 684 1,259 5,271 6,530
Exceptional credit/(charge) (d) 1,660 2,859 (1,301) 1,558
Profit on ordinary activities before interest and tax 2,344 4,118 3,970 8,088
Investment revenue 376 887 — 887
Interest payable (415) (764) — (764)
Group-controlled profit before tax 2,305 4,241 3,970 8,211
Tax charge on profit on ordinary activities (e,f) (2,183) (4,017) 3,288 (729)
Group-controlled profit after tax 122 224 7,258 7,482
Share of associated companies’ profit after tax (e) 8,129 14,958 (5,005) 9,953
Profit after tax and before discontinued operations 17,435
Discontinued operations (b,d) 8,365 15,392 (6,725) 8,667
Profit for the year 16,616 30,574 (4,472) 26,102
Attributable to:
Equity holders of M.P. Evans Group PLC 16,086 29,599 (4,298) 25,301
Minority interests 530 975 (174) 801
16,616 30,574 (4,472) 26,102
Basic earnings per 10p share
Continuing operations (b) — 32.71c
Continuing and discontinued operations 31.63p 49.75c
Diluted earnings per 10p share
Continuing operations (b) — 31.42c
Continuing and discontinued operations 30.39p 47.80c
66 ANNUAL REPORT 2007
Consolidated balance sheet
31 DECEMBER 2006
31 DECEMBER
2006 31 DECEMBER 31 DECEMBER
AS PREVIOUSLY 2006 CHANGE DUE 2006
REPORTED AS TRANSLATED TO IFRS UNDER IFRS
NOTE £’000 US$’000 US$’000 US$’000
Non-current assets
Intangible assets – goodwill (g) (327) (641) 1,543 902
Biological assets (c) — — 43,017 43,017
Property, plant and equipment (c,h) 39,629 77,673 (22,458) 55,215
Investments (c,g) 33,964 66,570 17,827 84,397
Deferred tax asset 396 776 (444) 332
73,662 144,378 39,485 183,863
Current assets
Biological assets — — 868 868
Inventories 2,092 4,101 (868) 3,233
Trade and other receivables 3,954 7,693 — 7,693
Current tax asset 380 745 — 745
Investments 5,871 11,507 (11,507) —
Cash and cash equivalents 11,024 21,607 11,507 33,114
23,321 45,653 — 45,653
Total assets 96,983 190,031 39,485 229,516
Current liabilities
Bank loans and overdrafts 7,962 15,605 — 15,605
Trade and other payables 3,514 6,888 — 6,888
Current tax liability 170 334 334
11,646 22,827 — 22,827
Non-current liabilities (f,i)
Deferred tax liability — — 12,843 12,843
Long-term provisions 788 1,542 — 1,542
788 1,542 12,843 14,385
Total liabilities 12,434 24,369 12,843 37,212
Net assets 84,549 165,662 26,642 192,304
Equity (a)
Called-up share capital 5,096 9,988 (1,406) 8,582
Share premium account 10,447 20,477 (3,074) 17,403
Revaluation reserve 12,067 23,652 (7,468) 16,184
Capital redemption reserve 2,139 4,191 (295) 3,896
Merger reserve (4,037) (7,914) 294 (7,620)
Other reserve 269 527 (35) 492
Share of associated companies’ reserves (c) 6,623 12,981 23,635 36,616
Foreign exchange reserve — — (226) (226)
Profit and loss account (b) 47,727 93,546 14,822 108,368
Equity attributable to members of M. P. Evans Group PLC 80,331 157,448 26,247 183,695
Minority interest 4,218 8,214 395 8,609
Total equity 84,549 165,662 26,642 192,304
67 Consolidated balance sheet
1 JANUARY 2006
31 DECEMBER
2005 31 DECEMBER 1 JANUARY
AS PREVIOUSLY 2005 CHANGE DUE 2006
REPORTED AS TRANSLATED TO IFRS UNDER IFRS
NOTE £’000 US$’000 US$’000 US$’000
Non-current assets
Intangible assets - goodwill (g) (597) (1,027) 1,529 502
Biological assets (c) — — 51,176 51,176
Property, plant and equipment (c,h) 40,500 69,672 (15,993) 53,679
Investments (c,g) 31,789 54,684 21,412 76,096
Deferred tax asset — — 88 88
71,692 123,329 58,212 181,541
Current assets
Inventories 1,622 2,790 — 2,790
Trade and other receivables 2,721 4,681 — 4,681
Current tax asset 795 1,368 — 1,368
Investments 2,790 4,800 (4,800) —
Cash and cash equivalents 3,006 5,172 4,800 9,972
10,934 18,811 — 18,811
Total assets 82,626 142,140 58,212 200,352
Current liabilities
Bank loans and overdrafts 2,755 4,739 — 4,739
Trade and other payables 4,097 7,050 — 7,050
Current tax liability 170 292 — 292
7,022 12,081 — 12,081
Non-current liabilities
Bank loans and overdrafts 536 923 — 923
Deferred tax liabilities 58 100 17,528 17,628
Long-term provisions (f,i) 721 1,241 — 1,241
1,315 2,264 17,528 19,792
Total liabilities 8,337 14,345 17,528 31,873
Net assets 74,289 127,795 40,684 168,479
Equity
Called-up share capital 5,078 8,735 (187) 8,548
Share premium account 10,317 17,748 (590) 17,158
Revaluation reserve 20,372 35,045 (2,900) 32,145
Capital redemption reserve 2,139 3,679 219 3,898
Merger reserve (4,099) (7,052) (594) (7,646)
Other reserve 231 397 25 422
Share of associated companies’ reserves (c) 5,093 8,761 22,944 31,705
Profit and loss account 31,839 54,772 20,047 74,819
Equity attributable to members of M. P. Evans Group PLC 70,970 122,085 38,964 161,049
Minority interest 3,319 5,710 1,720 7,430
Total equity 74,289 127,795 40,684 168,479
68 69
ANNUAL REPORT 2007
Notes
to the
consolidated
accounts
FOR THE YEAR
ENDED
31 DECEMBER
2007
(a) Functional currency
In recognising the US Dollar as the functional currency for a number of Group companies, the individual companies had to
reconstruct their fixed-asset registers bringing assets into their books using the exchange rate ruling at the date the asset was acquired.
This affects subsequent depreciation charged to the income statement, and hence the net book values included in the balance sheet.
Similarly, the US Dollar values of share capital and reserves have had to be restated in US Dollar terms using the exchange rates
ruling at the date of the relevant transactions.
(b) Discontinued operations
Discontinued operations are reported retrospectively for the comparative period. Two subsidiaries became classified as discontinued
during 2007. Hence the scope of discontinued operations reported in this note for 2006 differs from that originally reported for that
year in the Group’s 2006 annual report.
(c) Biological gain/loss
Increased palm-oil commodity prices and the planting of new land, as described in the review of operations, have led to an increase
in the valuation of oil palms. The biological asset at the point of IFRS transition was US$51 million. The reduction in the total biological
asset in the balance sheet at 31 December 2006 results from the sale, in line with the Group’s strategy, of three Malaysian oil-palm
estates during the course of that year.
The Group’s share of biological asset valuations and changes is reflected in its share of associated companies’ profits and the carrying
amount in respect of its associated undertakings. At the point of IFRS transition this amounted to US$9.3 million.
(d) Exceptional profits
The profit made on disposal of the Group’s three Malaysian oil-palm estates sold during 2006, classified under discontinued operations,
has been reduced by US$7.7 million. Under IFRS the carrying value, set against sale proceeds to establish profit on disposal, includes
biological assets valued under IAS 41.
(e) Share of associated companies’ profits
The Group’s share of associated companies’ profits now appears after tax. It was previously shown before tax with an amount included
in the in the Group tax charge to reflect its share of the tax borne by associated companies.
(f) Deferred tax
Deferred tax is charged at 30% on the difference between biological assets at depreciated historical cost and the carrying value in the
balance sheet determined under IAS 41.
(g) Surplus of fair value of identifiable assets, liabilities and provisions over cost of acquisition
When the Group acquired its investment in NAPCo, there was a surplus in the fair value of the assets acquired over acquisition cost.
Under IFRS this is immediately recognised in profit and loss rather than being amortised over 20 years. At the IFRS transition date this
adjustment amounted to US$12.3 million.
(h) Valuation of leasehold land
Under IFRS 1, long-term leasehold land has been brought into the opening IFRS balance sheet at a valuation that is its deemed cost.
The valuation is lower than the carrying amount under UK-GAAP, that reflected a value for the planting found on the land as well
as historical exchange differences. At the IFRS transition date this adjustment amounted to US$11.6 million.
(i) Post-retirement employee benefits
The Group’s Indonesian workforce is entitled to a terminal payment when a worker retires or leaves the Group. This post-employment
benefit has been provided for under IAS 19.
(j) Changes to reported IFRS transition information
Further work following the publication of the Group’s IFRS transition information in its 2007 interim report has led to some revisions.
The differences, which do not affect reported profit, are:
 Minority interest: the minority share of the adjustments relating the translation of some Malaysian assets was understated. As a result,
the minority’s share of net assets in the figures reported here is reduced. This adjustment does not affect net assets.
 Classification of tax assets and liabilities: certain deferred tax assets had been netted off against deferred tax liabilities. These amounts
are shown gross in the figures reported here under deferred tax assets and deferred tax liabilities respectively. This adjustment does
not affect net assets.
 Deferred tax: deferred tax was not provided against an historical revaluation carried out in an Australian subsidiary. This affects both
the transition balance sheet and the balance sheet at 31 December 2006. The effect is to reduce net assets by US$3.2 million. 
NOTE32TRANSITION FROM UK-GAAP TO IFRS CONTINUED 70
We have audited the parent-Company financial
statements of M. P. Evans Group PLC for the year ended
31 December 2007 which comprise the Company balance
sheet and the related notes (i) to (ix). These parent-Company
financial statements have been prepared under the
accounting policies set out therein.
We have reported separately on the Group financial
statements of M. P. Evans Group PLC for the year ended
31 December 2007.
This report is made solely to the Company’s members,
as a body, in accordance with section 235 of the Companies
Act 1985. Our audit work has been undertaken so that we
might state to the Company’s members those matters we
are required to state to them in an auditors’ report and for
no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other
than the Company and the Company’s members as a body,
for our audit work, for this report, or for the opinions we
have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS
AND AUDITORS
The directors’ responsibilities for preparing the annual
report, and the parent-Company financial statements
in accordance with applicable law and United Kingdom
Accounting Standards (United Kingdom Generally Accepted
Accounting Practice) are set out in the statement of
directors’ responsibilities.
Our responsibility is to audit the parent-Company financial
statements in accordance with relevant legal and regulatory
requirements and International Standards on Auditing
(UK and Ireland).
We report to you our opinion as to whether the parent-
Company financial statements give a true and fair view and
whether the parent-Company financial statements have been
properly prepared in accordance with the Companies Act
1985. We also report to you whether in our opinion the
directors’ report is consistent with the parent-Company
financial statements. The information given in the directors’
report includes that specific information presented in the
chairman’s statement and the review of operations that is
cross referred from the principal activities section of the
directors’ report.
In addition we report to you if, in our opinion, the
Company has not kept proper accounting records, if we
have not received all the information and explanations
we require for our audit, or if information specified by 
law regarding directors’ remuneration and other transactions
is not disclosed.
We read the other information contained in the annual
report as described in the contents section and consider
whether it is consistent with the audited parent-Company
financial statements. We consider the implications for our
report if we become aware of any apparent misstatements or
material inconsistencies with the parent-Company financial
statements. Our responsibilities do not extend to any further
information outside the annual report.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with International
Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and
disclosures in the parent-Company financial statements.
It also includes an assessment of the significant estimates
and judgments made by the directors in the preparation
of the parent-Company financial statements, and of whether
the accounting policies are appropriate to the Company’s
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all
the information and explanations which we considered
necessary in order to provide us with sufficient evidence
to give reasonable assurance that the parent-Company
financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error.
In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the parent-
Company financial statements.
OPINION
In our opinion:
 the parent-Company financial statements give a true
and fair view, in accordance with United Kingdom
Generally Accepted Accounting Practice, of the state
of the Company’s affairs as at 31 December 2007
and its profit for the year then ended;
 the parent-Company financial statements have been
properly prepared in accordance with the Companies
Act 1985; and
 the information given in the directors’ report is consistent
with the parent-Company financial statements.
DELOITTE & TOUCHE LLP
Chartered Accountants and Registered Auditors,
Crawley, United Kingdom
2 May 2008
Independent auditors’ report on the
parent-Company financial statements
TO THE MEMBERS OF M. P. EVANS GROUP PLC, THE PARENT COMPANY ANNUAL REPORT 2007
71
Parent-Company balance sheet
AT 31 DECEMBER 2007
2007 2006
Note US$’000 US$’000 US$’000 US$’000
Fixed assets
Tangible fixed assets (iii) 938 1,012
Investments (iv) 43,118 60,813
44,056 61,825
Current assets
Debtors (v) 56,549 38,698
Cash at bank and in hand 7,418 15,862
63,967 54,560
Total assets 108,023 116,385
Creditors - amounts falling
due within one year (vi) (67,147) (77,866)
Net current liabilities (3,180) (23,306)
Net assets 40,876 38,519
Capital and reserves
Called-up share capital (vii) 8,728 8,582
Other reserves (viii) 24,165 23,225
Profit and loss account (viii) 7,983 6,712
Total shareholders’ funds (ix) 40,876 38,519
These financial statements were approved by the board of directors
on 2 May 2008 and signed on its behalf
Philip Fletcher
Peter Hadsley-Chaplin
Directors 72
Notes to
the parent-
Company
balance
sheet
Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 1985. They have been prepared
under the historical-cost convention and in accordance with applicable United Kingdom Accounting Standards and law.
The principal accounting policies are summarised below. The directors have concluded that the functional currency is the US Dollar.
The impact of this change is set out in note viii.
Tangible fixed assets
Freehold property is not depreciated but is tested for impairment. Plant, equipment and vehicles are depreciated over their estimated
useful lives at 25%.
Investments
Fixed-asset investments in subsidiaries are shown at cost less provision for impairment.
Note i SIGNIFICANT ACCOUNTING POLICIES
As permitted by section 230 of the Companies Act 1985, the Company has elected not to present its own profit and loss account for the year.
M. P. Evans Group PLC reported a profit for the financial year ended 31 December 2007 of US$7,906,000 (2006 loss of US$387,000).
The auditors’ remuneration for audit and other services is disclosed in note 8 to the consolidated financial statements.
Note ii PROFIT FOR THE YEAR
PLANT, PLANT,
EQUIPMENT EQUIPMENT
BUILDINGS AND VEHICLES TOTAL
US$’000 US$’000 US$’000
Cost
At 1 January 2007 834 588 1,422
Additions — 18 18
Disposals — (35) (35)
At 31 December 2007 834 571 1,405
Accumulated depreciation
At 1 January 2007 — 409 409
Disposals — (12) (12)
Charge for the year — 70 70
At 31 December 2007 — 467 467
Net book value
At 31 December 2007 834 104 938
Net book value
At 31 December 2006 834 179 1,012
Note iii TANGIBLE FIXED ASSETS ANNUAL REPORT 2007
73
2007 2006
US$’000 US$’000
Subsidiaries 43,118 60,813
AT COST PROVISIONS NET BOOK VALUE
Subsidiary undertakings US$’000 US$’000 US$’000
At 1 January 2007 74,509 13,696 60,813
Disposals (17,695) — (17,695)
At 31 December 2007 56,814 13,696 43,118
The following companies are the principal subsidiary companies of M. P. Evans Group PLC:
COUNTRY OF HOLDING
OPERATION %
M. P. Evans & Co. Limited UK 100
Sungkai Holdings Limited UK 100
Bertam (UK) Limited UK 100
Sungkai Estates Limited UK 100
The Singapore Para Rubber Estates, Limited UK 100
Note iv FIXED-ASSET INVESTMENTS
2007 2006
US$’000 US$’000
Amount falling due within one year
Amounts owed by subsidiary undertakings 56,486 38,661
Other debtors 42 32
Prepayments and accrued income 21 —
56,549 38,698
NotevDEBTORS 2007 2006
US$’000 US$’000
Amounts owed to subsidiary undertakings 64,472 75,550
Other creditors 2,675 2,316
67,147 77,866
Note vi CURRENT LIABILITIES – AMOUNTS FALLING DUE WITHIN ONE YEAR
2007 2006
US$’000 US$’000
Profit/(loss) attributable to members of the company 7,906 (387)
Dividends paid (6,655) (5,846)
1,251 (6,233)
Issue of shares 1,095 279
Share-based payments 11 69
Net addition/(reduction) in shareholders’ funds 2,357 (5,885)
Opening shareholders’ funds 38,519 44,404
Closing shareholders’ funds 40,876 38,519
Note ix RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
See note 24 to the consolidated financial statements.
Note vii CALLED-UP SHARE CAPITAL
SHARE CAPITAL PROFIT
PREMIUM REDEMPTION MERGER OTHER AND LOSS
ACCOUNT RESERVE RESERVE RESERVES TOTAL ACCOUNT
US$’000 US$’000 US$’000 US$’000 US$’000 US$’000
At 1 January 2007 20,409 4,192 1,456 527 26,584 6,513
Change in functional currency (3,006) (296) (22) (35) (3,359) 199
At 1 January 2007 restated 17,403 3,896 1,434 492 23,225 6,712
Issue of shares 949 ——— 949 —
Share-based payments ——— (9) (9) 20
Profit for the financial year ————— 7,906
Dividend (see note 11) ————— (6,655)
At 31 December 2007 18,352 3,896 1,434 483 24,165 7,983
Note viii RESERVES
74
Notes to
the parent-
Company
balance
sheet ANNUAL REPORT 2007
75
Subsidiary and associated undertakings
SUBSIDIARY UNDERTAKINGS
Details of the principal subsidiary undertakings as at 31 December 2007 are as follows:
% OF SHARES
AND VOTING COUNTRY OF COUNTRY OF
NAME OF SUBSIDIARY RIGHTS HELD INCORPORATION OPERATION FIELD OF ACTIVITY
PT Bilah Plantindo 80 Indonesia Indonesia Production of oil palm f.f.b.
PT Pangkatan Indonesia 80 Indonesia Indonesia Production of crude palm oil,
palm kernels and rubber
PT Sembada Sennah Maju 64 Indonesia Indonesia Production of oil palm f.f.b. 
PT Simpang Kiri Plantation 80 Indonesia Indonesia Production of oil palm f.f.b.
Indonesia
PT Gunung Pelawan Lestari 90 Indonesia Indonesia In the process of development
into an oil-palm plantation
PT Prima Mitrajaya Mandiri 92.5 Indonesia Indonesia In the process of development
into an oil-palm plantation
PT Teguh Jayaprima Abadi 92.5 Indonesia Indonesia In the process of development
into an oil-palm plantation
PT Evans Indonesia 100 Indonesia Indonesia Provision of consultancy services
Gubbagunyah Partnership 100 Australia Australia Beef-cattle farming
Bertam Consolidated Rubber 100 England Malaysia Production of oil palm f.f.b.
Company Limited and Wales and holding of investments
Bertam (U.K.) Limited* 100 England United Kingdom Investment holding company
and Wales and Australia
Sungkai Estates Limited* 100 England Malaysia Production of oil palm f.f.b.
and Wales
The Singapore Para Rubber Estates, 100 England Malaysia Production of oil palm f.f.b.
Limited* and Wales
Supara Company Limited 100 Thailand Thailand Rubber manufacture
The shareholdings in the above companies represent ordinary shares except Gubbagunyah Partnership which has no class
of share.
All of the above subsidiaries are held through intermediary holding companies with the exception of those marked *
which are held directly by M. P. Evans Group PLC.
ASSOCIATED UNDERTAKINGS
Details of the associated undertakings as at 31 December 2007 are as follows:
ISSUED, FULLY-PAID % COUNTRY OF COUNTRY OF
SHARE CAPITAL HELD INCORPORATION OPERATION FIELD OF ACTIVITY
Unlisted
PT Agro Muko Rp54.58m 31.53 Indonesia Indonesia Production of crude palm
oil, palm kernels and rubber 
PT Kerasaan Indonesia Rp138.07m 38.00 Indonesia Indonesia Production of oil palm f.f.b.
The North Australian Pastoral A$16.80m 29.64 Australia Australia Beef-cattle farming
Company Pty Limited
Bertam Properties Sdn. Berhad. Rp60.00m 40.00 Malaysia Malaysia Property development
The shareholdings in the above companies represent ordinary shares. The investments in associated undertakings are held
by subsidiary undertakings. Analysis of land areas
AT 31 DECEMBER 2007
The information on the following pages does not form part of the audited financial statements.
OIL PALM RUBBER UNPLANTED CATTLE TOTAL
OWNED MATURE IMMATURE TOTAL MATURE IMMATURE TOTAL
OIL PALM RUBBER
%HA HAHA HA HA HA HA HA HA
INDONESIA
Subsidiary undertakings
Bilah 80.00 2,368 389 2,757 —— — 204 — 2,961
Pangkatan 80.00 1,869 583 2,452 —— — 134 — 2,586
Sennah 64.00 1,036 627 1,663 —— — 150 — 1,813
Simpang Kiri 80.00 2,206 251 2,457 —— — 197 — 2,654
Bangka 90.00 — 2,008 2,008 —— — 9,992 — 12,000
East Kalimantan 92.50 — 985 985 —— — 23,015 — 24,000
Total majority-owned 7,479 4,843 12,322 —— — 33,692 — 46,014
Associated undertakings
P T Agro Muko 31.53 15,107 2,056 17,163 1,826 373 2,199 3,552 — 22,914
P T Kerasaan Indonesia 38.00 1,997 318 2,315 —— — 47 — 2,362
Total minority-owned 17,104 2,374 19,478 1,826 373 2,199 3,599 — 25,276
Total Indonesian majority
and minority-owned 24,583 7,217 31,800 1,826 373 2,199 37,291 — 71,290
MALAYSIA
Subsidiary undertakings
Perhentian Tinggi 100.00 704 98 802 —— — 24 — 826
Sungei Kruit 100.00 809 — 809 —— — 19 — 828
Bertam 100.00 65 — 65 —— — 9 — 74
Total majority-owned 1,578 98 1,676 —— — 52 — 1,728
Associated undertaking
Bertam Properties
Sdn. Berhad 40.00 541 — 541 —— — 39 — 580
Total Malaysian majority
and minority-owned 2,119 98 2,217 —— — 91 — 2,308
AUSTRALIA
Subsidiary undertaking
Woodlands aggregation 100.00 —— — — — — — 31,000 31,000
Associated undertaking
The North Australian
Pastoral Company
Pty Limited 29.64 —— — — — — — 6,000,000 6,000,000
Total Australian majority
and minority-owned —— — — — — — 6,031,000 6,031,000
76 ANNUAL REPORT 2007
5-year summary
*
2007 2006 2005 2004 2003
TONNES TONNES TONNES TONNES TONNES
Production
Palm oil 19,500 24,000 21,600 ——
Palm kernels 5,400 6,000 5,000 ——
Crops – f.f.b.
Majority-owned estates 162,558 213,392 222,683 228,287 213,620
Associated company estates 355,768 364,594 334,830 335,997 319,779
US$ US$ US$ US$ US$
Average sale prices
Palm oil - Rotterdam c.i.f. per tonne 481 475 420 475 449
Exchange rates
US$1 = Indonesian Rupiah - average 9,140 9,167 9,712 8,953 8,569
- year end 9,419 8,994 9,840 9,336 8,447
US$1 = Australian Dollar - average 1.20 1.33 1.31 1.36 1.54
- year end 1.14 1.27 1.36 1.29 1,33
US$1 = Malaysian Ringgit - average 3.44 3.67 3.79 3.80 3.80
- year end 3.31 3.53 3.78 3.80 3.80
£1 = US Dollar - average 2.00 1.84 1.82 1.83 1.64
- year end 1.99 1.96 1.72 1.92 1.79
US$’000 US$’000 £’000 £’000 £’000
Revenue 23,597 20,425 12,182 12,911 7,599
Gross profit before biological
bearer-asset adjustment 10,632 6,345 5,082 6,374 4,209
Profit for the year 46,630 26,102 4,366 7,324 5,095
US CENTS US CENTS PENCE PENCE PENCE
Earnings per share (continuing
and discontinued operations) 71.21 32.71 8.67 13.86 10.59
PENCE PENCE PENCE PENCE PENCE
Dividend per share 7.00 6.50 6.25 6.00 5.50
US$’000 US$’000 £’000 £’000 £’000
Equity attributable to members of
M. P. Evans Group PLC 223,412 183,695 70,970 59,834 44,906
Net cash (outflow)/inflow from
operating activities (4,850) (9,234) 5,499 8,684 3,555
* The figures for 2003-05 have not been restated following the adoption of IFRS, and hence reflect the Group’s
result expressed under UK-GAAP. 
77 78
NOTICE IS HEREBY GIVEN that the annual general meeting
of M.P. Evans Group PLC will be held at Tallow Chandlers’
Hall, 4 Dowgate Hill, London EC4R 2SH on 4 June 2008 at
12:00 noon for the following purposes:
AS ORDINARY BUSINESS
1 To receive and consider the report of the directors and
the audited financial statements for the year ended
31 December 2007.
RESOLUTION ON FORM OF PROXY No 1
2 To declare a final dividend.
RESOLUTION ON FORM OF PROXY No 2
3 To re-elect Mr R M Robinow as a director.
RESOLUTION ON FORM OF PROXY No 3
4 To re-elect Mr O D Wilkinson as a director.
RESOLUTION ON FORM OF PROXY No 4
5 To re-elect Mr J D Shaw as a director.
RESOLUTION ON FORM OF PROXY No 5
6 To re-appoint Deloitte & Touche LLP as auditors and to
authorise the directors to determine their remuneration.
RESOLUTION ON FORM OF PROXY No 6
AS SPECIAL BUSINESS
To consider and, if thought fit, pass the following resolutions,
of which resolution 7 will be proposed as an ordinary
resolution and resolutions 8, 9 and 10 will be proposed
as special resolutions:
7 That the maximum nominal amount of relevant securities
(within the meaning of section 80 of the Companies Act
1985) which the directors are authorised to allot pursuant
to article 4(B) of the Company’s articles of association shall
be £1,722,853 provided that this authority shall expire at
the conclusion of the next annual general meeting of the
Company or on 30 June 2009 whichever shall be the earlier
(and that, if resolution 10 below is passed, the references in
this resolution to the Company’s articles of association be
deemed to be references to the new articles of association
adopted pursuant to resolution 10).
RESOLUTION ON FORM OF PROXY No 7
8 That the directors be empowered to allot equity securities
(as defined in section 94(2) of the Companies Act 1985)
pursuant to the authority conferred by resolution 7 as if
section 89(1) of the Companies Act 1985 did not apply
to any such allotment provided that this power shall be
limited to any allotment falling within the provisions of
article 4(C)(a) of the Company’s articles of association or
any allotment up to an aggregate nominal amount of
£258,454 falling within the provisions of article 4(C)(b)
of the Company’s articles of association. Such power will
extend to the sale of treasury shares (within the meaning
of section 162A of the Companies Act 1985) for cash as
if in respect of any such sale the words “pursuant to the
authority from time to time conferred by article 4(B) hereof”
were omitted from the second line of article 4(C) and, for
the purpose of such power, the reference in article 4(C)(a)
to “where the equity securities attributable to the interests
of all of the holders of the shares are proportionate (as nearly
as may be) to the numbers of shares held by them” shall be
deemed to exclude the Company in respect of any treasury
shares held by it (and that, if resolution 10 below is passed,
the references in this resolution to the Company’s articles
of association be deemed to be references to the new
articles of association adopted pursuant to resolution 10).
RESOLUTION ON FORM OF PROXY No 8
9 That the Company is hereby generally and unconditionally
authorised to make market purchases (within the meaning
of section 163 of the Companies Act 1985) of shares of
10p each in the capital of the Company provided that:
(a) the maximum number of shares hereby authorised to
be purchased is 5,169,075;
(b) the minimum price which may be paid for each share
is 10p (exclusive of expenses);
(c) the maximum price (exclusive of expenses) which may
be paid for each share is an amount equal to 105%
of the average of the middle-market quotations for
such shares as derived from the Daily Official List
of the London Stock Exchange for the five business
days immediately preceding the day of purchase; and
(d) the authority hereby conferred shall expire at the conclusion
of the next annual general meeting of the Company or
on 30 June 2009 whichever shall be the earlier save that
the Company may, before the expiry of this authority, make
a contract of purchase which will or may be executed
wholly or partly after such expiry and may make a
purchase of shares pursuant to any such contract.
RESOLUTION ON FORM OF PROXY No 9
10 That articles of association in the form of those produced
to the meeting and signed for the purpose of
identification by the chairman of the meeting be adopted
as the articles of association of the Company in
substitution for the existing articles of association.
RESOLUTION ON FORM OF PROXY No 10
By order of the board
J F Elliott
Secretary
7 May 2008
Notice of meeting 79
NOTES
1 A member of the Company entitled to attend, speak and
vote at the meeting convened by this notice may appoint
a proxy to exercise all or any of his rights to attend,
speak and vote at the meeting on his or her behalf.
A proxy need not be a member of the Company.
Appointment of a proxy will not subsequently preclude
a member from attending and voting at the meeting in
person if he or she so wishes. A member may appoint
more than one proxy provided that each proxy is
appointed to exercise the rights attached to different
shares held by the member. [The form of proxy contains
instructions on how to appoint more than one proxy.]
2 A form of proxy for use at the meeting is enclosed.
Please return the form of proxy as soon as possible.
To be valid, it must be received [by post or (during
normal business hours only) by hand] at the office
of the registrars, Computershare Investor Services PLC,
at The Pavilions, Bridgwater Road, Bristol, BS99 6ZY
no later than 12:00 noon on 2 June 2008 (or, if the
meeting is adjourned, no later than 48 hours before
the time for holding the adjourned meeting, or, if a poll
is taken otherwise than at or on the same day as the
meeting at which it is demanded, no later than 24 hours
before the time appointed for the taking of the poll).
3 The right to appoint a proxy does not apply to persons
whose shares are held on their behalf by another person
and who have been nominated to receive communications
from the Company in accordance with section 146 of the
Companies Act 2006 (“nominated persons”). Nominated
persons may have a right under an agreement with the
registered shareholder who holds the shares on their
behalf to be appointed (or to have someone else appointed)
as a proxy. Alternatively, if nominated persons do not
have such a right, or do not wish to exercise it, they may
have a right under such an agreement to give instructions
to the person holding the shares as to the exercise of
voting rights.
4 Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001, the Company has specified that only
those shareholders registered on the register of members
of the Company at 11.00 p.m. on 2 June 2008 (or, if the
meeting is adjourned, 48 hours before the time of the
adjourned meeting) shall be entitled to attend and vote
at the meeting in respect of the number of shares
registered in their name at that time. Changes to the
register of members after that time will be disregarded
in determining the rights of any person to attend and
vote at the meeting.
5 In order to facilitate voting by corporate representatives
at the meeting, arrangements will be put in place
at the meeting so that (i) if a corporate shareholder has
appointed the chairman of the meeting as its corporate
representative with instructions to vote on a poll in
accordance with the directions of all of the other
corporate representatives for that shareholder at the
meeting, then on a poll those corporate representatives
will give voting directions to the chairman and the
chairman will vote (or withhold a vote) as corporate
representative in accordance with those directions;
and (ii) if more than one corporate representative for
the same corporate shareholder attends the meeting
but the corporate shareholder has not appointed the
chairman of the meeting as its corporate representative,
a designated corporate representative will be nominated,
from those corporate representatives who attend, who
will vote on a poll and the other corporate representatives
will give voting directions to that designated corporate
representative. Corporate shareholders are referred
to the guidance issued by the Institute of Chartered
Secretaries and Administrators on proxies and corporate
representatives (www.icsa.org.uk) for further details of
this procedure. The guidance includes a sample form
of representation letter if the chairman is being appointed
as described in (i) above.
6 As at 1 May 2008 the Company’s issued share capital
consisted of 51,690,758 shares carrying one vote each.
Therefore the total number of voting rights in the
Company as at that date was 51,690,758.
7 Copies of the directors’ service contracts and terms and
conditions of appointment will be available for inspection
at the registered office of the Company during normal
business hours and at the place of the meeting from
15 minutes prior to the meeting until its conclusion.
Any addressee of this notice who has sold or transferred
all of the shares of the Company held by him should
pass the annual report of which this notice forms part
(including the form of proxy enclosed herewith) to the
person through whom the sale was effected for
transmission to the transferee or purchaser.
ANNUAL REPORT 2007 80
INTRODUCTION
It is proposed that the Company adopt new articles of
association (the “New Articles”) in order to reflect certain
provisions of the Companies Act 2006 (“CA 2006”) currently
in force.  As the proposed changes affect various provisions
in the Company’s existing articles of association (the “Current
Articles”), it is considered more practical to replace the Current
Articles in full rather than to seek approval for numerous
individual amendments.
The changes introduced in the New Articles are summarised
below (but minor and technical changes have not been
separately noted). The numbering of articles below corresponds
to the numbering in the New Articles.
A copy of the New Articles will be available for inspection
at the offices of Lovells LLP, Atlantic House, Holborn
Viaduct, London EC1A 2FG and at the registered office of
the Company on any weekday (public holidays excepted)
from the date of the notice of the annual general meeting
until the close of the annual general meeting.
CONVENING AND NOTICE OF GENERAL MEETINGS
(ARTICLE 55)
The New Articles reduce the minimum notice period for
general meetings (other than annual general meetings) from
21 days to 14 days, even where a special resolution is to be
considered, in line with what is permitted by the CA 2006.
DIRECTORS’ CONFLICTS OF INTEREST
(ARTICLES 94(B) TO (F))
The CA 2006 sets out directors’ general duties which largely
codify the existing law but with some changes. Under the
CA 2006, from 1 October 2008 a director must avoid a
situation where he has, or can have, a direct or indirect
interest that conflicts, or possibly may conflict, with the
Company’s interests. The requirement is very broad and
could apply, for example, if a director becomes a director
of another company or a trustee of another organisation.
The CA 2006 allows directors of public companies to authorise
conflicts and potential conflicts, where appropriate, if their
articles of association contain a provision to this effect.
The CA 2006 also allows the articles of association to contain
other provisions for dealing with directors’ conflicts of interest
to avoid a breach of duty. The New Articles will, with
effect from 1 October 2008, give the directors authority
to approve such situations and include other provisions 
to allow conflicts of interest to be dealt with in a similar
way to the current position.
There are safeguards which will apply when directors decide
whether to authorise a conflict or potential conflict. First,
only directors who have no interest in the matter being
considered will be able to take the relevant decision,
and second, in taking the decision the directors must act
in a way they consider, in good faith, will be most likely
to promote the Company’s success. The directors will
be able to impose limits or conditions when giving
authorisation if they think this is appropriate.
SENDING OF NOTICES, DOCUMENTS ETC
(INCLUDING ELECTRONIC AND WEB COMMUNICATIONS)
(ARTICLES 151 TO 157 AND 161(B))
The New Articles contain detailed provisions as to how
notices, documents and other information may be sent to
or by the Company and extend the new company
communication provisions of the CA 2006 to any document
or information sent by the Company. The CA 2006 allows
companies to communicate with shareholders by electronic
and website communications. The New Articles continue
to allow communications by the Company to shareholders
in electronic form (provided that the shareholder has agreed,
generally or specifically, to this) and, in addition, they also
permit the Company to take advantage of the new provisions
relating to website communications. As provided by the
CA 2006, before the Company can communicate with
a shareholder by means of a website, the shareholder must
be asked individually by the Company to agree that the
Company may send or supply documents or information
to him by means of a website and the Company must either
have received a positive response or have received
no response within 28 days (in which case the Company
may take that as consent by the member to receive
communications in this way). When the Company makes
a document or information available on its website, it must
notify the shareholder of this. A shareholder who has
received a document or information in electronic form
or via a website can always request a hard copy of the
document or information.
In line with the position in the Current Articles and the
CA 2006, a shareholder may communicate with the
Company by electronic communication if the Company
has agreed that the document or information can be sent
or supplied in electronic form (but then only in the type
of electronic form that the Company has agreed to).
In certain circumstances, the CA 2006 will deem the
Company to have agreed that shareholders may send
documents or other information electronically.
Article 162 sets out when notices, documents and other
information given or sent by the Company to its shareholders
are deemed to be received. A document or information
sent by electronic means is deemed to have been received
24 hours after it was sent (notwithstanding a failure in
transmission) and a document or information made available
on a website is deemed to have been received when the
material was first made available on the website or, if later,
the intended recipient has been notified (in accordance with
the New Articles) of its availability on the website.
The directors have no current intention of communicating
with shareholders in electronic form or via a website and
are accordingly not yet seeking the consent of individual
shareholders to do so. However, they consider it appropriate
for the Company to have the flexibility to communicate
electronically should this be desirable.
Appendix to the notice of the annual general meeting:
explanation of the proposed amendments to the Company’s articles of association 81
ANNUAL REPORT 2007
SECRETARY AND REGISTERED OFFICE
John F Elliott
3 Clanricarde Gardens
Tunbridge Wells
Kent TN1 1HQ
Tel: 01892 516333
Fax: 01892 518639
www.mpevans.co.uk
Company number: 1555042
INDEPENDENT AUDITORS
Deloitte & Touche LLP
Chartered Accountants and
Registered Auditors
Crawley
REGISTRARS
Computershare Investor Services PLC
PO Box 82, The Pavilions
Bridgwater Road
Bristol BS99 7NH
Tel: 08707 071176
Fax: 08707 036101
www.computershare.com
Email: web.queries@computershare.co.uk
MANAGING AGENTS IN SUMATRA, INDONESIA
P.T. Tolan Tiga Indonesia
Bank Sumut Building, 7th Floor
Jln Imam Bonjol No 18
Medan 20152
North Sumatra
PRINCIPAL BANKERS
HSBC Bank PLC
105 Mount Pleasant
Tunbridge Wells
Kent TN1 1QP
Bank Mandiri (Persero)
Plaza Mandiri
Kav. 36-38 Jln. Jend. Gatot Subroto
Jakarta 12190
Indonesia
HSBC Bank Malaysia Berhad
1 Leboh Downing
10300 Pulau Pinang
Malaysia
Commonwealth Bank of Australia
PO Box 2856
Toowoomba
Queensland 4350
Australia
NOMINATED ADVISER AND BROKER
Panmure Gordon (UK) Limited
Moorgate Hall
155 Moorgate
London EC2M 6XB
SOLICITORS
Lovells LLP
Atlantic House
Holborn Viaduct
London EC1A 2FG
Professional advisers and representatives
Designed, typeset and printed
by Michael R. Dalby Limited
Mulberry Business Centre
Quebec Way, London SE16 7LB
020 7394 1112
email: mrd@mrdltd.plus.com Notes
82 83
ANNUAL REPORT 2007 84
Notes Tallow Chandlers’ Hall
4 Dowgate Hill
London EC4R 2SH
Venue of annual general meeting www.mpevans.co.uk