SOCIETE FINANCIERE DES CAOUTCHOUCS
2023
ANNUAL REPORT
Socfin
2
|
ANNUAL REPORT 2023
|
Socfin
Table of contents
Group profile 4
1. Overview of the Group 4
2. History 4
3. Group structure 5
4. Information on the holdings of Socfin 6
International market for rubber and palm oil 9
1. Rubber 9
2. Palm oil 12
Environment and social responsibility 15
Key figures 16
1. Activity Indicators 16
2. Key figures in the consolidated income statement 17
3. Key figures in the consolidated statement of financial position 17
Stock market data 18
Corporate governance statement 19
1. Introduction 19
2. Corporate governance chart 19
3. Board of Directors 19
4. Committees of the Board of Directors 22
4.1. Audit Committee 22
4.2. Appointment and Remuneration Committee 22
5. Remunerations 23
6. Shareholding status 23
7. Financial calendar 24
8. External audit 24
9. Corporate, social and environmental responsibility 24
10. Other information 24
Statement of compliance 25
Consolidated management report 26
Auditor’s report on the consolidated financial statements 30
Consolidated financial statements 35
1. Consolidated statement of financial position 35
2. Consolidated income statement 37
3. Consolidated statement of comprehensive income 38
4. Consolidated statement of cash flows 39
5. Consolidated statement of changes in equity 40
6. Notes to the consolidated financial statements 41
Note 1. Overview and material accounting policies 41
Note 2. Subsidiaries 53
Note 3. Restatement and reclassification 56
Note 4. Goodwill 57
Note 5. Leases 58
Note 6. Intangible assets 60
Note 7. Property, plant and equipment 61
Note 8. Biological assets 63
Note 9. Depreciation and impairment 64
Note 10. Impairment of assets 64
Note 11. Investment properties 66
Note 12. Non-wholly owned subsidiaries in which non-controlling interests are significant 67
Note 13. Financial assets at fair value through other comprehensive income 70
Note 14. Deferred taxes 71
Note 15. Current tax assets and liabilities 72
Note 16. Income tax expense 73
Table of contents
Socfin
|
ANNUAL REPORT 2023
|
3
Note 17. Inventories 75
Note 18. Trade receivables (current assets) 76
Note 19. Other receivables (current assets) 76
Note 20. Cash and cash equivalents 77
Note 21. Share capital and share premium 77
Note 22. Legal reserve 77
Note 23. Pension obligations 78
Note 24. Financial debts 81
Note 25. Trade and other payables 85
Note 26. Financial Instruments 86
Note 27. Staff costs and average number of staff 88
Note 28. Other financial income 88
Note 29. Financial expenses 89
Note 30. Net earnings per share 89
Note 31. Dividends and directors’ fees 89
Note 32. Information on related party 90
Note 33. Off balance sheet commitments 91
Note 34. Segment information 91
Note 35. Risk management 99
Note 36. Contingent liabilities 102
Note 37. Political and economic environment 104
Note 38. Events after the closing date 104
Note 39. Assets classified as held for sale 105
Note 40. Auditor’s fees 105
Company’s management Report 106
Audit report on the Company’s financial statements 112
Company’s financial statements 116
1. Balance sheet as at 31 December 2023 116
2. Income statement for the year ended 31 December 2023 118
3. Notes to the financial statements for the year 2023 119
Note 1. Overview 119
Note 2. Accounting principles, rules and methods 119
Note 3. Financial fixed assets 122
Note 4. Amounts owed by affiliated undertakings 123
Note 5. Equity 123
Note 6. Amounts to affiliated undertakings 124
Note 7. Income from participating interests 124
Note 8. Income from other investments and loans forming part of the fixed assets 124
Note 9. Taxation 124
Note 10. Remuneration of the Board of Directors 125
Note 11. Political and economic environment 125
Note 12. Off-balance sheet commitments 125
Note 13. Significant events after the year end 125
Glossary 126
4
|
ANNUAL REPORT 2023
|
Socfin
Portrait du GroupeGroup profile
1. Overview of the Group
as “Socfin”, is a Luxembourgish company (the
“Company”), with its registered office at 4 avenue
Guillaume, L-1650 Luxembourg . It was incorporated
on 5 December 1959 and is listed on the Luxembourg
Stock Exchange.
Socfin’s principal activity is the management of a
portfolio of shares. These shares mainly focus on the
exploitation of more than 190,000 hectares of tropical
palm oil plantations and rubber trees, located in Africa
people and has achieved a consolidated revenue of
EUR 863 million over that same year.
2. History
• 05/12/1959 Constitution of the Société Financière Luxembourgeoise S.A., abbreviated as “Socfinal” in the
form of a holding company.
• 09/06/1960 The Socfinal shares are listed on the Luxembourg Stock Exchange.
• 31/12/1960 Since its formation, Socfinal has invested, among others, in the following companies: Société
Financière des Caoutchoucs “Socfin” (Belgium); Plantations Nord-Sumatra (Belgium); Selangor
Plantations Company Berhad (Malaysia); Sennah Rubber Company Ltd (England) and various
societies of Congolese equatorial cultures.
• 31/12/1965 The portfolio includes new investments in Indonesia, such as : Société de Cultures Asahan; Société
de Cultures Batangara; Huileries de Deli and Société de Cultures Sungei Liput
• 31/12/1971 Socfinal invests in the Compagnie Internationale de Cultures “Intercultures” (former name of
Socfinaf), a Luxembourgish company listed on the Luxembourg Stock Exchange; Socfin Industrial
Development “Socfinde” (Luxembourg) and in Compagnie du Cambodge (France).
• 31/12/1972 Socfinal participates in the formation of Socfinasia (Luxembourg) in exchange for the shares of
Indonesian companies Asahan, Batangara, Huileries de Deli and Sungei Liput. Socfinasia will be
listed on the Luxembourg Stock Exchange in 1973.
• 31/12/1975 Disposal of Socfin (Belgium) shares from the portfolio.
• 31/12/1980 Acquisition of Selangor Holding shares, a Luxembourgish company listed on the Luxembourg Stock
Exchange.
• 31/12/1994 Socfinal invests 60% in the capital of SOGB (Côte d’Ivoire) following the privatisation of this Ivorian
plantation. This participation will be transferred to Intercultures.
• 31/12/1999 Sale of holdings Selangor Holding and Plantations Nord-Sumatra
• 31/12/2000 Sale of Sennah Rubber Company shares following the public tender on these shares.
• 15/11/2006 Following the distribution of Intercultures shares by Socfinasia (spin-off), Socfinal directly holds,
onthe one hand, Socfinasia (Asia), and on the other, Intercultures (Africa).
• 10/01/2011 Extraordinary General Meeting, which ratified the abandonment of the holding 29 status, and the
change of the name to Société Financière des Caoutchoucs, abbreviated as “Socfin”. The name of
Intercultures is changed to Socfinaf.
• 01/07/2011 The share is split by 20
• 29/08/2014 Socfin exchanges 9% of Socfinaf’s shares against 100% of the shares of Société Anonyme Forestière
and Agricole SAFA, the company incorporated under French law. The latter owns 68.93% of
Safacam, a Cameroonian plantation company that exploits 5,400 hectares of palm oil trees and
4,400 hectares of rubber trees. Following this exchange, Socfin still holds 55.08% of Socfinaf.
• 31/12/2014 The SAFA participation is brought into Socfinaf through a capital increase by contribution in kind.
Socfin holds 56.48% of Socfinasia’s capital and 58.79% of Socfinaf’s capital.
Socfin
|
ANNUAL REPORT 2023
|
5
Group profile
3. Group structure
PNS LTD
Luxembourg
PNS LTD
Luxembourg
65% 58%
30%
35%
50%
50%
50% 50%
50% 50%
33%
48%
100%
15%
15%
50%
50%
93%
87%
100%
100%
100%
SOCFINAF
Luxembourg
SOCFINAF
Luxembourg
10%
19%
SOCFIN
Luxembourg
SOCFIN
Luxembourg
SOCFINASIA
Luxembourg
SOCFINASIA
Luxembourg
100%
SOCFINDE
Luxembourg
SOCFINDE
Luxembourg
20% 80%
50%
10%
50%
50%
35%
30%
50%
100%90%
100%
BEREBY-
FINANCES
Côte d’Ivoire
BEREBY-
FINANCES
Côte d’Ivoire
73%70%
100%
66%
100%
STP INVEST
Belgique
STP INVEST
Belgique
100%
SAFA
France
SAFA
France
100%
88% 69%
100%
100%
100%
50%
50%
Holding companiesHolding companies
67%
Group profile
6
|
ANNUAL REPORT 2023
|
Socfin
4. Information on the holdings of Socfin
Portfolio Number of shares Direct %
1) Listed shares
Luxembourg
Socfinasia
11,413,822 58.25%
Socfinaf
11,528,898 64.64%
2) Non-listed shares
Luxembourg
Terrasia 1,891 18.91%
Induservices 3,500 35.00%
Management Associates 3,000 30.00%
The following pages contain a summary of the
subsidiaries’ activity. It also includes comments on the
financial information regarding the past two financial
years of the main companies in which Socfin holds a
direct or indirect participation.
Unless indicated otherwise, equity includes capital,
reserves and the results that were brought forward
before the allocation of current year results.
Corporate data refers to consolidated data.
The balance sheet displays figures in the functional
currency of the respective entities.
Group profile
Socfin
|
ANNUAL REPORT 2023
|
7
SOCFINASIA
SOCFINASIA is a Luxembourgish entity with stakes in
companies that operate directly or indirectly in South-
East Asia, namely in the rubber and palm oil sectors.
Share capital: EUR 24,492,825.
The profit for the year, which ended on 31 December
2023, amounts to EUR 48,129,963. At the Annual
General Meeting, which will take place on 29 May 2024,
the Board of Directors will propose the payment of a
dividend of EUR 4.00 per share. From this, EUR 2.00
per share has already been paid at the end of 2023
as an interim dividend for the financial year of 2023.
Key figures (thousands of EUR)
At at 31 December 2023 2022
Fixed assets
357,705 405,668
Current assets
72,553 52,029
Equity (*)
424,074 452,144
Borrowings, provisions and third parties
6,183 5,552
Profit / (loss) for the period
48,130 70,685
Distribution
87,086 76,200
Share price (EUR)
15.40 14.80
Dividend per share (EUR)
4.00 3.50
Dividend / market capitalisation
G
(%)
25.97 23.65
Socfin's stake (%)
58.25 58.25
(*) Before profit allocation but after interim dividend.
Group profile
8
|
ANNUAL REPORT 2023
|
Socfin
SOCFINAF
SOCFINAF is a Luxembourgish entity with stakes
in companies that operate directly or indirectly in
tropical Africa, mainly in the rubber and palm oil
sectors.
Share capital: EUR 35,673,300.
The profit for the year, which ended on 31 December
2023 amounts to EUR 2,658,856. At the Annual General
Meeting, which will take place on 29 May 2024, the
Board of Directors will propose not to pay any dividend
for the financial year of 2023.
Key figures (thousands of EUR)
At at 31 December 2023 2022
Fixed assets
317,047 361,924
Current assets
32,231 36,676
Equity
223,913 221,254
Borrowings, provisions and third parties
125,366 177,347
Profit / (loss) for the period
2,659 -37,543
Distribution
0 0
Share price (EUR)
10.80 11.80
Dividend per share (EUR)
0 0
Dividend / market capitalisation
G
(%)
0 0
Socfin's stake (%)
64.64 64.64
Socfin
|
ANNUAL REPORT 2023
|
9
International market for rubber and palm oil
1. Rubber
SGX - NATURAL RUBBER - 5 years +
SGX - NATURAL RUBBER - 1 year +
50
100
150
200
250
300
50
100
150
200
250
300
$ct/Kg
RSS3
TSR20
100
120
140
160
180
200
220
100
120
140
160
180
200
220
$ct/Kg
RSS3
TSR20
Jan 2023
Feb 2023
Mar 2023
Apr 2023
May 2023
Jun 2023
Jul 2023
Aug 2023
Sep 2023
Oct 2023
Nov 2023
Dec 2023
Jan 2024
Feb 2024
International market for rubber and palm oil
10
|
ANNUAL REPORT 2023
|
Socfin
The international market in 2023
The average natural rubber price (TSR20
G
1
st
position
on SGX
G
) for the year 2023 is USD 1,377/T FOB
G
Singapore compared with USD 1,548/T in 2022, a fall
of 11%.
Converted into euros, the average TSR20
G
price in
2023 is EUR 1,273/T, compared with EUR 1,469/T in
2022.
The end of 2022 was marked by the end of the ‘zero-
covid’ policy in China and high stocks of natural rubber
in consumer countries. China, the world’s leading
consumer of natural rubber, saw one of its lowest
rates of economic growth for 40 years in 2022, at 3%.
Hopes of a recovery in Chinese economic activity at
the start of the year enabled natural rubber prices
to reach levels close to USD 1,450/T at the end of
January 2023. Indeed, the lifting of public health
measures was expected to go hand in hand with a
spectacular upturn in the Chinese economy. In reality,
however, the country has not recovered, faced with
a major property crisis, falling exports and sluggish
domestic consumption.
Against this backdrop, and despite the start of the
winter season in producing countries, prices remained
under pressure from February onwards, fluctuating
between USD 1,300 and USD 1,400/T against a
backdrop of slowing consumption, the war in Ukraine,
persistent inflationary pressures, restrictive monetary
policies on the part of the main central banks and
turbulence in the banking sector. In mid-August,
natural rubber prices reached their lowest point of
the year at USD 1,270/T.
The fall in demand for natural rubber was particularly
felt in the European and American markets, leading
to an increase in inventories at tyre manufacturers’
plants.
The fall in production in Indonesia and Malaysia, due
in particular to a rubber tree disease, did not have
a positive effect on natural rubber prices, as it was
offset by increased production in other countries
such as Côte d’Ivoire and Cambodia. In 2023, Côte
d’Ivoire recorded its strongest annual production
growth (+26%) for five years, consolidating its status
as the world’s third producer with 1.68 million tons
produced.
From the end of August, natural rubber prices
recovered following measures taken by the Chinese
government to stimulate economic growth and
downward revisions to production in Thailand and
Indonesia due to heavy rains hampering harvests.
At the end of December, natural rubber prices broke
through the USD 1,500/T barrier and reached their
highest level of the year at USD 1,561/T on the last
closing day of 2023.
In stark contrast to 2021 and the first half of 2022,
global logistics improved at the end of 2022 and ocean
freight rates fell steadily during 2023 to return to
pre-COVID levels. Freight rates out of Asia have fallen
faster than out of Africa, making Asian rubber more
competitive with African rubber.
However, the tensions that have arisen in the Red
Sea have had an impact on freight rates from Asia
to Europe, which began to rise sharply at the end
of 2023. Shipowners are now having to divert their
vessels to the Cape of Good Hope instead of the Suez
Canal, and are imposing substantial freight surcharges
for cargoes originating in Asia.
According to the latest forecasts published by
GlobalData in February 2024, world natural rubber
production in 2023 will be 14.15 million tons, down
1.1% on 2022, while world consumption will be
14.03 million tons, up 2.3% on 2022, resulting in a
surplus of 118,000 tons in 2023 compared with 596,000
tons in 2022.
International market for rubber and palm oil
Socfin
|
ANNUAL REPORT 2023
|
11
Outlook 2024
Natural rubber prices remained above USD 1,500/T
at the start of the year, reaching USD 1,603/T at the
end of February, their highest level since July 2022.
Natural rubber prices should be supported in 2024
by tight supply and a recovery in demand. Poor
weather conditions which disrupted production in
the southern provinces of Thailand in late 2023 and
early 2024 and the possibility of an early winter
in the main producing countries linked to the El
Nino phenomenon could amplify the natural rubber
deficit forecast for 2024.
The end of interest rate rises and, depending on
inflation trends, a probable easing of monetary
policy by central banks in the USA and Europe could
encourage an economic recovery with a positive
impact in terms of demand for natural rubber.
Price trends will also depend on the effectiveness
of the measures taken by the Chinese government
to stimulate the economic recovery, which remains
affected by an unprecedented property crisis and
a global economic slowdown as a result of the fight
against inflation.
The entry into force at the end of 2024 of the
European “EUDR” regulation aimed at banning
certain raw materials derived from deforestation
should change the structure of the market. The
strong demand from tyre manufacturers for
traceable natural rubber destined for mainland
Europe should enable producers who can prove that
their supply chain is legal and does not come from
deforested areas to obtain a substantial premium
over the reference market. Rubber producers who
do not comply with the EUDR will be forced to sell
their production outside the single market at a
lower premium.
According to the IRSG’s latest forecasts, published
in August 2023, the IRSG estimates world
production in 2024 at 14.90 million tons (up 2.2%)
and world demand of around 14.95 million tons (up
2.7%), resulting in a rubber deficit of 48,000 tons.
Consumption and production are therefore almost
in balance.
The TSR20
G
1
st
FOB
G
Singapore position on SGX
G
was
quoted at USD 1,603/T on 23 February 2024.
International market for rubber and palm oil
12
|
ANNUAL REPORT 2023
|
Socfin
2. Palm oil
CIF ROTTERDAM - PALM OILS - 5 years +
CIF ROTTERDAM - PALM OILS - 1 year +
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2,800
$/Mton
CPO
CPKO
600
700
800
900
1,000
1,100
1,200
600
700
800
900
1,000
1,100
1,200
$/Mton
CPO
CPKO
Jan 2023
Feb 2023
Mar 2023
Apr 2023
May 2023
Jun 2023
Jul 2023
Aug 2023
Sep 2023
Oct 2023
Nov 2023
Dec 2023
Jan 2024
Feb 2024
International market for rubber and palm oil
Socfin
|
ANNUAL REPORT 2023
|
13
World palm oil production in million tons
(source: Oil World)
2024 (*) 2023 2022 2021 2020 2019 2018 2015 2005 1995
Indonesia
48.2 48.4 46.7 44.7 42.8 44.2 41.6 33.4 14.1 4.2
Malaysia
18.4 18.6 18.5 18.1 19.1 19.9 19.5 20.0 15.0 7.8
Other
14.8 14.4 14.0 13.1 12.2 12.4 11.9 9.1 4.8 3.2
TOTAL
81.4 81.6 79.2 75.9 74.1 76.5 73.0 62.5 33.9 15.2
(*) Estimated (December 2023).
Production of the main oils in million tons
(source: Oil World)
Oct 2023 to Sep 2024 (*) 2023 2022 2021 2020 2019 2018 2015 2005 1995
Palm
81.4 81.6 79.2 75.9 74.1 76.5 73.0 62.5 33.9 15.2
Soya
61.4 59.7 60.1 60.1 58.6 56.8 56.8 48.8 33.6 20.2
Rapeseed
30.9 30.6 25.7 26.9 25.3 24.9 25.6 26.3 16.2 10.8
Sunflower
22.3 22.3 19.7 18.9 21.3 20.7 19.0 15.1 9.7 8.7
Palm kernel
8.5 8.4 8.2 8.0 7.8 8.1 7.7 6.8 4.0 2.0
Cotton
4.5 4.4 4.4 4.4 4.6 4.6 4.7 4.7 5.0 3.9
Peanut
4.4 4.4 4.7 4.4 4.2 3.7 4.0 3.7 4.5 4.3
Copra
3.0 3.1 3.0 2.8 2.6 2.9 2.9 2.9 3.2 3.3
TOTAL
216.6 214.5 205.1 201.4 198.5 198.2 193.7 170.8 110.1 68.4
(*) Estimated (December 2023).
The international market in 2023
The average price for CIF Rotterdam
G
crude palm oil
in 2023 is USD 964/T, compared with USD 1,352/T in
2022.
Whereas 2022 had been characterised by high price
volatility, 2023 was marked by a degree of stability,
with prices mostly fluctuating between USD 900 and
USD 1,000/T.
In 2022, prices rose spectacularly in the first half of
the year, triggered by a sudden restriction in supply
due to the Russian-Ukrainian conflict and protectionist
measures taken by Indonesia. Then, in the second half
of the year, rising stocks and the massive return of
Indonesian palm oil to the markets created strong
downward pressure on prices. After losing almost USD
500/T in the space of a few months, the price of CIF
Rotterdam
G
crude palm oil ended 2022 at around USD
1,000/T.
Over the first few months of 2023, prices stabilised at
around USD 1,000/T, with the market torn between
bullish and bearish news. The supply of vegetable oil
on the markets remained strong, encouraging bearish
sentiment. At the same time, fairly positive export
statistics and difficult weather conditions likely to
affect harvests helped to support prices during this
period.
After several months without much volatility, palm oil
prices finally eroded in May, falling from USD 1,000/T
to USD 850/T CIF Rotterdam
G
, before rebounding in
June following announcements of a likely return of the
El Niño weather phenomenon. In South-East Asia, El
Niño is traditionally synonymous with drought, which
can lead to sharp falls in production, and therefore a
tightening of palm oil supply on the markets.
International market for rubber and palm oil
14
|
ANNUAL REPORT 2023
|
Socfin
However, while the occurrence of this climatic
phenomenon has now been confirmed, the forecasts
for a “strong” El Niño have gradually faded. The
impact on palm oil production could be delayed and
less severe than expected.
Oil World forecasts global palm oil production at
around 81.6 million tons in 2023.
Demand remains strong, despite the slowdown in the
Chinese economy. India remains the biggest importer,
with almost 10 million tons expected to be imported
by 2023. But the biggest consumer is Indonesia, which
absorbs more than 20 million tons of palm oil a year,
or 40% of its production. The proportion destined for
the biofuel industry (11 million tons) now exceeds
that destined for the food industry (9 million tons).
At the end of 23 December 2023, the CIF Rotterdam
G
CPO
G
was trading at around USD 935/T.
Outlook 2024
After rising sharply in recent years, global palm oil
production is now running out of steam. The two
main palm oil producing countries, Indonesia and
Malaysia (85% of world production), are experiencing
a slowdown in production growth, with fewer areas
available for planting and labour shortages. In addition,
the possible effects of the El Niño phenomenon on
palm plantations could also have an impact on palm
oil production in 2024.
The available supply of palm oil could therefore prove
insufficient to satisfy the growth in world demand.
Demand remains strong, thanks in particular to the
increase in the world’s population and the continuing
rise in demand for vegetable oils in developing
countries.
Given the current global economic slowdown,
however, demand could show signs of weakening,
even if the main importing countries, led by India and
China, do not see their consumption fall significantly.
The biofuels industry’s increasingly ambitious
programmes (B20 in Malaysia, B35 in Indonesia) should
provide some support for palm oil prices. By 2023, it
is estimated that over 20 million tons of palm oil (25%
of global production) will have been used to make
biodiesel.
Some experts also believe that the entry into force of
the European regulation on imported products (EUDR)
could create a two-tier palm oil market. From the end
of 2024, this law will prohibit the arrival on European
soil of raw materials originating from deforestation
zones after 2020. This restrictive legislation could
split the palm oil market in two: on the one hand,
traceable palm oil produced by the largest plantations
capable of complying with European regulations, and
on the other, downgraded oil produced by smaller
players that will be sold outside the European Union.
This “non-labelled” oil would then see its price fall in
relation to “EUDR” palm oil.
Palm oil prices are also likely to be affected by the
trend in soya prices in 2024. Brazil, which accounts
for almost 40% of global soya production, is currently
experiencing severe weather problems (dry weather in
Mato Grosso and heavy rain in Paraná) that are likely
to affect the 2024 harvest and influence the overall
supply of vegetable oils on the markets.
On 23 February 2024, the CIF Rotterdam
G
CPO
G
was
quoted at around USD 960/ton.
Socfin
|
ANNUAL REPORT 2023
|
15
Environment and social responsibility
Along with its specific commitment to transparency,
the Group has built a responsible management policy
around its three pillars of commitment, namely: rural
development, workers and local communities, and
environment. These commitments form the basis of
key initiatives that are aimed at improving long-term
economic performance, social well-being, health,
safety and natural resource management.
An implementation plan for this policy was defined
and implemented since 2022.
A regularly updated dashboard, as well as a separate
annual report (“Sustainable Development Report”),
details the efforts and actions undertaken by the
Socfin Group in this area.
The responsible management policy, the dashboard
and the annual sustainable development report are
available on the Group’s website.
16
|
ANNUAL REPORT 2023
|
Socfin
1. Activity Indicators
Area (hectares) Rubber Palm
As at 31
December 2023
Immatures (by year of planting)
2023
850 2,740
2022
559 2,748
2021
1,055 2,766
2020
1,190 0
2019
1,529 0
2018
2,361 0
2017
912 0
2016
167 0
2015
611 0
2014
74 0
2013
0 0
2012
3 0
2011
40 0
Total immatures
9,351 7,984
Young (from 8 to 11 years)
15,325 (from 4 to 7 years) 21,816
Prime (from 12 to 22 years)
26,729 (from 8 to 18 years) 57,668
Old (above 22 years)
8,975 (above 18 years) 42,747
Total in production
51,030 122,231
TOTAL
60,381 130,215
Area (hectares) 2023 2022 2021 2020 2019
Palm
130,215 130,239 130,093 129,934 129,667
Rubber
60,381 60,800 61,826 62,560 63,190
TOTAL
190,596 191,039 191,919 192,494 192,857
Production 2023 2022 2021 2020 2019
Palm Oil (tons)
550,951 529,160 536,508 503,926 468,441
Own production
G
508,118 488,060 489,733 468,303 434,013
Third party purchases
G
42,833 41,100 46,775 35,623 34,428
Rubber (tons)
164,722 160,185 167,278 160,411 162,975
Own production
G
83,460 71,941 70,880 64,082 68,873
Third party purchases
G
81,262 88,243 96,397 96,329 94,102
Seeds (thousands)
12,654 17,683 15,030 9,454 6,308
Own production
G
12,654 17,683 15,030 9,454 6,308
Key figures
Key figures
Socfin
|
ANNUAL REPORT 2023
|
17
Turnover (EUR million)
2023 2022 2021 2020 2019
Palm
525 583 471 347 309
Rubber
225 269 234 183 200
Other agricultural products
7 9 6 4 4
Trading activities
G
96 119 119 64 72
Other
10 11 8 7 7
TOTAL
863 992 838 605 592
Staff 2023 2022 2021 2020 2019
Average workforce
33,809 35,226 34,945 33,834 34,916
2. Key figures in the consolidated income statement
(EUR million)
2023
2022
Restated
2021 2020 2019
Turnover
863 992 838 605 592
Operating income
179 259 235 92 81
Profit / (loss) for the period attributable to the Group
42 74 80 6 9
EBITDA
G
271 355 294 172 152
Net cash flows from operating activities
187 283 252 141 93
Free cash flows
G
115 209 179 59 -20
3. Key figures in the consolidated statement of financial position
(EUR million)
2023
2022
Restated
2021
Restated
2020 2019
Bearer biological assets
389 438 479 468 520
Other non-current assets
366 379 370 339 361
Current assets
339 374 329 224 227
Assets classified as held for sale
6 0 0 0 0
Total equity
767 809 737 576 640
Non-current liabilities
128 127 212 136 237
Current liabilities
205 256 228 319 229
18
|
ANNUAL REPORT 2023
|
Socfin
Stock market data
(EUR)
2023
2022
Restated
2021
Restated
2020 2019
Number of shares
14,159,720 14,159,720 14,159,720 14,159,720 14,159,720
Equity attributable to the owners of the
Company
425,338,285 431,235,365 380,256,719 284,874,406 317,582,175
Undiluted net profit per share
2.94 5.23 5.68 0.33 0.64
Dividend per share
1.00 1.25 0.60 0 0.55
Share price
Minimum
20.00 19.20 18.60 18.20 23.20
Maximum
31.00 24.40 24.00 27.00 29.00
Closing
31.00 20.20 20.80 23.20 26.60
Market capitalisation
G
438,951,320 286,026,344 294,522,176 328,505,504 376,648,552
Dividend paid / net profit attributable to the
owners of the Company
34.01% 23.41% 10.56% N/A 85.94%
Dividends / market capitalisation
G
3.23% 6.19% 2.88% N/A 2.07%
Market price / undiluted net profit per share
10.54 3.78 3.66 70.30 41.56
Socfin
|
ANNUAL REPORT 2023
|
19
Corporate governance statement
1. Introduction
Socfin pays close attention to the evolution of the ten
principles of corporate governance of the Luxembourg
Stock Exchange. It commits to providing the necessary
explanations for a comprehensive understanding on
how the Company functions.
Corporate governance is a set of principles and
rules whose main objective is to contribute to long-
term value creation. It allows the Board to promote
the interests of the Company and its shareholders
while putting in place effective control systems,
management of risks and conflicts of interests.
2. Corporate governance chart
The Board of Directors adopted the corporate
governance chart on 21 November 2018. It was
updated on 27 March 2024 and is available on the
Group’s website.
3. Board of Directors
Composition of the Board of Directors
Name Nationality
Year of
Birth
Position
First
nomination
Term of Office
Mr. Hubert Fabri Belgian 1952 Chairman
(a)
AGO 1981 AGO 2027
Mr. Vincent Bolloré French 1952 Director
(a)
AGE 1990 AGO 2029
Mr. Cyrille Bolloré French 1985 Director
(a)
AGO 2022 AGO 2028
Mr. François Fabri Belgian 1984 Director
(b)
AGO 2014 AGO 2026
Mr. Philippe Fabri Belgian 1988 Executive Director
(b)
AGO 2020 AGO 2026
(a) Non-Executive Dependent Director
(b) Executive Dependent Director
The mandate of Mr. François Fabri, outgoing Director,
is eligible for re-election. The Board will propose the
renewal of this term of office at the next General
Meeting. This renewal will hold for a period of six
years, until the General Meeting of 2030.
20
|
ANNUAL REPORT 2023
|
Socfin
Corporate governance statement
Other mandates held by the directors in listed companies
Hubert Fabri
Chairman
Positions and offices held in Luxembourgish companies
• Chairman and director of the Board of Directors of Société Financière des Caoutchoucs “Socfin”, Socfinaf
and Socfinasia.
Positions and offices held in foreign companies
• Chairman and Director of the Board of Directors of Palmeraies de Mopoli;
• Vice-Chairman of Société des Caoutchoucs du Grand Bereby “SOGB”;
• Vice-Chairman and member of the Supervisory Board of Compagnie du Cambodge;
• Director of Compagnie de l’Odet, Financière Moncey, Okomu Oil Palm Company, S.A.F.A. Cameroon
“Safacam”, Société Industrielle et Financière de l’Artois and La Forestière Equatoriale;
• Permanent representative of Administration and Finance Corporation “AFICO” at the Board of Société
Camerounaise de Palmeraies “Socapalm”.
Vincent Bolloré
Director
Positions and offices held in Luxembourgish companies
• Director of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia.
Positions and offices held in foreign companies
• Chairman and Chief Executive Officer of Compagnie de l’Odet;
• Vice-Chairman of Société des Caoutchoucs du Grand Bereby “SOGB”;
• Director of Compagnie de l’Odet;
• Permanent representative of Bolloré Participations SE on the Boards of Directors of S.A.F.A. Cameroon
“Safacam”, Société des Caoutchoucs du Grand Bereby “SOGB” and Société Camerounaise de Palmeraies
“Socapalm”.
Cyrille Bolloré
Director
Positions and offices held in Luxembourgish companies
• Director of Société Financière des Caoutchoucs “Socfin” and Socfinasia;
• Permanent representative of Bolloré Participations SE on the Boards of Directors of Socfinaf.
Positions and offices held in foreign companies
• Chairman and Chief Executive Officer of the Board of Directors of Bolloré SE;
• Member of the Supervisory Board of Compagnie du Cambodge;
• Vice-Chairman of Compagnie de l’Odet;
• Director of Bolloré SE, Compagnie de l’Odet and Société Industrielle et Financière de l’Artois;
• Permanent representative of Compagnie du Cambodge on the Board of Financière Moncey;
• Member of the Supervisory Board of Vivendi SE;
• Non-Executive Director and member of the Compensation Committee of UMG N.V.
Corporate governance statement
Socfin
|
ANNUAL REPORT 2023
|
21
François Fabri
Director
Positions and offices held in Luxembourgish companies
• Director of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia;
• Executive Director of Socfinaf.
Positions and offices held in foreign companies
• Permanent Representative of Administration and Finance Corporation “AFICO” on the Board of Société des
Caoutchoucs du Grand Bereby “SOGB” and Société Industrielle et Financière de l’Artois;
• Managing Director of Palmeraies de Mopoli;
• Director of S.A.F.A. Cameroon “Safacam” and Société Camerounaise de Palmeraies “Socapalm”.
Philippe Fabri
Executive Director
Positions and offices held in Luxembourgish companies
• Director of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia;
• Executive Director of Société Financière des Caoutchoucs “Socfin”.
Positions and offices held in foreign companies
• Member of the Supervisory Board of Palmeraies de Mopoli;
• Permanent representative of Société Anonyme Forestière et Agricole “SAFA” on the board of S.A.F.A.
Cameroon “Safacam”.
Appointments of Directors
The Board of Directors proposes the appointment
of the Directors at the Annual General Meeting of
shareholders.
In the event of a vacancy due to the passing of or
following the resignation of one or more Directors,
the remaining Directors will proceed to temporary co-
optations. These co-optations will be subject to the
approval of the Annual General Meeting at its following
meeting. The Director appointed to replace another
Director will complete the term of his predecessor.
Role and powers of the Board of Directors
The Board of Directors is the body responsible for
the management of the Company and the control of
day-to-day management. It acts in the interest of the
Company.
The Board of Directors ensures that all financial
and human resources are available and that all the
necessary structures are in place to achieve its
objectives and secure long-term value creation.
The Articles of Association empower the Board of
Directors to perform all actions necessary to achieve
the corporate purpose.
22
|
ANNUAL REPORT 2023
|
Socfin
Corporate governance statement
Activity report of the Board of Directors
Number of meetings
There are at least two meetings for the end and mid-
year evaluations. During the 2023 financial year, the
Board of Directors met 5 times.
Topics generally discussed
Periodic accounting situations;
Portfolio movements;
Inventory and valuation of the portfolio;
Evolution of significant holdings;
Management report;
Investment projects;
Corporate, social and environmental responsibility.
Average attendance rate of Directors
- 2023: 95%
- 2022: 92%
- 2021: 93%
- 2020: 92%
- 2019: 92%
4. Committees of the Board of Directors
4.1. Audit Committee
The Committee consists of three members, of which
2 are independents and one is assigned as President
of the Audit Committee. The members of the Audit
Committee are appointed for one year and are eligible
for re-election. This Audit Committee is effective as of
1 January 2024 and has been in charge of supervising
the preparation of the financial information for the
year 2023.
The Board of Directors has proposed that its constitution
will be as follows:
9 Mrs. Valérie Hortefeux (Independent Member) -
Chairperson
9 Mr. Frédéric Lemaire (Independent Member)
9 Mr. Philippe Fabri (Director)
The appointment of the non-executive members will
be confirmed at the General Meeting of Shareholders
on 29 May 2024.
The Audit Committee will assist the Board of Directors
in its supervisory function and is responsible of the
monitoring of the financial reporting, the audit
process, the analysis and the control of financial risks.
The Audit Committee shall meet three times a year.
4.2. Appointment and Remuneration Committee
The principal shareholders set the remuneration of
the operational management of Socfin. The Board of
Directors does not consider it necessary to set up a
Remuneration Committee. Similarly, for practical
reasons and due to the size of the Company, the Board
of Directors has chosen not to set up a Nomination
Committee.
Corporate governance statement
Socfin
|
ANNUAL REPORT 2023
|
23
5. Remunerations
The remuneration allocated to the members of the
Board of Directors of Socfin for the financial year
of 2023 amounts to EUR 14,299,575, compared to
EUR 18,071,177 for the financial year of 2022. The
Directors of Socfin did not receive any other payment
in shares (stock options).
6. Shareholding status
Shareholder
Number of shares held =
Number of voting rights (*)
Percentage holding Date of notification
Hubert Fabri 5,083,420 35.90 31/05/2023
AFICO S.A.
L-1650 Luxembourg 2,834,772 20.02 06/10/2023
Total Hubert Fabri
(direct and indirect) 7,918,192 55.92
Bolloré Participations SE
F-29500 Ergué Gaberic 1,000 0.01 07/06/2023
Bolloré SE
F-29500 Ergué Gaberic 2,110,698 14.91 07/06/2023
Compagnie du Cambodge
F-92800 Puteaux 1,747,220 12.34 07/06/2023
Technifin
CH-1705 Fribourg 1,416,062 10.00 07/06/2023
Plantations des Terres Rouges
L-1724 Luxembourg 268,080 1.89 07/06/2023
Compagnie des Glénans
F-29500 Ergué Gaberic 80,000 0.56 07/06/2023
Compagnie de l’Odet
F-29500 Ergué Gaberic 5,534 0.04 07/06/2023
Total Bolloré Participations SE
(direct and indirect) 5,628,594 39.75
Corporate governance statement
24
|
ANNUAL REPORT 2023
|
Socfin
7. Financial calendar
29 May 2024 Annual General Meeting at noon
8 June 2024 Payment of the balance of dividend for 2023 (coupon number 84)
End of September 2024 Half-year stand-alone and consolidated results as at 30 June 2024
Mid-November 2024 Interim Management statement for 3
rd
quarter of 2024
End of March 2025 Annual stand-alone results as at 31 December 2024
Mid-April 2025 Consolidated annual results as at 31 December 2024
Mid-May 2025 Interim Management statement for the 1
st
quarter of 2025
28 May 2025 Annual General Meeting at noon
The results of the Company are published on the website of the Luxembourg Stock Exchange www.bourse.lu and
on the website of the Company www.socfin.com.
8. External audit
Independent statutory auditor
(Réviseur d’entreprises agréé)
Ernst & Young “EY”
35E Avenue John F. Kennedy
L-1855 Luxembourg.
In 2023, the audit fees amount to EUR 1,529,754 VAT
included.
The audit fees include all fees paid to the independent
statutory auditor of the Group, as well as those paid
to member firms within their network for the year. No
material consulting work or other non-audit services
have been performed by those companies in 2023.
9. Corporate, social and environmental responsibility
Along with its specific commitment to transparency,
the Group has built a responsible management policy
around its three pillars of commitment, namely: rural
development, workers and local communities, and
environment. These commitments form the basis of
key initiatives that are aimed at improving long-term
economic performance, social well-being, health,
safety and natural resource management.
An implementation plan for this policy has been
defined and implemented since 2022.
The efforts and actions undertaken by the Socfin
Group in this area are detailed in a regularly updated
dashboard as well as in a separate annual report
(“Sustainable Development Report”).
The responsible management policy, the dashboard
and the annual sustainable development report are
available on the Group’s website.
10. Other information
Following the Regulation 2016/347 of the European
Commission of 10 March 2016, which specifies the
modalities for updating insider lists, a list of insiders
has been drawn up and is updated continuously. The
persons concerned were informed of their inclusion
on this list.
Socfin
|
ANNUAL REPORT 2023
|
25
Statement of compliance
Mr. Philippe Fabri, Director and Mr. Daniel Haas, Chief Financial Officer, indicate that, to their knowledge:
(a) in accordance with the international accounting standards adopted by the European Union, the consolidated
financial statements prepared for the year which ended on 31 December 2023, provide a true and fair view
of the assets and liabilities, the financial position and the profits or losses attributable to Socfin and all of
the entities included in consolidation; and
(b) the management report presents the following information in a fair manner: the evolution and results of the
Company, the financial position of the Group and all the entities that are included in the consolidation, as
well as a description of the main risks and uncertainties they face.
26
|
ANNUAL REPORT 2023
|
Socfin
Consolidated management report
Directors’ report on the consolidated financial statements
presented by the Board of Directors to the
Annual General Meeting of the Shareholders of 29 May 2024
Ladies and Gentlemen,
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as at 31 December
2023 include the financial statements of Socfin and
of all subsidiaries and direct and indirect associate
companies. The details are given in Note 2 of the notes
to the consolidated financial statements.
As stated in Note 1 to the consolidated financial
statements, the consolidated financial statements were
prepared in accordance with the International Financial
Reporting Standards (IFRS
G
) as adopted by the European
Union. Socfin (the Group) adopted IFRS for the first time
in 2005, and implemented all the standards applicable
to the Group as at 31 December 2023.
Consolidated results
For the 2023 financial year, the result attributable
to the Group as the parent company amounted to
EUR 41.6 million compared to EUR 74.0 million in
2022. This resulted in net earnings of EUR 2.94 per
share against EUR 5.23 in 2022.
The consolidated revenue on 31 December 2023
amounted to EUR 862.5 million compared to
EUR 991.5 million in 2022 (EUR -129.0 million). This
change in revenue is mainly due to a decrease in the
price (EUR -47.0 million) and a variation of transactional
currency versus the Euro (EUR -87.7 million).
The operating profit amounted to EUR 178.7 million
compared to EUR 259.3 million during the previous
period. As a reminder, in 2022 the fixed assets
were subject to a non-recurring impairment of
EUR 27.3 million.
Other financial income decreased to EUR 34.1 million
compared to EUR 39.2 million in 2022. They mainly
consisted of foreign exchange gains of EUR 29.6 million
and interests from current assets of EUR 4.2 million.
Financial expenses amounted to EUR 49.8 million
compared to EUR 56.5 million during 2022. They mainly
consisted of foreign exchange losses of EUR 36.8 million
and interests on loans of EUR 6.1 million.
Furthermore, the tax expense decreased, with
income taxes amounting to EUR 60.0 million
compared to EUR 71.3 million in 2022. Deferred
income tax amounted to EUR -4.6 million compared to
EUR -8.5 million in 2022.
Consolidated statement of financial position
Socfin’s assets consist of:
- non-current assets of EUR 755.3 million compared
to EUR 817.0 million on 31 December 2022. There is
thus a decrease of EUR -61.7 million, which is mainly
due to a decrease in the non-current biological
assets of EUR -48.8 million, in the property, plant
and equipment of EUR -32.3 million, and to the
increase in right-of-use assets of EUR 21.6 million;
- current assets that amount to EUR 339.0 million
compared to EUR 374.2 million on 31 December
2022. This is mainly due to a decrease in the cash
and cash equivalents of EUR 17.9 million and in
inventories of EUR 16.5 million.
The shareholders’ equity amounted to EUR 425.3 million
compared to EUR 421.0 million on 31 December
2022. The variation in the shareholders’ equity of
EUR +4.4 million is mainly due to the profit during
the period (of EUR +41.6 million), the impact of
hyperinflation (of EUR +10.3 million), the dividend paid
during the period (with an impact of EUR -14.1 million)
and the variation of translation reserve (with an impact
of EUR -34.2 million).
Consolidated management report
Socfin
|
ANNUAL REPORT 2023
|
27
Based on the consolidated shareholders’ equity, the net
value per share
G
before the distribution of dividend is
EUR 30.04 against EUR 29.73 at the end of the previous
year. As at 31 December 2023, the share price stands at
EUR 31.00.
Current and non-current liabilities decreased to
EUR 332.8 million compared to EUR 406.1 million at the
end of 2022. The difference is mainly due to a decrease
of EUR 51.4 million in long-term and short-term
financial debts and of EUR 23.5 million in the current
tax liabilities.
Consolidated cash flow
As at 31 December 2023, cash and cash equivalents
amount to EUR 153.3 million, with a decrease of
EUR 14.6 million for the entire year (compared to
an increase of EUR 30.6 million during the previous
financial year).
Net cash flows from operating activities amount
to EUR 187.5 million for the 2023 financial year
(EUR 282.7 million during 2022) and cash flows from
operations amount to EUR 261.9 million compared to
EUR 329.9 million during the previous year.
Cash flows from investing activities amount to
EUR -72.4 million (compared to EUR -73.3 million
during 2022).
Cash flows from financing activities amount to
EUR -118.0 million (compared to EUR -179.4 million
during 2022). They relate primarily to the payment of
dividends of EUR -71.0 million and to the decrease in
net borrowings for EUR -38.4 million.
2. FINANCIAL INSTRUMENTS
Financial risk management policies are described in the
notes to the consolidated financial statements of the
Company (refer to Notes 26 and 35).
3. OUTLOOK 2024
The results for the next financial year will largely
depend on factors that are external to the Group’s
management such as the prevailing political and
economic conditions in the countries where the
subsidiaries are established, the changes in the
price of rubber and palm oil, but also the price of
the Indonesian rupiah and the US dollar against the
Euro. The Group, for its part, maintains its policy of
keeping cost prices as low as possible and of improving
its production capacity.
4. POLITICAL AND ECONOMIC ENVIRONMENT
The Company holds interests in subsidiaries which
operate indirectly in Africa and South-East Asia.
Given the economic and political instability in some of
these countries, these holdings present a risk in terms
of their exposure to political and economic changes.
Geopolitical uncertainties
In February 2022, a number of countries (including
the US, UK and EU) imposed sanctions against certain
entities and individuals in Russia as a result of the
official recognition of the Donetsk People Republic and
Lugansk People Republic by the Russian Federation.
Announcements of potential additional sanctions were
made following military operations initiated by Russia
against Ukraine on 24 February 2022.
On 7 October 2023, Palestinian militant groups led by
Hamas launched a coordinated surprise offensive on
Israel resulting in more than 1,200 deaths, primarily
Israeli citizens. Following this attack, Israel declared
Consolidated management report
28
|
ANNUAL REPORT 2023
|
Socfin
itself in a state of war for the first time since the Yom
Kippur War in 1973.
Due to the geopolitical tensions, since February 2022,
there has been a significant increase in volatility on
the securities and currency markets. The conflicts
have had a significant impact on the financial markets,
with many investors concerned about the risk of
further escalation and the ensuing impact on global
trade and economic growth.
Although the aforementioned aspects have not
significantly impacted the company’s operations nor
performance and going concern has during 2023, the
Board of Directors continues to monitor the evolving
situation and its impact on the company’s financial
position and results.
5. EVENTS AFTER THE CLOSING DATE
There are no material events after the closing date
to mention.
6. CORPORATE GOVERNANCE
The Board of Directors implements the corporate
governance rules that are applicable in the Grand
Duchy of Luxembourg into the Group’s financial
structure and reports.
Further information on how these rules are
implemented is available in the corporate governance
statement of the annual report and in the management
report on the Company’s stand-alone financial
statements.
7. GENERAL INTERNAL CONTROL SYSTEM ADAPTED TO THE GROUP’S
SPECIFIC ACTIVITIES
Segregation of functions
The segregation of the operational, commercial and
financial functions implemented at each level of the
Group encourages an autonomous model of internal
control.
In each of their area of responsibility, these different
functions ensure the completeness and reliability
of information. They provide regular updates on
this aspect to local managers and to the Group’s
headquarters, on information related to agricultural
and industrial production, trade, human resources,
finance, etc.
Autonomy and accountability of subsidiaries
The operational entities have a large degree of
autonomy in their management due to geographical
distances. In particular, they are responsible for
the implementation of an internal control system,
which is adapted not only to the nature and extent
of their activity, but also to the optimisation of their
operations and financial performances, the protection
of their assets and the management of their risks.
This autonomy allows the entities to be more
accountable and to ensure consistency between
their practices and the legal framework of their host
country.
Centralised control
The top management of the entities within the Group
adhere to a Human Resources Management policy,
which is centralised at the Group’s headquarters.
This policy contributes to the smooth running of the
internal control system and ensures its effectiveness
through different practices such as autonomous
recruiting processes, the harmonisation of all
Consolidated management report
Socfin
|
ANNUAL REPORT 2023
|
29
segregated functions, as well as annual evaluations
and training programs.
The operational, commercial and financial functions
centrally define a set of standard reports which ensure
that information originating from the subsidiaries is
presented homogenously.
Treasury reporting process
The treasury department organises, supervises and
controls the reporting of the subsidiaries’ daily
information and weekly indicators. In particular, it
monitors the position of the cash flow, the evolution
of net debt and the expenses related to investments.
Financial reporting process
The financial department organises, supervises
and controls the reporting of monthly accounting,
budgetary and financial information. It distributes
condensed reports used by the Group’s operational
management.
Twice per year, it includes this information in the long-
term development plan of the subsidiaries. It also
ensures the implementation of the financial decisions
taken by the subsidiaries’ Board of Directors.
Preparation of consolidated accounts
The consolidated financial statements are prepared
on a half-yearly basis. On a yearly basis, they are
audited by the external auditors as part of a financial
audit of subsidiaries, which covers both the statutory
accounts of the entities in the scope of consolidation
and the consolidated financial statements.
Once approved by the Board of Directors, they are
published.
The consolidation department of the Group
guarantees homogeneity and treatment monitoring
for all companies within the scope of consolidation. It
strictly adheres to the accounting standards in force
relating to consolidation operations. It uses a standard
consolidation tool to ensure a number of procedures,
such as the secure processing of information
feedback from subsidiaries, the transparency and
relevance of automatic consolidation processes
and the consistency of the accounting aggregates’s
presentation in the annual report. Lastly, due to the
complexity of the accounting standards in force and
the many specificities around their implementation,
the consolidation service centralises the adjustments
specific to the valuation rules applicable to the
consolidated financial statements.
8. ENVIRONMENT AND SOCIAL RESPONSIBILITY
Along with its specific commitment to transparency, the
responsible management policy embodies the Group’s
three pillars of commitment: rural development,
workers and local communities, and environment.
These commitments form the basis of key initiatives
aimed at improving long-term economic performance,
social well-being, health, safety and natural resource
management.
An implementation plan for this policy was defined
and implemented since 2022.
A regularly-updated dashboard as well as a separate
annual report (“Sustainable Development Report”)
detail the efforts and actions undertaken by the Socfin
Group in relation to this policy.
The responsible management policy, the dashboard
and the annual sustainable development report are
available on the Group’s website.
The Board of Directors
30
|
ANNUAL REPORT 2023
|
Socfin
Auditor’s report on the consolidated financial statements
To the Shareholders of
Société Financière des Caoutchoucs S.A.
4, Avenue Guillaume
L-1650 Luxembourg
Report on the audit of the consolidated
financial statements
Opinion
We have audited the consolidated financial statements
of Société Financière des Caoutchoucs S.A. (the
“Company”) and its subsidiaries (the “Group”), which
comprise the consolidated statement of financial
position as at 31 December 2023, and the consolidated
statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and
the notes to the consolidated financial statements,
including material accounting policy information.
In our opinion, the accompanying consolidated
financial statements give a true and fair view of the
consolidated financial position of the Company as at
31 December 2023, and of its consolidated financial
performance and consolidated cash flows for the year
then ended in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the
European Union.
Basis for opinion
We conducted our audit in accordance with EU
Regulation N° 537/2014, the Law of 23 July 2016 on
the audit profession (“Law of 23 July 2016”) and with
International Standards on Auditing (“ISAs”) as adopted
for Luxembourg by the “Commission de Surveillance
du Secteur Financier” (“CSSF”). Our responsibilities
under the EU Regulation Nº 537/2014, the Law of 23
July 2016 and ISAs as adopted for Luxembourg by the
CSSF are further described in the “Responsibilities
of the “réviseur d’entreprises agréé” for the audit
of the consolidated financial statements” section of
our report. We are also independent of the Company
in accordance with the International Code of Ethics
for Professional Accountants, including International
Independence Standards, issued by the International
Ethics Standards Board for Accountants (“IESBA Code”)
as adopted for Luxembourg by the CSSF together
with the ethical requirements that are relevant to
our audit of the consolidated financial statements,
and have fulfilled our other ethical responsibilities
under those ethical requirements. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the consolidated financial statements of
the current period. These matters were addressed in
the context of the audit of the consolidated financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
Valuation of biological assets
Risk identified
As at 31 December 2023, the value of the Group’s
biological assets amounted to EUR 389,3 million out of
total assets of EUR 1.100,5 million.
The Group owns biological assets in Asia and Africa.
These biological assets, which consist mainly of oil
palm and rubber plantations, are valued in accordance
with the principles defined in IAS 16 «Property, Plant
and Equipment». These assets are recognised at cost
less accumulated depreciation and any impairment
losses.
The note 10 «Impairment of assets» of the consolidated
financial statements describes the methodology used
by Group management to assess whether there is any
indicator of impairment or any indicator of impairment
reversal at the balance sheet date. When an indicator
is identified, Group management determines the
recoverable amount of the biological assets and thus
determines the impairment loss or the reversal of
impairment to be recognised, if any.
Auditor’s report on the consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
31
The indicators used by Group Management are:
• a decrease or an increase of the listed price of
natural rubber (TSR20 1st position on SGX) and the
listed price of crude palm oil (CIF Rotterdam) at the
balance sheet date higher than 15% compared to a
five-year average of the prices observed on those
markets
• a decrease or an increase of the six-month average
of the prices observed of those markets higher than
15% compared to a five-year average of the prices
observed on those markets
• a decrease or an increase of the twelve-month
average of the prices observed of those markets of
more than 15% compared to a five-year average of
the prices observed on those markets
For palm oil, which is mainly sold on local markets,
Group Management also analyses local sales prices,
considering that a decrease or an increase in these
prices at the balance sheet date higher than 15%
compared to a five-year average value of the local
prices constitutes an indicator of impairment or an
indicator of impairment reversal respectively.
In addition to these external factors, the Group
analyses the following internal performance
indicators:
- Specificities of the local market (evolution of supply
and demand, ...);
- Physical indications of impairment;
- Significant changes in the plantations that could
have a material impact on future cash flows.
The recoverable amount is determined as the higher
of the value in use and the fair value less costs of
disposal. The value in use is defined in terms of
discounted future net cash flows and involves
significant judgements and estimations by Group
Management, including financial forecasts and the
utilization of appropriate discount rates.
We considered the valuation of biological assets to be
a key audit issue because of :
- their significance in relation to the Group’s total
assets
- the assessment of whether there is any indicator of
impairment or any indicator of impairment reversal;
and
- the determination of their recoverable amount
which involves significant judgements and
estimates.
Audit response
In order to assess the reasonableness of an indicator
of impairment or an indicator of impairment reversal
and, where appropriate, to determine the recoverable
amount of biological assets, we performed the following
audit procedures :
• Assess the compliance of Group’s management’s
methodology with the provisions of IAS 36
«Impairment of Assets»;
• Analyze the methodology used with a particular focus
on the indicators of impairment or on the indicators
of impairment reversal;
• Analyze the completeness of indicators of impairment
or indicators of impairment reversal:
- Evaluating the assessment performed by Group
management to identify the existence of indicators
of impairment or indicators of impairment reversal
by comparing the underlying data of the analysis
with the source of the data used;
- Comparing the evolution of yields per hectare; and
- Overseeing the audit work of the components
auditors of material subsidiaries to identify any
indicators of impairment or any indicators of
impairment reversal, including that site visits of
the plantations have been carried out;
• In case of identification of an indicator of impairment
or an indicator of impairment reversal, we:
- Assess the appropriateness of the methodology
applied by Group Management to determine the
recoverable value of the biological assets and the
accuracy of any impairment loss or any impairment
reversal recorded;
- Analyze the reasonableness of the cash flow
forecasts used by Group Management to determine
the value in use of the biological assets;
- Assess the reasonableness of the assumptions and
inputs used by Group management; and
- Reconcile the key inputs used in the model with
information audited by the components auditors of
material subsidiaries.
• Assess whether the disclosures required by IAS 36
«Impairment of Assets» for biological assets are
properly disclosed in the notes of the consolidated
financial statements.
Auditor’s report on the consolidated financial statements
32
|
ANNUAL REPORT 2023
|
Socfin
Other information
The Board of Directors is responsible for the other
information. The other information comprises the
information included in the consolidated management
report and the corporate governance statement but
does not include the consolidated financial statements
and our report of “réviseur d’entreprises agréé”
thereon.
Our opinion on the consolidated financial statements
does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated
financial statements, our responsibility is to read the
other information and, in doing so, consider whether
the other information is materially inconsistent
with the consolidated financial statements or our
knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are
required to report this fact. We have nothing to report
in this regard.
Responsibilities of the Board of Directors and
of those charged with governance for the
consolidated financial statements
The Board of Directors is responsible for the preparation
and fair presentation of the consolidated financial
statements in accordance with IFRS as adopted by the
European Union, and for such internal control as the
Board of Directors determines is necessary to enable
the preparation of consolidated financial statements
that are free from material misstatement, whether
due to fraud or error.
The Board of Directors is also responsible for presenting
and marking up the consolidated financial statements
in compliance with the requirements set out in the
Delegated Regulation 2019/815 on European Single
Electronic Format, as amended (“ESEF Regulation”).
In preparing the consolidated financial statements,
the Board of Directors is responsible for assessing
the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of
accounting unless the Board of Directors either intends
to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for
overseeing the Company’s financial reporting process.
Responsibilities of the “réviseur d’entreprises
agréé” for the audit of the financial statements
The objectives of our audit are to obtain reasonable
assurance about whether the consolidated financial
statements as a whole are free from material
misstatement, whether due to fraud or error, and to
issue a report of the “réviseur d’entreprises agréé”
that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that
an audit conducted in accordance with EU Regulation
N° 537/2014, the Law of 23 July 2016 and with the
ISAs as adopted for Luxembourg by the CSSF will
always detect a material misstatement when it
exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on
the basis of these consolidated financial statements.
As part of an audit in accordance with EU Regulation
N° 537/2014, the Law of 23 July 2016 and with ISAs
as adopted for Luxembourg by the CSSF, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement
of the consolidated financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from
fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Auditor’s report on the consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
33
• Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by the
Board of Directors.
• Conclude on the appropriateness of Board of
Directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or
conditions that may cast significant doubt on the
Company’s ability to continue as a going concern.
If we conclude that a material uncertainty exists,
we are required to draw attention in our report of
the “réviseur d’entreprises agréé” to the related
disclosures in the consolidated financial statements
or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our report of
the “réviseur d’entreprises agréé”. However, future
events or conditions may cause the Company to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and
content of the consolidated financial statements,
including the disclosures, and whether the
consolidated financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.
• Assess whether the consolidated financial
statements have been prepared, in all material
respects, in compliance with the requirements laid
down in the ESEF Regulation.
• Obtain sufficient appropriate audit evidence
regarding the financial information of the entities
and business activities within the Group to express
an opinion on the consolidated financial statements.
We are responsible for the direction, supervision
and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
communicate to them all relationships and other
matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
From the matters communicated with those charged
with governance, we determine those matters
that were of most significance in the audit of the
consolidated financial statements of the current period
and are therefore the key audit matters. We describe
these matters in our report unless law or regulation
precludes public disclosure about the matter.
Report on other legal and regulatory
requirements
We have been appointed as “réviseur d’entreprises
agréé” by the General Meeting of the Shareholders on
26 May 2020 and the duration of our uninterrupted
engagement, including previous renewals and
reappointments, is 4 years.
The consolidated management report is consistent
with the consolidated financial statements and has
been prepared in accordance with applicable legal
requirements.
The accompanying corporate governance statement
on pages 19 to 24 is the responsibility of the Board
of Directors. The information required by article
68ter paragraph (1) letters c) and d) of the law of
19 December 2002 on the commercial and companies
register and on the accounting records and annual
accounts of undertakings, as amended, is consistent
with the consolidated financial statements and has
been prepared in accordance with applicable legal
requirements.
We have checked the compliance of the consolidated
financial statements of the Company as at 31 December
2023 with relevant statutory requirements set out
in the ESEF Regulation that are applicable to the
financial statements. For the Company, it relates to :
• Financial statements prepared in valid xHTML
format;
• The XBRL markup of the consolidated financial
statements using the core taxonomy and the
common rules on markups specified in the ESEF
Regulation.
Auditor’s report on the consolidated financial statements
34
|
ANNUAL REPORT 2023
|
Socfin
In our opinion, the consolidated financial statements
of the Company as at 31 December 2023, identified
as Socfin-2023-12-31-en.zip, have been prepared,
in all material respects, in compliance with the
requirements laid down in the ESEF Regulation.
We confirm that the audit opinion is consistent with
the additional report to the audit committee or
equivalent.
We confirm that the prohibited non-audit services
referred to in EU Regulation No 537/2014 were not
provided and that we remained independent of the
Company in conducting the audit.
Ernst & Young
Société anonyme
Cabinet de révision agréé
Anthony CANNELLA
Socfin
|
ANNUAL REPORT 2023
|
35
Consolidated financial statements
1. Consolidated statement of financial position
31/12/2023
31/12/2022
Restated (*)
01/01/2022
Restated (*)
ASSETS Note EUR EUR EUR
Non-Current Assets
Goodwill 4 4,951,057 4,951,057 4,951,057
Right-of-use assets 5 33,550,055 11,902,767 10,505,511
Intangible assets 6 2,202,137 2,594,599 3,705,743
Property, plant and equipment 7 306,496,776 338,771,365 322,679,989
Biological assets 8 389,297,248 438,088,818 478,856,665
Investment properties 11 3,509,654 3,670,084 3,860,781
Financial assets at fair value through other
comprehensive income
13 645,773 688,024 715,578
Long-term advances 2,328,080 1,978,537 1,858,758
Deferred tax assets 14 9,106,597 11,698,487 19,434,381
Other non-current assets 3,169,704 2,699,565 1,823,792
Current Assets
Inventories 17 112,162,085 128,671,570 114,505,857
Current biological assets 3,515,839 4,689,621 3,559,160
Trade receivables 18 39,887,915 36,867,117 42,082,791
Other receivables 19 10,075,144 8,665,133 10,238,140
Current tax assets 15 10,931,694 14,942,449 15,291,971
Cash and cash equivalents 20 162,389,373 180,322,293 143,315,435
Assets classified as held for sale 39 6,313,418 0 0
TOTAL ASSETS 1,100,532,549 1,191,201,486 1,177,385,609
(*) For further details, refer to Note 3.
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
36
|
ANNUAL REPORT 2023
|
Socfin
31/12/2023
31/12/2022
Restated (*)
01/02/2022
Restated (*)
EQUITY AND LIABILITIES Note EUR EUR EUR
Equity attributable to the owners of the
Parent
Share capital 21 24,779,510 24,779,510 24,779,510
Share premium 21 501,847 501,847 501,847
Legal reserve 22 2,477,951 2,477,951 2,477,951
Consolidated reserves
Translation reserves
-151,049,161 -116,814,359 -108,159,406
Profit / (loss) for the period
Non-controlling interests
12
Total Equity 767,403,535 785,114,877 715,838,345
Non-Current Liabilities
Deferred tax liabilities 14 28,336,810 38,251,719 38,013,906
Employee benefits obligations 23 48,564,561 47,578,049 51,008,374
Long-term debt, net of current portion 24 22,485,633 51,992,495 131,880,070
Long-term lease liabilities 5 27,037,253 11,087,025 10,977,778
Other payables 25 1,633,474 1,650,572 1,445,937
Current Liabilities
Short-term debt and current portion of long-
term debt
24 69,534,449 91,466,449 78,836,653
Short-term lease liabilities
5
Trade payables
25
Current tax liabilities 15 33,288,514 56,820,337 48,328,464
Provisions
Other payables 25 48,208,836 50,892,559 54,304,967
Liabilities associated with assets classified as
held for sale
39
TOTAL EQUITY AND LIABILITIES 1,100,532,549 1,191,201,486 1,177,385,609
(*) For further details, refer to Note 3.
The accompanying notes are an integral part of these consolidated financial statements.
Socfin
|
ANNUAL REPORT 2023
|
37
Consolidated financial statements
2. Consolidated income statement
2023 2022
Restated (*)
Note EUR EUR
Revenue 34 862,543,071 991,511,407
Change in inventories of finished products and work in progress
Other operational income
34
Raw materials and consumables used
34
-334,820,746 -338,675,776
Other expenses
34
-103,757,778 -105,929,797
Staff costs 27 -170,011,589 -171,029,916
Depreciation and impairment expense 9 -81,377,637 -95,876,217
Other operating expenses
34
-17,382,113 -27,793,834
Operating profit / (loss)
Other financial income 28 34,116,308 39,239,727
Gain on disposals
Loss on disposals
-1,366,073 -2,315,202
Financial expenses 29 -49,780,244 -56,548,682
Profit / (loss) before taxes 161,829,545 240,610,893
Income tax expense 16 -59,988,495 -71,319,742
Deferred tax (expense) / income 16 -4,641,335 -8,549,967
Profit / (loss) for the period
Profit / (loss) attributable to non-controlling interests 55,607,699 86,704,706
Profit / (loss) attributable to the owners of the Parent 41,592,016 74,036,478
Basic earnings per share undiluted
30 2.94 5.23
Number of Socfin shares
Basic earnings per share 2.94 5.23
Diluted earnings per share 2.94 5.23
(*) For further details, refer to Note 3.
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
38
|
ANNUAL REPORT 2023
|
Socfin
Consolidated financial statements
3. Consolidated statement of comprehensive income
2023 2022
Restated (*)
Note EUR EUR
Profit / (loss) for the period
Other comprehensive income
Actuarial gains / (losses)
23 -2,858,113 3,482,512
Deferred tax on actuarial losses and gains
Fair value changes of securities measured at fair value through
other comprehensive income, before taxes
13 -42,251 -27,554
Deferred tax on fair value changes of securities measured at fair
value through other comprehensive income
Subtotal of items that cannot be reclassified to profit or loss
-2,044,832 2,843,973
Gains / (losses) on exchange differences on translation of
subsidiaries (**)
-63,748,158 -8,624,112
Subtotal of items eligible for reclassification to profit or loss
-63,748,158 -8,624,112
Total other comprehensive income
-65,792,990 -5,780,139
Comprehensive income
Comprehensive income attributable to non-controlling interests
Comprehensive income attributable to the owners of the Parent
(*) For further details, refer to Note 3.
(**)
Of which EUR -33.1 million relating to Okomu and EUR -13.6 million relating to PSG (following the important
devaluation of the Naira and the Cedi during the period, refer to Note 1.9).
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
39
Consolidated financial statements
4. Consolidated statement of cash flows
2023 2022
Restated (*)
Note EUR EUR
Operating activities
Profit / (loss) attributable to the owners of the Parent
Profit / (loss) attributable to non-controlling shareholders
Fair value of agricultural production 8,446,246 -8,167,928
Other adjustments having no impact on cash position
Depreciation and impairment expense 9 81,377,637 95,876,217
Provisions and allowances
Net loss on disposals of assets
Income tax expense and deferred tax 16 64,629,830 79,869,709
Cash flows from operating activities 261,851,432 329,897,835
Interest expense 28, 29 5,385,499 9,025,529
Income tax paid 16 -67,930,193 -71,319,742
Change in inventory
-5,017,656 -8,881,196
Change in trade and other receivables
-13,192,007 5,220,302
Change in trade and other payables
Change in accruals and prepayments
Change in working capital requirement -11,816,148 15,069,993
Net cash flows from operating activities 187,490,590 282,673,615
Investing activities
Acquisitions / disposals of intangible assets
-1,198,169 -670,619
Acquisitions of property, plant and equipment and biological assets 7, 8 -77,403,757 -76,862,221
Disposals of property, plant and equipment
Acquisitions / disposals of financial assets
-271,986 70,269
Interest received 28 4,223,545 0
Net cash flows from investing activities
-72,384,565 -73,265,878
Financing activities
Acquisition of additional interests in subsidiaries
-30 -2,177,315
Dividends paid to the owners of the Parent
31
-14,159,720 -17,699,650
Dividends paid to non-controlling shareholders
12
-56,883,481 -66,091,730
Proceeds from changes in subsidiaries that do not result in loss
of control (**)
Proceeds from borrowings
24
Repayment of borrowings
24
-41,988,008 -89,450,023
Repayment of lease liabilities
24
-4,928,725 -2,035,612
Interest paid
29
-9,609,044 -9,025,529
Net cash flows from financing activities -118,011,290 -179,449,571
Effect of exchange rate fluctuations
-9,813,092 621,212
Effect of cash transfers
-1,473,707 0
Effect of cash linked to assets held for sale
39
-361,169 0
Net cash flow -14,553,233 30,579,378
Cash and cash equivalents as at 1 January 20 167,865,056 137,285,678
Cash and cash equivalents as at 31 December 20 153,311,823 167,865,056
Net increase / (decrease) in cash and cash equivalents -14,553,233 30,579,378
(*) For further details, refer to Note 3.
(**) Linked to Management Associates capital increase in 2023 (minority shareholder contribution).
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
40
|
ANNUAL REPORT 2023
|
Socfin
5. Consolidated statement of changes in equity
EUR
Share
capital
Share
premium
Legal
reserve
Translation
reserves
Conso-
lidated
reserves
Equity
attributable
to the
owners of
the Parent
Non-
controlling
interests
TOTAL
EQUITY
Balance as at 1 January 2022 – Restated (*)
Profit / (loss) for the period
Actuarial (losses) / gains
Change in fair value of securities at fair value
through other comprehensive income
-12,301 -12,301 -8,381 -20,682
Foreign currency translation adjustments
-7,940,387 0 -7,940,387 -683,725 -8,624,112
Transfer between reserves
Other comprehensive income
-7,939,678 75,631,480 67,691,802 87,269,243 154,961,045
Dividends (Notes 12, 31)
-7,079,860 -7,079,860 -41,246,080 -48,325,940
Interim dividends (Notes 12, 31)
-10,619,790 -10,619,790 -24,845,650 -35,465,440
Other movements (Notes 2, 12)
-715,275 303,190 -412,085 -1,481,048 -1,893,133
Transactions with shareholders
-715,275 -17,396,460 -18,111,735 -67,572,778 -85,684,513
Balance as at 31 December 2022 – Restated (*)
Balance as at 1 January 2023
Profit / (loss) for the period
Actuarial (losses) / gains
-979,015 -979,015 -1,034,103 -2,013,118
Change in fair value of securities at fair value
through other comprehensive income
-18,863 -18,863 -12,851 -31,714
Foreign currency translation adjustments
-32,361,459 0 -32,361,459 -31,386,699 -63,748,158
Transfer between reserves
-1,873,343 1,873,343 0 0 0
Other comprehensive income
-34,234,802 42,467,481 8,232,679 23,174,046 31,406,725
Dividends (Notes 12, 31)
-7,079,860 -7,079,860 -36,934,444 -44,014,304
Interim dividends (Notes 12, 31)
-7,079,860 -7,079,860 -19,949,037 -27,028,897
Hyperinflation
Other movements (Notes 2, 12)
Transactions with shareholders
Balance as at 31 December 2023
(*) For further details, refer to Note 3.
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
41
6. Notes to the consolidated financial statements
Note 1. Overview and material accounting policies
1.1. Overview
as Socfin (“the Company”), was incorporated on 5
December 1959. Its corporate purpose qualifies it
as a soparfi
G
(terms having a
G
are explained part
“Glossary” at the end of the annual report) since
the Annual General Meeting of 10 January 2011. The
registered office is established at 4 avenue Guillaume,
The main activity of the Company and its subsidiaries
(the “Group”) is the management of a portfolio
of interests that mainly focus on the operation of
tropical palm oil and rubber plantations in Africa and
South-East of Asia.
The Company is listed on the Luxembourg Stock
Exchange under ISIN LU0027967834 and is registered
in the commercial register under number B5937.
1.2. Statement of compliance
The consolidated financial statements have been
prepared on a going concern basis and in accordance
with International Financial Reporting Standards (IFRS)
as adopted by the European Union. The consolidated
On 27 March 2024, the Board of Directors approved
the consolidated financial statements.
In conformity with the current legislation existing
in the Grand Duchy of Luxembourg, the financial
statements will be approved by the shareholders
during the Annual General Meeting. The official version
of these financial statements is the ESEF
G
version
available with the Officially Appointed Mechanism
(OAM) tool.
New standards and amendments issued but not yet
effective on 1 January 2023:
The Group does not expect the adoption of the
standards and amendments described below to
have a material impact on its consolidated financial
statements, nor does it anticipate the early
adoption of new accounting standards, amendments
and interpretations.
- In January 2020 and October 2022, the IASB issued
amendments to paragraphs 69 to 76 of IAS
G
1
“Presentation of Financial Statements” to specify
the requirements for classifying liabilities as current
or non-current. The amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the
reporting period
• That classification is unaffected by the likelihood
that an entity will exercise its deferral right
• That only if an embedded derivative in a convertible
liability is itself an equity instrument would the
terms of a liability not impact its classification
In addition, a requirement has been introduced to
require disclosure when a liability arising from a loan
agreement is classified as non-current and the entity’s
right to defer settlement is contingent on compliance
with future covenants within twelve months. The
amendments are effective for annual reporting
periods beginning on or after 1 January 2024 and must
be applied retrospectively.
- In September 2022, the IASB issued amendments to
IFRS
G
16 to specify the requirements that a seller-
lessee uses in measuring the lease liability arising
in a sale and leaseback transaction, to ensure the
seller-lessee does not recognise any amount of
the gain or loss that relates to the right of use
G
it
retains. The amendments are effective for annual
reporting periods beginning on or after 1 January
2024 and must applied retrospectively to sale and
leaseback transactions entered into after the date
of initial application of IFRS
G
16. Earlier application
is permitted and that fact must be disclosed.
Consolidated financial statements
42
|
ANNUAL REPORT 2023
|
Socfin
New IFRS
G
standards, amendments and
interpretations not yet endorsed by the European
Union:
The Group does not expect the adoption of the
standards and amendments described below to
have a material impact on its consolidated financial
statements, nor does it anticipate the early adoption
of new accounting standards, amendments and
interpretations.
- On 25 May 2023, the IASB issued amendments to
IAS
G
7 and IFRS
G
7 “Supplier Finance Arrangements”:
the amendments clarify the characteristics of
an arrangement for which an entity is required
to provide the information. They also require
entities to disclose information that allows users
to assess how supplier finance arrangements affect
an entity’s liabilities, cash flows and exposure to
liquidity risk. Such information may consist of the
terms and conditions of these arrangements and the
carrying amount of the supplier finance arrangement
financial liabilities. The amendments will be applied
to annual reporting periods beginning on or after 1
January 2024, with early adoption permitted.
- On 25 August 2023, the IASB issued amendments
to IAS
G
21 “Lack of Exchangeability”. The
amendments clarify how an entity should assess
whether a currency is exchangeable, and how
it should determine a spot exchange rate when
exchangeability is lacking. They also explain how an
entity should specify information disclosures so that
they help users of financial statements understand
the impact of a currency that is not exchangeable.
The amendments will be applied prospectively to
annual reporting periods beginning on or after 1
January 2025, with early adoption permitted.
1.3. Presentation of the consolidated financial
statements
They are prepared based on historical cost with the
exception of the following assets:
- Biological assets (current) (IAS
G
2, IAS
G
41),
securities measured at fair value through other
comprehensive income
G
, all of which are recognised
at fair value;
- Property, plant and equipment acquired as part of a
business combination (IFRS
G
3), which are measured
initially at their fair value at the date of acquisition.
The accounting principles and rules are applied in a
consistent and permanent way within the Group. The
consolidated financial statements are prepared for
the accounting year ending on 31 December 2023,
and are presented before the Annual General Meeting
of shareholders that approves the allocation of the
parent company’s income.
As of 1 January 2023, the Group adopted the following
amendments without any material impact on the
Group’s consolidated financial statements:
- IFRS
G
17 “Insurance Contracts” and its amendments:
establishes principles for the recognition,
measurement and presentation of insurance
contracts. Under IFRS
G
17, insurance performance
should be measured at its current execution value
and provide a more consistent measurement and
presentation method for all types of insurance
contracts. IFRS
G
17 replaces IFRS
G
4 “Insurance
contracts” and its interpretations.
- Amendments to IAS
G
12 “Deferred Tax related
to Assets and Liabilities arising from a Single
Transaction”: the amendments narrowed the
scope of the recognition exemption in paragraphs
15 and 24 of IAS
G
12 (recognition exemption) so
that it no longer applies to transactions that, on
initial recognition, give rise to equal taxable and
deductible temporary differences.
- Amendments to IAS
G
8 Definition of Accounting
Estimates: the amendments to IAS
G
8 clarify
the distinction between changes in accounting
estimates, changes in accounting policies and the
correction of errors. They also clarify how entities
use measurement techniques and inputs to develop
accounting estimates.
- Amendments to IAS
G
1 and IFRS
G
Practice
Statement 2 Disclosure of Accounting Policies:
the amendments to IAS
G
1 and IFRS
G
Practice
Statement 2 Making Materiality Judgements
provide guidance and examples to help entities
apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities
provide accounting policy disclosures that are more
useful by replacing the requirement for entities
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
43
to disclose their ‘significant’ accounting policies
with a requirement to disclose their ‘material’
accounting policies and adding guidance on how
entities apply the concept of materiality in making
decisions about accounting policy disclosures.
- Amendments to IAS
G
12 “International Tax Reform -
Pilar Two Model Rules”: on 23 May 2023, the IASB
issued amendments to IAS
G
12 in order to respond
to concerns about the potential implications of
the OECD Pillar Two model rules. The amendments
introduce, in IAS
G
12, a mandatory exception from
recognising and disclosing deferred tax assets and
liabilities related to Pillar Two income taxes on the
one hand, and disclosure requirements on the other.
The latter are intended for affected entities to help
users of the financial statements have a better
understanding of the exposure to Pillar Two income
taxes that arise from that legislation, in particular
before its effective date. The consequences of this
amendment are further disclosed in Note 14.
1.4. Consolidation principles
The consolidated financial statements include the
financial statements of the parent company Socfin
as well as those of the companies controlled by the
parent (“subsidiaries”), all of which constitute the
“Group”.
All companies included in the scope of consolidation
as of 31 December 2023 close their accounts on 31
December.
Subsidiaries
In accordance with IFRS
G
10, an investor has control
when it fulfills three conditions:
1) It holds power over the entity;
2) It is entitled to or is exposed to variable returns
from its involvement;
3) It has the ability to use its power over the entity to
affect returns.
Currently, the Group holds the majority of the voting
rights in the entities.
Income and expenses from subsidiaries acquired or
sold during the year are included in the consolidated
income statement, respectively, from the date of
acquisition to the date of disposal.
Profit or loss and components of other comprehensive
income
G
are attributed to the equity holders of
the parent of the Group and to the non-controlling
interests
G
, even if this results in the non-controlling
interests
G
having a deficit balance.
Where appropriate, restatements are made to the
financial statements of the subsidiaries to align the
accounting principles used with those of the Group.
All intra-group balances and transactions are
eliminated upon consolidation.
If the Group loses control over a subsidiary, it
derecognises the related assets (including goodwill),
liabilities, non-controlling interest
G
and other
components of equity. Any residual gain or loss is
recognised in profit or loss, while any investment
retained is recognised at fair value.
The list of subsidiaries of the Group is presented in
Note 2.
1.5. Changes in accounting policies, errors and
changes in estimates
A change in accounting policy is applicable only if it meets
the requirements of a standard or an interpretation or
allows more reliable and relevant information. Changes
in accounting policies are accounted for retrospectively,
except in the case of transitional provisions specific to
the standard or interpretation. A material error, when
discovered, is also adjusted retrospectively.
Uncertainties inherent to the activity require the use
of estimates when preparing financial statements. The
estimates are based on judgements intended to give a
reasonable assessment of the latest reliable information
available. An estimate is revised to reflect changes in
circumstances, new information available and the
effects of experience.
1.6. Business combinations
IFRS
G
3 “Business Combinations” provides the
accounting basis for recognising business combinations
and changes in interests in subsidiaries after obtaining
control.
For each business combination, the Group elects
whether to measure the non-controlling interests
G
in
Consolidated financial statements
44
|
ANNUAL REPORT 2023
|
Socfin
the acquiree at fair value or at the proportionate share
of the acquiree’s identifiable net assets.
Changes in interest in a subsidiary that do not result in
loss of control are accounted for as equity transactions.
1.7. Goodwill
Goodwill is the difference on the date of acquisition
between the fair value of the consideration given
in exchange for taking control, the value of non-
controlling interests
G
, the fair value of previous
equity investments and the fair value of identifiable
assets and liabilities and contingent liabilities of the
acquiree.
When disposing of a subsidiary, the residual amount of
goodwill attributable to the subsidiary is included in
the calculation of the disposal’s result.
1.8. Gain on a bargain purchase
Gain on a bargain purchase represents the excess of
the Group’s interest in the fair value of identifiable
assets and liabilities, and the contingent liabilities of
a subsidiary or associate on the cost of acquisition on
the acquisition date.
Insofar as gain on a bargain purchase remains after
considering and reassessing the fair value of identifiable
assets and liabilities as well as of contingent liabilities
of a subsidiary or associate, it is recognised directly as
an income in the income statement.
1.9. Foreign currency conversion
In the financial statements of Socfin and of each
subsidiary, transactions in foreign currency are recorded,
upon initial recognition, in the functional currency of
the company concerned. The exchange rate in force is
applied on the transaction date. At closing, monetary
assets and liabilities denominated in foreign currencies
are converted on the last day of the year. Gains and
losses arising from the realisation or translation of
monetary items denominated in foreign currencies are
recorded in the income statement for the year.
On consolidation, the assets and liabilities of companies
whose accounts are held in a currency other than the
euro are translated into euros at the exchange rate
prevailing on the closing date. Income and expenses
are converted into euros at the average exchange rate
for the year. Any exchange differences are classified as
equity under “Translation differences”. In the event
of a disposal, the translation differences relating to
the company concerned are recognised in the income
statement for the year in which the sale occurred.
Goodwill and fair value adjustments arising on the
acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the
closing rate.
The following exchange rates have been used for the
conversion of the consolidated annual accounts:
| Closing rate | Average Rate | |||
| 1 euro equals to: | 31/12/2023 | 31/12/2022 | 2023 | 2022 |
| Euro | 1.000 | 1.000 | 1.000 | 1.000 |
| CFA franc | 655.957 | 655.957 | 655.957 | 655.957 |
| Ghanaian cedi | 13.1274 | 9.1472 | 12.0698 | 8.4184 |
| Indonesian rupiah | 17,140 | 16,713 | 16,471 | 15,648 |
| Nigerian naira | 994.55 | 478.92 | 661.63 | 445.11 |
| Dobra of São Tomé | 24.50 | 24.50 | 24.50 | 24.50 |
| Congolese franc | 2,961 | 2,151 | 2,514 | 2,103 |
| American dollar | 1.1050 | 1.0666 | 1.0826 | 1.0479 |
1.10. Intangible assets
Intangible assets are stated at their acquisition cost
less accumulated depreciation and any impairment
losses.
Amortisation is applied on a straight-line basis
based on an estimate of the useful life of the asset
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
45
in question. Intangible assets are not subject to
revaluation. When the recoverable value of an asset
is lower than its book value, the latter is reduced to
reflect this loss in value.
The estimated useful lives are as follows:
| Patents | 3 to 5 years |
| Other intangible assets | 3 to 5 years |
| Software | 3 to 5 years |
| ConcessionsG | Length of the concessionsG |
Amortisation starts from the date when the asset is
available to use.
Gains or losses arising from derecognition of assets
(i.e. the difference between the disposal proceeds
and the carrying amount of the asset) are included in
the income statement when assets are derecognised.
1.11. Property, plant and equipment
Tangible fixed assets are recorded at their acquisition
cost less accumulated amortisation and any
impairment losses.
Property, plant and equipment in progress is carried at
cost less any identified impairment.
Depreciation is applied on a straight-line basis,
according to an estimate of the useful life for each
significant component of the asset in question. When
the recoverable value of an asset is lower than its
book value, the latter is reduced to reflect this loss
in value.
The estimated useful lives are as follows:
| Buildings | 20 to 50 years |
| Technical installations | 3 to 20 years |
| Furniture, vehicles and others | 3 to 20 years |
Depreciation starts from the date that the assets are
available for use.
Land is not subject to depreciation.
Gains or losses arising from the derecognition of assets
(i.e. the difference between the disposal proceeds
and the carrying amount of the asset) are included in
the income statement when assets are derecognised.
1.12. Investment properties
Investment properties are real estate (land and
buildings or part of buildings) held for rental or capital
appreciation.
Investment properties are recorded at cost less
accumulated depreciation and any impairment
charges.
Depreciation is determined on a straight-line basis
over the useful life of the asset. The depreciation
period for investment properties is set at 50 years.
Gains or losses arising from the derecognition of assets
(i.e. the difference between the disposal proceeds
and the carrying amount of the asset) are included in
the income statement when assets are derecognised.
1.13. Bearer biological assets
The Group has biological assets in Africa and South-
East Asia. These biological assets, mainly consisting of
palm oil and rubber plantations, are valued according
to the principles defined in IAS
G
16 Property, plant and
equipment.
Biological assets at the time of harvest, in particular
for palm bunches, palm oil and rubber, are evaluated
according to the principles defined by IAS
G
41
“Agriculture”.
Bearer biological assets
Producer biological assets are recorded at acquisition
cost, less accumulated amortisation and any
impairment losses.
Depreciation is applied according to the straight-line
method based on an estimate of the useful life. When
the recoverable amount of an asset is less than its
carrying amount, the carrying amount is reduced to
reflect that impairment.
The estimated useful lives are as follows:
| Bearer plants – Palm | 20 to 26 years |
| Bearer plants - Rubber | 20 to 33 years |
The depreciation starting date is the date of transfer of
biological assets in production (i.e. asset being mature).
This transfer takes place in the third year after palm
oil tree planting in Asia, in the fourth year after palm
Consolidated financial statements
46
|
ANNUAL REPORT 2023
|
Socfin
oil tree planting in Africa and in the seventh year after
rubber tree planting. For each entity, the operating
period can be adapted according to the particular
circumstances.
Agricultural production
Agricultural production at harvest is valued at fair
value less the estimated costs necessary to complete
the sale.
There are no observable data for agricultural
production (palm harvest, latex). The World Bank
publishes price forecasts for dry rubber
G
(finished
product). These forecasts are based on the RSS3
G
grade
(smoked sheet
G
) that is not produced by the Group.
Lastly, and even more so, there are no observable
prospective data relating to the Group’s agricultural
production. The price of a standard product in a
global market is not sufficiently representative of the
economic reality in which the various entities of the
Group intervene. This price can hence not be used as
a reference for valuation.
As a result, each entity determines the fair value of
agricultural production based on actual market prices
obtained over the past year.
The Group considers produce that grows on mature
plantations (oil in the palm fruits and produce of
rubber) as biological assets, in accordance with IAS
G
41 principles. This produce is measured at fair value
until the point of harvest. Any resultant gains or losses
arising from changes in fair value are recognised in
the income statement
1.14. Leases
The Group assesses at contract inception whether
a contract is, or contains, a lease. That is, if the
contract conveys the right to control the use of an
identified asset for a period of time in exchange for
consideration.
The Group applies a single recognition and
measurement approach for all leases, except for short-
term leases and leases of low-value assets (mainly
IT equipment), for which payments associated are
recognised as an expense in the income statement.
The Group recognises lease liabilities to make lease
payments and right-of-use assets representing the
right to use the underlying assets.
The Group leases offices and agricultural land for
terms ranging from 1 to 99 years, as well as vehicles
and equipment for terms ranging from 1 month to 5
years.
The Group’s lease contracts are standard contracts
that do not include additional non-leasing components,
except for some vehicle lease contracts that include
a maintenance service. The Group has used the
practical expedient that allows the non-segregation of
the lease component from the non-lease component
for these contracts.
Assets and liabilities related to lease contracts are
initially measured at the present value of the fixed
payments, including in-substance fixed payments less
any lease incentives receivable. Lease payments to
be made under reasonably certain extension options
are also included in the measurement of the liability.
To this purpose, the management considers all facts
and circumstances that may create an incentive to
exercise a renewal option or not to exercise an early
termination option. The lease liability is remeasured
if there is a change in the lease term, in the lease
payment or in the assessment of an option to purchase
the underlying asset.
As the implicit interest rate is unknown for all the
Group’s contracts, the incremental borrowing rate was
used to discount the lease payments. The incremental
borrowing rate is the rate that the lessee would have
to pay to borrow, for a similar term and with a similar
guarantee, the funds necessary to acquire an asset
whose value is similar to the asset under the right-of-
use in a similar economic environment.
In determining the incremental borrowing rate, the
Group:
- where possible, uses the most recent financing
received by the lessee as a starting point, which
was adjusted to reflect the change in financing
conditions since the financing was received;
- uses a build-up approach starting with a risk-free
rate which was adjusted for credit risk for leases for
entities with no recent external financing;
- makes lease specific adjustments (such as term,
country, currency and collateral).
The discount rates used by the Group range between
1.75% and 19.9%.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
47
Lease payments are allocated between the repayment
of the principal amount of the lease liabilities and
interest expense. Interest expense is recognised in
the income statement for the period over the term
of the lease. Right-of-use assets are depreciated on a
The Group applies IAS
G
36 to determine whether a
right-of-use asset is impaired and recognises any
impairment loss as described in Note 10: Impairment
of assets.
1.15. Impairment of assets
Goodwill is not amortised, but is tested for impairment
at least once a year, and whenever there is an
indication of impairment.
In addition, at each reporting date, the Group reviews
the carrying amounts of its intangible and tangible
assets, including its organic producing assets, in order
to assess whether there is any indication that its assets
may have lost value. If there is such an indication,
the recoverable amount of the asset is estimated to
determine, if applicable, the amount of the loss or
impairment. The recoverable amount is the highest of
the fair value less the costs to sell the asset and the
value in use.
The fair value of property, plant and equipment and
intangible assets is the present value of estimated
future cash flows expected from the use of an asset
or cash-generating unit. When it is not possible to
estimate the recoverable amount of an isolated asset,
the Group determines the recoverable amount of the
cash-generating unit to which the asset belongs.
If the recoverable amount of an asset (or a cash-
generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable
amount. Impairment losses are immediately
recognised as expenses in the income statement.
When an impairment loss which was recognised in a
prior period no longer exists or needs to be written
down, the carrying amount of the asset (cash-
generating unit) is increased to the extent of the
revised estimate of its recoverable amount. However,
this increased carrying amount may not exceed the
carrying amount that would have been determined if
no impairment loss had been recognised for the asset
(cash-generating unit) in prior years. The reversal
of an impairment loss is recognised immediately in
income in the income statement.
It is not possible to subsequently reverse an impairment
loss recorded on goodwill.
1.16. Inventories
Inventories are recorded at the lower of cost and net
realisable value. Cost includes direct material costs
and, if applicable, direct labour costs and directly
attributable overhead costs.
Where specific identification is not possible, the cost
is determined based on the weighted average cost
method. Net realisable value is the estimated selling
price in the ordinary course of business less estimated
costs of completion and the estimated costs necessary
to complete the sale (primarily selling expenses).
Impairment or loss on inventory to net realisable value
is recognised as an expense in the period in which the
impairment or loss occurred.
As explained in Note 1.13. Bearer biological assets,
agricultural production is measured at fair value less
estimated costs necessary to make the sale.
1.17. Trade receivables
Trade receivables are valued at their nominal value and
do not bear interest. The Group applies a simplified
approach and records a provision for expected losses
over the life of the receivables. This provision for
losses is an amount that the Group considers a reliable
estimate of the inability of its customers to make the
required payments (refer to Note 35).
1.18. Cash and cash equivalents
Cash and cash equivalents include cash, demand
deposits, short-term deposits of less than 3 months,
as well as investments that are subject to a negligible
risk of change in value and are easily convertible into
a known amount of cash, having a maturity of three
months or less.
Consolidated financial statements
48
|
ANNUAL REPORT 2023
|
Socfin
1.19. Financial instruments
Financial assets and liabilities are recognised in the
consolidated statement of the financial position
when the Group becomes a party to the contractual
provisions of the instrument.
Loans
The Group’s business model for financial assets
management describes the way it manages its
financial assets in order to generate cash flows. The
business model determines whether cash flows will
result from the collection of contractual cash flows,
from the disposal of financial assets, or both. Financial
assets classified and measured at amortised cost are
held in a business model with the aim to hold financial
assets and collect contractual cash flows. Long-term
advances and other receivables are held for the sole
purpose of collecting principal and interest. As such,
they comply with the “Solely Payments of Principal
and Interest” (SPPI
G
) model. They are accounted for
using the amortised cost method.
Loans bearing interest are recorded at the net value
of the amounts given, less direct costs of issue.
Financial income is added to the carrying amount of
the instrument to the extent that it is not received in
the period in which it occurs. Interest is calculated
using the effective interest rate method.
The Group applies the low credit risk simplification: at
every reporting date, the Group evaluates whether the
debt instrument is considered to have low credit risk
using all reasonable and supportable information that
is available without undue cost or effort. In making
that evaluation, the Group reassesses the internal
credit rating of the debt instrument. In addition,
the Group considers that there has been a significant
increase in credit risk when contractual payments are
more than 30 days past due.
Interest-bearing borrowings and overdrafts are
recorded for the net value of amounts received, minus
direct issue costs. Financial expenses are recognised
in income statement and are added to the carrying
amount of the instrument to the extent that they are
unpaid in the year in which they occur.
The carrying amount is a reasonable approximation of
fair value in the case of financial instruments such as
borrowings and debts with short-term maturity.
The fair value measurement of borrowings and debts
with financial institutions, other than in the short
term, depends both on the specifics of the loans and
on current market conditions. The fair value was
calculated by discounting the expected future cash
flows at the re-estimated interest rates prevailing at
the balance sheet date over the remaining term of
repayment of the loans (see Note 26).
The Group relied on the evolution of the interest
rate of the European Central Bank adjusted for the
specific risk inherent in each financial instrument, as
a reasonable benchmark for estimating the fair value
of such borrowings (see Note 26).
Financial assets designated at fair value through
OCI (equity instruments)
Upon initial recognition, the Group can elect to
classify irrevocably its equity investments as equity
instruments designated at fair value through OCI
if they meet the definition of equity under IAS
G
32
Financial Instruments: Presentation and are not held
for trading. The classification is determined on an
instrument-by-instrument basis.
Gains and losses on these financial assets are never
recycled into profit or loss. Dividends are recognised
as other income in the statement of profit or loss
when the right of payment has been established,
except when the Group benefits from such proceeds
as a recovery of part of the cost of the financial asset,
in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are
not subject to impairment assessment.
The Group elected to classify irrevocably its non-
listed equity investments under this category. The
Group continues to hold these equity investments in
the context of events explained in Note 36 (also refer
to Note 13).
Other financial assets and liabilities
Other financial assets (trade receivables, other
receivables, ...) and liabilities (trade payables, other
payables, ...) are recorded at their acquisition cost.
The fair value of other financial assets and liabilities is
estimated to be close to the carrying amount.
The receivables are valued at their nominal value
(at cost) minus any write-downs covering amounts
considered as non-recoverable if the Group deems it
necessary. Impairment of assets is recognised in the
income statement under “Other operating income/
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
49
expenses”. The Group has established a provision
matrix, based on its historical credit loss experience
(average default over several years), which was
adjusted for prospective factors specific to the
debtors and the economic environment. The carrying
amount of the asset is reduced using a provision
account, and the amount of the loss is recognised
in the consolidated income statement. The Board of
Directors of each subsidiary evaluates the receivables
individually. Value adjustments are determined by
taking into account the local economic reality of each
country. They are reviewed at the reception of new
events and at least annually.
1.20. Provisions
Provisions occur when the Group has a present
obligation (legal or constructive) as a result of a past
event. This present obligation will probably lead to an
outflow of economic benefits, insofar as they can be
reasonably estimated.
Restructuring provisions occur when the Group has
come up with a formal and detailed plan for the
restructuring, which has been notified to the affected
parties.
1.21. Pension obligations
Defined contribution plans
The defined contribution plans designate the post-
employment benefit plans under which the Group pays
defined contributions to external insurance companies
for certain categories of employees. Payments made
under these pension plans are recognised in the
income statement in the year when they are due.
As these plans do not generate future commitments
for the Group, they do not give rise to provisions.
Defined benefit plans
The defined benefit plans refer to post-employment
benefit plans that provide additional income to certain
categories of employees for services rendered during
the year and prior years.
This guarantee of additional resources is a future
expenditure for the Group for which a commitment
is calculated by independent actuaries at the end of
each financial year.
The actuarial assumptions used to determine the
liabilities vary according to the prevailing economic
conditions in the country in which the plan is located.
The discount rates applicable to post-employment
benefit obligations should be determined by reference
to the market yields on high quality corporate bonds
that are appropriate to the estimated timing of benefit
payments at the balance sheet date.
The Group decided to calculate discount rates using
an economic approach for high-quality corporate
bonds whose duration corresponds to the terms of
employee benefits in the countries concerned. In the
countries where there is no active market for such
obligation, the Group refers to the market yields
(at the end of the reporting period) of government
bonds. The currency and duration of these corporate
or government bonds must correspond to the currency
and estimated duration of the post-employment
benefit obligations.
The cost of corresponding commitments is determined
by using the projected unit credit method, with a
discounted value calculation at the balance sheet
date in accordance with the principles of IAS
G
19
“Employee Benefits”.
All changes in the amount of defined benefit pension
obligations are recognised as soon as they occur.
Remeasurements of defined benefit pension
obligations, including actuarial gains and losses, should
be recognised immediately in “Other comprehensive
income”
G
.
The costs of services rendered during the period, past
service costs (plan amendment) and net interest are
recognised as an expense immediately.
The amount recognised in the statement of financial
position consists of the present value of the defined
benefit plans’ pension obligations. This value has been
adjusted for actuarial gains and losses, minus the fair
value of plan assets.
1.22. Revenue recognition
The Group’s revenues derive from the performance
obligation to transfer the control of products under
arrangements. According to these arrangements,
the transfer of control and the fulfilment of the
performance obligation occur at the same time.
Consolidated financial statements
50
|
ANNUAL REPORT 2023
|
Socfin
The point of control of the asset by the customer
depends on the moment when the goods are made
available to the carrier or when the buyer takes
possession of the goods. This also depends on the
delivery conditions. With regards to the Group’s
activities, the recognition criteria are generally met:
(a) for export sales, where the time of the transfer of
deed is based on the incoterms;
(b) for local sales, depending on the delivery
conditions, either when the goods leave the premises
or when the customer takes possession of the goods.
This is the moment when the Group has fulfilled its
performance obligations.
Revenues are valued at the transaction price of the
consideration received or receivable, to which the
company expects to be entitled.
The selling price is determined at the market price
and, in a few cases, is contractually determined on
a provisional basis using a reliable estimate. In the
latter case, price adjustments can then take place
depending on the movements between the reference
price and the final price, as recognised.
The Group considers itself to be the principal in its
revenue arrangements, because it controls the goods
sold before transferring them to the customers.
As at 31 December 2023, revenue from the major
customer within the Group accounted for approximately
EUR 83.8 million (2022: EUR 96.2 million) of total
Group revenue.
1.23. Taxes
Current tax is the amount of tax payable or recoverable
on the profit or loss of a financial year.
Temporary differences between the book values of
assets and liabilities on the one hand, and their tax
bases on the other hand, lead to the recognition of a
deferred tax using the tax rates which are applicable
when the temporary differences disappear, as adopted
on the closing date.
A deferred tax is recognised for all taxable temporary
differences, unless the deferred tax is generated:
- by goodwill or;
- by the initial recognition of an asset or liability in a
transaction which is not acquired through a business
combination, does not affect neither the accounting
profit nor the taxable profit (tax loss), nor gives
rise to equal taxable and deductible temporary
differences at the time of the transaction.
A deferred tax liability is recognised for all taxable
temporary differences related to investments in
subsidiaries and associates, unless the date on which
the temporary difference will be reversed can be
controlled and it will most likely not be reversed in
the foreseeable future.
A deferred tax asset is recognised in order to carry
forward unused tax losses and tax credits, so that
future taxable profits, on which these unused tax losses
and tax credits can be charged, will likely be available.
Deferred tax is recognised in the income statement,
unless it relates to items that have been directly
recognised, either in equity or in other comprehensive
income
G
.
The Group applies the mandatory exception to
recognise and disclose information about deferred
tax assets and liabilities related to Pillar Two income
taxes (refer to Note 14).
1.24. Segment information
IFRS
G
8 – Operating Segments requires operating
segments to be identified based on an internal
reporting. This internal reporting is analysed by the
entity’s chief operating decision-maker, in order to
assess performance and make resource decisions for
the segments.
The identification of these operational sectors
originates from the information that is analysed by
the management. This information is based on the
geographic distribution of political and economic
risks, as well as on the analysis of individual social
accounts at historical cost.
1.25. Use of estimates
For the preparation of consolidated financial
statements in accordance with IFRS, the Group’s
management has made use of its best estimates to
make assumptions on the following aspects, and to
what extent they were affected: the carrying amount
of assets and liabilities, information on assets and
liabilities, contingent liabilities and the carrying
amount of income and expenses recorded during the
period.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
51
Depending on the evolution of these assumptions or
changing economic conditions, the amount that will
appear in the Group’s future consolidated financial
statements may still differ from current estimates.
Material accounting policies, for which the Group
has made estimates, mainly concern the application
of IAS
G
19 - Employee Benefits (Note 23), IAS
G
41 -
Agriculture and IAS
G
2 - Inventories (Notes 8 and 17),
IAS 16
G
- Property, Plant and Equipment (Note 7), IAS
G
36 - Impairment of Assets (Notes 9 and 10), IFRS
G
9 -
Financial Instruments (Note 26) and IFRS
G
16 – Leases
(Note 5).
In the absence of observable data within the scope of
IFRS
G
13 – Fair Value Measurement, the Group makes
use of a model that was developed with the aim to
assess the fair value of agricultural production, using
local production costs and conditions, and local sales
(Refer to Note 1.13).
This method is inherently more volatile than
assessment at historical cost.
1.26. Non-Current Assets held for sale
Non-current assets (or disposal groups) are classified
as assets that are held for sale when their carrying
amount is to be recovered principally through a sale
transaction and when a sale is considered highly
probable. If their carrying amount is recovered
principally through a sale transaction rather than
through continuing use, these assets are stated at the
lowest of the carrying amount and fair value, less the
costs of disposal (Note 39).
1.27. Hyperinflation
The accounts of entities whose economies are
in hyperinflation are translated in accordance
with the standard IAS
G
29 – Financial reporting in
hyperinflationary economies. Monetary items in the
balance sheet are not restated, as they are already
expressed in the measuring unit current at the
end of the reporting period, unlike non-monetary
items, which are restated in terms of the measuring
unit current at the end of the reporting period.
In accordance with IAS 21 Foreign exchange, as
comparative amounts are translated into the currency
of a non-hyperinflationnary economy, they do not
need to be restated.
Sierra Leone
Since October 2023, Sierra Leone is considered
hyperinflationary. IAS
G
29 is applicable to entities
whose functional currency is the Leone of Sierra
Leone (SLL). The functional currency of the subsidiary
located in Sierra Leone is the US dollar. Consequently,
IAS
G
29 has no incidence on the Group financial
statements in Sierra Leone.
Ghana
Since October 2023, Ghana is considered
hyperinflationary. IAS
G
29 is applicable to entities
whose functional currency is the Ghanaian Cedi (GHS).
The functional currency of the subsidiary located in
Ghana is the Ghanaian Cedi. Consequently, non-
monetary items of the subsidiary located in Ghana have
been restated in terms of the measuring unit current
at the end of the reporting period (refer to Notes 5,
7 and 8), corresponding to the Ghana Consumer Price
Index (CPI), provided by the Government of Ghana
Statistical Service.
1.28. Climate effect
The Group considered the potential impact of climate
change, which may affect positively or negatively
the Group’s biological assets, and thus the financial
performance of the Group. Among climate factors,
the distribution of rainfall and sunshine are the most
important ones.
The Group considered climatic events such as severe
wind or fires in the valuation of the biological assets.
However, given current knowledge, distinguishing
the impact of natural climate changes from climate
impact caused by anthropic activity remains difficult.
The Management Board considered various
documentation in its assessment of the impact, such
as the last Intergovernmental Panel on Climate Change
(IPCC) reports but also the data coming from the
agronomic departments which reflect the potential
effect of climate change over the past years. Budgets
are adjusted to integrate the operational needs that
may result of the impact of those changes and the value
in use of the biological assets is aligned consequently
(Note 1.15 and Note 10). From a social stand point, the
effect of climate change are integrated through the
regular updates of the data used for the calculation of
the employee benefit provision (Note 23).
Consolidated financial statements
52
|
ANNUAL REPORT 2023
|
Socfin
The Management Board will continue to consider the
potential impact of climate change in its assessments,
and will integrate any new potential impact that could
lead to a material change in the Group’s financial
statements.
1.29. Geopolitical uncertainties
In February 2022, a number of countries (including
the US, UK and EU) imposed sanctions against certain
entities and individuals in Russia as a result of the
official recognition of the Donetsk People Republic and
Lugansk People Republic by the Russian Federation.
Announcements of potential additional sanctions were
made following military operations initiated by Russia
against Ukraine on 24 February 2022.
On 7 October 2023 Palestinian militant groups led by
Hamas launched a coordinated surprise offensive on
Israel resulting in more than 1,200 deaths, primarily
Israeli citizens. Following this attack, Israel declared
itself in a state of war for the first time since the Yom
Kippur War in 1973.
Due to the geopolitical tensions, since February 2022,
there has been a significant increase in volatility on
the securities and currency markets. The conflicts
have had a significant impact on the financial markets,
with many investors concerned about the risk of
further escalation and the ensuing impact on global
trade and economic growth.
Although the aforementioned aspects have not
significantly impacted the company’s operations nor
performance and going concern during 2023, the
Board of Directors continues to monitor the evolving
situation and its impact on the company’s financial
position and results.
1.30. Environmental, Social and Governance
The Group has described its ambitions and objectives
in terms of environment, social responsibilities and
governance in a separate Sustainability Report that
can be accessed on Socfin website.
Management has performed a preliminary assessment
to measure the financial impacts of those objectives
on the consolidated financial statements. Based on
this assessment, Management was able to conclude
that most of the commitments described in the
Sustainability Report have already been incorporated
in the budgets of the subsidiaries of Group. Those
budgets are mainly used for the determination of
internal indicators of impairment but also as a basis
for the determination of the expected growth rates
of the companies. A further description for the
assessment of impairment indicators is provided in
Notes 1.15 and 10.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
53
Note 2. Subsidiaries
| % Group | % Group | Consolidation | % Group | % Group | Consolidation | |
| Interest | Control | Method (*) | Interest | Control | Method (*) | |
| 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | |
| AFRICA | ||||||
| Rubber and palm | ||||||
| SOGB S.A. | 41.17 | 73.16 | FI | 41.17 | 73.16 | FI |
| PLANTATIONS SOCFINAF GHANA "PSG" LTD | 64.64 | 100.00 | FI | 64.64 | 100.00 | FI |
| OKOMU OIL PALM COMPANY PLC | 42.90 | 66.38 | FI | 42.90 | 66.38 | FI |
| SOCIETE AFRICAINE FORESTIERE ET AGRICOLE DU CAMEROUN "SAFACAM" S.A. | 44.63 | 69.05 | FI | 44.63 | 69.05 | FI |
| SOCIETE CAMEROUNAISE DE PALMERAIES “SOCAPALM” S.A. | 43.60 | 67.46 | FI | 43.60 | 67.46 | FI |
| Rubber | ||||||
| LIBERIAN AGRICULTURAL COMPANY "LAC" | 64.64 | 100.00 | FI | 64.64 | 100.00 | FI |
| SALALA RUBBER CORPORATION "SRC" | 64.64 | 100.00 | FI | 64.64 | 100.00 | FI |
| SUD COMOË CAOUTCHOUC "SCC" S.A. | 39.39 | 70.01 | FI | 39.39 | 70.01 | FI |
| Palm | ||||||
| SOCFIN AGRICULTURAL COMPANY "SAC" LTD | 60.11 | 93.00 | FI | 60.11 | 93.00 | FI |
| SOCIETE DES PALMERAIES DE LA FERME SUISSE "SPFS" S.A. | 43.60 | 100.00 | FI | 43.60 | 100.00 | FI |
| AGRIPALMA LDA | 56.88 | 88.00 | FI | 56.88 | 88.00 | FI |
| BRABANTA S.A.U. | 64.64 | 100.00 | FI | 64.64 | 100.00 | FI |
| Other activities | ||||||
| BEREBY-FINANCES "BEFIN" S.A. | 56.27 | 87.06 | FI | 56.27 | 87.06 | FI |
| CAMSEEDS S.A. | 43.64 | 100.00 | FI | 43.70 | 100.00 | FI |
| SOGESCOL CAMEROUN "SOGESCOL CAM" S.A.R.L. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| ASIA | ||||||
| Rubber and palm | ||||||
| PT SOCFIN INDONESIA "SOCFINDO" | 52.43 | 90.00 | FI | 52.43 | 90.00 | FI |
| Rubber | ||||||
| SETHIKULA CO LTD | 58.25 | 100.00 | FI | 58.25 | 100.00 | FI |
| SOCFIN-KCD CO LTD | 58.25 | 100.00 | FI | 58.25 | 100.00 | FI |
| VARANASI CO LTD | 58.25 | 100.00 | FI | 58.25 | 100.00 | FI |
| COVIPHAMA CO LTD | 58.25 | 100.00 | FI | 58.25 | 100.00 | FI |
| EUROPE | ||||||
| Other activities | ||||||
| CENTRAGES S.A. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| IMMOBILIERE DE LA PEPINIERE S.A. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| INDUSERVICES S.A. | 74.78 | 100.00 | FI | 74.78 | 100.00 | FI |
| INDUSERVICES FR S.A. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| MANAGEMENT ASSOCIATES S.A. | 60.72 | 80.00 | FI | 60.72 | 80.00 | FI |
| PLANTATION NORD-SUMATRA LTD "PNS Ltd" S.A. | 58.25 | 100.00 | FI | 58.25 | 100.00 | FI |
| SOCIETE ANONYME FORESTIERE AGRICOLE "SAFA" S.A.S. | 64.64 | 100.00 | FI | 64.64 | 100.00 | FI |
| SOCFINAF S.A. | 64.64 | 64.64 | FI | 64.64 | 64.64 | FI |
| SOCFINASIA S.A. | 58.25 | 58.25 | FI | 58.25 | 58.25 | FI |
| SOCFINCO S.A. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| SOCFINCO FR S.A. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| SOCFINDE S.A. | 59.48 | 99.92 | FI | 59.48 | 99.92 | FI |
| SODIMEX FR S.A. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| SOGESCOL FR S.A. | 61.44 | 100.00 | FI | 61.44 | 100.00 | FI |
| STP INVEST S.A. | 64.64 | 100.00 | FI | 64.64 | 100.00 | FI |
| TERRASIA S.A. | 68.27 | 100.00 | FI | 68.27 | 100.00 | FI |
(*) Consolidation Method: FI: Fully integrated, NC: Not Consolidated
Other entities not consolidated due to their low materiality: Socficom and Soggai.
Consolidated financial statements
54
|
ANNUAL REPORT 2023
|
Socfin
List of subsidiaries
* AGRIPALMA LDA is a company located on the
island of São Tomé and Principe, specialised in the
production of palm oil.
* BEREBY-FINANCES “BEFIN” S.A. is a holding
company under Ivorian law that owns the Ivorian
companies SOGB S.A. and SCC. S.A.
* BRABANTA S.A. is a Congolese company specialised
in the production of palm oil.
* CAMSEEDS S.A. is a company under Cameroonian
law specialised in research, development and
production of seeds (palm).
* CENTRAGES S.A. is a company under Belgian law
providing administrative and accounting services,
and which owns three floors of office space in
Brussels.
* COVIPHAMA CO LTD is a company under Cambodian
law involved in rubber.
* IMMOBILIERE DE LA PEPINIERE “PEPINIERE” S.A. is
a company under Belgian law with three floors of
office space in Brussels.
* INDUSERVICES S.A. is a company under
Luxembourgish law whose purpose is to provide
all administrative services to all companies and
organisations, including all services relating
to documentation, bookkeeping and register
services, as well as all representation, study,
consultation activities and assistance.
* INDUSERVICES FR S.A. is a company under Swiss
law whose purpose is to provide all administrative
services to all companies and organisations,
including all services relating to documentation,
bookkeeping and register services, as well as all
representation, study, consultation activities
and assistance. In addition, it provides all Group
companies with access to the common IT platform.
* LIBERIAN AGRICULTURAL COMPANY “LAC” is a
company under Liberian law that specialises in the
production of rubber.
* MANAGEMENT ASSOCIATES S.A. is a company under
Luxembourgish law active in the transport sector.
* OKOMU OIL PALM COMPANY “OKOMU” PLC is a
company under Nigerian law specialised in the
production of palm and rubber products.
* PLANTATION NORD-SUMATRA LTD “PNS” S.A. is a
holding company under Luxembourgish law that
holds stakes in PT Socfindo and Coviphama Co LTD.
* PLANTATIONS SOCFINAF GHANA “PSG” LTD is a
Ghanaian company specialised in the production
of palm and rubber products.
* PT SOCFIN INDONESIA “SOCFINDO” is a company
under Indonesian law active in the production of
palm oil and rubber.
* SOCIETE AFRICAINE FORESTIERE ET AGRICOLE DU
CAMEROUN “SAFACAM” S.A. is a company under
Cameroonian law active in the production of palm
oil and the cultivation of rubber trees.
* SALALA RUBBER CORPORATION “SRC” is a company
under Liberian law active in the cultivation of
rubber trees.
* SETHIKULA CO LTD is a company under Cambodian
law that holds concessions
G
of agricultural land.
* SOCIETE CAMEROUNAISE DE PALMERAIES
“SOCAPALM” S.A. is active in Cameroon in the
production of palm oil and rubber cultivation.
* SOCFIN AGRICULTURAL COMPANY “SAC” LTD is a
company located in Sierra Leone specialised in the
production of palm oil.
* SOCFIN CONSULTANT SERVICES “SOCFINCO” S.A.
is a company established in Belgium providing
technical assistance, as well as agronomic and
financial services.
* SOCFIN-KCD CO LTD is a company under Cambodian
law active in the production of rubber products.
* SOCFINAF S.A. is a holding company incorporated
under Luxembourgish law whose activity mainly
focuses on the management of a portfolio of active
participations in plantations located in Africa.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
55
* SOCFINASIA S.A. is a holding company under
Luxembourgish law whose activity focuses on the
management of a portfolio of interests involved in
plantations located in South-East Asia.
* SOCFINCO FR S.A. is a Swiss company providing
services, studies and management of agro-
industrial plantations.
* SOCFINDE S.A. is a finance holding company under
Luxembourgish law.
* SOCIETE ANONYME FORESTIERE AGRICOLE “SAFA”
S.A.S. is a company under French law holding a
stake in a plantation in Cameroon, Safacam S.A.
* SOCIETE DES PALMERAIES DE LA FERME SUISSE
“SPFS” S.A. is a company incorporated under the
Cameroon law in the production and marketing of
palm oil.
* SODIMEX FR S.A. is a Swiss company active in the
purchase and sale of equipment for plantations.
* SOCIETE DES CAOUTCHOUCS DE GRAND-BEREBY
“SOGB” S.A. is a company under Ivorian law
specialised in the production of palm and rubber
products.
* SOGESCOL FR S.A. is a Swiss company active in the
tropical products trade.
* SOGESCOL CAMEROON “SOGESCOL CAM” S.A R.L.
is a company under Cameroonian law active in the
trading of palm oil in Cameroon.
* STP INVEST S.A. is a company under Belgian law
with a stake in Agripalma LDA.
* SUD COMOË CAOUTCHOUC “SCC” is a company
under Ivorian law whose business is the processing
and marketing of rubber.
* TERRASIA S.A. is a company under Luxembourgish
law set up for office ownerships.
* VARANASI CO LTD is a company under Cambodian
law holding concessions
G
of agricultural land.
Consolidated financial statements
56
|
ANNUAL REPORT 2023
|
Socfin
Note 3. Restatement and reclassification
The Group has restated its previously issued consolidated
financial statements for the years ended 31 December
2022 and 1 January 2022. The Group has identified a
misstatement from prior year. This misstatement has
been considered by restating each of the relevant line
items in the prior years’ financial statements.
Certain items in the reported figures relating to
prior year have been reclassified for current year
presentation purposes.
The following tables summarise the impact of these
restatement and reclassification on the Group’s
financial statements.
Consolidated statement of financial position:
| Impact of the | Impact of the | ||||
| restatement | reclassification | ||||
| Previously | |||||
| 01/01/2022 | published | (a) | (b) | (c) | Restated |
| Consolidated reserves | 380,183,421 | -8,783,914 | 371,399,507 | ||
| Translation reserves | -108,075,534 | -83,872 | -108,159,406 | ||
| Profit / (loss) for the period | 80,389,524 | 80,389,524 | |||
| Non-controlling interests | 356,654,107 | -12,204,694 | 344,449,413 | ||
| Total Equity | 709,151,518 | -21,072,480 | 0 | 688,079,038 | |
| Deferred tax liabilities | 16,941,426 | 21,072,480 | 38,013,906 | ||
| Long-term debt, net of current portion | 125,924,853 | 5,955,219 | 131,880,072 | ||
| Other payables, non-current | 7,401,153 | -5,955,219 | 1,445,934 | ||
| Short-term debt and current portion of | |||||
| long-term debt | 38,433,365 | 40,403,288 | 78,836,653 | ||
| Other payables, current | 94,708,254 | -40,403,288 | 54,304,966 | ||
| TOTAL EQUITY AND LIABILITIES | 283,409,051 | 21,072,480 | 0 | 304,481,531 | |
| Impact of the | Impact of the | ||||
| restatement | reclassification | ||||
| Previously | |||||
| 31/12/2022 | published | (a) | (b) | (c) | Restated |
| Consolidated reserves | 444,942,847 | -8,955,276 | 435,987,571 | ||
| Translation reserves | -117,053,765 | 239,406 | -116,814,359 | ||
| Profit / (loss) for the period | 75,586,975 | -1,550,497 | 74,036,478 | ||
| Non-controlling interest | 377,808,668 | -13,662,790 | 364,145,878 | ||
| Total Equity | 781,284,725 | -23,929,157 | 0 | 757,355,568 | |
| Deferred tax liabilities | 14,322,564 | 23,929,157 | 38,251,721 | ||
| Long-term debt, net of current portion | 47,637,647 | 4,354,848 | 51,992,495 | ||
| Other payables, non-current | 6,005,420 | -4,354,848 | 1,650,572 | ||
| Short-term debt and current portion of | |||||
| long-term debt | 51,060,969 | 40,405,480 | 91,466,449 | ||
| Other payables, current | 91,298,039 | -40,405,480 | 50,892,559 | ||
| TOTAL EQUITY AND LIABILITIES | 210,324,639 | 23,929,157 | 0 | 234,253,796 | |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
57
Consolidated income statement and statement of comprehensive income:
| Impact of the | Impact of the | ||||
| restatement | reclassification | ||||
| Previously | |||||
| For the year ended 31 December 2022 | published | (a) | (b) | (c) | Restated |
| Work performed by entity and capitalised | 10,557,795 | -10,557,795 | 0 | ||
| Raw materials and consumables used | -343,091,740 | 4,415,965 | -338,675,775 | ||
| Other expenses | -110,398,857 | 4,469,060 | -105,929,797 | ||
| Staff costs | -172,621,305 | 1,591,389 | -171,029,916 | ||
| Other operating expenses | -27,875,215 | 81,381 | -27,793,834 | ||
| Deferred tax (expense) / income | -4,936,022 | -3,613,947 | -8,549,969 | ||
| Profit / (loss) for the period | 164,355,130 | -3,613,947 | 0 | 0 | 160,741,183 |
| Profit / (loss) attributable to non-controlling | |||||
| interests | 88,768,156 | -2,063,449 | 86,704,707 | ||
| Profit / (loss) attributable to the owners of | |||||
| the Parent | 75,586,975 | -1,550,498 | 74,036,477 | ||
| Gains / (losses) on exchange differences on | |||||
| translation of subsidiaries | -9,379,794 | 755,682 | -8,624,112 | ||
| Comprehensive income | 157,819,309 | -2,858,265 | 0 | 154,961,044 | |
The restatement (a) corresponds to deferred tax liabilities of one of the subsidiaries in Africa (Okomu), that
were understated in prior years.
The reclassification are described below:
(b) Loans from shareholders have been reclassified respectively from other payables (non-current) to long-term
debt, and from other payables (current) to short-term debt;
(c) Work performed by entity and capitalised and related expenses, for several subsidiaries in Africa and
Asia, have been offset within income statement, in order to impact the statement of financial position
movements only.
Undiluted earnings per share for the year ended 31 December 2022 have also been adjusted. The amount of the
adjustment to undiluted earnings per share is a decrease of EUR 0.11 per share.
Note 4. Goodwill
| 2023 | 2022 | |
| EUR | EUR | |
| Gross amount as at 1 January | 16,297,341 | 16,297,341 |
| Gross amount as at 31 December | 16,297,341 | 16,297,341 |
| Impairment as at 1 January | -11,346,284 | -11,346,284 |
| Impairment as at 31 December | -11,346,284 | -11,346,284 |
| Net balance as at 31 December | 4,951,057 | 4,951,057 |
Goodwill resulted from the initial consolidation of undertakings.
Impairment test on goodwill is disclosed in Note 10.
Consolidated financial statements
58
|
ANNUAL REPORT 2023
|
Socfin
Note 5. Leases
Right-of-use assets:
| Land and | ||||
| Furniture, | concession of | |||
| vehicles and | agricultural | |||
| EUR | other | Buildings | area | TOTAL |
| Gross value as at 1 January 2022 | 8,389,661 | 4,446,738 | 8,698,627 | 21,535,026 |
| Additions | 2,517,377 | 0 | 1,230,079 | 3,747,456 |
| Disposals | 0 | -136,602 | 0 | -136,602 |
| Foreign exchange differences | -32,383 | 18,542 | -4,169 | -18,010 |
| Gross value as at 31 December 2022 | 10,874,655 | 4,328,678 | 9,924,537 | 25,127,870 |
| Accumulated depreciation as at 1 January 2022 | -6,202,323 | -1,990,193 | -2,837,000 | -11,029,516 |
| Depreciation | -1,673,697 | -300,913 | -271,888 | -2,246,498 |
| Depreciation reversals | 0 | 40,980 | 0 | 40,980 |
| Transfer | 0 | 0 | -14,218 | -14,218 |
| Foreign exchange differences | 40,887 | -7,572 | -9,167 | 24,148 |
| Accumulated depreciation as at 31 December 2022 | -7,835,133 | -2,257,698 | -3,132,273 | -13,225,104 |
| Net book value as at 31 December 2022 | 3,039,522 | 2,070,980 | 6,792,264 | 11,902,766 |
| Gross value as at 1 January 2023 | 10,874,655 | 4,328,678 | 9,924,537 | 25,127,870 |
| Additions | 10,151,459 | 0 | 15,404,673 (*) | 25,556,132 |
| Disposals | -4,402,886 | 0 | 0 | -4,402,886 |
| Hyperinflation | 0 | 0 | 3,213,055 | 3,213,055 |
| Transfer to assets held for sale | 0 | 0 | -185,995 | -185,995 |
| Foreign exchange differences | -3,219,325 | -11,911 | -493,523 | -3,724,759 |
| Gross value as at 31 December 2023 | 13,403,903 | 4,316,767 | 27,862,747 | 45,583,417 |
| Accumulated depreciation as at 1 January 2023 | -7,835,133 | -2,257,698 | -3,132,273 | -13,225,104 |
| Depreciation | -3,648,983 | -295,476 | -665,685 | -4,610,144 |
| Depreciation reversals | 4,402,886 | 0 | 0 | 4,402,886 |
| Transfer to assets held for sale | 0 | 0 | 152,144 | 152,144 |
| Foreign exchange differences | 1,180,354 | 6,578 | 59,922 | 1,246,854 |
| Accumulated depreciation as at 31 December 2023 | -5,900,876 | -2,546,596 | -3,585,892 | -12,033,364 |
| Net book value as at 31 December 2023 | 7,503,027 | 1,770,171 | 24,276,855 | 33,550,053 |
(*) Additions during the period correspond to the revision of the concession price in Cameroon.
Lease liabilities
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Long-term lease liabilities | 27,037,253 | 11,087,025 |
| Short-term lease liabilities | 3,089,617 | 1,836,468 |
| Total | 30,126,870 | 12,923,493 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
59
The amounts recognised in the income statement in relation with lease contracts are detailed as follows:
| 2023 | 2022 | |
| EUR | EUR | |
| Depreciation of right-of-use assets | 4,610,144 | 2,246,498 |
| Expenses related to short-term leases and leases of low-value assets | 2,378,412 | 1,735,913 |
| Interest expense (included in the financial expenses) | 3,509,582 | 1,147,359 |
| Total | 10,498,138 | 5,129,770 |
Information relating to leases where the Group is the lessor is provided in Note 11.
Agricultural concessions
G
The Group does not own all the land on which the biological assets are planted. In general, these lands are
subject to very long-term concessions
G
from the local public authority. These concessions are renewable.
| Company | Date of initial lease or | Duration of the | Area | |
| renewal extension | initial lease | conceded | ||
| SAC | 2011/2012/2013/2014 | 50 years | 18,473 ha | (1) |
| LAC | 1959 | 70 years | 121,407 ha | |
| SRC | 1960 | 70 years | 8,000 ha | (3) |
| SOGB | 1995 | 99 years | 34,712 ha | |
| PSG | 2013/2016/2022 | 50 years | 18,304 ha | |
| OKOMU | 1986/1993/1999//2014 | 92 to 99 years | 33,113 ha | |
| SOCAPALM | 2005 | 60 years | 58,063 ha | |
| SAFACAM | 2022 | 3 years | 2,161 ha | (4) |
| AGRIPALMA | 2009 | 25 years | 1,735 ha | (2)(5) |
| BRABANTA | 2004 to 2022 | 25 years | 8,380 ha | |
| SETHIKULA | 2010 | 99 years | 4,273 ha | |
| VARANASI | 2009 | 70 years | 2,386 ha | |
| COVIPHAMA | 2008 | 70 years | 5,345 ha | |
| SOCFINDO | 1990 to 2023 | 25 to 35 years | 47,532 ha |
(1) Renewable concessions
G
for a term of 25 years
(2) Concessions renewable tacitly for periods of 25 years
(3) Extensible concessions
G
up to 40,000 ha
(4) Safacam owns 15,529 ha
(5) Agripalma owns 653 ha
Consolidated financial statements
60
|
ANNUAL REPORT 2023
|
Socfin
Note 6. Intangible assets
| Other | ||||
| Concessions | intangible | |||
| EUR | and patents | Softwares | assets | TOTAL |
| Cost as at 1 January 2022 | 2,804,674 | 3,426,922 | 1,370,782 | 7,602,378 |
| Additions | 582,356 | 56,261 | 32,003 | 670,620 |
| Disposals | -446 | -348,795 | -221,865 | -571,106 |
| Transfer | -1,171,888 | 0 | 0 | -1,171,888 |
| Foreign exchange differences | -534,704 | -57,672 | -1,204 | -593,580 |
| Cost as at 31 December 2022 | 1,679,992 | 3,076,716 | 1,179,716 | 5,936,424 |
| Accumulated depreciation as at 1 January 2022 | -338,550 | -2,258,794 | -1,299,290 | -3,896,634 |
| Depreciation | -35,068 | -84,039 | -29,603 | -148,710 |
| Depreciation reversals | 446 | 349,070 | 221,865 | 571,381 |
| Transfer | 14,218 | 0 | 0 | 14,218 |
| Foreign exchange differences | 66,332 | 50,386 | 1,204 | 117,922 |
| Accumulated depreciation as at 31 December 2022 | -292,622 | -1,943,377 | -1,105,824 | -3,341,823 |
| Net book value as at 31 December 2022 | 1,387,370 | 1,133,339 | 73,892 | 2,594,601 |
| Cost as at 1 January 2023 | 1,679,992 | 3,076,716 | 1,179,716 | 5,936,424 |
| Additions | 409 | 150,361 | 0 | 150,770 |
| Disposals | -122 | 0 | -177 | -299 |
| Transfer | 0 | 0 | -35,710 | -35,710 |
| Foreign exchange differences | -490,907 | -68,734 | -13,624 | -573,265 |
| Cost as at 31 December 2023 | 1,189,372 | 3,158,343 | 1,130,205 | 5,477,920 |
| Accumulated depreciation as at 1 January 2023 | -292,622 | -1,943,377 | -1,105,824 | -3,341,823 |
| Depreciation | -24,459 | -53,597 | -37,239 | -115,295 |
| Depreciation reversals | 122 | 0 | 0 | 122 |
| Transfer | 0 | 0 | 35,710 | 35,710 |
| Foreign exchange differences | 72,098 | 59,785 | 13,624 | 145,507 |
| Accumulated depreciation as at 31 December 2023 | -244,861 | -1,937,189 | -1,093,729 | -3,275,779 |
| Net book value as at 31 December 2023 | 944,511 | 1,221,154 | 36,476 | 2,202,141 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
61
Note 7. Property, plant and equipment
| Furniture, | Advances | ||||||
| Land and | Technical | vehicles and | Work in | and prepay- | |||
| EUR | nurseries (***) | Buildings | installations | others | progress | ments | TOTAL |
| Cost as at 1 January 2022 | 13,160,471 | 323,813,263 | 212,959,932 | 237,872,242 | 17,791,826 | 662,343 | 806,260,077 |
| Additions (*) | 1,307,378 | 7,265,938 | 17,785,161 | 13,927,535 | 12,637,721 | 8,156,462 | 61,080,195 |
| Disposals | -814,455 | -1,956,328 | -730,891 | -8,436,791 | 0 | 0 | -11,938,465 |
| Transfer | 411,687 | 2,275,785 | -4,958,284 | 17,957,479 | -16,230,492 | -316,007 | -859,832 |
| Foreign exchange differences | 12,632 | 424,229 | -4,779,210 | -320,573 | 178,575 | -62,363 | -4,546,710 |
| Cost as at 31 December 2022 | 14,077,713 | 331,822,887 | 220,276,708 | 260,999,892 | 14,377,630 | 8,440,435 | 849,995,265 |
| Accumulated depreciation as at | -1,196,798 | -179,330,353 | -118,680,012 | -180,257,412 | 0 | 0 | -479,464,575 |
| 1 January 2022 | |||||||
| Depreciation | -16,775 | -13,812,619 | -13,102,651 | -14,221,686 | 0 | 0 | -41,153,731 |
| Depreciation reversals | 22,946 | 1,949,306 | 620,400 | 7,360,966 | 0 | 0 | 9,953,618 |
| Transfer | 0 | -1,736,377 | 9,176,617 | -7,272,790 | 0 | 0 | 167,450 |
| Foreign exchange differences | -2,805 | 568,395 | 1,738,956 | -308,271 | 0 | 0 | 1,996,275 |
| Accumulated depreciation as at | -1,193,432 | -192,361,648 | -120,246,690 | -194,699,193 | 0 | 0 | -508,500,963 |
| 31 December 2022 | |||||||
| Accumulated impairment as at | 0 | 0 | -1,728,058 | -2,387,455 | 0 | 0 | -4,115,513 |
| 1 January 2022 | |||||||
| Impairment (**) | 0 | -409,129 | -403,478 | 0 | 0 | 0 | -812,607 |
| Impairment reversal | 0 | 0 | 0 | 2,205,185 | 0 | 0 | 2,205,185 |
| Accumulated impairment as at | 0 | -409,129 | -2,131,536 | -182,270 | 0 | 0 | -2,722,935 |
| 31 December 2022 | |||||||
| Net book value as at 31 December 2022 | 12,884,281 | 139,052,110 | 97,898,482 | 66,118,429 | 14,377,630 | 8,440,435 | 338,771,367 |
Consolidated financial statements
62
|
ANNUAL REPORT 2023
|
Socfin
| Furniture, | Advances | ||||||
| Land and | Technical | vehicles and | Work in | and prepay- | |||
| EUR | nurseries (***) | Buildings | installations | others | progress | ments | TOTAL |
| Cost as at 1 January 2023 | 14,077,713 | 331,822,887 | 220,276,708 | 260,999,892 | 14,377,630 | 8,440,435 | 849,995,265 |
| Additions (*) | 0 | 6,188,130 | 7,178,845 | 16,134,071 | 12,492,050 | 15,715,933 | 57,709,029 |
| Disposals | 0 | -335,101 | -1,132,950 | -3,654,693 | -1,487,422 | 0 | -6,610,166 |
| Hyperinflation | 0 | 3,559,352 | 4,626,554 | 1,723,126 | 0 | 0 | 9,909,032 |
| Transfer | -2,326,775 | 10,498,434 | 2,291,874 | 3,184,170 | -14,757,682 | -1,156,473 | -2,266,452 |
| Transfer to assets held for sale | 0 | -5,971,824 | 0 | -1,261,309 | 0 | 0 | -7,233,133 |
| Foreign exchange differences | -2,384,883 | -21,574,837 | -40,402,777 | -15,314,793 | -1,280,886 | -10,969 | -80,969,145 |
| Cost as at 31 December 2023 | 9,366,055 | 324,187,041 | 192,838,254 | 261,810,464 | 9,343,690 | 22,988,926 | 820,534,430 |
| Accumulated depreciation as at | -1,193,432 | -192,361,648 | -120,246,690 | -194,699,193 | 0 | 0 | -508,500,963 |
| 1 January 2023 | |||||||
| Depreciation | -16,518 | -14,147,731 | -11,197,879 | -16,145,479 | 0 | 0 | -41,507,607 |
| Depreciation reversals | 0 | 299,356 | 907,740 | 3,596,473 | 0 | 0 | 4,803,569 |
| Transfer | 19,670 | -61,214 | -393 | 393 | 0 | 0 | -41,544 |
| Transfer to assets held for sale | 0 | 3,631,134 | 0 | 975,370 | 0 | 0 | 4,606,504 |
| Foreign exchange differences | 5,941 | 7,557,446 | 11,635,353 | 9,898,516 | 0 | 0 | 29,097,256 |
| Accumulated depreciation as at | -1,184,339 | -195,082,657 | -118,901,869 | -196,373,920 | 0 | 0 | -511,542,785 |
| 31 December 2023 | |||||||
| Accumulated impairment as at | 0 | -409,129 | -2,131,536 | -182,270 | 0 | 0 | -2,722,935 |
| 1 January 2023 | |||||||
| Impairment (**) | 0 | -298,687 | 0 | 0 | 0 | 0 | -298,687 |
| Impairment reversal | 0 | 0 | 133,234 | 0 | 0 | 0 | 133,234 |
| Transfer to assets held for sale | 0 | 385,553 | 0 | 0 | 0 | 0 | 385,553 |
| Foreign exchange differences | 0 | 7,968 | 0 | 0 | 0 | 0 | 7,968 |
| Accumulated impairment as at | 0 | -314,295 | -1,998,302 | -182,270 | 0 | 0 | -2,494,867 |
| 31 December 2023 | |||||||
| Net book value as at 31 December 2023 | 8,181,716 | 128,790,089 | 71,938,083 | 65,254,274 | 9,343,690 | 22,988,926 | 306,496,778 |
(*) Additions for the period include capitalised costs.
(**) Impairment test on property, plant and equipment is disclosed in Note 10.
(***) Nurseries have been reclassified in 2023 from property, plant and equipment to biological assets, see Note 8.
As at 31 December 2023, the Group has technical installations and professional equipment pledged as guarantees for borrowings of the Group for an
amount of EUR 4.9 million (2022: EUR 8.1 million). Details of these guarantees are provided in Note 33.
The accounting policies adopted for Property, plant and equipment are detailed in Notes 1 and 10.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
63
Note 8. Biological assets
| Palm | Rubber | Nurseries and | TOTAL | |||
| others (****) | ||||||
| EUR | Mature | Immature | Mature | Immature | ||
| Cost as at 1 January 2022 | 434,505,440 | 19,921,189 | 252,075,659 | 71,488,835 | 7,131 | 777,998,254 |
| Additions (*) | 0 | 9,038,860 | 0 | 6,708,384 | 0 | 15,747,244 |
| Disposals | -8,567,446 | -521,789 | -5,519,885 | -2,684,168 | 0 | -17,293,288 |
| Transfer (***) | 10,645,515 | -10,127,535 | 11,945,449 | -17,861,891 | 0 | -5,398,462 |
| Foreign exchange differences | -3,985,217 | -578,035 | 5,748,587 | 881,947 | 0 | 2,067,282 |
| Cost as at 31 December 2022 | 432,598,292 | 17,732,690 | 264,249,810 | 58,533,107 | 7,131 | 773,121,030 |
| Accumulated depreciation as at 1 January 2022 | -153,841,284 | 0 | -76,064,692 | 0 | -3,104 | -229,909,080 |
| Depreciation | -18,869,674 | 0 | -8,755,167 | 0 | -56 | -27,624,897 |
| Depreciation reversals | 8,384,373 | 0 | 4,907,080 | 0 | 0 | 13,291,453 |
| Transfer (***) | -304,376 | 0 | 369,669 | 0 | 0 | 65,293 |
| Foreign exchange differences | 1,616,083 | 0 | -1,240,360 | 0 | 0 | 375,723 |
| Accumulated depreciation as at | -163,014,878 | 0 | -80,783,470 | 0 | -3,160 | -243,801,508 |
| 31 December 2022 | ||||||
| Accumulated impairment as at 1 January 2022 | -22,828,695 | 0 | -37,132,301 | -9,271,513 | 0 | -69,232,509 |
| Impairment (**) | 0 | 0 | -27,341,960 | -182,149 | 0 | -27,524,109 |
| Impairment reversal | 0 | 0 | 386,164 | 1,268,463 | 0 | 1,654,627 |
| Transfer (***) | 0 | 0 | 300,553 | 5,724,995 | 0 | 6,025,548 |
| Foreign exchange differences | -761,413 | 0 | -1,049,535 | -343,317 | 0 | -2,154,265 |
| Accumulated impairment as at 31 December 2022 | -23,590,108 | 0 | -64,837,079 | -2,803,521 | 0 | -91,230,708 |
| Net book value as at 31 December 2022 | 245,993,306 | 17,732,690 | 118,629,261 | 55,729,586 | 3,971 | 438,088,814 |
| Cost as at 1 January 2023 | 432,598,292 | 17,732,690 | 264,249,810 | 58,533,107 | 7,131 | 773,121,030 |
| Additions (*) | 0 | 10,905,738 | 0 | 6,944,818 | 1,783,574 | 19,634,130 |
| Disposals | -2,842,401 | -386,833 | -4,346,546 | 0 | -1,214,519 | -8,790,299 |
| Hyperinflation | 3,386,453 | 0 | 1,689,724 | 0 | 0 | 5,076,177 |
| Transfer | 8,301,719 | -7,635,294 | 20,159,904 | -19,868,096 | 1,368,543 | 2,326,776 |
| Transfer to assets held for sale | 0 | 0 | -40,811,858 | -4,002,517 | -71,764 | -44,886,139 |
| Foreign exchange differences | -39,259,571 | -531,183 | -12,011,433 | -3,419,693 | -212,512 | -55,434,392 |
| Cost as at 31 December 2023 | 402,184,492 | 20,085,118 | 228,929,601 | 38,187,619 | 1,660,453 | 691,047,283 |
| Accumulated depreciation as at 1 January 2023 | -163,014,878 | 0 | -80,783,470 | 0 | -3,160 | -243,801,508 |
| Depreciation | -17,821,119 | 0 | -9,388,863 | 0 | -302 | -27,210,284 |
| Depreciation reversals | 2,419,542 | 0 | 3,216,432 | 0 | 0 | 5,635,974 |
| Transfer | 889 | 0 | 0 | 0 | -19,670 | -18,781 |
| Transfer to assets held for sale | 0 | 0 | 5,837,046 | 0 | 0 | 5,837,046 |
| Foreign exchange differences | 10,620,696 | 0 | 3,454,451 | 0 | 0 | 14,075,147 |
| Accumulated depreciation as at | -167,794,870 | 0 | -77,664,404 | 0 | -23,132 | -245,482,406 |
| 31 December 2023 | ||||||
| Accumulated impairment as at 1 January 2023 | -23,590,108 | 0 | -64,837,079 | -2,803,521 | 0 | -91,230,708 |
| Impairment (**) | 0 | 0 | -6,632,680 | -915,146 | 0 | -7,547,826 |
| Transfer | 0 | 0 | -851,402 | 851,402 | 0 | 0 |
| Transfer to assets held for sale | 0 | 0 | 34,311,388 | 2,768,543 | 0 | 37,079,931 |
| Foreign exchange differences | 2,853,205 | 0 | 2,479,051 | 98,722 | 0 | 5,430,978 |
| Accumulated impairment as at 31 December 2023 | -20,736,903 | 0 | -35,530,722 | 0 | 0 | -56,267,625 |
| Net book value as at 31 December 2023 | 213,652,719 | 20,085,118 | 115,734,475 | 38,187,619 | 1,637,321 | 389,297,252 |
(*) Additions for the period include capitalised costs.
(**) Impairment test on biological assets is disclosed in Note 10.
(***) During previous periods, a positive revaluation for EUR 5.8 million and an impairment for EUR 6.0 million had been booked on biological assets on
the Cambodian segment. As those adjustments had no significant net impact, they were cancelled in 2022.
(****) Nursery has been reclassified in 2023 within biological assets.
Accounting policy regarding current biological assets is disclosed in note 1.13.
Consolidated financial statements
64
|
ANNUAL REPORT 2023
|
Socfin
Note 9. Depreciation and impairment
| 2023 | 2022 | |
| EUR | EUR | |
| Depreciation | ||
| Of intangible assets (Note 6) | 115,295 | 148,710 |
| Of property, plant and equipment excluding biological assets (Note 7) | 41,507,607 | 41,153,732 |
| Of biological assets (Note 8) | 27,210,284 | 27,624,896 |
| Of investment properties (Note 11) | 221,028 | 225,478 |
| Of right-of-use assets (Note 5) | 4,610,144 | 2,246,498 |
| Impairment | ||
| Of property, plant and equipment excluding biological assets (Note 7) | 298,686 | 812,607 |
| Of biological assets (Note 8) | 7,547,826 | 27,524,109 |
| Impairment reversal | ||
| Of property, plant and equipment excluding biological assets (Note 7) | -133,234 | -2,205,185 |
| Of biological assets (Note 8) | 0 | -1,654,627 |
| TOTAL | 81,377,636 | 95,876,218 |
Note 10. Impairment of assets
Goodwill
Impairment tests on goodwill are performed at least
once a year to assess whether the carrying amount is
still appropriate.
Intangible and tangible assets and right-of-use
of assets
At each reporting date, the Group reviews the carrying
amount of its intangible and tangible assets and right-
of-use assets in order to assess whether there is any
indication of impairment.
If such indication arises, the recoverable amount of
the asset is estimated to determine the amount of the
impairment loss.
As at 31 December 2023, an impairment loss
of EUR 0.3 million (2022: impairment loss for
EUR 0.8 million) and an impairment reversal for
EUR 0.1 million (2022: impairment reversal for
EUR 2.2 million) were recognised on property, plant
and equipment.
Bearer biological assets
At each reporting date, the Group assesses if there
is any indication that its biological assets may be
impaired.
For this purpose, the Group assesses several indicators:
The significant and sustained decreasing trend in the
prices of natural rubber (TSR20
G
1
st
position on SGX
G
)
and crude palm oil (CIF Rotterdam
G
) was considered
as an observable sign that the biological assets may
have been impaired. A decrease in these prices at
reporting date greater than 15% compared to an
average of 5-year value has been set by the Group as
an impairment indicator.
As at 31 December 2023, the decrease in prices does
not exceed 15% of the average price over the past 5
years for the Rubber and Palm segment.
The Group also considers average prices over the six
months before reporting date, and average prices over
the last twelve months, instead of only closing prices.
This is done in order to avoid seasonal fluctuations in
the prices of supply materials.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
65
Moreover, the Group also reviews the prices observed
on local market and considers a decrease in these
prices at the closing date of more than 15% compared
to an average of values over 5 years, as an impairment
indicator.
Based on these criteria, for the rubber segment, the
rise in prices observed during the 2023 financial year
does not exceed 15% of the average prices over the past
5 years. For the palm segment, the review of global and
local prices do not show any impairment indicator.
In addition to these external indicators, the Group
considers the following indicators:
- Internal performance indicators;
- Criteria relating to the local market;
- Physical indicators of impairment;
- Significant changes in plantations that could have a
material impact on their future cash flows.
The review of impairment indicators led the Group to
conclude that a sign of impairment exist for SRC.
If an indication of impairment is identified, the
recoverable amount of the bearer biological assets is
determined.
Impairment tests must be performed on the smallest
identifiable group of assets which generates cash flows
independently of other assets or groups of assets, and
for which the Group prepares financial information for
the Board of Directors.
The identification of Cash Generating Units (CGUs)
depends, in particular, on:
- how the Group manages the activities of the entity;
- the way in which decisions are made with regards to
the pursuit or the disposal of its activities and;
- the existence of an active market for all or part of
the production.
The Group considers the political and country specific risk
factors while reviewing business evolution. Therefore,
companies are grouped within the CGU country.
The recoverable amount of bearer biological assets
is determined through the calculation of value in use
by using the most recent information approved by the
local management. Those information comprise the
measures taken that will help to prevent the effects
of the climate change (maintenance program, land
and field preparation against the fire and / or flooding
resulting from heavy rainfalls). The impacts on future
cash-flows of the potential effects of climate changes
are therefore taken into consideration. Then the
Group uses the discounted value of expected net cash
flows, which are discounted at a pre-tax rate. On the
reporting date, the financial projection incorporates
the full exploitation of the younger bearer biological
assets. The operational life
G
ranges from 25 to 30 years
for both crops. This period can be adapted according
to the particular circumstances for each entity.
The value in use calculation has been very sensitive
to:
- changes in the margins achieved by the entity and
- changes related to discount rates.
This sensitivity analysis is performed whenever an
impairment test is performed after impairment
indicators are identified.
Changes in realised margins
Initially, the Group determines separately the expected
production of each category of bearer biological assets
within the entity over their remaining life. This expected
production is estimated through the surface areas
planted on the reporting date, as well as through the
actual crop yield recorded during the financial year. The
latter depends on the maturity of the bearer biological
asset. Production is then valued on an average basis
of five-year of the margins that were achieved by the
entity in relation to the agricultural activity. The value
in use of the bearer biological asset is then obtained
by discounting these cash flows. Average margins are
considered constant over the duration of the financial
projection. No indexing factor is considered.
Based on the existence of an impairment indication
and following subsequent impairment tests, the Group
accounted for an impairment loss of EUR 7.5 million
for SRC (Liberia). The remaining amount has been
reclassified within assets held for sale (see also Notes
8 and 39).
As at 31 December 2023, accumulated impairment
losses in the palm business segment amounted to
EUR 9.2 million for Agripalma, EUR 7.2 million for
Brabanta and EUR 4.4 million for Socfin Agricultural
Company. For the Rubber segment, the accumulated
impairment losses are EUR 18.0 million for Socfin
KCD, EUR 8.6 million for Safacam, EUR 8.0 million for
Coviphama, and EUR 1.0 million for PSG (Note 8). No
impairment reversal indicators have been identified
during the year.
Consolidated financial statements
66
|
ANNUAL REPORT 2023
|
Socfin
Note 11. Investment properties
| EUR | |
| Cost as at 1 January 2022 | 9,893,106 |
| Additions | 34,782 |
| Cost as at 31 December 2022 | 9,927,888 |
| Accumulated depreciation as at 1 January 2022 | -6,032,324 |
| Depreciation | -225,478 |
| Accumulated depreciation as at 31 December 2022 | -6,257,802 |
| Net book value as at 31 December 2022 | 3,670,086 |
| Cost as at 1 January 2023 | 9,927,888 |
| Additions | 60,598 |
| Disposals | -216 |
| Cost as at 31 December 2023 | 9,988,270 |
| Accumulated depreciation as at 1 January 2023 | -6,257,802 |
| Depreciation | -221,028 |
| Depreciation reversals | 216 |
| Accumulated depreciation as at 31 December 2023 | -6,478,614 |
| Net book value as at 31 December 2023 | 3,509,656 |
The leases are in the form of a 9-year renewable lease
(Socfin being the lessor). Premises of the Champ de
Mars building that were rented generated a rental
income of EUR 0.5 million (2022: EUR 0.6 million). The
direct operating expenses incurred by this property
amounted to EUR 0.4 million (2022: EUR 0.4 million).
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
67
Note 12. Non-wholly owned subsidiaries in which non-controlling interests
are significant
Interests of non-controlling interests in the activities of the Group
| Percentage of equity shares of | Percentage of voting rights of | ||||
| Subsidiary | Main location | non-controlling interest | non-controlling interests | ||
| 2023 | 2022 | 2023 | 2022 | ||
| Production of palm oil and rubber | |||||
| SOGB | Côte d'Ivoire | 58.83% | 58.83% | 26.84% | 26.84% |
| OKOMU | Nigeria | 57.10% | 57.10% | 33.62% | 33.62% |
| SAFACAM | Cameroon | 55.37% | 55.37% | 30.95% | 30.95% |
| SOCAPALM | Cameroon | 56.40% | 56.40% | 32.54% | 32.54% |
| SOCFINDO | Indonesia | 47.57% | 47.57% | 10.00% | 10.00% |
| Production of rubber | |||||
| LAC | Liberia | 35.36% | 35.36% | 0.00% | 0.00% |
| Investment portfolio management | |||||
| SOCFINASIA | Luxembourg | 41.75% | 41.75% | 41.75% | 41.75% |
| SOCFINAF | Luxembourg | 35.36% | 35.36% | 35.36% | 35.36% |
| Net income attributed to | ||||
| non-controlling interests in | ||||
| the subsidiary during the | Accumulated non-controlling | |||
| Subsidiary | financial period | interests in the subsidiary | ||
| 2023 | 2022 | 2023 | 2022 | |
| EUR | EUR | EUR | EUR | |
| SOGB | 2,943,080 | 16,073,618 | 55,786,753 | 65,338,576 |
| OKOMU (Restated) | 19,582,939 | 21,685,176 | 23,709,332 | 41,496,493 |
| SAFACAM | -617,609 | 1,399,945 | 21,671,956 | 24,635,112 |
| SOCAPALM | 10,109,713 | 10,176,916 | 51,092,601 | 48,821,644 |
| SOCFINDO | 26,120,312 | 34,766,880 | 31,926,776 | 26,499,209 |
| LAC | -807,026 | 1,175,888 | 17,456,925 | 14,175,710 |
| SOCFINASIA | -2,651,864 | 1,417,674 | 55,344,085 | 69,185,844 |
| SOCFINAF | -6,780,572 | -8,941,567 | 39,869,186 | 33,510,966 |
| Subsidiaries that hold non-controlling interests that are not significant individually | 45,207,636 | 40,482,324 | ||
| Non-controlling interests | 342,065,250 | 364,145,878 | ||
Consolidated financial statements
68
|
ANNUAL REPORT 2023
|
Socfin
Summary financial information concerning subsidiaries whose interests of non-controlling interests are
significant for the Group excluding intragroup eliminations
| Non-current | Current | Non-current | ||
| Subsidiary | Current assets | assets | liabilities | liabilities |
| 2022 | EUR | EUR | EUR | EUR |
| SOGB | 41,259,858 | 98,190,002 | 27,675,941 | 6,768,082 |
| OKOMU (Restated) | 28,642,085 | 116,727,370 | 19,373,135 | 38,262,602 |
| SAFACAM | 12,578,738 | 33,387,449 | 9,541,067 | 3,840,819 |
| SOCAPALM | 31,652,073 | 113,564,581 | 37,057,322 | 7,186,191 |
| SOCFINDO | 36,446,379 | 91,330,388 | 33,993,571 | 34,304,495 |
| LAC | 22,116,139 | 78,750,441 | 15,173,372 | 28,673,339 |
| SOCFINASIA | 52,028,834 | 405,667,839 | 5,552,442 | 0 |
| SOCFINAF | 36,675,973 | 361,924,445 | 57,346,716 | 120,000,000 |
| 2023 | EUR | EUR | EUR | EUR |
| SOGB | 39,237,673 | 96,453,663 | 35,692,377 | 7,376,308 |
| OKOMU | 23,453,222 | 59,724,716 | 17,910,393 | 24,411,400 |
| SAFACAM | 13,883,373 | 34,456,093 | 11,913,763 | 7,092,036 |
| SOCAPALM | 28,442,311 | 111,898,820 | 31,614,481 | 5,254,925 |
| SOCFINDO | 34,884,343 | 94,960,391 | 25,934,158 | 34,533,441 |
| LAC | 21,947,518 | 58,654,948 | 8,464,889 | 33,302,119 |
| SOCFINASIA | 72,552,549 | 357,704,576 | 6,182,830 | 0 |
| SOCFINAF | 32,231,455 | 317,046,977 | 25,365,875 | 100,000,000 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
69
| Dividends | ||||
| Revenue from | Comprehensive | paid to non- | ||
| ordinary | Net income for | income for | controlling | |
| Subsidiary | activities | the period | the period | interests |
| 2022 | EUR | EUR | EUR | EUR |
| SOGB | 143,125,135 | 23,862,820 | 23,862,820 | 5,321,013 |
| OKOMU (Restated) | 133,279,823 | 38,962,980 | 38,962,980 | 13,683,296 |
| SAFACAM | 35,405,879 | 4,188,838 | 4,188,838 | 1,177,658 |
| SOCAPALM | 112,851,693 | 16,268,753 | 16,268,753 | 7,717,380 |
| SOCFINDO | 193,795,921 | 71,954,260 | 71,954,260 | 7,524,578 |
| LAC | 40,756,657 | 3,508,835 | 3,508,835 | 0 |
| SOCFINASIA | 0 | 70,684,907 | 70,684,907 | 24,569,808 |
| SOCFINAF | 0 | -37,542,749 | -37,542,749 | 0 |
| 2023 | EUR | EUR | EUR | EUR |
| SOGB | 111,971,288 | 8,034,526 | 8,034,526 | 5,480,113 |
| OKOMU | 113,518,676 | 35,264,066 | 35,264,066 | 8,816,146 |
| SAFACAM | 35,943,252 | 933,817 | 933,817 | 1,303,922 |
| SOCAPALM | 129,002,660 | 18,194,012 | 18,194,012 | 5,107,090 |
| SOCFINDO | 166,005,846 | 52,959,587 | 52,959,587 | 4,111,802 |
| LAC | 34,963,720 | -16,537,760 | -16,537,760 | 0 |
| SOCFINASIA | 0 | 48,129,963 | 48,129,963 | 28,631,533 |
| SOCFINAF | 0 | 2,658,856 | 2,658,856 | 0 |
Consolidated financial statements
70
|
ANNUAL REPORT 2023
|
Socfin
| Net cash inflows (outflows) | ||||
| Operating | Investing | Financing | Net cash inflows | |
| Subsidiary | activities | activities | activities | (outflows) |
| 2022 | EUR | EUR | EUR | EUR |
| SOGB | 46,841,347 | -8,339,224 | -31,411,643 | 7,090,479 |
| OKOMU | 50,558,570 | -22,109,292 | -37,698,943 | -9,249,665 |
| SAFACAM | 8,426,402 | -2,316,652 | -6,346,027 | -236,277 |
| SOCAPALM | 28,473,548 | -10,987,793 | -17,619,574 | -133,819 |
| SOCFINDO | 78,446,226 | -12,561,950 | -75,245,783 | -9,361,507 |
| LAC | 3,320,791 | -2,627,891 | 0 | 692,900 |
| SOCFINASIA | 73,747,907 | 2,994,820 | -65,656,710 | 11,086,017 |
| SOCFINAF | 26,451,606 | 22,249,770 | -56,722,228 | -8,020,852 |
| 2023 | EUR | EUR | EUR | EUR |
| SOGB | 30,182,499 | -8,399,725 | -18,023,120 | 3,759,654 |
| OKOMU | 32,367,223 | -11,180,148 | -25,909,506 | -4,722,431 |
| SAFACAM | 5,355,954 | -4,585,446 | -2,522,796 | -1,752,289 |
| SOCAPALM | 35,566,217 | -11,080,808 | -19,192,268 | 5,293,141 |
| SOCFINDO | 65,138,520 | -15,351,501 | -41,118,016 | 8,669,003 |
| LAC | 3,960,079 | -2,827,854 | -901,618 | 230,607 |
| SOCFINASIA | 48,567,753 | 50,764,461 | -80,699,909 | 18,632,305 |
| SOCFINAF | 28,400,632 | 16,300,881 | -44,500,295 | 201,218 |
The nature and evolution of the risks associated with
the interests held by the Group in the subsidiaries
remained stable over the financial period compared
to the previous year.
Note 13. Financial assets at fair value through other comprehensive income
| 2023 | 2022 | |
| EUR | EUR | |
| Fair value as at 1 January | 688,024 | 715,578 |
| Change in fair value (*) | -42,251 | -27,554 |
| Fair value as at 31 December | 645,773 | 688,024 |
(*) The variation in the fair value of the financial assets is accounted under the Other Comprehensive Income.
| EUR | Cost (historical) | Fair value | ||
| 2023 | 2022 | 2023 | 2022 | |
| Financial assets at fair value through other | 600,118 | 600,118 | 645,773 | 688,024 |
| comprehensive income | ||||
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
71
Note 14. Deferred taxes
* Components of deferred tax assets and liabilities
| 2023 | 2022 | |
| Restated | ||
| EUR | ||
| IAS 2 / IAS 41: Agricultural production | -2,742,949 | -4,731,573 |
| IAS 12: Income Tax (*) | -6,264,584 | -4,696,048 |
| IAS 16: Property, plant and equipment (**) | -20,441,717 | -30,689,264 |
| IAS 19: Pension obligations | 10,357,180 | 10,956,040 |
| IAS 21: Translation differences | -1,174,888 | 46,624 |
| IAS 37: Provisions for risks and charges | 197,064 | 426,163 |
| IAS 38: Formation expenses | 0 | 516,393 |
| IAS 38: Research costs | 1,009,510 | 935,670 |
| IFRS 9: Financial assets measured at fair value through other | -47,658 | -109,204 |
| comprehensive income | ||
| IFRS 9: Forward exchange contract | -134,635 | -255,132 |
| IFRS 16: Leases | 16,389 | 719,833 |
| IAS 23: Capitalised interests | 0 | 347,960 |
| IFRS 13: Fair value of investment property | 0 | -16,580 |
| Others | -3,924 | -4,114 |
| Balance as at 31 December | -19,230,212 | -26,553,232 |
| Of which Deferred Tax Assets | 9,106,597 | 11,698,485 |
| Of which Deferred Tax Liabilities | -28,336,810 | -38,251,718 |
(*) Of which EUR 3.6 million of deferred tax asset linked to losses carried forward activated, and EUR 6.8 million of deferred
tax liability linked to withholding tax.
(**) Of which EUR -1.1 million relating to hyperinflation (reevaluation of property, plant and equipment).
The above-deferred taxes are presented per category
of deferred taxes that result from consolidation
adjustments. They are calculated company per
company and the net position between deferred tax
liabilities and deferred tax assets is presented.
The Group Socfin is within the scope of the OECD Pillar
Two model rules. Pillar Two legislation was enacted or
substantively enacted in certain jurisdictions where the
Group operates to come into effect in January 2024.
Since the Pillar Two legislation was not effective at
the reporting date, the Group has no related current
tax exposure. The Group applies the exception to
recognising and disclosing information about deferred
tax assets and liabilities related to Pillar Two income
taxes, as provided in the amendments to IAS 12 published
in May 2023 and adopted by the EU in November 2023.
Based on preliminary analysis, the Company should
qualify as the "Ultimate Parent Entity" (UPE) due to the
fact that it is the largest entity that consolidate, and it
is not owned, directly or indirectly, by another entity
having a controlling interest. The UPE, Socfin, would be
subject to IIR or would apply the IIR Offset Mechanism.
However, the Pillar Tow rules were enacted in
Luxembourg close to the reporting date. There are
significant complexities inherent in applying the
legislation and performing the Pillar Two calculations,
therefore the quantitative impact of the Pillar
Two rules is not reasonably estimable at this time.
In addition, quantitative information to indicate
potential exposure to Pillar Two income taxes is not
currently known or reasonably estimable. Therefore,
the Company (in its potential condition as a UPE) is
still in process of assessing the potential exposure (if
any) to Pillar Two income taxes as at 31 December
2023. The Group applies the exception to recognising
and disclosing information about deferred tax assets
and liabilities related to Pillar Two income taxes, as
Consolidated financial statements
72
|
ANNUAL REPORT 2023
|
Socfin
provided in the amendments to IAS 12 published in
May 2023 and adopted by the EU in November 2023.
The Company will report the potential exposure in its
next Annual Report for the period ending 31 December
2024.
* Contingent tax assets and liabilities
Some of the subsidiaries have accumulated either tax
losses that are or are not limited over time, or capital
allowances limited or not over time.
LAC, Brabanta, Agripalma, Socfin KCD, Immobilière
de la Pépinière, Coviphama and Camseeds
have unused tax losses, whose recoverability is
uncertain, amounting to EUR 33.5 million (to use
before 2030), EUR 16.6 million (recoverability not
limited), EUR 7.0 million (to use before 2028),
EUR 5.9 million (to use before 2027), EUR 2.9 million
(recoverability not limited), EUR 2.2 million (to
use before 2028) and EUR 1.6 million (to use
before 2025) respectively as at 31 December 2023.
Socfinaf has unused tax losses of EUR 250.4 million
(mainly to use before 2040), PNS Ltd of EUR 14.8 million
(to use before 2040) and Socfin of EUR 12.1 million
(mainly with recoverability not limited).
Due to the instability which may exist in these countries
with regards to the evolution of tax legislation or its
application, no deferred tax assets have been booked
related to these tax losses.
Note 15. Current tax assets and liabilities
* Components of current tax assets
| 2023 | 2022 | |
| EUR | EUR | |
| Current tax assets as at 1 January | 14,942,449 | 15,291,971 |
| Tax income | 4,530,327 | 1,504,864 |
| Other taxes (*) | 9,547,356 | -1,708,373 |
| Taxes paid or recovered | -2,671,958 | 2,628,666 |
| Transfer (**) | -15,032,706 | -3,039,355 |
| Scope exits | 0 | -4,719 |
| Assets classified as held for sale | -299,780 | 0 |
| Foreign exchange differences | -83,993 | 269,395 |
| Current tax assets as at 31 December | 10,931,694 | 14,942,449 |
(*) Other taxes are composed of taxes not enclosed in general tax expenses: VAT, withholding tax, custom tax,...
(**) Corresponds mainly to offset of tax assets and tax liabilities.
* Components of current tax liabilities
| 2023 | 2022 | |
| EUR | EUR | |
| Current tax liabilities as at 1 January | 56,820,337 | 48,328,464 |
| Tax expense | 56,801,988 | 73,278,655 |
| Other taxes (*) | 40,304,324 | 22,682,424 |
| Taxes paid or recovered | -94,521,057 | -86,029,666 |
| Transfer (**) | -16,175,687 | -1,155,592 |
| Foreign exchange differences | -9,941,390 | -283,948 |
| Current tax liabilities as at 31 December | 33,288,514 | 56,820,337 |
(*) Other taxes are composed of taxes not enclosed in general tax expenses: VAT, withholding tax, custom tax,...
(**) Corresponds mainly to offset of tax assets and tax liabilities.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
73
Note 16. Income tax expense
* Components of the income tax
| 2023 | 2022 | |
| Restated | ||
| EUR | ||
| Income tax expense (*) | 59,988,495 | 71,319,742 |
| Deferred tax expense / (income) | 4,641,335 | 8,549,967 |
| Tax expense as at 31 December | 64,629,830 | 79,869,709 |
(*) Withholding tax on dividends is presented within income tax expense.
* Components of the deferred tax expense / (income)
| 2023 | 2022 | |
| Restated | ||
| EUR | ||
| IAS 12: Income tax (*) | 1,861,556 | 2,275,153 |
| IAS 19: Pension obligations | 1,459,218 | -1,415,185 |
| IAS 38: Intangible assets | 434,805 | -73,140 |
| IAS 2 / IAS 41: Fair value of agricultural produce | -2,130,479 | 1,483,247 |
| IFRS 9: Forward exchange contracts | -114,133 | 412,526 |
| IFRS 9: Fair value | 0 | 44,201 |
| IFRS 13: Fair valuation of buildings | -16,005 | 0 |
| IAS 16: Tangible assets | 812,634 | 5,992,136 |
| IFRS 16: Leases | 296,074 | -31,084 |
| IAS 37: Provisions for risks and charges | -133,936 | -267,461 |
| IAS 21: Foreign exchange differences | 1,829,252 | -117,856 |
| IAS 23: Capitalised interests | 342,809 | 8,638 |
| Others | -461 | 238,796 |
| Deferred tax expense / (income) as at 31 December | 4,641,334 | 8,549,971 |
(*) Of which impact of losses carried forward and capital allowances activated for EUR 4.1 million, and withholding tax for
EUR -2.0 million.
Consolidated financial statements
74
|
ANNUAL REPORT 2023
|
Socfin
* Reconciliation between income statement and cash flow statement
| 2023 | 2022 | |
| EUR | EUR | |
| Income tax expense paid during the period | -59,988,495 | -71,319,742 |
| Income tax – movement on financial position | -7,941,698 | 0 |
| Income tax paid | -67,930,193 | -71,319,742 |
* Reconciliation of income tax expense
| 2023 | 2022 | |
| Restated | ||
| EUR | ||
| Profit before tax from continuing operations | 161,829,545 | 240,610,893 |
| Nominal tax rate of the parent company | 24.94% | 24.94% |
| Nominal tax rate of subsidiaries | from 0% to 33% | from 1% to 33% |
| Income tax at nominal tax rates of subsidiaries | 34,488,751 | 53,451,880 |
| Unfunded taxes | -87,529 | 41,281 |
| Definitively taxed income | 2,795,663 | 653,221 |
| Use unrecognised of capital allowances | -778,351 | -113,315 |
| Specific tax regimes in foreign countries | 11,940,187 | 14,241,642 |
| Non-taxable income | -5,785,215 | -4,125,468 |
| Non-deductible expenses | 10,031,774 | 12,391,601 |
| Use of unrecognised accumulated tax losses | -2,171,557 | -1,413,647 |
| Unrecognised losses carried forward | 8,908,776 | 4,605,716 |
| Other tax benefits | -10,671 | -40,956 |
| Additional tax assessment | 346,668 | 36,742 |
| Impact of change in tax rate | 4,719,703 | 143,873 |
| Other adjustments | 231,633 | -2,859 |
| Tax expense as at 31 December | 64,629,832 | 79,869,711 |
* Change of rate for the subsidiaries
In 2023, following changes at local level, income tax rates for SAC and PSG have been updated respectively to
0% (15% in 2022) and 7.5% (1% in 2022).
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
75
Note 17. Inventories
* Carrying value of inventories by category
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Raw materials G | 25,188,980 | 34,379,009 |
| Consumables | 22,294,157 | 26,481,895 |
| Spare parts | 32,024,207 | 34,226,019 |
| Production in progress G | 6,042,554 | 3,329,146 |
| Finished products G | 28,614,841 | 31,976,663 |
| Down-payments and orders in progress | 2,945,178 | 4,400,098 |
| Gross amount (before impairment) as at 31 December | 117,109,917 | 134,792,830 |
| Inventory write-downs | -4,947,832 | -6,121,259 |
| Net amount as at 31 December | 112,162,085 | 128,671,571 |
* Reconciliation of inventories
| 2023 | 2022 | |
| EUR | EUR | |
| Situation as at 1 January | 134,792,830 | 119,153,517 |
| Change in inventory | 4,794,817 | 8,667,796 |
| Fair value of agricultural products | -8,042,768 | 6,870,293 |
| Transfer to assets held for sale | -956,711 | 0 |
| Foreign exchange differences | -13,478,251 | 101,224 |
| Gross amount (before impairment) as at 31 December | 117,109,917 | 134,792,830 |
| Inventory write-downs | -4,947,832 | -6,121,259 |
| Net amount as at 31 December | 112,162,085 | 128,671,571 |
* Quantity of inventory by category
| 31/12/2022 | Raw materials G | Production-in-progress G | Finished goods G |
| Crude Palm Oil / Palm Kernel OilG (tons) | 667 | 0 | 11,947 |
| Rubber (tons) | 34,170 | 0 | 12,391 |
| Others (units) | 0 | 10,043,350 | 2,150,187 |
| 31/12/2023 | Raw materials G | Production-in-progress G | Finished goods G |
| Crude Palm Oil / Palm Kernel OilG (tons) | 0 | 0 | 14,616 |
| Rubber (tons) | 33,743 | 0 | 11,429 |
| Others (units) | 0 | 26,517,167 | 2,386,647 |
Consolidated financial statements
76
|
ANNUAL REPORT 2023
|
Socfin
Note 18. Trade receivables (current assets)
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Trade receivables | 35,108,737 | 31,611,721 |
| Advances and prepayments | 4,779,180 | 5,255,396 |
| TOTAL | 39,887,917 | 36,867,117 |
The accounting and risk management policies related to receivables are detailed in Notes 1 and 35.
The Group performed ECL analysis on trade receivables during the year. Following this analysis, the Group did
not identify any impairment to book.
Note 19. Other receivables (current assets)
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Social security | 1,260,393 | 1,026,966 |
| Other receivables (*) | 6,423,945 | 5,870,957 |
| Accrued charges | 2,390,806 | 1,767,210 |
| TOTAL | 10,075,144 | 8,665,133 |
(*) Other receivables include receivables linked to non-operational activities.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
77
Note 20. Cash and cash equivalents
* Reconciliation with the amounts in the financial statements
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Current account | 162,389,373 | 178,560,956 |
| Financial instruments (*) | 0 | 1,761,337 |
| TOTAL | 162,389,373 | 180,322,293 |
(*) The financial instruments, corresponding to the value of the forward exchange contracts as at end of each period, have
been reclassified from cash and cash equivalents to other receivables in 2023.
* Reconciliation with the cash flow statement
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Current account | 162,389,373 | 178,560,956 |
| Bank overdrafts (*) | -9,077,549 | -10,695,901 |
| TOTAL | 153,311,824 | 167,865,055 |
(*) See also Note 24.
Note 21. Share capital and share premium
Issued and fully paid capital amounted to
EUR 24.8 million as at 31 December 2023, which
was stable compared to 2022. A share premium of
EUR 0.5 million was added to the issued capital.
In accordance with the law of 28 July 2014 regarding
immobilisation of bearer shares, 80,280 shares have
been cancelled in 2018.
Compensation for cancelled shares can be obtained at
the company statutory head office.
As at 31 December 2023, the Company’s share capital
is represented by 14,159,720 shares.
| 2023 | 2022 | |
| Ordinary shares | Ordinary shares | |
| Number of Shares as at 31 December | 14,159,720 | 14,159,720 |
| Number of fully paid shares issued without designation of par value | 14,159,720 | 14,159,720 |
Note 22. Legal reserve
In accordance with Luxembourgish commercial law,
the company is required to allocate a minimum of
5% of its net profit for each financial year to a legal
reserve. This requirement ceases to be necessary once
the balance on the legal reserve reaches 10% of the
issued share capital. The legal reserve is not available
for distribution to the shareholders.
Consolidated financial statements
78
|
ANNUAL REPORT 2023
|
Socfin
Note 23. Pension obligations
* Defined benefit pension plan and post-employment sickness
The Group provides a defined benefit pension plan to its employees
in its Indonesian subsidiary. The latter pays benefits which are
payable in the event of retirement or voluntary resignation. The
benefits paid are calculated as a percentage of the salary, and
are based on the number of years of service. The plan finds its
legitimacy in the employment contract for the employees and on
the collective agreements for the labourers.
Apart from the local applicable social security provisions, most
of the Group’s employees in Africa benefit from a defined benefit
pension plan. The subsidiaries pay benefits which are payable in
the event of retirement and in case of dismissal in some countries.
Allowances paid are expressed as a percentage of salary and are
based on the number of years of service. The plans are governed
by the local collective agreements in force in each country.
Except in Cameroon and Switzerland, the benefits payable to
the employees are not financed by a specific asset in return for
provisions.
| 2023 | 2022 | |||||
| EUR | EUR | |||||
| Fair value of | Fair value of | |||||
| Present value | the defined | Net amount | Present value | the defined | Net amount | |
| of obligations | benefit plan | recognised | of obligations | benefit plan | recognised | |
| assets | assets | |||||
| Net amount recognised in the statement of | 57,843,953 | -9,279,409 | 48,564,544 | 55,754,461 | -8,176,424 | 47,578,037 |
| financial position for defined benefit plans | ||||||
| Components of net charge | ||||||
| Current service costs | 3,269,091 | 0 | 3,269,091 | 3,615,375 | 0 | 3,615,375 |
| Financial costs | 3,359,440 | 23,504 | 3,382,944 | 3,011,609 | 23,422 | 3,035,031 |
| Interest income on plan assets | 0 | -329,983 | -329,983 | 0 | -142,018 | -142,018 |
| Early retirement, reductions, liquidations | 658,875 | 0 | 658,875 | 0 | 0 | 0 |
| Past service costs | 324,073 | 0 | 324,073 | -56,735 | 0 | -56,735 |
| Defined benefit plan costs | 7,611,479 | -306,479 | 7,305,000 | 6,570,249 | -118,596 | 6,451,653 |
| Movements in liabilities / net assets recognised in the statement of financial position | ||||||
| As at 1 January | 55,754,466 | -8,176,414 | 47,578,052 | 59,869,574 | -8,861,195 | 51,008,379 |
| Costs as per income statement | 7,611,479 | -306,479 | 7,305,000 | 6,570,249 | -118,596 | 6,451,653 |
| Contributions by employer | -4,804,700 | -1,681,942 | -6,486,642 | -4,759,538 | -1,554,724 | -6,314,262 |
| Contributions by employees | 1,319,723 | -1,319,723 | 0 | 919,272 | -919,272 | 0 |
| Costs of services rendered | -2,179,787 | 2,179,787 | 0 | -2,734,502 | 2,734,502 | 0 |
| Actuarial gains and losses of the year recognised | 2,821,749 | 36,366 | 2,858,115 | -3,488,286 | 5,774 | -3,482,512 |
| in other comprehensive income | ||||||
| Reclassification of net asset | 0 | 449,526 | 449,526 | 0 | 877,478 | 877,478 |
| Foreign exchange differences | -2,678,970 | -460,516 | -3,139,486 | -622,304 | -340,380 | -962,684 |
| As at 31 December | 57,843,960 | -9,279,396 | 48,564,564 | 55,754,466 | -8,176,414 | 47,578,052 |
Provisions are based on actuarial valuation reports prepared in January 2024.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
79
* Actuarial gains and losses recognised in other comprehensive income
| 2023 | 2022 | |||||
| EUR | EUR | |||||
| Present | Fair value of | Net | Present | Fair value of | Net | |
| value of | the defined | amount | value of | the defined | amount | |
| obligations | benefit plan | recognised | obligations | benefit plan | recognised | |
| assets | assets | |||||
| Adjustments of liabilities related to experience | -3,305,924 | 0 | -3,305,924 | -208,413 | 0 | -208,413 |
| Changes in financial assumptions related to | 1,131,567 | 0 | 1,131,567 | 3,925,112 | 0 | 3,925,112 |
| recognised liabilities | ||||||
| Changes in demographic assumptions related to | -647,390 | 0 | -647,390 | -228,414 | 0 | -228,414 |
| recognised liabilities | ||||||
| Return on assets in the plan excl. interest income | 0 | -36,366 | -36,366 | 0 | -5,774 | -5,774 |
| Actuarial gains and losses recognised during | -2,821,747 | -36,366 | -2,858,113 | 3,488,285 | -5,774 | 3,482,511 |
| the period in other comprehensive income |
* Asset plan
In Cameroon and Switzerland, defined benefit obligations are
partially covered by plan assets. Subsidiaries contribute each
year to these plan assets. Benefits are paid when and only if
employees retire.
The plan’s assets are managed by third parties, each year earning
financial interests for a global amount of EUR 0.3 million during
2023’s financial period (2022: EUR 0.1 million).
* Actuarial valuation assumptions
| 31/12/2023 | 31/12/2022 | |
| EUROPE | ||
| Average discount rate | 1.45% | 2.30% |
| Expected long-term returns of plan assets | 108,495 | 154,964 |
| Future salary increases | 1.50% | 1.50% |
| Average remaining active life of employees (in years) | 8.73 | 8.93 |
| AFRICA | ||
| Average discount rate | from 5.42% to 17.11% | from 4.93% to 18.48% |
| Expected long-term returns of plan assets | 229,001 | 170,158 |
| Future salary increases | from 1.74% to 10.7% | from 1.74% to 12% |
| Average remaining active life of employees (in years) | 19.06 | 19.34 |
| ASIA | ||
| Average discount rate | from 6.37% to 7.10% | from 5.52% to 7.44% |
| Expected long-term returns of plan assets | N/A | N/A |
| Future salary increases | 6.50% | 6.50% |
| Average remaining active life of employees (in years) | 13.49 | 13.10 |
Consolidated financial statements
80
|
ANNUAL REPORT 2023
|
Socfin
* Sensitivity analysis of the actuarial value of defined benefit obligations
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| EUROPE | ||
| Actuarial value of the obligation | ||
| - Pension plan | 9,377,589 | 7,760,804 |
| - Fair value of plan assets | -7,847,742 | -6,853,790 |
| Total as at 31 December | 1,529,847 | 907,014 |
| Actuarial rate (on pension plan) | ||
| Increase of 0.5% | 8,767,957 | 7,313,114 |
| Decrease of 0.5% | 10,073,957 | 8,269,218 |
| Expected future salary increases (on pension plan) | ||
| Increase of 0.5% | 9,453,930 | 7,817,510 |
| Decrease of 0.5% | 9,304,884 | 7,707,019 |
| AFRICA | ||
| Actuarial value of the obligation | ||
| - Pension plan | 13,932,928 | 13,689,169 |
| - Fair value of plan assets | -1,431,667 | -1,322,634 |
| Total as at 31 December | 12,501,261 | 12,366,535 |
| Actuarial rate (on pension plan) | ||
| Increase of 0.5% | 13,515,787 | 13,285,487 |
| Decrease of 0.5% | 14,375,266 | 14,093,019 |
| Expected future salary increases (on pension plan) | ||
| Increase of 0.5% | 14,360,688 | 14,067,916 |
| Decrease of 0.5% | 13,526,805 | 13,306,104 |
| ASIA | ||
| Actuarial value of the obligation | ||
| - Pension plan | 32,801,665 | 32,563,604 |
| - Other long-term benefits | 1,731,771 | 1,740,884 |
| Total as at 31 December | 34,533,436 | 34,304,488 |
| Actuarial rate (on pension plan) | ||
| Increase of 0.5% | 33,382,168 | 33,188,601 |
| Decrease of 0.5% | 35,753,213 | 35,486,229 |
| Expected future salary increases (on pension plan) | ||
| Increase of 0.5% | 35,658,854 | 35,408,582 |
| Decrease of 0.5% | 33,461,593 | 33,252,768 |
The sensitivity analysis is based on the same actuarial method used to measure the obligations of the defined
benefit plans. The mortality rate which can be impacted by the effect of the climate change is included in this
sensitivity analysis.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
81
* Impact of the defined benefit pension plan on future cash flows
| 2024 | 2023 | |
| Estimated contributions for the next financial year (in euros) | 6,440,998 | 5,034,050 |
| 2023 | 2022 | |
| Weighted average duration of defined benefit plan obligations (in years) | ||
| EUROPE | 6.9 | 6.5 |
| AFRICA | 6.1 | 6.2 |
| ASIA | 13.0 | 12.8 |
* Defined contribution pension scheme
| EUR | 2023 | 2022 |
| Accounted expense for the defined contribution pension plan | 3,411,735 | 3,375,907 |
Note 24. Financial debts
| 31/12/2022 | |||
| EUR | < 1 year | > 1 year | TOTAL |
| Restated | |||
| Loans held by financial institutions | 39,525,552 | 47,637,646 | 87,163,198 |
| Bank overdrafts (*) | 10,695,901 | 0 | 10,695,901 |
| Other loans | 41,244,997 | 4,354,848 | 45,599,845 |
| Lease liabilities | 1,836,468 | 11,087,026 | 12,923,494 |
| TOTAL | 93,302,918 | 63,079,520 | 156,382,438 |
| 31/12/2023 | |||
| EUR | < 1 year | > 1 year | TOTAL |
| Loans held by financial institutions | 15,383,801 | 18,999,213 | 34,383,014 |
| Bank overdrafts (*) | 9,077,549 | 0 | 9,077,549 |
| Other loans | 45,073,098 | 3,486,420 | 48,559,518 |
| Lease liabilities | 3,089,617 | 27,037,253 | 30,126,870 |
| TOTAL | 72,624,065 | 49,522,886 | 122,146,951 |
(*) See also Note 20.
Most of the consolidated borrowings are denominated in US Dollars and in Euros or CFA francs (whose parity
is linked to the Euro). The fixed interest rates from financial institutions and which are pegged to the Euro
vary between 5.50% and 7.09%. As explained in Note 35, interest rate management is the subject of ongoing
management attention.
The Group is in compliance with covenants related to amounts owed to credit institutions.
Consolidated financial statements
82
|
ANNUAL REPORT 2023
|
Socfin
* Long-term debt analysis by interest rate
| 31/12/2022 | |||||
| EUR | Fixed Rate | Rate | Floating rate | Rate | TOTAL |
| Restated | |||||
| Loans held by financial institutions | |||||
| 3-month | |||||
| Luxembourg | 0 | 0.00% | 9,375,586 | SOFRG + 5% | 9,375,586 |
| Switzerland | 3,655,936 | 1.55% to 2.65% | 0 | - | 3,655,936 |
| Côte d'Ivoire | 2,647,566 | 5.50% to 6.50% | 0 | - | 2,647,566 |
| Nigeria | 17,197,310 | 5.00% to 10.00% | 0 | - | 17,197,310 |
| Liberia | 1,699,592 | 7.60% | 0 | - | 1,699,592 |
| Cameroon | 8,186,656 | 5.00% to 7.09% | 0 | - | 8,186,656 |
| Ghana | 4,874,999 | 4.00% | 0 | - | 4,874,999 |
| 38,262,059 | 9,375,586 | 47,637,645 | |||
| Other loans | |||||
| Sierra Leone | 4,354,848 | 0% | 0 | - | 4,354,848 |
| 4,354,848 | 0 | 4,354,848 | |||
| TOTAL | 42,616,907 | 9,375,586 | 51,992,493 |
| 31/12/2023 | |||||
| EUR | Fixed Rate | Rate | Floating rate | Rate | TOTAL |
| Loans held by financial institutions | |||||
| Switzerland | 1,641,468 | 1.55% to 2.65% | 0 | - | 1,641,468 |
| Côte d'Ivoire | 175,639 | 5.50% | 0 | - | 175,639 |
| Nigeria | 7,240,279 | 5.00% to 10.00% | 0 | - | 7,240,279 |
| Cameroon | 8,316,825 | 5.70% to 7.09% | 0 | - | 8,316,825 |
| Ghana | 1,625,000 | 4.00% | 0 | - | 1,625,000 |
| 18,999,211 | 0 | 18,999,211 | |||
| Other loans | |||||
| Sierra Leone | 3,486,420 | 0% | - | 3,486,420 | |
| 3,486,420 | 0 | 3,486,420 | |||
| TOTAL | 22,485,631 | 0 | 22,485,631 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
83
* Long-term debts analysis by currency
| 31/12/2022 | EUR | XAF | NGN | USD | STN | GHS | CDF | CHF | TOTAL EUR |
| Restated | |||||||||
| Loans held by financial | 4,874,999 | 10,834,222 | 17,197,310 | 11,075,178 | 0 | 0 | 0 | 3,655,936 | 47,637,645 |
| institutions | |||||||||
| Other loans | 0 | 0 | 0 | 4,354,848 | 0 | 0 | 0 | 0 | 4,354,848 |
| Lease liabilities | 0 | 7,039,341 | 65,318 | 1,762,701 | 268,436 | 35,690 | 38,702 | 1,876,836 | 11,087,024 |
| TOTAL | 4,874,999 | 17,873,563 | 17,262,628 | 17,192,727 | 268,436 | 35,690 | 38,702 | 5,532,772 | 63,079,517 |
| 31/12/2023 | EUR | XAF | NGN | USD | STN | GHS | CDF | CHF | TOTAL EUR |
| Loans held by financial | 1,625,000 | 8,492,464 | 7,240,279 | 0 | 0 | 0 | 0 | 1,641,468 | 18,999,211 |
| institutions | |||||||||
| Other loans | 0 | 0 | 0 | 3,486,420 | 0 | 0 | 0 | 0 | 3,486,420 |
| Lease liabilities | 0 | 20,400,413 | 3,236,272 | 1,616,829 | 112,602 | 25,509 | 27,063 | 1,618,565 | 27,037,253 |
| TOTAL | 1,625,000 | 28,892,877 | 10,476,551 | 5,103,249 | 112,602 | 25,509 | 27,063 | 3,260,033 | 49,522,884 |
* Long-term debt analysis by maturity
| 31/12/2022 | ||||||
| EUR | 2024 | 2025 | 2026 | 2027 | 2028 and above | TOTAL |
| Restated | ||||||
| Loans held by financial institutions | 25,376,903 | 9,246,072 | 4,539,071 | 3,950,392 | 4,525,209 | 47,637,647 |
| Other loans | 0 | 0 | 0 | 0 | 4,354,848 | 4,354,848 |
| Lease liabilities | 1,532,263 | 917,067 | 597,085 | 399,223 | 7,641,387 | 11,087,025 |
| TOTAL | 26,909,166 | 10,163,139 | 5,136,156 | 4,349,615 | 16,521,444 | 63,079,520 |
| 31/12/2023 | ||||||
| EUR | 2025 | 2026 | 2027 | 2028 | 2029 and above | TOTAL |
| Loans held by financial institutions | 10,008,353 | 4,773,585 | 4,061,408 | 2,685,043 | 1,051,182 | 22,579,571 |
| Other loans | 0 | 0 | 0 | 0 | 3,487,181 | 3,487,181 |
| Lease liabilities | 2,642,386 | 2,130,007 | 1,859,052 | 408,880 | 19,996,927 | 27,037,252 |
| TOTAL | 12,650,739 | 6,903,592 | 5,920,460 | 3,093,923 | 24,535,290 | 53,104,004 |
* Short-term debt analysis
The short-term debts are mainly composed of the shareholder advances with Bolloré and Mopoli. The detail of the interest rates,
currency and maturity are disclosed in Note 32 Information on related party.
Consolidated financial statements
84
|
ANNUAL REPORT 2023
|
Socfin
* Net cash surplus / (Net debt)
| 31/12/2023 | 31/12/2022 | |
| Restated | ||
| EUR | ||
| Cash and cash equivalents | 162,389,373 | 180,322,293 |
| Long-term debt net of current portion | -22,485,633 | -51,992,494 |
| Short-term debt and current portion of long-term debt | -69,534,449 | -91,466,449 |
| Lease liabilities | -30,126,870 | -12,923,494 |
| Net cash surplus / (Net debt) | 40,242,421 | 23,939,856 |
| Cash and cash equivalents | 162,389,373 | 180,322,293 |
| Loan bearing interest at a fixed rate | -92,020,082 | -115,561,281 |
| Loan bearing interest at a variable rate | 0 | -27,897,662 |
| Lease liabilities | -30,126,870 | -12,923,494 |
| Net cash surplus / (Net debt) | 40,242,421 | 23,939,856 |
* Reconciliation of net cash surplus / (net debt)
| Short term debt | |||||
| Long term debt, | and current | Debt | |||
| Cash and cash | net of current | portion of long | related to | ||
| EUR | equivalents | portion | term debt | leases | TOTAL |
| At 1 January 2022 - Restated | 143,315,435 | -131,880,074 | -78,836,654 | -12,378,796 | -79,780,089 |
| Cash flows | 36,497,884 | 85,205,260 | -8,116,520 | 2,035,612 | 115,622,236 |
| Foreign exchange differences | 508,975 | -4,565,980 | 505,711 | -105,236 | -3,656,530 |
| Transfers | 0 | 9,328,030 | -5,080,021 | 0 | 4,248,009 |
| Other movements with no impact on cash flows | 0 | -10,079,732 | 61,035 | -2,475,075 | -12,493,772 |
| At 31 December 2022 - Restated | 180,322,294 | -51,992,496 | -91,466,449 | -12,923,495 | 23,939,854 |
| Cash flows | -5,943,640 | -3,452,404 | 43,875,121 (*) | 4,928,725 | 39,407,802 |
| Foreign exchange differences | -9,886,774 | 9,845,544 | 399,813 | 2,288,765 | 2,667,348 |
| Transfers | -1,761,337 | 23,110,487 | -23,262,963 | 0 | -1,913,813 |
| Transfer to assets held for sale | -361,169 | 0 | 0 | 45,866 | -315,303 |
| Other movements with no impact on cash flows | 0 | 3,234 | 920,031 | -24,466,735 | -23,543,470 |
| At 31 December 2023 | 162,389,374 | -22,485,635 | -69,534,447 | -30,126,874 | 40,242,418 |
(*) Of which EUR 3.3 million relating to movements on bank overdrafts and EUR 40.5 million relating to repayment of borrowings.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
85
Note 25. Trade and other payables
| 31/12/2023 | 31/12/2022 | |
| Restated | ||
| EUR | ||
| Non-current other payables | 1,633,474 | 1,650,572 |
| Trade creditors: suppliers | 31,998,379 | 39,802,147 |
| Advances received and invoices to be received | 18,025,232 | 14,042,266 |
| Subtotal trade payables | 50,023,611 | 53,844,413 |
| Staff cost liabilities (*) | 24,397,738 | 23,998,749 |
| Other payables | 17,096,936 | 15,057,974 |
| Accruals (**) | 6,714,162 | 11,835,836 |
| Subtotal current other payables | 48,208,836 | 50,892,559 |
| TOTAL | 99,865,921 | 106,387,544 |
| Non-current liabilities | 1,633,474 | 1,650,572 |
| Current liabilities | 98,232,447 | 104,736,972 |
(*) Debts towards employees (EUR 17.7 million in 2022) have been reclassified from “other payables” to “staff cost liabilities”
in 2022.
(**) This amount comprises the Okomu grant part of the loans, for EUR 2.2 million (2022: EUR 6.2 million).
Consolidated financial statements
86
|
ANNUAL REPORT 2023
|
Socfin
Note 26. Financial Instruments
| Financial | ||||||
| assets at | ||||||
| fair value | ||||||
| through other | Other financial | Other financial | ||||
| Loans and | comprehensive | assets and | Loans and | assets and | ||
| 31/12/2022 | borrowings | income | liabilities | TOTAL | borrowings (*) | liabilities (*) |
| EUR | At cost | At fair value | At cost | At fair value | At fair value | |
| Assets | ||||||
| Financial assets at fair value through other | 0 | 688,024 | 0 | 688,024 | 0 | 0 |
| comprehensive income | ||||||
| Long-term advances | 821,712 | 0 | 1,156,825 | 1,978,537 | 821,712 | 1,156,825 |
| Other non-current assets | 0 | 0 | 2,699,565 | 2,699,565 | 0 | 2,699,565 |
| Trade receivables | 0 | 0 | 36,867,116 | 36,867,116 | 0 | 36,867,116 |
| Other receivables | 0 | 0 | 8,665,133 | 8,665,133 | 0 | 8,665,133 |
| Cash and cash equivalents | 0 | 0 | 180,322,293 | 180,322,293 | 0 | 180,322,293 |
| Total Assets | 821,712 | 688,024 | 229,710,932 | 231,220,668 | 821,712 | 229,710,932 |
| Liabilities | ||||||
| Long-term debts (**) | 51,992,494 | 0 | 0 | 51,992,494 | 46,962,729 | 0 |
| Other non-current liabilities | 0 | 0 | 1,650,572 | 1,650,572 | 0 | 1,650,572 |
| Short-term debts (**) | 80,770,549 | 0 | 10,695,900 | 91,466,449 | 80,770,549 | 10,695,900 |
| Trade payables (current) | 0 | 0 | 53,844,413 | 53,844,413 | 0 | 53,844,413 |
| Other payables (current) (**) | 0 | 0 | 50,892,559 | 50,892,559 | 0 | 50,892,559 |
| Total Liabilities | 132,763,043 | 0 | 117,083,444 | 249,846,487 | 127,733,278 | 117,083,444 |
(*) For information purposes.
(**) See Note 24.
| 31/12/2022 | Fair Value | |||
| EUR | Level 1 | Level 2 | Level 3 | TOTAL |
| Financial assets at fair value through other comprehensive income | 0 | 0 | 688,024 | 688,024 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
87
| Financial | ||||||
| assets at | ||||||
| fair value | ||||||
| through other | Other financial | Other financial | ||||
| Loans and | comprehensive | assets and | Loans and | assets and | ||
| 31/12/2023 | borrowings | income | liabilities | TOTAL | borrowings (*) | liabilities (*) |
| EUR | At cost | At fair value | At cost | At fair value | At fair value | |
| Assets | ||||||
| Financial assets at fair value through other | 0 | 645,773 | 0 | 645,773 | 0 | 0 |
| comprehensive income | ||||||
| Long-term advances | 1,092,170 | 0 | 1,235,909 | 2,328,079 | 1,092,170 | 1,235,909 |
| Other non-current assets | 0 | 0 | 3,169,704 | 3,169,704 | 0 | 3,169,704 |
| Trade receivables | 0 | 0 | 39,887,917 | 39,887,917 | 0 | 39,887,917 |
| Other receivables | 0 | 0 | 10,075,144 | 10,075,144 | 0 | 10,075,144 |
| Cash and cash equivalents | 0 | 0 | 162,389,373 | 162,389,373 | 0 | 162,389,373 |
| Total Assets | 1,092,170 | 645,773 | 216,758,047 | 218,495,990 | 1,092,170 | 216,758,047 |
| Liabilities | ||||||
| Long-term debts (**) | 22,485,633 | 0 | 0 | 22,485,633 | 21,146,655 | 0 |
| Other non-current liabilities | 0 | 0 | 1,633,474 | 1,633,474 | 0 | 1,633,474 |
| Short-term debts (**) | 60,456,899 | 0 | 9,077,550 | 69,534,449 | 60,456,899 | 9,077,550 |
| Trade payables (current) | 0 | 0 | 50,023,611 | 50,023,611 | 0 | 50,023,611 |
| Other payables (current) | 0 | 0 | 48,208,836 | 48,208,836 | 0 | 48,208,836 |
| Total Liabilities | 82,942,532 | 0 | 108,943,471 | 191,886,003 | 81,603,554 | 108,943,471 |
(*) For information purposes.
(**) See Note 24.
| 31/12/2023 | Fair Value | |||
| EUR | Level 1 | Level 2 | Level 3 | TOTAL |
| Financial assets at fair value through other comprehensive income | 0 | 0 | 645,773 | 645,773 |
The Group estimated the fair value of the financial instruments by comparing their interest rates to the actual interest rate as at
year-end, provided by the European Central Bank. In case of material differences between the interest rates, the estimated fair value
of the financial instruments is disclosed in this note.
Consolidated financial statements
88
|
ANNUAL REPORT 2023
|
Socfin
Note 27. Staff costs and average number of staff
| Average number of employees | 2023 | 2022 |
| Directors | 353 | 317 |
| Employees | 7,857 | 6,948 |
| Workers (including temporary workers) | 25,599 | 27,961 |
| TOTAL | 33,809 | 35,226 |
| 2023 | 2022 | |
| Restated | ||
| Staff costs (EUR) | ||
| Remuneration | 149,054,485 | 152,682,795 |
| Social security and pension expenses | 20,957,104 | 18,347,122 |
| TOTAL | 170,011,589 | 171,029,917 |
Note 28. Other financial income
| 2023 | 2022 | |
| EUR | EUR | |
| On current assets / liabilities | ||
| Interest from receivables and cash and cash equivalents | 4,223,545 | 1,528,653 |
| Exchange gains | 29,588,636 | 36,987,532 |
| Others | 304,127 | 723,543 |
| TOTAL | 34,116,308 | 39,239,728 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
89
Note 29. Financial expenses
| 2023 | 2022 | |
| EUR | EUR | |
| Interest and finance expense | 6,099,463 | 9,406,822 |
| Interest expense on lease liabilities | 3,509,582 | 1,147,359 |
| Exchange losses | 36,774,678 | 42,903,370 |
| Others | 3,396,521 | 3,091,131 |
| TOTAL | 49,780,244 | 56,548,682 |
Note 30. Net earnings per share
Undiluted net earnings per share (basic) is the profit
for the year attributable to ordinary shareholders,
divided by the average number of ordinary shares
during the year. As there are no potential dilutive
ordinary shares, the diluted net earnings per share is
identical to the undiluted net earnings per share.
| 2023 | 2022 | |
| Restated | ||
| Net profit / (loss) for the period (in euros) | 41,592,016 | 74,036,478 |
| Average number of shares | 14,159,720 | 14,159,720 |
| Net earnings per share undiluted (in euros) | 2.94 | 5.23 |
Note 31. Dividends and directors’ fees
The Board will propose to the Annual General Meeting
on 29 May 2024, to pay a dividend of EUR 1.00 , out of
which an interim dividend of EUR 0.50 per share was
paid in November 2023. If the proposed dividend is
approved by the general meeting of shareholders, a
balance of EUR 0.50 per share for a total amount of
EUR 7.1 million would therefore remain payable.
| 2023 | 2022 | |
| Dividends paid to the owners of the Parent | 14,159,720 | 17,699,650 |
| Average number of shares | 14,159,720 | 14,159,720 |
| Dividend per share distributed during the period |
In addition, in accordance with the statutory provisions, 1/9
th
of the gross dividend is allocated to the Board of
Directors.
Consolidated financial statements
90
|
ANNUAL REPORT 2023
|
Socfin
Note 32. Information on related party
* Directors’ remuneration
| 2023 | 2022 | |
| EUR | EUR | |
| Short-term benefits | 14,299,575 | 18,071,177 |
| Post-employment benefits | 113,174 | 78,433 |
* Related party transactions
| 31/12/2023 | 31/12/2022 | |
| Restated | ||
| EUR | ||
| Non-Current Liabilities | ||
| Financial debts | 3,487,181 | 4,284,667 |
| 3,487,181 | 4,284,667 | |
| Current liabilities | ||
| Financial debts | 40,705,753 | 40,405,480 |
| 40,705,753 | 40,405,480 |
| 2023 | 2022 | |
| EUR | EUR | |
| Income statement | ||
| Financial expenses | 2,003,287 | 1,600,000 |
Related party transactions are made at arm’s length.
The Group carries out transactions with other
related parties, namely Bolloré Participations and
Palmboomen Cultuur Maatschappij (Mopoli).
Mopoli is a Dutch company which is mainly owned by
Mr Hubert Fabri through Financière Privée, which also
owns Socfin.
Bolloré Participations is a shareholder and director of
Socfinaf.
In 2014, Socfinaf obtained a cash advance of
EUR 35 million from Mopoli. This advance bears an
annual interest (net of tax) of 6% (2022: 4%). Interest
is payable in arrears at the end of each calendar
quarter. The amount of interest recognised for the
year 2023 is EUR 1.0 million. As at 31 December 2023,
the outstanding balance amounts to EUR 20.3 million
and is repayable on demand with final maturity on
July 2026.
In 2016, Socfinaf obtained a loan of EUR 20 million
from Bolloré Participations. The loan has an annual
interest rate of 6% (2022: 4%). The amount of interest
recognised for the year 2023 is EUR 1.0 million euros.
As at 31 December 2023, the outstanding balance
amounts to EUR 20.4 million and is repayable on
demand with final maturity on June 2025.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
91
Note 33. Off balance sheet commitments
In 2019, a subsidiary of Socfinaf, Okomu Palm Oil
Company obtained a loan of Naira 10 billion. The
contract stipulates that up until the loan is granted,
Okomu will use the 11,416 ha plantation as mortgage
guarantee. As at 31 December 2023, the balance of the
loan amounts to EUR 7 million (2022: EUR 15 million).
In 2019, a subsidiary of Socfinaf, Plantations Socfinaf
Ghana (PSG), obtained a loan of EUR 16.5 million for
the construction of an oil mill. This loan consists of
a credit line of EUR 15 million and a bank overdraft
of EUR 1.5 million. The contract stipulates that
PSG will use the oil mill as mortgage guarantee, up
until the loan granted. As at 31 December 2023, the
balance of the loan amounts to EUR 4.9 million (2022:
EUR 8.1 million) and the overdraft is nil (2021: nil).
In 2021, a subsidiary of Socfinaf, Okomu Palm Oil
Company obtained a loan of Naira 2 billion. The
contract stipulates that up until the loan is granted,
Okomu will use the 11,416 ha plantation as mortgage
guarantee. As at 31 December 2023, the balance of the
loan amounts to EUR 1 million (2022: EUR 3 million).
In compliance with Group’s commitments on
responsible management, most of the plantations
within the Group have been certified RSPO. RSPO
certification contains engagements to support
reforestation projects, named compensation plans.
Since most of the plantations have been certified RSPO,
the Group is committed into several reforestation
projects in Africa, representing an overall budget of
USD 19.6 million (EUR 17.8 million, undiscounted),
that should be expensed between 2023 and 2047.
Note 34. Segment information
In accordance with IFRS 8, the information analysed by
management is based on the geographical distribution
of political and economic risks. As a result, the sectors
presented are Europe, Sierra Leone, Liberia, Côte
d’Ivoire, Ghana, Nigeria, Cameroon, São Tomé and
Principe, Congo (DRC), Cambodia and Indonesia.
Products from Côte d’Ivoire, Nigeria, Cameroon and
Indonesia’s operating sectors come from palm oil and
rubber sales. Those from the Liberia and Cambodia
sectors only originate from rubber sales, while those
from Sierra Leone, Ghana, São Tomé and Principe and
Congo come solely from sales of palm oil. Those in
the European segment come from the provision of
administrative services, of assistance in managing the
areas under plantation and the marketing of products
outside of the Group. The segment result of the Group
is the profit from operations.
The stated figures originate from internal reporting.
Since they do not reflect any consolidation or
IFRS adjustments or restatements, they are not
directly comparable to the amount reported in the
consolidated statement of the financial position and
income statement.
Consolidated financial statements
92
|
ANNUAL REPORT 2023
|
Socfin
* Segmental breakdown of profit / (loss) as at 31 December 2022
| Revenue from | |||
| ordinary business | Revenue from | ||
| with external | ordinary business | Sector profit / (loss) | |
| EUR | customers | between segments | (*) |
| Restated | |||
| Europe | 152,377,408 | 48,262,436 | 15,456,815 |
| Sierra Leone | 58,553,604 | 4,146,011 | 21,826,293 |
| Liberia | 40,756,657 | 40,635,339 | 1,747,945 |
| Côte d'Ivoire | 200,451,043 | 168,573,577 | 38,224,054 |
| Ghana | 33,083,346 | 0 | 18,234,769 |
| Nigeria | 133,279,822 | 12,346,955 | 56,251,979 |
| Cameroon | 147,069,445 | 14,153,553 | 34,187,590 |
| São Tomé and Principe | 7,781,775 | 7,781,775 | 779,099 |
| Congo (DRC) | 16,366,246 | 0 | -398,915 |
| Cambodia | 8,164,138 | 880,645 | -2,490,942 |
| Indonesia | 193,627,923 | 12,658,309 | 91,818,399 |
| TOTAL | 991,511,407 | 309,438,600 | 275,637,085 |
| Depreciation, amortisation and impairment of bearer plants | -22,989,184 | ||
| Fair value of agricultural production | 6,870,293 | ||
| Other IFRS adjustments | -1,373,700 | ||
| Consolidation adjustments (intra-group and others) | 1,192,647 | ||
| Financial income and gain on disposals | 40,137,641 | ||
| Financial expenses and loss on disposals | -58,863,885 | ||
| Income tax expense and deferred tax (expense) / income | -79,869,713 | ||
| Net Profit / (loss) for the period | 160,741,184 | ||
(*) Profit / (loss) for the period include other expenses of EUR 105.9 million, corresponding mainly to external services
invoiced to plantations and related directly to the operational activity (road maintenance, …). Other operating expenses of
EUR 27.8 million are not directly related to the operational activity. Instead, they refer to costs such as other taxes, property
taxes, ….
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
93
* Segmental breakdown of profit / (loss) as at 31 December 2023
| Revenue from | |||
| ordinary business | Revenue from | ||
| with external | ordinary business | Sector profit / | |
| EUR | customers | between segments | (loss) (*) |
| Europe | 121,026,682 | 46,439,678 | 8,345,517 |
| Sierra Leone | 44,340,974 | 3,694,262 | 13,979,176 |
| Liberia | 36,813,393 | 34,963,711 | -1,791,812 |
| Côte d'Ivoire | 160,456,979 | 133,320,524 | 15,070,482 |
| Ghana | 34,514,182 | 0 | 18,494,533 |
| Nigeria | 113,518,677 | 12,017,172 | 50,396,027 |
| Cameroon | 156,987,752 | 9,706,884 | 27,855,397 |
| São Tomé and Principe | 5,511,788 | 5,222,997 | -2,496,052 |
| Congo (DRC) | 10,923,105 | 0 | -4,555,130 |
| Cambodia | 10,777,027 | 1,012,147 | 160,349 |
| Indonesia | 167,672,513 | 7,279,792 | 68,542,397 |
| TOTAL | 862,543,071 | 253,657,168 | 194,000,883 |
| Depreciation, amortisation and impairment of bearer plants | -8,508,049 | ||
| Fair value of agricultural production | -8,042,768 | ||
| Other IFRS adjustments | 6,893,724 | ||
| Consolidation adjustments (intra-group and others) | -5,642,608 | ||
| Financial income and gain on disposals | 34,274,682 | ||
| Financial expenses and loss on disposals | -51,146,317 | ||
| Income tax expense and deferred tax (expense) / income | -64,629,830 | ||
| Net Profit / (loss) for the period | 97,199,718 | ||
(*) Profit / (loss) for the period include other expenses of EUR 103.8 million, corresponding mainly to external services
invoiced to plantations and related directly to the operational activity (road maintenance, …). Other operating expenses of
EUR 17.4 million and other operational income for EUR 15.3 million are not directly related to the operational activity. Instead,
they refer to elements such as government grants, other taxes, property taxes, …
Consolidated financial statements
94
|
ANNUAL REPORT 2023
|
Socfin
* Total segmental assets
G
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Europe | 214,260,598 | 188,941,141 |
| Sierra Leone | 123,185,982 | 128,721,882 |
| Liberia | 115,836,618 | 121,732,913 |
| Côte d'Ivoire | 151,924,753 | 166,346,688 |
| Ghana | 37,518,498 | 57,837,090 |
| Nigeria | 81,865,152 | 145,216,147 |
| Cameroon | 178,294,475 | 184,331,852 |
| São Tomé and Principe | 26,624,876 | 28,111,519 |
| Congo (DRC) | 51,567,843 | 68,260,622 |
| Cambodia | 64,227,738 | 67,618,326 |
| Indonesia | 118,943,164 | 117,769,545 |
| Total | 1,164,249,697 | 1,274,887,726 |
| IFRS 3 / IAS 16: Bearer plants | -44,483,146 | -53,381,980 |
| IAS 2 / IAS 41: Agricultural production | 4,166,477 | 13,057,113 |
| Other IFRS adjustments | -11,733,437 | -9,617,424 |
| Consolidation adjustments (intra-group and others) | -92,738,560 | -91,269,968 |
| Total consolidated segmental assets | 1,019,461,029 | 1,133,675,467 |
| Consolidated assets not included in segmental assets | ||
| Goodwill | 4,951,057 | 4,951,057 |
| Right-of-use assets | 33,550,055 | 11,902,768 |
| Financial assets at fair value through other comprehensive income | 645,773 | 688,024 |
| Long-term advances | 2,328,080 | 1,978,537 |
| Deferred tax | 9,106,597 | 11,698,485 |
| Other non-current assets | 3,169,704 | 2,699,565 |
| Consolidated non-current assets | 53,751,266 | 33,918,436 |
| Other debtors | 10,075,144 | 8,665,133 |
| Current tax assets | 10,931,694 | 14,942,449 |
| Consolidated current assets | 21,006,837 | 23,607,582 |
| Total of consolidated assets in the segmental assets | 74,758,103 | 57,526,018 |
| Assets classified as held for sale | 6,313,418 | 0 |
| Total assets | 1,100,532,550 | 1,191,201,486 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
95
* Total segmental liabilities
G
| 31/12/2023 | 31/12/2022 | |
| Restated | ||
| EUR | ||
| Europe | 149,861,471 | 155,776,545 |
| Sierra Leone | 2,453,806 | 3,426,717 |
| Liberia | 7,008,789 | 13,882,723 |
| Côte d'Ivoire | 29,593,122 | 22,364,064 |
| Ghana | 597,314 | 1,066,056 |
| Nigeria | 3,674,454 | 6,950,565 |
| Cameroon | 27,372,442 | 20,897,779 |
| São Tomé and Principe | 4,435,416 | 3,492,126 |
| Congo (DRC) | 2,393,585 | 1,045,995 |
| Cambodia | 1,239,938 | 1,318,995 |
| Indonesia | 24,537,641 | 24,094,356 |
| Total | 253,167,976 | 254,315,921 |
| Other IFRS adjustments | 2,238,169 | 6,220,680 |
| Consolidation adjustments (intra-group and others) | -157,173,698 | -155,799,630 |
| Total consolidated segmental liabilities | 98,232,447 | 104,736,972 |
| Consolidated equity and liabilities not included in segmental liabilities | ||
| Total equity | 767,403,537 | 785,114,876 |
| Non-current liabilities | 128,057,731 | 150,559,859 |
| Current financial debts | 69,534,449 | 91,466,449 |
| Current lease liabilities | 3,089,617 | 1,836,468 |
| Current tax liabilities | 33,288,514 | 56,820,337 |
| Provisions | 641,977 | 666,524 |
| Total consolidated equity and liabilities not included in segmental | 1,002,015,825 | 1,086,464,514 |
| liabilities | ||
| Liabilities associated with assets classified as held for sale | 284,279 | 0 |
| Total equity and liabilities | 1,100,532,550 | 1,191,201,486 |
Consolidated financial statements
96
|
ANNUAL REPORT 2023
|
Socfin
* Costs incurred for acquisition of segmental assets during 2022
| Intangible | Tangible | Investment | Biological | ||
| EUR | assets | assets | properties | assets | TOTAL |
| Europe | 2,683 | 7,896,419 | 34,782 | 0 | 7,933,884 |
| Sierra Leone | 0 | 2,125,221 | 0 | 0 | 2,125,221 |
| Liberia | 0 | 2,197,106 | 0 | 898,587 | 3,095,694 |
| Côte d'Ivoire | 32,003 | 5,966,349 | 0 | 3,393,844 | 9,392,196 |
| Ghana | 0 | 2,277,025 | 0 | 0 | 2,277,025 |
| Nigeria | 0 | 22,269,520 | 0 | 827,710 | 23,097,230 |
| Cameroon | 0 | 10,862,418 | 0 | 3,144,690 | 14,007,108 |
| São Tomé and Principe | 0 | 275,584 | 0 | 0 | 275,584 |
| Congo (DRC) | 0 | 906,694 | 0 | 0 | 906,694 |
| Cambodia | 0 | 417,668 | 0 | 469,391 | 887,058 |
| Indonesia | 635,933 | 5,886,190 | 0 | 7,013,022 | 13,535,145 |
| TOTAL | 670,619 | 61,080,195 | 34,782 | 15,747,244 | 77,532,840 |
* Costs incurred for acquisition of segmental assets during 2023
| Intangible | Tangible | Investment | Biological | ||
| EUR | assets | assets | properties | assets | TOTAL |
| Europe | 10,668 | 15,740,303 | 60,598 | 0 | 15,811,569 |
| Sierra Leone | 0 | 2,535,268 | 0 | 0 | 2,535,268 |
| Liberia | 0 | 2,492,307 | 0 | 1,238,634 | 3,730,941 |
| Côte d'Ivoire | 15,621 | 5,647,697 | 0 | 3,685,695 | 9,349,013 |
| Ghana | 0 | 1,580,958 | 0 | 160,462 | 1,741,420 |
| Nigeria | 0 | 10,397,083 | 0 | 759,758 | 11,156,841 |
| Cameroon | 0 | 12,548,621 | 0 | 3,801,263 | 16,349,884 |
| São Tomé and Principe | 0 | 811,212 | 0 | 0 | 811,212 |
| Congo (DRC) | 0 | 106,557 | 0 | 0 | 106,557 |
| Cambodia | 0 | 480,750 | 0 | 426,311 | 907,061 |
| Indonesia | 1,172,057 | 5,368,272 | 0 | 9,562,007 | 16,102,337 |
| TOTAL | 1,198,346 | 57,709,029 | 60,598 | 19,634,130 | 78,602,103 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
97
* Information by sector of activity
Revenue from external customers:
| 2023 | 2022 | |
| EUR | EUR | |
| Palm | 524,781,585 | 582,827,456 |
| Rubber | 224,854,842 | 269,137,780 |
| Other agricultural activities | 7,327,186 | 9,316,123 |
| Trading activitiesG | 95,525,049 | 119,380,568 |
| Others | 10,054,404 | 10,849,478 |
| TOTAL | 862,543,066 | 991,511,407 |
* Information by geographical region
Revenue from external customers by origin of the customers and geographical location:
| EUR | 2022 | |||||
| Geographical | ||||||
| location | ||||||
| Origin | Europe | Africa | Asia | America | TOTAL | |
| Europe | 3,865,186 | 2,292,183 | 1,370,073 | 0 | 7,527,442 | |
| Africa | 271,281,825 | 397,718,362 | 49,169,238 | 62,509,276 | 780,678,701 | |
| Asia | 8,010,890 | 9,297,206 | 180,852,212 | 5,144,956 | 203,305,263 | |
| TOTAL | 283,157,902 | 409,307,751 | 231,391,522 | 67,654,232 | 991,511,407 |
| EUR | 2023 | |||||
| Geographical | ||||||
| location | ||||||
| Origin | Europe | Africa | Asia | America | TOTAL | |
| Europe | 2,694,106 | 1,813,506 | 847,622 | 0 | 5,355,234 | |
| Africa | 167,316,353 | 373,712,145 | 93,426,952 | 44,061,692 | 678,517,141 | |
| Asia | 6,879,664 | 550,463 | 169,427,811 | 1,812,759 | 178,670,697 | |
| TOTAL | 176,890,123 | 376,076,114 | 263,702,385 | 45,874,450 | 862,543,072 |
Consolidated financial statements
98
|
ANNUAL REPORT 2023
|
Socfin
* Information by business segment and revenue category
Revenue from external customers by business segment and geographical area:
| EUR | 2022 | ||||
| Service | |||||
| Category | Other | and other | |||
| agricultural | commercial | ||||
| Business Segment | Palm | Rubber | products | business | TOTAL |
| Sierra Leone | 58,553,604 | 0 | 0 | 0 | 58,553,604 |
| Liberia | 0 | 40,635,339 | 0 | 121,318 | 40,756,657 |
| Côte d'Ivoire | 39,919,397 | 157,537,226 | 0 | 2,994,417 | 200,451,040 |
| Ghana | 31,991,119 | 968,476 | 0 | 123,751 | 33,083,346 |
| Nigeria | 120,757,226 | 12,346,955 | 0 | 175,641 | 133,279,822 |
| Cameroon | 133,093,402 | 10,764,990 | 1,947,102 | 1,263,951 | 147,069,445 |
| São Tomé and Principe | 7,781,775 | 0 | 0 | 0 | 7,781,775 |
| Congo (DRC) | 16,366,246 | 0 | 0 | 0 | 16,366,246 |
| Indonesia | 170,771,625 | 14,157,861 | 7,369,021 | 1,329,408 | 193,627,916 |
| Cambodia | 0 | 8,164,138 | 0 | 0 | 8,164,138 |
| Europe | 3,593,062 | 24,562,784 | 0 | 124,221,571 | 152,377,418 |
| TOTAL | 582,827,457 | 269,137,769 | 9,316,123 | 130,230,058 | 991,511,407 |
| EUR | 2023 | ||||
| Service | |||||
| Category | Other | and other | |||
| agricultural | commercial | ||||
| Business Segment | Palm | Rubber | products | business | TOTAL |
| Sierra Leone | 44,340,974 | 0 | 0 | 0 | 44,340,974 |
| Liberia | 0 | 36,813,393 | 0 | 0 | 36,813,393 |
| Côte d'Ivoire | 30,964,234 | 126,880,126 | 0 | 2,612,616 | 160,456,976 |
| Ghana | 33,301,860 | 1,136,571 | 0 | 75,751 | 34,514,182 |
| Nigeria | 101,319,579 | 12,017,173 | 0 | 181,926 | 113,518,677 |
| Cameroon | 143,702,547 | 9,998,817 | 1,717,350 | 1,569,037 | 156,987,751 |
| São Tomé and Principe | 5,511,788 | 0 | 0 | 0 | 5,511,788 |
| Congo (DRC) | 10,923,105 | 0 | 0 | 0 | 10,923,105 |
| Indonesia | 150,821,396 | 9,874,419 | 5,609,840 | 1,366,863 | 167,672,518 |
| Cambodia | 0 | 10,777,027 | 0 | 0 | 10,777,027 |
| Europe | 3,896,103 | 17,357,321 | 0 | 99,773,255 | 121,026,680 |
| TOTAL | 524,781,586 | 224,854,846 | 7,327,190 | 105,579,449 | 862,543,071 |
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
99
Note 35. Risk management
Capital management
The Group manages its capital and adapts according
to changes in economic conditions and investment
opportunities. To maintain or adjust the capital
structure, the Group may issue new shares, repay part
of the capital or adjust the payment of dividends to
shareholders.
The Group also manages its capital by closely
monitoring the ratio of debt over equity.
Financial risk
The financial risk for the companies within the Group
originates mainly from changes in the selling price of
agricultural commodities, foreign exchange and, to a
lesser extent, interest rate movements.
Potential risk
Apart from Ghana and Sierra Leone (refer to Note
1.27), the countries where the Group operates do
not correspond to hyperinflationary economies or
suffer from an immediate threat of price devaluation.
Nevertheless, in a minority of those countries, the
political system and economic stability remain
fragile and could lead to currency devaluation or
hyperinflation.
Risk management and opportunities
The Group regularly reviews its sources of financing as
well as currency movements. Moreover, its decisions
are based on a variety of risks and opportunities,
which themselves depend on several factors, including
interest rates, currency and counterparties.
Market risk
* Price risk in commodities market
Potential risk
The Group markets its finished products at prices
that may be influenced by commodity prices in
international markets. It therefore faces the risk of
volatility in the prices of these commodities.
Risk management and opportunities
The main policy of the Group’s companies has always
been to control its production costs. It aims to
generate margins for the viability of structures in the
event of a significant drop in the selling prices of raw
materials
G
and, conversely, to generate profit margins
during the market downturns.
In parallel with this main policy, secondary policies
have also been implemented to improve or consolidate
profit margins, such as:
- the production of agricultural products of superior
quality and branded, in particular for rubber and;
- the use of the Group’s expertise in the commercial
sector.
The Group reduces its exposure to price risk by
investing into different geographical markets and
products.
* Foreign currency risk
Potential risk
The Group carries out transactions in local currencies,
the main ones being US dollar, Nigerian naira and
Indonesian rupiah. In addition, financial instruments
hedging against fluctuations in exchange rate may
not be available for certain currencies. This creates
exposure to exchange rate fluctuations, which may
have an impact on the financial result denominated
in euro.
In Nigeria, the availability of hard currency is
extremely limited. The gap between the central bank
rate (CBN) and OTC remains strong as at 2023 year-
end. For consolidation purposes, the Group uses the
Central Bank of Nigeria (CBN) rates. These rates are
disclosed in Note 1.9 to the financial statements.
The impact of the Group’s Nigerian operations on the
consolidated result is disclosed in Note 34 (Segment
information) to the financial statements.
Risk management and opportunities
Apart from the current currency hedging instruments
for operational transactions, which is relatively
limited, the main policy of the Group to finance its
development projects in the local currencies of the
Consolidated financial statements
100
|
ANNUAL REPORT 2023
|
Socfin
Consolidated financial statements
region. This practice is favourable for the significant
investments made in the plantations, as an attempt to
reduce borrowings wherever possible.
Management closely monitors developments in the
Nigerian foreign exchange markets and is keen to
present a fair view of the financial statements.
* Interest rate risk
Potential risk
The first risk linked to the interest rate denotes a
change in cash flows relating to short-term borrowings,
often on a variable rate, as well as a relatively
high level of base interest rates on cash and cash
equivalents. The second risk is linked to developing
markets, when borrowing in a local currency.
Risk management and opportunities
The first risk is maintained under control by an active
policy of monitoring the evolution of local financial
markets on the one hand and, when necessary, short-
term debt consolidation in the long term on the
other. Another systematic policy keeps an eye on the
second risk, by putting local and international banks
in competition with international lenders who can
offer real investment and development opportunities
at attractive rates.
Credit risk
Potential risk
Credit risk arises from the potential inability of clients
to meet their contractual obligations.
Risk management and opportunities
To manage credit risk, the Group ensures the
payment of local sales in cash or the guarantee of the
receivables by obtaining approved bills of exchange.
The export sales of the plantations are centralised
in the Group’s sales structure, which applies either
a cash payment policy or a commercial credit policy
whose limits are defined by its Board of Directors.
Details on impairment of financial assets and liabilities,
including measurement of expected credit losses, are
disclosed in Note 1.19.
Liquidity risk
Potential risk
Liquidity risk is defined as the risk that the Group
cannot meet its obligations in time or at a reasonable
price. This risk mainly affects plantations, which are
both the main source of cash and financing needs.
Risk management and opportunities
Given the specific economic and technological
environment of each plantation, the Group manages
the liquidity risk in a decentralised manner. However,
both the available cash and the implementation of the
financing are supervised by the Group Management.
The Group chooses, whenever possible, to maintain/
claim financial liabilities and cash position (as
mentioned respectively in Notes 24 and 20) with low
credit risk institutions.
Emerging market risks
Potential risk
Current or future political instability in certain
countries in which the Group operates may affect the
Group’s profitability and its ability to do business and
generate revenue.
The political system in some of the Group’s markets is
relatively fragile and can be potentially threatened by
cross-border conflicts or wars between rival groups.
Risk management and opportunities
Through its activities, the Group contributes to the
improvement of the quality of life in the countries
in which it operates. It also focuses on improving
the stability of its markets, which may lead to
an appreciation in the value of the Group’s local
companies.
By diversifying the countries, economies and
currencies in which the Group generates its revenues
and cash flows, it reduces its exposure to emerging
market risk.
The Group is aware of its environmental and social
responsibility towards the local population and is
continually implementing initiatives to this end.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
101
Risk of expropriation
Potential risk
Certain countries in which the Group operates have
political regimes that may call into question foreign
commercial interests by limiting their activities and
may attempt to exert control over the Group’s assets.
This is known as the risk of expropriation.
Risk management and opportunities
The diversified geographical distribution of the
countries in which the Group generates its revenues
and its cash flows reduces its exposure to this risk.
Credibility risk
Potential risk
With the Group being linked to the state of the
financial markets, the Group may be exposed to a
credibility risk when said markets lose confidence.
This depends on the Group’s ability to maintain sound
financial health considering:
- its environmental impact,
- its social responsibility and
- the economic and geopolitical risks that certain
Group entities may face.
Risk management and opportunities
The Group has published its responsible management
policy in 2017, which was updated in 2022. This
complements the Group’s sustainable development
commitments, formalised in 2012.
The Group’s initiatives to monitor this risk are detailed
in the information provided in the annual sustainable
development report available on request at Group
headquarters.
Risk sensitivity
* Exchange rate risk
The Group is exposed to changes in value arising
from fluctuations in exchange rates generated by its
operating activities. However, as local turnover was
made in the local currency, and export sales are made
in US dollar, the Group’s exposure is mainly limited to
fluctuations in dollar against the euro. The impact on
the result of a 10% increase or decrease (EUR/USD)
in foreign currency financial instruments amounts to
EUR 7.7 million.
In the case where the currency of sale is not the
functional currency of the Company and it is linked
to a strong currency, the conversion is ensured at the
time of the conclusion of the contract. The local sales
concluded in the local currency in 2023 (including
US dollars) amounted to EUR 543.3 million. The
global sales (mainly concluded in US dollars) in 2023
amounted to EUR 319.3 million.
* Interest rate risk
The breakdown of fixed rate loans and variable
rate loans is described in Note 24. Following the
reimbursement of the variable rate loan arrangement
by PNS Ltd in February 2023, the Group’s exposure
to interest rate risk decreased in 2023. However, the
management continues to closely monitor the interest
rate’s evolution.
* Credit risk
On 31 December 2023, the trade receivables from
global customers and local customers amounted to
EUR 28.1 million and EUR 15.7 million respectively.
Accounts receivable from global customers are mainly
receivables related to the sale of rubber. Raw palm oil
is sold locally to local players, which entails a wide
range of customers. The marketing of refined palm oil
and rubber is entrusted to Sogescol FR. It trades either
on the physical markets or directly with end customers.
Consolidated financial statements
102
|
ANNUAL REPORT 2023
|
Socfin
| 31/12/2023 | 31/12/2022 | |
| EUR | EUR | |
| Trade receivables | 43,827,351 | 40,812,839 |
| Provision incurred mainly on non-operational receivables | -3,939,434 | -3,945,723 |
| Other receivables | 10,075,144 | 8,665,133 |
| Total net receivables | 49,963,061 | 45,532,249 |
| Amount not due | 48,068,684 | 44,544,890 |
| Amount due less than 6 months | 1,820,539 | 236,316 |
| Amount due for more than 6 months and less than one year | 37,647 | 405,019 |
| Amount due for more than one year | 36,191 | 346,024 |
| Total net receivables | 49,963,061 | 45,532,249 |
Note 36. Contingent liabilities
1. Litigation against the Belgian Federal Public Service
Finance (Corporate Tax)
The company SOCFICOM (“Socficom”), a public
limited company incorporated under Liechtenstein
law and a subsidiary of the Group, was the subject of
criminal proceedings initiated by the Belgian Public
Prosecutor’s Office.
The main accusation against Socficom was that the
Belgian Public Prosecutor’s Office considered that
Socficom was a “Belgian resident company”, subject
to Belgian corporate income tax.
Socficom was acquitted, following a ruling by the 11
th
Chamber of the Brussels Court of Appeal, sitting in
correctional matters, dated from 23 October 2018. The
Court ruled that “it is clear from all these elements
that the real seat of the defendant Socficom is indeed
established in Liechtenstein and that nothing allows
it to be located in Brussels”. The Public Prosecutor’s
Office did not appeal against this judgement and this
decision is therefore final.
However, the Federal Public Service Finance relied
exclusively on the investigation file submitted by the
Belgian Public Prosecutor’s Office in criminal matters.
The former therefore maintains that Socficom meets
the conditions to be liable to corporate income tax in
Belgium. The Federal Public Service Finance indeed
considers that Socficom is effectively managed from
Belgium and that all its activities are carried out
there.
Socficom was therefore automatically assessed with
corporate income tax on 4 January 2012, for the tax
years 2004 to 2009 for an amount of EUR 77,343,783,
excluding late payment interest at an annual rate of
7% reduced to 4% as from 1 January 2018.
On 5 April 2013, Socficom filed a tax claim against
the 6 ex officio tax assessments. These 6 claims were
declared admissible, but were rejected.
Socficom filed an action before the “Tribunal de
première instance francophone” of Brussels.
The “Tribunal de première instance francophone”
of Brussels, by judgement dated from 26 April 2019,
declared the claim admissible and partially founded
insofar as it ordered the partial relief of the disputed
taxes.
Socficom considers that this decision, although
partially favourable to the argument it defended
before the Court, is not satisfactory, given the
acquittal decision referred to above.
The tax authorities want to tax Socficom exclusively
on the basis of the elements in the criminal file, as
the tax file does not contain any “new claims” in
relation to the criminal proceedings. The facts judged
in the tax proceedings have already been decided by
the Court of Appeal (correctional chamber) which
acquitted Socficom and the other defendants.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
103
The Court could therefore not agree with the tax office
on the basis of documents, observations or findings,
without taking into consideration the judgement of
the Court of Appeal of 23 October 2018. The Brussels
Tax Court has “re-heard” the criminal case ignoring
the acquittal of the 11
th
Chamber of the Brussels Court
of Appeal.
Socficom has therefore decided to appeal against the
tax judgement in order to request that the Court grants
the request initially formulated by the company, i.e.
to order the complete cancellation of the relief of the
disputed taxes.
Tax judgements that are appealed against are not
enforceable until the Court has ruled on them.
The amounts initially claimed by the tax authorities
from Socficom amounted to EUR 77,343,783,
excluding interest (see above), from which must be
deducted the relief granted by the Court amounting
to EUR 50,000,000.
The company’s counsel and Group management are
of the opinion that the Court of Appeal should fully
cancel these taxes, based on the acquittal decision
of the Court of Appeal, Correctional Chamber, dated
23 October 2018 which confirms “that the real seat
of the defendant Socficom is indeed established in
Liechtenstein and that there is no reason to locate it in
Brussels”. Based on these elements, the management
is of the opinion that no provision should be recorded
as the probability of an outflow of financial resources
by the Group is low. The findings of the Court of Appeal
are not expected before 2024.
2. Litigation against the Belgian Federal Public
Service Finance (VAT)
As described above, the Federal Public Service
Finance maintains that Socficom is a Belgian resident
company. The tax authorities are claiming VAT of
EUR 3,054,160.15 for the years 2006, 2007, 2008 and
2009, adding to this tax fines and interest at a rate of
0.8% per month as from 20 January 2010.
The amounts claimed amount to EUR 10,310,844.61,
split as follows:
- EUR 3,054,160 for VAT
- EUR 1,148,364 in interest
- EUR 6,108,320 in fines
- plus interest for late payment to be calculated on
the VAT due from 21 December 2013.
Socficom contested this tax before the Brussels Court
of First Instance.
The Court declared the claim admissible and
partially founded insofar as it cancelled the fines
of EUR 6,108,320 and the interest charged on this
amount.
Socficom considers that this decision, although
partially favorable to the case it defended before
the Court, is not satisfactory since it was granted the
acquittal following the judgement rendered by the
11
th
Chamber of the Brussels Court of Appeal dated 23
October 2018.
In order to claim the disputed VAT from Socficom, the
tax authorities based themselves exclusively on the
criminal file. However, the Brussels Court could not
ignore the acquittal decision and condemn Socficom
without taking into account the final and res judicata
judgement of the Brussels Court of Appeal.
In the absence of new elements brought by the tax
authorities and having an impact on the outcome
of the trial, the decision of the Court of Appeal of
23 October 2018 could not be challenged and is
binding on the Court.
Socficom therefore decided to appeal the tax ruling
in order to request the Court to grant the request
initially made by the company, i.e. to order a tax
relief for the disputed taxes.
The Company’s counsel and the Group’s management
are of the opinion that the Court of Appeal should fully
cancel these taxes, based on the acquittal decision
of the Court of Appeal, Correctional Chamber, dated
from 23 October 2018, which confirm: “that the real
seat of the defendant Socficom is indeed established
in Liechtenstein and that there is no reason to locate
it in Brussels”. Based on these elements, management
is of the opinion that no provision should be recorded
as the probability of an outflow of financial resources
by the Group is low. The findings of the Court of Appeal
are not expected before 2024.
Consolidated financial statements
104
|
ANNUAL REPORT 2023
|
Socfin
3. Claim against “Caisse Nationale de Prévoyance
Sociale”
Société des Caoutchoucs du Grand Bereby (“SOGB”), a
public limited company incorporated under Ivorian law
and subsidiary of the Group, is involved in a dispute
with the Caisse Nationale de Prévoyance Sociale
(“CNPS”) of Côte d’Ivoire. This dispute concerns the
tax audit of the benefits in kind that SOGB should
have paid to CNPS for having provided housing to its
employees.
Following an initial analysis for the period from
1 January 2010 to 31 December 2013, CNPS estimated
the due amount at CFA 182 million, equivalent to
EUR 277,000. Based on SOGB’s calculations, the amount
owed is of CFA 32 million, equivalent to EUR 48,000.
Following a contestation, the case was brought
before the Court of Sassandra. The latter invited the
two parties to reach an amicable settlement for the
dispute, and to submit a transactional agreement if
necessary.
In the absence of an amicable settlement for the
dispute, it would be up to the Sassandra Court to rule
on the merits.
The CNPS carried out a second analysis covering the
years 2014 through 2018. The CNPS added to the
previous amount a sum of CFA 1,650 million, equivalent
to EUR 2.5 million. The SOGB has recorded a provision
of CFA 250 million, equivalent to EUR 381,000,
which corresponds to the amount it considers to be
effectively due.
The matter of housing on plantations in rural areas
is a general issue and concerns most agricultural and
forestry companies, particularly those in the rubber,
oil palm and banana sectors.
For this reason, actions have been undertaken by
companies in the sector, which are supported by
the Union of Agricultural and Forestry Companies
(“UNEMAF”) and the General Confederation of
Companies of Côte d’Ivoire (“CGECI”), to obtain a
clear position from the CNPS on this issue.
The CNPS had always shown leniency for determining
benefits in kind constituted by the provision of housing
in rural areas.
A proposal for arbitration was submitted to the
Ministry of Employment and Social Protection by a
working group that comprises members of CGECI and
UNEMAF. Working group meetings were scheduled
to take place in the course of 2020, but these were
postponed due to the health situation and have not
been resumed to date.
At the date of the closing of the accounts, the
amicable procedure is therefore still in progress. Its
outcome will determine whether or not the case is
referred to the Sassandra Court, which has the power
alone to enforce the parties. Insofar as there is no
legal constraint to date, and based on the above, the
management is of the opinion that no provision should
be recorded because the probability of a claim is very
low.
Note 37. Political and economic environment
The Group (company) holds interests in subsidiaries
that operate indirectly in Africa and South-East Asia.
Given the economic and political instability in some of
these countries, these holdings pose a risk in terms of
exposure to political and economic changes.
Note 38. Events after the closing date
There are no material events after the closing date
to mention.
Consolidated financial statements
Socfin
|
ANNUAL REPORT 2023
|
105
Note 39. Assets classified as held for sale
| EUR | 31/12/2023 |
| ASSETS | |
| Non-Current Assets | |
| Right-of-use assets | 33,851 |
| Property, plant and equipment | 2,241,077 |
| Biological assets | 1,969,162 |
| 4,244,090 | |
| Current Assets | |
| Inventories | 956,711 |
| Current biological assets | 21,188 |
| Trade receivables | 2,973 |
| Other receivables | 427,509 |
| Current tax assets | 299,777 |
| Cash and cash equivalents | 361,169 |
| 2,069,328 | |
| Assets classified as held for sale | 6,313,418 |
| EUR | 31/12/2023 |
| EQUITY AND LIABILITIES | |
| Non-Current Liabilities | |
| Long-term lease liabilities | 35,449 |
| 35,449 | |
| Current Liabilities | |
| Short-term lease liabilities | 10,417 |
| Trade payables | 119,584 |
| Other payables | 118,829 |
| 248,830 | |
| Liabilities associated with assets classified as held for sale | 284,279 |
As at 31 December 2023, the carrying amounts of the
assets classified as held for sale and related liabilities
are attributable to SRC. In the last quarter of 2023, the
management of Socfinaf conducted negociations on
the disposal of SRC. Accordingly, SRC was reclassified
as a disposal as at 31 December 2023. The transaction
is subject to local regulatory approval and is expected
to close in the first half of 2024.
Note 40. Auditor’s fees
| 2023 | 2022 | |
| EUR | EUR | |
| Audit (VAT included) | 1,529,754 | 1,509,211 |
The audit fees include all fees paid to the independent
statutory auditor of the Group, namely EY, as well as
those paid to member firms within EY’s network for
the relevant years.
This firm performed no material consulting work or
other non-audit services in 2023 or in 2022.
Company’s management Report
106
|
ANNUAL REPORT 2023
|
Socfin
Company’s management Report
Presented by the Board of Directors at the Annual General Meeting of 29 May 2024
Ladies and gentlemen,
We are pleased to present our annual report and to submit for your approval the annual accounts of our Company
as at 31 December 2023.
Activities
Socfin mainly holds financial interests in portfolio companies which operate indirectly in Southeast Asia and/or
tropical Africa in the rubber and palm oil sectors.
Result of the year
The profit and loss account for the year, compared to that of the previous year, is as follows:
(EUR million) 2023 2022
INCOME
Income from participating interests
derived from affiliated undertakings
Dividends
39.9 34.2
Interest on receivables
5.8 8.8
45.7 43.0
Income from current assets
0.1 3.6
Total income
45.8 46.6
EXPENSES
Other external charges
2.9 1.5
Interest payable and similar expenses
4.6 11.3
Total expenses
7.5 12.8
PROFIT FOR THE FINANCIAL YEAR
38.3 33.8
As at 31 December 2023, net profit amounted to
EUR 38.3 million compared to EUR 33.8 million at the
end of the previous year.
Revenue amounted to EUR 45.8 million
(EUR 46.6 million as at 31 December 2022).
Total expenses amounted to EUR 7.5 million compared
to EUR 12.8 million as at 31 December 2022.
Company’s management Report
Socfin
|
ANNUAL REPORT 2023
|
107
Balance sheet
As at 31 December 2023, Socfin’s total assets amounted
to EUR 284.5 million compared to EUR 324.5 million as
at 31 December 2022.
Socfin’s assets consist of a portfolio of EUR 196.4 million,
financial fixed assets of EUR 80.4 million, and other
debtors of EUR 7.7 million.
Equity amounted to EUR 232.6 million.
Porfolio
Movements
During the financial year 2023, Socfin has participated
in the capital increase of Management Associates.
Revaluations
As at 31 December 2023, the unrealised capital
gains on the investment portfolio are estimated at
EUR 114 million compared to EUR 141.5 million in
previous year.
Holdings
The main holdings have evolved as follows during the
last months:
Socfinasia S.A. (Luxembourg) - 58.25%
The company holds stakes in Southeast Asian
companies active in the rubber and palm oil sector.
As at 31 December 2023, net profit amounted to
EUR 48.1 million compared to EUR 70.7 million as at
31 December 2022.
The net value of Socfinasia’s investments amounted
to EUR 294.1 million as at 31 December 2023 and the
valuation of the portfolio shows unrealised gains of
EUR 62.4 million.
At the next General Meeting, the Board of Directors of
Socfinasia will propose the payment of a final dividend
of EUR 2.00 per share, an interim dividend of EUR 2.00
has already been paid in November 2023.
2023 2022
Socfinasia (EUR million)
Assets
430.2 457.7
Fixed assets
357.7 405.7
Current assets
72.5 52.0
Equity and Liabilities
430.2 457.7
Equity
424.1 452.1
Liabilities
6.1 5.6
Socfinaf S.A. (Luxembourg) – 64.64%
The company has interests in entities in tropical Africa
active in the rubber and palm oil sector.
As at 31 December 2023, net profit amounted
to EUR 2.7 million compared to a net loss of
EUR 37.5 million as at 31 December 2022.
The net asset value of financial assets amounted to
EUR 187.4 million as at 31 December 2023 and the
valuation of the portfolio generated unrealised gains
of EUR 469.2 million.
The Board of Directors of Socfinaf will propose at the
next General Meeting not to pay a dividend for the
financial year 2023.
Company’s management Report
108
|
ANNUAL REPORT 2023
|
Socfin
2023 2022
Socfinaf (EUR million)
Assets
349.3 398.6
Fixed assets
316.8 361.7
Current assets
32.5 36.9
Liabilities
349.3 398.6
Equity
223.9 221.3
Liability
125.4 177.3
Allocation of profit
The profit for the year for Socfin of EUR 38,275,879
increased by the retained earnings of EUR 117,203,463
result in total earnings of EUR 155,479,342 which it is
proposed to allocate as follows:
Earnings allocation
EUR
Retained earnings 139,746,320
From the balance:
10% to the Board of Directors
1,573,302
90% to 14,159,720 shares
14,159,720
representing EUR 1.00 per share of which EUR 0.50 already paid on November 2023
155,479,342
As a reminder, the dividend relating to previous year was EUR 1.25.
Reserves
After this distribution of profit, the reserves will be as follows:
EUR
Legal reserve 2,477,951
Other reserves 57,277,681
Retained earnings 139,746,320
199,501,953
If this distribution is approved, coupon Nr 84 of EUR 0.50 will be declared on 5 June 2024 and will be payable
as of 8 June 2024.
Company’s management Report
Socfin
|
ANNUAL REPORT 2023
|
109
Treasury shares
The company did not buy back its own shares during the 2023 financial year.
Research and development
During the financial year 2023, Socfin did not incur any expenses for research and development.
Financial instruments
Financial risk management policies are described in the notes to the company’s consolidated financial statements.
Branch
The company has a permanent establishment in
Fribourg (CH).
Mentions required by Art. 11 (1) points a) to k) of
the law of 19 May 2006 concerning Public Takeover
Bids
a) b) f) The issued capital of the Company is set at
EUR 24,779,510 represented by 14,159,720 shares
without par value, fully paid up. Each share
entitles the holder to one vote without limitation
or restriction.
c) On 9 October 2023, Mr. Hubert Fabri declared in
accordance with the Luxembourg law of 11 January
2008 on transparency requirements in relation to
information about issuers whose securities are
admitted to trading on a regulated market that he
held a direct and indirect stake of 95.67% of the
voting rights in Socfin.
d) On 30 May 2023, Afico, an entity ultimately
controlled by Mr. Hubert Fabri, published a notice
in accordance with Art. 3(1) of the Luxembourg
law of 21 July 2012 on mandatory squeeze-outs
and sell-outs, immediately followed by the public
announcement that it intended to carry out
a squeeze out for the shares of Socfin not held
or controlled by the Concert Parties (as defined
below) in accordance with Art. 4(1) of that law
(the “Squeeze Out”).
g) By virtue of an agreement among Mr. Fabri, Afico
and Bolloré SE (the “Concert Parties”) signed
by the parties on 30 May 2023, an aggregate of
39.75% of voting rights directly or indirectly held
by Bolloré SE are attributed to Mr. Fabri.
h) Art. 14. of the statutes: “The Company is
administered by a Board composed of at least
three members, whether natural or legal persons.
The Directors are appointed for a period of six
years by the General Meeting of Shareholders.
They are eligible for re-election. The Directors
are renewed by lottery, so that at least one
Director will be leaving each year.”
Art. 23. of the statutes: “In the event of
vacancy of one or more director’s seat, it may
be provisionally replaced by complying with the
formalities provided for by law.”
Art. 32. of the statutes: “The present statutes can
be modified by decision of the General Meeting
specially convened for this purpose, in the forms
and conditions prescribed by articles 450-1
and 450-8 of the law of 10 August 1915 on the
commercial companies, as amended.”
i) The powers of the members of the Board of Directors
are defined in Art. 18 and seq. of the statutes of the
Company. They provide in particular that: “The Board
of Directors is vested with the broadest powers for
the administration of the Company. All matters not
expressly reserved to the General Meeting by the
statutes or the law fall within the competence of
the Board”.
In addition, the statutes provide in Art. 6: “In the
event of a capital increase, the Board of Directors
shall determine the conditions of issue of the shares.
The new shares to be paid up in cash shall be
offered in preference to the current shareholders,
in accordance with the law.
Company’s management Report
110
|
ANNUAL REPORT 2023
|
Socfin
In the event of the issue of shares by contribution
in cash or in the event of the issue of instruments
which fall within the scope of application of article
420-27 of the law on companies and which are
paid for in cash, including and in a non-exhaustive
manner, convertible bonds allowing their holder
to subscribe to shares or to be allocated shares,
shareholders have preferential subscription rights
in proportion to their participation with regard to
all these issues in accordance with the provisions of
company law.
The General Meeting called to deliberate, under
the conditions required for the amendment of
the Articles of Association, on the increase in the
share capital or on the authorisation to increase
the capital in accordance with Article 420-23 of the
law of commercial companies, may limit or cancel
the preferential subscription right or authorise
the Board to do so in the manner and under the
conditions provided for by law.”
The other points of Art. 11 (1) are not applicable,
namely:
• holding of shares giving special control rights;
• the existence of a staff shareholding system;
• the indemnities provided in the event of the
resignation or dismissal of members of the Board
of Directors or staff following a takeover bid.
Responsible management policy
The responsible management policy is based on the
Group’s three pillars of commitment, alongside
its specific commitment to transparency: rural
development, workers and local communities, and
environment. These commitments form the basis of
key initiatives aimed at improving long-term economic
performance, social well-being, health, safety and
natural resource management.
An implementation plan for this policy has been
defined and implemented throughout 2023.
The efforts and actions undertaken by the Socfin
Group in this area are detailed in a regularly updated
dashboard as well as in a separate annual report
(“Sustainable Development Report”).
The responsible management policy, the dashboard
and the annual sustainable development report are
available on the Group’s website.
Estimated value of the share (company accounts)
The estimated value of Socfin as at 31 December 2023
amounts to EUR 346.6 million. This valuation includes
unrealised gains on the portfolio.
As a reminder, the share price was EUR 31.00 at the
end of the 2023 financial year compared to EUR 20.20
one year earlier.
Significant events after the end of the year
There are no significant post-closing events affecting
the Company.
Company’s management Report
Socfin
|
ANNUAL REPORT 2023
|
111
Key risks and uncertainties
It must be emphasised that the Group’s investments in
Africa and Southeast Asia may be subject to political
and economic risks. On-site executives and managers
follow the day-to-day evolution of the situation.
Perspectives
The result for the 2024 financial year will depend to
a large extent on the dividend distributions of the
subsidiaries.
Statutory appointments
Mr. François Fabri, outgoing director, is eligible for re-
election. The Board will propose to the next General
Meeting the renewal of this term of office for a period
of six years.
The Board of Directors
Audit report on the Company’s financial statements
112
|
ANNUAL REPORT 2023
|
Socfin
Audit report on the Company’s financial statements
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of
Société Financière des Caoutchoucs S.A.
4, avenue Guillaume
L-1650 Luxembourg
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Société
Financière des Caoutchoucs S.A. (the “Company”),
which comprise the balance sheet as at 31 December
2023, and the profit and loss account for the year then
ended, and the notes to the financial statements,
including a summary of significant accounting policies.
In our opinion, the accompanying financial statements
give a true and fair view of the financial position of the
Company as at 31 December 2023, and of the results of
its operations for the year then ended in accordance
with Luxembourg legal and regulatory requirements
relating to the preparation and presentation of the
financial statements.
Basis for opinion
We conducted our audit in accordance with EU
Regulation N° 537/2014, the Law of 23 July 2016
on the audit profession (“Law of 23 July 2016”) and
with International Standards on Auditing (“ISAs”)
as adopted for Luxembourg by the “Commission de
Surveillance du Secteur Financier” (“CSSF”). Our
responsibilities under the EU Regulation Nº 537/2014,
the Law of 23 July 2016 and ISAs as adopted for
Luxembourg by the CSSF are further described in the
“Responsibilities of the “réviseur d’entreprises agréé”
for the audit of the financial statements” section of
our report. We are also independent of the Company
in accordance with the International Code of Ethics
for Professional Accountants, including International
Independence Standards, issued by the International
Ethics Standards Board for Accountants (“IESBA Code”)
as adopted for Luxembourg by the CSSF together with
the ethical requirements that are relevant to our
audit of the financial statements, and have fulfilled
our other ethical responsibilities under those ethical
requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period. These matters were addressed in the context
of the audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Valuation of shares in affiliated undertakings
Risk identified
As at 31 December 2023, the shares in affiliated
undertakings amounts to 196 million euros and
represents 69% of the total assets of the balance
sheet. Shares in affiliated undertakings are valued at
historical acquisition cost, respectively their nominal
value, which includes incidental expenses. In the case
of durable depreciation in value according to the
opinion of the Board of Directors, value adjustments
are made in respect of financial fixed assets, so that
they are valued at the lower figure to be attributed
to them at the balance sheet date. These value
adjustments are not continued if the reasons for
which the value adjustments were made have ceased
to apply. In the event of an impairment that, in the
opinion of the Board of Directors, is of a lasting
nature, these financial assets are subject to value
adjustments in order to give them the lower value
that should be attributed to them on the balance
sheet date, as determined by the Board of Directors.
Audit report on the Company’s financial statements
Socfin
|
ANNUAL REPORT 2023
|
113
Audit report on the Company’s financial statements
The assessment of the durable depreciation in value
of these shares in affiliated undertakings requires the
exercise of the Board of Directors’ judgement in its
choice of the elements to be considered according
to the shares in affiliated undertakings, whether
market elements (shares price when applicable) and/
or historical elements (adjusted net equity) and/or
forecast elements (discounted future cash flows to
shareholders).
Due to the size of the balance and judgement included,
we considered this area to be a key audit matter.
Our answer
Our audit procedures over the impairment of the shares
in affiliated undertakings and of the loans to affiliated
undertakings included amongst other :
• Assessing the accounting policies determined by
the Board of Directors, as described in the note 2
of the financial statements, to determine the value
adjustments to be recorded on shares in the affiliated
undertakings ;
• Ensuring that the accounting policies used by the
Board of Directors were properly applied:
- when the Board of Directors relied on market
data, we reconciled the share prices as at 31
December 2023 used for the valuation of shares in
affiliated undertakings to the official stock markets
quotations ;
- when the Board of Directors relied on historical
data, we reconciled the adjusted net equity
used in the valuation of the shares in affiliated
undertakings as at 31 December 2023 to the
financial information of the related affiliated
undertakings and assessed the appropriateness of
evidence supporting the adjustments made to the
net equity, if any.
• Assessing the appropriateness of the disclosures
made in the Note 3 of the financial statements.
Other information
The Board of Directors is responsible for the other
information. The other information comprises the
information included in the annual reporting including
the management report and the corporate governance
statement but does not include the financial
statements and our report of “réviseur d’entreprises
agréé” thereon.
Our opinion on the financial statements does not cover
the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements,
our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a
material misstatement of this other information, we
are required to report this fact. We have nothing to
report in this regard.
Responsibilities of the Board of Directors and of
those charged with governance for the financial
statements
The Board of Directors is responsible for the
preparation and fair presentation of the financial
statements in accordance with Luxembourg legal and
regulatory requirements relating to the preparation
and presentation of the financial statements, and
for such internal control as the Board of Directors
determines is necessary to enable the preparation
of financial statements that are free from material
misstatement, whether due to fraud or error.
The Board of Directors is also responsible for
presenting and marking up the financial statements
in compliance with the requirements set out in the
Delegated Regulation 2019/815 on European Single
Electronic Format, as amended (“ESEF Regulation”).
In preparing the financial statements, the Board of
Directors is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using
the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company
or to cease operations, or has no realistic alternative
but to do so.
Responsibilities of the “réviseur d’entreprises
agréé” for the audit of the financial statements
The objectives of our audit are to obtain reasonable
assurance about whether the financial statements
as a whole are free from material misstatement,
whether due to fraud or error, and to issue a report
of the “réviseur d’entreprises agréé” that includes
114
|
ANNUAL REPORT 2023
|
Socfin
Portrait du GroupeAudit report on the Company’s financial statements
our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit
conducted in accordance with EU Regulation N°
537/2014, the Law of 23 July 2016 and with the ISAs
as adopted for Luxembourg by the CSSF will always
detect a material misstatement when it exists.
Misstatements can arise from fraud or error and
are considered material if, individually or in the
aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with EU Regulation
N° 537/2014, the Law of 23 July 2016 and with ISAs
as adopted for Luxembourg by the CSSF, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material
misstatement of the financial statements, whether
due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from
fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures
that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
estimates and related disclosures made by the
Board of Directors.
• Conclude on the appropriateness of Board of
Directors’ use of the going concern basis of
accounting and, based on the audit evidence
obtained, whether a material uncertainty exists
related to events or conditions that may cast
significant doubt on the Company’s ability to
continue as a going concern. If we conclude that
a material uncertainty exists, we are required
to draw attention in our report of the “réviseur
d’entreprises agréé” to the related disclosures in
the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the
date of our report of the “réviseur d’entreprises
agréé”. However, future events or conditions may
cause the Company to cease to continue as a going
concern.
• Evaluate the overall presentation, structure and
content of the financial statements, including the
disclosures, and whether the financial statements
represent the underlying transactions and events in
a manner that achieves fair presentation.
• Assess whether the financial statements have been
prepared, in all material respects, in compliance
with the requirements laid down in the ESEF
Regulation.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
communicate to them all relationships and other
matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the financial
statements of the current period and are therefore
the key audit matters. We describe these matters in
our report unless law or regulation precludes public
disclosure about the matter.
Report on other legal and regulatory
requirements
We have been appointed as “réviseur d’entreprises
agréé” by the General Meeting of the Shareholders on
26 May 2020 and the duration of our uninterrupted
engagement, including previous renewals and
reappointments, is 4 years.
The management report is consistent with the financial
statements and has been prepared in accordance with
applicable legal requirements.
Audit report on the Company’s financial statements
Socfin
|
ANNUAL REPORT 2023
|
115
Audit report on the Company’s financial statements
The accompanying corporate governance statement
on pages 19 to 24 is the responsibility of the Board
of Directors. The information required by article
68ter paragraph (1) letters c) and d) of the law of
19 December 2002 on the commercial and companies
register and on the accounting records and annual
accounts of undertakings, as amended, is consistent
with the financial statements and has been prepared
in accordance with applicable legal requirements.
We have checked the compliance of the financial
statements of the Company as at 31 December 2023
with relevant statutory requirements set out in the
ESEF Regulation that are applicable to the financial
statements. For the Company, it relates to :
• Financial statements prepared in valid xHTML
format
In our opinion, the financial statements of the
Company as at 31 December 2023, have been
prepared, in all material respects, in compliance with
the requirements laid down in the ESEF Regulation.
We confirm that the audit opinion is consistent with
the additional report to the audit committee or
equivalent.
We confirm that the prohibited non-audit services
referred to in EU Regulation No 537/2014 were not
provided and that we remained independent of the
Company in conducting the audit.
Ernst & Young
Société anonyme
Cabinet de révision agréé
Anthony CANNELLA
Company’s financial statements
116
|
ANNUAL REPORT 2023
|
Socfin
Company’s financial statements
1. Balance sheet as at 31 December 2023
2023 2022
ASSETS
Note EUR EUR
FIXED ASSETS
Financial assets 3
Shares in affiliated undertakings 196,356,984.97 187,356,984.97
Loans to affiliated undertakings 80,442,500.00 120,412,500.00
276,799,484.97 307,769,484.97
CURRENT ASSETS
Debtors
Amounts owed by affiliated undertakings 4
Becoming due and payable within one year 7,154,053.92 16,325,350.98
Other debtors
Becoming due and payable within one year 207,296.24 153,785.88
7,361,350.16 16,479,136.86
Cash at bank and in hand 363,981.87 259,023.92
7,725,332.03 16,738,160.78
TOTAL ASSETS 284,524,817.00 324,507,645.75
The accompanying notes form an integral part of the financial statements.
Company’s financial statements
Socfin
|
ANNUAL REPORT 2023
|
117
Company’s financial statements
2023 2022
CAPITAL, RESERVES AND LIABILITIES Note EUR EUR
CAPITAL AND RESERVES 5
Issued capital 24,779,510.00 24,779,510.00
Share premium account 501,846.51 501,846.51
Reserves
Legal reserve 2,477,951.00 2,477,951.00
Other reserves, including the fair value reserve
Other available reserves 57,277,681.15 57,277,681.15
59,755,632.15 59,755,632.15
Profit brought forward 117,203,463.42 103,075,979.76
Profit for the financial year 38,275,879.44 33,793,761.44
Interim dividends -7,866,511.11 -11,799,766.67
232,649,820.41 210,106,963.19
CREDITORS
Amounts owed to credit institutions
Becoming due and payable within one year 0.00 18.18
Trade creditors
Becoming due and payable within one year 225,406.00 216,429.50
Amounts owed to affiliated undertakings 6
Becoming due and payable within one year 1,181,499.84 13,830,365.13
Becoming due and payable after more than one year 50,000,000.00 100,000,000.00
Other creditors
Tax authorities 200,520.00 86,520.00
Other creditors
Becoming due and payable within one year 267,570.75 267,349.75
51,874,996.59 114,400,682.56
TOTAL CAPITAL, RESERVES AND LIABILITIES 284,524,817.00 324,507,645.75
The accompanying notes form an integral part of the financial statements.
Company’s financial statements
118
|
ANNUAL REPORT 2023
|
Socfin
Company’s financial statements
2. Income statement for the year ended 31 December 2023
2023 2022
Note EUR EUR
Other operating income 0.00 46,068.75
Raw materials and consumables
Other external expenses -2,861,799.83 -1,509,020.71
Other operating expenses -14,478.50 -18,139.65
Income from participating interests
Derived from affiliated undertakings 7 39,948,377.00 34,212,972.00
Income from other investments and loans forming part
of the fixed assets
Derived from affiliated undertakings 8 5,786,549.68 8,835,902.76
Other interest receivable and similar income
Derived from affiliated undertakings 54,925.05 3,601,489.37
Other interest and similar income 579.54 2,063.34
Interest payable and similar expenses
Derived from affiliated undertakings -4,523,557.33 -11,282,652.87
Other interest and similar expenses -827.83 -46,681.90
Tax on profit or loss -0.05 -6.49
Profit or loss after taxation 38,389,767.73 33,841,994.60
Other taxes not shown above 113,888.29 -48,233.16
Profit for the financial year 38,275,879.44 33,793,761.44
Beneficiary distribution proposal
2023 2022
EUR EUR
Retained earnings 139,746,320.64 117,203,463.42
From the balance:
10% on the Board of Directors 1,573,302.22 1,966,627.78
90% to 14,159,720 shares 14,159,720.00 17,699,650.00
155,479,342.86 136,869,741.20
Dividend per share 1.00 1.25
The accompanying notes form an integral part of the financial statements.
Company’s financial statements
Socfin
|
ANNUAL REPORT 2023
|
119
3. Notes to the financial statements for the year 2023
Note 1. Overview
The company was incorporated on 5 December 1959
as a public limited company and adopted the status of
“Soparfi” on 10 January 2011.
The duration of the company is unlimited, and its
registered office is established in Luxembourg. The
company is registered in the Register of Commerce
and Companies under number B5937 and is listed on
the Luxembourg Stock Exchange under ISIN number
LU0027967834.
The object of the company is (i) the acquisition,
holding and disposal, in any form whatsoever and by
any means, directly or indirectly, of participations,
rights and interests, as well as bonds of Luxembourgish
or foreign companies, (ii) the acquisition by
contribution, purchase, subscription or otherwise,
as well as the disposal by sale, transfer, exchange
or otherwise, of shares, interests, bonds, debts,
notes and other securities or financial instruments
of any kind (in particular bonds or shares issued
by Luxembourg or foreign collective investment
funds or any other similar body), loans or any other
credit line, as well as contracts relating thereto and
(iii) the holding,administration, development and
management of a portfolio of assets (composed in
particular of the assets described in points (i) and (ii)
above).
The company may also acquire and develop any
patents and other rights relating to or supplementing
those patents.
The company may borrow in any form whatsoever. It
may enter into any kind of loan agreement and may
issue debt securities, bonds, certificates, shares,
profit shares, warrants and all kinds of debt and equity
securities, including by virtue of one or several issue
programmes. The company may lend funds, including
those resulting from borrowings and/or securities
issues, to its subsidiaries, affiliates and any other
company.
The company also prepares consolidated financial
statements which are published in accordance with
the law and which are available at the company’s
registered office (4, avenue Guillaume, L-1650
Luxembourg) or on the Internet site: www.socfin.com.
The financial year begins on 1 January and ends on 31
December.
Note 2. Accounting principles, rules and methods
General principles
The annual financial statements are prepared in
accordance with Luxembourg legal and regulatory
requirements in force in Luxembourg under the
historical cost convention.
The accounting policies and valuation principles
are, apart from the rules imposed by the law of 19
December 2002, determined and implemented by the
Board of Directors.
The preparation of the annual financial statements
involves the use of a number of critical accounting
estimates. It also requires the Board of Directors
to exercise its judgement in the application of
accounting principles. Any change in assumptions may
have a significant impact on the financial statements
for the period in which the assumptions are changed.
The Board of Directors believes that the underlying
assumptions are appropriate and that the financial
statements give a true and fair view of the financial
position and results of the company.
Company’s financial statements
120
|
ANNUAL REPORT 2023
|
Socfin
Currency conversion
The company keeps its accounts in euros (EUR); the
annual accounts are expressed in the same currency.
Transactions in a currency other than the balance
sheet currency are converted into the balance sheet
currency at the exchange rate prevailing on the date
of the transaction.
At the balance sheet date:
- the acquisition price of the financial assets,
expressed in a currency other than the currency
of the balance sheet, remains converted at the
historical exchange rate. The current portion
of receivables is one exception to this, as it is
valued individually at the lowest of their historical
exchange rate value or their value determined on
the basis of the exchange rate prevailing at the
balance sheet date;
- bank accounts expressed in a currency other than
the currency of the balance sheet are valued on the
basis of the exchange rate prevailing on the balance
sheet date. Foreign exchange gains and losses are
recognised in the current period;
- all other assets, expressed in a currency other
than the currency of the balance sheet, are valued
individually at the lowest of their value at the
historical exchange rate or their value determined
on the basis of the exchange rate prevailing at the
balance sheet date;
- all liability items, expressed in a currency other
than the currency of the balance sheet, are valued
individually. For this, the highest amount is used
between their value at the historical exchange
rate and their value determined on the basis of the
exchange rate prevailing on the balance sheet.
Realised foreign exchange gains and losses and
unrealised losses are recognised in the profit and loss
account. Unrealised foreign exchange gains are not
recognised.
If there is an economic link between two transactions,
unrealised exchange differences are recognised at the
corresponding unrealised exchange loss.
Valuation of financial assets
Shares in affiliated undertakings are valued at
acquisition cost, which includes incidental expenses.
Receivables from affiliated companies are valued
at their nominal value, which includes incidental
expenses.
In the event of an impairment that, in the opinion of
the Board of Directors, is of a lasting nature, these
financial fixed assets are subject to value adjustments.
The aim of the latter is to give them the lowest value
that should be attributed to them on the balance
sheet date, as determined by the Board of Directors.
In order to determine the value adjustments that are
permanent at the balance sheet date, the Board of
Directors carries out the following analyses for each
investment on an individual basis:
1/ For investments listed on public markets, the
Board of Directors compares the net book value of
the investment with its shares in the market based on
the stock market price at the closing date. When the
market value is greater than or equal to the net book
value, the Board of Directors considers that no value
adjustment needs to be recorded at the closing date.
However, when the market value is lower than the net
book value, the Board of Directors tests the net book
value against the share in the revalued net assets of
the investment.
2/ If the net book value exceeds the market value or
the equity value for unlisted investments, the Board
of Directors compares the net book value with the
share held in the revalued net assets as well as in
the consolidated net assets (i.e. equity attributable
to owners of the parent company) if the subsidiary
prepares consolidated accounts.
If either the market or the equity value is greater than
or equal to the net book value of the investment, no
value adjustment is recognised.
3/ When both values are lower than the net book
value of the investment:
• for support companies (other than plantations
or industrial companies), the Board of Directors
records the value adjustment resulting from the
smaller difference between the net book value of
Company’s financial statements
Socfin
|
ANNUAL REPORT 2023
|
121
the investment and the share held in the revalued
net assets or in the consolidated net assets;
• for investments in plantations or industrial
companies, the Board of Directors makes a value
adjustment to adjust the carrying value to the
enterprise value which is calculated on the basis of
the discounted future cash flows available to the
shareholders. These discounted future cash flows
take into account the foreseeable development of
the business of the investments under test.
However, the Board of Directors may take other
factors into consideration., Particularly, in view of the
very long period of immaturity of young plantation, it
considers that the value adjustment is not permanent
for a plantation where more than half of the planted
area is not being used.
Loans to affiliated companies are subject to a value
adjustment in the event that the net book value test
by discounting future cash flows to shareholders does
not support the full repayment of the receivable.
These value adjustments are not maintained when
the reasons for which they were established cease to
exist.
Receivables
Receivables are recorded at their nominal value.
They are subject to value adjustments when their
recovery is compromised. These value adjustments
are not continued if the reason for which the value
adjustments were made are no longer applicable.
Liabilities
Debts are recorded at their reimbursement value.
When the amount to be repaid on the debts exceeds
the amount received, the difference is recorded to
the profit and loss account.
Geopolitical uncertainties
In February 2022, a number of countries (including
the US, UK and EU) imposed sanctions against certain
entities and individuals in Russia as a result of the
official recognition of the Donetsk People Republic and
Lugansk People Republic by the Russian Federation.
Announcements of potential additional sanctions were
made following military operations initiated by Russia
against Ukraine on 24 February 2022.
On 7 October 2023, Palestinian militant groups led by
Hamas launched a coordinated surprise offensive on
Israel resulting in more than 1,200 deaths, primarily
Israeli citizens. Following this attack, Israel declared
itself in a state of war for the first time since the Yom
Kippur War in 1973.
Due to the geopolitical tensions, since February 2022,
there has been a significant increase in volatility on
the securities and currency markets. The conflicts
have had a significant impact on the financial markets,
with many investors concerned about the risk of
further escalation and the ensuing impact on global
trade and economic growth.
Although the aforementioned aspects have not
significantly impacted the company’s operations nor
performance and going concern during 2023, the
Board of Directors continues to monitor the evolving
situation and its impact on the company’s financial
position and results.
Company’s financial statements
122
|
ANNUAL REPORT 2023
|
Socfin
Note 3. Financial fixed assets
Shares in affiliated undertakings Loans to affiliated undertakings Total
2023 2022 2023 2022 2023 2022
EUR EUR EUR EUR EUR EUR
Acquisition cost nominal value at
the beginning of the year
187,356,984.97 186,370,878.78 120,412.500.00 187,056,434.52 307,769,484.97 373,427,313.30
Increases
9,000,000.00 1,049,628.23 30,000.00 0.00 9,030,000.00 1,049,628.23
Decrease
0.00 -63,522.04 -40.000.000.00 -66,643,934.52 -41,000,000.00 -66,707,456.56
Acquisition cost nominal value at
the end of the year
196,356,984.97 187,356,984.97 80,442,500.00 120,412,500.00 276,799,484.97 307,769,484.97
Value adjustments at the beginning and
at the end of the year
0.00 0.00 0.00 0.00 0.00 0.00
Net book value at the end of the year
196,356,984.97 187,356,984.97 80,442,500.00 120,412,500.00 276,799,484.97 307,769,484.97
Information on movements during the year
During the year, the Company has participated in the capital increase of Management Associates S.A. for a total amount of EUR 9,000,000.
Information on companies in which the company holds at least 20% of the capital
Entity Country % held
Net book value
EUR Year end
Currencies
of the
annual
accounts
Net equity at
31/12/2023
Net result at
31/12/2023
Socfinaf (**) Luxembourg 64.64 137,565,946 31/12/2023 EUR 223,912,557 2,658,856
Socfinasia (**) Luxembourg 58.25 49,071,662 31/12/2023 EUR 424,074,295 48,129,963
Induservices (*) Luxembourg 35.00 35,000 31/12/2023 EUR 486,125 158,489
Management Associates (*) Luxembourg 30.00 9,637,500 31/12/2023 EUR 32,473,351 17,271
196,310,108
(*) Based on unaudited financial statements as at 31 December 2023.
(**) Based on audited financial statements as at 31 December 2023.
Valuation of shares in affiliated undertakings
As at 31 December 2023, the Board of Directors is of the opinion that there is no permanent value decrease for the shares in
affiliated undertakings.
Information and valuation of loans to affiliated undertakings
As at 31 December 2023, the loans to affiliated undertakings are mainly comprised of receivables from Socfinaf for a nominal amount
of EUR 80,000,000 (2022: EUR 120,000,000) and which bear a fixed interest rate of 6.25%. The maturity of the receivable is fixed on
10 November 2026. During the year, the company has received a reimbursement from Socfinaf of EUR 40,000,000.
As at 31 December 2023, the Board of Directors are of the opinion that these loans are recoverable as such, no impairment loss has
been accounted for.
Company’s financial statements
Socfin
|
ANNUAL REPORT 2023
|
123
Company’s financial statements
Note 4. Amounts owed by affiliated undertakings
The amounts owed by affiliated undertakings mainly consist of
receivables from the subsidiary Socfinde corresponding to the
cash pooling balance of EUR 5,885,387 (2022: EUR 1,914,036).
During the year, the company has received a reimbursement from
Socfinaf of EUR 13,615,803.
As at 31 December 2023, the Board of Directors is of the opinion
that the amounts are fully recoverable and as such, no impairment
has been accounted for.
Note 5. Equity
Issued
capital
EUR
Share
premium
EUR
Legal
reserve
EUR
Other
reserves
EUR
Retained
earnings
EUR
Profit for
the year
EUR
Interim
dividends
EUR
Situation as at 1 January 2022
24,779,510.00 501,846.51 2,477,951.00 57,277,681.15 102,447,638.68 10,068,154.41 -1,573,302.22
Allocation of the result for the 2021
financial year following decision of the
General Meeting
held on 31 May 2022:
• Retained earnings
628,341.08 -628,341.08
•
Dividends
-7,079,860.00
• Director’s fees
-786,651.11
• 2021 interim dividend
-1,573,302.22 1,573,302.22
Interim dividends as per decision of
the Board of Directors of 27 October
2022
-11,799,766.67
Financial year profit for 2022
33,793,761.44
Situation as at 31 December 2022
24,779,510.00 501,846.51 2,477,951.00 57,277,681.15 103,075,979.76 33,793,761.44 -11,799,766.67
Distribution of the result for the 2022
financial year following decision of the
General Meeting held on 30 May 2023:
• Retained earnings
14,127,483.66 -14,127,483.66
•
Dividends
-7,079,860.00
• Director’s fees
-786,651.11
• 2022 interim dividend
-11,799,766.67 11,799,766.67
Interim dividends as per decision of
the Board of Directors of 26 October
2023
-7,866,511.11
Financial year profit for 2023
38,275,879.44
Situation as at 31 December 2023
24,779,510.00 501,846.51 2,477,951.00 57,277,681.15 117,203,463.42 38,275,879.44 -7,866,511.11
Issued capital
As at 31 December 2023 and 2022, the issued and fully paid
capital is EUR 24,779,510 represented by 14,159,720 shares
without nominal value.
Share premium
As at 31 December 2023 and 2022, the share premium amounts
to EUR 501,846.
Legal reserve
The annual profit is subject to a levy of 5% to be allocated to a
legal reserve. This allocation ceases to be compulsory as soon as
the reserve reaches 10% of the capital. The legal reserve cannot
be distributed.
Company’s financial statements
124
|
ANNUAL REPORT 2023
|
Socfin
Company’s financial statements
Note 6. Amounts to affiliated undertakings
As at 31 December 2023, the amounts owed to
affiliated undertakings mainly consist of:
a) Becoming due and payable within one year :
- the remaining portion of a debt toward PNS
Ltd that has been reimbursed during the year
for 13,615,803. The remaining amount for the
year is mainly composed of the interests of
the EUR 50,000,000 loan due to Socfinasia of
EUR 900,000 (2022 : EUR 400,000)
b) Becoming due and payable after more than one
year:
- a debt to Socfinasia for a nominal amount of
EUR 50,000,000 (2022: EUR 100,000,000) and
which bear a fixed interest rate of 6%. This debt
is repayable early or at the latest on 10 November
2026. During the year, the company has reimbursed
an amount of EUR 50,000,000.
Note 7. Income from participating interests
2023 2022
EUR EUR
Dividends received
39,948,377 34,212,972
This amount corresponds to the dividend received from the affiliated undertakings (Note 3).
Note 8. Income from other investments and loans forming part of the fixed
assets
2023 2022
EUR EUR
Interest on related companies’ receivables
5,786,550 8,835,903
This amount corresponds to interest income received on the loans granted by affiliated undertakings (Note 3).
Note 9. Taxation
The company is subject to all taxes to which
Luxembourg commercial companies are subject to.
Based on the last filed tax return, the management
of the Company recognises that the Company has
EUR 10,515,211 of carried forward tax losses available
as at 31 December 2022 and estimates approximately
EUR 1,539,398 of additional tax losses for the current
period (FY 2023).
Regarding the portion of the aforementioned losses
that have been generated as from tax year 2017
(approximately EUR 8,131,536) that amount can be
carried forward for the seventeen years following the
tax year in which the losses arose.
Company’s financial statements
Socfin
|
ANNUAL REPORT 2023
|
125
Note 10. Remuneration of the Board of Directors
During the 2023 financial year, the remuneration of
the Board members amounted to EUR 7,188 (2022:
EUR 8,750) as attendance fees and EUR 1,573,302
(2022: EUR 1,966,628) as directors’ fees.
During 2023, no advances or loans were granted to the
Board members.
Note 11. Political and economic environment
The company holds interests in companies that
operate indirectly in Africa and South-East Asia.
Given the economic and political instability in these
African countries (Sierra Leone, Liberia, Côte d’Ivoire,
Ghana, Nigeria, Cameroon, São Tomé and Principe and
Democratic Republic of Congo) and South-East Asia
(Cambodia and Indonesia), these holdings are exposed
to political and economic fluctuations risks.
Note 12. Off-balance sheet commitments
As at 31 December 2023 and 2022, the Company had
no significant off-balance sheet commitments.
Note 13. Significant events after the year end
There are no significant post-closing events affecting
the Company.
126
|
ANNUAL REPORT 2023
|
Socfin
Glossary
CIF Rotterdam - Cost Insurance & Freight Rotterdam,
corresponds to:
- The cost of the good/oil;
- The insurance cost for the whole consignment right
from port of loading until arrived and delivered;
- Freight: the carrying cost from port of loading all the
way up to Rotterdam.
In other words, the seller pays for the goods,
transportation to the port of destination, and marine
insurance.
CONCESSION - Contract, signed with local authorities,
giving specific rights to control an area of land and for
the conduct of specific activities in that area, during
a defined period.
CPO - Crude Palm Oil is edible oil which is extracted
from the pulp of fruit of oil palm trees.
CPKO - Crude Palm Kernel Oil is the light crude oil,
extracted from the Oil Palm kernels, containing
mainly lauric acid.
DAP – Delivered At Place is an international commercial
term (Incoterm) that refers to the idea that the seller
takes on all the risks and costs of delivering goods to
an agreed-upon location.
DRY RUBBER - This is the weight of natural rubber
produced, determined at the end of the milling and
drying process. After tapping, liquid latex drips from
the rubber trees in the field, mostly harvested after
in-field coagulation. However, the “wet rubber” still
contains water and many other natural components
apart from the rubber particles. Natural rubber is
marketed as “dry rubber” – after processing – to be
used in numerous industrial value chains among which
the manufacturing of tyres is the most important.
EBIT - This abbreviation is defined as earnings before
the financial result and tax. It is the result of ordinary
business activities and is used to assess operational
profitability.
EBITDA - This abbreviation is defined as earnings
before financial result, tax, depreciation and
amortisation. This key figure is used to assess
operational profitability.
ESEF - European Single Electronic Format is the
electronic reporting format in which issuers whose
securities are admitted to trading on EU regulated
markets must prepare their annual financial reports to
facilitate accessibility, analysis and comparability of
annual financial reports.
EXW - Ex works is an Incoterm, in which a seller makes
a product directly available from the factory or place
of manufacture. The buyer of the product must cover
the transport costs.
FINISHED GOODS - Goods that have completed the
manufacturing process but have not yet been sold or
distributed to the end user (for example dry rubber,
crude palm oil, seeds, palm kernel oil, palm kernel
cake).
FOB - Free On Board is an Incoterm, thatmeans that
the seller is responsible for loading the purchased
goods onto the ship, and all costs associated. As soon
as the goods are safe aboard the vessel, the risk
transfers to the buyer, who assumes the responsibility
of the remainder of the transport.
FREE CASH FLOWS – Free cash flows are the sum of
cash flows arising from operating activities and cash
flows arising from investing activities. Also referred
to as cash flows before financing activities. Free cash
flows are used to assess financial performance.
GPSNR - Global Platform for Sustainable Natural
Rubber. GPSNR is an international, multistakeholder,
voluntary membership organisation, whose mission
is to lead improvements in the socioeconomic and
environmental performance of the natural rubber
value chain.
IAS - International Accounting Standards. Accounting
standards issued by the International Accounting
Standards Board (IASB), which have been replaced by
IFRS in 2001.
IFRS - International Financial Reporting Standards are
accounting rules for public companies, with the goal
of making company financial statements consistent,
transparent, and easily comparable around the
world. IFRS are issued by the IASB. IFRS include IAS
(older standards), the interpretations of the IFRS
Interpretations Committee or of the predecessor IFRIC
as well as the former SIC.
Glossary
Socfin
|
ANNUAL REPORT 2023
|
127
IRSG - International Rubber Study Group. It is an
inter-governmental organisation composed of rubber
producing and consuming stakeholders. Located in
Singapore, IRSG was established in 1944.
MARKET CAPITALISATION – The product of the number
of shares multiplied by the closing market price.
NET VALUE PER SHARE – Equity attributable to the
owners of the Parent at closing period, divided by
the number of shares. Allows readers of the financial
statements to compare easily the share price at
closing period with its value within the financial
statements. As an example, value as at 31 December
2023 is obtained by dividing EUR 425,338,285 (value
of Equity attributable to the owners of the Parent) by
14,159,720 (number of shares).
NON-CONTROLLING INTEREST - Equity in a subsidiary
not attributable, directly or indirectly, to a parent.
OPERATIONAL LIFE – Length of time during which a
tangible or intangible asset can be used economically
before breakdown. Operational life does not include
post-closure activities. As an example, rubber and
palm trees have an estimated operational life between
20 and 33 years.
OTHER COMPREHENSIVE INCOME - Items of income
and expense (including reclassification adjustments)
that are not recognised in profit or loss as required or
permitted by other IFRSs.
OWN PRODUCTION - Quantities of raw materials
(Fresh Fruit Bunches, wet rubber, …) milled that have
been harvested on own plantations managed by the
Group.
PRODUCTION-IN-PROGRESS - Inventory that has begun
the manufacturing process and is no longer included in
raw materials inventory, but is not yet a completed
product. In the financial statements, production in
progress is classified within current assets, with other
items of inventory.
RAW MATERIALS - Raw materials are the input goods
or inventory that a company needs to manufacture
its products (for example Fresh Fruit Bunches, wet
rubber, …).
RIGHT OF USE ASSET - Asset that represents the
lessee’s right to use an underlying asset over the
duration of the lease.
RSS3 - Ribbed Smoked Sheet is rubber coagulated from
high quality natural rubber. Rubber is then processed
into sheet, dried, smoked, and visually graded. RSS3
rubber sheets are used in the production of tyres,
tread carcass, footwear, …
SGX - Singapore Exchange is Singapore’s primary
asset exchange. The SGX lists stocks, bonds,
options contracts, foreign currency exchanges and
commodities, representing in 2021 the largest stock
market exchange in South-East Asia.
SEGMENTAL ASSETS / SEGMENTAL LIABILITIES -
Segmental assets and segmental liabilities are not
part of internal reporting, they are included to meet
the requirements of IFRS 8:
- Segmental assets include fixed assets, biological
assets, trade receivables, inventories, cash and cash
equivalents. They do not include any consolidation
nor IFRS adjustments;
- Segmental liabilities include only trade payables
and other payables. They do not include any
consolidation nor IFRS adjustments.
SMOKED SHEET - It is a type of crude natural rubber
in the form of brown sheets obtained by coagulating
latex with an acid, rolling it into sheets, and drying
it over open wood fires. It is the main raw material
for natural rubber products. Also called: ribbed and
smoked sheet.
SOFR - The Secured Overnight Financing Rate (SOFR)
is a broad measure of the cost of borrowing cash
overnight collateralised by United States Treasury
securities
SOPARFI - SOciété de PARticipations FInancières.
SOPARFIs are fully taxable ordinary commercial
companies, whose corporate purpose consists in
the holding of participations and related financing
activities.
Glossary
128
|
ANNUAL REPORT 2023
|
Socfin
SPPI - Solely Payments of Principal and Interest. It
is in the context of IFRS 9 one of the two required
conditions for classifying an instrument at amortised
cost. It specifies that the contractual terms of the
lending agreement gives rise on specified dates of
contractual cash flows that are either:
- repayments of the borrowed principal or,
- interest on the principal amount outstanding.
TAPPER - Agricultural worker trained and qualified to
“tap” a tree with a special knife. Trees are tapped at
regular interval (4-7 days), releasing the latex from
the latex vessels situated in the soft outer bark of the
tree.
THIRD PARTY PURCHASES - Business deal that involves
a person or entity other than a Group company.
Typically, third-party purchases are made with small
local growers.
TRADING ACTIVITIES – The activity of selling, buying
or exchanging goods and services in order to generate
profit. This commercial activity is mainly centralised
within Sogescol FR.
TSR20 - Technically Specified Rubber graded
corresponds to block rubber made by crashing, cleaning
and drying solid rubber. Major producing countries
have their own TSR standard (STR in Thailand, SIR in
Indonesia, …). TSR are graded according to a variety
of factors, including volatile matter, ash content,
color, viscosity, …