2023
ANNUAL REPORT
Socfinasia S.A.
2
|
ANNUAL REPORT 2023
|
Socfinasia
TABLE OF CONTENTS
Group profile 4
1. Overview of the Group 4
2. History 4
3. Group structure 5
4. Information on Socfinasia’s holdings 6
International market for rubber and palm oil 17
1. Rubber 17
2. Palm oil 20
Environment and social responsibility 23
Key figures 24
1. Activity indicators 24
2. Key figures from the consolidated income statement and consolidated statement of cash flows 25
3. Key figures in the consolidated statement of financial position 25
Stock market data 26
Financial highlights of the year 26
Corporate governance statement 27
1. Introduction 27
2. Corporate governance chart 27
3. Board of Directors 27
4. Committees of the Board of Directors 31
4.1 Audit Committee 31
4.2 Appointment and Remuneration Committee 31
5. Remuneration 31
6. Shareholding status 32
7. Financial calendar 32
8. External audit 32
9. Corporate, social and environmental responsibility 33
10. Other information 33
Statement of compliance 34
Consolidated management report 35
Auditor’s report on the consolidated financial statements 39
Consolidated financial statements 44
1. Consolidated statement of financial position 44
2. Consolidated income statement 46
3. Consolidated statement of comprehensive income 47
4. Consolidated statement of cash flows 48
5. Consolidated statement of changes in equity 49
6. Notes to the consolidated financial statements 50
Note 1. Overview and material accounting policies 50
Note 2. Subsidiaries and associates 61
Note 3. Leases 63
Note 4. Intangible assets 65
Note 5. Property, plant and equipment 66
Note 6. Biological assets 67
Note 7. Depreciation and impairment 68
Note 8. Impairment of assets 68
Note 9. Non-wholly owned subsidiaries in which non-controlling interests
G
are significant 70
Note 10. Investments in associates 71
Note 11. Financial assets at fair value through other comprehensive income
G
75
Note 12. Long-term advances 75
Note 13. Deferred taxes 75
Note 14. Current tax assets and liabilities 77
Note 15. Income tax expense 77
Socfinasia
|
ANNUAL REPORT 2023
|
3
TABLE OF CONTENTS
Note 16. Inventories 79
Note 17. Trade receivables (current assets) 80
Note 18. Other receivables (current assets) 80
Note 19. Cash and cash equivalents 80
Note 20. Share capital 81
Note 21. Reserve 81
Note 22. Pension obligations 82
Note 23. Financial debts 84
Note 24. Trade and other payables 87
Note 25. Financial instruments 88
Note 26. Staff costs and average number of staff 90
Note 27. Other financial income 90
Note 28. Financial expenses 91
Note 29. Net earnings per share 91
Note 30. Dividends and directors’ fees 91
Note 31. Information on related party 92
Note 32. Off balance sheet commitments 94
Note 33. Segment information 94
Note 34. Risk management 99
Note 35. Profit before interest, taxes, depreciation and amortisation 102
Note 36. Contingent liabilities 102
Note 37. Political and economic environment 104
Note 38. Events after the closing date 104
Note 39. Auditor’s fees 104
Company’s management report 105
Report on the audit of the financial statements 111
Company financial statements 115
1. Balance sheet as at 31 December 2023 115
2. Profit and loss account for the year ended 31 December 2023 117
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 121
Note 4. Amounts owed by affiliated undertakings 123
Note 5. Equity 124
Note 6. Other payables 125
Note 7. Income from participating interests 125
Note 8. Income from other investments and loans forming part of the fixed assets 125
Note 9. Taxation 125
Note 10. Remuneration of the Board of Directors 125
Note 11. Political and economic environment 126
Note 12. Off-balance sheet commitments 126
Note 13. Significant events after the year end 126
Glossary 127
4
|
ANNUAL REPORT 2023
|
Socfinasia
Portrait du GroupeGroup profile
1. Overview of the Group
with its registered address at 4 Avenue Guillaume,
L 1650 Luxembourg. It was incorporated on
20 November 1972 and is listed on the Stock Exchange
of Luxembourg.
Socfinasia’s principal activity is to manage a portfolio
of shares focused on the operation of more than 52,000
hectares of tropical palm oil and rubber plantations in
South-East Asia. As of 2023, Socfinasia employs 9,686
people and has achieved a consolidated turnover of
EUR 179 million over that same year.
2. History
• 20/11/1972 Incorporation of Socfinasia as a Luxembourg holding company through the contribution of shares
in PT Socfindo.
• 30/06/1973 Since its incorporation, Socfinasia has invested, amongst others, in Fininter (Belgium) and Socfinal
(Luxembourg).
• 23/01/1974 The shares of Socfinasia have been listed on the Stock Exchange of Luxembourg.
• 30/06/1975 The portfolio includes new investments: Socfin (Belgium), Plantations Nord Sumatra (Belgium) and
Selangor Plantations Cy (Malaysia).
• 30/06/1977 Socfinasia invests in Sennah Rubber Cy, New African Plantations Cy, la Banque d’Investissements
Privés and Socficom. It disposes of its stakes in Socfin (Belgium) and Socfinal.
• 04/12/1979 PT Socfindo increases its share capital through capitalisation of reserves. Free allotment of 1,166
shares in PT Atmindo.
• 31/12/1980 Acquisition of shares in Selangor Holding, a Luxembourgish company listed on the Stock Exchange
of Luxembourg.
• 24/04/1989 PT Socfindo increases its share capital through the capitalisation of the revaluation reserve of its
fixed tangible assets.
• 31/03/1996 Acquisition of shares in Intercultures, a Luxembourgish company listed on the Stock Exchange of
Luxembourg.
• 31/03/1997 Initially, Socfinasia increases its stake in its Indonesian subsidiaries: PT Socfindo and PT Atmindo.
Thereafter, Socfinasia incorporates Plantations Nord Sumatra Limited, to which it transferred its
Indonesian subsidiaries.
• 31/03/1999 Increase in the subscribed capital of Intercultures.
• 05/02/2000 Takeover bid/public exchange offer by Selangor Holding for Sennah Rubber Cy which will be
liquidated in August 2000.
• 01/04/2000 Increase in subscribed capital to EUR 25,062,500 and the accounting par to 1,002,500 shares.
• 26/06/2000 Takeover bid by Socfinasia on the shares of Selangor Holding which will be liquidated in May 2001.
• 17/10/2000 Change in financial year-end to 31 December.
• 31/12/2001 PNS Ltd has acquired 30% of PT Socfindo from the Indonesian state.
• 31/12/2006 Restructuring of the subsidiaries within the Socfinal Group, including the distribution of shares of
Intercultures by Socfinasia (spin-off) and repositioning of the operational companies within the
Group.
• 31/12/2007 Incorporation of Socfin-KCD (Cambodia).
• 17/03/2010 Disposal of Socfinaf Cy (Kenya).
• 10/01/2011 Extraordinary General Meeting which ratified abandon of the holding 29 status.
• 01/07/2011 Share split by 20.
• 13/08/2013 Socfinasia acquires, through its subsidiary PNS Ltd, 90% of Coviphama Co, a company incorporated
under the Cambodian Law, benefitting from a new grant of 5,300 hectares.
• 30/07/2015 Acquisition of shares in Socfin-KCD to increase the percentage holding to 100%.
Group profile
Socfinasia
|
ANNUAL REPORT 2023
|
5
3. Group structure
Holding companiesHolding companies
SOCFIN
Luxembourg
SOCFIN
Luxembourg
SOCFINDE
Luxembourg
SOCFINDE
Luxembourg
58%
SOCFINASIA
Luxembourg
SOCFINASIA
Luxembourg
PNS LTD
Luxembourg
PNS LTD
Luxembourg
100%100%
100%
100%
100%90%
80%
48%
35%
15%
50%
50%
50%
50%
50%
35%
19%
10%
50%
50%
30%
10%
Group profile
6
|
ANNUAL REPORT 2023
|
Socfinasia
4. Information on Socfinasia’s holdings
Portfolio Number of shares Direct %
Cambodia
Socfin-KCD Co
2,000 100.00%
Luxembourg
PNS Ltd 27,780,000
100.00%
Socfinde 199,790 79.92%
Management Associates 1,500 15.00%
Terrasia 4,781 47.81%
Induservices 3,500 35.00%
Belgium
Centrages 7,500 50.00%
Immobilière de la Pépinière 3,333 50.00%
Socfinco 8,750 50.00%
Switzerland
Sogescol FR 2,650 50.00%
Socfinco FR 650 50.00%
Sodimex FR 675 50.00%
Induservices FR 700 50.00%
The following pages contain a summary of the activity
and comments on the financial information for the
past two financial years in which Socfinasia holds a
direct or indirect participation.
Unless indicated otherwise, equity includes capital,
reserves and the results brought forward before
allocation of current year results.
Corporate data refers to consolidated data.
The balance sheet figures are presented in the
functional currency of the respective entities.
Group profile
Socfinasia
|
ANNUAL REPORT 2023
|
7
PT SOCFIN INDONESIA “SOCFINDO”
PT Socfindo is an Indonesian company which manages oil palm and rubber plantations in North Sumatra, Indonesia.
Key data
Area (hectares) Planted area
As at 31 December 2023 Mature Immature Total
Rubber
5,232 1,090 6,322
Palm
34,511 4,988 39,499
TOTAL
39,743 6,078 45,821
Concessions
G
(terms having a
G
are explained part “Glossary” at the end of the annual report): 47,532 ha
Permanent staff as at 31 December 2023: 8,559
Production and turnover
As at 31 December 2023 2022
Production (tons)
Rubber
6,397 6,896
Palm oil
188,527 179,516
Seeds (thousands)
9,190 13,189
Turnover (EUR 000) 166,006 193,796
Result (EUR 000) 52,960 71,954
Average selling price (EUR / kg)
Rubber 1.54 2.05
Palm oil 0.8 0.95
Seeds (EUR / 1,000) 704 564
Average rate EUR / IDR
16,471 15,648
Closing rate EUR / IDR
17,140 16,713
Key figures (IDR million)
As at 31 December 2023 2022
Non-current assets 1,627,575 1,526,371
Current assets 597,901 609,115
Shareholder’s Equity (*) 1,189,091 994,045
Debt, provisions and third parties (*) 1,036,385 1,141,440
Profit / (loss) for the period 872,310 1,125,920
Dividend per share (USD) (**) (**)
Interim dividend per share (USD) 300 400
PNS Ltd’s stake (%) 89.98 89.98
(*) After interim dividend, before profit allocation.
(**) Not known to-date.
Group profile
8
|
ANNUAL REPORT 2023
|
Socfinasia
PT SOCFIN INDONESIA “SOCFINDO”
STATEMENT OF FINANCIAL POSITION
As at 31 December 2023 and 2022
(Expressed in IDR 000, unless otherwise stated)
Exchange rate: EUR 1 = IDR 17,140 16,713
Average rate: EUR 1 = IDR 16,471 15,648
ASSETS 31/12/2023 31/12/2022
CURRENT ASSETS
Cash and cash equivalents 170,239,908 185,733,528
Receivables
Trade receivables
Amount from related parties 15,425,141 20,381,992
Amount due from customers 10,395,468 21,720,236
Trade receivables – invoices to send 9,569,212 0
Tax debtors 11,537,415 0
Other receivables 22,252,523 4,986,085
Inventories 212,841,578 207,972,126
Advance payment on order 0 8,192,643
Deferred and accruals 145,639,562 160,128,112
TOTAL CURRENT ASSETS 597,900,806 609,114,722
NON-CURRENT ASSETS
Fixed assets 1,618,686,580 1,521,296,612
Rights-of-use of assets 1,470,849 2,941,698
Deferred tax assets 7,406,744 2,121,243
Other 11,100 11,100
TOTAL NON-CURRENT ASSETS 1,627,575,273 1,526,370,652
TOTAL ASSETS 2,225,476,080 2,135,485,374
Group profile
Socfinasia
|
ANNUAL REPORT 2023
|
9
LIABILITIES AND EQUITY 31/12/2023 31/12/2022
LIABILITIES
CURRENT LIABILITIES
Amount payable to suppliers 48,703,174 32,906,833
Invoices to be received
42,584,997 0
Other payables
Amount due to third parties 12,085,274 12,019,642
Amount due to related parties 1,680,718 1,082,630
Accruals 285,793,275 324,622,563
Advances and payments on work in progress 24,075,765 27,449,274
Employee benefit obligations 4,018,788 3,433,799
Current tax liabilities 25,556,956 166,607,114
TOTAL CURRENT LIABILITIES
444,498,949 568,121,855
NON-CURRENT LIABILITIES
Employee benefit obligations 591,886,519 573,318,210
TOTAL LIABILITIES
1,036,385,468 1,141,440,065
Equity
Share capital
Type A 2,385 2,385
Type B 265 265
Type C 7,947,350 7,947,350
Type D 34,300,000 34,300,000
Total share capital
42,250,000 42,250,000
Share premium 3,670,500 3,670,500
Retained earnings
Allocated to the general reserve 270,860,290 -177,794,840
Retained earnings not allocated 872,309,822 1,125,919,650
TOTAL EQUITY
1,189,090,612 994,045,310
TOTAL LIABILITIES AND EQUITY 2,225,476,080 2,135,485,374
Group profile
10
|
ANNUAL REPORT 2023
|
Socfinasia
STATEMENT OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
G
As at 31 December 2023 and 2022
(Expressed in IDR 000, unless otherwise stated)
2023 2022
Revenue 2,734,321,376 3,011,660,868
Cost of sales -1,192,582,816 -1,050,595,306
GROSS PROFIT 1,541,738,560 1,961,065,562
Selling expenses -59,591,271 -48,099,014
General and administrative overheads (*) -415,742,621 -494,204,078
Other income 85,972,560 86,128,668
Other expenses -17,563,555 -47,880,050
Gain / (loss) arising from change in fair value of biological assets -14,865,352 -40,755,194
OPERATING PROFIT 1,119,948,321 1,416,255,894
Finance Income 7,751,179 7,407,886
PROFIT BEFORE TAX 1,127,699,500 1,423,663,780
Income tax expense -247,629,294 -316,637,933
Profit / (loss) for the period 880,070,206 1,107,025,847
Comprehensive income
Revaluation of post-employment benefits -7,760,384 18,893,803
TOTAL COMPREHENSIVE INCOME 872,309,822 1,125,919,650
(*) These amounts include emoluments paid to the directors of PT Socfindo who are members of the Board of Directors of
Socfinasia (2023 = IDR 64,787,211,746 and 2022 = 135,314,429,990).
Group profile
Socfinasia
|
ANNUAL REPORT 2023
|
11
SOCFIN-KCD Co Ltd
Share capital: KHR 160,000,000,000.
Socfin-KCD is a Cambodian company involved in the production of rubber.
Key data
Area (hectares) Planted area
As at 31 December 2023 Mature Immature Total
Rubber
3,662 30 3,692
Concessions
G
: 6,659 ha (including subsidiaries)
Permanent staff as at 31 December 2023: 816
Production and turnover
As at 31 December 2023 2022
Production (tons)
Rubber
8,853 6,018
Turnover (EUR 000)
10,777 8,164
Result (EUR 000)
576 -1,402
Average selling price (EUR / kg)
Rubber
1.22 1.36
Average rate EUR / USD
1.08 1.05
Closing rate EUR / USD
1.10 1.07
Key figures (USD 000)
As at 31 December 2023 2022
Fixed assets
47,648 49,833
Current assets
4,170 3,475
Equity (*)
32,573 31,950
Borrowing, provisions and third-parties (*)
19,245 21,358
Profit / (loss) for the period
624 -1,469
Socfinasia’s holding (%)
100.00 100.00
(*) Before profit allocation.
Group profile
12
|
ANNUAL REPORT 2023
|
Socfinasia
COVIPHAMA Co Ltd
Share capital: KHR 8,640,000,000.
Coviphama is a Cambodian company involved in the production of rubber.
Key data
Area (hectares) Planted area
As at 31 December 2023 Mature Immature Total
Rubber
2,532 695 3,227
Concessions
G
: 5,345 hectares
Permanent staff as at 31 December 2023: 311
2023 2022
Average rate EUR / USD
1.08 1.05
Closing rate EUR / USD 1.10 1.07
Key figures (USD 000)
As at 31 December 2023 2022
Fixed assets 22,542 22,710
Current assets 1,083 572
Equity -2,174 -1,603
Borrowing, provisions and third-parties 25,799 24,884
Profit / (loss) for the period -571 -1,156
Socfinasia’s holding (%) 100.00 100.00
Group profile
Socfinasia
|
ANNUAL REPORT 2023
|
13
PLANTATION NORD-SUMATRA “PNS” Ltd S.A.
Share capital: USD 260,084,774.
PNS Ltd’s is a holding company whose principal assets are its controlling interest of 89.98% in PT Socfindo, a 100%
investment in Coviphama Co as well as a receivable from the latter.
2023 2022
Average rate EUR / USD
1.08 1.05
Closing rate EUR / USD
1.10 1.07
Key figures (USD 000)
As at 31 December 2023 2022
Fixed assets
307,871 306,521
Current assets
816 37,660
Equity (*)
308,686 313,879
Borrowing, provisions and third-parties (*)
1 30,302
Profit / (loss) for the period
35,921 64,637
Distribution
41,114 61,116
Socfinasia’s holding (%)
100.00 100.00
(*) Before profit allocation.
Group profile
14
|
ANNUAL REPORT 2023
|
Socfinasia
SOCFINDE S.A.
Share capital: EUR 1,250,000.
Socfinde is a Luxembourgish holding company.
Profit for the year ended on 31 December 2023 is EUR 644,758. The Board of Directors will not propose any
dividend distribution at the Annual General Meeting.
Key figures (EUR 000)
As at 31 December 2023 2022
Fixed assets
2,992 9,962
Current assets
107,749 47,412
Equity
6,668 6,023
Borrowing, provisions and third-parties
104,073 51,350
Profit / (loss) for the period
645 140
Socfinasia’s holding (%)
79.92 79.92
Group profile
Socfinasia
|
ANNUAL REPORT 2023
|
15
SOGESCOL FR S.A.
Share capital: CHF 5,300,000.
Sogescol FR is a Swiss company that trades in rubber and palm oil.
Profit for the year that ended on 31 December 2023 amounted to USD 6,705,434. The Board of Directors will
propose a dividend distribution of USD 8,000,000 at the Annual General Meeting.
2023 2022
Average rate EUR / USD
1.08 1.05
Closing rate EUR / USD
1.10 1.07
Key figures (USD 000)
As at 31 December 2023 2022
Fixed assets
4,031 773
Current assets
49,001 50,991
Equity (*)
16,660 17,955
Borrowing, provisions and third-parties (*)
36,372 33,809
Profit / (loss) for the period
6,705 8,865
Distribution
8,000 8,000
Dividend per share (USD)
1,509 1,509
Socfinasia’s holding (%)
50.00 50.00
(*) Before profit allocation.
Group profile
16
|
ANNUAL REPORT 2023
|
Socfinasia
SOCFINCO FR
Capital: CHF 1,300,000.
Socfinco FR is a Swiss company that provides services, studies and management of agro-industrial plantations.
Socfinco FR covers the agro-industrial sector of palm oil and rubber.
The profit of the year that ended on 31 December 2023 is EUR 6,488,998. The Board of Directors will propose a
dividend distribution of EUR 6,000,000 at the Annual General Meeting.
Key Figures (EUR 000)
As at 31 December 2023 2022
Fixed assets
5,444 4,309
Current assets
19,703 22,133
Equity (*)
14,921 16,432
Borrowing, provisions and third parties (*)
10,225 10,010
Sales and services
26,709 30,293
Profit / (loss) for the period
6,489 8,834
Distribution
6,000 8,000
Dividend per share (EUR)
4,615 6,154
Socfinasia’s holding (%)
50.00 50.00
(*) Before profit allocation.
Socfinasia
|
ANNUAL REPORT 2023
|
17
International market for rubber and palm oil
1. Rubber
SGX – NATURAL RUBBER – 5 years +
SGX – NATURAL RUBBER – 1 year +
$ct/Kg
50
100
150
200
250
300
50
100
150
200
250
300
RSS3
TSR20
$ct/Kg
100
120
140
160
180
200
220
100
120
140
160
180
200
220
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
18
|
ANNUAL REPORT 2023
|
Socfinasia
The international market in 2023
The average natural rubber price (TSR20
G
1st position
on SGX
G
) 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
Socfinasia
|
ANNUAL REPORT 2023
|
19
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
1st 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
20
|
ANNUAL REPORT 2023
|
Socfinasia
2. Palm oil
CIF ROTTERDAM – PALM OILS – 5 years +
CIF ROTTERDAM – PALM OILS – 1 year +
$/Mton
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
CPO
CPKO
$/Mton
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
500
600
700
800
900
1,000
1,100
1,200
1,300
500
600
700
800
900
1,000
1,100
1,200
1,300
CPO
CPKO
International market for rubber and palm oil
Socfinasia
|
ANNUAL REPORT 2023
|
21
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 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.
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.
International market for rubber and palm oil
22
|
ANNUAL REPORT 2023
|
Socfinasia
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.
Socfinasia
|
ANNUAL REPORT 2023
|
23
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.
24
|
ANNUAL REPORT 2023
|
Socfinasia
Key figures
1. Activity indicators
Area (hectares) Rubber Palm
As at 31 December 2023
Immatures (by year of planting)
2023 244 1,979
2022 167 1,724
2021 120 1,286
2020 189 0
2019 155 0
2018 215 0
2015 609 0
2014 74 0
2012 3 0
2011 38 0
2010 2 0
Total immatures
1,816 4,989
Young (from 6 to 11 years)
2,900 (from 3 to 7 years) 7,521
Prime (from 12 to 22 years)
8,290 (from 8 to 18 years) 11,644
Old (above 22 years)
236 (above 18 years) 15,346
Total in production
11,426 34,511
TOTAL
13,243 39,499
Area (hectares) 2023 2022 2021 2020 2019
Palm
39,499 39,279 39,089 38,727 38,447
Rubber
13,243 13,523 13,886 14,414 14,829
TOTAL
52,742 52,802 52,975 53,141 53,276
Production 2023 2022 2021 2020 2019
Palm Oil (tons)
Own production
G
188,527 179,516 180,584 182,577 189,462
Rubber (tons)
Own production
G
15,250 12,914 15,430 15,110 15,123
Seeds (thousands)
Own production
G
9,190 13,189 11,668 8,042 6,308
Key figures
Socfinasia
|
ANNUAL REPORT 2023
|
25
Turnover (EUR million) 2023 2022 2021 2020 2019
Palm
151 171 141 105 99
Rubber
21 22 21 18 19
Other agricultural products
7 7 5 4 4
Other
1 1 1 0 0
TOTAL
179 202 168 127 122
Staff 2023 2022 2021 2020 2019
Average workforce
9,686 9,595 10,168 10,363 10,567
2. Key figures from the consolidated income statement and consolidated
statement of cash flows
(EUR million) 2023 2022 2021 2020 2019
Turnover
179 202 168 127 122
Operating income
62 56 73 34 21
Profit / (loss) for the period attributable to the Group
46 48 57 16 14
Net cash flows from operating activities
63 91 69 36 25
Free cash flows
G
122 152 60 25 12
3. Key figures in the consolidated statement of financial position
(EUR million) 2023 2022 2021 2020 2019
Bearer biological assets
92 90 115 107 117
Other non-current assets
126 183 256 154 87
Current assets
146 145 115 75 143
Total equity
256 280 296 247 255
Non-current liabilities
39 40 121 37 45
Current liabilities
69 99 70 52 47
26
|
ANNUAL REPORT 2023
|
Socfinasia
Stock market data
(EUR) 2023 2022 2021 2020 2019
Number of shares
19,594,260 19,594,260 19,594,260 19,594,260 19,594,260
Equity attributable to the owners of the
Company
247,910,360 273,585,223 289,258,777 241,466,670 247,709,358
Undiluted net profit per share
2.35 2.45 2.93 0.84 0.73
Dividend per share
4.00 3.50 1.40 0.80 0.80
Share price
Minimum
14.70 14.20 13.10 11.10 11.70
Maximum
17.20 18.80 17.80 17.80 16.40
Closing
15.40 16.50 14.30 14.50 16.30
Market capitalisation
G
301,751,604 323,305,290 280,197,918 284,116,770 319,386,438
Dividend paid / net profit attributable to the
owners of the Company
170.00% 143.03% 47.78% 95.36% 109.27%
Dividends / market capitalisation
G
25.97% 21.21% 9.79% 5.52% 4.91%
Market price / undiluted net profit per share
6.55 6.74 4.88 17.28 22.26
Financial highlights of the year
No material events occurred during the financial period.
Socfinasia
|
ANNUAL REPORT 2023
|
27
1. Introduction
Socfinasia 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 1980 AGO 2027
Mr. Vincent Bolloré French 1952 Director
(a)
AGE 1990 AGO 2029
Mr. Cyrille Bolloré French 1985 Director
(a)
AGO 2019 AGO 2025
Administration and Finance Corporation
“AFICO” represented by Régis Helsmoortel
Belgian 1961 Director
(b)
AGO 1997 AGO 2028
Mr. François Fabri Belgian 1984 Director
(b)
AGO 2014 AGO 2026
Mr. Philippe Fabri Belgian 1988 Director
(b)
AGO 2018 AGO 2024
Mrs. Valérie Hortefeux French 1967 Director
(c)
AGO 2019 AGO 2025
(a)
Non-Executive non-independent Director
(b)
Executive non-independent Director
(c)
Independent Director
The mandate of Mr. Philippe 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.
Corporate governance statement
28
|
ANNUAL REPORT 2023
|
Socfinasia
Corporate governance statement
Other mandates held by the directors in listed companies
Hubert Fabri
Chairman
Positions and offices held in Luxembourg 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 Luxembourg companies
• Director of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia.
Positions and offices held in foreign companies
• Chairman 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 Luxembourg companies
• Director of Société Financière des Caoutchoucs “Socfin” and Socfinasia;
• Permanent representative of Bolloré Participations SE on the Board 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
Socfinasia
|
ANNUAL REPORT 2023
|
29
Administration and Finance Corporation “AFICO”
Director
Positions and offices held in Luxembourg companies
• Director of Socfinasia.
Positions and offices held in foreign companies
• Director of Société des Caoutchoucs du Grand Bereby “SOGB”, Société Industrielle et Financière de l’Artois
and Société Camerounaise de Palmeraies “Socapalm”.
François Fabri
Director
Positions and offices held in Luxembourg 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
Director
Positions and offices held in Luxembourg 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”.
Valérie Hortefeux
Director
Positions and offices held in Luxembourg companies
• Director of Socfinasia.
Positions and offices held in foreign companies
• Director of Mediobanca and Compagnie de l’Odet.
Corporate governance statement
30
|
ANNUAL REPORT 2023
|
Socfinasia
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 of
shareholders 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.
Activity report of the Board of Directors
Number of meetings
There are at least two meetings for the year-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: 96%
- 2022: 95%
- 2021: 98%
- 2020: 100%
- 2019: 91%
Corporate governance statement
Socfinasia
|
ANNUAL REPORT 2023
|
31
4. Committees of the Board of Directors
4.1 Audit Committee
The Committee consists of three members, of which
2 are independent 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 2023 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:
• Mrs. Valérie Hortefeux (Independent
Member) - Chairperson
• Mr. Frédéric Lemaire (Independent Member)
• 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 assists 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 Socfinasia. 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.
5. Remuneration
The remuneration allocated to the members of the
Board of Directors of Socfinasia for the financial
year 2023 amounts to EUR 11,674,417 compared to
EUR 15,278,115 in 2022.
The Directors of Socfinasia did not receive any other
payment in shares (stock options).
Corporate governance statement
32
|
ANNUAL REPORT 2023
|
Socfinasia
6. Shareholding status
Shareholder
Number of shares held =
Number of voting rights
Percentage
holding
Date of
notification
Socfin
L-1650 Luxembourg
11,324,179 57.79 01/02/2017
Bolloré Participations
F-29500 Ergué Gaberic
200 0.001 22/10/2018
Bolloré
F-29500 Ergué Gaberic
3,358,100 17.138 22/10/2018
Compagnie du Cambodge
F-92800 Puteaux
1,002,500 5.116 22/10/2018
Total Bolloré interests (direct and indirect)
4,360,800 22.255
7. Financial calendar
29 May 2024 Annual General Meeting at 11.00 am
14 June 2024 Payment of the balance of dividend for 2023 (coupon number 84)
End of September 2024 Half year stand alone and consolidated results at 30 June 2024
Mid-November 2024 Interim Management statement for 3
rd
quarter of 2024
End of March 2025 Annual stand alone results at 31 December 2024
Mid-April 2025 Consolidated annual results at 31 December 2024
Mid-May 2025 Interim Management statement for the 1
st
quarter of 2025
28 May 2025 Annual General Meeting at 11.00 am
The Company’s results are published on the Luxembourg Stock Exchange website www.bourse.lu and on the
Company’s website 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 amounted to EUR 375,814 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
consulting work or other non-audit services have been
performed by those companies in 2023.
Corporate governance statement
Socfinasia
|
ANNUAL REPORT 2023
|
33
9. Corporate, social and environmental 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 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 kept continuously up to
date. The persons concerned were informed of their
inclusion on this list.
34
|
ANNUAL REPORT 2023
|
Socfinasia
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 that ended on 31 December 2023, give a
true and fair view of the assets and liabilities, the
financial position and the profit or loss of Socfinasia
and of all the entities included in consolidation,
and
(b) the management report presents the following
information in a fairly 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.
Socfinasia
|
ANNUAL REPORT 2023
|
35
Portrait du GroupeConsolidated 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 Socfinasia,
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
have been prepared in accordance with International
Financial Reporting Standards or IFRS
G
(terms having a
G
are explained part “Glossary” at the end of the annual
report) as adopted by the European Union. Socfinasia (the
Group) adopted IFRS
G
standards for the first time in 2005,
and implemented all the standards applicable to the
Group as at 31 December 2023 have been implemented.
Consolidated results
For the 2023 financial year, the result attributable to
the Group amounted to EUR 46.1 million compared to
EUR 47.9 million in 2022. This resulted in earnings per
share attributable to the Group of EUR 2.35 compared to
EUR 2.45 in 2022.
The consolidated revenue amounted to EUR 178.5 million
in 2023 compared to EUR 202.0 million in 2022, thus a
decrease of EUR 23.5 million. This decrease in revenue
was mainly due to a fall in the price (EUR -23.9 million),
and the variation of the Indonesian Rupiah versus the
Euro (EUR -9.2 million), whereas quantities sold during
the period increased (EUR +12.0 million).
The operating profit increased to EUR 62.0 million
compared to EUR 55.7 million in 2022. As a reminder, the
fixed assets were subject to a non-recurring impairment
of EUR 27.3 million in 2022.
Other financial income decreased to EUR 12.1 million
compared to EUR 26.8 million in 2022 and consisted
mainly of EUR 4.6 million of interest on long-term
advances to Socfin and interest on short-term deposits
for EUR 4.3 million.
Financial expenses amounted to EUR 7.5 million
compared to EUR 8.8 million in 2022 and consisted mainly
of foreign exchange losses for EUR 5.7 million.
Furthermore, the tax expense decreased, with income
taxes amounting to EUR 20.1 million compared to
EUR 28.3 million in 2022.
Profit for the year from associates attributable to
the Group decreased to EUR 5.9 million compared to
EUR 10.8 million in 2022.
Consolidated statement of financial position
Socfinasia’s assets consist of:
- non-current assets of EUR 217.6 million compared
to EUR 273.1 million in 2022, a decrease of
EUR 55.6 million mainly due to a decrease in long-term
advances towards Socfin of EUR 50.0 million and in
other non-current assets of EUR 7.0 million;
- current assets for EUR 145.8 million compared to
EUR 145.4 million in 2022, mainly linked to the
decrease in other receivables for EUR 18.5 million
and to the increase in cash and cash equivalents of
EUR 19.9 million.
The shareholders’ equity attributable to the
Group amounted to EUR 247.9 million compared
to EUR 273.6 million in 2022. The decrease in the
shareholders’ equity of EUR -25.7 million is mainly due
to the profit for the period (EUR +46.1 million) and to
the allocation of the net results (EUR -68.6 million, final
dividend 2022 and interim dividend 2023 included).
Based on the consolidated shareholders’ equity, the
net value per share
G
attributable to the Group, before
the distribution of the balance of the dividend, was
EUR 12.65 compared to EUR 13.96 a year earlier. As at
31 December 2023, the share price stood at EUR 15.40.
Current and non-current liabilities decreased to
EUR 107.8 million compared to EUR 138.6 million in
the previous year. The other payables increased at
EUR 59.7 million compared to EUR 54.8 million in the
previous year, whereas financial debts decreased at
EUR 0 million compared to EUR 27.9 million in the
previous year.
Statement of compliance
36
|
ANNUAL REPORT 2023
|
Socfinasia
Consolidated cash flow
As at 31 December 2023, cash and cash equivalents
amounted to EUR 114.6 million, an increase of
EUR 19.9 million for the period compared to an increase
of EUR 21.2 million in the previous financial year.
Net cash flows from operating activities amount to
EUR 62.8 million in 2023 (EUR 91.3 million in 2022)
and cash flows from operating activities amount to
EUR 85.7 million compared to EUR 107.9 million during
the previous financial year.
Cash flows from investing activities show a net inflow,
amounting to EUR 58.9 million compared to a net
inflow of EUR 60.9 million in 2022, due to the partial
reimbursement of the long-term advance from Socfin.
Cash flows from financing activities amounted to
EUR 101.3 million (EUR 132.0 million in 2022) of which
EUR 72.7 million of dividends (EUR 66.3 million in
2022) and EUR 27.5 million repayment of borrowings.
2. Financial instruments
The financial risk management policies are described in
the notes to the consolidated financial statements of
the Company (see notes 23 and 34).
3. Outlook 2024
The results for the next financial year will largely
depend on factors which are external to the
management of the Group, such as the political
and economic conditions in the countries where the
subsidiaries are established, the changes in the price
of rubber and palm oil, and the evolution 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 operating
in South-East Asia.
Given the economic and political instability of some
of these countries, these investments present a risk in
terms of exposure to political and economic changes.
Geopolitical uncertainties
In February 2022, a number of countries (including
the US, UK and EU) enforced 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.
Following the military operations initiated by Russia
against Ukraine on 24 February 2022, potential
additional sanctions were announced.
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 neither the company’s operations nor its
performance and going concern have been significantly
impacted by the above in 2023, the Board of Directors
continues to monitor the evolving situation and the
possible effects on the financial position and results
of the company.
Statement of compliance
Socfinasia
|
ANNUAL REPORT 2023
|
37
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 carry out/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 independent/
autonomous recruiting processes, the harmonisation of
all 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 the investments.
Statement of compliance
38
|
ANNUAL REPORT 2023
|
Socfinasia
Financial reporting process
The financial department organises, supervises
and controls the reporting of monthly accounting,
budgetary and financial information. It distributes
condensed reports for use 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
annually 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’
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
Socfinasia
|
ANNUAL REPORT 2023
|
39
Portrait du GroupeAuditor’s report on the consolidated financial statements
To the Shareholders
SOCFINASIA 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 Socfinasia 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 91.8 million out
of total assets of EUR 363.4 million.
The Group owns biological assets in Asia. 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 8 “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
Auditor’s report on the consolidated financial statements
40
|
ANNUAL REPORT 2023
|
Socfinasia
Auditor’s report on the consolidated financial statements
of the biological assets and thus determines the
impairment loss or the reversal of impairment to be
recognised, if any.
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;
Auditor’s report on the consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
41
- 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.
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,
Auditor’s report on the consolidated financial statements
42
|
ANNUAL REPORT 2023
|
Socfinasia
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 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 27 to 33 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
Auditor’s report on the consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
43
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.
In our opinion, the consolidated financial statements
of the Company as at 31 December 2023, identified
as Socfinasia 2023 Annual Report.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
Luxembourg
44
|
ANNUAL REPORT 2023
|
Socfinasia
Portrait du GroupeConsolidated financial statements
1. Consolidated statement of financial position
31/12/2023 31/12/2022
ASSETS Note EUR EUR
Non-Current Assets
Right-of-use assets
3
Intangible assets
4
Property, plant and equipment
5
Biological assets
6
Investments in associates
10
Financial assets at fair value through other comprehensive
income
G
11
Long-term advances
12
Deferred tax assets
13
Other non-current assets
Current Assets
Inventories
16
Current biological assets
Trade receivables
17
Other receivables
18
Current tax assets
14
Cash and cash equivalents
19
TOTAL ASSETS 363,377,734 418,554,755
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
45
1. Consolidated statement of financial position
31/12/2023 31/12/2022
ASSETS Note EUR EUR
Non-Current Assets
Right-of-use assets
3
2,693,850 1,866,143
Intangible assets
4
301,923 237,776
Property, plant and equipment
5
39,209,888 40,992,845
Biological assets
6
91,842,656 90,355,051
Investments in associates
10
22,687,671 25,588,659
Financial assets at fair value through other comprehensive
income
G
11
5,231,277 773,528
Long-term advances
12
50,500,175 100,503,325
Deferred tax assets
13
5,105,504 5,817,338
Other non-current assets
0 7,000,000
217,572,944 273,134,665
Current Assets
Inventories
16
16,916,698 15,945,854
Current biological assets
1,386,059 1,684,003
Trade receivables
17
2,259,161 3,141,096
Other receivables
18
9,924,598 28,426,558
Current tax assets
14
743,616 1,574,532
Cash and cash equivalents
19
114,574,658 94,648,047
145,804,790 145,420,090
TOTAL ASSETS 363,377,734 418,554,755
The accompanying notes are an integral part of these consolidated financial statements.
31/12/2023 31/12/2022
EQUITY AND LIABILITIES Note EUR EUR
Equity attributable to the owners of the Parent
Share capital
20 24,492,825 24,492,825
Legal reserve
21 2,449,283 2,449,283
Consolidated reserves
Translation reserves
-125,025,089 -122,604,832
Profit / (loss) for the period
Non-controlling interests
G
9 7,663,646 6,404,183
Total Equity
Non-Current Liabilities
Deferred tax liabilities
13 3,626,925 4,856,278
Employee benefits obligations
22 34,533,436 34,304,488
Long-term debt, net of current portion
23 0 9,375,586
Long-term lease liabilities
3 356,638 397,717
Current Liabilities
Short-term debt and current portion of long-term debt
23 0 18,522,296
Short-term lease liabilities
3 27,258 28,105
Trade payables
24 7,345,213 4,333,217
Current tax liabilities
14 2,197,336 11,928,558
Other payables
24 59,716,921 54,819,105
TOTAL EQUITY AND LIABILITIES 363,377,734 418,554,755
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
46
|
ANNUAL REPORT 2023
|
Socfinasia
2. Consolidated income statement
2023 2022
Note EUR EUR
Revenue
33 178,523,977 201,959,951
Change in inventories of finished products and work in progress
-704,274 -772,075
Other operational income
Raw materials
G
and consumables used
33 -23,405,777 -18,516,134
Other expenses
33 -17,110,218 -14,928,608
Staff costs
26 -65,035,465 -73,053,902
Depreciation and impairment expense
7 -10,799,732 -37,867,992
Other operating expenses
33
-1,028,843 -4,843,681
Operating profit / (loss)
Other financial income
27 12,105,421 26,794,435
Gain on disposals
Loss on disposals
-1,023,704 -301,923
Financial expenses
28 -7,542,460 -8,794,505
Profit / (loss) before taxes
Income tax expense
15 -20,108,323 -28,346,768
Deferred tax (expense) / income
15 412,214 -1,042,777
Share of the Group in the result from associates
10 5,890,456 10,844,143
Profit / (loss) for the period
Profit / (loss) attributable to non-controlling interests
G
Profit / (loss) attributable to the owners of the Parent
Basic earnings per share undiluted
29 2.35 2.45
Number of Socfinasia’s shares
Basic earnings per share
Diluted earnings per share
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
47
3. Consolidated statement of comprehensive income
2023 2022
Note EUR EUR
Profit / (loss) for the period
Other comprehensive income
G
Actuarial gains / (losses)
22 -604,037 1,548,009
Deferred tax on actuarial losses and gains
Fair value changes of securities measured at fair value through other
comprehensive income
G
, before taxes
11 -42,251 -27,554
Deferred tax on fair value changes of securities measured at fair value
through other comprehensive income
G
Subtotal of items that cannot be reclassified to profit or loss
-502,863 1,241,566
Gains / (losses) on exchange differences on translation of subsidiaries
-2,610,919 -6,643,883
Share of other comprehensive income
G
related to associates
10 -337,884 443,738
Subtotal of items eligible for reclassification to profit or loss
-2,948,803 -6,200,145
Total other comprehensive income
G
-3,451,666 -4,958,579
Total comprehensive income
Comprehensive income attributable to non-controlling interests
G
Comprehensive income attributable to the owners of the Parent
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
48
|
ANNUAL REPORT 2023
|
Socfinasia
4. Consolidated statement of cash flows
2023 2022
Note EUR EUR
Operating activities
Profit / (loss) attributable to the owners of the Parent
Profit / (loss) attributable to non-controlling shareholders
Income from associates
10 -5,890,456 -10,844,143
Dividends received from associates
10 8,292,174 7,126,982
Fair value of agricultural production
-1,213,115 -2,378,830
Other adjustments having no impact on cash position
Depreciation, impairment, provisions and allowances
Net loss on disposals of assets
Income tax expense and deferred tax
15 19,696,109 29,389,545
Cash flows from operating activities
Interest expense / (income)
27, 28 -7,820,796 -5,700,645
Income tax paid
15 -27,880,824 -28,346,768
Change in inventory
Change in trade and other receivables
Change in trade and other payables
Change in accruals and prepayments
-1,081,260 1,444,533
Change in working capital requirement
Net cash flows from operating activities
Investing activities
Acquisitions / disposals of intangible assets
-1,172,057 -635,933
Acquisitions of property, plant and equipment and biological assets
5, 6 -15,837,340 -13,786,271
Disposals of property, plant and equipment
Acquisitions / disposals of financial assets and loans with shareholder
31 66,359,340 67,069,288
Interest received
27 8,885,904 5,700,645
Net cash flows from investing activities
Financing activities
Dividends paid to the owners of the Parent
30 -68,579,910 -58,782,780
Dividends paid to non-controlling shareholders
9 -4,111,803 -7,521,462
Proceeds from borrowings
23 3,130 0
Repayment of borrowings
23 -27,484,691 -65,642,097
Repayment of lease liabilities
-27,689 -28,470
Interest paid
28 -1,065,108 0
Net cash flows from financing activities
-101,266,071 -131,974,809
Effect of exchange rate fluctuations
-462,646 1,009,875
Net cash flow
Cash and cash equivalents as at 1 January
19 94,648,047 73,404,709
Cash and cash equivalents as at 31 December
19 114,574,658 94,648,047
Net increase / (decrease) in cash and cash equivalents
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
49
5. Consolidated statement of changes in equity
EUR Share capital Legal reserve
Translation
reserves
Consolidated
reserves
Equity
attributable
to the
owners of
the Parent
Non-
controlling
interests
G
TOTAL
EQUITY
Balance as at 1 January 2022
Profit / (loss) for the period
Actuarial (losses) / gains
Change in fair value of securities at fair
value through other comprehensive income
G
-16,529 -16,529 -4,153 -20,682
Foreign currency translation adjustments
-6,453,559 -6,453,559 -190,324 -6,643,883
Share in other comprehensive income
G
from associates
Total comprehensive income
G
-6,453,559 49,512,076 43,058,517 7,263,233 50,321,750
Dividends (Note 30)
-19,594,260 -19,594,260 -5,521,954 -25,116,214
Interim dividends (note 30)
-39,188,520 -39,188,520 -1,999,508 -41,188,028
Other movements
Transactions with shareholders
-58,732,071 -58,732,071 -7,521,481 -66,253,552
Balance as at 31 December 2022
Balance as at 1 January 2023
Profit / (loss) for the period
Actuarial (losses) / gains
-424,034
-424,034
-47,115
-471,149
Change in fair value of securities at fair
value through other comprehensive income
G
-25,345 -25,345 -6,369 -31,714
Foreign currency translation adjustments
-2,420,257 -2,420,257 -190,662 -2,610,919
Share in other comprehensive income
G
from
associates
-337,884 -337,884 -337,884
Total comprehensive income
G
-2,420,257 45,316,097 42,895,840 5,371,255 48,267,095
Dividends (Note 30)
-29,391,390 -29,391,390 -2,705,086 -32,096,476
Interim dividends (Note 30)
-39,188,520 -39,188,520 -1,406,717 -40,595,237
Other movements
Transactions with shareholders
-68,570,701 -68,570,701 -4,111,792 -72,682,493
Balance as at 31 December 2023
The accompanying notes are an integral part of these consolidated financial statements.
Consolidated financial statements
6. Notes to the consolidated financial statements
50
|
ANNUAL REPORT 2023
|
Socfinasia
Note 1. Overview and material accounting policies
1.1. Overview
20 November 1972. 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 focuses on the operation of
tropical oil palm and rubber plantations mainly in
South-East of Asia.
Socfinasia is controlled by Société Financière des
Caoutchoucs, abbreviated as “Socfin ” which is the
largest entity that consolidates. The registered office
of the latter company is also located in Luxembourg .
The Company is registered in the commercial
register under the number B10534 and is listed on
the Luxembourg Stock Exchange under ISIN code:
LU0092047413.
1.2. Statement of complaince
The consolidated financial statements have been
prepared on a going concern basis and in accordance
with International Financial Reporting Standards (IFRS
G
)
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
Socfinasia
|
ANNUAL REPORT 2023
|
51
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:
o 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.
o 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.
o 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.
o Amendments to 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 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.
Consolidated financial statements
52
|
ANNUAL REPORT 2023
|
Socfinasia
o 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 13.
1.4. Consolidation principles
The consolidated financial statements include the
financial statements of the parent company Socfinasia
as well as those of the companies controlled by the
parent ("subsidiaries") and those of the companies
in which Socfinasia exercises significant influence
("associates"), 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.
a) 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.
b) Investments in associates and joint ventures
An associate is a company over which the Group
exercises significant influence through its participation in
the financial and operational decisions of this company,
but over which it has no control. Significant influence is
presumed when the Group holds, directly or indirectly
through its subsidiaries, between 20% and 50% of the voting
rights. A joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement have
rights to the net assets of the arrangement. Joint control
is the contractually agreed sharing of control of an
arrangement (i.e. decisions require unanimous consent
of the parties sharing control).
Associates and joint ventures are accounted for using
the equity method. Under this method, the Group’s
interest in the associate and joint venture is initially
recognised at cost in the statement of financial position
and subsequently adjusted to recognise the Group’s
share of movements in profit and loss and other
comprehensive income
G
.
The profit or loss statement reflects the Group’s
share in the results of the associate or joint venture’s
operations. Any change in other comprehensive income
G
of those investees is presented as part of the Group’s
other comprehensive income
G
. Unrealised gains and
losses resulting from transactions between the Group
and the associate or joint venture are eliminated to the
extent of the interest in the associate or joint venture.
Investments in associates and joint ventures are included
in the consolidated financial statements using the equity
method from the date on which significant influence
begins until the date when this influence ceases. The
carrying amount of positive goodwill that results from the
acquisition of associates and joint ventures is included
in the carrying amount of the investment and is not
tested for impairment separately. An impairment test
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
53
is performed if an objective indication of impairment
is identified. Impairment is recognised, if necessary, in
the income statement under the heading “Share of the
Group in the result from associates”.
The list of subsidiaries and associated companies
(including joint ventures) 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 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 t
e fair value of identifiable
e 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 Socfinasia 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.
Pag
Consolidated financial statements
54
|
ANNUAL REPORT 2023
|
Socfinasia
The following exchange rates have been used for the conversion of the consolidated financial statements:
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
Indonesian rupiah 17,140 16,713 16,471 15,648
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
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
Concessions
G
Length of the concessions
G
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 to 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. Bearer biological assets
The Group has biological assets in 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.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
55
The estimated useful lives are as follows:
Bearer plants – Palm 20 to 25 years
Bearer plants – Rubber 20 to 25 years
The depreciation starting date is the date of transfer
of biological assets in production (asset being mature).
This transfer takes place in the third year after palm
oil tree planting 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.
1.13. 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).
Consolidated financial statements
56
|
ANNUAL REPORT 2023
|
Socfinasia
The discount rates used by the Group range between
1.75% and 14.1%.
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 8: Impairment
of assets.
1.14. 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.
1.15. 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 1.12. Bearer biological assets,
agricultural production is measured at fair value less
estimated costs necessary to make the sale.
1.16. 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 34).
approach and
records a provision for expected losses
1.17. 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
Socfinasia
|
ANNUAL REPORT 2023
|
57
1.18. 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 (refer to Note 25).
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 25).
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.
Other financial assets and liabilities
Other financial assets and liabilities 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/
expenses". The Group has established a provision
matrix, based on its historical credit loss experience
Consolidated financial statements
58
|
ANNUAL REPORT 2023
|
Socfinasia
(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.
1.19. 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.
1.20. 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/relevant 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.
1.21. 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
Socfinasia
|
ANNUAL REPORT 2023
|
59
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.
1.22. 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 13).
1.23. 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 follows
from the information 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.
1.24. Use of estimates
For the preparation of consolidated financial
statements in accordance with IFRS
G
, the Group’s
Consolidated financial statements
60
|
ANNUAL REPORT 2023
|
Socfinasia
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. Depending on the evolution of
these assumptions or different economic conditions,
the amount that will appear in the Group’s future
consolidated financial statements may 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
22), IAS
G
41 – Agriculture and IAS
G
2 – Inventories (Note
16), IAS
G
16 – Property, Plant and Equipment (Note 5),
IAS
G
36 – Impairment of Assets (Notes 6 and 8), IFRS
G
9 – Financial Instruments (Notes 25 and 34) and IFRS
G
16 – Leases (Note 3).
In the absence of observable data within the scope of
IFRS
G
13 – Fair Value Measurement, the Group makes
use of a model developed with the aim to assess
the fair value of agricultural production, using local
production costs and conditions and local sales (Refer
to Note 1.12).
This method is inherently more volatile than
assessment at historical cost.
1.25. 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 1.14 and Note 8). 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 22).
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.
1.26. 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.
1.27. Environmental, Social and Governance
The Group has described its ambitions and objectives
in terms of environment, social responsibilities and
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
61
governance in a separate Sustainability Report that
can be accessed on Socfinasia 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 the Group. Those
budgets are mainly used for 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 Notes 1.14 and 8.
Note 2. Subsidiaries and associates
% Group
Interest
% Group
Control
Consolidation
Method (*)
% Group
Interest
% Group
Control
Consolidation
Method (*)
2023 2023 2023 2022 2022 2022
ASIA
Rubber and palm
PT SOCFIN INDONESIA “SOCFINDO"
90.00 90.00 FI 90.00 90.00 FI
Rubber
SETHIKULA CO LTD
100.00 100.00 FI 100.00 100.00 FI
SOCFIN-KCD CO LTD
100.00 100.00 FI 100.00 100.00 FI
VARANASI CO LTD
100.00 100.00 FI 100.00 100.00 FI
COVIPHAMA CO LTD
100.00 100.00 FI 100.00 100.00 FI
EUROPE
Other activities
CENTRAGES S.A.
50.00 50.00 EM 50.00 50.00 EM
IMMOBILIERE DE LA PEPINIERE S.A.
50.00 50.00 EM 50.00 50.00 EM
INDUSERVICES S.A.
35.00 35.00 EM 35.00 35.00 EM
INDUSERVICES FR S.A.
50.00 50.00 EM 50.00 50.00 EM
PLANTATION NORD-SUMATRA LTD
“PNS Ltd” S.A.
100.00 100.00 FI 100.00 100.00 FI
SOCFINCO S.A.
50.00 50.00 EM 50.00 50.00 EM
SOCFINCO FR S.A.
50.00 50.00 EM 50.00 50.00 EM
SOCFINDE S.A.
79.92 79.92 FI 79.92 79.92 FI
SODIMEX FR S.A.
50.00 50.00 EM 50.00 50.00 EM
SOGESCOL FR S.A.
50.00 50.00 EM 50.00 50.00 EM
TERRASIA S.A.
47.81 47.81 EM 47.81 47.81 EM
(*) Consolidation method: FI: Full Integration, EM: Equity Method, NC: Not Consolidated
Consolidated financial statements
62
|
ANNUAL REPORT 2023
|
Socfinasia
List of subsidiaries and associated companies
* 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 active in the production of rubber.
* IMMOBILIERE DE LA PEPINIERE “PEPINIERE” S.A. is a
company under Belgian law which owns 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 of the Group’s
companies with access to the general IT platform.
* PLANTATION NORD-SUMATRA LTD “PNS” S.A. is a
holding company under Luxembourgish law which
holds stakes in PT Socfindo and Coviphama Co.
* PT SOCFIN INDONESIA “SOCFINDO” is a company
under Indonesian law active in the production of
palm oil and rubber.
* SETHIKULA CO LTD is a company under Cambodian
law holding concessions
G
of agricultural land.
* SOCFIN CONSULTANT SERVICES “SOCFINCO” S.A. is a
company established in Belgium providing technical
assistance, agronomic and financial services.
* SOCFIN-KCD CO LTD is a company under Cambodian
law active in the production of rubber products.
* 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.
* SODIMEX FR S.A. is a Swiss company active in the
purchase and sale of equipment for plantations.
* SOGESCOL FR S.A. is a Swiss company active in the
tropical products trade.
* TERRASIA S.A is a company under Luxembourgish
law owning office space.
* VARANASI Co LTD is a company under Cambodian
law holding concession
G
of agricultural land.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
63
Note 3. Leases
The amounts recognised in the balance sheet, related to leases under IFRS
G
16 are as follows:
Right-of-use assets
EUR Buildings
Land and
concession
G
of
agricultural area TOTAL
Gross value as at 1 January 2022
300,283 1,260,658 1,560,941
Additions
0 1,171,888 1,171,888
Foreign exchange differences
18,581 -90,767 -72,186
Gross value as at 31 December 2022
318,864 2,341,779 2,660,643
Accumulated depreciation as at 1 January 2022
-130,611 -520,264 -650,875
Depreciation
-28,424 -112,901 -141,325
Transfer
0 -14,218 -14,218
Foreign exchange differences
-7,584 19,502 11,918
Accumulated depreciation as at 31 December 2022
-166,619 -627,881 -794,500
Net book value as at 31 December 2022
152,245 1,713,898 1,866,143
Gross value as at 1 January 2023 318,864 2,341,779 2,660,643
Additions 0 1,047,577 1,047,577
Foreign exchange differences -11,081 -101,983 -113,064
Gross value as at 31 December 2023 307,783 3,287,373 3,595,156
Accumulated depreciation as at 1 January 2023 -166,619 -627,881 -794,500
Depreciation -27,513 -105,996 -133,509
Foreign exchange differences 6,347 20,356 26,703
Accumulated depreciation as at 31 December 2023 -187,785 -713,521 -901,306
Net book value as at 31 December 2023 119,998 2,573,852 2,693,850
Lease liabilities
31/12/2023 31/12/2022
EUR EUR
Long-term lease liabilities
356,638 397,717
Short-term lease liabilities
27,258 28,105
TOTAL
383,896 425,822
Consolidated financial statements
64
|
ANNUAL REPORT 2023
|
Socfinasia
Long-term lease liabilities are payable as follows:
2022
EUR 2024 2025 2026 2027
2028 and
above
TOTAL
Lease liabilities
28,239 28,374 28,511 28,649 283,944 397,717
2023
EUR 2025 2026 2027 2028
2029 and
above
TOTAL
Lease liabilities
27,388 27,520 27,653 34 274,042 356,637
The amounts recognised in the income statement in relation with the lease contracts are detailed as follows:
2023 2022
EUR EUR
Depreciation of right-of-use assets
133,509 141,325
Expenses related to short-term leases and leases of low-value assets
8,318 8,553
Interest expense (included in the financial expenses)
40,977 42,471
TOTAL
182,804 192,349
Agricultural land and concessions
G
The Group does not own all of the land on which its bio-based assets are planted. In general, these lands are
subject to very long-term concessions
G
from the local public authority. These concessions
G
are renewable.
Company
Date of initial
lease or renewal
extension
Duration of the
initial lease
Area conceded
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
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
65
Note 4. Intangible assets
EUR
Concessions
G
and patents Softwares TOTAL
Cost as at 1 January 2022
615,096 1,689,291 2,304,387
Additions
582,356 53,577 635,933
Disposals
-446 -591 -1,037
Transfer
-1,171,888 0 -1,171,888
Foreign exchange differences
21,897 -59,530 -37,633
Cost as at 31 December 2022
47,015 1,682,747 1,729,762
Accumulated depreciation as at 1 January 2022
-58,474 -1,417,300 -1,475,774
Depreciation
0 -80,101 -80,101
Depreciation reversals
446 591 1,037
Transfer
14,218 0 14,218
Foreign exchange differences
-3,205 51,841 48,636
Accumulated depreciation as at 31 December 2022
-47,015 -1,444,969 -1,491,984
Net book value as at 31 December 2022
0 237,778 237,778
Cost as at 1 January 2023
47,015 1,682,747 1,729,762
Additions
409 124,071 124,480
Disposals
-122 0 -122
Foreign exchange differences
-2,038 -46,353 -48,391
Cost as at 31 December 2023
45,264 1,760,465 1,805,729
Accumulated depreciation as at 1 January 2023
-47,015 -1,444,969 -1,491,984
Depreciation
0 -51,568 -51,568
Depreciation reversals
122 0 122
Foreign exchange differences
1,629 37,995 39,624
Accumulated depreciation as at 31 December 2023
-45,264 -1,458,542 -1,503,806
Net book value as at 31 December 2023
0 301,923 301,923
Consolidated financial statements
66
|
ANNUAL REPORT 2023
|
Socfinasia
Note 5. Property, plant and equipment
EUR
Land and
nurseries
(**) Buildings
Technical
installations
Furniture,
vehicles and
others
Work in
progress
Advances
and pre-
payments TOTAL
Cost as at
1 January 2022
4,631,730 71,227,704 66,035,129 2,207,097 31,348 4,249 144,137,257
Additions (*)
897,761 867,390 2,411,185 1,936,327 118,524 72,671 6,303,858
Disposals
-814,455 -41,902 -387,475 -766,566 0 0 -2,010,398
Transfer
-458,382 39,874 -12,788,979 12,788,688 -39,874 -1,550 -460,223
Foreign exchange
differences
191,134 -999,343 -1,025,891 -870,621 561 -984 -2,705,144
Cost as at
31 December 2022
4,447,788 71,093,723 54,243,969 15,294,925 110,559 74,386 145,265,350
Accumulated
depreciation as at
1 January 2022
-21,228 -49,032,994 -51,413,412 -2,361,173 0 0 -102,828,807
Depreciation
0 -1,972,066 -2,220,215 -1,305,477 0 0 -5,497,758
Depreciation reversals
22,946 39,989 381,523 731,185 0 0 1,175,643
Transfer
0 0 9,176,617 -9,174,777 0 0 1,840
Foreign exchange
differences
-1,718 1,270,341 980,800 627,153 0 0 2,876,576
Accumulated
depreciation as at
31 December 2022
0 -49,694,730 -43,094,687 -11,483,089 0 0 -104,272,506
Net book value as at
31 December 2022
4,447,788 21,398,993 11,149,282 3,811,836 110,559 74,386 40,992,844
Cost as at
1 January 2023
4,447,788 71,093,723 54,243,969 15,294,925 110,559 74,386 145,265,350
Additions (*)
0 1,588,418 1,944,221 2,007,240 221,573 87,571 5,849,023
Disposals
0 -184,117 -687,127 -49,723 0 0 -920,967
Transfer
-843,920 201,459 94,867 0 -209,181 -87,145 -843,920
Foreign exchange
differences
-124,922 -1,984,690 -1,451,509 -467,490 -4,093 -2,594 -4,035,298
Cost as at
31 December 2023
3,478,946 70,714,793 54,144,421 16,784,952 118,858 72,218 145,314,188
Accumulated
depreciation as at
1 January 2023
0 -49,694,730 -43,094,687 -11,483,089 0 0 -104,272,506
Depreciation
0 -1,789,250 -2,273,315 -1,430,713 0 0 -5,493,278
Depreciation reversals
0 158,912 601,609 49,623 0 0 810,144
Foreign exchange
differences
0 1,343,932 1,159,710 347,697 0 0 2,851,339
Accumulated
depreciation as at
31 December 2023
0 -49,981,136 -43,606,683 -12,516,482 0 0 -106,104,301
Net book value as at
31 December 2023
3,478,946 20,733,657 10,537,738 4,268,470 118,858 72,218 39,209,887
(*) Additions for the period include capitalised costs.
(**) Nurseries have been reclassified in 2023 from property, plant and equipment to biological assets, see Note 6.
The accounting policies applicable to property, plant and equipment are detailed in Notes 1 and 8.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
67
Note 6. Biological assets
Palm Rubber Nurseries
and Others
(****) TOTAL
EUR Mature Immature Mature Immature
Cost as at 1 January 2022
66,212,837 13,414,776 65,313,189 21,236,412 0 166,177,214
Additions (*)
0 6,199,700 0 1,282,713 0 7,482,413
Disposals
-952,198 0 -905,821 -1,635,892 0 -3,493,911
Transfer (***)
7,424,736 -6,997,999 -4,213,088 -1,846,110 0 -5,632,461
Foreign exchange differences
-2,597,597 -391,853 2,244,270 1,012,781 0 267,601
Cost as at 31 December 2022
70,087,778 12,224,624 62,438,550 20,049,904 0 164,800,856
Accumulated depreciation as at 1 January 2022
-29,181,051 0 -14,653,300 0 0 -43,834,351
Depreciation
-3,500,858 0 -2,778,468 0 0 -6,279,326
Depreciation reversals
794,304 0 592,730 0 0 1,387,034
Transfer
0 0 65,294 0 0 65,294
Foreign exchange differences
1,135,500 0 -57,472 0 0 1,078,028
Accumulated depreciation as at 31 December 2022
-30,752,105 0 -16,831,216 0 0 -47,583,321
Accumulated impairment as at 1 January 2022
0 0 -4,711,086 -2,226,181 0 -6,937,267
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 4,705,732 1,319,816 0 6,025,548
Foreign exchange differences
0 0 98,668 -179,948 0 -81,280
Accumulated impairment as at 31 December 2022
0 0 -26,862,482 1 0 -26,862,481
Net book value as at 31 December 2022
39,335,673 12,224,624 18,744,852 20,049,905 0 90,355,054
Cost as at 1 January 2023
70,087,778 12,224,624 62,438,550 20,049,904 0 164,800,856
Additions (*)
0 7,415,390 0 1,310,752 1,262,177 9,988,319
Disposals
-1,908,203 0 -1,391,273 0 -444,953 -3,744,429
Transfer
4,755,361 -4,122,492 11,221,078 -11,103,067 93,040 843,920
Foreign exchange differences
-1,856,675 -432,871 -2,161,294 -475,634 -23,572 -4,950,046
Cost as at 31 December 2023
71,078,261 15,084,651 70,107,061 9,781,955 886,692 166,938,620
Accumulated depreciation as at 1 January 2023
-30,752,105 0 -16,831,216 0 0 -47,583,321
Depreciation
-3,406,818 0 -1,714,560 0 0 -5,121,378
Depreciation reversals
1,487,661 0 682,359 0 0 2,170,020
Foreign exchange differences
840,766 0 526,929 0 0 1,367,695
Accumulated depreciation as at 31 December 2023
-31,830,496 0 -17,336,488 0 0 -49,166,984
Accumulated impairment as at 1 January 2023
0 0 -26,862,482 1 0 -26,862,481
Impairment (**)
0 0 0 0 0 0
Foreign exchange differences
0 0 933,502 -1 0 933,501
Accumulated impairment as at 31 December 2023
0 0 -25,928,980 0 0 -25,928,980
Net book value as at 31 December 2023
39,247,765 15,084,651 26,841,593 9,781,955 886,692 91,842,656
(*) Additions for the period include capitalised costs.
(**) Impairment test on biological assets is disclosed in Note 8.
(***) 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 removed in 2022.
(****) Nurseries have been reclassified in 2023 within biological assets.
Accounting policy regarding current biological assets is disclosed in Note 1.12.
Consolidated financial statements
68
|
ANNUAL REPORT 2023
|
Socfinasia
Note 7. Depreciation and impairment
2023 2022
EUR EUR
Depreciation
Of right-of-use assets (Note 3) 133,509 141,325
Of intangible assets (Note 4) 51,568 80,101
Of property, plant and equipment excluding biological assets (Note 5) 5,493,278 5,497,758
Of biological assets (Note 6) 5,121,377 6,279,327
Impairment
Of biological assets (Note 6) 0 27,524,109
Impairment reversal
Of biological assets (Note 6) 0 -1,654,627
TOTAL 10,799,732 37,867,993
Note 8. Impairment of assets
Intangible and tangible assets and right-of-use
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, no impairment was recognised
on the above-mentioned assets.
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 closing prices did not
exceed 15% of the average price over the past 5 years
for the Rubber and Palm segments.
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.
Moreover, the Group also reviews the prices of palm
oil 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 the above criteria, the review of global and
local prices led to the conclusion that there are no
external indicators of impairment.
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.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
69
If an indication of impairment is identified, the
recoverable amount of the producing 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 fire and / or flooding resulting
from heavy rainfalls). The impacts on future cash-
flows of the potential effects of climate change 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. At 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 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 achieved
by the entity in relation to agricultural activities. The
value-in-use of the 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.
As at 31 December 2023, accumulated impairment
losses amounted to EUR 18.0 million for Socfin KCD
and EUR 8.0 million for Coviphama (Note 6). No
further impairment or impairment reversal indicators
have been identified during the year.
Consolidated financial statements
70
|
ANNUAL REPORT 2023
|
Socfinasia
Note 9. Non-wholly owned subsidiaries in which non-controlling interests
G
are
significant
Interests of non-controlling interests
G
in the activities of the Group
Subsidiary Main location
Percentage of equity shares
of non-controlling interest
G
Percentage of voting rights of
non-controlling interests
G
2023 2022 2023 2022
Production of palm oil and rubber
SOCFINDO Indonesia 10% 10% 10% 10%
Subsidiary
Net income attributed to
non-controlling interests
G
in the subsidiary during the
financial period
Accumulated non-controlling
interests
G
in the subsidiary
2023 2022 2023 2022
EUR EUR EUR EUR
SOCFINDO 5,490,432 7,307,921 6,710,938 5,570,075
Subsidiaries that hold non-controlling interests
G
that are not significant individually 952,708 834,108
Non-controlling interests
G
7,663,646 6,404,183
Summary financial information concerning subsidiaries whose interests of non-controlling interests
G
are
significant for the Group excluding intragroup eliminations
Subsidiary Current assets
Non-current
assets
Current
liabilities
Non-Current
Liabilities
EUR EUR EUR EUR
SOCFINDO
2022 36,446,379 91,330,388 33,993,571 34,304,495
2023 34,884,343 94,960,391 25,934,158 34,533,441
Subsidiary
Revenue from
ordinary
activities
Net income for
the period
Comprehensive
income for the
period
Dividends paid to
non-controlling
interests
G
EUR EUR EUR EUR
SOCFINDO
2022 193,795,921 71,954,260 71,954,260 5,525,070
2023 166,005,846 52,959,587 52,959,587 2,705,085
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
71
Subsidiary Net cash inflows (outflows)
Net cash inflows
(outflows)
Operating
activities
Investing
activities
Financing
activities
EUR EUR EUR EUR
SOCFINDO
2022 78,446,226 -12,561,950 -75,245,783 -9,361,507
2023 65,138,520 -15,351,501 -41,118,016 8,669,003
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 10. Investments in associates
2023 2022
EUR EUR
Value as at 1 January
25,588,658 21,934,906
Income from associates
5,890,456 10,844,143
Dividends
-8,292,174 -7,126,982
Share in other comprehensive income
G
from associates
-337,884 443,737
Scope exits (Note 2)
0 -442,029
Other movements
-161,385 -65,117
Value as at 31 December
22,687,671 25,588,658
Value of investment
in associates
Income from
associates
Value of investment
in associates
Income from
associates
31/12/2023 2023 31/12/2022 2022
EUR EUR EUR EUR
Centrages
3,344,822 79,639 3,365,183 132,473
Immobilière de la Pépinière
1,794,038 -71,861 1,866,129 1,962
Induservices
170,144 55,471 114,673 30,840
Induservices FR
0 125,258 0 -108,679
Management Associates
0 0 0 154,201
Socfinco
313,853 -4,683 318,537 -256,646
Socfinco FR
7,106,126 2,558,601 8,639,420 5,223,770
Sodimex
0 0 0 -49,895
Sodimex FR
2,116,830 342,281 2,183,194 451,950
Sogescol FR
7,533,893 2,791,818 8,807,490 5,249,578
Terrasia
307,966 13,933 294,033 14,590
TOTAL
22,687,672 5,890,457 25,588,659 10,844,144
Consolidated financial statements
72
|
ANNUAL REPORT 2023
|
Socfinasia
Total assets Revenue Total assets Revenue
31/12/2023 2023 31/12/2022 2022
EUR EUR EUR EUR
Centrages
3,973,190 3,921,004 4,106,686 3,880,683
Immobilière de la Pépinière
3,738,399 512,571 4,019,267 591,134
Induservices
1,080,076 2,240,040 815,459 2,700,576
Induservices FR
7,823,488 3,651,270 6,629,460 2,937,282
Socfinco
1,581,948 0 1,589,976 169
Socfinco FR
25,146,251 26,708,826 26,442,122 30,292,559
Sodimex FR
8,126,993 21,344,372 10,279,841 21,313,415
Sogescol FR
47,993,053 326,642,221 48,532,250 411,044,829
Terrasia
655,210 0 624,891 0
TOTAL
100,118,608 385,020,304 103,039,952 472,760,647
Main data of significant associates accounted for using the equity method
Associate company Main location Main activity
Dividend
received
Dividend
received
31/12/2023 31/12/2022
EUR EUR
Socfinco Belgium Rendering of services
0 200,000
Socfinco FR Switzerland Rendering of services
4,000,000 4,000,000
Sodimex FR Switzerland Purchase and sale of equipment
375,000 250,000
Sogescol FR Switzerland Trade of tropical products
3,744,267 2,476,982
TOTAL
8,119,267 6,926,982
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
73
Summary financial information of interests held in associates – Statement of financial position
Associate company
Current
assets
Non-current
assets
Current
liabilities
Non-current
liabilities
31/12/2022 EUR EUR EUR EUR
Centrages 2,209,820 1,896,866 728,645 0
Socfinco FR 22,132,936 4,309,187 6,658,770 3,351,275
Sodimex FR 10,245,556 34,286 5,825,789 0
Sogescol FR 47,807,127 725,123 31,698,353 0
TOTAL
82,395,439 6,965,462 44,911,557 3,351,275
31/12/2023 EUR EUR EUR EUR
Centrages 2,473,196 1,499,994 677,627 0
Socfinco FR 19,702,567 5,443,685 8,691,698 1,533,477
Sodimex FR 8,104,378 22,616 3,492,398 301,364
Sogescol FR 44,344,968 3,648,084 32,518,033 0
TOTAL
74,625,109 10,614,379 45,379,756 1,834,841
Summary financial information of interests held in associates – Income statement
Associate company
Profit from
operations
Net income for
the period
Other
comprehensive
income for the
period
Total
comprehensive
income for the
period
2022 EUR EUR EUR EUR
Centrages 223,191 223,191 0 223,191
Socfinco FR 8,833,675 8,833,675 51,338 8,885,013
Sodimex FR 905,204 905,204 90,864 996,068
Sogescol FR 8,459,383 8,459,383 192,819 8,652,202
TOTAL
18,421,453 18,421,453 335,022 18,756,475
2023 EUR EUR EUR EUR
Centrages 217,890 117,522 0 117,522
Socfinco FR 7,755,033 6,488,998 -91,830 6,397,168
Sodimex FR 712,284 609,180 -33,645 575,535
Sogescol FR 7,990,852 6,193,674 -87,087 6,106,587
TOTAL
16,676,059 13,409,374 -212,563 13,196,811
Consolidated financial statements
74
|
ANNUAL REPORT 2023
|
Socfinasia
Reconciliation of the financial information summarised above to the carrying amount of the investments
in the consolidated financial statements
Associate company
Net assets
of the associate
% stake held by
the Group
Other IFRS
G
adjustments
Value of stake
held by the Group
31/12/2022 EUR EUR EUR
Centrages 3,378,041 50% 1,676,163 3,365,183
Socfinco FR 16,432,078 50% 423,381 8,639,420
Sodimex FR 4,454,053 50% -43,833 2,183,194
Sogescol FR 16,833,897 50% 390,542 8,807,490
TOTAL
41,098,069 2,446,253 22,995,287
31/12/2023 EUR EUR EUR
Centrages 3,295,563 50% 1,697,041 3,344,822
Socfinco FR 14,921,076 50% -354,412 7,106,126
Sodimex FR 4,333,232 50% -49,786 2,116,830
Sogescol FR 15,475,019 50% -203,617 7,533,893
TOTAL
38,024,891 1,089,226 20,101,671
There is no goodwill attributed to the above associates.
Aggregated information relating to associates that are not significant individually
2023 2022
EUR EUR
Share of profit from continued operations attributable to the Group
118,118 -213,627
Share of other comprehensive income
G
attributable to the Group
-125,259 108,679
Share of total comprehensive income
G
attributable to the Group
-7,141 -104,948
Total book value of investments in associates held by the Group
2,586,000 2,593,372
Profit after tax from discontinued operations for 2023
and 2022 are nil for all associate companies of the
Group.
The nature, extent and financial impact of the
interests held in associates by the Group, including
the nature of relationships with other investors,
remained stable over the financial period compared
to the previous year.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
75
Note 11. Financial assets at fair value through other comprehensive income
G
2023 2022
EUR EUR
Fair value as at 1 January
773,528 501,082
Change in fair value (*)
-42,251 -27,554
Increase (**)
4,500,000 300,000
Fair value as at 31 December
5,231,277 773,528
(*) The variation in the fair value of the financial assets is accounted under the Other Comprehensive Income
G
.
(**) Movement in 2023 corresponds to Management Associates capital increase.
EUR Cost (historical) Fair value
31/12/2023 31/12/2022 31/12/2023 31/12/2022
Financial assets at fair value through other
comprehensive income
G
5,271,587 771,587 5,231,277 773,528
Note 12. Long-term advances
As at 31 December 2023, the long-term advances
consist mainly of a receivable from Socfin for a nominal
amount of EUR 50,000,000 (2022: EUR 100,412,500).
This receivable bears interest at a rate of 6% per
annum (2022: rate of 4% per annum), and is repayable
within 3 years.
Note 13. Deferred taxes
* Components of deferred tax assets and liabilities
31/12/2023 31/12/2022
EUR EUR
IAS
G
2 / IAS
G
41: Agricultural production
-1,476,045 -1,430,218
IAS
G
16: Property, plant and equipment
-4,600,547 -4,455,862
IAS
G
19: Pension obligations
7,597,356 7,546,987
IAS
G
12: Tax latencies (*)
3,571,683 4,148,849
IFRS
G
16: Leases
5,463 10,525
IAS
G
12: Withholding Tax
-3,626,925 -4,856,278
IFRS
G
9: Financial assets measured at fair value through other
comprehensive income
7,594 -2,943
Balance as at 31 December
1,478,579 961,060
Of which Deferred Tax Assets
5,105,504 5,817,338
Of which Deferred Tax Liabilities
-3,626,925 -4,856,278
(*) Mainly linked to Socfinasia's losses carried forward activated.
Consolidated financial statements
76
|
ANNUAL REPORT 2023
|
Socfinasia
The above deferred taxes are presented per category
of deferred taxes resulting 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 Socfinasia 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 a "partially-owned parent entity" (POPE)
due to the fact that more than 20% of the ownership
interest in its profit is held, directly or indirectly,
by one or several persons that are not constituent
entities of the Group. As a POPE, the Company should
be subject to IIR based on its allocable share of the
top-up tax (if any) of its low-tax constituent entities.
The Company is controlled by Société Financière
des Caoutchoucs, abbreviated as “Socfin” which
is the largest entity that consolidate, and which
should qualify as the Ultimate Parent Entity (UPE)
for Luxembourg Pillar Two purpose. The UPE, Socfin,
would be subject to IIR but 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 POPE) 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
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 tax losses
that are or are not limited over time or capital
allowances that are or are not limited over time.
PNS Ltd, Socfin KCD and Coviphama have unused
tax losses for respectively EUR 14.8 million,
EUR 4.8 million and EUR 2.2 million.
Due to the instability that 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.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
77
Note 14. Current tax assets and liabilities
* Components of current tax assets
2023 2022
EUR EUR
Current tax assets as at 1 January 1,574,531 1,228,967
Tax income 3,390,475 11,108
Taxes paid or recovered -2,263,556 323,667
Transfer (*) -2,067,475 3,004
Foreign exchange differences 109,639 7,785
Current tax assets as at 31 December 743,614 1,574,531
(*) Corresponds to offset of tax assets and tax liabilities.
* Components of current tax liabilities
2023 2022
EUR EUR
Current tax liabilities as at 1 January 11,928,557 16,005,952
Tax expense 21,416,571 32,284,407
Other taxes 2,075,670 68,832
Taxes paid or recovered -31,244,084 -35,985,895
Transfer (*) -2,062,429 -3,049
Foreign exchange differences 83,049 -441,690
Current tax liabilities as at 31 December 2,197,334 11,928,557
(*) Corresponds to offset of tax assets and tax liabilities.
Note 15. Income tax expense
* Components of the tax expense
2023 2022
EUR EUR
Current income tax expense (*)
20,108,323 28,346,768
Deferred tax expense / (income)
-412,214 1,042,777
Tax expense as at 31 December
19,696,109 29,389,545
(*) Withholding tax on dividends is presented within income tax expense.
Consolidated financial statements
78
|
ANNUAL REPORT 2023
|
Socfinasia
* Components of the deferred tax expense / (income)
2023 2022
EUR EUR
IAS
G
12: Income Tax (*)
-644,705 339,175
IAS
G
19: Pension obligations
-115,122 13,070
IAS
G
2 / IAS
G
41: Fair value of agricultural produce
84,754 230,832
IAS
G
16: Tangible assets
265,647 382,839
IFRS
G
16: Leases
4,694 -386
IAS
G
37 : Provisions for risks and charges
-7,482 0
Others
0 77,247
Deferred tax expense / (income) as at 31 December
-412,214 1,042,777
(*) Of which impact of losses carried forward activated for EUR 0.6 million (EUR 1.1 million in 2022), and withholding tax for
EUR -1.2 million (EUR -0.7 million in 2022).
* Reconciliation between income statement and cash flow statement
2023 2022
EUR EUR
Income tax expense paid during the period
-20,108,323 -28,346,769
Income tax movement on financial position (*)
-7,772,501 0
Income tax paid
-27,880,824 -28,346,769
(*) Income tax paid has been reclassified in 2023 from change in working capital to income tax paid.
* Reconciliation of income tax expense
2023 2022
EUR EUR
Profit before tax from continuing operations
65,524,414 73,825,731
Nominal tax rate of the parent company
24.94% 24.94%
Nominal tax rate of subsidiaries
from 20% to 24.94% from 20% to 24.94%
Income tax at nominal tax rates of subsidiaries
14,216,425 17,052,299
Unfunded taxes
579 -20,640
Definitively taxed income / (expense)
-47,609 -1,568,319
Use of capital allowances
-586,234 745,288
Specific tax regimes in foreign countries
4,029,637 7,061,849
Non-taxable income
-269,907 -1,937,160
Non-deductible expenses
2,936,893 7,914,796
Use of unrecognised accumulated tax losses
-754,926 -263,288
Unrecognised losses carried forward
170,599 379,823
Impact of change in tax rate
0 25,110
Other adjustments
652 -213
Tax expense as at 31 December
19,696,109 29,389,545
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
79
Note 16. Inventories
* Carrying value of inventories by category
31/12/2023 31/12/2022
EUR EUR
Raw materials
G
550,516 768,403
Consumables 5,443,932 3,537,708
Spare parts 1,361,118 2,066,773
Production in progress
G
5,184,375 2,693,651
Finished products 4,377,247 7,608,564
Gross amount (before impairment) as at 31 December
16,917,188 16,675,099
Inventory write-downs -489 -729,244
Net amount as at 31 December 16,916,699 15,945,855
* Reconciliation of inventories
2023 2022
EUR EUR
Situation as at 1 January 16,675,099 16,706,227
Change in inventory -765,945 -1,413,348
Fair value of agricultural products 1,479,483 1,754,937
Foreign exchange differences -471,449 -372,717
Gross amount (before impairment) as at 31 December 16,917,188 16,675,099
Inventory write-downs -489 -729,244
Net amount as at 31 December 16,916,699 15,945,855
* Quantity of inventory by category
31/12/2022 Raw Materials
G
Production-in-progress Finished goods
G
Crude Palm Oil / Palm Kernel Oil
G
(tons) 0 0 5,868
Rubber (tons) 710 0 2,459
Others (units) 0 10,043,350 0
31/12/2023 Raw Materials
G
Production-in-progress Finished goods
G
Crude Palm Oil / Palm Kernel Oil
G
(tons) 0 0 3,773
Rubber (tons) 677 0 1,631
Others (units) 0 26,517,167 0
Consolidated financial statements
80
|
ANNUAL REPORT 2023
|
Socfinasia
Note 17. Trade receivables (current assets)
31/12/2023 31/12/2022
EUR EUR
Trade receivables
2,250,462 2,645,367
Advances and prepayments
8,698 495,729
TOTAL
2,259,160 3,141,096
Note 18. Other receivables (current assets)
31/12/2023 31/12/2022
EUR EUR
Social security
12,018 8,860
Other receivables (*)
9,856,820 28,371,836
Accrued charges
55,760 45,859
TOTAL
9,924,598 28,426,555
(*) The "other receivables" consist mainly of cash pooling receivables at Socfinde for EUR 8.5 million (EUR 13.4 million in 2022).
The accounting policy and risk management applicable to receivables are detailed in Notes 1 and 34.
Note 19. Cash and cash equivalents
* Reconciliation with the amounts in the statement of financial position
31/12/2023 31/12/2022
EUR EUR
Current account
114,574,658 94,648,047
TOTAL
114,574,658 94,648,047
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
81
* Reconciliation with the cash flow statement
31/12/2023 31/12/2022
EUR EUR
Current account
114,574,658 94,648,047
TOTAL
114,574,658 94,648,047
Note 20. Share capital
Issued and fully paid capital amounted to
EUR 24.5 million as at 31 December 2023 (no change
compared to 2022).
As at 31 December 2023, the share capital is
represented by 19,594,260 shares without nominal
value.
Ordinary shares
31/12/2023 31/12/2022
Number of shares as at 31 December 19,594,260 19,594,260
Number of fully paid shares issued without designation of par value 19,594,260 19,594,260
Note 21. Reserve
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
82
|
ANNUAL REPORT 2023
|
Socfinasia
Note 22. 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 pay 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. No specific asset
against the provisions finance the benefits payable to
the employees.
2023 2022
EUR EUR
Assets and liabilities recognised in the statement of financial
position
Present value of obligations
34,533,436 34,304,488
Net amount recognised in the statement of financial position for
defined benefit plans
34,533,436 34,304,488
Components of net charge
Current service costs
1,834,219 2,028,323
Financial costs
2,106,160 1,894,992
Present Value of Benefit obligation following employee mutation
664,750 0
Past service costs
23,790 0
Defined benefit plan costs
4,628,919 3,923,315
Movements in liabilities / net assets recognised in the statement of
financial position
As at 1 January
34,304,488 36,912,326
Costs as per income statement
4,628,919 3,923,315
Contributions
-4,105,636 -3,859,526
Actuarial gains and losses of the year recognised in other comprehensive
income
G
604,036 -1,548,010
Foreign exchange differences
-898,371 -1,123,617
As at 31 December
34,533,436 34,304,488
Provisions are based on actuarial valuation reports prepared in January 2024.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
83
* Actuarial gains and losses recognised in other comprehensive income
G
2023 2022
EUR EUR
Adjustments of liabilities related to experience
-2,150,024 533,879
Changes in financial assumptions related to recognised liabilities
1,545,988 1,014,131
Actuarial gains and losses recognised during the period in other
comprehensive income
G
-604,036 1,548,010
* Actuarial valuation assumptions
2023 2022
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
* Sensitivity analysis of the present value of defined benefit obligations
2023 2022
EUR EUR
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 are 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.
* Impact of the defined benefit pension plan on future cash flows
2023 2022
Estimated contributions for the next financial year (in euros)
4,267,713 2,924,588
2023 2022
Weighted average duration of defined benefit plan obligations (in years)
13.04 12.85
Consolidated financial statements
84
|
ANNUAL REPORT 2023
|
Socfinasia
Note 23. Financial debts
31/12/2022
EUR < 1 year > 1 year TOTAL
Loans held by financial institutions 18,522,074 9,375,586 27,897,660
Other loans 222 0 222
Lease liabilities 28,105 397,717 425,822
TOTAL 18,550,401 9,773,303 28,323,704
31/12/2023
EUR < 1 year > 1 year TOTAL
Loans held by financial institutions 0 0 0
Other loans 0 0 0
Lease liabilities 27,258 356,638 383,896
TOTAL 27,258 356,638 383,896
* Long-term debt analysis by interest rate
31/12/2022
EUR Fixed Rate Rate Floating rate Rate TOTAL
Loans held by financial institutions
Luxembourg 0 - 9,375,586 3-month + 5% SOFR
G
9,375,586
TOTAL 0 9,375,586 9,375,586
31/12/2023
EUR Fixed Rate Rate Floating rate Rate TOTAL
Loans held by financial institutions
Luxembourg 0 0 0 0 0
TOTAL 0 0 0
In 2023, the Group has no longer any long-term loans held by financial institutions.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
85
* Long-term debt analysis by currency
31/12/2022 USD TOTAL EUR
Loans held by financial institutions 9,375,586 9,375,586
Lease liabilities 397,716 397,716
TOTAL 9,773,302 9,773,302
31/12/2023 USD TOTAL EUR
Lease liabilities 356,638 356,638
TOTAL 356,638 356,638
* Long-term debt analysis by maturity
31/12/2022
EUR 2024 2025 2026 2027
2028 and
above
TOTAL
Loans held by financial
institutions
9,375,586 0 0 0 0 9,375,586
Lease liabilities 28,239 28,374 28,511 28,649 283,944 397,717
TOTAL 9,403,825 28,374 28,511 28,649 283,944 9,773,303
31/12/2023
EUR 2025 2026 2027 2028
2029 and
above
TOTAL
Lease liabilities 27,388 27,520 27,653 34 274,042 356,637
TOTAL 27,388 27,520 27,653 34 274,042 356,637
Consolidated financial statements
86
|
ANNUAL REPORT 2023
|
Socfinasia
* Net cash surplus / (Net debt)
31/12/2023 31/12/2022
EUR EUR
Cash and cash equivalents 114,574,658 94,648,047
Long-term debt net of current portion 0 -9,375,586
Short-term debt and current portion of long-term debt 0 -18,522,296
Lease liabilities -383,896 -425,822
Net cash surplus / (Net debt)
114,190,763 66,324,343
Cash and cash equivalents
114,574,658 94,648,047
Loan bearing interest at a variable rate 0 -27,897,882
Lease liabilities -383,896 -425,822
Net cash surplus / (Net debt) 114,190,763 66,324,343
* Reconciliation of net cash surplus / (net debt)
Cash and cash
equivalents
Long-term debt,
net of current
portion
Short-term debt
and current
portion of long-
term debt
Debt related to
leases TOTAL
As at 1 January 2022 73,404,709 -78,136,408 -8,853,829 -427,354 -14,012,882
Cash flows 20,233,462 66,817,381 -1,175,284 28,468 85,904,027
Foreign exchange
differences
1,009,876 -6,148,630 -384,269 -26,936 -5,549,959
Transfers 0 8,092,070 -8,108,913 0 -16,843
As at 31 December 2022 94,648,047 -9,375,586 -18,522,296 -425,822 66,324,343
Cash flows 20,389,257 -3,130 27,484,691 27,687 47,898,505
Foreign exchange
differences
-462,646 138,684 274,183 14,240 -35,539
Transfers 0 9,236,798 -9,236,578 0 220
Other movements with no
impact on cash flows
0 3,234 0 0 3,234
As at 31 December 2023 114,574,658 0 0 -383,895 114,190,763
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
87
Note 24. Trade and other payables
31/12/2023 31/12/2022
EUR EUR
Trade payables
7,345,213 4,333,218
Staff cost liabilities (*)
16,985,833 18,161,954
Other payables (**)
42,470,901 34,838,679
Accruals
260,188 1,818,472
TOTAL
67,062,135 59,152,323
(*) Debts towards employees (EUR 17.7 million in 2022) have been reclassified from “other payables” to “staff cost liabilities”
in 2022.
(**) Other payables consist mainly of debts of EUR 31.5 million (EUR 24.2 million in 2022) relating to the cash pooling at
Socfinde.
Consolidated financial statements
88
|
ANNUAL REPORT 2023
|
Socfinasia
Note 25. Financial instruments
31/12/2022
Loans and
borrowings
Financial assets
at fair value
through other
comprehensive
income
G
Other
financial
assets and
liabilities TOTAL
Loans and
borrowings
(*)
Other
financial
assets and
liabilities
(*)
EUR At cost At fair value At cost
At fair
value
At fair
value
Assets
Financial assets at fair value through
other comprehensive income
G
0 773,528 0 773,528 0 0
Long-term advances
100,412,500 0 90,824 100,503,324 100,412,500 90,824
Other non-current assets
7,000,000 0 0 7,000,000 7,000,000 0
Trade receivables
0 0 3,141,096 3,141,096 0 3,141,096
Other receivables
0 0 28,426,554 28,426,554 0 28,426,554
Cash and cash equivalents (**)
0 0 94,648,047 94,648,047 0 94,648,047
Total Assets
107,412,500 773,528 126,306,521 234,492,549 107,412,500 126,306,521
Liabilities
Long-term debts (**)
9,375,586 0 0 9,375,586 9,375,586 0
Short-term debts (**)
0 0 18,522,296 18,522,296 0 18,522,296
Trade payables (current)
0 0 4,333,218 4,333,218 0 4,333,218
Other payables (current)
0 0 54,819,105 54,819,105 0 54,819,105
Total Liabilities
9,375,586 0 77,674,619 87,050,205 9,375,586 77,674,619
(*) For information purposes.
(**) See Note 23.
31/12/2022 Fair Value
EUR Level 1 Level 2 Level 3 TOTAL
Financial assets at fair value through other
comprehensive income
G
0 0 773,528 773,528
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
89
31/12/2023
Loans and
borrowings
Financial assets
at fair value
through other
comprehensive
income
G
Other
financial
assets and
liabilities TOTAL
Loans and
borrowings
(*)
Other
financial
assets and
liabilities
(*)
EUR At cost At fair value At cost
At fair
value
At fair
value
Assets
Financial assets at fair value through
other comprehensive income
G
0 5,231,277 0 5,231,277 0 0
Long-term advances
50,412,500 0 87,675 50,500,175 50,412,500 87,675
Trade receivables
0 0 2,259,161 2,259,161 0 2,259,161
Other receivables
0 0 9,924,597 9,924,597 0 9,924,597
Cash and cash equivalents (**)
0 0 114,574,658 114,574,658 0 114,574,658
Total Assets
50,412,500 5,231,277 126,846,091 182,489,868 50,412,500 126,846,091
Liabilities
Short-term debts (**)
0 0 0 0 0 0
Trade payables (current)
0 0 7,345,213 7,345,213 0 7,345,213
Other payables (current)
0 0 59,716,922 59,716,922 0 59,716,922
Total Liabilities
0 0 67,062,135 67,062,135 0 67,062,135
(*) For information purposes.
(**) See Note 23.
31/12/2023 Fair Value
EUR Level 1 Level 2 Level 3 TOTAL
Financial assets at fair value through other
comprehensive income
G
0 0 5,231,277 5,231,277
The Group did not identify significant differences between the carrying amount of the loans and their fair value.
Consolidated financial statements
90
|
ANNUAL REPORT 2023
|
Socfinasia
Note 26. Staff costs and average number of staff
2023 2022
Average number of employees
Directors
194 195
Employees
2,590 2,253
Workers (including temporary workers)
6,902 7,147
TOTAL
9,686 9,595
2023 2022
Staff costs EUR EUR
Remuneration
58,505,265 67,263,579
Social security and pension expenses
6,530,200 5,790,322
TOTAL
65,035,465 73,053,901
Note 27. Other financial income
2023 2022
EUR EUR
On non-current assets / liabilities
Interest on other investments (*)
4,629,133 7,720,339
On current assets / liabilities
Interest from receivables and cash and cash equivalents
4,256,771 1,555,214
Exchange gains
3,184,412 17,463,418
Others
35,104 55,464
TOTAL
12,105,420 26,794,435
(*) Interests mainly relating to the long-term advances towards Socfin (see Note 31).
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
91
Note 28. Financial expenses
2023 2022
EUR EUR
On non-current assets / liabilities
Impairment on non-current assets
170,407 30,000
Interest expense on lease liabilities
40,977 42,471
On current assets / liabilities
Interest and finance expense
1,024,131 3,532,438
Impairment on current assets
2,897 -4,258
Exchange losses
5,693,613 3,614,032
Others
610,435 1,579,822
TOTAL
7,542,460 8,794,505
Note 29. 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
outstanding 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
Net profit / (loss) for the period (in euros)
46,103,360 47,948,844
Average number of shares
19,594,260 19,594,260
Net earnings per share undiluted (in euros)
2.35 2.45
Note 30. Dividends and directors’ fees
The Board will propose at the Annual General Meeting
of 29 May 2024 the payment of a total dividend of
EUR 4.00 per share, out of which an interim dividend
of EUR 2.00 per share was paid in November 2023.
If the proposed dividend is approved by the general
meeting of shareholders, a balance of EUR 2.00 per
share for a total amount of EUR 39.2 million would
therefore remain payable.
2023 2022
Dividends and interim dividends distributed during the period
68,579,910 58,782,780
Number of shares
19,594,260 19,594,260
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
92
|
ANNUAL REPORT 2023
|
Socfinasia
Note 31. Information on related party
* Directors’ remuneration
2023 2022
EUR EUR
Short-term benefits
11,674,417 15,278,115
* Other related party transactions
31/12/2022
EUR Parent Associates
Other related
parties TOTAL
Non-current assets
Long-term advances (Note 12)
100,000,000 132,500 280,000 100,412,500
Other non-current assets
0 0 7,000,000 7,000,000
100,000,000 132,500 7,280,000 107,412,500
Current assets
Trade receivables
0 1,308,312 37,405 1,345,717
Other receivables (Note 18)
14,498,034 6,016,300 7,520,601 28,034,935
14,498,034 7,324,612 7,558,006 29,380,652
Current liabilities
Trade payables
0 102,981 0 102,981
Other payables (Note 24)
1,914,036 7,780,667 15,313,990 25,008,693
1,914,036 7,883,648 15,313,990 25,111,674
2022
EUR Parent Associates
Other related
parties TOTAL
Income statement
Services and goods delivered
0 13,371,056 167,896 13,538,952
Services and goods received
0 5,596,574 447,562 6,044,136
Financial income
7,682,513 4,004,774 311,305 11,998,592
Financial expenses
2,220 30,020 71,073 103,313
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
93
31/12/2023
EUR Parent Associates
Other related
parties TOTAL
Non-current assets
Long-term advances (Note 12)
50,000,000 132,500 280,000 50,412,500
50,000,000 132,500 280,000 50,412,500
Current assets
Trade receivables
0 1,078,622 6,988 1,085,610
Other receivables (Note 18)
900,000 8,505,786 0 9,405,786
900,000 9,584,408 6,988 10,491,396
Current liabilities
Trade payables
0 18,167 0 18,167
Other payables (Note 24)
5,885,386 8,280,574 18,178,167 32,344,127
5,885,386 8,298,741 18,178,167 32,362,294
2023
EUR Parent Associates
Other related
parties TOTAL
Income statement
Services and goods delivered
0 8,217,506 74,431 8,291,937
Services and goods received
0 5,018,633 359,324 5,377,957
Financial income
4,520,047 4,270,504 254,465 9,045,016
Financial expenses
44,921 279,709 278,840 603,470
Related party transactions are made at arm’s length.
As at 31 December 2023, Socfinasia has an amount
receivable of EUR 50 million from Socfin. This
receivable bears interest at 6%. The amount of interest
recognised for the year 2023 is EUR 4.1 million.
As at 31 December 2023, PNS has no more receivable
towards Socfin, following the repayment of
EUR 14.1 million from Socfin in February 2023. The
amount of interest recognised for the year 2023 is
EUR 0.4 million.
No other significant transaction has been noted with
the parent company Socfin, with the exception of
the payment of dividends by Socfinasia amounting to
EUR 34.2 million in 2022 and EUR 39.9 million in 2023.
In addition, Socfinde has a payable of EUR 5.9 million
with the parent company as at 31 December 2023.
As at 31 December 2023, Socfinde has an amount
payable of EUR 15.9 million towards Socfinaf and its
subsidiaries (2022: EUR 0.3 million).
Consolidated financial statements
94
|
ANNUAL REPORT 2023
|
Socfinasia
Note 32. Off balance sheet commitments
In February 2023, PNS Ltd fully reimbursed
the remaining balance (USD 30 million) of the
USD 100 million loan obtained in 2021. Following this
reimbursement, the Group no longer has material off
balance sheet commitments as at 2023 year-end.
Note 33. Segment information
In accordance with IFRS
G
8, the analysis of information
by management is based on the geographical
distribution of political and economic risks. As a result,
the sectors are Indonesia, Cambodia and Europe.
The products of the operating sector from Indonesia
come from sales of palm oil and rubber. Those from
Cambodia come exclusively from the sale of rubber,
those from Europe from the provision of administrative
services, assistance in managing the areas under
plantation and the marketing of products outside of
the Group. The segment profit of the Group is the
profit from operations.
The stated figures originate from internal reporting.
Since they do not reflect any consolidation or IFRS
G
adjustments or adjustments, they are not directly
comparable to amounts reported in the consolidated
statement of the financial position and income
statement.
* Segmental breakdown of profit / (loss) as at 31 December 2022
EUR
Revenue from
ordinary business
with external
customers
Revenue from
ordinary business
between segments
Segmental profit /
(loss) (*)
Europe
0 0 -2,502,234
Cambodia
8,164,138 0 -2,490,942
Indonesia
193,795,812 0 91,818,347
TOTAL
201,959,951 0 86,825,171
Depreciation, amortisation and impairment of bearer plants
-25,063,440
Fair value of agricultural production
1,754,937
Other IFRS
G
adjustments
-1,509,266
Consolidation adjustments (intra-group and others)
-6,262,500
Financial income and gain on disposals
27,177,257
Financial expenses and loss on disposals
-9,096,429
Group share of income from associates
10,844,143
Income tax expense and deferred tax (expense) / income
-29,389,546
Net Profit / (loss) for the period
55,280,328
(*) Profit / (loss) for the period include other expenses for EUR 14.9 million, corresponding mainly to external services invoiced
to plantations and related directly to the operational activity (road maintenance, …), and other operating expenses for
EUR 4.8 million not related directly to the operational activity (other taxes, property taxes, …).
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
95
* Segmental breakdown of profit/(loss) as at 31 December 2023
EUR
Revenue from
ordinary business
with external
customers
Revenue from
ordinary business
between segments
Segmental profit /
(loss) (*)
Europe
0 0 -2,750,620
Cambodia
10,777,027 0 160,349
Indonesia
167,746,950 0 68,542,397
TOTAL
178,523,977 0 65,952,125
Depreciation, amortisation and impairment of bearer plants
896,304
Fair value of agricultural production
1,479,483
Other IFRS
G
adjustments
641,536
Consolidation adjustments (intra-group and others)
-6,984,289
Financial income and gain on disposals
12,105,421
Financial expenses and loss on disposals
-8,566,165
Group share of income from associates
5,890,456
Income tax expense and deferred tax (expense) / income
-19,696,109
Net Profit / (loss) for the period
51,718,763
(*) Profit / (loss) for the period include other expenses for EUR 17.1 million, corresponding mainly to external services invoiced
to plantations and related directly to the operational activity (road maintenance, …), and other operating expenses for
EUR 1.0 million not related directly to the operational activity (other taxes, property taxes, …).
Consolidated financial statements
96
|
ANNUAL REPORT 2023
|
Socfinasia
* Total segmental assets
G
31/12/2023 31/12/2022
EUR EUR
Europe
102,405,662 82,675,979
Cambodia
64,227,738 67,618,326
Indonesia
118,943,164 117,769,545
TOTAL
285,576,563 268,063,851
IFRS
G
3 / IAS
G
16: Bearer plants
-23,403,793 -25,178,480
IAS
G
2 / IAS
G
41: Agricultural production
3,130,129 1,752,466
Other IFRS
G
adjustments
-2,365,866 -1,494,716
Consolidation adjustments (intra-group and others)
3,554,009 3,861,555
Total consolidated segmental assets
G
266,491,043 247,004,675
Consolidated assets not included in segmental assets
G
Right-of-use assets
2,693,850 1,866,143
Investments in associates
22,687,671 25,588,659
Financial assets at fair value through other comprehensive income
G
5,231,277 773,528
Long-term advances
50,500,175 100,503,325
Deferred tax
5,105,504 5,817,339
Other non-current assets
0 7,000,000
Consolidated non-current assets
86,218,478 141,548,993
Other debtors
9,924,597 28,426,554
Current tax assets
743,616 1,574,532
Consolidated current assets
10,668,213 30,001,086
Total of consolidated assets in the segmental assets
G
96,886,691 171,550,080
Total assets
363,377,733 418,554,755
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
97
* Total segmental liabilities
G
31/12/2023 31/12/2022
EUR EUR
Europe
101,153,425 48,589,840
Cambodia
1,239,938 1,318,995
Indonesia
24,537,641 24,094,356
TOTAL
126,931,004 74,003,191
Other IFRS
G
adjustments
0 0
Consolidation adjustments (intra-group and others)
-59,868,869 -14,850,869
Total consolidated segmental liabilities
G
67,062,135 59,152,322
Consolidated equity and liabilities not included in
segmental liabilities
G
Total equity
255,574,006 279,989,406
Non-current liabilities
38,516,999 48,934,068
Current financial debts
0 18,522,296
Current lease liabilities
27,258 28,105
Current tax liabilities
2,197,335 11,928,558
Total consolidated equity and liabilities not included in
segmental liabilities
G
296,315,599 359,402,433
Total equity and liabilities
363,377,733 418,554,755
* Costs incurred for acquisition of segmental assets
G
during 2022
EUR Intangible assets Tangible assets Biological assets TOTAL
Cambodia
0 417,668 469,391 887,059
Indonesia
635,933 5,886,190 7,013,022 13,535,145
TOTAL
635,933 6,303,858 7,482,413 14,422,204
* Costs incurred for acquisition of segmental assets
G
during 2023
EUR Intangible assets Tangible assets Biological assets TOTAL
Cambodia
0 480,750 426,311 907,061
Indonesia
1,172,057 5,368,272 9,562,007 16,102,337
TOTAL
1,172,057 5,849,022 9,988,318 17,009,398
Consolidated financial statements
98
|
ANNUAL REPORT 2023
|
Socfinasia
* Information by category of revenue
2023 2022
EUR EUR
Palm
150,895,839 170,873,347
Rubber
20,651,439 22,322,007
Other agricultural activities
6,468,850 7,435,188
Others
507,849 1,329,409
TOTAL
178,523,977 201,959,951
* Information by geographical region
EUR
2022
Geographical
location
Origin Europe Africa Asia America TOTAL
Asia 13,092,428 785,781 187,277,153 804,588 201,959,951
EUR
2023
Geographical
location
Origin Europe Africa Asia America TOTAL
Asia 8,949,515 228,540 169,310,539 35,384 178,523,978
* Information by business segment by revenue category
EUR
2022
Category
Business Segment Palm Rubber
Other agricultural
products TOTAL
Indonesia
170,873,251 14,157,861 8,764,701 193,795,812
Cambodia
0 8,164,138 0 8,164,138
TOTAL
170,873,251 22,322,000 8,764,701 201,959,951
EUR
2023
Category
Business Segment
Palm Rubber
Other agricultural
products TOTAL
Indonesia
150,895,828 9,874,419 6,976,703 167,746,950
Cambodia
0 10,777,027 0 10,777,027
TOTAL
150,895,828 20,651,446 6,976,703 178,523,977
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
99
Note 34. 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 risks
None of the countries where the Group operates
has a hyperinflationary economy or suffers 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 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.
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
region. This practice is favourable for the significant
investments made in the plantations, as an attempt to
reduce borrowings wherever possible.
* 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-
Consolidated financial statements
100
|
ANNUAL REPORT 2023
|
Socfinasia
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 1.18.
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 23 and 19) 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.
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.
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
101
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, which are 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 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 6.0 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 amounted to
EUR 169.3 million.
Socfinasia’s companies have a cash position of
USD 65.9 million at 2023 year-end.
* Interest rate risk
The breakdown of fixed rate loans and variable rate
loans is described in Note 23. Due to the cash pooling
centralised, the Group is exposed to interest rate risk.
To control this risk, the management closely monitors
the interest rate’s evolution.
* Credit risk
On 31 December 2023, the trade receivables from
global customers amounted to EUR 1.1 million and
to EUR 1.2 million for local customers. Accounts
receivable from global customers are mainly
receivables related to the sale of rubber. Palm oil is
sold locally to local players (wide range of customers).
The marketing of rubber is entrusted to Sogescol FR
(equity accounted company). It trades either on the
physical markets or directly with end customers.
The outstanding trade receivables are not significant.
2023 2022
EUR EUR
Trade receivables
2,259,161 3,141,096
Other receivables
9,924,597 28,426,554
Long-term advances
50,500,175 100,503,325
Total net receivables
62,683,933 132,070,975
Amount not yet due
60,299,632 132,070,975
Amount due less than 6 months
2,384,301 0
Total net receivables
62,683,933 132,070,975
Consolidated financial statements
102
|
ANNUAL REPORT 2023
|
Socfinasia
Note 35. Profit before interest, taxes, depreciation and amortisation
EBITDA
G
2023 2022
EUR EUR
Profit after tax (Group’s share)
46,103,360 47,948,844
Profit share of non-controlling interests
G
5,615,402 7,331,484
Income from associates
-5,890,456 -10,844,143
Dividends received from associates
8,292,174 7,126,982
Fair value of biological assets
-1,213,115 -2,378,830
Depreciation, amortisation and provisions
11,284,832 38,054,928
Gains and losses on disposals of assets
1,023,704 344,053
Tax charge
19,696,109 29,389,546
Other financial income
-12,105,421 -26,794,436
Financial expenses
7,542,460 8,794,506
Financial expenses included in amortisation and provisions
-173,304 -25,742
Impact of lease restatement on EBITDA
G
-174,486 -183,797
TOTAL
80,001,259 98,763,396
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 11th
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 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
Consolidated financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
103
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.
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 11th 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 it 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, dating
from 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
11th Chamber of the Brussels Court of Appeal dating
from 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 that the Court to grant the request
initially made by the company, i.e. to order a tax
relief for the disputed taxes.
Consolidated financial statements
104
|
ANNUAL REPORT 2023
|
Socfinasia
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, dating
from 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, 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.
Note 37. Political and economic environment
The Company holds interests in subsidiaries operating
in South-East Asia.
Given the economic and political instability in some of
these countries, these investments represent 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.
Note 39. Auditor’s fees
2023 2022
EUR EUR
Audit (VAT included)
375,814 394,614
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. No consulting work or other non-
audit services have been performed by this firm in
2023 or in 2022.
Socfinasia
|
ANNUAL REPORT 2023
|
105
Portrait du GroupeCompany’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
Socfinasia S.A. holds financial interests in portfolio companies which operate directly or indirectly in South-East
Asia in the rubber and palm oil sectors.
The 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
Value adjustments in respect of financial assets
0.0 0.3
Income from participating interests
Derived from affiliated undertakings
50.5 69.0
Other interest receivable and similar income
2.4 5.5
Total income
52.9 74.8
EXPENSES
Other external expenses
2.2 2.0
Interest payable and similar expenses
1.9 1.4
Income tax
0.7 0.7
Total expenses
4.8 4.1
PROFIT FOR THE FINANCIAL YEAR
48.1 70.7
As at 31 December 2023, the income from financial fixed assets amounted to EUR 50.5 million compared to
EUR 69 million in 2022. The decrease is mainly due to decreased revenues from Indonesia.
The profit of the year, after structural charges and costs, stood at EUR 48.1 million compared to EUR 70.7 million
as at 31 December 2022.
Company’s management report
106
|
ANNUAL REPORT 2023
|
Socfinasia
Balance sheet
As at 31 December 2023, Socfinasia’s total assets amounted to EUR 430.2 million compared to EUR 457.7 million
in 2022.
Socfinasia’s assets mainly consist of financial fixed assets of EUR 357.7 million, receivables and cash at Bank of
EUR 72.6 million.
Shareholders’ equity, before allocation of the remaining dividend, amounts to EUR 424.1 million.
Portfolio
Movements
During the year, the company has participated in the capital increase of Management Associates.
Valuation
Unrealised capital gains on the portfolio of participating interests are estimated at EUR 62.4 million as at
31 December 2023 compared with EUR 101.9 million at the end of the previous year.
Investments
The main investments have evolved as follows during the period:
PT Socfindo (Indonesia)
90% subsidiary of PNS Limited which itself is 100% owned by Socfinasia.
Area (ha) at 31/12/2023 Planted area
Mature Immature Total
Rubber
5,232 1,091 6,323
Palm
34,511 4,989 39,500
Total
39,743 6,080 45,823
Key figures Realised 2023 Realised 2022 Difference (%)
Production (tons)
Rubber
6,397 6,896 -7.2
Palm oil
188,527 179,516 +5.0
Turnover (EUR 000)
Rubber
9,871 14,140 -30.2
Palm tree
150,842 170,656 -11.6
Seeds
5,234 7,426 -29.5
Total
165,947 192,222 -13.7
Result (EUR 000)
52,960 71,954 -26.4
Company’s management report
Socfinasia
|
ANNUAL REPORT 2023
|
107
Socfin-KCD Co Ltd (Cambodia) – 100% owned subsidiary
of Socfinasia and
Coviphama Co Ltd (Cambodia) – 100% owned subsidiary
of PNS Ltd, which itself is 100% owned by Socfinasia.
The production of rubber processed by Socfin KCD
during the year 2023 is up by 47% due to higher
production of Coviphama. Revenue was also up (+32%)
due to higher volume (+51%), partially offset by lower
selling prices (-13%). This had a positive impact on net
income and also benefited from a more favourable
unit margin than last year.
At Coviphama, raw rubber production up (+267%) due
to the opening of new agricultural plots for tapping.
Sales were also up (+238%) due to an increase in sales
volume (+267%), partially offset by a lower selling
price (-8%).
Allocation of profit
The profit for the year of EUR 48,129,963 increased by retained earnings of EUR 229,326,834, give a total
earnings of EUR 277,456,797 which was proposed to allocate as follows:
Earnings allocation EUR
Retained earnings
190,371,197
From the balance :
10% to the Board of Directors
8,708,560
90% to 19,594,260 shares
78,377,040
representing EUR 4.00 per share
of which EUR 2.00 already paid at the end of 2023
277,456,797
As a reminder, the dividend relating to the previous year was EUR 3.50.
After this allocation of earnings, the reserves will be as follows:
Reserves EUR
Legal reserve
2,449,282
Statutory reserve
125,993,370
Other reserves
30,070,910
Other available reserves
7,153,910
Retained earnings
190,371,197
356,038,669
If this distribution is approved, Coupon No. 86 of EUR 2.00 gross will be declared on 5 June 2024 and payable as
of 7 June 2024.
Company’s management report
108
|
ANNUAL REPORT 2023
|
Socfinasia
Own shares
During the year 2023, the Company did not buy back any of its shares.
Research and development
During the year 2023, Socfinasia did not incur any expenses relating to research and development.
Financial instruments
Socfinasia’s treasury holds USD 59,8 million in its position as at 31 December 2023. The purpose of holding this
currency is to cover dollar related investments and expenses.
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) and f) The issued capital of the Company is set
at EUR 24,492,825 represented by 19,594,260
shares without par value, fully paid up. Each
share entitles the holder to one vote without
limitation or restriction.
c) On 1 February 2017, Socfin declared that it holds
57.79% direct stake in Socfinasia.
On 22 October 2018, Bolloré Participations
declared that it holds a direct and indirect stake
of 22.255% in Socfinasia, of which 17.138% via
Bolloré and 5.116% via Compagnie du Cambodge.
h) Art. 13. 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. 22. 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. 31. 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. 17 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
Company’s management report
Socfinasia
|
ANNUAL REPORT 2023
|
109
or the law fall within the competence of the
Board”.
In addition, the Articles 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.
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:
• the holding of shares giving special control rights;
• the existence of a staff shareholding system;
• shareholder agreements that may result in
restrictions on the transfer of securities or voting
rights;
• the agreements to which the Company is party,
and which take effect are modified or terminated
in the event of a change of control of the Company
following a takeover bid;
• 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 was 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 Socfinasia as at 31 December
2023 before allocation of the result and after the
interim dividend payment for the financial year
amounts to EUR 486.5 million. This valuation
incorporates the unrealised capital gains of the
portfolio.
As a reminder, the share price as at 31 December 2023
was EUR 15.40 compared to EUR 14.80 the previous
year.
Company’s management report
110
|
ANNUAL REPORT 2023
|
Socfinasia
Significant events after the end of the year
As at 31 December 2023 and 2022, the Company had no significant off-balance sheet commitments.
Main risks and uncertainties
It must be emphasised that the Group’s investments
in South-East Asia may be subject to political and
economic risks. On-site executives and managers
follow the day-to-day evolution of the situation.
In addition, the Company may be exposed to foreign
exchange risks on long-term advances to subsidiaries.
The assessment of this risk is described in the notes to
the Company’s statutory financial statements.
Perspectives
The result for the 2024 financial year will largely depend on the dividend distributions of the subsidiaries.
Statutory appointments
Mr. Philippe 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
Socfinasia
|
ANNUAL REPORT 2023
|
111
Report on the audit of the financial statements
To the Shareholders
SOCFINASIA S.A.
4, Avenue Guillaume
L-1650 Luxembourg
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of Socfinasia
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 294 million euros and
represents 68% 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.
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).
Report on the audit of the financial statements
112
|
ANNUAL REPORT 2023
|
Socfinasia
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
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
Report on the audit of the financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
113
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.
The accompanying corporate governance statement
on pages 27 to 33 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.
Report on the audit of the financial statements
114
|
ANNUAL REPORT 2023
|
Socfinasia
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
Luxembourg
Socfinasia
|
ANNUAL REPORT 2023
|
115
Portrait du GroupeCompany 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
294,122,628.31 289,622,628.31
Loans to affiliated undertakings
63,581,947.65 116,045,211.05
357,704,575.96 405,667,839.36
CURRENT ASSETS
Debtors
Amounts owed by affiliated undertakings
Becoming due and payable within one year
4 67,260,251.61 12,794,759.27
Other debtors
Becoming due and payable within one year
2,065,605.05 1,553,016.15
69,325,856.66 14,347,775.42
Cash at bank and in hand
3,226,692.02 37,681,058.52
72,552,548.68 52,028,833.94
TOTAL ASSETS
430,257,124.64 457,696,673.30
The accompanying notes form an integral part of the financial statements.
Company financial statements
116
|
ANNUAL REPORT 2023
|
Socfinasia
2023 2022
CAPITAL, RESERVES AND LIABILITIES Note EUR EUR
CAPITAL AND RESERVES 5
Issued capital
24,492,825.00 24,492,825.00
Reserves
Legal reserve
2,449,282.50 2,449,282.50
Reserves provided for by the articles of association
125,993,370.46 125,993,370.46
Other reserves, including the fair value reserve
Other available reserves
37,224,819,43 37,224,819.43
165,667,472.39 165,667,472.39
Profit brought forward
229,326,833.87 234,841,827.35
Profit for the financial year
48,129,963.38 70,684,906.52
Interim dividends
-43,542,800.00 -43,542,800.00
424,074,294.64 452,144,231.26
CREDITORS
Amounts owed to credit institutions
Becoming due and payable within one year
0.00 9.04
Trade creditors
Becoming due and payable within one year
233,943.47 226,872.44
Amounts owed to affiliated undertakings
Becoming due and payable within one year
603.00 1,872.00
Other creditors
Tax authorities
2,476,680.00 1,852,680.00
Other creditors
Becoming due and payable within one year
6 3,471,603.53 3,471,008.56
6,182,830.00 5,552,442.04
TOTAL CAPITAL, RESERVES AND LIABILITIES
430,257,124.64 457,696,673.30
The accompanying notes form an integral part of the financial statements.
Company financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
117
2. Profit and loss account for the year ended 31 December 2023
2023 2022
Note EUR EUR
Other operating income
0.00 175,99
Raw materials
G
and consumables and other external expenses
Other external expenses
-2,146,274.69 -1,922,242.44
Other operating expenses
-101,860.81 -107,709.95
Income from participating interests
derived from affiliated undertakings
7 46,464,771.90 65,053,599.02
Income from other investments and loans
forming part of the fixed assets
derived from affiliated undertakings
8 4,121,111.11 3,972,222.23
Other interest receivable and other similar income
derived from affiliated undertakings
2,247,994.95 5,183,952.87
other interests and financial income
139,784.85 264,535.28
Value adjustments in respect of financial assets and of
investments held as current assets
0.00 347,589.84
Interest payable and similar expenses
derived from affiliated undertakings
-1,354,353.05 -492,636.07
other interest and similar charges
-582,060.65 -883,552.26
Tax on profit
-39,182.31 -80,175.06
Profit after taxation
48,749,931.30 71,335,759.45
Other taxes not shown above
-619,967.92 -650,852.93
Profit for the financial year
48,129,963.38 70,684,906.52
Company financial statements
118
|
ANNUAL REPORT 2023
|
Socfinasia
Allocation of profit
2023 2022
EUR EUR
Retained earnings
190,371,197.25 229,326,833.87
From the balance:
10% to the Board of Directors
8,708,560.00 7,619,990.00
90% to 19,594,260 shares
78,377,040.00 68,579,910.00
277,456,797.25 305,526,733.87
Dividend per share
4.00 3.50
The accompanying notes form an integral part of the financial statements.
Company financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
119
3. Notes to the financial statements for the year 2023
Note 1. Overview
SOCFINASIA, (the “Company’’) was incorporated on
20 November 1972 as a public limited company and
adopted the status of “Soparfi"
G
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 B10534, and is listed
on the Luxembourg Stock Exchange under ISIN number
LU0092047413.
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 Luxembourg 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.
Although the company is included in the consolidated
financial statements of Société Financière des
Caoutchoucs, abbreviated as “Socfin", which is the
largest entity in which the company is consolidated,
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 Luxembourgish 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.
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.
Company financial statements
120
|
ANNUAL REPORT 2023
|
Socfinasia
At the balance sheet date:
- the acquisition price of the financial assets, expressed in
a currency other than the currency of the balance sheet,
remain 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 values 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 smallest difference between the
net book value of 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 and, in particular, 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 have ceased to exist.
Company financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
121
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.
Securities
Securities are valued at the lower of cost, including incidental
costs or market value. A value adjustment is recorded when the
market price is lower than the purchase price. Value adjustments
are not maintained if the reasons for their negotiations have
ceased to exist.
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 has during 2023, the Board of Directors continues to
monitor the evolving situation and its impact on the company’s
financial position and results.
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
290,868,480.28 291,418,270.12 116,045,211.05 120,642,097.14 406,913,691.33 412,060,367.26
Increases
4,500,000.00 0.00 0.00 0.00 4.500.000,00 0.00
Decreases
0.00 -549,789.84
-52,463,263.40
-4,596,886.09
-52,463,263.40
-5,146,675.93
Acquisition cost/nominal value
at the end of the year
295,368,480.28 290,868,480.28 63,581,947.65 116,045,211.05 358,950,427.93 406,913,691.33
Value adjustments
at the beginning of the year
-1,245,851,97 -1,593,441.81 0.00 0.00 -1,245,851.97 -1,593,441.81
Impairment
0.00 0.00 0.00 0.00 0.00 0.00
Reversal
0.00 347,589.84 0.00 0.00 0.00 347,589.84
Value adjustments
at the end of the year
-1,245,851.97 -1,245,851.97 0.00 0.00 -1,245,851.97 -1,245,851.97
Net book value
at the end of the year
294,122,628.31 289,622,628.31 63,581,947.65 116,045,211.05 357,704,575.96 405,667,839.36
Company financial statements
122
|
ANNUAL REPORT 2023
|
Socfinasia
Note 3. Financial fixed assets (continued)
Information on companies in which the Company holds at least 20% of the capital
Name Country % held
NET BOOK
VALUE
EUR Year end
Currencies
of the
annual
accounts
Net equity as at
31/12/2023 in
foreign currency
(including net
income) (*)
Net result as
at 31/12/2023
in foreign
currencies (*)
Induservices Luxembourg 35.00 35,000 31.12.2023 EUR 486,125 158,489
Plantation Nord-Sumatra Ltd Luxembourg 100.00 244,783,208 31.12.2023 USD 308,685,671 35,920,808
Socfinde Luxembourg 79.92 1,072,391 31.12.2023 EUR 6,667,848 644,758
Terrasia Luxembourg 47.81 118,518 31.12.2023 EUR 644,145 29,142
Induservices FR Switzerland 50.00 642,202 31.12.2023 EUR 877,365 -218,056
Socfinco FR Switzerland 50.00 486,891 31.12.2023 EUR 14,921,076 6,488,998
Sogescol FR Switzerland 50.00 1,985,019 31.12.2023 USD 16,660,468 6,705,434
Sodimex FR Switzerland 50.00 621,424 31.12.2023 EUR 4,313,232 609,180
Centrages Belgium 50.00 4,074,315 31.12.2023 EUR 3,295,563 117,522
Immobilière de la Pépinière Belgium 50.00 3,015,798 31.12.2023 EUR 3,518,757 -136,790
Socfinco Belgium 50.00 750,365 31.12.2023 EUR 1,527,706 -9,367
Socfin-KCD Cambodia 100.00 31,685,450 31.12.2023 USD 32,573,266 623,629
289,270,582
(*) Based on unaudited financial statements as at 31 December 2023.
Information on movements during the year
During the year, the company has participated in the capital increase of Management Associates for an amount of EUR 4,500,000.
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.
Company financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
123
Note 3. Financial fixed assets (continued)
Valuation of loans to affiliated undertakings
As at 31 December 2023, loans to affiliated undertakings are as follows:
Related parties Currency Balance Balance
Unrealised exchange
gains / (losses) *
in currency in EUR EUR
Induservices
EUR 132,500 132,500 0
Socfin
EUR 50,000,000 50,000,000 0
Socfin-KCD Co
USD 15,503,890 13,169,448 861,222
Management Associates
EUR 280,000 280,000 0
TOTAL
63,581,948 861,222
* In accordance with Luxembourgish legal and regulatory provisions and generally accepted accounting practices, loans
to affiliated undertakings are translated at the historical exchange rate. The unrealised foreign exchange gain or loss is
not recognised in the profit and loss account, with the exception of the current portion of receivables, which is valued
individually at the lower of their historical exchange rate value or their value determined by the exchange rate prevailing
at the balance sheet date.
During the year, the company has received a reimbursement of EUR 50,000,000 from Socfin and EUR 2,463,263
from Socfin KCD. As at 31 December 2023, the Board of Directors is of the opinion that these receivables do not
show any permanent impairment losses and consequently no impairment has been recorded.
Note 4. Amounts owed by affiliated undertakings
As at 31 December 2023, this item consists mainly of:
- receivables from the subsidiary Socfinde corresponding to the cash pooling balance of EUR 64,236,749
(2022: EUR 3,482,992).
This increase is mainly due to the reimbursement from Socfin. As at 31 December 2023, the Board of Directors
is of the opinion that the amounts are fully recoverable. As such, no impairment loss has been accounted for.
Company financial statements
124
|
ANNUAL REPORT 2023
|
Socfinasia
Note 5. Equity
Issued
capital
EUR
Legal
reserves
EUR
Other
reserves
EUR
Retained
earnings
EUR
Profit for
the year
EUR
Interim
dividend paid
EUR
Balance as at 1 January 2022
24,492,825.00 2,449,282.50 163,218,189.89 220,321,607.44 45,000,179.91 -8,708,560.00
Allocation of the result for the 2021 financial
year following decision of the General Meeting
held on 31 May 2022
• Retained earnings
14,520,219.91 -14,520,219.91
• Dividends
-19,594,260.00
• Directors’ fees
-2,177,140.00
• 2021 interim dividend
-8,708,560.00 8,708,560.00
Interim dividend as per decision of the Board of
Directors held on 27 October 2022
-43,542,800.00
Results for the financial year
70,684,906.52
Balance as at 31 December 2022
24,492,825.00 2,449,282.50 163,218,189.89 234,841,827.35 70,684,906.52 -43,542,800.00
Allocation of the result for the 2022 financial
year following decision of the General Meeting
held on 30 May 2023
• Retained earnings
-5,514,993.48 5,514,993.48
• Dividends
-29,391,390.00
• Directors’ fees
-3,265,710.00
• 2022 interim dividend
-43,542,800.00 43,542,800.00
Interim dividend as per decision of the Board of
Directors held on 26 October 2023
-43,542,800.00
Results for the financial year
48,129,963.38
Balance as at 31 December 2023
24,492,825.00 2,449,282.50 163,218,189.89 229,326,833.87 48,129,963.38 -43,542,800.00
Issued capital
As at 31 December 2023 and 2022, the issued and fully paid share capital is EUR 24,492,825 represented by 19,594,260 shares without
nominal value.
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 share capital. The legal reserve cannot be distributed.
Statutory reserves
The statutory reserve includes an unavailable reserve of EUR 125,993,370 (2022: EUR 125,993,370), relating to the profit earned
at the time of the formation of Plantation Nord-Sumatra Ltd. in 1997. Pursuant Article 33 of the Company’s coordinated Articles of
Association, this reserve is not available for distribution to shareholders.
Company financial statements
Socfinasia
|
ANNUAL REPORT 2023
|
125
Note 6. Other payables
As at 31 December 2023, this item includes interest payable for EUR 3,471,604 (2022: EUR 3,471,008).
Note 7. Income from participating interests
2023 2022
EUR EUR
Dividends received (*)
46,549,758 65,034,849
Capital gain on disposal of financial fixed assets (**)
5,013 18,750
46,554,772 65,053,599
(*) This amount corresponds to the dividend received from the affiliated undertakings (Note 3).
(**) This amount corresponds to a remaining amount form prior year disposal.
Note 8. Income from other investments and loans forming part of the
fixed assets
2023 2022
EUR EUR
Interest on related companies’ receivables
4,121,111 3,972,222
Note 9. Taxation
The Company is subject to all taxes to which Luxembourgish commercial companies are subject.
Based on the last filed tax return, the management of the company recognises that the company has
EUR 14,130,263 of carried forward tax losses available as at 31 December 2022.
Regarding the portion of the aforementioned losses that have been generated as from tax year 2017 (approximately
EUR 8,443,201) that amount can be carried forward for the seventeen years following the tax year in which the
losses arose.
Note 10. Remuneration of the Board of Directors
During 2023, the members of the Board of Directors received EUR 9,688 (2022: EUR 12,500) as attendance fees
and EUR 7,704,990 (2022: EUR 6,616,420) as directors’ fees.
During 2023, no advances or loans were granted to the Board members.
Company financial statements
126
|
ANNUAL REPORT 2023
|
Socfinasia
Note 11. Political and economic environment
The Company directly and indirectly holds interests in companies operating in Indonesia and Cambodia.
Given the political instability that exists in these countries and their economic fragility, the investments held by
the Company present a risk in terms of exposure to political and economic fluctuations.
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.
Socfinasia
|
ANNUAL REPORT 2023
|
127
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
G
,
crude palm oil, seeds, palm kernel oil, palm kernel
cake).
FOB – Free On Board is an Incoterm that means 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
G
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
G
(older standards), the interpretations of the IFRS
Interpretations Committee or of the predecessor IFRIC
as well as the former SIC.
Glossary
128
|
ANNUAL REPORT 2023
|
Socfinasia
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 247,910,361 (value
of Equity attributable to the owners of the Parent) by
19,594,260 (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
G
.
OWN PRODUCTION – Quantities of raw materials
G
(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
G
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
G
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
G
8:
- Segmental assets include fixed assets, biological
assets, trade receivables, inventories, cash and cash
equivalents. They do not include any consolidation
nor IFRS
G
adjustments;
- Segmental liabilities include only trade payables
and other payables. They do not include any
consolidation nor IFRS
G
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
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
Socfinasia
|
ANNUAL REPORT 2023
|
129
SPPI – Solely Payments of Principal and Interest. It
is in the context of IFRS
G
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…
130
|
ANNUAL REPORT 2023
|
Socfinasia