ANNUAL REPORT 2025
INSIDE
THIS
REPORT
01
OVERVIEW
AEP at a Glance 02
Key Information 04
Financial Highlights 05
Financial Record 06
Estate Areas 07
Location of Estates and Mills 08
Chairman’s Statement 09
02
STRATEGIC REPORT
Business Model 16
Our Strategy 17
Our Marketplace 18
Non-Financial and Sustainability
Information Statement
20
Operational & Financial Review 22
Business Review 25
Corporate Social Responsibility 30
ESG Practices 38
Climate and Nature-Related Risks and
Opportunities
51
Statement by Directors in Performance of
their Statutory Duties in accordance with
Section 172(1) of the Companies Act 2006
97
UNLOCKING
SHAREHOLDER VALUE
A bold “A” anchors our 2025 Annual
Report — marking a new name, a new logo,
and the first step in a visual progression
towards the full AEP mark.
Layered with imagery from our plantations
and produce, this “A” captures the depth
of our core operations and the strength of
our foundation. It embodies our identity
and intent: rooted in fundamentals like
fresh fruit bunches (“FFB”) yields, while
signaling momentum toward our 2026-
2030 strategy. The end cover brings this
narrative full circle, presenting our key
value drivers which are brought together
as a unified system, such as our estates,
mills, environmental, social, governance
(“ESG”) people, innovation, and disciplined
growth, illustrating how each element
connects to unlock and deliver sustainable
shareholder value
A new chapter begins. A foundation set.
AEP in motion.
1
03
GOVERNANCE
Directors’ Report 99
Directors’ Responsibility 104
Directors’ Profile 105
Statement on Corporate Governance 108
Audit Committee Report 115
Risk Management Committee Report 119
Directors’ Remuneration Report 122
04
FINANCIAL
STATEMENTS
Independent Auditor’s Report 137
Consolidated Income Statement 150
Consolidated Statement of Comprehensive
Income
151
Consolidated Statement of Financial Position 152
Consolidated Statement of Changes in Equity 154
Consolidated Statement of Cash Flows 155
Notes to the Consolidated Financial
Statements
157
Company Statement of Financial Position 215
Company Statement of Changes in Equity 216
Notes to the Company Financial Statements 217
05
OTHER
INFORMATION
Notice of Annual General Meeting 227
Shareholder Information 231
Our Offices & Advisers 232
Glossary 233
For more information online,
scan QR Code to visit our
corporate website at
https://aepplantations.com
Our reporting currency is the United States
Dollar. The following currencies may appear in
this Annual Report:
• $ and ¢: United States Dollars and cents
• £ and p: British Pound Sterling and pence
• RM: Ringgit Malaysia
• Rp: Indonesian Rupiah
2
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
AEP AT A GLANCE
The AEP group of
companies (“Group”)
is a producer of
sustainable palm oil,
owning, operating
and developing
plantations and mills
across Indonesia and
Malaysia.
Primary activities include
growing oil palms, FFB, and
processing them into crude
palm oil (“CPO”) and palm
kernels (“PK”).
AEP Group is committed to
the responsible development
of its plantations and
facilities, with particular
attention to both the
environment and society in
which it operates.
OIL PALM PLANTATIONS
Our Group is currently cultivating over 56 thousand ha in mature oil palms (excluding smallholder
cooperative plasma scheme (“Plasma”)) across 13 plantations in Indonesia, together with one (1)
plantation in Malaysia. The weighted average age of the trees in our Group is approximately 14
years. In 2025, our Group produced 1.1 million mt of FFB (2024: 1.0 million mt).
OIL PALM DEVELOPMENT
An oil palm tree usually takes around three (3) years from planting to harvest of the first crop and
will reach peak production around year 10. Our Group has approximately 8.8 thousand hectares
(“ha”) of immature plantations as at 31 December 2025 of which 2.7 thousand ha (excluding Plasma
scheme) were planted in 2025.
PALM OIL MILLS
Our Group operates seven (7) palm oil mills processing up to a combined capacity of 400 mt of FFB
per hour. The combined oil extraction rate (“OER”), being the percentage of CPO extracted from
FFB in 2025, averaged 19.8% while kernel extraction rate, being the percentage of PK extracted
from FFB, averaged 4.9%. The total FFB throughput at the Group’s mills in 2025 was 2.1 million mt
producing 0.4 million mt of CPO and 0.1 million mt of PK.
In line with our long-term growth strategy and commitment to enhancing operational capacity, our
Group has commenced construction of its eighth (8
th
) palm oil mill within the KAP estate. The new
mill is designed to support the growing FFB production from our maturing estates and to improve
logistics efficiency by reducing transportation distances and turnaround time. The mill is planned
with modern processing technology to optimise extraction efficiency, improve energy utilisation
and meet applicable environmental and sustainability standards.
Currently, construction is underway with commissioning and testing targeted for January 2027.
Upon completion, the new mill will further strengthen our Group’s processing capacity, support
higher crop intake in the surrounding estates and position the Group to capture additional value
across the upstream segment.
THIRD-PARTY CROP PURCHASES
In 2025, our Group purchased approximately 1.2 million mt of FFB from external/third-party
producers, comprising smallholders, local farmers and Plasma, for processing through our seven
(7) mills.
BIOGAS PLANTS
Four (4) mills are equipped with biogas plants that capture the methane gas emission to generate
electricity for internal consumption, with surplus power sold to the Indonesian state authorities. This
reduces the mills’ reliance on fossil fuels and improves our Group’s carbon footprint. In 2025, our
Group sold 11.7 GWh of surplus electricity to the Perusahaan Listrik Negara (“PLN”), Indonesia’s
state-owned electricity company.
Furthermore, our first Bio-compressed natural gas (“BioCNG”) plant at the Blankahan estate, which
converts methane captured from palm oil mill effluent (“POME”) into compressed natural gas, has
a production capacity of up to 300 MMBtu per day. Our second BioCNG plant at the Tasik estate
commenced commercial operations in July 2025 and has a production capacity of up to 450 MMBtu
gas per day. Together, the two (2) BioCNG plants delivered a total of 168,253 gas MMBtu in FY2025.
With both facilities in operation, the Group has further strengthened its renewable energy portfolio,
reduced greenhouse gas emissions through methane capture and enhanced value creation by
monetising POME and related by-products.
3
1
2
3
4
5
SECTION 1 :
OVERVIEW
OIL PALM PLANTATIONS
Our Group is currently cultivating over 56 thousand ha in mature oil palms (excluding smallholder
cooperative plasma scheme (“Plasma”)) across 13 plantations in Indonesia, together with one (1)
plantation in Malaysia. The weighted average age of the trees in our Group is approximately 14
years. In 2025, our Group produced 1.1 million mt of FFB (2024: 1.0 million mt).
OIL PALM DEVELOPMENT
An oil palm tree usually takes around three (3) years from planting to harvest of the first crop and
will reach peak production around year 10. Our Group has approximately 8.8 thousand hectares
(“ha”) of immature plantations as at 31 December 2025 of which 2.7 thousand ha (excluding Plasma
scheme) were planted in 2025.
PALM OIL MILLS
Our Group operates seven (7) palm oil mills processing up to a combined capacity of 400 mt of FFB
per hour. The combined oil extraction rate (“OER”), being the percentage of CPO extracted from
FFB in 2025, averaged 19.8% while kernel extraction rate, being the percentage of PK extracted
from FFB, averaged 4.9%. The total FFB throughput at the Group’s mills in 2025 was 2.1 million mt
producing 0.4 million mt of CPO and 0.1 million mt of PK.
In line with our long-term growth strategy and commitment to enhancing operational capacity, our
Group has commenced construction of its eighth (8
th
) palm oil mill within the KAP estate. The new
mill is designed to support the growing FFB production from our maturing estates and to improve
logistics efficiency by reducing transportation distances and turnaround time. The mill is planned
with modern processing technology to optimise extraction efficiency, improve energy utilisation
and meet applicable environmental and sustainability standards.
Currently, construction is underway with commissioning and testing targeted for January 2027.
Upon completion, the new mill will further strengthen our Group’s processing capacity, support
higher crop intake in the surrounding estates and position the Group to capture additional value
across the upstream segment.
THIRD-PARTY CROP PURCHASES
In 2025, our Group purchased approximately 1.2 million mt of FFB from external/third-party
producers, comprising smallholders, local farmers and Plasma, for processing through our seven
(7) mills.
BIOGAS PLANTS
Four (4) mills are equipped with biogas plants that capture the methane gas emission to generate
electricity for internal consumption, with surplus power sold to the Indonesian state authorities. This
reduces the mills’ reliance on fossil fuels and improves our Group’s carbon footprint. In 2025, our
Group sold 11.7 GWh of surplus electricity to the Perusahaan Listrik Negara (“PLN”), Indonesia’s
state-owned electricity company.
Furthermore, our first Bio-compressed natural gas (“BioCNG”) plant at the Blankahan estate, which
converts methane captured from palm oil mill effluent (“POME”) into compressed natural gas, has
a production capacity of up to 300 MMBtu per day. Our second BioCNG plant at the Tasik estate
commenced commercial operations in July 2025 and has a production capacity of up to 450 MMBtu
gas per day. Together, the two (2) BioCNG plants delivered a total of 168,253 gas MMBtu in FY2025.
With both facilities in operation, the Group has further strengthened its renewable energy portfolio,
reduced greenhouse gas emissions through methane capture and enhanced value creation by
monetising POME and related by-products.
AEP AT A GLANCE (CONTINUED)
4
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
KEY INFORMATION
AVERAGE AGE
OF OUR PALM:
14
PALM MATURITY PROFILE (DECEMBER 2025):
Old: 22%
Immature: 14%
Prime: 38%
Young: 26%
CPO & PK PRODUCTION (’000 MT)
’000 MT
500
400
300
200
100
0
2021 2022 2023 2024 2025
CPO PK
104
106
93
106
114
473
456
449
397
426
OWN FFB PRODUCTS VS. THIRD-PARTY FFB PURCHASED (’000 MT):
’000 MT
1,200
1,000
800
600
400
200
0
2021 2022 2023 2024 2025
Own FFB Produced Third-Party FFB Purchased
1,171
1,189
1,142
1,080
1,080
989
1,170
1,124
1,020
1,081
5
1
2
3
4
5
SECTION 1 :
OVERVIEW
FINANCIAL HIGHLIGHTS
2021 2022 2023 2024 2025
433.4
447.6
370.4
372.3
465.2
Revenue
($m)
2021 2022 2023 2024 2025
96.1
86.9
49.4
67.5
90.9
Profit Attributable to Shareholders
($m)
2021 2022 2023 2024 2025
440.0
466.1
513.6
551.0
580.7
Net Assets
(Excluding NCI) ($m)
2021 2022 2023 2024 2025
1,110
1,176
1,298
1,395
1,497
Asset Value Per Share
(¢)
2021 2022 2023 2024 2025
242
219
125
171
231
Earnings Per Share
(¢)
2021 2022 2023 2024 2025
129.3
132.9
69.7
81.7
111.6
Operating Profit
($m)
6
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
FINANCIAL RECORD
Income statement
2025
$000
2024
$000
2023
$000
2022
$000
2021
$000
Continuing operations
Revenue 465,211 372,263 370,435 447,619 433,421
Operating profit 111,553 81,734 69,712 132,895 129,332
Profit attributable to shareholders 90,882 67,514 49,418 86,877 96,054
Dividend proposed for year (31,360) (20,091) (11,868) (9,909) (1,982)
Financial position $000 $000 $000 $000 $000
Non-current assets & long-term
receivables 290,655 295,644 302,034 269,498 282,581
Cash net of short-term
borrowings 231,845 181,908 152,984 221,476 218,249
Other working capital* 64,515 81,231 64,284 81,571 38,284
Deferred tax (2,088) (325) 1,313 3,145 2,994
584,927 558,458 520,615 575,690 542,108
Non-controlling interests (4,238) (7,427) (6,976) (109,595) (102,078)
Net assets (excluding NCI) 580,689 551,031 513,639 466,095 440,030
Share capital 15,504 15,504 15,504 15,504 15,504
Treasury shares (13,840) (2,487) (1,847) (1,171) (1,171)
Share premium and capital
redemption reserve 25,022 25,022 25,022 25,022 25,022
Exchange reserves (381,476) (364,402) (341,180) (288,891) (241,907)
Retained earnings 935,479 877,394 816,140 715,631 642,582
Equity attributable to
shareholders’ funds 580,689 551,031 513,639 466,095 440,030
Ordinary shares in issue (‘000s) 39,976 39,976 39,976 39,976 39,976
Basic EPS (US cents) 231.42cts 170.88cts 124.92cts 219.19cts 242.34cts
Dividend per share for year
(US cents) 81.0cts 51.0cts 30.0cts 25.0cts 5.0cts
Asset value per share (US cents) 1,497cts 1,395cts 1,298cts 1,176cts 1,110cts
Exchange rates - year end
Rp : $ 16,782 16,162 15,416 15,731 14,269
$ : £ 1.35 1.25 1.27 1.20 1.35
RM: $ 4.06 4.47 4.60 4.41 4.17
Exchange rates - average
Rp : $ 16,475 15,847 15,255 14,810 14,312
$ : £ 1.32 1.28 1.24 1.24 1.38
RM: $ 4.28 4.57 4.56 4.40 4.15
* Other working capital comprises current assets, excluding cash and cash equivalents, less current liabilities and non-current
liabilities, with the exception of deferred tax liabilities..
7
1
2
3
4
5
SECTION 1 :
OVERVIEW
ESTATE AREAS
GROUP
TOTAL MALAYSIA
INDONESIA
TOTAL
NORTH
SUMATRA BENGKULU RIAU BANGKA KALIMANTAN
Mills/Biogas Plants
Number of Mills 7 - 7 3 2 1 - 1
Number of Biogas
Plants 4 - 4 2 1 - - 1
Combined Mills
Capacities (mt/hr) 400 - 400 160 120 60 - 60
Planted at
31 December 2025 Ha Ha Ha Ha Ha Ha Ha Ha
Oil palm
Mature 56,224 3,414 52,810 17,058 11,876 4,013 2,568 17,295
Immature 8,758 - 8,758 1,729 4,634 492 256 1,647
Total oil palm 64,982 3,414 61,568 18,787 16,510 4,505 2,824 18,942
Oil palm under Plasma
Scheme
Mature 3,422 - 3,422 230 - - 485 2,707
Immature 920 - 920 - - - 37 883
Total oil palm under
Plasma scheme 4,342 - 4,342 230 - - 522 3,590
Total oil palm
(including Plasma
scheme) 69,324 3,414 65,910 19,017 16,510 4,505 3,346 22,532
Others
Reserve 7,876 1,646 6,230 777 - - 1,220 4,233
Unplantable Areas 8,015 1,236 6,779 1,037 1,463 45 2,254 1,980
Oil Palm Nursery/
Mill/Infrastructure 3,147 72 3,075 1,038 552 98 22 1,365
Total other area 19,038 2,954 16,084 2,852 2,015 143 3,496 7,578
Total area 88,362 6,368 81,994 21,869 18,525 4,648 6,842 30,110
8
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
LOCATION OF ESTATES AND MILLS
2
3
4
5
6
7
8
9
12
13
14
Kalimantan
1
Peninsular Malaysia
10 11
6. HPP
7. CPA
8. Tasik
9. BPJ
10. MPM
11. Alno
12. BML
13. AEPN
14. KAP
1. Cenderung
2. Sungei Musam
3. Blankahan
4. Rambung
5. Anak Tasik
Estates
Estates with Mill
Estates with Mill & Biogas
Estates, Mill, Biogas & BioCNG
Sumatra
9
1
2
3
4
5
SECTION 1 :
OVERVIEW
CHAIRMAN’S STATEMENT
Our 2025 EPS from
continuing operations grew
by 35% to 231¢ per share,
reflecting the strength of
our business and team. In
light of this performance,
the Board is pleased to
declare a total dividend of
81¢ per share, reinforcing
our commitment to
shareholder value.
Jonathan
Law Ngee Song
Chairman
We delivered a strong trading performance
in 2025, supported by resilient operational
execution and favourable CPO and PK prices.
We achieved increased production volumes
and strong cash generation, reflecting both
the quality of our plantation assets and the
effectiveness of our operational strategy.
Operationally, we delivered a 6% increase in
FFB production, primarily driven by improved
output from young and matured palms in the
Bengkulu and Kalimantan regions in Indonesia.
FFB bought-in production increased by 18%,
primarily due to new third-party crop intake at the
recently commissioned PT Hijau Pryan Perdana
(“HPP”) Mill (North Sumatra) and Bengkulu
region. As a result, total CPO production rose
by 7%, while total PK production increased by
13%.
Revenues rose by 25% to $465.2 million (2024:
$372.3 million), mainly attributable to higher
production volumes and stronger CPO and PK
prices during the year.
Profit before tax increased by 35% to $119.3
million (2024: $88.1 million), driven by higher
production volumes and stronger CPO and
PK prices during the year. Earnings per share
increased by 35% to 231.42 cents (2024: 170.88
cents), reflecting the stronger operating
performance for the year.
The strength of our financial performance
has further reinforced our balance sheet and
enhanced our strategic flexibility. It enables us to
continue investing in the long-term sustainability
of our estates through replanting programmes,
pursue selective growth opportunities, support
shareholder returns and maintain a resilient
financial position.
10
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
CHAIRMAN’S STATEMENT (CONTINUED)
Our achievements also reflect the significant effort
and disciplined execution across our Group over
the past year, as our board of directors (“Board”)
and management team focused on strengthening
the operational and financial foundations of
the business. Priority has been placed on
rehabilitating older plantations, enhancing estate
productivity, expanding our Group’s land bank
and maintaining a disciplined capital deployment.
These initiatives are intended to reinforce the long-
term sustainability and resilience of our Group’s
asset base.
Supported by the commitment and dedication of
our teams across our Group, these efforts have
contributed to a stronger operational platform and
improved financial performance. Our Group now
benefits from a robust balance sheet and strong
cash generation, providing the flexibility to continue
investing in the long-term development of our
estates while also returning capital to shareholders
through dividends and share buybacks.
Our Board continues to adopt a disciplined and
balanced approach to capital allocation, ensuring
that sufficient resources are retained to support
organic expansion and selective acquisitions, while
delivering sustainable returns to shareholders.
During the year, our Group marked an important
milestone with the successful completion of its
rebranding to AEP Plantations Plc, which took
effect on 24 November 2025.
This development represents more than a change
in name; it reflects the continuing transformation
of our Group as we evolve to meet new
opportunities in a dynamic industry landscape.
As the organisation grows in scale, capability
and ambition, the refreshed identity signals our
readiness to move confidently into the next phase
of our journey while remaining firmly rooted in the
heritage and values that have guided us for over
four (4) decades.
We continue to build on our strong legacy while
strengthening our capabilities to create enduring
value for our shareholders, partners, employees
and the communities in which we operate.
We were also pleased to have been promoted
to the FTSE 250 Index, effective 17 September
2025. This advancement followed the substantial
appreciation in the Company’s share price and the
corresponding growth in its market capitalisation.
Our inclusion in the FTSE 250 reflects the
culmination of many years of disciplined execution,
operational resilience, and the unwavering
commitment of our people across the Group. The
progress we have achieved has been built steadily
over time through a clear strategic focus, prudent
management of our assets, and the collective
efforts of the teams across our organisation.
GROWTH OPPORTUNITIES AND STRATEGIC
EXPANSION
Looking ahead, our Group is entering an exciting
new phase of growth, with Indonesia firmly at the
centre of our long-term strategy.
A key pillar of this strategy is the proposed initial
public offering of our Indonesian subsidiary,
PT AEP Nusantara Plantations Tbk (“Proposed
IPO”). The Proposed IPO represents a natural
progression in aligning our capital structure with
our operational footprint, while broadening our
investor base and enhancing access to local capital
markets. It is expected to support targeted capital
expenditure, including infrastructure development
and processing capacity and to accelerate our
expansion in Kalimantan.
Our achievements also reflect
the significant effort and
disciplined execution across
our Group over the past year,
as our Board and management
team focused on strengthening
the operational and financial
foundations of the business.
11
1
2
3
4
5
SECTION 1 :
OVERVIEW
CHAIRMAN’S STATEMENT (CONTINUED)
The Proposed IPO and the potential addition of
PT JJU represent a balanced and complementary
growth strategy, combining capital market
initiatives, earnings-accretive acquisitions and
operational expansion. These initiatives reflect a
consistent strategic logic: disciplined expansion in
markets where we have demonstrated operational
capability, funded from a position of balance sheet
strength. These developments remain subject
to the requisite regulatory approvals, and we
will provide further updates in due course as the
process progresses.
Our Board remains committed to pursuing growth
in a disciplined and selective manner, ensuring
that all investments are aligned with our strategic
priorities and are expected to be accretive to
shareholder value.
SHAREHOLDER RETURNS
AEP delivered outstanding shareholder returns in
2025, with its share price rising 212% to £19.10, as at
8 April 2026, recording its strongest performance
since the current management team’s appointment
on 1 October 2024.
This significant uplift reflects our Board and
management team’s focused and disciplined
execution. Over the past year, we have prioritised
rehabilitating mature plantations, improving
estate productivity, expanding our land bank, and
maintaining strict capital discipline. These actions
have strengthened our operational platform,
enhanced financial performance, and driven strong
cash generation.
As a result, our Group now benefits from a robust
balance sheet and the financial flexibility to both
invest for long-term growth and return capital to
shareholders.
In line with this, our Board has declared a final
dividend of 43.7 cents per Share. With an interim
dividend of 37.3 cents per Share already paid,
the total dividend declared for the year ended
31 December 2025 will be 81.0 cents (2024: 51.0
cents per Share), representing approximately 35%
of retained profits attributable to our Group for the
year and higher than our dividend policy. Subject
to shareholder approval at the forthcoming Annual
General Meeting, the final dividend will be paid on
30 July 2026 to shareholders on the register on 19
June 2026.
In addition to dividend distributions, our Board
continues to view share buybacks as an effective
means of enhancing our shareholder value where
AEP’s ordinary shares (“Share(s)”) are traded at
a discount to their underlying intrinsic value. In
2025, our Group repurchased 707,762 Shares at
a total cost of £8.7 million at an average price of
£12.20 per Share. Building on this, a further share
buyback programme of up to £8.0 million was
announced in January 2026.
INVESTOR ENGAGEMENT AND MARKET
OUTREACH
During the year, we undertook a step change in
our approach to investor engagement and market
outreach. This initiative was led by our Executive
Director, Marcus Chan, who spearheaded a
structured programme of meetings and investor
roadshows with both existing and prospective
shareholders.
12
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
CHAIRMAN’S STATEMENT (CONTINUED)
These engagements were supported by a comprehensive investor presentation, which articulated AEP’s
strategy, operational footprint, asset quality, financial strength, sustainability agenda and long-term
value proposition. The objective was to ensure that the market gained a deeper and more accurate
understanding of the fundamentals of our business and the strategic direction set by our Board.
The feedback received from investors has been constructive and encouraging. This improved sentiment
was further complemented by the initiation of independent research coverage by our corporate adviser,
which recognised the strategic reset undertaken by our Board and management, the strengthening
operational and financial performance of our Group, and the growing visibility of AEP’s intrinsic value in
the market.
I firmly believe that consistent, transparent and proactive communication with the investment community
is critical to building long-term trust, improving market understanding and supporting sustainable
shareholder value creation. Our Board views this inaugural investor engagement initiative as an important
foundation for more regular and meaningful dialogue with shareholders in the years ahead.
REPLANTING TO IMPROVE LONG-TERM YIELD
Actual Target
Total 2022-2024 2025 2026 Total 2027-2030
Replanting (ha) 4,101 2,440 2,750 7,074
13
1
2
3
4
5
SECTION 1 :
OVERVIEW
CHAIRMAN’S STATEMENT (CONTINUED)
To ensure the improvement of yields, our Company
has intensified its replanting efforts in recent years.
In 2025 alone, approximately 2.4 thousand ha of
aged, low-yielding palms were replanted. Looking
ahead, AEP aims to replant around 10 thousand
ha as part of its 2026–2030 programme, with 2.8
thousand ha identified for replanting in 2026.
This initiative, involving the use of higher-yielding
and disease-resistant palm varieties, is expected
to significantly boost productivity and deliver
improved and sustainable returns.
Our Group’s replanting programme continues to
progress in line with plan. By 2028, AEP expects
to have replaced substantially all older palms trees
in Sumatra estates with younger planting material
that is more disease-resistant, higher yielding and
capable of delivering improved oil extraction rates
compared to earlier generations.
OUR PEOPLE
Our performance is the result of the sustained
efforts of our teams across our Group, who have
continued to focus on improving productivity,
maintaining operational discipline and optimising
resource utilisation. Their commitment has enabled
our Group to deliver consistent operational
outcomes while navigating a dynamic market
environment.
On behalf of our Board, I would like to convey our
sincere thanks to our management and employees
of our Group for their dedication, loyalty,
resourcefulness, commitment, and contribution to
our Group.
OUTLOOK
CPO remains competitively priced against other
vegetable oils, with its discount to soybean oil
continuing to support demand, particularly in
cost-sensitive markets. In addition, Indonesia’s
mandatory B50 biodiesel programme, effective
from July 2026, is expected to drive stronger
CPO demand and serve as a key anchor for price
stability.
Near-term volatility is expected to persist, driven
by geopolitical tensions, especially in the Middle
East, which impact crude oil prices, freight costs,
and overall market sentiment. These factors
are also contributing to rising input costs, with
increases in diesel and fertiliser prices, particularly
urea, weighing on plantation margins.
Notwithstanding the rising costs, given that CPO
prices are expected to remain elevated, we expect
sustainable performance for 2026.
JONATHAN LAW NGEE SONG
Chairman
30 April 2026
14
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STRATEGIC
REPORT
This Strategic Report has been prepared
to provide shareholders with information
to complement the financial statements.
Operational KPIs
YIELD PER HA:
Measures the amount of
palm oil produced per
hectare of plantation land.
2025:
19.2mt/ha
2024: 17.8mt/ha
OER:
Evaluates the efficiency of
oil extraction from FFB.
2025:
19.8%
2024: 20.2%
MILL UTILISATION RATE:
Measures the percentage of
the mill’s total processing
capacity being used.
2025:
112%
2024: 102%
15
1
2
3
4
5
SECTION 2 :
STRATEGIC REPORT
Financial KPIs
Sustainability KPIs
SCOPES 1 & 2 EMISSIONS:
Measures direct and indirect
greenhouse gas (“GHG”)
Emissions of our Group.
2025:
1.5 million
tCO
2
e
2024: 1.2 million tCO
2
e
SPOTT SCORE:
Assesses our
public disclosure
and transparency
regarding ESG
practices.
2025:
61.2%
2024: 60.2%
COMPLIANCE WITH
SUSTAINABILITY
POLICIES:
Ensures adherence to
relevant sustainability
standards and policies.
2024 & 2025:
We are compliant certified
with MSPO, ISPO, TCFD,
ISO 14001, ISO 14064-1 and
ISCC. RSPO certification is
in progress.
GROSS PROFIT MARGIN:
Measures the percentage
of revenue remaining after
deducting production costs.
2025:
26.6%
2024: 23.8%
NET PROFIT MARGIN:
Tracks the percentage of
revenue left after all expenses,
including taxes and interest.
2025:
18.6%
2024: 18.2%
16
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STRATEGIC REPORT (CONTINUED)STRATEGIC REPORT (CONTINUED)
Plantations Palm Oil Mill
Optimisation of existing assets
Implement best
management
practices to ensure
the effective
management of
established oil palm
plantations
Enhance the
efficiency of
operations at
existing palm oil
mills and increase
the sourcing of FFB
from surrounding
plantations to boost
productivity and
overall performance
Expansion into strategic locations
Acquire new oil
palm plantations
in Indonesia
and Malaysia to
strengthen AEP’s
sustainable growth
Setup or acquire new
mills to serve the
company’s plantations
and surrounding
smallholders
Our core values are as follows:
Walk the
block
We walk the
field to grasp
its dynamics
and be in it
to win it
Result-driven
We set
clear goals,
evaluate
progress
and achieve
meaningful
outcomes
Accountability
We own
our actions,
maintaining
openness and
integrity in
everything we
do
Excellence
We aim to do
better every
day, pursuing
continuous
improvement
and learning
to deliver
our best as a
team
People
We recognise
talent and
reward
performance,
promoting
the growth
and success
of our people
WE A PR E
BUSINESS MODEL
Our Group will continue to focus on its strength
and expertise, which is sustainably cultivating
oil palm for FFB and to turn them into CPO. To
increase production and reduce costs, our business
activities revolve mainly around the following:
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The culture is instilled throughout the workforce,
through these three main channels:
OUR STRATEGY
Our strategic focus is to drive sustainable growth
and unlock shareholder value by improving
operational performance, enhancing yields and
developing new value-accretive growth platforms.
Climate-related risks and opportunities are
integrated into AEP’s strategy and capital
allocation decisions. Through Climate Scenario
Analysis (“CSA”), the Group has identified
key physical risks, including rainfall variability,
flooding, drought, and temperature increases, as
well as transition risks linked to evolving regulatory
frameworks and market expectations. These risks
are considered in operational planning, including
yield optimisation, infrastructure investments
and sustainability initiatives, ensuring alignment
between long-term resilience and financial
performance.
A key priority is to increase the yield of our
Indonesian plantations to 25 mt/ha by 2030,
positioning our Group towards the upper quartile
of Indonesian oil palm peers. To achieve this, a
structured yield enhancement programme is
being implemented, focusing on:
• Replanting of mature palm trees (>25 years)
to rejuvenate estate productivity;
• Block-by-block yield improvement initiatives,
including identification, rectification, and
rehabilitation of underperforming areas; and
• Enhanced estate management and cost
control to improve overall efficiency.
In parallel, our Group is strengthening its milling
operations to improve extraction rates and
optimise processing costs, thereby increasing
value derived from each tonne of FFB.
Beyond core operations, AEP is investing in
downstream and strategic projects, including
new mills, PK crushing facilities, and digital/
monitoring systems, to enhance operational
control and capture additional value across the
supply chain.
1) Lead by Example:
Our managers and leaders demonstrate the
core values in their behaviour to inspire others
to emulate the same values, fostering trust,
respect and alignment within the organisation.
3) Recognise and Reinforce:
We celebrate and reward employees who
demonstrate the core values through their
behaviour and work. This positively reinforces the
concept and encourages others to follow suit.
2) Simplify and Engage:
The core values are displayed prominently
with simple language, relatable concepts and
infographics to ensure the message resonates
and stays memorable.
18
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STRATEGIC REPORT (CONTINUED)
Our Group also remains committed to sustainable and responsible practices, including the pursuit of
RSPO certification, expansion of social forestry initiatives, and maintaining high standards in safety
and environmental management. These efforts support long-term resilience and align with increasing
stakeholder expectations on ESG performance.
While revenue is influenced by CPO price volatility and external factors such as weather conditions,
our Group’s strategy focuses on controllable drivers, particularly yield improvement, cost discipline,
and operational excellence.
The Indonesian regulatory framework imposes certain constraints on plantation expansion, including
land ownership caps and limitations for foreign-controlled entities. In addition, the availability of
suitable land is increasingly limited. In response, AEP adopts a disciplined expansion strategy, focusing
on selective acquisitions and maximising productivity from its existing land bank.
Through a combination of higher yields, improved efficiency, disciplined capital deployment, and
strong ESG practices, the Group aims to deliver sustainable long-term value for shareholders.
OUR MARKETPLACE
AEP believes in the long-term potential of palm oil. With its economic production advantages compared
to alternative oils and its status as the most productive source of vegetable oil, palm oil continues to
play a vital role in meeting the demands of a growing global population. AEP remains focused on
leveraging these strengths to deliver value while upholding its commitment to sustainable practices
and responsible growth.
For comparison, the land needed to process one litre (per annum) of refined palm oil vs other refined
crop oils is as follows:
Crop Area required to produce 1L
Palm 1.7 m
2
Soybean 22.4 m
2
12x more land needed than palm
Rapeseed 8.4 m
2
4x more land needed than palm
Sunflower 10.5 m
2
5x more land needed than palm
Corn 58.1 m
2
34x more land needed than palm
Peanut 9.4 m
2
5x more land needed than palm
Compared to palm oil, other crops would require four (4) to 34 times more land to produce an
equivalent weight of palm oil, making palm oil a more sustainable choice compared to other edible
vegetable oils. Additionally, oil palm has a long and productive biological life of 25 years compared to
yearly planting for other soft oils.
Additionally, we have established our own mills in or near our plantations for several strategic and
operational reasons:
• Cost Efficiency and Increased Profit Margins: By processing FFB on-site, we reduce transportation
costs and minimise delays, ensuring the freshness of the fruit and higher OERs, along with being
able to capture more value from the supply chain.
• Quality Control: By owning our own mills, we are able to maintain strict quality standards throughout
the production process, ensuring premium-grade CPO.
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CPO prices in 2025 were generally higher than 2024, starting at $1,225/mt in January. CIF Rotterdam
price averaged at $1,151/mt for the year, 5% higher than last year. Our average ex-mill price for 2025
was at $853/mt, 7% higher than last year of $794/mt. Ex-mill prices are lower than CIF Rotterdam
prices due to logistic, insurance costs, Indonesian levies, and taxes.
Global palm oil market conditions in 2025 were shaped by geopolitical tensions, trade uncertainties,
and inflationary pressures. While these factors weighed on sentiment, CPO prices were supported
by firm demand from key markets and the expansion of Indonesia’s biodiesel mandate. However,
competition from other vegetable oils continued to create price volatility.
Ukraine remained a key exporter of sunflower oil to the European Union despite ongoing challenges,
while Brazil’s strong soybean production and ample global inventories sustained competition from
soybean oil.
• Sustainability: Integrated mills enable us to adopt eco-friendly practices by utilising by-products
like Empty Fruit Bunches (“EFB”) and POME for energy generation via Biogas and BioCNG plants
or repurposing them as organic fertilisers, and ensuring efficient waste management systems.
• Operational Independence: Plantations with own mills are not reliant on external processing
facilities, reducing logistical challenges and potential bottlenecks in production.
In addition to our own FFB, our mills accept FFB from external sources including crops from our
Plasma scheme and surrounding plantations including smallholders and communities. Despite stiff
competition for external crops from surrounding millers, AEP is committed to purchasing more external
crops from these external sources at competitive, yet fair prices, to maximise the production efficiency
of our mills. With higher throughput, the mills would achieve economies of scale in production. AEP
achieved a mill utilisation rate of 112% in 2025 vs 102% in 2024.
A mill is deemed to achieve 100% mill efficiency when it operates 16 hours a day for 300 days per
annum.
COMMODITY PRICES
1,500
1,400
1,300
1,200
1,100
1,000
900
800
700
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$/MT
CPO Price 2025 vs 2024
2025 2024
Source: LSEG Workspace
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AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STRATEGIC REPORT (CONTINUED)
The relative pricing of soft oils remained a key determinant of CPO demand. Although periods of
tighter supply allowed palm oil to trade at a premium, the narrowing price gap with competing oils
reduced its price advantage in certain markets, moderating demand growth in price-sensitive regions.
Over a period of 10 years, CPO price has touched a monthly average low of $472/mt in November
2018 and a monthly average high of $1,857/mt in March 2022. The monthly average price of CPO from
2016 to 2025 was about $907/mt.
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
Our Group complies with the requirements of Section 414CB of the Companies Act 2006 by providing
a wide range of non-financial information about employees, environmental, and social matters in
the table below and in our website. Additionally, AEP has identified key non-financial performance
indicators to measure progress, particularly in relation to carbon emissions and alignment with the Task
Force on Climate-related Financial Disclosures (“TCFD”) recommendations set out in this Strategic
Report.
Non-financial matter Policies and standards which govern our approach Page 38
Business model Business model and strategy Pages 16-17
Principal risks and uncertainties Pages 42-51
Environmental
matters
Principal risks and uncertainties: Country, regulatory and
governance practices
Pages 54-57
Principal risks and uncertainties: Weather and
Environmental and conservation practices
Pages 58-93
Source: LSEG Workspace
2,500
2,000
1,500
1,000
500
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
$/MT
CPO CIF Rotterdam (from year 2016 to 2025)
CPO CIF ROTTERDAM – 10-YEARS PRICE TREND
21
STRATEGIC REPORT (CONTINUED)
1
2
3
4
5
SECTION 2 :
STRATEGIC REPORT
Environmental
matters (continued)
Sustainable Palm Oil Certification Page 37
ESG practices Page 38
Climate-related financial disclosures: Pages 51-89
• Management of Climate Risks Pages 71-80
• Metrics and targets Pages 80-81
• Carbon Reporting 2025 Targets Page 85
GHG emissions tables (Scope 1, 2, 3) Pages 85-89
Corporate Governance: Environmental and corporate
responsibility
Pages 108-114
Other responsible agricultural practices and sustainable
policies can be found on our website
Page 70
Board diversity Page 94
Employees and
Health & Safety
Employees: Employment policies
Directors’ Remuneration Report: Employees engagement
Pages 95-96,
129
Workers are protected from exposure to occupational
health and safety hazards that are likely to pose immediate
risk of permanent injury, illness or fatality. Proper signages
are in place at relevant spots to alert employees of safety.
Workshops and training sessions on occupational safety
and health care are regularly conducted.
Pages 37-40
Social matters Principal risks and uncertainties: Highly Contagious &
Severe Diseases, AEP has implemented stringent policies
and protocols to control and prevent the spread of highly
contagious and severe diseases, drawing on lessons
learned from the Covid-19 pandemic. These measures
aim to safeguard the workplace environment and include
strict procedures for workplace testing, employee self-
isolation when necessary, and home support for affected
individuals. This support ensures employees achieve full
recovery before returning to work.
Pages 42-51
Respect for human
rights
AEP has clear policies of no exploitation of its employees,
including complying with paying minimum wage. It does
not practise child or forced labour in line with the Modern
Slavery Statement referred to on its website. In addition,
a whistle blowing policy is in place to allow any employee
to raise concerns about unethical, illegal or questionable
practices, in full confidence, without the risk of reprisal.
Pages 95 - 96
Anti-corruption and
anti-bribery matters
AEP has in place policies and procedures in respect
of bribery and corruption, with detailed guidelines
and reporting requirements for its UK, Indonesian and
Malaysian operations.
Page 96
22
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STRATEGIC REPORT (CONTINUED)
OPERATIONAL & FINANCIAL REVIEW
For the year under review, our Group’s continuing operations had achieved the following:
Unit 2025 2024 Variance (%)
FFB production (‘000 mt) 1,080.6 1,019.9 +6.0%
Mature plantation (‘000 ha) 56.2 57.2 -1.7%
FFB yield (mt/ha) 19.2 17.8 +7.9%
Mill FFB processed (‘000 mt) 2,146.7 1,960.8 +9.5%
Internal FFB source (‘000 mt) 976.6 971.9 +0.5%
External FFB source (‘000 mt) 1,170.1 988.9 +18.3%
CPO production (‘000 mt) 425.8 396.7 +7.3%
OER 19.8% 20.2% -0.4%
Performance of the Business during the Year:
• The average CPO price CIF Rotterdam for 2025
was $1,151/mt, 5% higher than 2024’s $1,096/
mt. The ex-mill price for 2025 averaged $853/
mt, 7% higher than last year’s $794/mt.
• FFB production totalled 1.08 million mt, a 6%
increase from the 1.02 million mt recorded
in 2024. Additionally, the yield increased to
19.2mt/ha (2024: 17.8 mt/ha), primarily driven
by improved output from young and matured
palms in the Bengkulu and Kalimantan regions
in Indonesia.
• FFB purchased from third-parties including
local smallholders and Plasma in 2025 amounted
to 1.17 million mt, reflecting a 18% increase
from 0.99 million mt in 2024, primarily due to
new third-party crop intake at the recently
commissioned HPP Mill (North Sumatra) and
Bengkulu region. Our mills processed a total of
2.15 million mt of FFB, 10% higher than the 1.96
million mt processed last year.
• CPO production was 7.3% higher at 425.8
thousand mt, compared to 396.7 thousand mt
in 2024, partially offset by a lower OER of 19.8%
against 20.2% in 2024. PK production for 2025
stood at 105.9 thousand mt, 13.4% higher than
last year’s 93.4 thousand mt.
• Revenue rose to $465.2 million, reflecting a 25%
increase compared to $372.3 million in 2024.
The increase was mainly attributable to higher
production volumes and stronger CPO prices
during the year.
• Administrative expenses increased by $4.8
million, from $9.4 million to $14.2 million. This
was mainly attributable to higher manpower
and general administrative costs of $3.1 million
to support expansion in Indonesia, higher PPE
write-offs of $0.5 million, and increased audit
fees of $0.6 million, largely relating to prior-
year fees recognised in the current year.
• Operating profit was $111.6 million, reflecting
a 36.6% increase from $81.7 million in the
previous year. This improvement was supported
by higher CPO and PK prices, and an increase
in production volume.
• Finance income increased by 48.1%, increasing
from $5.4 million to $8.0 million. The increase
was primarily due to higher cash holdings
during FY2025.
• Profit before tax from continuing operations
for our Group was $119.3 million, 35.4%
higher compared to $88.1 million in 2024. The
changes in fair value of biological assets was a
debit of $1.4 million, contrasting with a credit
of $2.9 million in 2024. This debit was mainly
attributable to lower harvestable FFB as at
31 December 2025. Tax expenses for 2025
increased from $20.5 million to $33.0 million.
• EPS rose from 170.88 cents to 231.42 cents,
primarily due to higher profit after tax.
• Loss on exchange translation of foreign
operations of $15.7 million was recognised in
other comprehensive income, compared to an
exchange loss of $23.2 million in the previous
year. This loss was driven by the weakening of
the Indonesian rupiah at the end of 2025.
23
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2
3
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5
SECTION 2 :
STRATEGIC REPORT
Financial Position and Cash Flows of the Business at the End of the Year
Our Group’s statement of financial position remains strong, with a cash and cash equivalents balance
including short-term investments (see Note b) of $232.3 million and no external borrowing at the
end of 2025. All material changes in statement of financial position and cash flows are listed in the
following table:
Note 31.12.2025
$000
31.12.2024
$000
Property, plant, and equipment a 272,547 271,170
Income tax liabilities b (10,173) (5,466)
Cash and cash equivalents b, c 231,845 181,908
Short-term investments b, c 500 1,253
Current assets - Investment b, c 22,000 23,976
Net cash generated from operating activities b 113,825 73,947
Purchase of property, plant and equipment a (29,922) (29,013)
Net cash used in financing activities d (46,348) (7,363)
Retirement benefits - net liabilities e (7,972) (11,073)
Notes:
a. The increase in property, plant, and equipment
from $271.2 million in 2024 to $272.5 million in
2025 was mainly due to replanting activities
and mill development and partially offset with
depreciation and exchange translation losses.
b. As of 31 December 2025, our Group held cash
and cash equivalents of $231.8 million (2024:
$181.9 million) and short-term investments
in fixed deposits of $0.5 million (2024:
$1.3 million). The higher cash position was
primarily from profits generated during the
year. Net cash inflow from operating activities
increased by 54%, reaching $113.8 million in
2025 compared to $73.9 million in 2024, mainly
driven by higher profit and lower net tax paid,
offset by a significant tax refund received in
2025.
c. During the year, our Group had invested $22.0
million in Indonesia government bonds and
bonds issued in Singapore, denominated in
US Dollar.
d. Net cash used in financing activities increased
significantly to $46.3 million in 2025, compared
to $7.4 million in 2024. The increase was mainly
attributable to higher dividend payments to
AEP shareholders and share buybacks during
the year.
e. Retirement benefits as of 31 December
2025, calculated by a third-party actuary,
amounted to $8.0 million (2024: $11.1 million),
representing the provision for the Group’s
provision for employee retirement benefit
obligations at the reporting date, reduced due
to lower accrual during the year and higher
contributions to plan assets.
VIABILITY STATEMENT
The viability assessment considers solvency and
liquidity over a five-year period, aligned with the
Group’s strategic planning horizon (2026–2030).
Inevitably, the degree of certainty reduces over a
longer period.
Our Group’s business activities, financial
performance, corporate development and
principal risks associated with the local operating
environment are covered under the various
sections of this Strategic Report.
In undertaking the review of our performance
in 2025, our Board considered the prospects of
our Group, as well as focusing on the strategy
for growth through the expansion of its planted
area in tandem with forecasting demand for
CPO, over one (1) to five (5)-year periods. The
process involved a detailed review of the annual
budget and the five (5)-year income and cash
flow projection. The one (1)-year budget is used
to set detailed budgetary targets at all levels
across our Group. The five (5)-year income and
24
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STRATEGIC REPORT (CONTINUED)
cash flow projection contains less certainty of
outcome but provides a robust planning tool
against which strategic decisions can be made.
Our Board believes that projections beyond five
(5) years are uncertain and therefore less reliable
for making informed decisions.
Our Board considered the five (5)-year cash
flow projection under various downside cases.
Additionally, our Board assessed the need to
support any financially loss-making newly matured
estate, namely PT Bangka Malindo Lestari, as well
as the projected capital expenditure required for
these estates.
Assumptions applied are linked to the risk of CPO
price fluctuation and risk of a substitute for oil
palm. On this basis and other matters considered
and reviewed by our Board during the year, our
Board has a reasonable expectation that our
Group has adequate resources to continue in
operation and meet its liabilities over the five (5)
years from 2026 to 2030.
In assessing our Group’s viability, consideration
has been given to climate-related risks identified
through the CSA, including potential impacts on
yield, operating costs and capital expenditure
requirements. Our Group’s strong financial
position and ongoing investment in climate
resilience measures support its ability to manage
these risks over the assessment period.
GOING CONCERN
Our Directors have carried out stress tests,
factoring in the identified uncertainties and risks
such as commodity prices. This is to ensure that
our Group has adequate resources in a worst-
case scenario to remain as a going concern for at
least 12 months from the date of this report.
Our Directors have a reasonable expectation,
having made the appropriate enquiries, that our
Group has sufficient cash resources to cover
our Group’s operating expenses for a period of
at least 12 months from the date of approval of
these financial statements. For these reasons,
our Directors adopted a going concern basis
in the preparation of the financial statements.
Our Directors have made this assessment after
consideration of our Group’s budgeted cash flows
and related assumptions including appropriate
stress testing of identified uncertainties, as well
as impact when demand on palm oil decreased by
50%. Stress testing of other identified uncertainties
and risks such as CPO prices and CPO demand
were also undertaken.
In assessing our Group’s ability to continue as
a going concern, AEP has considered climate-
related risks and regulatory developments,
including the EU Deforestation Regulation
(“EUDR”). Based on CSA and risk assessments
performed, climate-related physical risks, such
as flooding and drought, are currently assessed
as manageable at a Group level, with localised
impacts mitigated through operational controls
and adaptive practices. Longer-term risks,
particularly those related to temperature increases
and potential impacts on yield, are recognised
and monitored; however, these are not expected
to materially affect the Group’s ability to continue
as a going concern over the foreseeable future.
In relation to EUDR, AEP has initiated steps
to strengthen traceability and supply chain
due diligence, building on existing NDPE
commitments. The Group continues to assess
compliance requirements and engage with
stakeholders to ensure readiness for evolving
market and regulatory expectations.
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2
3
4
5
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As at the reporting date, no material uncertainties have been identified that would cast significant
doubt on the Group’s ability to continue as a going concern.
BUSINESS REVIEW
Plantations
Plantation FFB production Mature planted FFB yield
2025 2024 2025 2024 2025 2024
’000 mt ’000 mt ’000 ha ’000 ha mt/ha mt/ha
North Sumatra 410.7 397.5 17.1 17.8 24.1 22.3
Riau 90.6 111.7 4.0 4.8 22.6 23.4
Bangka 33.2 18.6 2.5 2.4 12.9 7.6
Bengkulu 200.1 179.3 11.9 12.4 16.8 14.5
Central Kalimantan 329.7 297.2 17.3 16.4 19.1 18.1
AEP Indonesia 1,064.3 1,004.3 52.8 53.8 20.2 18.7
Terengganu,
Malaysia
16.3 15.6 3.4 3.4 4.8 4.6
AEP Group 1,080.6 1,019.9 56.2 57.2 19.2 17.8
For 2025, the Group recorded a 6% and 8% increase
in FFB production and FFB yield, respectively.
This improvement is attributable to effective
agronomic practices and is commendable given
the ongoing replanting programme in Indonesia,
which temporarily reduced production capacity.
Our replanting efforts, though vital for ensuring
long-term yield sustainability, have a temporary
adverse impact on short-term yields. Palms
designated for replanting undergo a process
where fertiliser application is withdrawn two years
prior to replanting, leading to lower productivity
during this period. Following replanting, the area
remains non-productive for an additional three
to four years while the new palms mature and
become productive. In 2025, 2.4 thousand ha of
old palm was replanted with an additional 5.4
thousand ha designated for replanting in 2026
and 2027. While this will temporarily reduce
productions and revenues from these areas during
the immature phase, it is expected to support
improved productivity when the replanted areas
reach maturity.
INDONESIA
The performance of the Indonesian operations
was divided into five (5) geographical regions.
North Sumatra
FFB production in North Sumatra, which
aggregates the estates of Sungei Musam,
Blankahan, Simpang Ampat, Tasik, Anak Tasik,
PT Cahaya Pelita Andhika (“CPA”), and HPP
produced 410.7 thousand mt in 2025, about 3.3%
higher than last year.
• The average annual yield in North Sumatra
increased to 24.1 mt/ha in 2025, compared
with 22.3 mt/ha in the previous year. Although
yields in Blankahan remained above 25 mt/ha,
replanting was undertaken due to advanced
age of the palms and declining oil content.
• As part of our long-term plantation
sustainability strategy, replanting activities
were carried out across several estates. During
the year, 349 ha was replanted in CPA, 190 ha
in Blankahan, and 109 in Sungei Musam, with
more areas earmarked for replanting in 2026.
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ANNUAL REPORT 2025
STRATEGIC REPORT (CONTINUED)
• Fertilisation was withdrawn for areas
designated for replanting, which resulted in
lower yield.
• The outbreak of Ganoderma affecting our
trees has limited potential yield upside at
HPP, continued palm losses at HPP limits our
potential yield upside. Quick replacement of
dead palms ensures a steady palm density in
HPP which helped to maintain yield. In addition,
poor root anchorage, as well as sub-optimal
nutrient retention and absorption associated
with peat have contributed to lower bunch
weight at HPP.
Bengkulu
• The estates of Mitra Puding Mas (“MPM”)
and Alno Agro Utama (“AAU”) recorded an
aggregate FFB production of 200.1 thousand
mt (2024: 179.3 thousand mt), representing
a 11.6% increase compared with 2024. This
was driven by the increase in crop production
from both old and young matured palms,
particularly in second generation plantings.
• Mature areas, however, declined by 4% at 11.9
thousand ha in 2025, from 12.4 thousand ha in
the previous year.
• Tractors with attached water tank trailers were
used to water newly planted palms to ensure
sufficient irrigation. With more replanting, the
average stands per ha have improved to 112
stands per ha from slightly below 111. The
yield, however, was higher at 16.9mt/ha from
14.5mt/ha last year.
• Despite the replanting of 1,300 ha by MPM and
AAU, crop production in Bengkulu recorded
an increase during the year.
Riau
• FFB production comprised of Bina Pitri estates
produced 90.6 thousand mt in 2025 (2024:
111.7 thousand mt), which is 18.9% lower than
previous year.
• Monthly rainfalls were close to normal at
171mm.
• Yield for the year was 22.6 mt/ha, a 3.5%
reduction from last year. As 73% of the palms
are between the ages of 28 and 31 years,
replanting took place for a total of 492 ha in
2025.
Bangka
• FFB production in the Bangka region,
comprising of the Bangka Malindo Lestari
estate, produced 33.2 thousand mt in 2025
(2024: 18.6 thousand mt), 78.5% higher than
2024.
• Normal weather conditions in 2024 and 2025
have contributed to the higher yield in 2025
and the percentage of parthenocarpy has been
reduced to below 5%. Rainfall in 2024 and 2025
was 2,520 mm and 3,004 mm, respectively.
Kalimantan
• FFB production in Kalimantan which
comprises the PT AEP Nusantara Plantations
Tbk (“AEPN”) and Kahayan Agro Plantation
(“KAP”) estates was 329.7 thousand in 2025
(2024: 297.2 thousand mt), 10.9% higher than
2024. During the year, a total of 883 ha of
palms came into maturity, with AEPN and KAP
leading to its first harvest.
• Breeding and releasing of weevils to help with
pollination has reduced the extent of abnormal
fruit bunches reported in the previous year.
• The average bunch weight was nevertheless
below industrial standard due to the sandy
podzolic soil at AEPN, but the higher stands
per ha made up for the yield.
• The stand per ha in AEPN and KAP plantations
averaged 126 stands and 119 stands per ha
respectively. The yield in Kalimantan increased
by 5.1% to 19.1 mt/ha in 2025. Rainfall in KAP
was 4.070 mm (2024: 4,151 mm) while at
AEPN, at 2,550 mm (2024: 2,764 mm).
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MALAYSIA
Retaining our foreign workforce continues to present challenges amid increasing competition from
other industries. Consequently, our plantation faced some workforce constraints that affected field
maintenance, fertiliser application and harvesting activities, which had an impact on crop yields.
The palms, with an average age of over 25 years, face declining yield. In response, management is
actively evaluating a programme of gradual replanting to rejuvenate older palms and sustain long-
term productivity. The stand per ha further reduced due to the damages caused by wild elephants.
However, production and yields of the plantation has increased in 2025 compared to 2024 due to efforts
by management to improve operational efficiency including harvesting round and improvements in
access. Our Group will continue to try to maximise production from the existing palms while assessing
the feasibility of replanting and exploring alternative initiatives to utilise the land more productively
and sustainably.
Mills
Mill FFB processed CPO production OER
2025 2024 2025 2024 2025 2024
’000 mt ’000 mt ’000 mt ’000 mt
North Sumatra 852.1 725.9 167.6 146.7 19.7% 20.2%
Riau 308.3 341.0 56.1 62.8 18.2% 18.4%
Bengkulu 660.6 548.6 132.2 109.1 20.0% 19.9%
Central Kalimantan 325.7 345.3 69.9 78.1 21.5% 22.6%
AEP Group 2,146.7 1,960.8 425.8 396.7 19.8% 20.2%
Throughput (i.e. FFB processed) was generally
higher in 2025 compared with 2024 due to the
increase of both internal and third-party crops
intake by 9.5% compared to 2024. OER was also
marginally lower possibly caused by additional
moisture from the wet weather of 2025. 2025
CPO production was 7.3% higher than in 2024. The
proportion of own crops to total FFB processed
declined slightly to 45.5% (2024: 49.6%).
OER are typically lower in our Sumatra mills
compared to Central Kalimantan due to the
higher volume of external FFB processed in
Sumatra. These external FFB often contain the
dura palm strain, which has a thinner mesocarp
(less pulp) and lower oil content compared to the
tenera variety predominantly cultivated in our
plantations.
North Sumatra
• Our three (3) mills in North Sumatra namely
Blankahan, Tasik, and HPP recorded higher
CPO compared to 2024 due to higher
throughput in 2025.
• The HPP mill commenced commercial CPO
production in January 2025. Intake of third-
party crops is being tightly controlled due to
higher presence of dura fruits and their low oil
content, which will lead to lower OER. Close
monitoring of third-party crop intake continues
to ensure optimal mill efficiency.
Bengkulu
• Our two Bengkulu mills, under MPM and AAU
processed 20.4% higher FFB than 2024 and
CPO production increased by 21.2% compared
to 2024.
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Riau
• Our BPJ mill located in Riau produced 10.7%
less CPO in 2025 due to both lower FFB
processed by 9.6% and lower OER compared
to 2024.
• Our competition for external crops in Riau
has intensified due to the rise of mini mills
since early 2022, spurred by high CPO prices.
However, we managed to process more
than 300,000 mt/year with the increase of
third-party crops by 3.4% compared to 2024.
Kalimantan
• Our AEPN mill located in Central Kalimantan
produced 10.6% less CPO in 2025 than in 2024.
• External FFB (including Plasma) purchased
was 2.6% less than the previous year while
internal FFB decreased by 2.6%. The external
crops decreased by 48% in 2025 compared to
2024 primarily due to changes in third-party
supply arrangements during the year.
• We also experienced a decrease in both the
quality and quantity of FFB sent from our KAP
estate for processing at AEPN mill, due to
delivery delays caused by damaged roads and
labour shortage.
• Currently, most of the KAP estate’s crops are
being sent to a nearby mill, which is more
economical in terms of transportation costs
and help maintain fruit quality, rather than
sending them to the AEPN mill, which is 500
km away.
BIOGAS & BIOCNG
Another milestone was captured in renewable
energy when our second commercial BioCNG
plant had commenced operations in Indonesia in
July 2025. Located adjacent to our mill in Tasik
Raja, North Sumatra, the plant was constructed
and managed by PT KIS Biofuel Indonesia with
the strategic collaboration of AEP after our
first successful plant in the Blankahan Mill. In
accordance with the Build-Own-Operate-Transfer
agreement, ownership of the BioCNG plant will
be transferred to AEP by 2039. AEP receives a
share of the BioCNG sales (subject to minimum
annual amount) and potential carbon credit sales
(if any in the future), but we do not foresee this as
a significant contributor to AEP’s future income
stream.
• In North Sumatra, Biogas/BioCNG plant in
Blankahan mill has generated 93,542 MMBtu of
BioCNG for 2025.
• The BioCNG plant in our Tasik Mill has been
successfully commissioned in May 2025 and up
to December 2025, we have generated 74,711
MMBtu of BioCNG.
• In 2025, over 3,281 MWh of surplus electricity
was sold in Bengkulu and generated $133.4
thousand in revenue, which was 35.9% lower
compared to the previous year (2024: $216.3
thousand). The lower power supply to the
National Grid in 2025 was due to reduced
demand from PLN, as they were sourcing
power from other IPPs using diesel generators
installed at their National Grid station.
• Power generation at the AEPN mill in 2025
was 11.8% higher (8,359 MWh) compared to
2024 (7,478 MWh). The revenue generated in
2025 was $358.7 thousand, 7.5% higher than
2024. The increase due to additional power
generation from the second gas engine,
which was transferred from Bengkulu and
commissioned in March 2025 to meet the
additional power requirements of the National
Grid.
ESTATE DEVELOPMENT
In 2025, our Group cleared 0.5 thousand ha of
land, including the Plasma, for new planting
and replanted 2.6 thousand ha of oil palm,
primarily in Bengkulu and North Sumatra. The
2025 plantings utilised new-generation planting
materials. For many years, dura palms formed a
significant portion of the planted areas in North
Sumatra and Bengkulu. Fruits from dura palms
have thin mesocarp which ultimately produce less
oil. Around 10.0 thousand ha of palm has been
designated for replanting in the next 5 years due
to poor yield, as well as their advanced age.
Seedlings are sourced from reputable suppliers to
ensure only quality Tenera palms are cultivated, to
significantly increasing productivity and land use
efficiency. This is especially important considering
that the oil palm is a perennial crop with a 25-year
economic lifespan.
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In 2026, our Group plans to
replant 2.8 thousand ha of oil
palm in North Sumatra and
Bengkulu, along with the new
planting of 0.3 thousand ha
in Kalimantan and Bangka to
support sustainable growth and
productivity improvements.”
Our total planted area including Plasma is 69.3
thousand ha by the end of 2025. In 2026, our
Group plans to replant 2.8 thousand ha of oil palm
in North Sumatra and Bengkulu, along with the
new planting of 0.3 thousand ha in Kalimantan
and Bangka to support sustainable growth and
productivity improvements. Clearing land for new
planting is a complex process requiring written
approval from local authorities, submission of
Environmental Impact Assessments (“EIA”), and
engagement with local communities. All new
plantings strictly follow the High Carbon Stock
Approach (“HCSA”) guidelines and are verified by
accredited consultants.
Last year, our Group invested $0.99 million to
modernise old workers’ quarters in North Sumatra
and Bengkulu. In 2025, our Group engaged the
local electricity authority to supply electricity to
953 homes of our employees in Bengkulu and
Riau, eliminating reliance on generators that limit
electricity availability. For 2026, an additional
$4.86 million has been budgeted for further
renovations and refurbishments to enhance
worker accommodation. In 2026, $0.9 million is
allocated to provide electricity to our workers
and families.
To improve transportation and the delivery of
FFB in our plantations, our Group purchased 20
units of dump trucks at a cost of $0.6 million in
2025, with an additional $1.1 million allocated
for similar purchases in 2026. This is to addresses
rising logistics costs as transport companies
in Kalimantan and Bengkulu often prioritise
coal transport due to better rates, resulting
in insufficient trucks available for our harvest.
Furthermore, our Group invested $1.6 million
in 2025 to improve field roads and connectivity
between estates and mills by constructing new
bridges. To improve connectivity, an additional
$8.1 million is budgeted for 2026 to continue
enhancing and maintaining our road network for
improved connectivity.
MILL AND BIOGAS DEVELOPMENT
We have received the Environmental Permit from
Ministry of Environmental for KAP mill, located in
Kalimantan Tengah. This mill will enable the KAP
estate to process its own FFB as well as FFB from
surrounding smallholders, reducing transport
costs, ensuring timely processing, and offering
better control and higher profitability. While
the earthwork for the mill has been completed,
the civil, structures and mechanical works are
currently in progress. The planned mill, with an
estimated cost of $15.1 million, is designed to
have a capacity of 45 mt/hr. The completion of
the mill is targeted in December 2026.
Two of our mills, the AEPN mill and the HPP
mill, which currently rely on river barges to
transport their CPO, have been directed by
government authorities to construct their own
jetties. At present, both mills use government-
owned jetties, which are designated for public
use and only available on a temporary basis.
Jetties are essential for connecting the shore to
deep water, allowing river barges to dock and
facilitate the loading of CPO. To comply with
these requirements, our Group has acquired land
adjacent to the rivers for the construction of two
jetties in 2024, with an estimated investment of
$1.5 million.
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Currently, the construction of the jetty for both
mills has been temporarily put on hold as a better
alternative for CPO despatch has been identified.
For the AEPN mill, we have begun using a privately
owned jetty that obtained a CPO despatch permit
effective January 2026. This jetty is located closer
to the mill, approximately 50 km away, compared
to the previous jetty which was about 100 km
away. By switching CPO despatch to this new
jetty, the estimated operational cost savings are
approximately $125 thousand per year. For the
HPP mill, CPO despatch continues to be carried
out through the existing jetty owned by the local
government. The contract to utilise jetty has
been extended and the despatch operations are
proceeding smoothly.
In 2025, our Blankahan mill installed a belt press
at a cost of $0.13 million to remove solids from
the effluent before it is fed into the aeration pond.
This is to reduce the biochemical oxygen demand
level and meet the required parameters.
At AAU Mill, Boiler No. 1 (Vickers) was upgraded
with superheater elements to enhance boiler
operating efficiency, at a cost of $0.2 million.
At MPM mill, another boiler was refurbished and
upgraded with the addition of superheaters to
improve performance, at a cost of $0.21 million.
Despite operational challenges in its oil recovery
system since 2023, the MPM mill has taken steps
to resolve the issue by installing two units of high-
speed separators. These were commissioned
in July 2024, and the performance has been
satisfactory, with the mill achieving lower oil
losses in the final effluent.
Finally, at our Tasik Raja Mill, an additional new
boiler with superheaters and a capacity of 45
thousand kg/hr was installed at the cost of $1.2
million and was successfully commissioned in
April 2025. The upgrading of biogas to BioCNG
had also been completed and successfully
commissioned effective May 2025.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (“CSR”) forms
an integral part of our corporate self-regulation
and is embedded into our business model. Law
No. 40/2007 of the Indonesian Limited Liability
Companies, Article 1 Paragraph 3, defines
corporate social and environmental responsibility
as a company’s commitment to participate in
sustainable economic development to enhance
the quality of life and the environment for the
benefit the company, local communities, and
society at large. AEP recognises its responsibility
to manage the impact of its operations on
the environment, consumers, employees,
communities, stakeholders and all other members
of the public sphere.
Our Group’s sustainability policy, including
our commitment to no deforestation and no
development on peat land, no open burning, the
prohibition of exploitation, forced labour or child
labour, and other best management practices
is available on our website. Our Group has also
released a statement pursuant to the UK Modern
Slavery Act 2015, which is published on the
website under the same section.
The majority of employees and their dependents
in the plantations and mills are housed in self-
contained communities built by the Group. The
employees and their dependents are provided
with free housing, clean water and electricity.
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Places of Worship
Our Group builds, provides and maintains places
of worship for workers of different religious faiths,
within the plantation communities. Schools and
sports facilities are also established to support
community development. Over the years, our
Group has built a total of 79 mosques and 20
churches across our estates. During the fasting
month, the management team regularly break
fast with employees from the estates and mills as
well as with surrounding villagers. Our Group has
also sponsored and made donations to celebrate
various religious festivals. In 2025, our Group
spent $0.3 million (2024: $0.4 million) to maintain
these amenities and support the communal
activities.
Our Group has built a total of
79 mosques and
20 churches across our estates.
Education Support for Employees’ Children
Our Group provides free education for employees’
children in the plantations and surrounding
communities where it operates. In addition, our
Group provides computers and funding for the
construction of educational facilities including
laboratories and libraries. The salaries of teachers
in the estates, as well as the cost of purchasing and
operating school buses to transport employees’
children are borne by our Group. Over the
years, our Group has built a total of 35 schools,
comprising 19 pre-schools, 10 primary schools,
five (5) secondary and one (1) high school.
Approximately 90% of enrolment consists of our
employees’ children, while the remainder are from
local communities. AEP currently employs 125
full time teachers and operates 51 school buses.
Our Group built a total of
35 schools, comprising
19 pre-schools, 10 primary schools, five (5)
secondary and one (1) high school.
Scholarships for Qualified Students
As part of our Group’s contribution to education,
we provide scholarships to qualified students
from local communities as well as employees’
children to pursue tertiary education.
The programme, which was initiated in 1999,
supports students across different stages of
their studies, subject to maintaining minimum
academic performance requirements.
To date, a total of 86 students have successfully
graduated from universities, with several now
working for our Group. Students are supported
across a range of areas of study, including
Engineering, Education, Economics and
Agriculture.
Provision of Comprehensive Healthcare Services
Our Group continues to provide comprehensive
healthcare services for all its workers. To support
this, we have established 23 clinics of which 17 are
still operated by our Group, staffed with qualified
doctors, nurses, and hospital assistants in the
estates. Our Group had previously upgraded two
(2) of its clinics in North Sumatra and Bengkulu
to meet the minimum standard required by
the government under the country’s Health
and Social Security Agency. These clinics also
provide healthcare services to the surrounding
communities, reducing the need to travel to
distant cities for medical treatment. Our Group
operates 15 ambulances to support emergency
transportation needs within the estates, mills
and surrounding villages. In addition, our Group
organised fogging programmes to prevent the
spread of dengue mosquitoes.
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We have established
23 clinics of which 17 are still
operated by our Group, staffed with qualified
doctors, nurses and hospital assistants in the
estates.
In remote and isolated locations, where piped
water is unavailable, water is generally pumped
from underground or rivers sources. Reverse
osmosis facilities are progressively installed in
across estates to provide clean drinking water to
workers. Meanwhile, healthcare related expenses
for full-time and part-time field workers, including
monthly contributions to the Health and Social
Security Agency, amounted to $1.4 million in
2025 (2024: $1.3 million).
Employee Training and Development
AEP recognises that employees are valuable
assets in maintaining efficient, effective, profitable
and sustainable business operations. Selected
employees are given the opportunities to attend
seminars and external training programmes to
enhance their skills and capabilities. We constantly
recruit potential field employees who undergo a
rigorous 12-month training programme which
includes theory and practical fieldwork at the
Group’s central training facility in Blankahan,
established in 2014. Since its inception in 1993, 607
employees have participated in the programme,
with 37% still working for the Group. Over the
years, one employee has been promoted to
General Manager, while 34 others now hold senior
positions in the head office, plantations and mills.
As part of the training and development
programme, our Group has sent security
personnel regularly to training facilities organised
by the Police to be certified. Professional trainers
are frequently engaged to conduct leadership
development training courses to upskill managers
at the estates and mills.
Our Group recognises its obligations to the
wider farming communities in which it operates.
The Indonesian regulations require that not
less than 20% of newly planted areas acquired
from 2007 onwards to be reserved for Plasma.
These smallholder developments are integrated
alongside our estates. The Plasma development
has commenced in stages across estates in
Sumatera, Bangka, and Kalimantan. Out of the
6,953 ha Plasma commitment, our Group has
planted oil palm in 5,945 ha. In 2025, our Group
received 54,954 mt of FFB from Plasma schemes
compared to 44,962 mt in the previous year. Total
revenue generated by Plasma cooperatives was
$10.4 million in 2025 against $7.8 million in 2024.
Total revenue generated by
Plasma cooperatives was $10.4
million in 2025 against $7.8
million in 2024.”
Corporate Guarantees Provided to Plasma
Scheme Cooperatives
To aid the development of Plasma schemes, our
Group provided corporate guarantees of over
$0.5 million through its subsidiaries to local banks
to cover loans raised by the cooperatives. Our
Group also assisted the cooperatives to obtain
the proper land rights certification from the local
land office.
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Our Group has also participated in government
social and partnership programmes for farmers
and smallholders when renewing cultivation
rights. These programmes include providing
financial support to farmers for agricultural
and planting materials and equipment, as well
as training and education on good plantation
practices to improve smallholders’ productivity
and output. The partnership also assists farmers
in obtaining the necessary permits from relevant
government authorities and local regencies to
establish their plantations.
In addition, we also assist smallholders in
obtaining legal land titles, enabling them to apply
for ISPO sustainable certification.
Our Group supported the Kas Desa smallholder
village development programme to supplement
the livelihood of rural communities. In 2025, our
Group has financed, developed and managed 22
smallholder village oil palm schemes across four
companies. This programme allows participants
to opt out and self-manage their plantations.
Since 2022, five smallholders had successfully
exited from the programme.
Contribute to Infrastructure Development
In addition, AEP contributes to the development
of infrastructure in the communities where it
operates. In 2025, our Group undertook the
construction and repair of bridges and maintained
over approximately 170 km of external roads, at
a cost of $0.92 million. Our Group also provided
initial aid and seed capital to villagers such as fruit
seedlings, fish fry, cattle and ducks to start and
support community sustainable programmes.
Our Group also leased two (2) ha of land near
Kuala Lumpur, Malaysia and began clearing the
land in 2020 to develop greenhouses for organic
farming. The project aims to produce organic
vegetables and fruits in an environmentally
sustainable manner and make them available to
consumers at affordable prices as part of our
Group’s corporate social responsibility efforts. A
substantial portion of the produce is donated to
orphanages and retirement homes.
Social Forestry Programme
Recognising the importance of the No
Deforestation, No Peat, and No Exploitation
(“NDPE”) commitments to our stakeholders, AEP
incorporated these principles into its Sustainability
Policy, which was published on
15 June 2019:
No Deforestation:
Prevents the clearing of forests for
agricultural development, protects
areas of High Conservation Value
(“HCV”) and HCSA areas.
No Peat:
Prohibits new developments on
peatlands, which are critical for
carbon storage, and promotes best
management practices for existing
plantations.
No Exploitation:
Safeguards the rights of workers,
local communities, and smallholders,
ensuring fair treatment, gender
equality and the prevention of child
labour.
Since 31 December 2015, AEP has been committed
to identifying potential loss of HCS areas across
its palm oil concessions in Indonesia. The analysis
identified 967 ha requiring full recovery obligations
to support environmental sustainability and
benefit surrounding communities.
To address the loss of HCSA areas, AEP has
provided compensation through support for
social forestry programmes in Seluma Regency,
Bengkulu Province. These initiatives cover
approximately 1,072 ha in Sinar Pagi Village,
North Seluma District. AEP’s recovery efforts
focus on protecting and restoring ecological
functions while addressing social and economic
aspects by developing alternative livelihoods and
establishing community-based business units.
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The recovery plan is built around four key
principles:
FOREST CONSERVATION, PROTECTION, AND
SECURITY
In collaboration with the Seluma Social Forestry
team, AEP assessed land cover at the Gapoktanhut
Hutan Karya (community forests) site to guide
area management. Forested areas with dense
canopy have been designated as protected zones
to prevent conversion into community gardens.
Efforts include optimising existing gardens
through agroforestry systems, rehabilitating
critical lands with woody plants, and establishing
agroforestry planting on open lands.
Key activities under the initiative include:
• Demarcation of social forestry area boundaries.
• Conservation of forest ecosystems.
• Routine patrols to prevent encroachment,
illegal wildlife hunting, and forest fires.
These measures aim to balance environmental
preservation with sustainable land use, creating
a framework for long-term community and
ecological benefits.
Coffee Cultivation Training
AEP previously facilitated coffee pruning training
sessions to enhance the skills of forest farmer
groups in the HKm Gapoktanhut Hutan Karya
area, which is a community forest area under
Indonesia’s social forestry programme managed
by a federation of forest farmer groups. These
sessions aimed to improve coffee yields and
beans quality.
Farmers in Sinar Pagi Village primarily grow
Robusta coffee using traditional methods.
However, aging coffee plants and the absence
of proper pruning practice have led to declining
production. While one ha of coffee plantation
typically yields one to two tons of coffee, the
output in Sinar Pagi Village has dropped to just
500kg to one (1) ton per ha.
1) Additionality:
Seluma Regency has the highest poverty rate
in Bengkulu Province, with pockets of poverty
located near areas rich in natural resources and
biodiversity. Empowering rural communities
through social forestry initiatives is expected
to improve their standard of living, reduce
poverty and lessen pressure on protected
forest areas.
3) Equitability:
The programme is developed and implemented
collaboratively, involving local communities,
national non-governmental organisations
(NGOs), local government authorities and
the Ministry of Environment and Forestry.
Representatives from the Bengkulu Provincial
Environment and Forestry Service have
emphasised the need for broader support
for these social forestry activities. Local
communities have been actively consulted
throughout the programme, and their consent
has been obtained.
2) Long-Lasting Impact:
A recovery programme is implemented
within the social forestry area, which grants
communities legal access for 35 years,
extendable thereafter. AEP is committed
to supporting the programme for 25 years,
fostering community independence and
long-term forest conservation.
4) Knowledge-Based Approach:
Using the Theory of Change framework, the
programme is based on a thorough analysis
of current and anticipated conditions, threats
and contributing factors. It sets conservation
targets and strategic approaches aimed at
achieving sustainable outcomes.
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To address this issue, AEP is gradually
implementing a coffee pruning system to boost
production. Initial efforts focus on raising
awareness among farmers about the benefit of
the system and encouraging its adoption, steadily
improving productivity.
To further support this initiative, frequent
visits were made to UKM Kopi Curup (a small
and medium enterprises in Curup, Bengkulu-
renowned for their coffee). Insights gained from
these visits were applied to farming practices in
Sinar Pagi Village, enabling farmers to broaden
their perspectives on production methods and
comparing coffee farming practices across the
Bengkulu Province.
Proper Facilities and Infrastructure to Enhance
Coffee Quality
To enhance coffee quality, AEP has provided
coffee bean peeling machines to Sinar Pagi
farmers together with 54 coffee drying racks to
support farmers interested in processing red-
picked coffee. This initiative has resulted in a
higher market price compared to unripe coffee
and has encouraged more farmers to produce
red-picked coffee.
LAND REHABILITATION THROUGH
AGROFORESTRY
AEP has launched a land rehabilitation programme
in Sinar Pagi Village through the implementation
of agroforestry system. This initiative involves the
distribution of high-quality seedlings of avocado,
pete, jengkol and durian, which serve as shade
trees for coffee cultivation. These shade plants
not only protect coffee plants but also provide
both ecological and economic benefits:
• Ecological Benefits:
Enhances soil and water conservation,
increases biodiversity, enriches soil nutrient
content, increases carbon reserves and
reduces pests and diseases.
• Economic Benefits:
Improves crop yields and quality while boosting
overall community income.
This integrated approach harmonises
environmental sustainability with economic
empowerment, ensuring lasting benefits for both
ecosystems and local livelihoods.
UTILISATION OF ENVIRONMENTAL SERVICES
AEP has been actively developing environmental
service activities within the social forestry area,
including:
Ecotourism:
Promoting nature-based tourism.
River Utilisation:
Supporting the sustainable use of
water resources.
Biodiversity Protection:
Conservation of plant and animal
life.
Carbon Absorption and Storage:
Contributing to climate change
mitigation.
Environmental Recovery:
Restoration of degraded natural
areas.
To enhance agricultural productivity, AEP has
installed irrigation pipelines to support paddy
cultivation and maximising rice production in
local paddy fields. Additional developments
include the establishment of a camping ground,
agroforestry-based coffee ecotourism and fruit
gardens, all integrated into the AEP social forestry
management plan.
COMMUNITY EMPOWERMENT AND CORPORATE
RESPONSIBILITY
We have further empowered local communities
by involving them as members of forest patrol
teams to monitor boundaries against illegal
encroachment and logging activities. This
initiative strengthens community participation in
safeguarding environmental resources.
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In accordance with Article 1 Paragraph 3 of
the Law of the Republic of Indonesia No. 40 of
2007 concerning Limited Liability Companies,
corporate social and environmental responsibility
is defined as a company’s commitment to
sustainable economic development, aimed at
enhancing the quality of life and the environment
to benefit the company, local communities,
and the public. Our Group fully embraces this
responsibility by addressing the impact of its
operation on the environment, consumers,
employees, communities, stakeholders, and the
wider public. In addressing the social dimension
of CSR, our Group acknowledges the importance
of contributing to its employees’ development
while continuing efforts to improve the well-being
of surrounding communities.
SUSTAINABILITY POLICY AND COMMITMENTS
AEP’s sustainability policy outlines its
commitments to no deforestation, no
development on peatlands, no open burning, no
exploitation, and the prohibition of forced or child
labour, among other best management practices.
These policies reflect our Group’s dedication to
responsible and ethical business operations and
are available on our website under the Corporate
Governance section.
RECOVERY OBLIGATIONS AND SUPPORT FOR
SOCIAL FORESTRY
As part of our continued commitment to responsible
land stewardship, AEP has strengthened and
significantly expanded its recovery initiatives in
Seluma Regency, Bengkulu Province. Building
upon our earlier HCSA assessment and recovery
commitments, the scope of implementation has
grown substantially in 2025.
To date, AEP is implementing its recovery
plan across 5,675 ha of social forestry areas, in
addition to safeguarding 8,114 ha of primary
forest, resulting in a total managed landscape of
13, 789 ha. This represents a substantial increase
from the previously reported 1,072 ha, reflecting
our transition from a compliance-based approach
to a broader landscape-scale sustainability
commitment.
Through close collaboration with village
governments and Social Forestry Institution
Management Bodies, AEP continues to implement
long-term development plans, co-management
strategies, and a structured annual work program
aligned with applicable regulations and national
social forestry objectives. The collaborative
Management Agreement signed with Sinar Pagi
Village in January 2024 remains a key milestone,
guiding participatory governance and transparent
implementation.
Importantly, the current recovery area exceeds
our original recovery obligation, reflecting
AEP’s long-term commitment to environmental
protection and community development beyond
regulatory requirements.
For AEP, recovery is not merely corrective, it is
transformative. By integrating conservation,
community livelihoods, and sustainable forest
management within a broader landscape
approach, we aim to generate enduring ecological
and socio-economic value for Seluma Regency.
COMMITMENT TO SUCCESSFUL
IMPLEMENTATION
Recognising the scale and complexity of
landscape-level recovery, AEP remains steadfast in
its commitment to collaborative implementation.
Our Group continues to engage actively with local
communities, village authorities, social forestry
institutions, and relevant government agencies to
ensure inclusive decision-making and measurable
outcomes.
Our approach emphasises:
• Participatory planning and transparent
governance
• Strengthening institutional capacity at the
village level
• Monitoring and adaptive management of
conservation and livelihood programs
• Alignment with national sustainability
frameworks and supply chain expectations.
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Through this integrated and cooperative model,
AEP seeks to achieve meaningful, long-term
outcomes that reinforce our sustainability
commitments while contributing positively to
forest conservation, climate resilience and rural
development.
SUSTAINABLE PALM OIL CERTIFICATION
The ISPO certification is legally mandatory for
all plantations in Indonesia, while the MSPO
certification is a requirement for our Group’s
Malaysian plantations. In addition to complying
with these certifications, our Group enforces zero
deforestation, zero burning, and zero exploitation,
as outlined in our Sustainability Policy.
The ISPO scheme, designed to ensure that palm
oil production in Indonesia is carried out in an
environmentally and socially responsible manner.
It emphasises sustainable procedures, including
preventing worker exploitation, responsible use of
agrochemicals, and application of proper pesticide
techniques. To maintain certification, companies
must undergo regular audits and verification. Our
Group works closely with certification bodies to
ensure continued compliance, and all 13 of our
operating companies are ISPO-certified.
Our group has continued progressing toward
RSPO certification, with the due diligence
process completed in 2025. We are currently
awaiting formal membership approval from
the RSPO secretariat. This important milestone
reflects our commitment to adopting a globally
recognised standard for certified sustainable
palm oil. Achieving RSPO membership will further
strengthen transparency, reinforce stakeholder
confidence, and underscore our dedication to
environmental, social and economic sustainability.
STRENGTHENING SAFETY AND WORKPLACE
PRACTICES
To foster a strong safety culture, AEP organises
workshops and training sessions on occupational
safety and healthcare across all estates and mills.
Employee development, well-being, and work-
life balance remain top priorities. Employees are
empowered to report Near-Miss incidents and
provide feedback through standardised forms,
enabling proactive identification of hazards and
continuous improvement of safety practices.
Any incident involving fatalities or serious injuries
is rigorously investigated to identify root causes
and implement corrective actions to prevent
recurrence. Additionally, AEP compiles and
reviews statistics on work-related accidents as
part of our safety monitoring efforts.
To meet safety and environmental standards
such as International Sustainability and Carbon
Certification, ISO 14001, and Program for Pollution
Control Evaluation and Rating (“PROPER”), our
Group continues to upgrade agricultural chemical
stores and diesel fuel storage tanks across various
plantations and mills.
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Every estate is also mandated under ISPO to have
a fire team with fully trained personnel holding
certification from fire departments. AEP conducts
annual fire drills, constructs watchtowers in every
estate, and uses drones to monitor fire outbreaks.
Standard operating procedures have been refined
and documented based on sustainable oil palm
practices and in compliance with Indonesian
regulations, specifically the Regulation of the
Minister of Agriculture Number 05/PERMENTAN/
KB.410/1/2018 on plantation land management
without burning.
Internal audits, guided by checklists adapted from
sustainable practices, are conducted to ensure
operational compliance. These efforts strengthen
AEP’s commitment to safety and environmental
sustainability.
ESG PRACTICES
Achievements in ESG:
• Expanded renewable energy initiatives
through two (2) BioCNG plants,
converting methane from POME
into renewable gas thereby reducing
greenhouse gas emissions.
• Strengthened ESG and climate risk
governance by integrating sustainability
and climate-related risks into the Group’s
enterprise risk management framework.
• Advanced emissions management
through ongoing quantification and
verification of Scopes 1,2 & 3 greenhouse
gas emissions.
• Progressed sustainable infrastructure
development, with construction of the
Group’s eighth palm oil mill incorporating
modern, energy-efficient processing
technology and environmental standards.
AEP believes that the responsible stewardship
of our environment is critical in benefiting our
consumers, employees, shareholders, and society
in general, thus maintaining the industry’s long-
term prospects.
AEP is taking active steps to reduce its carbon
footprint by constructing biogas and/or BioCNG
plants at its mills in stages. The surplus electricity
generated through Biogas plants is sold to the
national grid. Additionally, the methane from
Biogas may be purified and compressed into
BioCNG cylinders in a BioCNG plant for industrial
use. This increased industrial adoption of BioCNG
is expected to reduce fossil fuel consumption,
further lowering Green House Gases (“GHG”)
emissions per metric ton of CPO produced over
the coming years.
AEP plans to utilise EFB, the byproduct left after
stripping palm fruitlets from FFB during CPO
production, as a feedstock to enhance BioCNG
output in response to market demand. This
initiative aligns with our goal to reduce waste and
reduce GHG emissions. Our Group has also set
metrics and targets to lower GHG emissions over
time as detailed in the Decarbonisation modelling
and high-level target setting.
AEP has established a dedicated sustainability
team based in the Medan Operations Office.
The team is led by the Sustainability & Risk
Management Controller and operates under the
guidance of key leadership, including the Chief
Corporate Planning & ESG Officer and other
key management members. They oversee and
implement strategies to achieve our Group’s
ESG goals while managing sustainability risks
effectively.
In 2025, our Group further strengthened its
governance framework through the formal
establishment of an Enterprise Risk Management
Framework (“ERMF”), which includes a Board-
approved Risk Appetite Statement. The ERMF
provides a structured and systematic approach
to identifying, assessing, managing, and
monitoring risks across the organisation, ensuring
that sustainability and climate-related risks
are integrated into strategic decision-making
processes.
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Our Board and key management maintain visibility
and general awareness of climate and nature-
related risks and opportunities. Plans, objectives,
and targets related to these risks are discussed
annually, or as needed, through engagement with
external sustainability partners and management
meetings where new or material issues are raised.
Climate change and nature remain standing
agenda items for the Board, underscoring their
significance in our decision-making processes.
THE BOARD
The Board provides overall oversight and
strategic direction on the Group’s sustainability
and governance matters. In discharging its
responsibilities, the Board undertakes the
following:
• Monitors and reviews the progress against
our sustainability-related targets on an annual
basis
• Oversees reviews of our Group’s corporate
governance policies and initiatives, including
Sustainability Policy published in 2019
Our Sustainability Policy aims to drive change
needed in reducing environmental impact,
delivering more efficient land use, ensuring social
justice, and practicing responsible business
across all operations. It embeds policies to
mitigate key climate and nature-related risks. Our
Group also participates in the SPOTT assessment
by the Zoological Society London that uses
publicly available information to annually assess
palm oil producers on the transparency of their
commitments to environmental, social and
governmental best practice. Apart from aligning
with the TCFD, we have also looked to adopt the
recommendations of the Taskforce for Nature-
related Financial Disclosures (“TNFD”) despite
this not yet being a mandatory requirement.
The palm oil industry has continuously received
close scrutiny in the media due to concerns
on global warming and rainforest destruction.
Realising this, our Group has adopted a NDPE,
and zero burning policy throughout our Group.
HOW FALLEN PALM TRUNKS RECYCLES
NUTRIENTS BACK ONTO THE SOIL
• Felled palm trunks are chipped, shredded and
left to decompose on the site
• Mitigates the release of greenhouse gases
commonly associated with open burning
through the traditional land- clearing method
of slash-and-burn
• Chipping and shredding palm trunks enriches
soil organic matter & recycles nutrients back
onto the soil
Where land is sloping, terraces are built which
helps to prevent landslides and soil erosion,
conserve the water and nutrients and provide
better accessibility for operations. Conservation
pits and sumps are also constructed to harvest
and contain rainwater.
Legume cover crops are planted to minimise soil
erosion, preserve the soil moisture and improve
soil chemical and physical properties, thus
reducing the use of chemical fertilisers. In mature
areas, fronds and EFB are neatly stacked on the
inter-rows to allow for the slow release of organic
nutrients while minimising soil erosion. Estates
with sandy areas use soft grass, Nephrolepis
biserrata ferns and cut fronds to cover bare
ground to increase soil moisture and improve
organic matter contents.
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1. Effluents discharged from our mills are fully
treated in anaerobic lagoons and tanks to
reduce its biological demand (“BOD”).
2. Final discharge is applied to the estate’s land
as fertilisers and BOD is tested regularly to
ensure that it is below the legal limit for land
application in Indonesia.
An Integrated Pest Management
system has been adopted
to control the population
of damaging pests and to
improve biological balance
while reducing dependency on
chemical pesticides.”
AEP operates four (4) biogas plants, which
enhance the treatment of palm oil mill effluents
while simultaneously mitigating GHG emissions.
The captured biogas is utilised to generate
electricity, which is supplied to the national grid,
reducing reliance on fossil fuels. Alternatively,
the biogas may be purified and compressed to
produce BioCNG in plants such as the BioCNG
plant in our Blankahan estate. Plans are underway
to explore and implement similar biogas initiatives
at other mills, focusing on locations where such
projects are commercially viable. These efforts
will be carried out in stages, further advancing
our commitment to sustainability and renewable
energy.
AEP is committed to implementing good
agricultural practices as spelt out in its standard
operating procedures for all activities. An
Integrated Pest Management system has been
adopted to control the population of damaging
pests and to improve biological balance while
reducing dependency on chemical pesticides.
Barn owls, which are natural predators, have
been introduced to control the rat population,
replacing the use of rat baits. Beneficial plants
such as Turnera subulata, Cassia cobanensis and
Antigonon leptopus were planted to attract natural
predators for biological control of bagworms and
leaf-eating caterpillars.
AEP minimises the use of toxic pesticides and
herbicides, with plans to phase them out when
viable alternatives are available. Employees are
regularly trained in safe and proper spraying
techniques, provided protective equipment,
on-site washing facilities, and routine medical
examinations. Chemicals are stored in designated
areas and inspected regularly, with strict
adherence to safety standards as per Indonesian
regulations.
Under the Manpower and Transmigration
Ministerial Decree No. 08/2010, our Group strictly
enforces compliance with occupational safety
standards. Managers and employees risk penalties
or disciplinary actions if found non-compliant,
as safety audits are conducted periodically.
Additionally, ISPO-certified companies are
prohibited from using 36 banned pesticide
ingredients, which are known to pose significant
health risks to humans and harm the environment.
Chemicals banned under WHO Class 1A and
1B, as well as the Stockholm and Rotterdam
Conventions including highly toxic pesticides
such as Paraquat, have been eliminated from our
plantation. Safer alternatives are currently being
evaluated.
A standard operating procedure ensures the
management is informed of any pesticide
poisoning cases among applicators, reinforcing
AEP’s commitment to safety and sustainability.
To minimise accidents at workplaces, regular
training and refresher courses are held to instil the
importance of safe working practices. Warnings
and reminders are displayed at the mills and
estates to remind the workers on their safety.
Warning signs are placed at strategic locations
such as speed limits in housing estates and
warning against crossing Irish bridges when river
water is at a dangerous level.
AEP continues to comply and preserve HCV as
well as HCS areas recognised by the Department
of Forestry. Every development has gone through
the proper environmental impact analysis. EIA
studies, environment management and monitoring
efforts are retained under the Indonesia Omnibus
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Law passed in 2020, companies are however
no longer required to obtain environmental
license. All HCV and HCS areas were mapped
with boundaries clearly marked by independent
surveyors to ensure that our Group does not plant
in these sensitive areas. Our Group patrols these
protected areas to ensure no encroachment and
maintain regular monitoring and management
plans to preserve the flora and fauna of
these sensitive areas. Natural vegetation on
uncultivable lands such as deep peat, very steep
areas and riparian zones along watercourses and
mangroves are spared from planting in order to
preserve biodiversity and wildlife corridors as
well as to check erosion. Peatland is considered
to be one of the most efficient carbon sinks and
any burning or drying will release the sequestered
carbon dioxide into the air contributing to global
warming. Conservation of peatland is also
important as it is at high fire risk, raising concerns
of sub-terrain wildfires which is very difficult to
put out. Peatland is made up of decomposed
vegetation which not only holds carbon dioxide
but also highly inflammable when dry. We have
a strict no-peat policy and prohibit new planting
in peat areas since 2019. In places like the HPP
estate, where palms were planted between 2006
and 2012 on peat prior to the introduction of the
no-peat policy, 42 permanent water gates were
installed to monitor and maintain stable water
levels.
Degradation of the mangroves, on the other
hand, leads to coastal erosion, loss of biodiversity
and economic hardship for communities that
depend on them for their livelihoods. In response,
Indonesia has in recent years intensified efforts
to protect and restore mangrove ecosystems
through national rehabilitation programmes,
strengthened regulations, and community-based
conservation initiatives.
In Indonesia where drought occurs regularly,
an emergency response team is set up in every
estate armed with the proper equipment and gear
to put out fire and prevent them from spreading
during the dry months. Regular training on fire-
fighting techniques and safety is provided by the
fire departments. Our estates have also invested
in modern technology by utilising drones to
pinpoint areas of fire outbreak whenever they
are detected by the watchtowers. These drones
are particularly useful in remote areas where
accessibility is restricted.
According to Indonesian Law No. 41/1999 on
forestry, a deliberate act of forest burning could
lead to 15 years imprisonment and a fine of up to
Rp5 billion or about $350,000, while negligence
that leads to a forest fire is punishable by a
5-year imprisonment and a fine of up to Rp1.5
billion or $105,000 for environmental crime. The
government is stepping up its enforcement where
large fines are imposed on companies for breach
of environmental law.
AEP upholds its commitment to a no open burning
policy, ensuring it plays no part in such activities.
In addition, AEP respects local communities by
preserving all sacred and customary lands for
traditional practices, including prayers and ritual
ceremonies.
Our seven (7) mills are operating in compliance
with criteria set by PROPER overseen by
the Indonesian Department of Environment.
Many of the criteria set by PROPER are also
part of the ISPO requirement. These mills are
officially graded Blue and rated to adhere to the
criteria set for the management of waste and
compliance to environmental conservation over
water resources, land development, air and sea
pollution and dangerous toxic waste treatment
which impact the environment. The certification
of the seventh mill which has just commenced
operation is currently under review. Six mills
are certified to ISO 14001:2015 (Environmental
Management System) standard with the seventh
in progress. Implementing an environmental
management system can provide the mills, the
ability to manage environmental performance
through more efficient use of resources and
will also increase the confidence of internal and
external parties that the environmental impacts
of its activities have been measured, managed
and continuously improved.
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Seven mills are certified to ISO
14001:2015 (Environmental
Management System) standard
with the seventh in progress.”
The ISCC is issued by ISCC System GmbH, a global
certification body based in Cologne, Germany.
The criteria used in the certification process are:
• Implement social and ecological sustainability
criteria
• Monitor deforestation-free supply chains
• Avoid conversion of biodiverse grassland
• Calculate and reduce GHG Emissions
• Establish traceability in global supply chains
The Tasik Raja and Blankahan estates and mills
were ISCC certified in 2024. The certification
identifies a company as a responsible player in
the industry that has taken efforts to produce
sustainable CPO.
We have completed full traceability of external
FFB purchased from suppliers’ farms or
plantations to our mills. AEP is actively managing
a comprehensive database of all our smallholders
and aims to identify the precise locations of their
plantations. By maintaining close relationships
with our suppliers, we provide them with
technical and management expertise while
integrating our sustainability policies into their
practices. This collaborative approach reinforces
our commitment to responsible sourcing and
sustainable operations.
More details on our ESG efforts may be obtained
from the Company’s website.
PRINCIPAL AND EMERGING RISKS AND
UNCERTAINTIES
AEP regularly evaluates its principal risks as
part of its ERMF. Our Board, supported by the
Audit Committee, Risk Management Committee
and senior management, reviews and assesses
material risks annually. These assessments are
integrated into our Group’s strategic planning
process and support informed decision-making
across operations.
Emerging risks are discussed during regular key
management meetings where potential impacts,
likelihood and mitigation strategies are evaluated.
Matters of significance are subsequently escalated
to our Group Chief Executive Officer and
Executive Director, who provide updates to the
Audit Committee, Risk Management Committee
and our Board where appropriate.
In 2025, our Group enhanced its risk assessment
methodology through a structured risk likelihood
and consequence matrix, enabling clearer
prioritisation of operational, financial, regulatory
and sustainability-related risks. Based on the
latest assessment, AEP has identified several key
principal risks affecting our Group.
The most significant risk remains CPO market price
fluctuation, which may have a substantial impact
on our Group’s financial performance. Given the
global nature of palm oil markets, volatility in
commodity prices continues to represent a major
external risk factor.
Operational risks also remain a key focus. These
include risks associated with natural disasters
and extreme weather events, such as floods,
droughts, storms and earthquakes, which may
disrupt plantation and mill operations. Fire
hazards in mill operations and plantation areas
also represent operational risks that are closely
monitored and mitigated through strict safety
and fire prevention protocols (see ‘Operational
Risks – Fires’ on page 46 for further details).
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Supply chain stability remains another area of
attention. Disruptions to logistics networks,
availability of inputs and market access may
impact operational continuity. In addition, labour
availability, workforce stability and employee
retention are monitored closely as part of
operational risk management.
From a governance and compliance perspective,
our Group continues to manage risks related
to regulatory changes, political developments
and compliance obligations across its operating
jurisdictions. Our Group also maintains strict
policies to prevent bribery and corruption and
continues strengthening its internal governance
practices.
Environmental and sustainability-related risks
remain important considerations for our Group.
These include risks associated with deforestation,
biodiversity protection, land rights and community
relations, as well as regulatory expectations
related to sustainable plantation management.
In line with increasing digitalisation, our Group
also monitors data security and privacy risks
to ensure that information technology systems
remain resilient and protected against potential
cyber threats.
Our Group also recognises the growing
importance of climate-related considerations.
Risks associated with soil erosion, environmental
degradation and extreme weather patterns are
continuously assessed as part of our Group’s
sustainability and climate resilience strategy.
Through its ERMF, AEP continues to strengthen
risk identification, monitoring and mitigation
processes. Principal risks are reviewed regularly
to ensure that appropriate controls and mitigation
actions remain effective in supporting our Group’s
long-term resilience and business sustainability.
Land Use and Rehabilitation Obligations
AEP has assessed whether there are any legal
or constructive obligations to rehabilitate land
following plantation operations in its jurisdictions
of operation, including Indonesia and Malaysia.
Plantation land is typically managed under long-
term land-use rights (such as Hak Guna Usaha
in Indonesia), which do not generally require
restoration to original natural conditions upon
cessation of use.
Existing regulations focus on compliance
with environmental management practices
during operations, rather than formal post-use
rehabilitation obligations comparable to those in
extractive industries.
Based on this assessment, our Group has
not identified a present legal or constructive
obligation that would require recognition of a
provision under IAS 37.
Notwithstanding this, AEP continues to
implement sustainability commitments, including
No Deforestation, No Peat, No Exploitation
(“NDPE”) policies and conservation initiatives,
which support responsible land stewardship.
These risks are informed by CSA, which assesses
potential impacts under multiple climate pathways
and supports the Group’s risk prioritization and
mitigation planning.
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CONSEQUENCE ON AEP
EXTREMEMAJOR
R2-EOPR.
Extreme rainfall
which cases
flooding
2
R7-MOPR.
Natural disasters
(e.g., floods, storms,
earthquakes)
14
R5-EOPR.
Fires
5
R5-MOPR.
Fire hazard in the
mill area
12
R1-MOPR.
Equipment
breakdown due to
poor maintenance
8
R3-MOPR.
Environmental
compliance
violation
10
MODERATE
R3-EOPR.
Deforestation,
Biodiversity &
Habitat Loss
3
R2-MGMT.
Regulatory,
Governance and
ethics
17
R1-EOPR.
The long dry period
which causes
drought
1
R6-EOPR.
Pest & Diseases
6
R2-MOPR.
Disruption of supply
chain
9
R8-MOPR.
Work Accident
15
R1-MGMT.
Political Instability
16
R3-MGMT.
Information
Technology (“IT”)
security risk
18
R4-FIN.
Changes in foreign
exchange rates
28
R8-MGMT.
Data security
breaches and
privacy violations
23
R1-FIN.
CPO market
price fluctuation
25
R2-FIN.
Securing
competitive CPO
pricing
26
R3-FIN.
Negative campaign
27
MINOR
R7-MGMT.
Lack of succession
planning for key
roles
22
R9-MGMT.
Contractual
disputes and
litigation
24
R4-EOPR.
Soil Erosion &
Degradation
4
R7-EOPR.
Land Rights &
Conflicts
7
R4-MOPR.
Labor shortages or
disputes
11
R6-MOPR.
Regulatory changes
impacting operations
13
R4-MGMT.
Employee turnover
due to lack of
engagement
19
R5-MGMT.
Workplace conflicts
and grievances
20
R6-MGMT.
Inadequate
performance
management
processes
21
INSIGNIFICANT
RARE UNLIKELY POSSIBLE LIKELY ALMOST CERTAIN
LIKELIHOOD OF OCCURENCE
PRINCIPAL RISKS AT A GLANCE
Legand (risk categories):
EOPR - Estate operational risk | MOPR - Mill operational risk | FIN - Finance risk | MGMT - Management risk
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Key:
▲ Increase ▼ Decrease ◆ No change
F New risk
Risk Consequence Mitigation
1
Estate
Operational Risks F
The long dry period,
which causes drought
Consequence
Moderate ▼
Likelihood
Unlikely ▼
Reduced FFB yields,
decline in palm
productivity, increased
irrigation costs and
potential long-term
plantation damage.
1. Record the rainfall data from units
2. Fire patrol using drone and watch tower
3. Routine patrol by security
4. Monitoring and early warning systems
using websites, such as:
https://sipongi.menlhk.go.id/
https://spartan.bmkg.go.id/
https://www.globalforestwatch.org/
2
Estate
Operational Risks F
Extreme rainfall which
causes flooding
Consequence
Major ◆
Likelihood
Rare ◆
Disruption to harvesting
and transportation,
damage to plantation
infrastructure, soil
nutrient loss and potential
delays in mill processing.
AEP mitigates flood risks in palm oil
production through:
1. Water Management – implementing
drainage systems, improving soil drainage,
and managing water flow.
2. Land Use Planning – avoiding flood-prone
areas, maintaining drainage, and preserving
natural buffers like wetlands and forests.
3. Infrastructure Design – constructing
elevated and flood-resistant roads, bridges,
and buildings.
4. Early Warning & Preparedness – using
weather monitoring and remote sensing,
training workers, and maintaining
contingency plans.
3
Estate
Operational Risks F
Deforestation,
Biodiversity & Habitat
Loss
Consequence
Moderate ◆
Likelihood
Rare ◆
Reputational
damage, potential
loss of sustainability
certifications (e.g. RSPO),
regulatory penalties and
restricted market access.
AEP ensures sustainable and responsible
production by:
1. NDPE Commitment – enforcing zero-
deforestation and no-exploitation policies,
protecting HCV and HCS areas, respecting
community rights, and applying
sustainable land management.
2. Stakeholder Engagement – collaborating
with local communities, indigenous
groups, NGOs, and others through FPIC
and participatory land-use planning.
4
Estate
Operational Risks
Soil Erosion &
Degradation
Consequence
Minor
◆
Likelihood
Unlikely ◆
Reduced soil fertility
leading to lower yields,
increased rehabilitation
costs and long-term
productivity decline.
AEP has implemented soil conservation
practices, such as terracing and cover
cropping, promote sustainable land use
planning, adopt responsible agroforestry
techniques.
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Risk Consequence Mitigation
5
Estate
Operational Risks
Fires
Consequence
Major
▼
Likelihood
Unlikely ▼
Damage to plantation
assets, loss of crops,
environmental impact,
regulatory penalties and
reputational harm.
AEP reduces drought and fire risks by:
1. Monitoring & Early Warning – using weather
systems, remote sensing, and fire towers to
track soil, vegetation, and fire risks.
2. Sustainability Policies – enforcing zero-
deforestation and no-burn commitments
to protect forests and peatlands.
3. Community Engagement – raising
awareness, offering alternative livelihoods,
and training in fire prevention and
firefighting.
4. Standards & Compliance – implementing
RSPO, ISPO, ISCC, ISO 14001, and
PROPER for sustainable management.
6
Estate
Operational Risks
Pest & Diseases
Consequence
Moderate
▼
Likelihood
Unlikely ▼
Decline in plantation
productivity, increased
pest control costs and
potential crop losses
affecting revenue.
AEP reduces pest and disease risks through:
1. Early Detection & Monitoring – routine
surveillance with trained officers and early
warning systems.
2. Biological Control – using barn owls to
control rats and cultivating beneficial
plants (Casia Cobanensis, Antigonon,
Tunera Subulata) to deter leaf-eating
pests.
3. Disease Management – isolating
Ganoderma with trenches to prevent its
spread.
7
Estate
Operational Risks
Land Rights & Conflicts
Consequence
Minor
◆
Likelihood
Unlikely ◆
Operational disruptions,
legal disputes,
reputational risk and
potential delays in
plantation development
activities.
AEP safeguards community and land rights by:
1. Community Consent – engaging indigenous
groups through FPIC before projects begin.
2. Land Rights Protection – conducting land
tenure mapping, legal recognition and due
diligence in acquisitions.
3. Fair Compensation – ensuring communities
are properly compensated for land use
(GRTT).
4. Sustainability Standards – applying and
implementing ISPO, ISCC, ISO, PROPER,
and RSPO.
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STRATEGIC REPORT (CONTINUED)
1
2
3
4
5
SECTION 2 :
STRATEGIC REPORT
Risk Consequence Mitigation
8
Mill Operational Risks
Equipment breakdown
due to poor
maintenance
Consequence
Major
▼
Likelihood
Possible ▼
Production downtime,
reduced milling capacity,
increased repair costs and
delays in processing FFB.
Regular maintenance schedule including
preventive maintenance, proactive
equipment inspections, spare parts inventory
management.
9
Mill Operational Risks
Disruption of supply
chain
Consequence
Moderate
◆
Likelihood
Unlikely ◆
Delays in receiving raw
materials or delivering
CPO products, leading to
production inefficiencies
and potential revenue
loss.
Secure supply by diversifying vendors
and planning for crop cycles. Ensure early
traceability to identify and exclude any non-
compliant smallholder crops under EUDR,
minimising disruption to FFB supply.
10
Mill Operational Risks
Environmental
compliance violation
Consequence
Major
◆
Likelihood
Possible ◆
Regulatory penalties,
suspension of operations,
loss of certification and
reputational damage.
Implementation of environmental
management systems, regular monitoring
of emissions and effluents, and employee
training on environmental regulations.
11
Mill Operational Risks
Labor shortages or
disputes
Consequence
Minor
▼
Likelihood
Unlikely ▼
Reduced operational
efficiency, delays in mill
operations and increased
labour costs.
Cross-training of employees, contingency
workforce planning, engagement with labour
unions, and fair labour practices according to
the labour law.
12
Mill Operational Risks
Fire hazard in the mill
area
Consequence
Major
▼
Likelihood
Unlikely ▼
Damage to critical
equipment and facilities,
safety risks to workers
and interruption of
production.
Installation of fire detection and suppression
systems, regular fire drills and training, and
proper storage of flammable materials.
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Risk Consequence Mitigation
13
Mill Operational Risks
Regulatory changes
impacting operations
Consequence
Minor
◆
Likelihood
Unlikely ◆
Increased compliance
costs, operational
adjustments and potential
delays in production
activities.
Regular monitoring of regulatory updates,
compliance audits.
14
Mill Operational Risks
Natural disasters
(e.g., floods, storms,
earthquakes)
Consequence
Major
◆
Likelihood
Rare ◆
Physical damage to mill
facilities, interruption of
operations and increased
repair and recovery costs.
Disaster preparedness and response plans,
infrastructure resilience measures, early
warning systems, insurance coverage for
business interruption.
15
Mill Operational Risks
Work Accident
Consequence
Moderate
▼
Likelihood
Unlikely ▼
Injury or loss of life,
regulatory penalties,
operational disruption
and reputational impact.
AEP ensures workplace safety through:
1. Training & Awareness – employee training,
safety committees, and regular meetings.
2. Policies & Procedures – clear safety
policies, hazard identification, and risk
assessments.
3. Protective Measures – PPE, machine
guarding, safety signage, and labels.
4. Monitoring & Improvement – regular
inspections, maintenance, and continuous
improvement.
16
Management Risks
Political Instability
Consequence
Moderate
◆
Likelihood
Unlikely ◆
Uncertainty in business
operations, regulatory
changes, and potential
disruption to investment
and expansion plans.
Monitoring the political landscape through
news, social media, and stakeholder
engagement while building strong
relationships with government, civil society
groups, and the community.
17
Management Risks
Regulatory, Governance
and ethics
Consequence
Moderate
◆
Likelihood
Rare ◆
Legal penalties,
reputational damage, loss
of stakeholder trust and
potential restrictions on
business operations.
Ensure compliance with palm oil regulations
through robust traceability systems and
sustainability standards (ISPO, ISCC, ISO
14001, RSPO, EUDR), while engaging with
local communities and indigenous groups,
regularly updating governance practices, and
fostering integrity through a code of conduct,
ethics training, and whistleblower mechanisms.
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2
3
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Risk Consequence Mitigation
18
Management Risks
Information Technology
(“IT”) security risk
Consequence
Moderate
◆
Likelihood
Unlikely ◆
Disruption to business
systems, loss of sensitive
information and financial
losses due to cyber
incidents.
Develop and enforce robust IT security
policies and procedures, maintain up-to-
date software and security patches, and
implement strong cybersecurity measures
such as firewalls, IDS/IPS, and regular
employee training to identify and report
threats.
19
Management Risks
Employee turnover due
to lack of engagement
Consequence
Minor
◆
Likelihood
Unlikely ◆
Loss of experienced
personnel, increased
recruitment and
training costs and
reduced organisational
productivity.
Conduct employee engagement surveys,
implement retention initiatives, career
development programmes.
20
Management Risks
Workplace conflicts and
grievances
Consequence
Minor
◆
Likelihood
Unlikely ◆
Reduced employee
morale, productivity
losses and potential legal
or industrial relations
disputes.
Implement conflict resolution procedures,
provide training on effective communication
and conflict management.
21
Management Risks
Inadequate performance
management processes
Consequence
Minor
◆
Likelihood
Unlikely ◆
Inefficient operations,
lack of accountability
and reduced overall
organisational
performance.
Implement performance appraisal systems,
provide training on goal setting and
feedback.
22
Management Risks
Lack of succession
planning for key roles
Consequence
Minor
◆
Likelihood
Rare ◆
Leadership gaps,
disruption in strategic
decision-making and
reduced organisational
stability.
Develop succession plans, identify and
groom high-potential employees, cross-train
employees.
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Risk Consequence Mitigation
23
Management Risks
Data security breaches
and privacy violations
Consequence
Moderate
▼
Likelihood
Possible ▼
Legal liabilities, financial
penalties, reputational
damage and loss of
stakeholder confidence.
Enhance data security measures, implement
data privacy policies, and provide training on
data protection.
24
Management Risks
Contractual disputes
and litigation
Consequence
Minor
◆
Likelihood
Rare ◆
Financial losses, legal
costs, operational delays
and reputational risks.
Ensure contracts are clear and comprehensive,
establish dispute resolution mechanisms,
engage in alternative dispute resolution
methods.
25
Finance Risks
CPO market price
fluctuation
Consequence
Moderate
▼
Likelihood
Possible ▼
Significant impact on
revenue, profitability and
financial performance
due to volatility in global
commodity markets.
Cost control through mechanisation and
appropriate and measurable use of resources.
26
Finance Risks
Securing competitive
CPO pricing
Consequence
Moderate
▼
Likelihood
Possible ▼
Reduced profit margins
and potential loss of
market competitiveness.
Tendering CPO sales on a weekly basis.
27
Finance Risks
Negative campaign
Consequence
Moderate
▼
Likelihood
Possible ▼
Reputational damage
that may affect customer
confidence, investor
sentiment and market
access.
1. AEP has aimed to balance societal,
environmental and economic interests.
2. AEP promotes efficient practices in
biodiversity, soil and water conservation,
ensuring safe conditions for employees,
and the community.
3. AEP also collaborates with smallholders,
NGOs and other stakeholders to protect
forests, peatlands and human rights.
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28
Finance Risks
Changes in foreign
exchange rates
Consequence
Moderate
▼
Likelihood
Unlikely ▼
Fluctuations in export
revenues and operational
costs, impacting financial
performance.
To reduce the risk of adverse movement in
exchange rates, AEP converts excess IDR into
USD.
CLIMATE AND NATURE-RELATED RISKS AND OPPORTUNITIES
AEP is committed to creating a sustainable future for all its stakeholders - its employees, shareholders,
investors and communities. It is on a journey of self-improvement on both the TCFD and TNFD
frameworks, having identified through previous consultations, gaps to improve its climate and nature
disclosure maturity.
Our Climate/Nature Disclosure Roadmap:
1 2 3
4
910
5
6 7 8
Explore
• Information resourcing,
upskilling, data gathering
Engage
• Internal collaboration,
address resource gaps
Strategy
• High-level strategy for staged
sustainability/climate actions
• Establish GHG emission reduction targets
Development of Framework
• Align 4 pillars: Governance,
Strategy, Risk Management, and
Metrics & Targets
Reporting
• Draft report aligned with regulatory
requirements (TCFD)
• Voluntary TCFD disclosures
• Prepare transition to ISSB
• Report progress on GHG emissions
Review and Refine
• Review process and learnings
• Gather feedback from internal and external
stakeholders
• Regular updates and sector benchmarking
• Continuous improvements
Risk and Opportunity Assessment
• Assess physical and transition risks across
timeframes (short, medium, long)
• Develop and apply materiality assessment
• Integrate climate/nature risks
Scenario Analysis
• Identify scenarios
and assess impacts of
climate-related risks
and opportunities
Financial Impact Analysis
• Quantify physical and transition risks
and opportunities
• Understand impacts on key assets and
indirect impacts on business operations
Deep Dive on Key
Perils
• Detailed study of
impacts in high-
risk locations
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ANNUAL REPORT 2025
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AEP’s priority in 2025 was to strengthen its governance framework to reinforce the foundation for its
ESG and sustainability initiatives and progress towards its goals. In 2025, we placed a strong focus on
governance actions while continuing to enhance our efforts in strategy and risk management. Both
our Board and management have been actively engaged in this process and remain committed to the
initiatives undertaken.
We recognise that nature is core to our business and closely interlinked with climate, in terms of our
impacts, dependencies, risks and opportunities.
This is our sixth year disclosing against the eleven TCFD recommendations. Following the TCFD gap
analysis we conducted in previous years, we have continued to improve our alignment with TCFD’s
recommendations by acting in accordance with the TCFD roadmap we have put in place last year. We
have revisited our climate and nature-related risks and opportunities, incorporating findings from our
scenario analysis in line with TCFD expectations.
This scenario analysis explores how strategically-important climate and nature risks and opportunities
may change across short, medium and long-term time horizons within distinctive and plausible
scenarios (including a Paris Agreement Aligned scenario which limits global warming to 1.5C by the
end of the century).
We are also in the process of aligning our climate and nature risk management to the TNFD by explicitly
considering nature risk alongside climate risk, and by adopting elements of the TNFD’s recommended
scenario analysis methodology – using a ‘What If’ process to build out our scenarios to consider
how climate and nature risks might manifest. We will further develop our holistic approach to risk
management which integrates climate and nature in the future.
SUMMARY TCFD ALIGNMENT TABLE
Assessment Remarks and reference page
Governance
Describe the board’s oversight of
climate-related risks and opportunities
Board has oversight which have been
enhanced in 2025.
Pages 54-55: Board Oversight
Describe management’s role in
assessing and managing climate-related
risks and opportunities
Management has responsibilities and
resources which were enhanced in 2025.
Page 55: Management’s Role
Strategy
Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long-term
In 2023, AEP engaged external consultants
to conduct a CSA to assess strategically
important climate and nature-related risks.
Pages 63-69: Material climate and nature-
related risks and opportunities
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Assessment Remarks and reference page
Describe the impact on the business of
climate-related risks and opportunities
on the organisation’s business, strategy
and financial planning
To date our analysis have enable AEP to
understand the potential impacts. We
intend to broaden the assessment further in
2025 to understand further impacts on the
business.
Pages 56-57: Impact on business, strategy
and financial planning
Describe the resilience of the
organisation’s strategy, taking into
consideration different scenarios,
including a 2 °C or lower climate
scenario
We have considered the potential impacts
from climate and nature from different
scenarios and time horizons and resiliency
of strategy against the risks.
Pages 58-62: Resilience of our Strategy
Risk Management
Describe the organisation’s processes
for identifying and assessing climate-
related risk
AEP has implemented a process for
identifying assessing prioritising and
managing climate and nature risks.
The process is now enhanced with the
establishment of an ESG committee and
dedicated ESG resources.
Pages 71-72: Identifying and assessing
climate and nature-related risks
Describe the organisation’s process for
managing climate-related risks
The Process is described in pages 71-72:
Managing dependencies, impacts, risks and
opportunities.
Describe how processes for identifying,
assessing, and managing climate-
related risks are integrated into the
organisation’s overall risk management
Currently compliant however as AEP is
intending to review and refresh its risk
management practice and integrate climate
and nature more deeply into the Company’s
practice.
Page 80: Integration of climate and nature
into overall risk management
Metrics & Targets
Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process
The metrics are disclosed in pages 80-
81 Metrics to assess climate and nature-
related risks and opportunities.
Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 GHG emissions,
and related risks
AEP discloses Scopes 1,2 and 3.
Pages 85-93: Carbon Reporting – 2025
Results
Describe the targets used by the
organisation to manage climate-
related risks and opportunities and
performance against targets
Target disclosed in pages 85-89: Targets
for dependencies, impacts, risks and
opportunities.
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ANNUAL REPORT 2025
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CURRENT AND FUTURE STEPS ON TCFD AND
TNFD
Governance
• In 2025, AEP strengthened its governance
framework to enhance oversight of climate
and nature-related risks and opportunities,
ensuring these considerations are embedded
within strategic decision-making.
• AEP continues to align with the
recommendations of the Task Force on
TCFD, as outlined in its 2024 disclosures,
while progressively adopting the Task Force
on TNFD to enhance nature-related risk
transparency over time.
• During the year, AEP enhanced key elements
of its governance and risk management
practices in line with TCFD expectations, while
taking preparatory steps towards alignment
with International Sustainability Standards
Board (“ISSB”) requirements.
• These enhancements reflect AEP’s ongoing
commitment to strengthening governance
structures to support a more integrated and
mature approach to sustainability, aligned
with the expectations of investors, regulators,
and broader stakeholders.
Board oversight
• AEP Board has ultimate responsibility for
oversight of AEP’s management of material
business risks and opportunities including
climate and nature related risks in its strategy,
risks, budgets and capital expenditure. AEP
Board has taken active steps to improve
governance in a number of ways:
i. Changes to Board Committee Terms of
Reference – In 2025, a number of changes
to the Committee terms of reference
were adopted. These changes reflect the
significance and importance of the role
of the board in its oversight of climate
and nature related risks to its business.
Our Board considers and approves AEP’s
sustainability objectives and monitors and
reviews progress against our sustainability
targets annually including the emissions
reduction targets set in 2021. We plan to
increase the oversight of these targets by
informing the Board on GHG emissions
reduction progress at least two times a
year.
Our ESG & Corporate Governance
Committee oversees reviews of our
Group’s corporate governance policies
and initiatives, including our Sustainability
Policy which was published in 2019. Our
Sustainability Policy aims to drive change
needed in reducing environmental impact,
delivering more efficient land use, ensuring
social justice, and practicing responsible
business across all operations. It embeds
policies to mitigate key climate and nature-
related risks. Our Group also participates in
the SPOTT assessment by the ZSL that uses
publicly available information to annually
assess palm oil producers on transparency
of commitments to environmental and
best practice.
Any material Sustainability and Climate
issues are to be brought to our Board’s
attention for approval after consideration
by the newly established ESG & Corporate
Governance committee. Our Board will
have access to other Sustainability reports
and activities undertaken and reported
to the ESG & Corporate Governance
committee.
Topics on Sustainability and Climate will
be considered at board meetings, with
a cadence for reporting topics being
agreed for the year. The ESG & Corporate
Governance committee meets at least
three times a year and at each of these
meetings, progress against objectives
and targets are considered. The Board
has adopted a new reporting template
addressing climate/nature related issues
for consideration when making decisions.
This initiative reflects the significance
of climate and nature consideration in
decision-making.
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Other important changes include
escalation of environmentally significant
events to the Board on identification of
issues.
iii. Establishment of a new ESG and Corporate
Governance Committee – Recognising the
importance of ESG to the business, the
committee was established in January
2024 as ESG Committee and subsequently
renamed ESG and Corporate Governance
Committee. The Committee comprises
three Directors and is currently supported
by our Group CEO, Indonesian CEO and
Chief Corporate Planning & ESG Officer. The
Committee is responsible for overseeing
the implementation of AEP’s Sustainability
Policy and guiding the Group’s approach
to environmental stewardship, health and
safety, CSR, corporate governance, and
sustainability.
The ESG and Corporate Governance
committee will meet at least three (3)
times annually prior to Board meetings.
Strategic matters are escalated to the
Board for approval while other items are
either endorsed by the Committee or
reported to our Board for noting.
iv. Other committees - We have introduced
several changes to our Board committees,
including the Audit, Nomination,
Remuneration, Risk Management,
and ESG & Corporate Governance
Committees. Updates to the terms of
reference have been made to enhance
the scope of oversight and to clarify roles
and relationships both with the Board and
among the committees.
For instance, the former Audit & Risk
Management Committee has been
separated into the Audit Committee
and the Risk Management Committee to
better reflect their distinct responsibilities.
This change strengthens oversight of risk
management and compliance, while also
ensuring the integration of ESG risks into
the Group’s overall risk profile.
The Nomination & Corporate Governance
Committee has also been reorganised into
the Nomination Committee and the ESG
& Corporate Governance Committee to
avoid overlapping responsibilities related
to ESG matters.
Management’s role
• In September 2024, AEP created a new role –
Chief Corporate Planning & ESG Officer. This
role reports to Group Chief Executive and is
responsible for designing and implementing
all aspects of the sustainable programme
including:
- climate and nature reporting
- delivery of initiatives to improve
environmental performance
- resiliency of the business against climate
and nature risks
- progress towards reduction on emissions
• Our Environment Health and Safety (“EHS”)
and Sustainability Department aids our key
management in addressing climate and
nature-related risks by integrating ESG
considerations into our risk management
framework. It identifies and assesses risks
such as climate change impacts, biodiversity
loss, and resource scarcity, ensuring these are
factored into strategic decision-making.
• Our dedicated ESG team, comprising the
Chief Corporate Planning & ESG Officer and
the EHS and Sustainability Department,
oversees the tracking of ESG-related projects
and targets. The team collaborates with key
management across various functions within
our Group (including estates, mills, human
resources, legal, and finance) to ensure
alignment with our ESG objectives and to
address sustainability issues within AEP.
In addition to quarterly reporting, material
sustainability and climate-related matters
are escalated on an ad-hoc basis to the
Committee and the Board to ensure timely
decision-making.
We remain committed to accountability and
continuously adapt our strategies to meet our
goals, as we progress toward further integrating
our climate and nature risk management approach
with broader strategic risk management.
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ANNUAL REPORT 2025
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STRATEGY
Climate-Related Risks, Opportunities, and Financial
Impacts
• AEP recognises that climate change presents
both physical and transitions risks, which
may impact the Group’s operations, financial
performance, and long-term sustainability.
These risks include changes in rainfall patterns,
flooding, drought, and rising temperatures, as
well as evolving regulatory requirements and
market expectations for sustainable palm oil
production.
• In 2023, AEP engaged external consultants
to conduct a CSA of strategically important
climate and nature risks relevant to its
business. This process entailed identifying a
long list of climate- and nature-related risks
under the Network for Greening the Financial
System’s (“NGFS”) ‘Orderly’, ‘Disorderly’, and
‘Hot House’ scenarios in short, medium and
long-term.
• The CSA identified two transition and three
physical climate and nature risks of strategic
importance for further interrogation.
• Transition risks to AEP emerge primarily from
increasing expectations regarding climate and
nature performance (from both regulators and
customers) and non-compliance with those
expectations.
• Key climate-related physical risks to AEP were
identified as drought, flood and temperature
rise. Upon further investigation of these key
physical risks using the World Wide Fund
for Nature (“WWF”) and World Research
Institute (“WRI”) data, no discernible trend in
drought was projected for any of AEP’s sites
through to 2050, and although projections
suggest flood risk at AEP’s sites will increase
slightly, AEP is already operating – without
any significant disruption – within areas that
are categorised as having high flood risk.
However, the CSA showed the aggregated
impact of temperatures rise has the potential
to significantly impact palm yield in the
long-term, particularly in the Disorderly and
Hothouse scenarios, in which the potential
financial impact on AEP is deemed high by
2050.
Climate-related risks and opportunities are
integrated into AEP’s business strategy, reflecting
their potential impact on operational performance,
financial outcomes, and long-term sustainability.
Through its CSA, AEP has identified key physical
risks, including rainfall variability, flooding,
drought, and rising temperatures, as well as
transition risks associated with evolving regulatory
and market expectations.
These risks are incorporated into strategic planning,
particularly in relation to yield optimisation,
infrastructure investment, and sustainability
initiatives. AEP prioritises investments in climate-
resilient plantation practices, renewable energy
projects, and operational efficiency improvements
to mitigate risks and enhance long-term value
creation.
Financial Impacts and Business Performance
AEP has undertaken a qualitative and semi-
quantitative assessment of climate-related
financial impacts across its operations. Where
feasible, impacts are categorised on potential
effects on revenue, costs, capital expenditure,
and assets values:
• Revenue impacts may arise from reduced
FFB yields due to drought, flooding, or
temperature stress
• Operating costs may increase due to higher
fertiliser usage, maintenance, and climate
adaptation measures
• Capital expenditure may be required for
infrastructure improvements, including
drainage systems, terracing, and renewable
energy facilities such as biogas plants
• Asset values may be affected under prolonged
adverse climate conditions, particularly in
relation to biological assets
These impacts are reflected in key financial
statement areas, including biological assets (IAS
41), property, plant and equipment (IAS 16), and
inventory valuation (IAS 2), where relevant.
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While full quantification of climate-related financial
impacts remains subject to data maturity and
scenario uncertainty, AEP continues to enhance
its modelling capabilities and progressively
strengthen the linkage between climate risks and
financial planning.
Strategic Response and Transition Plan
AEP has developed an initial transition pathway
to support a lower-carbon and climate-resilient
business model. This includes:
• Expansion of biogas and BioCNG projects
to reduce Scope 1 emissions and generate
renewable energy
• Optimisation of fertiliser application to
improve efficiency and reduce emissions
• Continuous improvement in plantation
productivity to enhance carbon efficiency
• Investment in infrastructure resilience,
including drainage and water management
systems
These initiatives are integrated into the Group’s
operational planning and capital allocation
processes, ensuring alignment between
sustainability objectives and business strategy.
Climate Risk Integration into Operations
Climate-related risks are embedded across AEP’s
operations:
• Plantation operations: Climate variability may
affect yield, pollination, and crop quality. AEP
applies adaptive agronomic practices and
replanting strategies to enhance resilience
• Mill operations: Flooding and extreme
rainfall may disrupt processing and logistics.
Infrastructure upgrades and operational
improvements mitigate these risks
• Supply chain: Weather-related disruptions
may impact transportation and access. AEP
continues to strengthen logistics planning and
infrastructure resilience
Scenario Resilience and Outlook
AEP’s Climate Scenario Analysis indicates that:
• Short-term (to 2030): Climate-related risks
are generally manageable, with limited
financial and operational disruption under
most scenarios
• Medium- to long-term (to 2050): Exposure
to climate risks increases, particularly under
higher warming scenarios, driven mainly by
temperature-related impacts on yield and
productivity
Despite these challenges, AEP’s business model
remains resilient under a range of climate
scenarios, supported by:
• Strong operational cash flows
• Ongoing investment in adaptation and
mitigation measures
• Integration of climate risks into strategic and
financial planning
Governance and Risk Management
Climate-related risks are integrated into AEP’s
Enterprise Risk Management Framework
(“ERMF”), where they are identified, assessed,
and monitored alongside other principal risks.
Risks are evaluated using the Group’s standard
likelihood and consequence methodology and
are reviewed regularly by management, the
Risk Management Committee, and the Board.
Climate considerations are also incorporated into
capital allocation and strategic decision-making
processes.
Continuous Improvement
AEP remains committed to enhancing its
climate-related disclosures in line with TCFD
recommendations and evolving IFRS S2
requirements, including:
• Improving quantification of financial impacts
• Enhancing scenario modelling and
assumptions
• Strengthening linkage between climate risks
and financial outcomes
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CLIMATE AND NATURE SCENARIO ANALYSIS FINDINGS
For the purposes of climate scenario analysis, AEP classifies exposure levels as Low, Moderate, and
High based on the potential financial and operational impact over time horizons. These classifications
are aligned to, but not directly equivalent with, the Group’s Enterprise Risk Management (“ERM”)
risk matrix, which uses likelihood and consequence scoring. Climate risks identified through scenario
analysis are subsequently integrated into the ERM framework to ensure consistency in risk assessment,
monitoring, and mitigation.
Risk Impact Scenario Potential Exposure Description
Short
(2025)
Medium
(2030)
Long
(2050)
Policy/
Regulation
A wide range of
climate and/or
nature- related
regulation
has been adopted, is
in consultation, or
has been proposed
in different
jurisdictions around
the world. While
there is considerable
uncertainty as to how
future regulation will
evolve, in scenarios
that limit warming
to 1.5C – and/or in
which concern about
nature/biodiversity
continues to grow – it
is highly likely that
expectations of palm
growers will tighten.
Potential impact:
Increasing climate
and nature regulation
could increase
compliance and
reporting costs,
require changes in
growing practices
and, if compliance is
not achieved, limit
market access.
Orderly Low Moderate High An internationally -
coordinated approach
limits risk in the short-
term but ever-increasing
obligations across a
range of sustainability
criteria require continual
investment in the
medium and long-term.
Disorderly Moderate Moderate High A lack of international
coordination –
particularly regarding
the roll-out of regulation
around deforestation –
creates moderate risk
even in the short-term.
Different expectations
and frameworks apply
in different geographies
and, with a lack of
alignment between
climate and nature
policy, reporting, and
compliance costs
become very high
in the long-term for
companies seeking to
access all markets.
Hothouse Low Low Moderate This risk is low in the
short- and medium-
term as no new climate
or nature-related
regulation is introduced
or enforced. Reporting
and compliance costs
are low, although
expectations grow
over time to voluntarily
demonstrate climate/
nature resilience and an
ability to provide secure
supply.
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Risk Impact Scenario Potential Exposure Description
Short
(2025)
Medium
(2030)
Long
(2050)
Changing
Customer
Requirements
The palm sector’s
prominence in
debates about the
drivers of tropical
deforestation
– and the adverse
perception of
palm oil as an
environmentally-
unfriendly product
(particularly
by European
consumers)
– has increased
pressure on public-
facing consumer-
goods companies
to demonstrate
strong
performance on
climate and nature.
Those companies
are increasingly
placing
expectations on
their suppliers
to disclose and
improve strategy
and performance
across a suite
of sustainability
issues and metrics.
Potential Impact:
Increasing customer
expectations
regarding climate and
nature could increase
administrative and
reporting costs,
require changes in
growing practices,
and impact sales.
Orderly Low Moderate High This risk is low in short-
term but escalates
rapidly as leading fast-
moving consumer goods
companies push ever-
more stringent demands
down their supply chains
– raising compliance
costs and presenting the
prospect of lost sales if
demands are not met.
Disorderly Low Moderate High This risk is low in
the short-term and
moderate in medium-
term, although
customers that are
*already* pushing
carbon and nature
disclosure and
performance
improvement continue
to do so. The percentage
of sales at risk from
‘non-compliance’ is low,
but sales are at risk from
protectionism. In the
long-term, additional
uncertainty arises from
volatile activism causing
poorly predictable
customer responses.
Hothouse Low Moderate High This risk is low in
the short-term and
moderate in medium-
term, although
customers that are
*already* pushing
carbon and nature
disclosure and
performance
improvement continue
to do so. The percentage
of sales at risk from
‘non-compliance’ is low,
but sales are at risk from
protectionism. In the
long-term, additional
uncertainty arises from
volatile activism causing
poorly predictable
customer responses.
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Risk Impact Scenario Potential Exposure Description
Short
(2025)
Medium
(2030)
Long
(2050)
Drought Our estates are
located within
regions that
are categorised as
having ‘low’ drought
risk. However, our
current models
may underestimate
associated risks with
El Niño-induced
droughts, and its
potential frequency
and intensity due to
climate change.
Potential Impact:
If climate change
increases drought,
conditions and/or
water stress it will
have a negative
impact on yield and
revenues.
Orderly Low Low Low Our estates are located
within regions that are
categorised as having
‘low’ drought risk.
Disorderly Low Low Moderate Due to uncertainty of
El Niño, drought risk by
2050 has been increased
to moderate within
the Disorderly and Hot
House scenarios. This
has been informed by
qualitative analysis,
rather than financial
modelling.
Hothouse Low Low Moderate
Flooding Heavy rainfall/
flooding can disrupt
operations, both on-
and off-site.
Potential Impact:
If climate change
increases the
frequency and
intensity of
heavy rainfall/
flooding events,
it will negatively
impact operational
efficiencies and
costs.
Orderly Low Low Low With projections
suggesting that flood
risk at our sites will
only increase slightly
– even within the Hot
House scenario – our
analysis did not flag any
significant risk over the
timeframes considered
(the risk to revenue
arising from operational
disruption was <1% in all
scenarios across all time
horizons).
Disorderly Low Low Low
Hothouse Low Low Low
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Risk Impact Scenario Potential Exposure Description
Short
(2025)
Medium
(2030)
Long
(2050)
The
aggregated
impacts
of climate
change at
different
temperature
thresholds
Different studies
assessing the
combined impacts
of climate change
on the palm sector
in Indonesia and
Malaysia offer varying
outcomes, ranging
from positive to
negative effects.
However, the specific
study we referenced
is designed to
explore uncertainty
and highlights a
predominantly
negative impact.
Potential impact:
Palm yield may be
negatively impacted
as temperature
thresholds are
crossed.
Orderly Low Moderate Moderate
Disorderly Low Moderate High
Hothouse Low Moderate High The findings indicate
that AEP’s potential
exposure to risks
becomes significantly
elevated, categorised as
‘high,’ by 2050 under the
Disorderly
– and particularly the
Hothouse scenarios.
Our exposure to physical
climate risk will be
lessened by effective
societal action to
address climate change.
As well as reducing our
own emissions, we will
support and advocate
for wider government
and industry action on
climate.
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Scenario notes
Archetype Orderly Disorderly Hot House
Temperature
alignment
(2100)
~1.5°C >2°C >4°C
External Data
Alignment
RCP 2.6 (IPCC)
Optimistic (WRI/WWF)
Net Zero 2050 (NGFS)
RCP 6.0 (IPCC)
Current/Business as Usual
(WRI/WWF)
Delayed Transition (NGFS)
RCP 8.5 (IPCC)
Pessimistic (WRI/WWF)
Summary Strong, sustained
and internationally-
coordinated action on
climate results in net zero
emissions being achieved
globally by 2050. Nature
rapidly emerges as a key
issue for companies and
governments alike through
the 2020s.
Climate and nature
action is divergent across
countries and sectors.
Differing, and sometimes
competing regulations,
incentives and climate/
nature ‘solutions’ are
embraced in different
regions.
Governments fail to build
on current policies and
action is insufficient to
keep warming below
2°C by 2050. Progressive
investors and companies
attempt to drive continued
action and activism
becomes increasingly
unpredictable and extreme.
Associated
‘what if’
questions
What if all current and
proposed climate and
nature regulation is
adopted and scaled
globally?
What if customers demand
best-practice on both
climate and nature?
What if a complex/
conflicting regulatory
landscape emerges, with
differing regional priorities
and/or differing emphases
on nature/climate?
What if key customers
impose differing demands
on growers re:climate and
nature?
What if no new regulation
is introduced to drive
climate action and progress
on nature stalls?
How might customers –
and other stakeholders
– respond if governments
backtrack?
Timescale
Short-Term 0-2 year Aligned with AEP’s annual planning and risk
management cycle
2026-2028
Medium-Term 2-5 year Aligned with medium-term strategic planning and
climate-related target horizons
2028-2031
Long-Term 5-20 year Aligned to Net Zero Target dates for much of the
world and to average economic life of an oil palm
plant
2031-2050
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Key Climate related risks and mitigation approaches – The table below outlines key climate-related risks
and our corresponding approaches. These insights have been carefully developed and incorporate findings
from the CSA, ensuring a comprehensive and informed overview:
risk
opportunity
Type Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk
Management approach
Policy &
Legal
Compliance
with changing
regulations
Import tariffs and taxes and
other import restrictions
imposed by importing
countries will affect the
demand for CPO and its
derivative products can
encourage substitution by
other vegetable oils. The
ISPO certification, which
requires producers to
mitigate their environmental
impacts, is legally mandatory
for all plantations in
Indonesia and therefore
non-compliance presents a
financial risk through fines.
AEP is legally required to
incorporate climate-related
financial disclosures into
annual reporting, in line with
recommendations of the
TCFD. AEP expects additional
nature-related disclosures
to become mandatory
in the future, in line with
recommendations of the
TNFD.
Other legislation aimed at
achieving nature-positive
outcomes is anticipated to
increase as a result of COP15,
such as the EU regulation on
deforestation-free products,
which seeks to encourage
regeneration as well as
halting deforestation.
All of our Indonesian plantations
are currently certified under
ISPO. Our Malaysian plantation
has also received the MSPO
certification. Our mills in Tasik Raja
and Blankahan have received the
ISCC and we have obtained ISO
14001:2015 certification for all
our mills to improve our PROPER
rating. The mills are regularly
audited for renewal of certification.
Example, every one year for ISCC,
three years for ISO 14001 and four
years for ISPO. Our current list
of sustainability certifications is
available on our website.
We are in the process of applying
for a RSPO membership. We have
completed Land Use Change
Analysis (“LUCA”) on seven
companies and are implementing
remediation/conservation projects.
Our sustainability certifications are
available on our website.
In addition to pursuing certification,
we are committed to advancing
transparency by achieving full
traceability of our FFB sources. This
proactive measure ensures that we
exceed our buyers’ expectations
while reinforcing trust in our supply
chain and aligning with the highest
standards of sustainability and
accountability.
Increasing climate and nature
regulation could increase
compliance and reporting costs,
require changes in growing
practices and, if compliance is not
achieved, limit market access.
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Type Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk
Management approach
Market &
Reputation
Changes in
buyer
preferences/
Difficulty
accessing
capital
Negative perceptions about
palm oil and its links to
deforestation can affect
market access/demand and
possibly lead to changes in
international legislation or
regulations.
Many large buyers and their
investors have targets to
source a certain % of palm
oil from RSPO certified
producers or producers with
carbon reduction targets.
The loss of a major customer
through a lack of RSPO
certification or Scope 1, 2 &
3 carbon targets may impact
profitability.
Access to capital, through
banks and investors, is also
increasingly tied to the ability
to evidence the sustainability
of palm oil products, with
several large banks, investors
and RSPO members.
As tenders are performed on
a weekly basis, we do not find
ourselves overly reliant on a single
customer. We ensure transparency
in our palm oil production practices
through annual disclosure to SPOTT
and certification as detailed above.
Rising customer expectations
regarding climate and nature
may lead to higher administrative
and reporting costs, necessitate
adjustments in growing practices,
and potentially affect sales. To
address this, we maintain regular
communication with buyers and
capital providers to understand and
proactively anticipate their evolving
expectations.
Our financial position also currently
negates the need for financing
through bank loans.
We have commissioned an
external consultant to prepare a
Sustainability Report for 2025,
which will be published on our
website once completed.
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Type Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk
Management approach
Market &
Reputation
Development of
new products
Palm oil can be used
to produce a range of
products, including low-
carbon alternative fuels and
materials. The development
of new products can
provide both reputational
and financial opportunities,
despite in many instances
being expensive to produce.
For example, increasing
demand for biodiesel in
markets such as China offers
additional sources of revenue.
However, policies in the EU
to reduce and phase out the
use of palm oil in biodiesel
by 2030 means that this
opportunity may be limited.
We have signed long-term
contracts with an investor to
construct purified/compressed
biogas plants BioCNG. These plants
will purify the biogas produced
from the biogas plants in the mills
to generate compressed biogas
with a high methane content to be
used to replace diesel in industrial
use.
BioCNG can also be used in trucks
carrying FFB within our estates.
This can provide a reputational
benefit, increased operational
resilience, and new revenue
streams.
Indonesia’s first commercial BioCNG
plant at our Blankahan estate
commenced operations in January
2024. We remain committed to
exploring innovative projects which
utilise palm by- products, including
further BioCNG and Biogas plants.
Technology Use of lower
emission
sources of
energy
POME is used as a feedstock
in anaerobic digesters to
produce biogas which
contains about 60% methane.
The biogas is purified and
used as a fuel in biogas
engines to generate electrical
power which reduces our
reliance on diesel.
Four of our mills are equipped with
biogas plants to capture biogas
and generate electricity for sale
to the state authorities or for own
consumption. This also reduces the
purchase of diesel for our estates,
as they are instead supplied power
by the grid, therefore reducing our
emissions.
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Type Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk
Management approach
Physical Heavy rainfall &
flooding
Excessive rainfall generally
leads to poor pollination
of palms and reduces the
effectiveness of fertilisers.
High levels of rainfall can also
disrupt estate operations and
result in harvesting delays with
loss of FFB or deterioration
in fruit quality. Where leading
to a reduction in revenues,
insurance cover may not
be available or may be
disproportionately expensive.
Where appropriate, bunding is
built around flood prone areas and
canals/drainage/retention ponds
and water gates are constructed and
adapted to evacuate surplus water.
Riparian reserves are also protected
to mitigate flood risks.
Where the land is undulating,
we build terraces for planting
which helps to prevent landslides,
ensures that water runs off into
groundwater stores, conserves
nutrients effectively, and provides
better accessibility for operations.
Where practical, natural disasters are
also covered by insurance policies.
Flood risk is generally low based
on scenario analysis conducted in
2023 and are not expected to cause
serious disruption to our operations.
While excessive rainfall
poses operational risks, in
certain locations, increased
precipitation may offer limited
benefits by improving water
availability during dry periods.
However, these benefits are
location-specific and do not
outweigh the overall risk.
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Type Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk
Management approach
Droughts Dry periods affect palm oil
yields in the short and medium
term through moisture stress
and can result in wildfires
that may damage the palms.
Drought events are localised
to our Kalimantan and Bangka
estates, where long droughts
(>three months) can affect
soil quality and lead to a lower
yield the following year (~10-
15% decrease at most).
Legume cover crops are planted to
minimise soil erosion, preserve soil
moisture and improve soil chemical
and physical properties. In mature
areas, fronds and EFB are placed
inter-rows to allow the slow release
of organic nutrients while minimising
soil erosion. Conservation pits and
sumps are constructed to harvest
and contain rainwater, whilst the
spreading of oil mill effluent in lines
provides a water storage medium.
‘Terracing’ also ensures that water
runs off into groundwater stores.
We are also closely following
developments of drought-resistant
oil palm varieties.
Risk of drought is also expected to
be manageable based on scenario
analysis conducted in 2023, but
that the scenario did not take into
account weather conditions that
cause draught such as El Nino which
emerged in June 2023, affecting
our estates in both Indonesia and
Malaysia.
Physical Aggregated
impacts of
temperature
thresholds
being reached
Related to drought risk,
temperature increase was
identified as a key change
factor which may moderate
palm oil FFB yield. Evidence
suggests that as temperatures
increase and global warming
surpasses temperature
thresholds, aggregated factors
relevant to climate change will
have a significant impact on
palm oil success and yield.
AEP is managing its carbon
emissions in order to reduce its
contribution to climate change
and therefore help to mitigate
temperature increase globally.
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Type Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk
Management approach
Fires During drought season
the risk of fire is present at
several estates, especially
where neighbouring land is
burnt for crop cultivation
by locals. El Nino weather
events can indirectly drive
widespread forest fires and
haze. The financial impact
of fire damage is relatively
low to our Group due to the
diverse geographical spread
of plantations.
Fire response crews are stationed in
each estate, with regular training on
firefighting techniques and safety
provided by local fire departments.
Ditches and boundaries are created
to prevent the spread of fire, whilst
watch towers have been built in
every estate to pinpoint outbreaks
of fire as soon as smoke is detected.
Our Group has also invested in
drones to pinpoint outbreaks of
fire where accessibility is restricted.
Where practical, natural disasters are
also covered by insurance policies.
Pests & disease Rhinoceros beetle or
Oryctes damage has been
observed in areas of large-
scale replanting, while
plantations have previously
been detrimentally impacted
by stem rot. More extreme
fluctuations in precipitation
may drive increased damage
from bagworms and leaf
beetles.
There is evidence that
pollinating weevils, which
help to pollinate palm trees,
are showing smaller flight
capabilities and pollinating
less because of changing
climatic conditions.
Pest and disease events are
localised, with early-warning
provided by supervision and
monitoring, and generally impact
immature palms.
Outbreaks are managed through
biological controls, such as the
planting of beneficial plants that
host natural predators to divert
bagworms from oil palms, and the
introduction of barn owls to control
rats. Individual estates have also
been replanted with more resistant
anti-Ganoderma material to reduce
the threat of stem rot. A variety of
planting materials are also being
considered to provide variability
and pollens, to mitigate changes
to pollinating insects, and hand
pollination can also be carried out
where required.
Physical Sea Level Rise Sea level rise related to
climate change may impact
AEP’s plantation and milling
locations, or logistics routes
that are coastal or at sea level.
The majority of AEP’s operations
occur at locations inland and above
sea level.
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Type Primary risk/
opportunity
driver
Rationale for inclusion as
priority risk
Management approach
Systemic
Risk
Systemic
Disruption
The TNFD has built upon
the TCFD’s categorisation
of risk by asking companies
to consider systemic risk
alongside physical and
transition risk. It outlines two
categories of nature-related
systemic risk:
Ecosystem stability risk:
Risk of the destabilisation
of a critical natural system,
so it can no longer provide
ecosystem services in the
same manner as before.
Financial stability risk:
Risk that a materialisation
and compounding of physical
and/or transition risk leads to
the destabilisation of an entire
financial system.
AEP examined this risk at a high level
to better understand and gather
evidence on whether/how systemic
risks might manifest change over
time.
Based on the scenarios assessed, AEP’s business model remains resilient under a range of climate
pathways, supported by adaptive operational practices, infrastructure investments, and integration of
climate considerations into financial and strategic planning.
Impact on business, strategy, and financial planning
• Strategic adjustments are implemented to mitigate disruptions, ensure resilience, and harness
opportunities that support long-term growth and alignment with our sustainability goals.
• Climate and nature-related risks and opportunities are being incorporated into our approach and
planning process through the following key processes, enabling us to effectively adapt to climate
and nature challenges:
i. Scenario Analysis: Various scenarios are employed to assess potential future impacts of climate
change, including extreme weather events, policy and regulatory changes, as well as shifts in
market dynamics.
ii. Risk Assessment: The impacts of key risks are assessed, including impact on our business,
financial performance, cash flow, insurance premiums and capital expenditures to mitigate
climate and nature-related impacts.
iii. Sustainability Policy and Governance Strategy: Our operations are guided by our sustainability
policies developed based on globally recognised frameworks and industry best practices,
such as NDPE policies, to mitigate environmental risks and enhance market competitiveness.
These efforts are supported by our dedicated ESG and Corporate Governance Committee and
ESG team, who oversee climate and nature-related planning to effectively integrate risks and
opportunities into our broader strategic goals.
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iv. Development of Metrics and Targets: Metrics
and targets are systematically designed to
measure and track progress toward climate
and nature-related objectives. These metrics
provide clear benchmarks for evaluating
the effectiveness of initiatives and ensure
alignment with broader strategic goals,
fostering continuous improvement and
accountability.
v. Stakeholder Engagement: Collaboration
with investors, regulators, non-profit
organisations and local communities
ensures that climate considerations are
factored into long-term planning and
operational decisions.
RESILIENCE OF OUR STRATEGY
Our scenario analysis has highlighted a strong
degree of resilience in the immediate term. We are
effectively managing drought and flood risks with
plans to further enhance our CSA by 2026. Our
strategic decision to pursue RSPO certification,
combined with our commitment to ensuring palm
oil supply traceability, positions us well to meet
emerging regulatory requirements and evolving
customer expectations.
We recognise, however, that both regulatory
and customer demands surrounding climate and
nature are subject to rapid change. Furthermore,
over extended timeframes, climate change
presents potential challenges to yields, particularly
in scenarios where societal action to mitigate its
effects remains insufficient. As such, we remain
dedicated to enhancing our climate and nature-
related performance and regularly revisiting
associated risks to safeguard our resilience.
Sustainability is at the heart of our operations,
reflected in our adoption of the NDPE policy.
This policy underscores our unwavering
commitment to sustainable practices by
prioritising environmental preservation and social
responsibility. We strictly oppose deforestation
and new development on peatlands, safeguarding
biodiversity and mitigating climate change, while
promoting best management practices for existing
peat areas. Furthermore, the policy reinforces
our dedication to human rights, the protection
of local communities through Free, Prior and
Informed Consent (“FPIC”), the assurance of
fair working conditions, and the inclusion of
smallholders within our supply chain. Through
adherence to NDPE principles, we aim to uphold
transparency, accountability, and alignment with
global sustainability standards.
In addition to NDPE principles, we emphasise
the identification and protection of HCV and
HCS areas, further ensuring the preservation of
biodiversity and critical ecosystems. We also
strictly oppose child and forced labour across our
operations and supply chains.
Our agricultural practices reflect our focus on
responsible land management. These include
zero burning, integrated pest management,
soil and water conservation, and biomass
recycling. During replanting, felled palms are
chipped, shredded, and left to decompose on-
site. This process eliminates greenhouse gas
emissions typically associated with burning, while
simultaneously enriching soil organic matter and
recycling nutrients.
Our Sustainability Policy (available on our
website) provides additional information on the
commitments we have made which will reduce
the likelihood and/or impact in some of our key
risk areas.
To enforce our policy, we employ comprehensive
strategies, including:
• Regular monitoring and audits
• Training and awareness programme
• Collaboration with communities and value
chain partners
• Thorough documentation and verification
processes
• Whistle-blowing and grievance mechanisms
As we continue to implement additional actions
to improve TCFD and TNFD alignment, we will
update our policy as relevant, including our
response to the emergence of new risks and
opportunities as well as further sustainability-
related metrics and targets.
In 2024, we commissioned Aon Global Risk
Consulting to review the CSA and provide
recommendations on next steps to improve
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the CSA results. A summary of the key
recommendations for 2025/2026 are as follows:
• Further assessment of potential flood-related
impacts – Reliance has been made on the WWF
and WRI global datasets to draw conclusions
on AEP’s exposure to flooding. These datasets
show aggregated exposure at basin/regional
levels and although may be suitable for climate
perils such as temperature rise and drought,
may over- or under- estimate exposure to
flooding at a particular site because flood
is a localised hazard and can vary quite
considerably even over small distances. Once
flood exposure has been assessed at a site
level, potential damage and disruption and the
overall financial impact on our Group can be
assessed.
• Further research into drought exposure –
Drought has been assumed not to have major
impact on our assets and operations based
on the WWF and WRI with drought hazard
information showing no change in drought risk.
However, there are other sources indicating
potential increase in drought probability for
Indonesia. Therefore, given the importance
of this climate stressor and its direct impact,
more research is recommended to validate the
assumptions around drought exposure.
• Identify and disclose climate and nature-
related opportunities – Climate and nature-
related opportunities should be identified and
their financial impact quantified and reported
alongside risks to provide a balanced and more
realistic view of potential climate- and nature-
related impacts on AEP’s business.
• Better communication of AEP’s climate and
nature-related initiatives – AEP has come a
long way to make its plantation business more
sustainable. Examples of our efforts include
the implementation of NDPE policy in 2019
or making the necessary arrangements for
compliance with the traceability expectations
of the EUDR. However, not all initiatives are
well communicated externally and therefore
not fully reflected in some of our external
ESG scores. Better communication of these
initiatives is recommended.
CLIMATE & NATURE RELATED RISK MANAGEMENT
Identifying and Assessing Climate and Nature-
Related Risks
Our Board maintains ultimate responsibility
for ensuring ongoing risk oversight, including
the identification of emerging risks and the
reassessment of materiality as conditions evolve.
At the operational level, our key management,
estate and mill managers continuously identify
and assess risks, including those related to
climate and nature. This risk management
approach is primarily guided by compliance with
various standards and certifications implemented
across several of our estates and mills, such as
ISO14001:2015, PROPER, ISPO, and ISCC.
AEP recognises the importance of embedding
climate and nature-related risk management into
these processes and is committed to ensuring that
staff possess a comprehensive understanding of
these elements. This will enable a holistic and
integrated approach to risk management across
the organisation.
Managing Dependencies, Impacts, Risks and
Opportunities
AEP is committed to maintaining a robust risk
management framework to identify, assess
and manage climate and nature-related
dependencies, impacts, risks and opportunities
across its operations. Our Group has established
clear governance structures and stakeholder
responsibilities to ensure that climate and
environmental risks are effectively mitigated,
transferred, accepted or managed as part of the
broader ERMF.
Short-term operational risks such as extreme
rainfall, flooding, drought, fires and pest or disease
outbreaks are monitored at the site level and
recorded in our Group’s operational risk registers.
These risks are assessed using a structured risk
matrix and prioritised based on their likelihood of
occurrence and potential consequences.
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Within AEP’s risk management framework, risks
are ranked according to likelihood categories of
rare, unlikely, possible, likely and almost certain,
and consequence categories of insignificant,
minor, moderate, major and extreme. The
combination of likelihood and consequence
determines the overall risk level and supports
prioritisation of mitigation measures across our
Group.
Plantation and mill management teams are
responsible for monitoring site-level risks and
implementing mitigation measures, working
closely with the Sustainability & Risk Management
department. Sustainability-related risks, including
deforestation, biodiversity and habitat protection,
soil degradation, land rights and community
relations, are incorporated into our Group’s risk
registers and reviewed regularly.
Key risk issues are reported to senior management
and escalated to our Board where necessary. This
process ensures appropriate oversight at our
Group level, approval of mitigation measures at
each operating site and continuous monitoring of
risk management performance.
The Sustainability and Environment, Health and
Safety (“EHS”) departments conduct annual risk
assessments, while updates to our Group-wide
risk registers are carried out periodically to reflect
operational developments, emerging risks and
regulatory changes.
Our Board, supported by senior management,
undertakes an annual review of our Group’s
principal and emerging risks, including climate-
and nature-related risks. With its collective
experience in the palm oil industry and awareness
of geopolitical and economic developments
in our Group’s operating regions, our Board
provides oversight of risks that may affect our
Group’s long-term sustainability and financial
performance.
Recognising the close relationship between
climate-related risks, environmental impacts and
business operations, AEP integrates these risks
into its broader enterprise risk management
framework. Risk assessments consider both
physical climate risks, such as extreme weather
events that may affect plantation productivity
or mill operations, and transition risks, including
regulatory changes, sustainability standards and
evolving market expectations for responsibly
produced palm oil.
Risk management processes are structured across
several key registers, including Operational,
Mill, Management and Financial risk registers,
each addressing specific areas of the Group’s
activities. These registers capture risks such as
natural disasters, equipment breakdown, labour
availability, regulatory compliance, market
volatility, cybersecurity threats and foreign
exchange exposure.
All identified risks are evaluated based on their
likelihood and consequence, and appropriate
mitigation strategies are implemented to
manage these risks effectively. The consolidated
risk registers are reviewed periodically by
management and presented to our Board
annually as part of our Group’s governance and
risk oversight process.
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STRATEGIC REPORT (CONTINUED)
1
2
3
4
5
SECTION 2 :
STRATEGIC REPORT
The following section outlines the climate- and nature-related risks identified in AEP’s Palm Oil Risk Register, which is reviewed and updated
annually as part of our Group’s ongoing risk management and sustainability practices.
1. Operational Risk
Before Controls
Existing Controls/
Mitigation (Currently
Implemented)
After control currently implemented
Risk
ID
Risk
Description
Risk
Category
Time
Horizon
Inherent
Likelihood
Inherent
Consequence
Inherent
Risk Score
Residual
Likelihood
Residual
Consequence
Residual
Risk Score
Additional
Action
Required
(if any)
Risk
Owner
Review
Date Status
R1 The long dry
period which
causes drought
Environmental
risks
Medium
Term
Possible
3
Major
4
High
12
1. Record the rainfall data
from units
2. Fire patrol using drone
and watch tower
3. Routine patrol by
security
4. Monitoring and use of
early warning systems
Unlikely
2
Moderate
3
Low
6
Ensure fire
fighting
equipment
is ready
and
maintained
Estate
Manager,
Agronomist,
and
Sustainability
& Risk
Management
Team
January
2025
Completed
R2 Extreme
rainfall which
causes
flooding
Environmental
risks
Medium
Term
Rare
1
Extreme
5
Low
5
AEP mitigates flood risks
in palm oil production
through:
1. Water Management –
implementing drainage
systems, improving
soil drainage, and
managing water flow.
2. Land Use Planning –
avoiding flood-prone
areas, maintaining
drainage, and
preserving natural
buffers like wetlands
and forests.
3. Infrastructure Design
– constructing elevated
and flood-resistant
roads, bridges, and
buildings.
4. Early Warning &
Preparedness – using
weather monitoring
and remote sensing,
training workers,
and maintaining
contingency plans.
Rare
1
Major
4
Low
4
Estate
Manager,
Agronomist,
and
Sustainability
& Risk
Management
Team
January
2025
Completed
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STRATEGIC REPORT (CONTINUED)
Before Controls
Existing Controls/
Mitigation (Currently
Implemented)
After control currently implemented
Risk
ID
Risk
Description
Risk
Category
Time
Horizon
Inherent
Likelihood
Inherent
Consequence
Inherent
Risk Score
Residual
Likelihood
Residual
Consequence
Residual
Risk Score
Additional
Action
Required
(if any)
Risk
Owner
Review
Date Status
R3 Deforestation,
Biodiversity &
Habitat Loss
Environmental
risks
Medium
Term
Unlikely
2
Major
4
Low
8
AEP ensures sustainable
and responsible
production by:
1. NDPE Commitment
– enforcing zero-
deforestation and no-
exploitation policies,
protecting HCV and
HCS areas, respecting
community rights, and
applying sustainable
land management.
2. Stakeholder
Engagement –
collaborating with
local communities,
indigenous groups,
NGOs, and others
through FPIC and
participatory land-use
planning.
Rare
1
Moderate
3
Low
3
Estate
Manager and
Sustainability
& Risk
Management
Team
January
2025
Completed
R4 Soil Erosion &
Degradation
Environmental
risks
Medium
Term
Unlikely
2
Moderate
3
Low
6
AEP has Implemented soil
conservation practices,
such as terracing
and cover cropping,
promote sustainable
land use planning, adopt
responsible agroforestry
techniques.
Unlikely
2
Minor
2
Low
4
Estate
Manager and
Agronomist
January
2025
Completed
R5 Fires Environmental
risks
Medium
Term
Possible
3
Major
4
High
12
AEP reduces drought and
fire risks by:
1. Monitoring & Early
Warning – using
weather systems,
remote sensing, and
fire towers to track soil,
vegetation, and fire
risks.
2. Sustainability Policies
– enforcing zero-
deforestation and
no-burn commitments
to protect forests and
peatlands.
3. Community
Engagement – raising
awareness, offering
alternative livelihoods,
and training in fire
prevention and
firefighting.
4. Standards &
Compliance –
implementing RSPO,
ISPO, ISCC, ISO
14001, and PROPER
for sustainable
management.
Unlikely
2
Major
4
Low
8
Ensure fire
fighting
equipment
is ready
and
maintained
Estate
Manager and
Sustainability
& Risk
Management
Team
January
2025
Completed
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STRATEGIC REPORT (CONTINUED)
1
2
3
4
5
SECTION 2 :
STRATEGIC REPORT
Before Controls
Existing Controls/
Mitigation (Currently
Implemented)
After control currently implemented
Risk
ID
Risk
Description
Risk
Category
Time
Horizon
Inherent
Likelihood
Inherent
Consequence
Inherent
Risk Score
Residual
Likelihood
Residual
Consequence
Residual
Risk Score
Additional
Action
Required
(if any)
Risk
Owner
Review
Date Status
R6 Pest &
Diseases
Operational
Risks
Short
Term
Possible
3
Moderate
3
Moderate
9
AEP reduces pest and
disease risks through:
1. Early Detection &
Monitoring – routine
surveillance with
trained officers and
early warning systems.
2. Biological Control
– using barn owls
to control rats and
cultivating beneficial
plants (Casia
Cobanensis, Antigonon,
Tunera Subulata) to
deter leaf-eating pests.
3. Disease Management
– isolating Ganoderma
with trenches to
prevent its spread.
Unlikely
2
Moderate
3
Low
6
Agronomist January
2025
Completed
R7 Land Rights &
Conflicts
Regulatory &
Compliance
Risks
Short
Term
Unlikely
2
Moderate
3
Low
6
AEP safeguards
community and land
rights by:
1. Community Consent
– engaging indigenous
groups through FPIC
before projects begin.
2. Land Rights Protection
– conducting land
tenure mapping,
legal recognition,
and due diligence in
acquisitions.
3. Fair Compensation –
ensuring communities
are properly
compensated for land
use (“GRTT”).
4. Sustainability
Standards – applying
and implementing
ISPO, ISCC, ISO,
PROPER, and RSPO.
Unlikely
2
Minor
2
Low
4
Estate
Manager,
Legal, and
Sustainability
& Risk
Management
Team
January
2025
Completed
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STRATEGIC REPORT (CONTINUED)
2. Mill Risks
Before Controls
Existing Controls/
Mitigation (Currently
Implemented)
After control currently implemented
Risk
ID
Risk
Description
Risk
Category
Time
Horizon
Inherent
Likelihood
Inherent
Consequence
Inherent
Risk Score
Residual
Likelihood
Residual
Consequence
Residual
Risk Score
Additional
Action
Required
(if any)
Risk
Owner
Review
Date Status
R1 Equipment
breakdown
due to poor
maintenance
Operational
Risks
Short
Term
Likely
4
Extreme
5
Critical
20
Regular maintenance
schedule including
preventive maintenance,
proactive equipment
inspections, spare parts
inventory management.
Possible
3
Major
4
High
12
Mill Manager
and
Maintenance
Assistant
January
2025
Completed
R2 Disruption of
supply chain
Supply Chain
Risks
Short
Term
Unlikely
2
Major
4
Low
8
Secure supply by
diversifying vendors and
planning for crop cycles.
Ensure early traceability
to identify and exclude
any non-compliant
smallholder crops under
EUDR, minimizing
disruption to FFB supply.
Unlikely
2
Moderate
3
Low
6
Mill Manager,
Estate
Manager, and
Commercial
January
2025
Completed
R3 Environmental
compliance
violation
Environmental
risks
Short
Term
Likely
4
Major
4
High
16
Implementation
of environmental
management systems,
regular monitoring of
emissions and effluents,
and employee training on
environmental regulations.
Possible
3
Major
4
High
12
Mill Manager
and
Sustainability
& Risk
Management
Team
January
2025
Completed
R4 Labour
shortages or
disputes
Operational
Risks
Medium
Term
Possible
3
Major
4
High
12
Cross-training of
employees, contingency
workforce planning,
engagement with labor
unions, and fair labor
practices according to the
labor law.
Unlikely
2
Minor
2
Low
4
Mill Manager
and HR
Manager
January
2025
Completed
R5 Fire hazard in
the mill area
Operational
Risks
Short
Term
Possible
3
Major
4
High
12
Installation of fire
detection and
suppression systems,
regular fire drills and
training, and proper
storage of flammable
materials.
Unlikely
2
Major
4
Low
8
Ensure fire
fighting
equipment
is ready
and
maintained
Mill Manager
and
Sustainability
& Risk
Management
Team
January
2025
Completed
R6 Regulatory
changes
impacting
operations
Regulatory &
Compliance
Risks
Medium
Term
Unlikely
2
Moderate
3
Low
6
Regular monitoring of
regulatory updates,
compliance audits.
Unlikely
2
Minor
2
Low
4
Mill Manager
and
Sustainability
& Risk
Management
Team
January
2025
Completed
R7 Natural
disasters (e.g.,
floods, storms,
earthquakes)
Environmental
Risks
Short
Term
Rare
1
Extreme
5
Low
5
Disaster preparedness
and response plans,
infrastructure resilience
measures, early warning
systems, insurance
coverage for business
interruption.
Rare
1
Major
4
Low
4
Mill Manager,
Eng.
Department
MHO, and
Sustainability
& Risk
Management
Team
January
2025
Completed
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STRATEGIC REPORT (CONTINUED)
1
2
3
4
5
SECTION 2 :
STRATEGIC REPORT
Before Controls
Existing Controls/
Mitigation (Currently
Implemented)
After control currently implemented
Risk
ID
Risk
Description
Risk
Category
Time
Horizon
Inherent
Likelihood
Inherent
Consequence
Inherent
Risk Score
Residual
Likelihood
Residual
Consequence
Residual
Risk Score
Additional
Action
Required
(if any)
Risk
Owner
Review
Date Status
R8 Work Accident People,
Health, Safety
& Social Risk
Short
Term
Possible
3
Major
4
High
12
AEP ensures workplace
safety through:
1. Training & Awareness –
employee training, safety
committees, and regular
meetings.
2. Policies & Procedures
– clear safety policies,
hazard identification, and
risk assessments.
3. Protective Measures –
PPE, machine guarding,
safety signage, and labels.
4. Monitoring &
Improvement – regular
inspections, maintenance,
and continuous
improvement.
Unlikely
2
Moderate
3
Low
6
Mill Manager
and
Sustainability
& Risk
Management
Team
January
2025
Completed
3. Management Risks
R1 Political
Instability
Regulatory &
Compliance
Risks
Medium
Term
Unlikely
2
Major
4
Low
8
Monitoring the political
landscape through
news, social media, and
stakeholder engagement
while building strong
relationships with
government, civil
society groups, and the
community.
Unlikely
2
Moderate
3
Low
6
GM, RM, and
Sustainability
& Risk
Management
Team
January
2025
Completed
R2 Regulatory,
Governance
and ethics
Regulatory &
Compliance
Risks
Medium
Term
Rare
1
Major
4
Low
4
Ensure compliance with
palm oil regulations
through robust
traceability systems and
sustainability standards
(ISPO, ISCC, ISO
14001, RSPO, EUDR),
while engaging with
local communities and
indigenous groups,
regularly updating
governance practices,
and fostering integrity
through a code of
conduct, ethics training,
and whistleblower
mechanisms.
Rare
1
Moderate
3
Low
3
Legal and
Sustainability
& Risk
Management
Team
January
2025
Completed
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STRATEGIC REPORT (CONTINUED)
Before Controls
Existing Controls/
Mitigation (Currently
Implemented)
After control currently implemented
Risk
ID
Risk
Description
Risk
Category
Time
Horizon
Inherent
Likelihood
Inherent
Consequence
Inherent
Risk Score
Residual
Likelihood
Residual
Consequence
Residual
Risk Score
Additional
Action
Required
(if any)
Risk
Owner
Review
Date Status
R3 Information
Technology
(“IT”) security
risk
Technology &
Cybersecurity
Risks
Short
Term
Unlikely
2
Major
4
Low
8
Develop and enforce
robust IT security policies
and procedures, maintain
up-to-date software
and security patches,
and implement strong
cybersecurity measures
such as firewalls, IDS/IPS,
and regular employee
training to identify and
report threats.
Unlikely
2
Moderate
3
Low
6
IT Manager January
2025
Completed
R4 Employee
turnover due
to lack of
engagement
Regulatory &
Compliance
Risks
Short
Term
Unlikely
2
Moderate
3
Low
6
Conduct employee
engagement
surveys, implement
retention initiatives,
career development
programmes.
Unlikely
2
Minor
2
Low
4
Estate
Manager, Mill
Manager, and
HR Manager
January
2025
Completed
R5 Workplace
conflicts and
grievances
Regulatory &
Compliance
Risks
Short
Term
Unlikely
2
Major
4
Low
8
Implement conflict
resolution procedures,
provide training on
effective communication
and conflict management.
Unlikely
2
Minor
2
Low
4
Estate
Manager, Mill
Manager, and
HR Manager
January
2025
Completed
R6 Inadequate
performance
management
processes
Regulatory &
Compliance
Risks
Short
Term
Unlikely
2
Moderate
3
Low
6
Implement performance
appraisal systems, provide
training on goal setting
and feedback.
Unlikely
2
Minor
2
Low
4
Estate
Manager, Mill
Manager, and
HR Manager
January
2025
Completed
R7 Lack of
succession
planning for
key roles
Regulatory &
Compliance
Risks
Medium
Term
Unlikely
2
Moderate
3
Low
6
Develop succession
plans, identify and groom
high-potential employees,
cross-train employees.
Rare
1
Minor
2
Low
2
Estate
Manager, Mill
Manager, and
HR Manager
January
2025
Completed
R8 Data security
breaches
and privacy
violations
Technology &
Cybersecurity
Risks
Short
Term
Possible
3
Major
4
High
12
Enhance data security
measures, implement
data privacy policies, and
provide training on data
protection.
Possible
3
Moderate
3
Moderate
9
Perform
regular
data
backups
to prevent
data loss
IT Manager January
2025
Completed
R9 Contractual
disputes and
litigation
Regulatory &
Compliance
Risks
Medium
Term
Rare
1
Moderate
3
Low
3
Ensure contracts are
clear and comprehensive,
establish dispute
resolution mechanisms,
engage in alternative
dispute resolution
methods.
Rare
1
Minor
2
Low
2
Estate
Manager, Mill
Manager, and
Legal
January
2025
Completed
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STRATEGIC REPORT (CONTINUED)
1
2
3
4
5
SECTION 2 :
STRATEGIC REPORT
4. Finance Risks
Before Controls
Existing Controls/
Mitigation (Currently
Implemented)
After control currently implemented
Risk
ID
Risk
Description
Risk
Category
Time
Horizon
Inherent
Likelihood
Inherent
Consequence
Inherent
Risk Score
Residual
Likelihood
Residual
Consequence
Residual
Risk Score
Additional
Action
Required
(if any)
Risk
Owner
Review
Date Status
R1 CPO market
price
fluctuation
Financial Risks Short
Term
Likely
4
Major
4
High
16
Cost control through
mechanisation and
appropriate and
measurable use of
resources.
Possible
3
Moderate
3
Moderate
9
Estate
Manager, Mill
Manager, and
Commercial
January
2025
Completed
R2 Securing
competitive
CPO pricing
Financial Risks Short
Term
Likely
4
Major
4
High
16
Tendering CPO sales on a
weekly basis.
Possible
3
Moderate
3
Moderate
9
Finance January
2025
Completed
R3 Negative
campaign
Regulatory &
Compliance
Risks
Medium
Term
Likely
4
Major
4
High
16
1. The Company has
aimed to balancing
societal, environmental,
and economic interests.
2. The Company
promotes efficient
practices in
biodiversity, soil and
water conservation,
ensuring safe
conditions for
employees, and the
comunity.
3. The Company also
collaborates with
smallholders, NGOs,
and other stakeholders
to protect forests,
peatlands, and human
rights.
Possible
3
Moderate
3
Moderate
9
Sustainability
& Risk
Management
Team
January
2025
Completed
R4 Changes
in foreign
exchange rates
Financial Risks Short
Term
Possible
3
Major
4
High
12
To reduce the risk of
foreign exchange rates,
the Company converts
excess IDR into USD.
Unlikely
2
Moderate
3
Low
6
Finance January
2025
Completed
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ANNUAL REPORT 2025
STRATEGIC REPORT (CONTINUED)
Integration of Climate and Nature into Overall
Risk Management
As part of our ongoing efforts, AEP aims to
enhance transparency in climate and nature-
related risk management. This includes providing
detailed accounts of implemented management
activities, their impact on inherent risks, and any
changes to the materiality of identified risks and
opportunities.
AEP is actively integrating climate and nature-
related risks into its risk management framework
while aligning its processes with best management
practices. Continuous improvements to these
processes are being planned and implemented to
ensure they remain robust and effective. In the
coming years, priority will be given to integrating
these strategies into global risk management
frameworks and continuously monitoring
mitigation efforts to ensure their effectiveness.
At the same time, AEP will continue managing
strategic and operational risks incorporating
climate and nature, reporting these to the
relevant Committees and Board. Risks and
opportunities across different climate scenarios
and time horizons identified are incorporated as
part of regular management review and actions.
AEP is aligning the risk reporting frequency to
every quarter to the Audit Committee and Risk
Management Committee in line with our Board’s
reporting cycles.
AEP is also instigating a new template for use in
reporting embedding an approach that specifically
enables decision-makers to turn their minds to
any specific climate/nature risks as part of a due
diligence process when approving significant
investments/projects. For example, prior to
agreeing to purchase additional plantation land,
impact on climate, and nature should be tabled
and discussed.
METRICS AND TARGETS
Metrics to Assess Climate and Nature-Related
Risks and Opportunities
AEP employs key metrics to manage risks and
opportunities within the business. Our annual
GHG reporting, aligned with the GHG Protocol
Corporate Accounting Standard and industry
guidelines, enables us to assess the impact of
business decisions on emissions (measured in
metric tonnes CO
2
e). Carbon intensity metrics,
such as emissions per ha of planted area, per
tonne of FFB produced, and per tonne of CPO
produced, serve as indicators of business
efficiency throughout the year. These metrics also
provide indirect insights into potential physical
risks like droughts or excessive rainfall.
Additional sustainability-related metrics support
the management of climate and nature-related
risks and opportunities. These include data
from certifications (e.g., ISPO and MSPO), HCV
areas, waste production, water consumption
and global cost premiums for certified palm oil
products (e.g., RSPO), which help evaluate risks
and opportunities arising from shifting market
preferences.
Building on our review and update of climate and
nature-related risks and opportunities (outlined
in the Strategy section), we aim to identify
further relevant metrics linked to these risks and
opportunities. This will include both historical
trends and forward-looking projections.
AEP reports Scopes 1 & 2 emissions in line with
the UK Streamlined Energy and Carbon Reporting
(“SECR”) regulation. We have also published
comprehensive assessment of our Scope 3
emissions across our corporate value chain. We
plan to improve our emissions calculation on an
ongoing basis by incrementally strengthening our
data collection to reduce reliance on estimation.
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The GHG Protocol Land Sector and Removals
guidance, originally expected to be finalized
in Q4 2025, was issued in January 2026. AEP
has established its methodology through an
internal SOP, and 2025 emissions have been
independently verified by PT. Mutu Agung Lestari
Tbk in accordance with ISO 14064-1. AEP will
review the final GHG Protocol Land Sector and
Removals guidance and update the methodology
where appropriate
As outlined above, we maintain additional nature-
related metrics through compliance with legal
obligations and certifications across several of our
estates and mills, including HCV, ISPO, PROPER,
ISO14001, and ISCC. These metrics support our
commitment to sustainability and responsible
business practices.
In parallel, the TNFD provides a voluntary
framework for organisations to identify and
address nature-related risks and opportunities.
While adherence to the TNFD is not compulsory,
we acknowledge its value in enhancing our
strategic approach to sustainability. Consequently,
we are proactively engaging with this framework
to further strengthen our management of nature-
related factors and to ensure alignment with
evolving global expectations.
Targets for Dependencies, Impacts, Risks and
Opportunities
During 2025, AEP continued to progress its
climate and sustainability target framework, with
a focus on strengthening data quality, refining
methodologies, and advancing towards more
comprehensive target-setting.
AEP maintains its target to reduce absolute
Scope 1 and Scope 2 emissions by 20.5% by 2030
from a 2019 baseline. In the current reporting
year, total emissions increased, primarily due to
replanting activities. These activities are part of
AEP’s long-term plantation management strategy
and are expected to support improved yields,
carbon sequestration potential, and operational
efficiency over time.
During the year, AEP enhanced its emissions data
collection and verification processes, resulting in
improved accuracy and completeness of reported
metrics. This provides a stronger foundation for
emissions management and target tracking going
forward.
A key development in 2025 was the completion
of AEP’s Scope 3 emissions baseline, following
a review of calculation methodologies based
on ISO 14064-1. This represents an important
step towards expanding AEP’s decarbonisation
strategy beyond direct operations.
Building on this progress, AEP has initiated
preparatory work to assess the feasibility of
adopting Science-Based Targets (SBTs), including
consideration of the Science Based Targets
initiative (SBTi) and SBTi-FLAG guidance. This
work is expected to continue into 2026.
In parallel, AEP has begun consolidating trend
data on water consumption and waste generation,
which will support the development of measurable
targets in these areas in future reporting
periods. These developments demonstrate
AEP’s continued progress in strengthening its
sustainability framework and aligning its long-
term targets with evolving regulatory expectations
and stakeholder priorities.
BIODIVERSITY AND NATURE
Nature loss and climate change are intrinsically
linked, with climate change being a major driver
of nature change. AEP is committed to voluntarily
making nature-related disclosures using the
TNFD framework. Building on the disclosures
made last year, we are actively progressing in
our TNFD compliance journey, recognising the
critical need to allocate resources toward nature
and biodiversity to safeguard natural ecosystems.
As part of this commitment, we are exploring
avenues where we can strategically channel
efforts to drive a meaningful impact.
It is important to note that TNFD alignment is
an area of active development for us. We view
this as an evolving journey and are dedicating
resources to strengthen our alignment with the
framework over time. The table below outlines
our ongoing efforts and forward-looking plans to
enhance TNFD compliance and address nature-
related risks and opportunities effectively.
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TNFD ALIGNMENT SUMMARY
Compliance Reference
Governance
Describe the board’s
oversight of nature-related
dependencies, impacts, risks,
and opportunities
Board has oversight which have been enhanced in
2025.
Describe management’s role in
assessing and managing nature-
related dependencies, impacts,
risks, and opportunities
Management has responsibilities and resources
which were enhanced in 2025.
Page 55: Management’s Role
Strategy
Describe the nature-related
dependencies, impacts,
risks, and opportunities the
organisation has identified over
the short-, medium- and long-
term
Limited compliance. Some nature-related risks
were identified during our climate and nature risk
identification exercise conducted in 2023. However,
we recognise the importance of undertaking a
more comprehensive assessment to encompass a
wider range of nature-related factors and will be
conducting it in the near future.
Pages 58-69: Material climate and nature-related
risks and opportunities including the table
Describe the impact on the
business of nature-related
risks and opportunities on
the organisation’s business,
strategy, and financial planning
Limited compliance. A scenario analysis was
previously conducted to assess how prioritised
climate and nature-related risks could impact our
business, strategy, and financial planning. However,
an update to this analysis will be conducted in
the near future to ensure its continued relevance
and alignment with current risks and evolving
circumstances.
Pages 56-69: Impact on business, strategy and
financial planning
Describe the resilience of the
organisation’s strategy, taking
into consideration different
scenarios, including a 2°C or
lower climate scenario
The resiliency of strategy against the risks
identified earlier is disclosed.
Pages 57-62: Resilience of our Strategy
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Compliance Reference
Describe the organisation’s
interactions with low integrity &
high importance ecosystems or
areas of water stress
Not
applicable
None of our sites have been identified as located
within areas of water stress, but all are located
within regions of high biodiversity value. We will
outline our interactions with high importance
ecosystems in future reports.
Risk Management
Describe the organisation’s
processes for identifying
and assessing nature-related
dependencies, impacts, risks,
and opportunities
AEP has implemented a process for identifying
assessing prioritising and managing climate
and nature risks. The process is now enhanced
with the establishment of an ESG and Corporate
Governance committee and dedicated ESG
resources.
Pages 71-72: Identifying and assessing climate and
nature-related risks
Describe the organisation’s
process for managing nature-
related dependencies, impacts,
risks, and opportunities
The process is described in pages 71-72: Managing
dependencies, impacts, risks and opportunities.
Describe how processes for
identifying, assessing, and
managing nature-related
risks are integrated into the
organisation’s overall risk
management
Currently compliant however as AEP is intending
to review and refresh its risk management practice
and integrate climate and nature more deeply into
the company’s practice.
Page 80: Integration of climate and nature into
overall risk management
Describe the organisation’s
approach to locate the sources
of inputs used to create value
that may generate nature-
related dependencies, impacts,
risks and opportunities
AEP’s FFB come from our plantations where we
are committed to NDPE. We have identified HCV
and HCS areas and implemented conservation
programs to mitigate habitat loss (see page 72 for
more details). Additionally, we are continuously
enhancing traceability of third-party FFB to ensure
sourcing from compliant areas.
Describe how stakeholders,
including rightsholders, are
engaged by the organisation in
its assessment and response to
nature-related dependencies,
impacts risks, and opportunities
AEP upholds the FPIC principles, ensuring land
rights protection and equitable community
engagement. In Seluma Regency, Bengkulu, AEP is
actively collaborating with local communities on a
social forestry scheme aimed at land recovery,
sustainable land use, and community development
(See page 33 on details of our social forestry
project). This initiative is integrated into AEP’s
broader stakeholder collaboration efforts, working
alongside NGOs and local groups to monitor nature
and environmental changes and support effective
land management.
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Compliance Reference
Metrics & Targets
Disclose the metrics used by
the organisation to assess
nature- related risks and
opportunities in line with its
strategy and risk management
process
The metrics are disclosed in pages 80-81: Metrics
to assess climate and nature-related risks and
opportunities.
Disclose the metrics used by
the organisation to assess and
manage direct, upstream and,
if appropriate, downstream
dependencies and impacts on
nature
In progress Framework iniated using LUCA, GIS Monitoring,
and Traceability to Plantation (“TtP”); expansion to
suppliers and downstream ongoing.
Describe the targets used by
the organisation to manage
nature- related dependencies,
impacts, risks and
opportunities, and performance
against targets
In progress NDPE, TtP, social forestry and land management
targets in place; formal TNFD targets under
development
Describe how targets on nature
and climate are aligned and
contribute to each other, and
any trade-offs
In progress Integration demonstrated through social forestry,
emissions reduction and NDPE; further alignment
planned under ISSB roadmap.
AEP continues to enhance its sustainability
disclosures in alignment with the
recommendations of the Task Force on TNFD,
building upon its established climate-related
reporting under TCFD.
AEP adopts a phased and pragmatic approach
to TNFD implementation, focusing initially on
governance, strategy, and risk management, while
progressively strengthening metrics, targets,
and data systems in line with evolving global
standards and the forthcoming ISSB framework.
AEP recognises that nature-related risks and
opportunities are intrinsically linked to its core
plantation operations, particularly in relation
to land use, biodiversity, water resources, and
supply chain dependencies.
AEP has commenced the development of a
structured framework to assess and manage
nature-related dependencies, impacts, risks, and
opportunities across its operations and supply
chain.
METRICS
AEP currently utilises a combination of
operational, environmental, and supply chain
indicators, including:
• Land Use & Land Cover Change
(via LUCA, HCV/HCS assessments and RSPO
processes)
• Deforestation Risk Monitoring
(satellite-based hotspot detection and
encroachment monitoring)
• Water Management Indicators
(water usage intensity and source mapping at
mill and estate level)
• Biodiversity & Conservation Indicators
(social forestry areas, protected forest
management, conservation activities)
• Traceability Metrics
(100% Traceability to Plantation for own
operations; expansion to smallholders
ongoing)
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AEP is progressively enhancing these metrics to
include upstream supplier risk profiling and, where
relevant, downstream value chain considerations,
consistent with the TNFD LEAP approach.
TARGETS
AEP’s nature-related targets are currently
aligned with its sustainability commitments and
operational practices, including:
• Zero Deforestation Commitment (NDPE
Policy)
• 100% Traceability to Plantation (achieved for
own operations; target for smallholders by
2026)
• Expansion of Social Forestry and Conservation
Areas (13,789 hectares under management,
including primary forest and community
forestry)
• Reduction in Land Clearing Activities (notable
reduction since 2024)
AEP is in the process of formalise disclosures.
CLIMATE–NATURE ALIGNMENT
AEP acknowledges the strong interdependencies
between climate and nature and is working
towards integrated management of both areas.
Key areas of alignment include:
• Social Forestry and Conservation Programmes
contributing to both biodiversity protection
and carbon sequestration
• Biogas and BioCNG Initiatives reducing
greenhouse gas emissions while improving
environmental performance
• Reduced Land Clearing Activities mitigating
both emissions and biodiversity loss
The Group also recognises potential trade-offs,
particularly between production expansion and
conservation priorities, which are managed
through its NDPE policy, risk management
framework, and governance oversight.
Further integration of climate and nature targets
will be developed as part of AEP’s transition
towards ISSB-aligned disclosures.
CARBON REPORTING 2025
SECR Compliant Directors’ Statement
AEP recognises that our global operations have
an environmental impact and we are committed
to monitoring and reducing our emissions year-
on-year. We are also aware of our reporting
obligations under The Companies (Directors’
Report) and Limited Liability Partnerships (Energy
and Carbon Report) Regulations 2018. As such,
we continue to report on our energy and carbon
performance and are committed to transparent
communication about our environmental impact
to our stakeholders.
Currently, our Group calculates Scope 1, Scope
2, & Scope 3 greenhouse gas (GHG) emissions
in accordance with ISO 14064-1 standards. The
emissions inventory is prepared internally by
our Sustainability team using a structured and
documented methodology to ensure consistency
and accuracy. To strengthen credibility and
transparency, the GHG calculation has undergone
independent validation and verification by an
accredited certification body, PT. Mutu Agung
Lestari. This external verification enhances the
reliability and accountability of our carbon
disclosures.
2025 Performance Summary
AEP’s Scopes 1 & 2 emissions increased by 14%
(including removals) and 28% (excluding removals)
in 2025 compared with 2024. This rise is primarily
attributed to a 34% in peat land cultivation
activities, which resulted in a proportional
increase in emissions. As an agricultural business,
our carbon footprint is inherently tied to land
management and planting practices.
Additionally, the carbon sequestration across our
estates increased by 59% during the reporting
period, partially offsetting higher emissions. ha
compared to the previous year, further influencing
our overall emissions profile.
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The increase in land clearance activities and
reduction in sequestrable land was mainly
attributed to our replanting programme, initiated
in 2022.
Replanted area (ha)
2025: 2,440
2024: 1,700 | 2023: 1,301
As part of its long-term plantation management
strategy, AEP continues to implement its
replanting programme covering the period from
2025 to 2029, targeting approximately 10,000
hectares.
During 2025, AEP replanted approximately 2,440
hectares, representing initial progress against this
multi-year target. Replanting activities during the
year were prioritised in areas with ageing palm
profiles to support future yield optimisation.
The newly replanted areas are expected to
require lower fertiliser input and deliver improved
yields over time compared to the ageing palms
they replace. In addition, younger palms are
anticipated to contribute to enhanced carbon
sequestration through increased photosynthetic
activity as they mature.
The replanting programme remains on track, and
AEP will continue to monitor progress annually
against its overall replanting targets.
Our fuel emissions have decreased by 79%, based
on ISO 14064-1 methodology, following the
increase in 2024 due to national grid disruptions
that led to higher fuel use.
Total operational emissions in 2025 have increased
by 200% with 2024. This is increasing due to the
ISO 14064-1 methodology to calculate emissions
of POME activities by using the inlet of Chemical
Oxygen Demand (“COD”) and Biochemical
Oxygen Demand’.
Progress in Emissions Management
During the reporting period, AEP continued
implementing emissions and energy reduction
initiatives, including transitioning to LED lighting
in offices and mills, utilising biogas for electricity
generation through gas engines, and using
transparent roofing in mill and storage buildings
to reduce daytime electricity demand.
AEP also advanced its broader emissions
management approach through review of
historical carbon footprint performance,
refinement of emissions reduction targets, and
continued alignment with evolving best practice
guidance, including the GHG Protocol Land
Sector and Removals guidance and wider target-
setting developments.
Metrics and Targets
AEP commits to a reduction in absolute Scopes
1 & 2 emissions by 20.5% by 2030 from a 2019
baseline. This target does not include the impact
of sequestration on site, as activity on this is
limited to the age profile of our crop.
We have identified the key areas we need to
take action as a business to achieve this target,
including the conversion of our remaining mills to
biogas plants from anaerobic lagoons, limiting our
land clearance levels, implementing a no new peat
policy and investigating our peat management
processes, particularly regarding management of
drainage depths.
We commit to reporting progress towards this
target each year and revisiting its appropriateness
and ambition on a regular basis to maintain its
value to our business and stakeholders.
2025 Scopes 1 & 2 and Out grower Results
Methodology
The methodology used to calculate the GHG
emissions is in accordance with the requirements
of the following standards:
• WRI GHG Protocol (revised version)
• Defra’s Environmental Reporting Guidelines:
Including SECR requirements (March 2019).
• ISO 14064-1, Greenhouse Gases
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Following an operational control approach to defining our organisational boundary, our calculated GHG
emissions from business activities fall within the reporting period of 1 January 2025 to 31 December
2025 and use the reporting period of January 2024 to December 2024 for comparison.
Note on Agricultural Emissions
Emissions from agricultural cultivation form the most significant part of our carbon footprint. As such
we have assessed these emissions in line with the methodology development by the RSPO. Version 4
of the RSPO’s Palm GHG application has been used to source relevant emission factors and provide a
sense check of calculations.
We account for emissions from agricultural cultivation on our own estates under direct Scope 1
emissions, whereby Scope 1 are the direct emissions sources that we own and control.
Emissions from land clearance are reported only for the reporting year in which the land clearance
activity took place. No amortisation has been applied, whereby the emissions would be allocated
equally over several years based on the changing land use during that time. We have chosen not to
apply amortisation as there is a lack of industry-acknowledge guidance on this topic at present.
Emissions and Energy Use (Scopes 1 & 2 with Removals)
Emissions Source
Global Emissions tCO
2
e
2025
vs 20242023 2024 2025
Scope 1
Removals (sequestration) -447,716 -369,446 -588,638 59%
Total with removals 671,357 841,254 958,758 28%
Scope 2
Removals 0 0 0 0%
Total with removals 2,715 3,632 1,670 -54%
Total Scopes 1 & 2 with removals 674,072 844,886 960,428 14%
Emissions and Energy Use (Scopes 1 & 2 without Removals)
Emissions Source
Global Emissions tCO
2
e
2025
vs 20242023 2024 2025
Scope 1
Fuels 19,994 18,769 3,898 -79%
Plantation vehicles 9,688 8,977 4,718 -47%
Fertiliser use 23,961 24,931 45,031 81%
Land clearance 450,333 557,270 360,076 -35%
Peat soil cultivation 490,311 483,070 649,196 34%
POME Treatment 124,786 117,683 484,390 312%
Usage of chemical
process and lubricants - - 43 -
Emissions of Fugitive
from GHG Releasing in
Anthropogenic System - - 44 -
Total Scope 1 1,119,073 1,210,700 1,547,396 28%
Total Scope 2 Electricity 2,715 3,632 1,670 54%
Total Scopes 1 & 2 1,121,788 1,214,332 1,549,066 28%
Total Energy Usage (gWh) 1,434 1,287 342 -73%
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Emissions Source
Global Emissions tCO
2
e
2025
vs 20242023 2024 2025
Intensity ratio tCO
2
e per ha of planted
area
17.3 18.6 21.75 17%
Intensity ratio tCO
2
e per tonne CPO
production
2.5 3.1 3.64 17%
Intensity ratio tCO
2
e per tonne FFB
production
1.0 1.2 1.43 19%
Direct emissions from biomass (biogenic
emissions) are excluded from Scope 1 totals and
disclosed separately in line with ISO 14064-1 and
GHG Protocol guidance.
These emissions relate to the combustion or
treatment of biomass-derived materials, which
are considered carbon-neutral over the life cycle
as part of the natural carbon cycle.
For 2025, biogenic emissions totalled 168,609
tCO₂e.
This presentation avoids double counting and
ensures that Scope 1 emissions reflect only
fossil fuel-related sources, while maintaining
transparency over total emissions associated with
the Group’s operations.
Notes:
• AEP is a UK-registered company. However, it has
minimal physical presence within the UK. As a result,
its contribution to UK emissions stands at 0%. This
disclosure is provided in the interest of transparency.
• For GHG report in 2019 – 2024 period, the analysis
of GHG emissions is partially based on the country-
specific CO
2
emission factors developed by the
International Energy Agency, © OECD/IEA 2023 but
the resulting analysis of GHG emissions has been
prepared for AEP and does not necessarily reflect
the views of the International Energy Agency.
• For GHG report 2025, the analysis of GHG emissions
is based on country-specific grid emission factors
obtained from official national sources, including the
Indonesian Ministry of Energy and Mineral Resources
(“ESDM”) and the Malaysia Energy Commission,
which are considered representative of local grid
conditions. The resulting GHG emissions analysis has
been prepared internally by AEP Plantations Plc in
accordance with ISO 14064-1, based on verified and
traceable activity data.
AEP is mandated to report under the UK SECR
regulations, as outlined above. To facilitate a direct
comparison with our 2019 reporting, the data is
additionally presented in a comparable format
below for clarity and consistency, and is aligned to
the WRI reporting principles of completeness and
relevance. This table includes emission estimates
of outgrower crops and electricity Transmission
and Distribution (“T&D”), which are scope 3 and
not included in the earlier Scope 1 & 2 tables.
Organisational Boundary
AEP is a UK-registered entity; however, all
operational activities are conducted through
subsidiaries located in Indonesia and Malaysia,
with no operational assets, facilities, or energy
consumption occurring within the UK.
In accordance with the operational control
boundary applied under ISO 14064-1 and SECR
requirements, energy consumption and associated
Scopes 1 & 2 emissions are recognised only for
entities and activities under operational control.
As AEP does not have any operational presence in
the UK, there is no UK-based energy consumption
to report. Accordingly, UK Scopes 1 & 2 emissions
are reported as 0%.
Energy Consumption Disclosure
Total energy consumption is disclosed in line with
SECR requirements and is disaggregated into the
following categories:
• Purchased electricity (kWh)
• Fuel consumption for stationary operations
(including diesel, biomass, biogas, and LPG)
• Fuel consumption for transportation (including
diesel and petrol used in operational vehicles)
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This disaggregation ensures transparency and
alignment with SECR reporting expectations. All
energy data is based on verified activity data and
prepared under ISO 14064-1 methodology.
SECR Minimum Boundary
In line with SECR requirements, the Group’s
energy-related emissions include:
• Scope 1 emissions from fuel combustion in
stationary operations and company-owned or
controlled vehicles
• Scope 2 emissions from purchased electricity
Additional emissions sources, including land use,
fertiliser application, and POME, are disclosed
separately as voluntary information to provide
a comprehensive view of the Group’s emissions
profile. These are not included within SECR
minimum disclosures.
Transport Emissions
Transport emissions reported under Scope 1
relate only to fuel consumption from company-
owned or controlled vehicles.
Transportation services provided by third-party
contractors are not included within Scope 1, as
AEP does not own or control the fuel used. These
emissions are classified as Scope 3 (transportation
and distribution) and are reported separately
within the Group’s broader GHG inventory.
Scope 2 Methodology
Scope 2 emissions are calculated using the
location-based method, based on national grid-
average emission factors for Indonesia and
Malaysia.
This approach reflects the actual carbon intensity
of electricity consumed and represents the
minimum required methodology under SECR.
AEP does not currently procure electricity
through contractual instruments such as
renewable energy certificates or power purchase
agreements; therefore, a market-based Scope 2
disclosure is not presented.
Emission Factors
Emission factors applied in the calculation of GHG
emissions are based on official national sources,
including:
• Indonesian Ministry of Energy and Mineral
Resources (“ESDM”)
• Malaysia Energy Commission
UK Government GHG Conversion Factors are not
applied, as they are specific to the UK and would
not appropriately reflect emissions associated
with AEP’s operations.
This approach ensures that emissions calculations
accurately reflect local grid characteristics and are
consistent with SECR guidance for multinational
groups.
Reporting Period
The reporting period for energy consumption and
emissions is aligned with the Group’s financial
year, from 1 January to 31 December 2025, with
comparative data presented for the prior year.
Intensity Ratios
AEP reports intensity ratios using both:
• Total emissions (including land-use and other
emissions)
• SECR-aligned emissions (Scopes 1 & 2 only)
Intensity metrics are expressed per tonne of CPO
and per tonne of FFB.
The SECR-aligned intensity ratio reflects energy-
related emissions only, ensuring compliance with
regulatory requirements, while total emissions
intensity provides additional transparency on the
Group’s full emissions footprint.
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Energy Efficiency Actions
During the reporting year, AEP implemented a
range of energy efficiency initiatives, including:
• Utilisation of biogas for electricity generation
• Installation of LED lighting across operational
facilities
• Operational improvements to enhance energy
efficiency in mills and estates
While individual energy savings are not
separately quantified, the combined effect of
these initiatives is reflected in the Group’s overall
energy consumption and emissions performance.
Gross vs Net Emissions
SECR disclosures are presented on a gross
emissions basis, including Scope 1 and Scope 2
emissions only.
Emissions removals and sequestration are
disclosed separately as supplementary
information and are not used to offset or reduce
reported emissions.
No netting or offsetting is applied in SECR
disclosures.
External Verification
AEP Group’s GHG emissions data for the reporting
year has been independently verified by PT Mutu
Agung Lestari Tbk in accordance with ISO 14064-
3.
The verification covers Scopes 1 & 2 emissions
under the operational control boundary.
The verification opinion statement is included in
the report as supporting evidence.
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2025 vs 2024 vs 2019 emissions comparison
Emissions source
Results (tCO
2
e)
2019 2024 2025 2025 vs 2019
POME Treatment 212,215 117,683 484,390 128%
Fertiliser application 26,614 24,931 45,031 69%
Fuel use 18,838 18,769 3,898 -79%
Diesel n/a 5,435 n/a -
Biomass n/a 13,334 n/a -
Electricity
consumption 1,984 3,632 1,670 -16%
Electricity T&D n/a 303 18 -
Company owned
vehicles 9,399 8,977 4,718 -50%
Third-party vehicles 7,367 5,371 14 -100%
Emissions of
Fugitive from
GHG Releasing in
Anthropogenic
System n/a n/a 44 -
Usage of chemical
process and
lubricants n/a n/a 43 -
Total operational
emissions 276,417 179,666 539,826 95%
Own
crop Outgrower
Own
crop Outgrower
Own
crop Outgrower
Own
crop Outgrower
Land clearance 322,182 285,094 557,270 539,613 360,076 915,825 12% 221%
Peat soil cultivation 488,823 54,790 483,070 54,862 649,196 152,971 33% 179%
Subtotal before
removals 811,005 339,884 1,040,340 594,475 1,009,272 1,068,796 24% 127%
Carbon sequestered -549,475 -446,388 -369,446 -395,497 -588,638 -424,415 7% -5%
Subtotal including
removals 261,530 -106,504 670,894 198,978 420,634 644,381 61% 705%
Total land use
emissions 155,026 869,872 1,065,015 587%
Overall emissions,
tCO
2
e 431,443 1,049,538 1,604,841 272%
Between 2019 and 2025, total operational emissions increased by 95% with significant increasing
in POME treatment 128% and fertiliser usage 69%. However, land-use emissions surged by 24% in
own crop, driven by a 12% rise in land clearance and a 33% increasing in peat soil cultivation and
for the carbon sequestration increase 7% due to the expansion of planted area. Despite operational
improvements, overall emissions increased by 272%, reaching 1,604,841 tCO
2
e in 2025. The increase
in reported figures is primarily attributed to the inclusion of additional calculation categories and
data adjustments following the organization’s achievement of verification under ISO 14064-1 from PT
Mutuagung Lestari Tbk (MUTU International).
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2025 vs 2019 Operational emissions intensity (excluding land use change emissions) (tCO
2
e)
Operational emissions reporting metric 2019 2024 2025
2025
vs 2019
Per ha of planted area 4.07 2.75 7.58 86%
Per tonne CPO production 0.70 0.45 1.27 81%
Per tonne FFB production 0.27 0.18 0.49 85%
The normaliser reported within the main report is calculated using total CO
2
e emissions. In previous
years, the normaliser has been calculated on operational emissions only. This reduces the influence of
the fluctuations in agricultural emissions. As such, the operational normalisers are also reported below.
The operational planted area intensity has increased by 86%. Conversely, the operational emissions
intensity of CPO and FFB production has increased by 81% and 85%, respectively.
Comprehensive Assessment of Scope 3 Emissions
In addition to the SECR-mandated emissions detailed in the previous section, we have included an
additional comprehensive inventory of our Scope 3 emissions extracted from the Scope 3 Emission
Report 2025 by AEP. The assessment of emissions quantification is carried out in accordance with the
methodology of the GHG Protocol and aided by the calculation guidance of:
• Corporate Value Chain (Scope 3) Accounting and Reporting Standard
• Technical Guidance for Calculating Scope 3 Emission (version 1.0)
• ISO 14064-1, Greenhouse Gases
AEP has classified this Scope 3 GHG emissions into 15 distinct categories. This classification enhances
transparency across our corporate value chain while minimising inaccuracies. Below is the summary
and breakdown for 2025:
Scope 3 Emission
Plantation
(EST)
Mill
(POM)
Office
(HO) Total
tCO
2
e (Conventional) 614,388 83,799 58,881 757,068
tCO
2
e (Biogenic) - - - -
Scope 3 Emission Contribution of 2025 (tCO
2
e)
7.8%
81.1%
11.1%
EST
POM
HO
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Breakdown:
Scope 3 Category Emission (tCO
2
e) Current Performance (%)
No. Category Applicability 2024 2025
2025
Contribution
2025
vs 2024
1 Purchased goods
and services
Relevant 755,064 709,880 93.77% - 6%
2 Capital goods Relevant 7,027 39,866 5.27% 467%
3 Fuel-and energy-
related activities
Relevant 162 - - -
4 Upstream
transportation and
distribution
Relevant 139,812 14 0.00% -100%
5 Waste generated in
operations
Relevant 246,550 108 0.01% -100%
6 Business travel Relevant 20 169 0.02% 745%
7 Employee
commuting
Relevant 3,993 6,969 0.92% 75%
8 Upstream leased
assets
Relevant 183 62 0.01% -66%
9 Downstream
transportation and
distribution
Relevant 15,361 - - -
10 Downstream
processing of sold
products
Relevant 51,829 - - -
11 Downstream use of
sold products*
Relevant 0.08 - - -
12 Downstream end-
of-life treatment of
sold products
Irrelevant - - - -
13 Downstream
leased assets
Irrelevant - - - -
14 Franchises Irrelevant - - - -
15 Investments Irrelevant - - - -
TOTAL 1,220,001 757,068 100.0% -38%
Note:
* All emissions of Category 11 originate from biodegradation process of POME to produce electricity via biogas.
For more information refer to Section Results – Biogenic Emission.
In 2025, the indirect emission from AEP’s value chain is shown to be reduced by 38% from the baseline of
2024. The reduction is linked to decreased procurement of goods and services within the supply chain,
primarily driven by Category 1 and 8. Despite the decreased intensity of procurement, few categories
are shown to have surging increases in emissions due to the rise of capital expenditure (Category 2)
and activities from business travel (Category 6). However, the increased emission from said categories
remains overshadowed by the higher reduction from a decline in procurement intensity.
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DIVERSITY
Table for reporting on gender identity or sex pursuant to the UK Listing Rules (“UKLR”):
Number
of Board
Members
Percentage
of the Board
Number
of Senior
Positions
on the Board
Number
of Executive
Management
Percentage
of Executive
Management
Men 4 80% 2 7 78%
Women 1 20% 1 2 22%
Total 5 100% 3 9 100%
Table for reporting on gender identity or sex pursuant to the UKLR:
Number
of Board
Members
Percentage
of the Board
Number
of Senior
Positions
on the Board
Number
of Executive
Management
Percentage
of Executive
Management
White British
or other White
(including
minority- white
groups)
1 20% - - -
Mixed/Multiple
ethnic groups
- - - - -
Asian/Asian British 4 80% 3 9 100%
Black/African/
Caribbean/ Black
British
- - - - -
Other ethnic
groups
- - - - -
Not specified/
prefer not to say
- - - - -
Total 5 100% 3 9 100%
With respect to diversity under the UKLR, our Board has not met the target of achieving at least 40%
female representation. Historically, the upstream palm oil industry has faced challenges with female
representation in senior roles, resulting in a limited pool of qualified candidates for board positions.
Nevertheless, we are committed to enhancing female representation while ensuring our Board upholds
its focus on quality and competence.
We have, however, met the UKLR requirement of having at least one senior board position held by a
woman. Additionally, 80% of our Directors are of Asian background, fulfilling the UKLR requirement
to have at least one Board member from a minority ethnic background. To support transparency, we
identify all Directors using their passports to confirm gender and ethnicity.
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The reference date for this disclosure is
31 December 2025, coinciding with the end of
our financial year. Moving forward, we intend to
continue using 31 December as our reference date,
unless circumstances necessitate a change. There
have been no changes to our Board between 31
December and the approval date of this annual
financial report that impact our compliance.
Our Board oversees the structure and
composition of the management team to ensure
selections are grounded in merit, focusing on
skills, qualifications, and experience. At the same
time, balanced representation is encouraged
across age, social, and ethnic backgrounds. This
strategy reflects AEP’s commitment to equity
and inclusivity, fostering a positive and respectful
work environment where every individual feels
valued. Our Board remains confident that the
current management team exemplifies well-
balanced diversity across these key dimensions.
EMPLOYEES
Oil palm cultivation is a labour-intensive industry.
In 2025, our Group employed an average of 7,276
full-time workers (2024: 7,486), representing
a decrease of approximately 3%. Part-time
labour averaged 7,807 (2024: 7,954), reflecting
a 2% decrease. Our Group has introduced
mechanisation in the field to boost productivity.
While mechanisation has its limitations, it can
help alleviate acute labour shortages and mitigate
cost pressures from rising minimum wages where
feasible.
AEP enforces a zero-cost recruitment policy
for all local and foreign employees. We have
formal recruitment processes, particularly for key
managerial positions, which include psychometric
testing to support hiring decisions. Departing
employees participate in exit interviews to help
management address significant concerns.
To enhance workforce competency, our
Group regularly selects employees for training
programmes conducted at our training centre,
offering grounding and refresher courses
on technical aspects of oil palm estate and
mill management. These programmes are
complemented by external management
development courses and industry conferences
on topics such as work ethics, motivation, health
and safety, and technical updates. In 2025, we
invested $59,800 in staff training and professional
development, compared to $91,800 in 2024,
highlighting our commitment to productivity
improvement through training.
Our cadet programme provides local university
graduates with theory and field training over
a 12-month period, after which successful
candidates are assigned as assistants to various
mills and estates.
A large proportion of our workforce and their
families live across our plantations. The extensive
benefits provided to them were detailed in the
CSR section of the Strategic Report. Along with
competitive salaries and bonuses, these benefits
help us retain and motivate employees. Our Group
adheres to Indonesia’s minimum wage policy,
respects employee rights, and strictly opposes
exploitation, including child or forced labour and
human trafficking, as outlined in the UK’s Modern
Slavery Act 2015. A full Modern Slavery statement
is available on our website.
Employees are covered by a government-
mandated personal accident scheme, with death
benefits up to 48 months of monthly salary. The
spouses and children of full-time employees are
also privately insured for death benefits by our
Group.
In addition to Indonesia’s mandatory retirement
programme managed by BPJS, casual workers
are enrolled in a defined contribution pension
scheme managed by AIA Financial, while
Indonesian managers and permanent employees
benefit from a post-employment compensation
fund managed by Allianz Indonesia.
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Employee rights and extensive benefits,
encompassing salary reviews, allowances,
bonuses, housing, training, safety, health and
ethical conduct, are documented in our Company’s
handbook, accessible to all employees.
Our Group is committed to creating equal and
ethnically diverse employment opportunities,
including gender diversity.
Key performance indicators determine employee
increments and bonus entitlements. Human
Resources and the Remuneration Committee
engage annually with labour unions representing
full-time workers to address performance bonuses
and grievances.
Note: More details are available in the Directors
Remuneration Report.
We have fostered a culture of accountability
through our whistle-blower policy, introduced in
2019, which allows employees to confidentially
or anonymously raise concerns for independent
investigation. The policy is available on our
website.
Recognising employees as vital assets, our
Group encourages their involvement through
meetings, performance appraisals, and feedback
mechanisms. Annual events, including a dinner
to honour high achievers, and family gatherings,
promote camaraderie among employees and
management.
Although we do not have a specific policy on
employing disabled persons, our Group welcomes
them into the workforce based on their suitability
and capabilities.
Anti-bribery and Anti-corruption
Our Group has in place policies and procedures in
respect of bribery and corruption, with detailed
guidelines and reporting requirements for its UK,
Indonesian and Malaysian operations which may
be viewed from our Company’s website.
Our Group is committed to
creating equal and ethnically
diverse employment
opportunities, including
gender diversity.”
The whistleblowing and grievance mechanism
policies which include reporting on corruption
practices are also highlighted in our Company’s
handbook. Management and senior staff have
had training programmes and updates as part
of their responsibility to ensure that bribery and
corruption do not exist in our Group’s operation.
New employees are also briefed on anti- corruption
practices during their orientation. Our Group has
in place a communication channel for employees
to report to the Chairman of the Audit Committee
via email at whistle.blowers@aepplantations.com
on incidences of bribery and corruption, on a
strictly confidential basis. Our Group uses its best
endeavour to ensure that its business partners
comply with the anti-bribery and anti-corruption
regulations.
OUTLOOK
CPO remains competitively priced against other
vegetable oils, with its discount to soybean oil
continuing to support demand, particularly in
cost-sensitive markets. In addition, Indonesia’s
mandatory B50 biodiesel programme, effective
from July 2026, is expected to drive stronger
CPO demand and serve as a key anchor for price
stability.
Near-term volatility is expected to persist, driven
by geopolitical tensions, especially in the Middle
East, which impact crude oil prices, freight costs,
and overall market sentiment. These factors
are also contributing to rising input costs, with
increases in diesel and fertiliser prices, particularly
urea, weighing on plantation margins.
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Notwithstanding the rising costs, given that CPO
prices are expected to remain elevated, we expect
sustainable performance for 2026.
STATEMENT BY DIRECTORS IN PERFORMANCE
OF THEIR STATUTORY DUTIES IN ACCORDANCE
WITH SECTION 172 (1) OF THE COMPANIES
ACT 2006
Our Board recognises its duty under Section
172(1) of the Companies Act 2006 to promote
the long-term success of AEP for the benefit of its
shareholders as a whole, while having regard to
the interests of wider stakeholders. In discharging
this responsibility, our Board considers the likely
long-term consequences of its decisions, the
interests of our employees, the need to foster
strong relationships with suppliers and customers,
the impact of the Group’s operations on the
environment and communities, the maintenance
of high standards of business conduct, and the
need to act fairly between shareholders.
Throughout 2025, our Board continued to
embed these considerations into its decision-
making processes as part of our Group’s strategic
oversight and governance framework.
Long-Term Strategy and Sustainable Growth
Our Board remains focused on delivering
sustainable long-term growth while maintaining
disciplined capital allocation and operational
excellence. During the year, our Group delivered
strong operational and financial performance,
supported by improved plantation productivity,
higher crop intake at our mills and favourable
palm oil prices. Revenue increased to $465.2
million, while profit after tax rose to $86.3
million, reflecting higher production volumes and
continued operational efficiencies.
To support the long-term productivity of our
estates, our Board continued to prioritise
investment in our Group’s replanting programme,
with approximately 2,440 hectares of aged palms
replanted in 2025. This programme forms part
of a broader multi-year strategy to enhance
yields, improve oil extraction rates and ensure the
sustainability of our plantation assets.
Our Board evaluates growth opportunities with
a disciplined focus on returns, strategic fit and
financial resilience. In this regard, the proposed
acquisition PT JJU together with the Proposed
IPO, represent key strategic initiatives expected
to be progressed in 2026 to enhance our Group’s
scale, strengthen its production base and expand
its geographic presence. These initiatives are
expected to support long-term value creation
while maintaining prudent balance sheet
management and financial discipline.
Environmental Sustainability and Climate
Considerations
Environmental stewardship remains a central
consideration in our Group’s long-term strategy.
In 2025, our Board continued to oversee the
integration of sustainability and climate-
related risks within the Group’s enterprise risk
management framework.
Our Group also expanded its renewable energy
initiatives through the development of BioCNG
plants that capture methane from POME and
convert it into renewable gas, contributing to the
reduction of greenhouse gas emissions. In parallel,
our Group advanced its emissions management
efforts through the ongoing quantification and
verification of Scopes 1, 2 & 3 greenhouse gas
emissions.
The construction of our eighth palm oil mill,
designed with modern energy-efficient processing
technology and environmental standards,
also reflects our commitment to responsible
infrastructure development and operational
sustainability.
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Stakeholder Engagement
Our Board recognises that effective engagement
with stakeholders is fundamental to the long-
term success of our Group. During the year, our
Company undertook a structured programme
of investor engagement and market outreach,
including meetings and roadshows with
existing and prospective shareholders. These
engagements provided an opportunity to
communicate our strategic direction, operational
performance and sustainability priorities, while
also enabling our Board and management to
receive valuable feedback from the investment
community.
Our Board also had regard to the interests of
employees and local communities. During the
year, our Group continued to invest in employee
welfare, including housing, utilities, training and
development programmes, recognising that
a skilled and engaged workforce underpins
operational performance. In addition, our Group
maintained its commitment to community
development through initiatives in education,
healthcare and smallholder (Plasma) support
schemes. Further details of these initiatives are
set out in the Corporate Social Responsibility
section on pages 30 to 36.
Acting Fairly Between Shareholders
Our Board remains committed to treating all
shareholders fairly and transparently. During the
year, our Company maintained a balanced capital
allocation framework that supports both long-
term growth and shareholder returns.
In line with this approach, our Board declared a
final dividend of 43.7 cents for the year ended
31 December 2025 and continued to implement a
share buyback programme, reflecting the Board’s
confidence in the long-term value and prospects
of the Company while maintaining financial
flexibility to support future investments. With an
interim dividend of 37.3 cents per Share already
paid, the total dividend declared for the year
ended 31 December 2025 will be 81.0 cents per
Share.
Governance and Oversight
Maintaining high standards of corporate
governance remains fundamental to the
Board’s responsibilities. Our Board continues to
strengthen its governance framework to ensure
effective oversight of strategy, risk management
and sustainability matters. This includes
integrating ESG and climate-related risks into
the Group’s broader risk management processes
and ensuring that the Board and its committees
provide appropriate oversight of these matters.
Through these actions, our Board seeks to ensure
that the Company operates responsibly, maintains
strong stakeholder relationships and delivers
sustainable long-term value for shareholders.
This Strategic Report, including the non-financial
reporting and sustainability information contained
herein, has been prepared in accordance with the
requirements of the Companies Act 2006 and
reflects the Board’s commitment to transparency
and responsible governance.
On behalf of the Board:
MARCUS CHAN JAU CHWEN
Executive Director of Corporate Affairs
30 April 2026
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DIRECTORS’ REPORT
Our Directors present the annual report on the
affairs of our Group, together with the financial
statements and auditor’s report, for the year
ended 31 December 2025.
Our Directors’ performance in relation to their
statutory duties, together with the principal
decisions taken during the year are detailed
in the Strategic Report under Statements by
Directors in Performance of Their Statutory
Duties in Accordance with Section 172 (1) Of the
Companies Act 2006.
ACCOUNTABILITY AND AUDIT
AEP is committed to ensure that the quality of
its financial reporting is of a high standard. Our
Board continually reviews its internal controls and
risk management systems to ensure our Group’s
affairs and our Group’s financial reporting comply
with the applicable accounting standards as
well as good corporate governance. The main
features of our Group’s internal controls and risk
management systems are further disclosed in the
Statement of Corporate Governance.
Our Board considers the Annual Report and
accounts including the Strategic Report
when taken as a whole, is fair, balanced and
understandable as it provides the information
necessary for shareholders to assess our Group’s
position and performance, business model and
strategy.
RESULTS AND DIVIDENDS
For the year ended 31 December 2025, our Group
recorded a profit before tax of $119.3 million
(2024: profit before tax of $88.1 million), with
a profit attributable to ordinary shareholders of
$90.9 million (2024: profit $67.5 million).
Interim dividend of 37.3 cents was paid on 7 Nov
2025 (2024: no interim dividend). Our Board has
recommended the final dividend for 2025 of 43.7
cents (2024: 51.0 cents), subject to shareholder
approval at the upcoming Annual General
Meeting. If approved, the dividend will be paid on
30 July 2026 to shareholders on the register as of
19 June 2026.
While the dividend is declared in US Dollars,
shareholders may elect to receive payment in
Pounds Sterling, as outlined in the Shareholders
Information section of the Annual Report.
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DIRECTORS’ REPORT (CONTINUED)
ADDITIONAL DISCLOSURES
Other information that is relevant to the Directors’ Report, and which is incorporated by reference into
this report, can be located as follows:
REFERENCE
Future developments Estate Development, Strategic Report
Corporate governance report Statement on Corporate Governance
Colleague engagement Directors’ Remuneration Report
GHG emissions Carbon Report, Strategic Report
Stakeholder engagement Last Page of Strategic Report
Section 172 statement Strategic Report
Financial assets policy Note 2(l) to the Consolidated Financial Statements
Disclosures required pursuant to the Listing Rules can be found on the following pages:
REFERENCE
Listing Rule 6.6.4R
Statement of capitalised interest
Receivables: Non-Current, Notes 11 to the Consolidated
Financial Statements
Listing Rule 6.6.6(8)
Climate-related financial
disclosures consistent with TCFD
Climate and Nature-Related Risks and Opportunities,
Strategic Report
Our Company has chosen, in accordance with section 414C (11) of the Companies Act 2006, and as
noted in this Directors’ Report, to include certain matters in the Strategic Report that would otherwise
be required to be disclosed in this Directors’ Report. The Strategic Report includes an indication of
future likely developments in our Company, details of important events and our Company’s business
model and strategy.
RESEARCH AND DEVELOPMENT
Our Group currently outsources our research and development activities. Our first research lab at
Blankahan is being constructed with internal leaf and soil analysis targeted for third quarter of 2026.
This will allow us to effectively monitor nutrient status and rapidly guide fertiliser management. Full
operational commencement will begin upon obtained necessary operating permits and regulatory
approvals.
POLITICAL DONATIONS
Our Group made no political donation during the year.
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DIRECTORS’ REPORT (CONTINUED)
PRINCIPAL RISKS
The material risks faced by our Group, including
any climate change related risks, and actions
taken to mitigate those risks are set out in the
Principal Risks and Uncertainties section of the
Strategic Report.
Information on financial instruments risks is set
out in the Disclosure of Financial Instruments
and Other Risks, Note 29 to the Consolidated
Financial Statements.
PROPERTY, PLANT AND EQUIPMENT
Information relating to changes in property,
plant and equipment and capitalised interest,
as required pursuant to Listing Rule 6.6.4R, are
given in Property, Plant and Equipment, Notes to
the Consolidated Financial Statements.
DIRECTORS
Jonathan Law Ngee Song, Marcus Chan Jau
Chwen, Farah Suhanah Tun Ahmad Sarji,
Michael Henry Stainer, and Onn Kien Hoe will be
submitting themselves for re-appointment at the
forthcoming annual general meeting.
Brief profiles of all Directors and our Group Chief
Executive Officer (“Group CEO”) are set out in the
Directors’ profile section of this Annual Report.
Our Board resolved in August 2025 to further
strengthen our governance framework through
a review and restructuring of its committee
arrangements. In particular, the former Audit &
Risk Management Committee was separated into
two distinct and specialised committees, namely
the Audit Committee and the Risk Management
Committee, each with updated terms of reference
to provide sharper focus, clearer accountability
and enhanced oversight in their respective areas
of responsibility. This reorganisation reflects
our Board’s commitment to robust governance,
effective internal controls and a clear delineation
of oversight functions across financial reporting,
risk management and compliance.
Following this restructuring, our Board’s
committees comprise:
Audit Committee (*with effect 11 August 2025):
• Onn Kien Hoe (Chair)
• Farah Suhanah Tun Ahmad Sarji (member)
• Michael Henry Stainer (member)
Risk Management Committee (*with effect 11
August 2025):
• Michael Henry Stainer (Chair)
• Marcus Chan Jau Chwen (member)
• Onn Kien Hoe (member)
Nomination Committee:
• Farah Suhanah Tun Ahmad Sarji (Chair)
• Michael Henry Stainer (member)
• Onn Kien Hoe (member)
Remuneration Committee:
• Farah Suhanah Tun Ahmad Sarji (Chair)
• Michael Henry Stainer (member)
• Onn Kien Hoe (member)
ESG and Corporate Governance Committee:
• Marcus Chan Jau Chwen (Chair)
• Jonathan Law Ngee Song (member)
• Farah Suhanah Tun Ahmad Sarji (member)
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DIRECTORS’ REPORT (CONTINUED)
SUBSTANTIAL SHARE INTERESTS
As at 31 March 2026 and 31 December 2025, our Company have been notified of the following interests
in accordance with Chapter 5 of the Disclosure Rules and Transparency Rules of the Financial Conduct
Authority, being interests in excess of three percent (3%) of the issued ordinary share capital of our
Company:
Name of Holder
As at 31.3.2026 As at 31.12.2025
Shares
held
% of voting
rights held
Shares
held
% of voting
rights held
Genton International Limited
(“Genton”)*
20,247,814 52.6% 20,247,814 52.2%
Nokia Bell Pensioenfonds 6,459,954 16.8% 6,512,019 16.8%
* The ultimate beneficial shareholders of Genton are vested in the estates of the late Madam Lim Siew Kim (“Madam Lim”) with
the application for probate in progress.
SHARE CAPITAL, RESTRICTIONS ON TRANSFER OF SHARES, ARRANGEMENTS AFFECTED BY
CHANGE OF CONTROL AND OTHER ADDITIONAL INFORMATION
Our Company has one class of share capital, ordinary shares. All the shares rank pari passu. The
articles of association of our Company contain provisions governing the transfer of shares, voting
rights, the appointment and replacement of Directors and amendments to the articles of association.
This accords with usual English company law provisions. There are no special control rights in relation
to our Company’s shares. There are no significant agreements to which our Company is a party which
take effect, alter or terminate in the event of a change of control of our Company. There are no
agreements providing for compensation for Directors or employees on change of control.
AUDITOR AND DISCLOSURE OF INFORMATION TO AUDITORS
All current Directors have taken all reasonable steps to ensure that they are aware of any information
required by our Company’s auditor for the purposes of the audit and to establish that the auditor is
aware of that information. Our Directors are not aware of any relevant audit information of which the
auditor is unaware.
Following our Company’s Annual General Meeting held on 23 June 2025, our Board was unable to reach
an agreement with Forvis Mazars LLP (“Mazars”) on the terms of its engagement as our Company’s
auditor for the financial year ending 31 December 2025. Accordingly, our Board resolved to appoint
MHA Audit Services LLP as auditor of our Group for the financial year ending 31 December 2025,
succeeding Mazars.
ACQUISITION OF THE COMPANY’S OWN SHARES AND AUTHORITY TO PURCHASE OWN SHARES
On 11 August 2025, our Company announced that it has entered into an irrevocable commitment
with Cavendish to manage a programme to repurchase up to 3,415,777 ordinary shares of 25p each.
On 6 January 2026, our Company announced a further share buyback programme to be managed
by Cavendish. Both programmes were conducted pursuant to, and within the limits of, the authority
granted by shareholders at our Company’s Annual General Meeting held on 23 June 2025.
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DIRECTORS’ REPORT (CONTINUED)
The authority to purchase own shares expires on
30 June 2026, or if earlier, at the conclusion of
the forthcoming annual general meeting. All such
purchases are market purchases made through
the London Stock Exchange. Shares purchased by
the Company may be held in treasury rather than
cancelled. Our Directors consider that shares held
in treasury provide our Company with flexibility,
including the ability to sell such shares quickly
and effectively where they consider it to be in the
interests of shareholders. While any such shares
are held in treasury, no dividends will be payable
on them and they will not carry any voting rights.
Our Company intends to seek a renewed authority
at the forthcoming annual general meeting to
purchase up to 10% of our Company’s issued
ordinary share capital (excluding treasury shares).
The maximum price which may be paid for an
ordinary share on any exercise of the authority
will be restricted to the higher of (i) an amount
equal to 5% above the average middle market
quotations for such shares as derived from the
London Stock Exchange Daily Official List for the
five (5) business days immediately preceding the
day on which such shares are purchased; (ii) an
amount equal to the price of the last independent
trade; and (iii) the highest current independent
purchase bid on the London Stock Exchange. The
maximum number of shares and the price range
are stated for the purpose of compliance with
statutory requirements in seeking this authority
and should not be taken as an indication of the
level of purchases, or the prices thereof, that AEP
would intend to make.
LIABILITY INSURANCE OUR COMPANY
OFFICERS
As permitted by the Companies Act 2006 our
Company has maintained insurance cover for
our Directors against liabilities in relation to our
Company which remains in force at the date of
this report.
on behalf of the Board:
MARCUS CHAN JAU CHWEN
Executive Director of Corporate Affairs
30 April 2026
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ANNUAL REPORT 2025
DIRECTORS’ RESPONSIBILITY
Our Directors are responsible for preparing
the annual report and the financial statements
in accordance with UK adopted International
Accounting Standards (“IAS”) and applicable law
and regulations.
Company law requires our Directors to prepare
financial statements for each financial year. Under
that law our Directors are required to prepare
our Group financial statements in accordance
with UK adopted IAS. Our Directors have elected
to prepare our Company financial statements
in accordance with United Kingdom Generally
Accepted Accounting Practice and other
applicable United Kingdom accounting standards
and laws. Under company law, our Directors must
not approve the financial statements unless they
are satisfied that they give a true and fair view of
the state of affairs of our Group and Company and
of the profit or loss of our Group for that period.
In preparing these financial statements, our
Directors are required to:
• Select suitable accounting policies and then
apply them consistently;
• Make judgements and accounting estimates
that are reasonable and prudent;
• State whether they have been prepared in
accordance with UK adopted International
Accounting Standards, including FRS 101
Reduced Disclosure Framework, subject to any
material departures disclosed and explained in
the financial statements;
• Prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that our Group and our Company will
continue in business; and
• Prepare a Directors’ Report, Strategic Report
and Directors’ Remuneration Report which
comply with the requirements of the Companies
Act 2006.
Our Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain our Company’s transactions
and disclose with reasonable accuracy at any time
the financial position of our Company and enable
them to ensure that the financial statements
comply with the Companies Act 2006.
They are also responsible for safeguarding the
assets of our Company and hence for taking
reasonable steps for the prevention and detection
of fraud and other irregularities. Our Directors are
responsible for ensuring that the annual report
and accounts, taken as a whole, are fair, balanced,
and understandable and provide the information
necessary for shareholders to assess our Group’s
performance, business model and strategy.
WEBSITE PUBLICATION
Our Directors are responsible for ensuring the
annual report and the financial statements are
made available on a website. Financial statements
are published on our Group’s website in accordance
with the legislation in the UK governing the
preparation and dissemination of financial
statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity
of our Group’s website is the responsibility of
our Directors. Our Directors’ responsibility also
extends to the ongoing integrity of the financial
statements contained therein.
DIRECTORS’ RESPONSIBILITIES PURSUANT TO
DISCLOSURE AND TRANSPARENCY RULES 4
(“DTR4”)
Our Directors confirm to the best of their
knowledge:
• the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair view
of the assets, liabilities, financial position and
profit or loss of the issuer and the undertakings
included in the consolidation taken as a whole;
and
• the management report includes a fair review
of the development and performance of the
business and the position of the issuer and
the undertakings included in the consolidation
taken as a whole, together with a description of
the principal risks and uncertainties that they
face.
on behalf of the Board:
MARCUS CHAN JAU CHWEN
Executive Director of Corporate Affairs
30 April 2026
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SECTION 3 :
GOVERNANCE
DIRECTORS’ PROFILE
JONATHAN LAW NGEE SONG
- Non Executive Chairman
- Member of the ESG & Corporate Governance
Committee
MARCUS CHAN JAU CHWEN
- Executive Director of Corporate Affairs
- Member of the Risk Management Committee
- Chairman of the ESG & Corporate Governance
Committee
Appointed as an Independent Non-Executive
Director on 4 July 2013 and was subsequently
appointed as the Non-Executive Chairman of AEP
on 8 July 2022.
Jonathan Law graduated from the Australian
National University in 1989 with a Bachelor of
Commerce and a Bachelor of Laws. He was
admitted as an Advocate and Solicitor of the High
Court of Malaya in 1991. He is currently in legal
practice as a Partner of Messrs Seow & Megat,
where he specialises in mergers and acquisitions
and corporate practice. He was previously a
partner at Messrs Azmi & Associates, Nik Saghir
& Ismail and Allen & Gledhill.
He is the Non-Independent Non-Executive
Chairman of Evergreen Fibreboard Berhad and
also serves on the boards of Pimpinan Ehsan
Berhad as Interim Non-Independent Non-
Executive Chairman, and ETA Group Berhad
(formerly known as Rex Industry Berhad) as a
Non-Independent Non-Executive Director, all
of which are listed on Bursa Malaysia, the stock
exchange of Malaysia.
Appointed as a Non-Independent Non-Executive
Director of our Group on 10 August 2022, and was
subsequently redesignated as Executive Director
of Corporate Affairs effective 1 October 2024.
Marcus Chan is deemed to be not independent as
he is the son of the late Madam Lim, whose estate
owns 51% of our Company’s shares.
He holds a Master of Business Administration
from China Europe International Business School
and is an alumnus of the University of Melbourne,
Australia, where he earned a Bachelor of
Commerce degree. He began his career at Ernst
& Young Malaysia as an associate auditor, before
advancing into roles in financial advisory, business
development, marketing, and overseeing private
businesses. His expertise encompasses finance,
business development and communications.
60 42
106
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
DIRECTORS’ PROFILE (CONTINUED)
FARAH SUHANAH TUN AHMAD SARJI
- Senior Independent Non-Executive Director
- Member of the Audit Committee
- Chairman of the Nomination Committee
- Chairman of the Remuneration Committee
- Member of the ESG & Corporate Governance
Committee
MICHAEL HENRY STAINER
- Independent Non-Executive Director
- Member of the Audit Committee
- Chairman of the Risk Management Committee
- Member of the Nomination Committee
- Member of the Remuneration Committee
Appointed as an Independent Non-Executive Director on
20 October 2022 and was subsequently redesignated as
Senior Independent Non-Executive Director effective 24
June 2024.
Farah Suhanah was admitted as an Advocate and Solicitor
of the High Court of Malaya in 1996. She graduated with
a Bachelor of Arts (Hons) in Law from the University of
Kent in 1988 and was admitted as a Barrister-at-Law of the
Middle Temple, London in 1989. She also holds a Master of
Business Administration (MBA) from Universiti Tun Abdul
Razak, awarded in October 2025.
She brings over 26 years of legal and commercial expertise
across a broad range of industries, including oil and
gas, telecommunications, satellite services and palm oil
plantations. She retired as Group Legal Counsel of IOI
Corporation Berhad, having previously served as General
Counsel of MEASAT Global for 10 years while also managing
her private legal firm. Earlier in her career, she held roles as a
Magistrate, Deputy Public Prosecutor, and Federal Counsel
in the Malaysian Attorney-General’s Chambers.
She is an Independent Non-Executive Director of Kluang
Rubber Company (Malaya) Berhad, AEON Credit Service
(M) Berhad, and Sunway REIT Management Sdn Bhd (the
Manager for Sunway Real Estate Investment Trust), and
also serves on the Board of Trustees of Yayasan DayaDiri.
Appointed as an Independent Non-Executive
Director on 1 May 2024.
Michael Henry Stainer is a highly qualified
accountant and corporate treasurer, with over
three decades of experience in senior finance roles
across private and listed companies in sectors such
as property, mining, technology, food, and public
utilities. From 1992 to 2002, he served as Group
Treasurer and Director of
non-regulated subsidiaries at Bristol Water
Holdings Plc.
His expertise in financial strategy and corporate
governance positions him as a key contributor
to strengthening AEP’s decision-making and
supporting sustainable growth.
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SECTION 3 :
GOVERNANCE
DIRECTORS’ PROFILE (CONTINUED)
ONN KIEN HOE
- Independent Non-Executive Director
- Chairman of the Audit Committee
- Member of the Risk Management Committee
- Member of the Nomination Committee
- Member of the Remuneration Committee
KEVIN WONG TACK WEE
- Group Chief Executive Officer
Appointed as an Independent Non-Executive
Director on 1 August 2025.
Kien Hoe is a fellow member of the Association
of Chartered Certified Accountants (UK), the
Malaysian Institute of Accountants, the Malaysian
Institute of Certified Public Accountants,
the Kampuchea Institute of Certified Public
Accountants and Auditors, the ASEAN Chartered
Professional Accountants Coordinating
Committee, and is a registered partner with the
Audit Oversight Board of Malaysia.
He is the Head of Corporate Advisory Division of
Crowe Malaysia PLT, where he is responsible for
corporate advisory and insolvency services. He is
also a Director in Crowe (KH) Co. Ltd, overseeing
the operations of Crowe in Cambodia.
He is an Independent Non-Executive Chairman of
the Board of Sern Kou Resources Berhad.
Joined AEP in January 2024 and was appointed
as the Group Chief Executive Officer effective 1
October 2024.
Kevin Wong’s leadership experience spans
multinational companies based in Malaysia and
Hong Kong, where he held senior positions with
regional responsibilities. Prior to joining AEP,
he served as Managing Director of Acapalm
Plantation Services and Group Chief Financial
Officer of IOI Corporation Berhad, overseeing
multinational strategic finance functions and
corporate governance initiatives.
He is a fellow member of the Chartered Institute of
Management Accountants (FCMA), a Chartered
Global Management Accountant (CGMA) and a
member of Chartered Accountant, Malaysia (CA,
Malaysia). With a strong and proven foundation
in corporate leadership, financial oversight, and
plantation economics, he continues to guide our
Group towards sustainable and profitable growth.
Our Group CEO is not a member of our Board and
does not participate in Board voting.
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AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STATEMENT ON CORPORATE GOVERNANCE
I am pleased to report on our
Company’s corporate governance
activities for the year ended 31
December 2025. This Statement
on Corporate Governance forms
part of the Directors’ Report.
COMPLIANCE WITH THE UK CORPORATE
GOVERNANCE CODE 2024 (“UK CODE”)
AEP is committed to conducting its business with
integrity, appropriately high ethical standards
and professionalism across all of its activities
and operations. This commitment extends
to maintaining high standards of corporate
governance, supported by appropriate systems
of controls oversight at both Board and senior
management level.
Our Board considers that the benchmark
standards for good corporate governance are
set out in the UK Code, which is published by
the Financial Reporting Council’s (“FRC”) and is
available at www.frc.org.uk. Our Company has
applied the principles of the UK Code and, for the
year ended 31 December 2025, was in compliance
with the UK Code except for Provisions 19 and 21,
as explained below.
Provision 19 of the UK Code provides that the
chair should not remain in the post beyond nine
(9) years from the date of their first appointment
to our Board. Jonathan Law served as an
Independent Non-Executive Director for nine
(9) years prior to his appointment as the Non-
Executive Chairman of AEP on 8 July 2022.
However, the UK Code allows a Non-Executive
Director to step up to the role of chair for a limited
time in order to facilitate effective succession
planning and the development of a diverse
Board. Our Board considers it appropriate for
Jonathan Law to continue in his role as Chairman
while the estate of the late Madam Lim has yet
to be finalised, in order to provide continuity and
stability at Board level.
AEP was not in compliance with Provision 21 of
the UK Code, which provides for a formal and
rigorous annual evaluation of the performance of
the Board, its committees, the Chair and individual
Directors, including an externally facilitated Board
evaluation at least once every three (3) years.
During the year, evaluations were conducted
internally under the leadership of the Chairman.
Further details are set out in the Operation of the
Board section below.
As the Chairman of the Remuneration Committee
has now served on the committee for the requisite
minimum period of at least 12 months, AEP is in
full compliance with Provision 32 for the financial
year ended 31 December 2025.
For completeness, Provision 40 of the UK
Code provides that notice or contract period
of Directors should be one (1) year or less.
Although Directors’ contracts at AEP have a two-
year term for administrative reasons, they can be
terminated with one or two months’ notice, and
therefore remain compliant with the requirements
of Provision 40. Further details are set out in the
Service Contracts section of the Remuneration
Report.
In the prior financial year, our Board reported
a departure from Principle Q of the UK Code in
relation to the consideration of the Group CEO’s
remuneration. During the year ended 31 December
2025, our Board has reviewed and strengthened
its procedures and confirms that our Company
has complied with Principle Q. All matters relating
to executive remuneration during the year were
considered through a fully independent process,
with the Group CEO having no involvement in the
presentation or discussion of his own remuneration
and not being present for any related deliberations.
Our Board is satisfied that appropriate governance
arrangements are now firmly embedded to ensure
independence, transparency and compliance with
the requirements of the UK Code.
Monitoring compliance with the UK Code is
the responsibility of the ESG & Corporate
Governance Committee. During the year the
terms of reference of all Board Committees were
reviewed and updated to ensure alignment with
the requirements of the UK Code.
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SECTION 3 :
GOVERNANCE
STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)
Board Leadership
and Company
Purpose
The core objective of our
Board is to promote the
long-term sustainable
success of our Company,
generating value for
shareholders while
contributing positively to
the wider society through
an appropriate culture and
set of behaviours.
See the Business Model and
Our Strategy, Strategic Report.
Composition,
Succession and
Evaluation
Our Board, supported by
the Nomination Committee,
keeps the composition
of our Board and its
Committees under regular
review, including matters
relating to succession
planning, diversity,
inclusion, and governance.
Our Board undertakes
an annual review of its
effectiveness, as well as
that of its Committees and
individual Directors.
See our Board section under
the Statement of Corporate
Governance for more details on
the Board effectiveness. The
activities of the Nomination
Committee can be found
under the remainder of this
Statement on Corporate
Governance.
Remuneration
Our Board, supported
by the Remuneration
Committee, ensures that
the remuneration policies
and practices are aligned
with our Company’s
strategy and promote long-
term sustainable success.
Executive remuneration
is designed to support
the successful delivery of
our Company’s long-term
objectives.
See Directors’ Remuneration
Report for more details on
the remuneration policy and
implementation of the policy.
Further details demonstrating
how the Principles and
Provisions of the UK Code have
been applied can be found
throughout the corporate
governance report, the
Directors’ report, each of the
Board Committee reports and
the Strategic Report.
Audit, Risk, and
Internal Control
Our Board is accountable to
shareholders for ensuring
that AEP is appropriately
managed and that
effective systems of risk
management and internal
control are in place. Our
Board sets AEP’s risk
appetite and satisfies itself
that financial controls and
risk management systems
are robust and that AEP
is adequately resourced.
Our Board receives regular
updates on audit, risk and
internal control matters,
with detailed oversight
undertaken by the Audit
Committee and the Risk
Management Committee,
whose findings and
recommendations are
reported to our Board.
See Audit Committee Report
for more details on audit and
internal control and the work of
the Audit Committee & the Risk
Management Committee.
Division of Responsibilities
Our Board established a clear division of responsibilities
between the leadership of our Board and executive
management of our Group, supported by our Company’s
corporate governance framework. Responsibilities are clearly
defined in role statements to ensure that no individual has
unrestricted powers of decision-making and that no small
group of Directors can dominate our Board’s decision-making.
The authority delegated to each Board Committees is set out
in their respective terms of reference.
For more details on Board composition, leadership and role
statements, see the Directors’ Profile above and the remainder of this
Statement on Corporate Governance.
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AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)
Disclosure required by Listing Rules on diversity,
with respect of gender, and ethnicity can be found
under Diversity section of the Strategic Report.
RELATIONSHIP WITH CONTROLLING
SHAREHOLDER
Under the UK Listing Rules 2024, listed companies
are no longer required to maintain a relationship
agreement with a controlling shareholder.
Instead, Listing Rules 6.6.1(13) requires AEP to
confirm in its annual report whether it continues
to be able to carry on its main business activity
independently of its controlling shareholder or
to provide an explanation if it is unable to do
so. In response, AEP has identified Genton as its
controlling shareholder. Our Board confirms that
AEP has continued to operate independently
from Genton at all times and that Genton has not
influenced our Company in a manner that would
be improper or unfair to minority shareholders.
AEP remains committed to high standards of
corporate governance and ensuring that the
interests of all shareholders are safeguarded.
OUR BOARD
Our Board is responsible for providing effective
leadership of the Company and for promoting
the long-term sustainable success of our Group.
In discharging its responsibilities, our Board sets
our Company’s strategic direction, oversees
management’s delivery of agreed objectives,
and ensures that appropriate standards of
governance, risk management and internal control
are maintained in the interests of shareholders
and wider stakeholders.
Our Board is provided with relevant, timely and
accurate information ahead of each meeting to
enable them to discharge their duties effectively
and to support robust and informed decision-
making.
Our Board has adopted a formal schedule of
matters reserved for its decision, consistent with
the UK Code and the UK Listing Rules 2024. These
matters include approval of the annual budgets,
interim and final results, dividends, significant
acquisitions and disposals, Group treasury
policies, Board appointments, shareholder
communications and circulars. Other matters are
delegated to Board Committees, in accordance
with their terms of reference, and the details of
which are set out below.
The Audit Committee and the Risk Management
Committee are responsible for overseeing the
integrity of financial reporting, the effectiveness
of risk management process and internal control
systems, working closely with the management
and internal auditors to ensure appropriate
oversight and assurance.
At the end of 2025, our Board comprised of five
(5) Directors: the Non-Executive Chairman, one
(1) Executive Director, two (2) Independent Non-
Executive Directors, and a Senior Independent
Non-Executive Director. AEP has complied with
Provision 11 of the UK Code, which requires that
at least half of the Board, excluding the Chair,
should comprise Non-Executive Directors whom
the Board considers to be independent.
In August 2025, Kien Hoe has been appointed
as an Independent Non-Executive Director and
Chairman of the Audit Committee of AEP. Given
his extensive experience in audit, finance and
corporate advisory, our Board believes that his
appointment has strengthened the effectiveness
of the Audit Committee and further enhanced
AEP’s governance framework.
The Nomination Committee continues to oversee
Board composition and succession planning
for both executive and non-executive roles,
including identifying internal and external talent,
promoting diversity and inclusion, and mitigating
risks associated with unforeseen departures
of key individuals. Our Chairman maintains
regular dialogue with individual Directors,
including discussions on performance, tenure
and future plans, particularly where Directors
approach nine (9) years of service, in support of
orderly succession planning and ongoing Board
effectiveness.
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SECTION 3 :
GOVERNANCE
STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)
INDEPENDENCE OF THE NON-EXECUTIVE
DIRECTORS
Our Board has evaluated the independence of
each of its Non-Executive Directors. Following
this assessment, our Board has determined that,
throughout the reporting period, three (3) of its
Non-Executive Directors, who were appointed for
specified terms of office were considered to be
independent, having regard in particular to their
objectivity, judgement and integrity.
In reaching this conclusion, our Board considered
the factors set out in Provision 10 of the UK Code
including, inter alia, whether any Non-Executive
Director:
• Has been an employee of our Group within the
last five (5) years;
• Has, or had within the last three (3) years, a
material business relationship with our Group;
• Receives additional remuneration from our
Group apart from a director’s fee;
• Has close family ties with any of our Group’s
advisors, Directors or senior employees;
• Holds cross-directorships or has significant
links with other Directors through involvement
in other companies or bodies;
• Has served on the Board for more than nine (9)
years; or
• Represents a significant shareholder.
The UK Code acknowledges that a director may
be regarded as independent notwithstanding the
existence of any of the above factors, provided a
clear explanation is given. Having considered all
relevant circumstances, our Board unanimously
agreed that the Independent Non-Executive
Directors have demonstrated independence
in character and judgement and that there are
no relationships or circumstances which could
materially interfere with the exercise of their
independent judgement.
SENIOR INDEPENDENT NON-EXECUTIVE
DIRECTOR
In accordance with Provision 12 of the UK
Code, Farah Suhanah has served as the Senior
Independent Non-Executive Director from 24
June 2024. The Senior Independent Director
provides a sounding board for the Chair, acts as an
intermediary for other Directors when required,
and is available to shareholders should they have
concerns which have not been resolved through
the usual channels.
OPERATION OF THE BOARD
The Board has adopted a formal schedule of
matters reserved for its decision, together with
clear delineation of responsibilities between
the Board and management. The Audit, Risk
Management, Nomination, Remuneration and
ESG & Corporate Governance Committees each
operate under written terms of reference, which
are reviewed periodically to ensure ongoing
alignment with best practice and regulatory
requirements. The terms of reference of each
Committee are available for inspection upon
request from our Company Secretary and are also
published on our Company’s website.
The Board normally meets two (2) to three (3)
times each year, with additional matters addressed
as appropriate through written resolutions and
teleconferences. In 2025, reflecting increased
activity and enhanced governance oversight, our
Board held six (6) formal meetings, attendance at
which is set out below.
Name of Directors Attendance
Jonathan Law Ngee Song 6/6
Marcus Chan Jau Chwen 6/6
Farah Suhanah Tun Ahmad
Sarji
6/6
Michael Henry Stainer 6/6
Onn Kien Hoe
(appointed on 1 August 2025)
3/3
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AEP PLANTATIONS PLC
ANNUAL REPORT 2025
STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)
Agenda and supporting papers, together with
minutes of previous meetings, were circulated
in advance of each meeting to enable informed
discussion.
During the year, the Independent Non-Executive
Directors also met without the Executive
Director present. In additional regular telephone
discussions took place between the Chairman
and the Non-Executive Directors outside formal
meetings.
Throughout 2025, our Board monitored our
Group’s results and the activities of its subsidiaries
through monthly reports prepared by the senior
management teams in Malaysia and Indonesia.
Our Board deliberated on the periodic results
and measured performance against approved
budgets and previous year achievements. It
also benchmarked performance against listed
plantation companies in the UK, Indonesia,
Malaysia and Belgium, with operations primarily
in Indonesia.
The Executive Committee, comprising the
Chairman, the Executive Director and our Group
CEO received quarterly detailed briefings from
the management on our Group’s performance
and significant corporate matters. In addition,
the Executive Committee closely monitored
developments in Indonesia through regular
operational meetings with senior management.
Given that a substantial proportion of our
Group’s revenue is derived from Indonesia, our
Board believes that closer oversight at senior
level enhances governance and supports the
achievement of our Group’s strategic objectives.
The senior management operational meetings
are attended by our Group CEO, Chief Corporate
Planning & ESG Officer and Group Finance
Manager from Malaysia, together with the
Indonesia-based management team comprising
the Indonesia CEO, Plantation Director, Finance
Director, Head of Mill & Engineering, and General
Manager of Operations & Human Resource. Other
senior managers were regularly invited to brief the
Executive Committee, the Audit Committee and
the Risk Management Committee on significant
matters relating to operations, internal audit, legal
proceedings, sustainability and risk management,
together with progress on follow-up actions. The
2026 annual budget was tabled, reviewed and
approved by our Board following deliberation.
On 11 August 2025 and 6 January 2026, our
Company announced that it has entered into
an irrevocable commitment with Cavendish to
manage a discretionary programme to repurchase
up to £16 million ordinary shares of AEP. Details
are included in the Chairman’s Statement and
Strategic Report.
In determining the level of dividends payable to
our shareholders, our Board adopted a balanced
approach, taking into account our Group’s funding
requirements for expansion and acquisitions while
remaining mindful of shareholders’ expectations
to have dividends as a form of income. In light of
the results achieved during the year, our Board
declared a final dividend of 43.7 cents per share
for the year ended 31 December 2025. With an
interim dividend of 37.3 cents per share already
paid, the total dividend declared for the year
ended 31 December 2025 will be 81.0 cents
(2024: 51.0 cents (interim and final)), an increase
of 58.8% from last year.
Each Director has access to the impartial advice
and services of our Company Secretary, who
is responsible for ensuring that appropriate
procedures are followed. Where necessary, our
Board members may also seek independent
professional advice from our Company’s brokers,
including legal counsel at our Company’s expense.
Our Company maintained Directors’ and officers’
liability insurance throughout 2025.
Non-Executive Directors are normally
appointed for two-year terms, renewable on
the recommendation of our Board. To maintain
the vitality of our Board, fixed terms of office
are specified for Non-Executive Directors, with
all Directors subject to annual re-election in
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SECTION 3 :
GOVERNANCE
STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)
accordance with the UK Code. The re-election of
the Independent Non-Executive Directors have
always been on the basis of gaining a majority of
the independent shareholders vote in addition to
the total shareholders vote since this requirement
was first introduced.
In 2025, our Board conducted an internal
evaluation of its performance through discussion
and concluded that it was performing effectively
and that our Directors collectively possessed
the appropriate balance of skills, experience
and knowledge to support our Group’s strategic
direction and for challenges ahead. No material
issues arose from this review. Our Company did
not appoint an external consultant during the
year to conduct a formal and rigorous evaluation
of our Board’s performance as our Board believes
that it had performed commendably going by the
financial results achieved over the years when
compared to its peers.
Following review of the Group’s internal control
and risks management systems in April, August
and December 2025, and in the absence of any
reported failure and weaknesses which our Board
considered significant, it was concluded that
these systems remain effective and sufficient for
their purpose.
In the following years, our Board intends to
implement a structured survey-based checklist
as part of its performance evaluation process, to
further enhance governance oversight.
In accordance with the applicable statutory
provisions relating to directors’ conflict of interest,
our Directors are required to avoid situations in
which they have, or can have, a direct or indirect
interest that conflicts, or possibly may conflict,
with the interests of our Company. The duty is
not infringed if the matter has been authorised
by the Directors. Under our Company’s Articles of
Association, our Board has the power to authorise
potential or actual conflict situations. Our Board
maintains effective procedures to enable the
Directors to notify our Company of any actual
or potential conflict situations and of those
situations to be reviewed and, if appropriate, to
be authorised by our Board. Directors’ conflict
situation if it arises is reviewed annually and
authorisation is recorded in our Board minutes.
NOMINATION COMMITTEE
The Nomination Committee held three (3)
meetings during 2025, attendance at which is set
out below:
Name of Directors Attendance
Farah Suhanah Tun Ahmad
Sarji (Chair)
3/3
Michael Henry Stainer 3/3
Onn Kien Hoe
(appointed on 1 August 2025)
1/1
Marcus Chan Jau Chwen* 3/3
* Marcus Chan served as a member of the Nomination
Committee until the restructuring of our Company’s
board committees which took place on 11 August 2025.
Attendance is recorded for all meetings held during his
period of eligibility.
Our Company’s policy on diversity is set out in
the Strategic Report.
ACTIVITIES
During the year, our Nomination Committee
reviewed and deliberated on the Statement of
Corporate Governance for inclusion in the Annual
Report. As part of its commitment to Board renewal
and strengthening leadership, the Committee
has been actively identifying candidates with the
appropriate skills, experience, and availability to
enhance AEP’s Board. This process led to the
identification and appointment of Onn Kien Hoe
as an Independent Non-Executive Director on 1
August 2025. His extensive expertise in finance,
treasury, and corporate governance across
various industries enhances the Board’s overall
capabilities and independence.
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ANNUAL REPORT 2025
STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)
RELATIONS WITH SHAREHOLDERS
All shareholders may attend our Company’s
AGM and put questions to our Board and such
questions must be with at least 20 working days’
notice. At the conclusion of the AGM, a summary
of votes for each resolution is reported and made
available at our Company’s website as soon as
practicable after the meeting. Shareholders will
not receive a hard copy of the proxy form for
the 2026 AGM. Instead, shareholders will be able
to vote electronically using the link at https://
www-uk.computershare.com/investor/. For more
details, please refer to online submission of proxy
voting on Notice of 2026 AGM.
The Executive Director regularly meets with
principal shareholders during the year to
understand their concerns and views on
governance and performance. The views of the
shareholders are communicated to our Board
to ensure that it is mindful of the shareholders’
sentiment and issues arising at all times.
The annual report, interim report, and trading
statements are intended to keep the shareholders
informed as to the progress in the operational and
financial performance of the Group. Our Company
maintains a corporate website at https://www.
aepplantations.com/.
This website has detailed information on
various aspects of our Group’s operations. It is
updated regularly and includes latest Company
announcements, information on our Company’s
share price, the price of crude palm oil, foreign
currency movement of Indonesian Rupiah
against US dollar and environmental, social and
governance matters.
Our Company’s results and other news releases
issued via the London Stock Exchange’s
Regulatory News Service are published on the
“Investors Information” and “News” sections of
the website and together with other relevant
information concerning our Company and the
Industry, are available for downloading.
In conjunction with the introduction of our
new name and logo, the website was recently
upgraded. Shareholders and investors may
continue to select and receive e-mail alerts on
regulatory news to follow the development of our
Company.
ENVIRONMENTAL AND CORPORATE
RESPONSIBILITY
AEP continues to apply responsible plantation
management practices across its operations in
Indonesia and Malaysia.
Beyond maintaining certification and compliance
with the ISPO and MSPO standards, our Board
has resolved to pursue RSPO membership. The
application remains subject to the organisation’s
review process. This strategic move aligns our
operations with internationally recognised
sustainability certification and reinforces our
commitment to best environmental and social
governance practices.
As part of routine governance and risk oversight,
our Group monitors regulatory developments
in the markets in which its products are traded.
This includes observing developments relating
to evolving supply chain and traceability
requirements. Internal record-keeping and
documentation processes are reviewed
periodically as part of normal operational controls.
Further information on environmental and
governance matters is set out in the Strategic
Report and on our website.
MARCUS CHAN JAU CHWEN
Chairman, ESG & Corporate Governance
Committee
30 April 2026
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AUDIT COMMITTEE REPORT
COMPOSITION
The Audit Committee had five (5) meetings* in
2025, which were attended as follows:
Name of Directors Attendance
Onn Kien Hoe (Chair)
(appointed 1 August 2025)
2/2
Farah Suhanah Tun Ahmad
Sarji
5/5
Michael Henry Stainer 5/5
* Prior to the restructuring of the Audit & Risk Management
committee on 11 August 2025, four (4) meetings were held
during the financial year. After the establishment of separate
Audit Committee and the Risk Management Committee
in the same year, one (1) meeting was held by the Audit
Committee. For disclosure purposes, our Company has
presented a total of five (5) Audit Committee meetings held
during the financial year.
The current members possess relevant financial
and professional experiences to discharge their
duties with respect to the Audit Committee. In
particular, the Chair of the Audit Committee, Onn
Kien Hoe, by virtue of his extensive professional
background in audit and accounting and corporate
advisory oversight, as well as his experience
serving on the boards of listed entities, possesses
the recent and relevant financial experience
required to lead the Committee effectively. His
breadth of experience in financial reporting, risk
oversight and governance matters enables him
to provide strong leadership to the Committee
and to support robust financial stewardship and
internal control oversight. Further details of their
qualifications and experience are provided in the
Directors’ Profile section of this Annual Report.
In 2025, Kien Hoe attended several professional
development programmes organised by
recognised professional bodies including the
Malaysian Institute of Accountants (“MIA”), the
Malaysian Institute of Certified Public Accountants
(“MICPA”) and the Institute of Corporate
Directors Malaysia (“ICDM”). The programmes
covered areas relevant to the Audit Committee’s
oversight responsibilities, including updates on
Malaysian Financial Reporting Standards (MFRS),
accounting for financial instruments under IFRS
9/MFRS 9, sustainability reporting under the
National Sustainability Reporting Framework
and compliance with IFRS S1 and S2 standards.
He also attended a programme on integrity
and governance for directors, focusing on
issues such as conflict of interest, related party
transactions and corruption risk management.
These programmes support the Committee’s
role in overseeing financial reporting, regulatory
compliance, risk management and governance
matters.
Farah Suhanah attended a wide range of training
programmes organised by professional bodies
including Institute of Corporate Directors
Malaysia, EY, PwC, KPMG and the Securities
Commission Malaysia. The programmes focused
on areas relevant to the Audit Committee’s
oversight responsibilities, including anti-bribery
and corruption frameworks, tax exposure for
independent directors, sustainability reporting
under the National Sustainability Reporting
Framework, double materiality assessment. She
also attended sessions on artificial intelligence
in governance, and climate-related matters,
supporting the Committee’s role in overseeing
financial reporting, regulatory compliance and
emerging governance risks.
Michael Henry Stainer provides valuable
input to the Audit Committee, drawing on his
experience in finance and corporate governance.
His perspectives support the Committee in its
oversight of financial reporting, internal controls
and governance practices, as well as in facilitating
informed decision-making. He continues to
keep abreast of relevant developments through
ongoing professional development.
PRINCIPLE ROLES OF THE AUDIT COMMITTEE
The Audit Committee is responsible for, amongst
others:
• Monitoring the integrity of the financial
statements of our Company and any formal
announcements relating to the our Company’s
financial performance, reviewing significant
reporting judgements contained in them,
assisting our Board’s oversight of our Group’s
compliance with applicable legal and regulatory
requirements in this respect;
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• Reviewing and discussing with our management,
the external auditors, the internal auditors and
other relevant parties, our Group’s significant
financial and compliance-related risk exposures
and the adequacy and effectiveness of the
internal control systems established to identify,
monitor, manage and report such risks;
• Overseeing, monitoring and reviewing the
effectiveness of internal audit, including,
amongst others, its strategic focus, activities
and plans, staff numbers and qualifications and
budget;
• Making recommendations to our Board in
relation to the appointment, reappointment
and removal of the external auditor, their
remuneration, and terms of engagement;
• Assessing annually the qualification, expertise
and resources, and independence and
objectivity of the external auditor and the
effectiveness of the audit process;
• Reporting to our Board on how it has discharged
its responsibilities; and
• Providing advice to our Board on the form
and basis underlying the longer-term viability
statement and going concern statement in the
annual reports.
The Audit Committee maintains rigorous
oversight of the external auditor’s engagement
for non-audit services, ensuring strict adherence
to the independence and objectivity requirement
set out in the Financial Reporting Council
Ethical Standard 2024. While our Group retains
ultimate responsibility to ensure compliance with
service restrictions, the external auditor are also
responsible for maintaining a comprehensive
record of engagements and self-evaluated
potential threats to their independence in
consultation with the Audit Committee.
To safeguard the integrity of the audit process,
our Board has resolved to limit non-audit
engagements exclusively for the review of the
interim financial report to ensure compliance prior
to announcements. Following the Committee’s
assessment of the nature, scope and remuneration
payable in respect of this service, the Committee
is satisfied that the engagement does not impair
the independence and objectivity of the auditor.
The Audit Committee discharges its duties
through a combination of formal sessions and
deliberative informal discussions between
themselves, maintaining an open dialogue with
the external auditor, the internal auditors and
senior management of our Group. In addition to
a minimum of two formal annual meetings, the
Committee evaluates management reports to
ensure the integrity of our Group’s governance
framework.
The Committee reviews operational reports
from the executive managements in Indonesia
and Malaysia, with a primary focus on the
identification, evaluation and management of
significant risks. This oversight ensures that
significant weaknesses are promptly addressed
and remedied. The Committee maintains a broad
remit of strategic risks that includes among
others, the continuous monitoring of commodity
price and exchange rate movements. To support
the Committee’s decision making process, the
Committee also seeks independent advise from
external professionals and experts as and when
required.
OVERVIEW
Throughout the financial year, the Committee
reviewed and deliberated upon the 2024 Annual
Report, 2025 Interim Results and Trading
Statements for 2025. Furthermore, the Committee
evaluated our Group’s capital requirements
and recommended the final dividend rate to
our Board for approval. In preparation of the
upcoming financial year, the Audit Committee
also deliberated and set the budget targets for
2026 for our Board’s endorsement.
The Internal Audit Manager presented a
comprehensive Internal Audit plan for 2026
to 2028 which was approved by the Audit
Committee. Detailed internal audit findings and
reports were tabled and discussed with members
of the Audit Committee in two (2) of the meetings.
The Audit Committee has open and constructive
dialogues, both formal and informal, with the
senior management in Indonesia and Malaysia to
ensure effectiveness of the internal audit process.
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AUDIT COMMITTEE REPORT (CONTINUED)
Prior to the finalisation of the 2025 accounts,
our Directors performed a thorough stress-test
analysis as part of the going concern assessment.
Our Directors have made this assessment after
consideration of our Group’s budgeted cash flow
and related assumptions, including stress testing
of identified uncertainties, as well as the impact
of a 50% decrease in the demand for palm oil.
Stress testing of other identified uncertainties
and risks such as commodity prices was also
undertaken. Following these simulations, our
Directors have reasonable expectation that the
cash flow projections indicate that our Group has
adequate resources to continue operating as a
going concern for the next five years.
No complaints were received via the whistleblower
mechanism in 2025.
EXTERNAL AUDIT
MHA Audit Services LLP (“MHA”) is our external
auditor for the 2025 audit. The external audit
was led by Simon Knibbs as Lead Engagement
Partner, who had overall responsibility for the
audit. He was supported by Dale Cadet as Second
Audit Partner. For overseas components, the
Indonesian operations were audited by Baker
Tilly Indonesia led by Junaidi Yang (Partner) and
the Malaysian operations were overseen by Baker
Tilly Malaysia overseen by Ng Jou Yin (Partner),
under the direction and coordination of the Lead
Engagement Partner. The external audit was
supported by specialists where required, including
tax, ESG, IT, pension and valuation experts. MHA
has a policy of rotation of the senior members of
the engagement team on a gradual basis in order
to safeguard its independence and at the same
time also ensuring a certain level of continuity
from year to year.
The Committee formally met with the external
auditor once in 2025 to discuss the audit planning
for 2025 financial year. The external auditor,
during the audit planning meeting, highlighted
to the Audit Committee their scope of audit
and their assessment of areas of audit risks. The
significant risks include:
• Risk of fraud in revenue recognition;
• Fraud due to management override of controls;
• Impairment of property, plant and equipment;
• Existence and valuation of Plasma receivables;
• Recoverability of income tax and other tax
receivables; and
• Impairment of investment in subsidiaries.
Revenue recognition continues to be a key area
of audit focus due to the presumed risk of fraud
under International Standards on Auditing. As a
listed company where profitability and revenue are
key performance indicators, there is an inherent
risk that revenue could be overstated through
fictitious transactions or premature recognition
of sales of CPO, PK or FFB. The auditor has
therefore focused on the occurrence and cut-off
of revenue to ensure that sales are recognised
only when control of the product has transferred
to the customer and within the correct financial
period.
The risk of fraud due to management override
of controls potentially driven by performance
obligations linked to compensation or
shareholders’ expectations could be achieved
by manipulating judgements and estimates or
through the posting of inappropriate journals in
accounting records.
Impairment of property, plant and equipment,
including bearer plants accounted for under IAS
16, requires significant judgement in assessing
whether impairment indicators exist and in
determining the recoverable value of assets. This
risk is heightened by potential climate-related
physical risks, such as flooding and changing
weather patterns, as well as transition risks arising
from regulatory or policy changes affecting the
palm oil industry.
The existence and valuation of Plasma receivables
was identified as another significant risk.
These balances arise from advances provided
to cooperatives under the Group’s Plasma
programme to support plantation development
and maintenance. The recoverability of these
receivables depends on the financial performance
of the cooperatives and therefore involves
judgement, including the potential recognition of
expected credit losses under IFRS 9.
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Our Group continues to hold significant tax
receivables in its Indonesian subsidiaries, primarily
from historical income tax prepayments. Under
Indonesian regulations, companies must prepay
taxes based on prior-year results. If actual results
show an overpayment, a refund must be claimed,
triggering a mandatory tax audit.
While both income tax and VAT refunds require
audits, VAT refunds are generally faster and more
straightforward. In contrast, income tax refunds
often involve a lengthy and complex arbitration
process that can take several years with uncertain
outcomes.
The Committee carries out an assessment of
the effectiveness of the external audit process
annually. The assessment this year was led by
the Chairman of the Audit Committee, assisted
by the Chairman, Executive Director, our
Group Chief Executive Officer, Chief Corporate
Planning & ESG Officer, and our Group Finance
Manager, focused on certain criteria which the
Committee considered to be important factors in
demonstrating an effective audit process. These
factors included the quality of audit staff, the
planning and execution of the audit according
to agreed plans and timeline, provision of sound
challenge on technical issues, and degree of
independence and professionalism displayed
during the audit for 2025. The Committee also
reviewed the tenure of the external auditor
and the extent of non-audit services that could
potentially affect auditor independence. The
fees paid for audit services are disclosed in Note
5 to the Consolidated Financial Statements.
For the financial year ended 2025, MHA did not
provide any non-audit services to our Group. The
Committee considered the key members of the
audit engagement team and component auditors
involved in our Group Audit. This includes the
Lead Engagement Partner and the Second Audit
Partner from MHA and the Partners from Baker
Tilly Indonesia and Malaysia.
Following this assessment, the Committee
concluded that the external audit process was
effective, and that the objectivity of the external
auditor was not impaired and that it provides an
appropriate independent challenge of the senior
management of the Group.
INTERNAL CONTROL
Our Company has been following the UK Code
provisions on internal control. Our Board has
overall responsibility for our Group’s internal
control systems and risk management and for
reviewing its effectiveness. Such a system is
designed to manage, rather than eliminate, the
risk of failure to achieve business objectives and
can only provide reasonable and not absolute
assurance against material misstatement or loss.
The Audit Committee reviews and monitors
specific risks and internal control procedures
and reports to our Board where appropriate.
Executive staff and Directors are responsible for
implementation of control procedures and for
identifying and managing business risks.
Our Group accounts and the consolidation
process are reviewed by our Group CEO and the
Executive Director.
Our Group has in-house internal auditors who
visit operating sites in Indonesia regularly based
on an approved Internal Audit Plan and provide
summarised internal audit reports to the Audit
Committee on a regular basis. The Internal Audit
team also conducts special audits throughout
the year as and when required by management.
The Internal Audit team provides objective
assurance as to the effectiveness of our Group’s
systems of internal control and risk management
of our Group’s operating management to the
Committee. Follow-up audits and discussions
are also held to ensure remedial actions are
taken promptly. The internal audit review is a
continuous and sequential process and in any one
year does not necessarily cover all risks which
are significant to our Group. The process aims to
provide reasonable assurance against material
misstatement or loss but cannot eliminate the risk
of loss.
ONN KIEN HOE
Chairman, Audit Committee
30 April 2026
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RISK MANAGEMENT COMMITTEE REPORT
COMPOSITION
The Risk Management Committee had five (5)
meetings* in 2025, which were attended as
follows:
Name of Directors Attendance
Michael Henry Stainer (Chair) 5/5
Onn Kien Hoe
(appointed 1 August 2025)
2/2
Marcus Chan Jau Chwen
(1)
1/1
Farah Suhanah Tun Ahmad
Sarji
(2)
4/4
* Prior to the restructuring of the Audit & Risk Management
committee on 11 August 2025, four (4) meetings were
held during the financial year. After the establishment
of separate Audit Committee and the Risk Management
Committee in the same year, one (1) meeting was held
by the Risk Management Committee. For disclosure
purposes, our Company has presented a total of five (5)
Risk Management Committee meetings held during the
financial year.
(1)
Marcus Chan was appointed as a member of the Risk
Management Committee after the restructuring of our
Company’s board committees. Attendance is recorded for
all meetings held during his period of eligibility
(2)
Farah Suhanah served as a member of the Risk Management
Committee until the restructuring of our Company’s board
committees. Attendance is recorded for all meetings held
during her period of eligibility.
The current members possess relevant financial
and professional experiences to discharge their
duties with respect to the Risk Management
Committee. In particular, the Chair of the Risk
Management Committee, Michael Henry Stainer,
has extensive expertise in finance, treasury, and
corporate governance across various industries
to discharge his duty as Chairman of the Risk
Management Committee. Further details of their
qualifications and experience are provided in the
Directors’ Profile section of this Annual Report.
PRINCIPLE ROLES OF THE RISK MANAGEMENT
COMMITTEE
The Risk Management Committee is responsible
for, amongst others:
• Reviewing and discussing with the management,
the external auditors, the internal auditors and
other relevant parties, our Group’s significant
strategic, operational, technological and other
non-financial risk exposures, and the adequacy
and effectiveness of the internal control system
established to identify, monitor, manage and
report such risks;
• Consulting and exchanging views with the
Audit Committee in order to assess the
scope, efficiency and effectiveness of the risk
management policies and strategies;
• Reporting to our Board its conclusions with
respect to the matters that the Committee has
considered;
• Evaluating the effectiveness of our Group’s
risk management structure, risk management
processes and support system to identify,
assess, monitor and manage our Group’s key
risks; and
• Ensuring adequate infrastructure, resources
and systems are in place for risk management
and that the risk management processes for
the identification, measurement and analysis
reporting and mitigation of risks are in place
within our Group and are operating in an
efficient and effective manner.
OVERVIEW
Throughout the financial year, the Committee
continued to oversee the effectiveness of our
Group’s enterprise risk management framework
and internal control environment. The Committee
reviewed the principal risks faced by our Group,
assessed emerging risk developments and
monitored the adequacy of mitigation measures
implemented by management.
The Committee updated the risks register chart
annually and deliberated on the probability
of various material risks from occurring and
the resulting financial impact should the risks
materialise. The Committee concluded that
produce prices continued to be the biggest risks
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RISK MANAGEMENT COMMITTEE REPORT (CONTINUED)
with high probability of occurring and with high
financial impact. With our Group substantial
cash holding in Indonesian Rupiah, the risks of
currency exchange rates movement are high with
medium financial impact. The country, regulatory
and governance practices, environmental and
conservation practice, weather and natural
disasters, and other climate and nature risks have
medium likelihood of happening with medium
financial impacts. Information technology security
risks have medium likelihood of happening with
low financial impacts. All other risks are generally
low in financial impact.
The Committee enhanced the risk assessment
methodology by upgrading the HIRARC (Hazard
Identification, Risk Assessment and Risk Control)
matrix from its previous format to a 5x5 matrix,
improving differentiation of risk levels and
strengthening escalation thresholds across
operational sites. The revised framework applies
a clearer likelihood scale (almost certain to rare)
and severity scale (catastrophic to insignificant),
thereby improving consistency and transparency
in risk scoring.
ESG AND CLIMATE RISK ENHANCEMENTS
During the year, significant progress was made
in strengthening the ESG components of the
operational risk register. Enhancements in
progress include:
• Strengthened traceability and deforestation-
free sourcing measures supported by satellite
monitoring systems;
• Expanded High Conservation Value (HCV) and
High Carbon Stock (HCS) protection measures;
• Quantification and verification of Scopes 1, 2 &
3 greenhouse gas emissions, alongside biogas
and renewable energy initiatives;
• Alignment with international sustainability
standards and certifications (including ISCC,
ISO 14001, RSPO, ISPO and PROPER);
• Enhanced human rights due diligence,
smallholder engagement and fair labour
practices; and
• Implementation of ESG scorecards and
benchmarking tools to improve transparency
and disclosure alignment with recognised
frameworks.
The Committee also oversaw ongoing
engagement with external advisor in relation to
the identification and integration of additional
climate and nature related risks into the risk
register, ensuring that forward-looking physical
and transition risks are appropriately assessed
and monitored.
These initiatives represent a shift from compliance-
based ESG monitoring toward a more proactive,
standards-aligned and enterprise-integrated risk
management model.
PRINCIPAL RISK ASSESSMENT
Following its review, the Committee concluded the
following risk assessments for the financial year:
• Operational and compliance-related risks,
particularly equipment breakdown due to poor
maintenance and environmental compliance
violations, remain the most significant risks
to the Group, assessed as having a possible
likelihood of occurrence and major consequence
on AEP.
• Financial risks, including those relating to
securing competitive CPO pricing, were
assessed as having a possible likelihood of
occurrence with moderate consequence on
AEP.
• Data security and privacy risks were assessed
as having a possible likelihood of occurrence
with moderate consequence on AEP,
reflecting potential operational, regulatory and
reputational implications.
• Environmental, climate and nature-related risks,
including fire hazards, prolonged dry periods,
extreme rainfall and natural disasters, were
assessed across a range of risk levels, generally
within rare to unlikely likelihood and moderate
to major consequence on AEP, depending on
the nature of the risk.
• Foreign currency risk, particularly arising from
exposure to foreign exchange movements,
was assessed as having an unlikely likelihood
of occurrence with moderate consequence on
AEP.
• Country, regulatory, governance and people-
related risks, including regulatory changes,
labour matters and employee-related issues,
were assessed as having rare to unlikely
likelihood with minor to moderate consequence
on AEP.
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• All other identified risks were assessed as
low to moderate in consequence on AEP and
continue to be monitored through established
internal controls and reporting mechanisms.
FORWARD-LOOKING FOCUS
In preparation for the 2026 financial year, the
Committee reviewed forward-looking risk
priorities and recommended:
• Integration of principal risks disclosed in the
Annual Report into the operational risk register;
• Introduction of explicit short-, medium- and
long-term time horizons for principal risks; and
RISK MANAGEMENT COMMITTEE REPORT (CONTINUED)
• Development of a consolidated ESG-integrated
enterprise risk register to provide a unified
view of strategic, operational and sustainability
risks.
The Committee is satisfied that the Group’s risk
management framework remains appropriate to
the scale, complexity and geographic footprint
of its operations. The Committee will continue to
monitor emerging risks and evolving regulatory
expectations to ensure the Group’s resilience and
long-term sustainability.
MICHAEL HENRY STAINER
Chairman, Risk Management Committee
30 April 2026
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ANNUAL REPORT 2025
DIRECTORS’ REMUNERATION REPORT
OVERVIEW
I am pleased to report on the activities of the
Remuneration Committee for the year ended
31 December 2025. This report sets out the
remuneration policy and remuneration details
for the Executive and Non-Executive Directors of
our Group. It has been prepared in accordance
with Schedule 8 of Large and Medium-sized
Companies and Groups (Accounts and reports)
Regulations 2008.
The Companies Act 2006 requires the auditor
to report to the shareholders on certain parts
of the Directors’ Remuneration Report and
to state whether, in their opinion, those parts
of the report have been properly prepared in
accordance with the Regulations. The parts of the
annual report on remuneration that are subject to
audit are indicated in that report. The report by
the Chairman of the Remuneration Committee
and the Directors’ Remuneration Policy are not
subject to audit.
ACTIVITIES
During the year the Remuneration Committee
reviewed the annual increment and bonus
entitlement of senior management in Indonesia.
In considering the bonus for 2025, the Committee
took into account the achievement of the key
performance criteria related to crop productions,
purchases of third-party/external crops, rate
of new planting, oil extraction rates, and
implementation of cost reduction measures. To
remain competitive, we also undertook benchmark
comparisons with other plantation companies
in respect of bonus payment for the year. A
remuneration package that aligns with long-
term shareholder value will be recommended,
incorporating performance-based incentives to
reinforce sustainable growth.
As part of our Board’s succession planning, the
Committee actively sought appropriately qualified
candidates through its network, ensuring that
potential appointees not only possess the requisite
skills and experience but also have the capacity
and commitment to contribute meaningfully
to our Board and management. Following this
process, Onn Kien Hoe was appointed to our
Board with effect from 1 August 2025.
Our Board and the Committee are also aware of
the need to comply with Provision 11 of the UK
Code, where at least half the Board, excluding
the Chair, should be Non-Executive Directors
whom our Board considers to be independent. In
respect of related party transactions, all directors,
and senior managers were required to declare
their interests as measures to avoid or manage
conflicts of interest.
The Committee also deliberated on the 2025
Remuneration Report and recommended its
acceptance to our Board.
AEP considers its employees as important
stakeholders for our Group’s long-term
sustainable success. As part of the engagement
of its workforce, the Chairman of the
Remuneration Committee, a Senior Independent
Non-Executive Director, conducted an online
meeting with employees’ representatives and
heads of employees’ cooperatives in Indonesia
to discuss and obtain feedback on issues relating
to their safety and welfare, working conditions,
remuneration and suggestions to improve
productivity.
At the engagement meeting, workers were
generally positive and expressed appreciation for
the continued upgrading and renovation of old
housing quarters, including the construction of
improved proper drainage and sanitation facilities
to improve living conditions and safety. In certain
remote areas, clinics staffed with medical doctors
are provided to ensure access to immediate
medical support.
The Chairman of the Remuneration Committee,
after discussions with management, assured
the workforce that additional equipment and
budget would be allocated in the coming year to
progressively improve the supply of clean water.
For villages located at higher elevations, clean
water will continue to be delivered by tankers
during the dry season until permanent solutions
are fully implemented.
In light of the rising cost of living, representatives
requested higher bonuses and salary increments,
including enhanced benefits to support higher
education. There were also requests for the
provision of schooling beyond the elementary
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DIRECTORS’ REMUNERATION REPORT (CONTINUED)
level, such as First High School and Secondary
High School. Management noted that, while
most estates currently provide education up to
the elementary level, school bus transportation
is already in place. The feasibility of expanding
access to higher-level education will be further
assessed, taking into consideration factors such
as student numbers and proximity to existing
schools. Management will review all requests in
line with operational performance and financial
considerations.
Employees also acknowledged the significant
progress made in connecting houses to the State
Electricity Company and expressed support for
the eventual replacement of in-house generators
in remote estates with stable grid electricity.
To foster camaraderie, teamwork and overall
wellbeing, employees proposed organising sports
tournaments among estates and mills within
the Group. The Chairman of the Remuneration
Committee suggested that such initiatives could
begin between geographically proximate estates.
There was also a request to upgrade a clinic to
provide a wider range of medical services, which
management will assess as part of its broader
infrastructure enhancement programme.
During the year, our Group approved an
Infrastructure Development Plan for PT KAP,
which is intended to be fully operational by
2027 in alignment with the commissioning of the
first palm oil mill in KAP. The plan is aimed at
transforming PT KAP into a fully operational and
self-sufficient plantation estate in preparation for
the commencement of mill operations in 2027.
PT KAP, established in 2011, has grown to nearly
8,000 hectares of planted palms including Plasma
scheme but continues to operate with relatively
minimal infrastructure. The absence of adequate
housing, internal roads, drainage systems
and reliable utilities has affected productivity,
operational efficiency and workforce stability.
With the estate’s first palm oil mill scheduled to
begin operations in 2027, upgrading infrastructure
has become a critical priority to ensure seamless
integration between estate and mill operations.
The Infrastructure Development Plan includes
the phased construction and upgrading of staff
housing, improvement of estate road networks and
bridges to facilitate FFB evacuation, enhancement
of drainage and sanitation systems, expansion
of clean water supply facilities, and progressive
electrification of housing and operational
facilities. These initiatives are designed not only
to support efficient mill operations but also to
improve living conditions, strengthen employee
retention and promote long-term sustainability
within the estate.
The management remains committed to ensuring
that appropriate technical training is provided
to staff for the operation and maintenance of
new equipment and technology introduced,
particularly in preparation for the commencement
of mill operations in KAP in 2027, to support safe,
efficient and sustainable operations.
COMPOSITION
The Remuneration Committee had two (2)
meetings in 2025, which were attended as follows:
Name of Directors Attendance
Farah Suhanah Tun Ahmad
Sarji (Chair)
2/2
Michael Henry Stainer 2/2
Onn Kien Hoe
(appointed 1 August 2025)
N/A*
*No committee meetings were held between 1 August 2025
and the end of the financial year 2025.
DIRECTORS’ REMUNERATION POLICY
The Directors’ Remuneration Policy was last
approved by shareholders at the 2023 AGM held
on 16 June 2023 and has applied from 2023
onwards (“2023 Policy”). Accordingly, a revised
Directors’ Remuneration Policy (“2026 Policy”)
will be presented for shareholder approval at
the AGM to be held on 15 June 2026. Subject to
shareholder approval, the 2026 Policy set out on
pages 123 to 130 (inclusive) will apply for three
(3) years from the conclusion of the 2026 AGM,
although we may seek shareholders’ approval
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DIRECTORS’ REMUNERATION REPORT (CONTINUED)
for a new policy during the period depending on
regulatory developments, changes to our strategy
or competitive pressures.
In developing the 2026 Policy, the Committee
undertook a comprehensive review of the 2023
Policy to assess whether it remains appropriate
in light of:
• The size, scale and complexity of the Group’s
operations;
• Investor feedback and shareholder
engagement;
• Eolving market practice and governance
expectations; and
• Competitive positioning relative to FTSE 250
and relevant international peers.
Input was received from our Group Chairman and
senior management, with appropriate safeguards
in place to mitigate conflicts of interest. In
exercising its discretion, the Committee has
applied independent judgement, ensured that no
Director was involved in determining his or her
own remuneration, and considered workforce pay
and related policies across our Group.
The Committee concluded that overall
remuneration opportunity for Directors had, over
time, fallen below the level considered appropriate
for the calibre of the Board and the Company’s
competitive positioning. This assessment was
informed by benchmarking against comparable
organisations of similar scale, geographic
footprint and with whom we compete for talent.
The Committee also noted that the 2023 Policy
and its implementation have received strong
shareholder support. This was reaffirmed during
engagement with shareholders during the 2025
AGM. Having considered shareholder feedback
and current market positioning, the Committee
has determined to put forward the 2026 Policy
for shareholders’ approval at the 2026 AGM.
SUMMARY OF KEY CHANGES FROM THE 2023
POLICY
The 2026 Policy introduces a number of material
changes compared to the 2023 Policy. These
changes reflect the Committee’s review of market
positioning, investor feedback and the Company’s
strategic development.
The principal changes are:
• Introduction of an annual performance-based
bonus opportunity of up to 100% of base salary
for the Executive Director. Under the 2023
Policy, Directors received fixed remuneration
only and no variable pay applied.
• Removal of the previous fixed salary cap
of £150,000 for the Executive Director and
replacement with a market-based positioning
framework, targeting remuneration within
the second or third quartile of FTSE 250
companies.
• Formal benchmarking of Non-Executive
Director fees against FTSE 250 comparators
to ensure competitive positioning.
• Introduction of additional fees for Senior
Independent Director and committee
responsibilities, reflecting the time
commitment and responsibilities associated
with these roles.
• Proposal to increase the aggregate annual
limit for Non-Executive Director fees, subject
to shareholder approval at the 2026 AGM, to
provide appropriate flexibility in light of the
Company’s size, complexity and FTSE 250
market positioning.
• Implementation of formal malus and
clawback provisions in respect of variable
remuneration, in line with the UK Corporate
Governance Code.
The Committee considers that these changes
enhance alignment between remuneration and
performance, strengthen governance safeguards,
and ensure the Company remains competitive in
attracting and retaining high-calibre Directors,
while remaining proportionate and aligned with
the Company’s long-term strategy.
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GOVERNANCE
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
For reference, at the 2023 AGM, shareholders voted as follows:
Shares
for
Shares
Against
% Shares
for
% Shares
Against
To approve Remuneration policy 30,820,328 649,054 97.9% 2.1%
The Directors’ Remuneration Report was approved at the 2025 AGM as follows:
Shares
for
Shares
Against
% Shares
for
% Shares
Against
To approve Directors’ Remuneration
Report
22,861,027 12,084 99.9% 0.1%
Our Company pays due attention to voting outcomes. Where a significant proportion of votes are
cast against any remuneration-related resolution, our Company will engage with shareholders to
understand concerns and disclose actions taken in the subsequent remuneration report, in line with
the UK Code.
The Committee, comprising Independent Non-Executive Directors, is responsible for:
• Determining the remuneration of the Executive Director and CEO (if separate);
• Setting the fee structure for the Chairman and Non-Executive Directors within the limits of the
Articles of Association;
• Overseeing alignment between executive remuneration and Company strategy, performance and
culture; and
• Reviewing workforce remuneration and conditions when setting executive pay.
No Director participates in discussions relating to his or her own remuneration.
The table below summarises the key components of the 2026 Policy in respect of the remuneration
package for directors. In determining and implementing such policy, our Company seeks to ensure
that arrangements are clear and transparent, straightforward, predictable as regards the range of any
discretionary awards, and proportionate in terms of targets and values in the context of our Company’s
business and strategy.
Type Purpose Operation Maximum
Opportunity
Performance
Metrics
Executive Director
Base salary To provide
competitive fixed
remuneration
reflecting role,
experience and
responsibilities.
Reviewed annually by
the Committee. Salary
increases will normally
be in line with those
awarded to the wider
workforce but may be
higher where justified
by role expansion,
sustained performance,
market positioning
or increased
responsibilities.
Within the second
or third quartile
remuneration
range for FTSE 250
companies
N/A
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Type Purpose Operation Maximum
Opportunity
Performance
Metrics
Annual
bonus
To incentivise
delivery of
annual financial,
operational,
strategic and
objectives
aligned with
long-term value
creation and
shareholder
returns.
Annual review of
performance measured
against prior year
progress in corporate
development, both
commercial and
financial, long-term
value creation and
shareholder returns.
Bonus awards are
subject to malus and
clawback provisions in
defined circumstances
including material
misstatement,
misconduct or serious
reputational damage.
(1)
Up to 100% of base
salary per annum.
A range of
objectives
reflecting key
priorities for
the year. The
weighting
of these
objectives will
be determined
annually at the
Committee’s
discretion,
taking into
account
the most
significant
factors
influencing
performance
during the
year.
Non-Executive Directors
Fees To reflect Board
leadership
responsibilities
and time
commitment
and to attract
individuals with
appropriate
experience and
independence.
Determined by the
Board within the limits
set by the Articles
of Association and
by reference to
comparable FTSE 250
companies and to
the time commitment
expected.
No Director takes part
in determining his or
her own remuneration.
The aggregate
annual limit for
Non-Executive
Directors’ fees
is set out in the
Company’s Articles
of Association.
(2)
In setting individual
fee levels, the
Board will have
regard to market
positioning
relative to FTSE
250 companies,
generally aiming to
position fees within
a competitive range
that is typically
around the second
or third quartile
remuneration
range, while
ensuring overall
proportionality
and alignment with
the Company’s
circumstances.
N/A
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GOVERNANCE
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Type Purpose Operation Maximum
Opportunity
Performance
Metrics
Additional
fee for
Committee
Chair and
Committee
membership
To reflect the
additional time
commitment,
preparation and
responsibilities
associated
with serving
as Chair or
member of one
or more a Board
Committee.
An additional fee will
be in payable for each
Board Committee role
held, whether as Chair
or as a member.
Where a Non-Executive
Director serves on
more than one Board
Committee, a separate
fee will be payable for
each committee role
held. Accordingly, a
Director who serves as
Chair of one or more
committees and/or as
a member of one or
more committees will
receive the applicable
fee for each such role.
The fee will be
determined by the
Board (excluding the
individual concerned),
having regard to
the additional time
commitment and
responsibilities of the
role and by reference
to comparable FTSE
250 companies.
A fixed annual fee
per Committee
Chair role and/
or per Committee
membership, set
within the overall
aggregate fee
limit approved by
shareholders.
N/A
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Type Purpose Operation Maximum
Opportunity
Performance
Metrics
Senior
independent
director fee
To recognise
the additional
responsibilities
and time
commitment
associated with
the role of Senior
Independent
Director,
including acting
as a sounding
board for the
Chair, serving as
an intermediary
for other
directors and
shareholders
where
appropriate,
and providing
additional
governance
oversight.
An additional flat
annual fee will be
paid to the Senior
Independent Director.
The fee will be
determined by the
Board (excluding the
individual concerned),
having regard to
the additional time
commitment and
responsibilities of the
role and by reference
to comparable FTSE
250 companies.
A fixed annual
fee, set within the
overall aggregate
fee limit approved
by shareholders.
N/A
Notes:
(1)
In accordance with Provision 38 of the UK Code, our Company maintains malus and clawback arrangements in respect of
variable remuneration of the Executive Director and may be operated within a reasonable period following the relevant
award/payment, having regard to the circumstances and applicable law. The Committee, acting at its discretion, may:
a. reduce any variable components of remuneration in respect of the current or future years (malus); and/or
b. recover any variable components of remuneration already paid or vested (clawback);
in any of the following circumstances:
a. a material misstatement of the Company’s audited results for the current or prior financial years caused by the
Executive Director’s negligent or wilful actions;
b. a material financial loss for the Company caused by the Executive Director’s negligent or wilful actions;
c. the discovery that the assessment of performance measures was based on misleading or inaccurate information; or
d. fraud or gross misconduct, or any circumstances that, in the opinion of the Remuneration Committee, would justify
summary dismissal.
The Committee retains full discretion to determine whether and how these provisions should be applied, including the
quantum to be reduced or recovered and the method of implementation. The Committee also reserves the right to amend
the scope and operation of these provisions from time to time, as it considers appropriate and in line with evolving market
practice and governance expectations.
No malus or clawback was applied during the year ended 31 December 2025.
(2)
A resolution is being proposed at the 2026 AGM to increase this aggregate limit to provide the Company with appropriate
flexibility in light of its size, complexity and market positioning. Subject to shareholder approval of that resolution, the
aggregate fees payable to Non-Executive Directors will not exceed the limit approved by shareholders from time to time.
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SECTION 3 :
GOVERNANCE
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Non-Executive Directors receive fixed fees only
and do not participate in bonus arrangements,
long-term incentive plans, share option schemes
or pension arrangements of our Company.
APPROACH TO RECRUITMENT REMUNERATION
In setting the remuneration package for a newly
appointed director, the Committee will apply the
policy set out above.
Base salary and any variable remuneration, where
applicable, will be set at levels appropriate to
the role, responsibilities and experience of the
director being appointed and, together with any
benefits included in the remuneration package,
will take into account the geographical location
in which the executive is to be based. Any
variable remuneration offered on appointment
will be determined by reference to the individual’s
experience, market positioning, the scope of the
role and our Company’s prevailing remuneration
framework, while remaining within the limits of
the approved Directors’ Remuneration Policy.
SENIOR MANAGEMENT
The Committee makes recommendations on
senior management pay and conditions, after
consultation with the Chairman. The following is a
summary of the key components of remuneration
packages of senior management:
Base salary
Base salaries of senior management are reviewed
on an annual basis by the Committee or when there
is a change in the individual’s responsibilities. Our
Group does not seek the advice of an external
consultant in determining the salaries of senior
management and Directors.
Bonus
Our Group operates performance-based bonus
schemes for senior executives and managers
of operating units. Awards are determined by
weighted performance criteria including crop
production, external crop purchases, expansion
of planted area, operational efficiency and overall
profitability.
The operating units in Indonesia and Malaysia
have in place a variable compensation policy
which over the recent years rewarded senior
executives and employees with bonuses based on
the individual’s and operating units’ performance.
Share Options
Our Company’s previous share option schemes
have expired. No outstanding options remain
vested or unvested.
Pensions
Operating units in Indonesia participate in
mandatory pension schemes for their local
executives and management. There is no company-
sponsored scheme for senior executives outside
of Indonesia. The Committee is still evaluating an
appropriate gratuity scheme, based on length of
service, for senior management and executives
who are not covered by the group-sponsored
scheme.
No employees or shareholders are specifically
consulted on the remuneration policy of our
Company. If a significant shareholder expresses
a particular concern regarding any aspect of the
policy, the views expressed would be carefully
weighed and addressed accordingly. In 2025,
no formal concerns or objections were raised
regarding the Directors’ Remuneration Policy.
However, AEP remains open to ongoing dialogue
with shareholders to ensure alignment with best
practices and corporate governance standards.
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DIRECTORS’ REMUNERATION REPORT (CONTINUED)
ILLUSTRATION OF APPLICATION OF REMUNERATION POLICY
The chart below shows the potential remuneration receivable by the Executive Director under the 2026
Policy under three (3) performance scenarios: minimum, in line with expectations and maximum. The
figures reflected in the chart above have been calculated based on the 2026 Policy.
The Executive Director does not participate in a Company-sponsored pension scheme. No pension
contribution is payable and no long-term incentive of the Company applies.
250%
200%
150%
100%
50%
0%
Base Salary Annual Bonus
100%
66.67%
33.33%
Minimum In Line with Expectation
50%
50%
Maximum
PAYMENT FOR LOSS OF OFFICE
It is not company policy to include provisions
in directors’ service contracts for compensation
for early termination beyond providing for an
entitlement to a payment in lieu of notice if due
notice is not given. Our Board will also have the
discretion to make retirement gratuity to any
directors who has retired from the office subject to
compliance with applicable laws and regulations.
SERVICE CONTRACTS
All Directors have formal appointment letters
with our Company. The Executive and Non-
Executives Directors are appointed normally on
a one to two-year term, subject to annual re-
election by shareholders, with notice periods of
one to three months. The service contracts are
kept at the registered office of our Company and
may be inspected by shareholders on request.
Notice periods for all other senior management
are generally three months. It is not our Company
policy to include provisions in Directors’ service
contracts, compensation for early termination
beyond providing for an entitlement to payment
in lieu of notice if due notice is not given.
The unexpired terms of the retiring Directors
are (subject to the annual re-election by the
shareholders on the next AGM):
Jonathan Law Ngee
Song
Expiry 23 June 2027
Marcus Chan Jau
Chwen
Expiry 23 June 2027
Farah Suhanah Tun
Ahmad Sarji
Expiry 23 June 2027
Michael Henry Stainer Expiry 23 June 2027
Onn Kien Hoe Expiry 1 August 2027
The unexpired term of Group CEO is:
Kevin Wong Tack Wee Expiry 8 January 2027
(three-month notice)
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SECTION 3 :
GOVERNANCE
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
ANNUAL REPORT ON REMUNERATION
No variable remuneration was paid to our Directors in 2025. Variable remuneration was paid to our
Group CEO, who is not a statutory director, and is disclosed below in accordance with the Regulations.
As such, the disclosures relating to the potential impact of a 50% increase in share price on share-
based compensation are not applicable as directors did not receive such compensation.
Directors’ Remuneration
The following part provides details of the remuneration of all the Directors for the year ended 31
December 2025.
The remuneration of all Directors who served during the year was as follows:
Single total figure of directors’ remuneration (audited) $000
Name 2025 2024
Fees/
Salary
Other
benefits Pension
Total Fixed
Remuneration
Total Variable
Remuneration Total
Total
Remuneration
Executive Directors:
Marcus Chan Jau
Chwen
(1)
174 - - 174 - 174 94
Dato’ John Lim
Ewe Chuan
(2)
- - - - - - 153
Group CEO:
Kevin Wong Tack
Wee
(3)
242 - 13 255 110 365 62
Non-Executive Directors:
Lim Tian Huat
(4)
- - - - - - 20
Jonathan Law
Ngee Song
66 - - 66 - 66 55
Farah Suhanah Tun
Ahmad Sarji
44 - - 44 - 44 35
Michael Henry
Stainer
43 - - 43 - 43 25
Onn Kien Hoe
(5)
18 - - 18 - 18 -
Total 587 - 13 600 110 710 444
Other than as disclosed, Directors’ remuneration consists solely of directors’ fees/salary with no
additional benefits, pensions, bonuses or share option expenses. AEP did not provide any variable
remuneration or benefits to statutory Directors in 2025. There were no (i) payments made to past
directors and (ii) payments made to directors as compensation for loss of office in 2025 (2024: $nil).
Notes:
(1)
Appointed as a Non-Independent Non-Executive Director of our Group on 10 August 2022, and was appointed as Executive
Director of Corporate Affairs effective from 1 October 2024. Other benefits includes $20,000 in 2024 to support his MBA
pursuit, reflecting the company’s commitment to leadership development.
(2)
Appointed as Senior Independent Non-Executive Director on 26 April 2008, redesignated as Executive Director on 1
September 2010, and resigned on 31 December 2024.
(3)
Kevin Wong continued to be paid on the same basis per his contract prior to his appointment as CEO during 2024. Amounts
reported are prorated to reflect his compensation for the period from his appointment as Group CEO on 1 October 2024 to
31 December 2024.
(4)
Appointed on 8 May 2015 and resigned at AGM on 24 June 2024.
(5)
Appointed on 1 August 2025.
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DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Chief Executive’s Remuneration Over 10 Years
Kevin Wong Tack Wee (Group CEO)
(1)
Year ended
31 December
Salary
($000)
Benefit
($000)
Pension
($000)
Bonus
($000)
Total
($000)
2025 242 - 13 110 365
2024 43 - 2 17 62
Dato’ John Lim Ewe Chuan
(2)
Year ended 31 December Total ($000)
2024 153
2023 148
2022 93
2021 87
2020 103
2019 116
2018 123
2017 113
2016 127
Notes:
(1)
Kevin Wong is not registered as a statutory director at Companies House, but is appointed as a Group CEO. As required
by Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports Regulations) 2008 Schedule
Clause 8, this table shows his remuneration after this appointment as Group CEO.
(2)
Dato’ John Lim’s basic salary was revised to £120,000 per annum with effect from 1 January 2023. From September 2022 to
31 December 2022, his salary was £90,000 per annum. Between September 2020 to August 2022, it was £63,000 per annum.
Prior to this, his salary from 2015 to 2019 was £90,000 per annum. The fluctuations during this period were the result of
exchange translations. Dato’ John does not receive any bonus. Dato’ John resigned from his role as director of AEP effective
31 December 2024.
Relative Importance of Spend on Pay
2024 2025
59,266
66,290
Total Group Employee Remuneration
($000)
2024 2025
5,923
34,649
Total Dividend Paid
($000)
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GOVERNANCE
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Directors’ Interests (Audited)
The interests of our Directors together with those of their immediate families in the securities of our
Company as shown below:
Directors’ beneficial interests at 31 December:
2025 2024
Ordinary shares Ordinary shares
Marcus Chan Jau Chwen 3,000 -
Jonathan Law Ngee Song - -
Farah Suhanah Tun Ahmad Sarji - -
Michael Henry Stainer - -
Onn Kien Hoe - -
Kevin Wong Tack Wee (Group CEO) - -
The ultimate beneficial shareholders of Genton International Limited are vested in the estates of the
late Madam Lim with the application for probate in progress.
There has been no change in the interests of our directors in the securities of our Company between
31 December 2025 and the date of this report. Other than Marcus Chan, none of our Directors had any
interest in the securities of our Company between the date of their appointments and the date of this
report. There is no requirement for Directors to hold shares in our Company. Other than as set out in
notes to the consolidated financial statements, no Director had a material interest in any contract of
our Company subsisting during, or at the end of the financial year. No Directors had any share options
in our Company in the current or prior year.
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DIRECTORS’ REMUNERATION REPORT (CONTINUED)
Notes:
1.
Directors’ fees may be paid in $ and other currencies. Amounts are converted into $ based on the average exchange rates for the year.
2.
Marcus Chan Jau Chwen’s compensation was adjusted to commensurate his transition from a Non-Executive role to Executive Director (Corporate Affairs) effective 1 October
2024.* He received $20,000 benefits in 2024 and no benefit in 2025.
3.
Lim Tian Huat and Dato’ John Lim resigned in 2024 and are therefore removed from the 2024/2023 comparison.
4.
Kevin Wong Tack Wee was appointed as Group Chief Executive Officer, effective 1 October 2024. The 2024 remuneration has been annualised for full year comparison.
Percentage Annual Change In Directors’ Remuneration And For Employees (Not Subject To Audit)
AEP (as a holding company) has no employees other than its Directors; our Group employs staff in its operating subsidiaries.
The table below shows the annual change in our Directors’ pay compared with our Group’s average pay for an employee for 2021 to 2025. Our
Directors’ total remuneration for 2024 and 2025 are disclosed in pages 131-132 of the Annual Report.
Annual changes in pay
for directors compared
with the Group's average
employees
2024/2025 2023/2024 2022/2023 2021/2022 2020/2021
Base
Salary/
Fees Benefits Bonus
Base
Salary/
Fees Benefits Bonus
Base
Salary/
Fees Benefits Bonus
Base
Salary/
Fees Benefits Bonus
Base
Salary/
Fees Benefits Bonus
Executive Director
Marcus Chan Jau Chwen +135% - - 57% - - - - -
Kevin Wong Tack Wee +41 +63% +62% 2024 is first year of
appointment
- - -
Dato' John Lim Ewe Chuan +59% - - +7% - - -16% - -
Non-Executive Directors
Jonathan Law Ngee Song +20% - - - - - +71% - - +48% - - - - -
Farah Suhanah Tun Ahmad
Sarji
+26% - - +6% - - +450% - - - - - - - -
Michael Henry Stainer +72% - - - - -
Onn Kien Hoe 2025 is first year of
appointment
Lim Tian Huat +74% - - +10% - - - - -
Marcus Chan Jau Chwen +327% - - - - - - - -
AEP Average Employees +10% +18% +17% -5% -26% -15% +1% +16% +15% +6% +55% +36% +12% -5% +32%
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GOVERNANCE
DIRECTORS’ REMUNERATION REPORT (CONTINUED)
% Change Trading volume
Year
FTSE 100 Index AEP Share Price Trading Volume
SHARE PRICE PERFORMANCE GRAPH
The performance graph illustrates our Company’s share price trajectory relative to the FTSE 100 index
from January 2016 to March 2026, providing insight into market volatility and trends over the past
decade. Using January 2016 as the base, AEP’s share price has consistently matched or exceeded
the FTSE 100 index. The FTSE 100 index was chosen for comparison due to the absence of an index
specific to our business.
As of 31 March 2026, AEP’s share price closed at £16.95, reflecting a price-to-earnings ratio of 9.9
times. This valuation appears more aligned with AEP’s current valuation and industry benchmarks
given AEP’s solid business fundamentals, intrinsic value, earnings, and prospects.
It is important to note that the Remuneration Committee bases senior management compensation on
operational performance rather than share price movements.
FARAH SUHANAH TUN AHMAD SARJI
Chairman, Remuneration Committee
30 April 2026
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ANNUAL REPORT 2025
FINANCIAL
STATEMENTS
Independent Auditor’s Report 137
Consolidated Income Statement 150
Consolidated Statement of Comprehensive Income 151
Consolidated Statement of Financial Position 152
Consolidated Statement of Changes in Equity 154
Consolidated Statement of Cash Flows 155
Notes to the Consolidated Financial Statements 157
Company Statement of Financial Position 215
Company Statement of Changes in Equity 216
Notes to the Company Financial Statements 217
137
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SECTION 4 :
FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC
For the purpose of this report, the terms “we” and “our” denote MHA in relation to UK legal, professional
and regulatory responsibilities and reporting obligations to the members of AEP Plantations plc. For
the purposes of the table on pages 139 to 143 that sets out the key audit matters and how our
audit addressed the key audit matters, the terms “we” and “our” refer to MHA. The Group financial
statements, as defined below, consolidate the accounts of AEP Plantations plc and its subsidiaries (the
“Group”). The “Parent Company” is defined as AEP Plantations plc, as an individual entity. The relevant
legislation governing the Parent Company is the United Kingdom Companies Act 2006 (“Companies
Act 2006”).
Opinion
We have audited the financial statements of AEP Plantations plc for the year ended 31 December
2025. The financial statements that we have audited comprise:
• the Consolidated Income Statement;
• the Consolidated Statement of Comprehensive Income;
• the Consolidated Statement of Financial Position;
• the Consolidated Statement of Changes in Equity;
• the Consolidated Statement of Cash Flows;
• the Notes to the consolidated financial statements, including material accounting policies;
• the Company Statement of Financial Position;
• the Company Statement of Changes in Equity; and
• the Notes to the company financial statements, including material accounting policies.
The financial reporting framework that has been applied in the preparation of the Group’s financial
statements is applicable law and United Kingdom adopted international Accounting Standards. The
financial reporting framework that has been applied in preparation of the Parent Company financial
statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting
Standard 101 Reduced Disclosure Framework (“United Kingdom Generally Accepted Accounting
Practice”).
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent
Company’s affairs as at 31 December 2025 and of the Group’s profit for the year then ended;
• the Group’s financial statements have been properly prepared in accordance with UK adopted
International Accounting Standards;
• the Parent Company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice; and
• the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Our opinion is consistent with our reporting to the Audit Committee.
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TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those standards are further described in the Auditor
Responsibilities for the Audit of the Financial Statements section of our report. We are independent
of the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities,
and we have fulfilled our ethical responsibilities in accordance with those requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors' use of the going concern
basis of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the Directors’ assessment of the Group’s and the Parent Company’s ability to continue
to adopt the going concern basis of accounting included:
• considering inherent risks to the Group’s and the Parent Company’s operations and specifically
their business model;
• confirming our understanding of the directors’ going concern assessment process, including
obtaining an understanding of relevant controls over the model;
• testing the mathematical accuracy and appropriateness of the model used to prepare the forecast
and verifying going concern model inputs against the board’s-approved forecasts;
• evaluating the financial forecasts for the Group and the Parent Company, including consideration
of management’s ability to forecast through comparison of recent production to budget, review of
trading activity and business plans, in assessing the reasonableness of the underlying assumptions
and the accuracy of management’s forecasting;
• challenging the key assumptions applied by management in the going concern assessment,
including consideration of their consistency with historical performance, current trading and
external market data;
• evaluating the Group’s base case and stress case scenarios, including the associated sensitivities
and consideration of possibly mitigating actions, and the rationale supporting the underlying
assumptions; and
• assessing the adequacy of the going concern disclosures in the directors’ report and note 1 of the
financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the Group’s and
Parent Company’s ability to continue as a going concern for a period of at least twelve months from
when the financial statements are authorised for issue.
In relation to the Group’s reporting on how it has applied the UK Corporate Governance Code, we
have nothing material to add or draw attention to in relation to the Directors’ statement in the financial
statements about whether the directors considered it appropriate to adopt the going concern basis
of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
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FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
Overview of our audit approach
Scope Our audit was scoped by obtaining an understanding of the Group, including the
Parent Company, and its environment, including the Group’s system of internal control,
and assessing the risks of material misstatement in the financial statements. We also
addressed the risk of management override of internal controls, including assessing
whether there was evidence of bias by the directors that may have represented a risk
of material misstatement.
We, and our component auditors acting on specific group instructions, undertook
audit procedures on the entire financial information of 11 components and specified
audit procedures on particular aspects and balances on another seven components.
In addition, for the remaining components for which we performed no audit procedures,
we performed analytical review procedures at an aggregated Group level to support our
assessment that there is no reasonable possibility that these components, individually
or in aggregate, could give rise to a material misstatement in the Group financial
statements, including consideration whether these amounts are material in aggregate.
Materiality 2025 2024
Group $5,571,000 $3,950,000 5% of profit before tax adjusted for non-
recurring items (2024: 5% of profit before tax)
Parent Company $860,000 $1,375,000 1% of gross assets (2024: 2% of gross assets)
Key audit matters
Recurring
• Impairment of property, plant and equipment (Group)
• Recoverability of taxes receivable (Group)
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) that we identified. These matters included
those matters which had the greatest effect on: the overall audit strategy; the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
Impairment of property, plant and equipment
Financial Statement Elements FY25 FY24
Property, plant and equipment (note 11) $272.547 million $271.170 million
Key audit matter
description
At 31 December 2025, the Group reported property, plant and equipment of
approximately $273 million, representing a significant proportion of total assets,
as disclosed in note 11 to the financial statements.
Under IAS 36, the Group is required to assess at each reporting date whether there
are indicators that non-financial assets may be impaired and, where such indicators
exist, to estimate the recoverable amount of the relevant cash-generating units
(“CGUs”), as further described in note 11 to the financial statements.
This assessment involves significant judgment and estimation uncertainty,
particularly in:
• determining the appropriate CGU structure based on the independence of cash
inflows;
• identifying whether impairment indicators exist, including assessing whether
factors such as operational performance, production levels and other forward-
looking market conditions are indicative of a potential impairment and sufficient
to warrant a detailed impairment assessment;
• estimating recoverable amounts, which are based on fair value less costs of
disposal (“FVLCD”) derived from external valuation reports; and
• valuing plantation assets using a market-based approach, which involves the
selection of appropriate comparable market transactions and the application
of judgmental adjustments to reflect differences in asset characteristics;
these inputs are not directly observable and require management to exercise
significant judgment in determining appropriate assumptions.
Given the materiality of the balances, the degree of estimation uncertainty, and
the involvement of valuation experts, we considered impairment of non-financial
assets to be a key audit matter. Further details are included within property, plant
and equipment note in note 11 to the financial statements.
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FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
How the scope
of our audit
responded to the
key audit matter
Controls and process understanding – We obtained an understanding of the
process and evaluated the design and implementation of relevant controls over the
impairment assessment, including management’s review of the external valuation
reports and challenge of key assumptions.
CGU determination – We assessed management’s identification of CGUs by
evaluating whether they represent the lowest level at which largely independent
cash inflows are generated in accordance with IAS 36. In doing so, we considered
the Group’s operational structure, how performance is monitored, and how
revenues are generated across estates and mills. We also evaluated the extent of
economic interdependence between estates and mills, including in cases where
estates supply fresh fruit bunches to related-party mills, by considering whether
alternative processing options exist and the degree of reliance between operations.
Impairment indicators – We evaluated management’s identification of impairment
indicators by considering the factors used by management, including operational
performance against expectations, production levels, environmental factors
and the expected period over which assets are recoverable, and whether these
appropriately indicated potential impairment. We tested the accuracy of key data
used in the assessment and performed independent assessment of selected CGUs,
taking into account factors such as yield trends and plantation age profiles.
Recoverable amount - We assessed the competence, capability and objectivity
of management’s external valuer. With the involvement of our valuation expert,
we evaluated the appropriateness of the valuation methodology against the
requirements of IAS 36 and IFRS 13.
Together with our valuation expert, we reviewed the comparable market
transactions used in the valuation and challenged the key assumptions and
adjustments applied. This included consideration of asset-specific factors such as
land tenure and legal title, as well as environmental and operational factors that
may affect the value and recoverability of the plantations.
We also tested key inputs, including land area and location, to supporting
documentation, and performed independent recalculations and benchmarking
against observable market data, including cross-check procedures to assess
whether the resulting recoverable amounts were supported by available market
evidence and exceeded the carrying values.
Use of auditor’s expert - We involved our valuation expert to assist in evaluating
the methodology and key assumptions applied by the external valuer and to
perform independent benchmarking and corroborative analyses of the recoverable
amounts. We also assessed the competence, capability and objectivity of our
auditor’s expert.
Sensitivity analysis - We performed sensitivity analysis to assess the impact of
reasonably possible changes in key assumptions, including the application of a
range of costs of disposal, and evaluated the resulting headroom between carrying
values and recoverable amounts.
Disclosure - We assessed the adequacy of the Group’s disclosures in relation to
the impairment assessment of non-financial assets in the financial statements.
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
Key audit
matter description
At 31 December 2025, the Group reported income tax receivables of $5.0 million
(2024: $18.3 million) and other tax receivables of $41.9 million (2024: $43.7 million),
predominantly comprising VAT receivables.
The recoverability of taxes receivable is subject to significant judgment, particularly in
assessing the likelihood and timing of recovery from tax authorities. These balances
primarily arise from overpayments of corporate income tax and input VAT claims in
Indonesia, where the recovery process can be complex and prolonged.
Key areas of judgment include:
• the interpretation and application of local tax regulations;
• the status and progress of ongoing tax audits and refund claims;
• the availability of supporting documentation to substantiate claims; and
• the expected timing and probability of recovery, including the potential for disputes
or adjustments by tax authorities.
Given the magnitude of the balances, the judgment involved in assessing recoverability,
we considered the recoverability of tax receivables to be a key audit matter.
How the scope
of our audit
responded to the
key audit matter
We evaluated management’s assessment of the recoverability of tax receivables,
focusing on the key judgments involved in determining the likelihood of recovery. This
included considering the nature and status of the balances, the progress of claims with
tax authorities and historical experience of recovery.
With the involvement of our and our component auditors’ tax specialists, we assessed
the reasonableness of management’s assumptions and judgments, including the
interpretation of relevant tax regulations and the likelihood of recovery of underlying
balances.
We also considered the accuracy of the underlying tax computations giving rise to the
receivables, including evaluating whether amounts recognised are supported by tax
filings and calculations prepared in accordance with applicable tax regulations.
We performed procedures, directly or through component auditors, to test
key supporting documentation for a sample of balances, including tax filings,
correspondence with tax authorities, and evidence supporting the underlying claims.
We also assessed the ageing profile of receivables and considered whether there were
indicators that recovery may be uncertain.
Where relevant, we considered the outcomes of recent tax audits and settlements
to assess whether these provided evidence supporting the recoverability of similar
balances.
We evaluated whether the carrying values of tax receivables were reasonable in the
context of the evidence obtained.
We also assessed the adequacy of the Group’s disclosures in relation to tax receivables
in the financial statements.
Key observations
communicated
to the Audit
Committee
Based on the work we performed, nothing has come to our attention that
indicates the carrying value of property, plant and equipment is misstated, or that
management’s assessment that no impairment is required is unreasonable.
Recoverability of taxes receivable
Financial Statement Elements FY25 FY24
Income tax and other tax receivables (note 8) $46.855 million $62.065 million
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FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
Key observations
communicated
to the Audit
Committee
Based on the work we performed, nothing has come to our attention that indicates
that the carrying value of income tax and other tax receivables is misstated, or
that management’s assessment of their recoverability is unreasonable.
Our application of materiality
Our definition of materiality considers the value of error or omission on the financial statements
that, individually or in aggregate, would change or influence the economic decision of a reasonably
knowledgeable user of those financial statements. Misstatements below these levels will not necessarily
be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements
as a whole. Materiality is used in planning the scope of our work, executing that work and evaluating
the results.
Materiality in respect of the Group was set at $5,571,000 (2024: $3,950,000) which was determined
on the basis of 5% of profit before tax adjusted for non-recurring items. Profit before tax adjusted for
non-recurring items was deemed to be the appropriate benchmark for the calculation of materiality
as it reflects the Group’s underlying performance and is a key measure used by users of the financial
statements in assessing the Group’s results. In our opinion, this is therefore the benchmark with which
the users of the financial statements are principally concerned.
Materiality in respect of the Parent Company was set at $860,000 (2024: $1,375,000), determined on
the basis of 1% (2024: 2%) of the Parent Company’s gross assets. Gross assets was considered to be
the most appropriate benchmark for determining materiality for the Parent Company, as it is a holding
company with no significant trading activities and users of the financial statements are primarily
focused on the balance sheet. In our opinion, this is therefore the benchmark with which the users of
the financial statements of the Parent Company are principally concerned.
Performance materiality is the application of materiality at the individual account or balance level, set
at an amount to reduce, to an appropriately low level, the probability that the aggregate of uncorrected
and undetected misstatements exceeds materiality for the financial statements as a whole.
Performance materiality for the Group was set at $3,342,000 (2024: $1,980,000) and for the Parent
Company at $516,000 (2024: $690,000), representing 60% of the respective materiality levels.
The determination of performance materiality reflects our assessment of the risk of undetected errors
existing, the nature of the systems and controls and our understanding of prior period misstatements
based on a review of predecessor auditors’ working papers.
We agreed to report any corrected or uncorrected adjustments exceeding $294,000 and $43,000 in
respect of the Group and Parent Company respectively to the Audit Committee as well as differences
below this threshold that in our view warranted reporting on qualitative grounds.
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
Overview of the scope of the Group audit
Our assessment of audit risk, evaluation of materiality and our determination of performance materiality
sets our audit scope for each company within the Group. Taken together, this enables us to form an
opinion on the consolidated financial statements. This assessment takes into account the size, risk
profile, organisation / distribution and effectiveness of group-wide controls, changes in the business
environment and other factors such as recent internal audit results when assessing the level of work to
be performed at each component.
In assessing the risk of material misstatement to the consolidated financial statements, and to ensure
we had adequate quantitative and qualitative coverage of significant accounts in the consolidated
financial statements, of the 27 reporting components of the group, we identified seven components in
the UK (one of which is the parent entity), four components in Malaysia, 14 components in Indonesia
and two components in Hong Kong.
Of these, we identified 11 components due to their financial significance in the consolidated financial
statements, to perform audits over the entire financial information. Additionally, considering the
remaining quantitative and qualitative coverage, we selected seven components with classes of
transactions, account balances, or disclosures (COTABDs) contributing to the specific risks of material
misstatement of the group financial statements.
The work over the audits of entire financial information combined with specified COTABDs provided
coverage of 99.4% of revenue, 97.6% of profit before tax and 98.2% of net assets.
Revenue Profit before tax Net assets
Inscope Out of scope Inscope Out of scope Inscope Out of scope
Our audit of the Group financial statements involved the use of component auditors in relation to
components based in Malaysia and Indonesia. The group audit team was actively involved in directing,
supervising and reviewing their work. This included regular correspondence, video calls, visits to
component auditors’ office, and review of key working papers compared to the initial reporting
deliverables sent to the component auditors. We assessed the risks of material misstatement at the
level of COTABDs, determined how these risks related to relevant assertions in each component’s
financial information, and coordinated the audit approach accordingly. The proposed responses to
these risks were discussed and agreed with the component auditors, along with the required nature,
timing and extent of their procedures and the format of their reporting. Throughout the audit, the
group team maintained close involvement through review of work performed and participation in
discussions at key stages of the engagement, ensuring the appropriateness and consistency of the
audit conclusions drawn.
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FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
The control environment
We evaluated the design and implementation of those internal controls of the Group, including the
Parent Company, which are relevant to our audit, such as those relating to the financial reporting cycle.
We do not place reliance over controls.
Climate-related risks
In planning our audit and gaining an understanding of the Group and Parent Company, we considered
the potential impact of climate-related risks on the business and its financial statements. We obtained
management’s climate-related risk assessment, along with relevant documentation and reports relating
to management’s assessment and held discussions with management to understand their process for
identifying and assessing those risks.
The Group has established sustainability commitments, including its No Deforestation, No Peat, and
No Exploitation (“NDPE”), and compliance with sustainable palm oil certification requirements. The
Group also provides climate-related disclosures aligned with the recommendations of the Task Force
on Climate-related Financial Disclosures (“TCFD”), which are included in the Strategic Report on pages
52 to 57.
Our responsibilities in relation to theses disclosure are described in the relevant section of this reporting
and our procedures on these disclosures therefore consisted solely of considering whether they are
materially inconsistent with the financial statements or our knowledge obtained from the audit or
otherwise appear to be materially misstated.
We involved internal specialists to assist in our consideration of climate-related risks and their potential
impact on the financial statements, including evaluating management’s assumptions and identifying
areas where such risks may have a financial reporting impact.
Based on our assessment, we did not identify any key audit matters materially impacted by climate-
related risks and related commitments.
Reporting on other information
The other information comprises the information included in the annual report other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
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INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
Strategic report and directors’ report
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and the Parent Company and their
environment obtained in the course of the audit, we have not identified material misstatements in the
strategic report or the directors’ report.
Directors’ remuneration report
Those aspects of the director’s remuneration report which are required to be audited have been
prepared in accordance with applicable legal requirements.
Corporate governance statement
We have reviewed the directors’ statement in relation to going concern, longer-term viability and that
part of the Corporate Governance Statement relating to the entity’s compliance with the provisions of
the UK Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the Corporate Governance Statement is materially consistent with the financial statements
and our knowledge obtained during the audit:
• Directors’ statement with regards the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 24;
• Directors’ explanation as to their assessment of the group’s prospects, the period this assessment
covers and why the period is appropriate set out on page 23;
• Directors’ statement on whether they have a reasonable expectation that the group will be able to
continue in operation and meets its liabilities set out on page 24;
• Directors’ statement on fair, balanced and understandable set out on page 99;
• Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks
set out on page 42;
• Section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on page 118; and
• Section describing the work of the audit committee set out on page 115.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for
our audit have not been received from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and
returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the part of the directors’ remuneration report to be audited is not in agreement with the accounting
records and returns; or
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FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF AEP PLANTATIONS PLC (CONTINUED)
• we have not received all the information and explanations we require for our audit; or
• a corporate governance statement has not been prepared by the Parent Company.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for
the preparation of the financial statements and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or Parent Company or to cease operations, or have no realistic alternative but to
do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the financial statements is located on the FRC’s website
at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud.
These audit procedures were designed to provide reasonable assurance that the financial statements
were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher
than the risk of not detecting one resulting from error and detecting irregularities that result from
fraud is inherently more difficult than detecting those that result from error, as fraud may involve
collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed
non-compliance with laws and regulations is from events and transactions reflected in the financial
statements, the less likely we would become aware of it.
Identifying and assessing potential risks arising from irregularities, including fraud
The extent of the procedures undertaken to identify and assess the risks of material misstatement in
respect of irregularities, including fraud, included the following:
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• we considered the nature of the industry and sector the control environment, business performance
including remuneration policies and the Group’s, including the Parent Company’s, own risk assessment
that irregularities might occur as a result of fraud or error. From our sector experience and through
discussion with the directors, we obtained an understanding of the legal and regulatory frameworks
applicable to the Group focusing on laws and regulations that could reasonably be expected to have
a direct material effect on the financial statements, such as provisions of the Companies Act 2006,
labour and employment laws in Indonesia and Malaysia, the requirements of the Anti-Bribery and
Corruption Acts in the UK, Malaysian and Indonesian Land Laws, Indonesian plasma regulations, the
Indonesian Sustainable Palm Oil (“ISPO”) regulations and Malaysian Sustainable Palm Oil (“MSPO”)
regulations and we considered the extent to which non-compliance might have a material effect on
the Group financial statements.
• We enquired of the directors and management including the audit committee concerning the
Group’s and the Parent Company’s policies and procedures relating to:
- identifying, evaluating and complying with the laws and regulations and whether they were
aware of any instances of non-compliance;
- detecting and responding to the risks of fraud and whether they had any knowledge of actual or
suspected fraud; and
- the internal controls established to mitigate risks related to fraud or non-compliance with laws
and regulations.
• We assessed the susceptibility of the financial statements to material misstatement, including how
fraud might occur by evaluating management’s incentives and opportunities for manipulation of
the financial statements. This included utilising the spectrum of inherent risk and an evaluation
of the risk of management override of controls. We determined that the principal risks were
management bias in accounting estimates, and posting of inappropriate journal entries in order
to conceal manipulation of accounting entries intended to result in the production of financial
statements which give a misleading view of the entity’s financial position or performance. The
group engagement team shared the risk assessment with the component auditors so that they
could include appropriate audit procedures in response to such risks in their work.
Audit response to risks identified
In respect of the above procedures:
• we corroborated the results of our enquiries through our review of the minutes of the Group’s and
the Parent Company’s board and Audit Committee meetings;
• audit procedures performed by the engagement team in connection with the risks identified
included:
o reviewing financial statement disclosures and testing to supporting documentation to assess
compliance with applicable laws and regulations expected to have a direct impact on the financial
statements.
o testing journal entries, including those processed late for financial statements preparation, those
posted by infrequent or unexpected users, those posted to unusual account combinations;
o evaluating the business rationale of significant transactions outside the normal course of business,
and reviewing accounting estimates for bias;
o enquiring of management and legal advisors around actual and potential litigation and claims;
o evaluating the design and implementation of management’s controls designed to prevent and
detect irregularities
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INDEPENDENT AUDITOR’S REPORT
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o challenging assumptions and judgements made by management in their significant accounting
estimates, in particular those relating to the estimation technique and assumptions used in
assessing the market value of the plantation land;
o using data analytics software to interrogate the journals posted in the year and to review areas
where the incentive to override controls may be greatest. We also used our data analytics tool
to identify potential transactions with related parties; and
o reviewing legal expenses incurred for evidence of potential undisclosed contingent liabilities.
• the Group operates in the agricultural sector. As such, the Senior Statutory Auditor considered the
experience and expertise of the engagement team to ensure that the team had the appropriate
competence and capabilities; and
• we communicated relevant laws and regulations and potential fraud risks to all engagement team
members, including experts, and the component auditors and remained alert to any indications of
fraud or non-compliance with laws and regulations throughout the audit.
Other requirements
Following the recommendation of the Audit Committee, we were appointed by the Directors on 15
September 2025 to audit the financial statements for the year ended 31 December 2025. The period
of total uninterrupted engagements is one year.
We did not provide any non-audit services which are prohibited by the FRC’s Ethical Standard to the
Group or the Parent Company, and we remain independent of the Group and the Parent Company in
conducting our audit.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter
3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state
to the Parent Company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
The Company is required to include these financial statements in an annual financial report prepared
under Disclosure Guidance and Transparency Rules 4.1.15R to 4.1.18R. This auditor’s report provides
no assurance over whether the annual financial report has been prepared in accordance with those
requirements.
(Senior Statutory Auditor)
for and on behalf of MHA , Statutory Auditor
Milton Keynes, United Kingdom
30 April 2026
MHA is the trading name of MHA Audit Services LLP, a limited liability partnership in England and
Wales (registered number OC455542).
150
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
| 2025 | 2024 | ||
| Note | $000 | $000 | |
| Continuing operations | |||
Revenue | 3 | ||
Cost of sales | ( | ( | |
Changes in fair value of biological assets | 18 | ( | |
Gross profit | |||
Administration expenses | 5 | ( | ( |
Other income | |||
Reversal of impairment/(impairment loss) | 11 | ( | |
(Loss)/gain arising from fair value of investments | 14 | ( | |
Operating profit | |||
Exchange (loss)/gains | ( | ||
Finance income | 4 | ||
Finance expense | 4 | ( | ( |
Profit before tax | 5 | ||
Tax expense | 8 | ( | ( |
Profit for the year | |||
| Profit/(loss) for the year attributable to: | |||
- Owners of the parent | |||
- Non-controlling interests | ( | ||
| Earnings per share attributable to the owners of the parent | |||
| during the year | |||
| Profit | |||
- basic and diluted | 9 |
Earnings per share are shown in note 9.
The accompanying notes are an integral part of this consolidated income statement.
151
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2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
| 2025 | 2024 | |
| $000 | $000 | |
Profit for the year | ||
| Other comprehensive loss: | ||
| Items may be reclassified to profit or loss: | ||
Loss on exchange translation of foreign operations | ( | ( |
Net other comprehensive loss may be reclassified to profit or loss | ( | ( |
| Items not to be reclassified to profit or loss: | ||
Remeasurement of retirement benefits plan, net of tax | ||
Net other comprehensive income not being reclassified to profit or loss | ||
Total other comprehensive loss for the year, net of tax | ( | ( |
Total comprehensive income/(loss) for the year | ||
| Total comprehensive income/(loss) for the year attributable to: | ||
- Owners of the parent | ||
- Non-controlling interests | ( | |
The accompanying notes are an integral part of this consolidated statement of comprehensive income.
152
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
COMPANY NUMBER: 01884630
| 31.12.2025 | 31.12.2024 | ||
| Note | $000 | $000 | |
| Non-current assets | |||
Property, plant and equipment | 11 | ||
Intangible assets | 12 | ||
Investments in associates | 13 | ||
Investments | 14 | ||
Receivables | 15 | ||
Deferred tax assets | 16 | ||
| Current assets | |||
Inventories | 17 | ||
Income tax receivables | 8 | ||
Other tax receivables | 8 | ||
Biological assets | 18 | ||
Trade and other receivables | 19 | ||
Investments | 14 | ||
Short-term investments | 20 | ||
Cash and cash equivalents | 20 | ||
| Current liabilities | |||
Trade and other payables | 21 | ( | ( |
Income tax liabilities | 8 | ( | ( |
Other tax liabilities | 8 | ( | ( |
Dividend payables | ( | ( | |
Lease liabilities | 22 | ( | ( |
( | ( | ||
Net current assets | |||
| Non-current liabilities | |||
Deferred tax liabilities | 16 | ( | ( |
Retirement benefits - net liabilities | 23 | ( | ( |
Lease liabilities | 22 | ( | ( |
( | ( | ||
Net assets |
153
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2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025 (CONTINUED)
COMPANY NUMBER: 01884630
| 31.12.2025 | 31.12.2024 | ||
| Note | $000 | $000 | |
| Issued capital and reserves attributable to owners of the parent | |||
Share capital | 24 | ||
Treasury shares | 24 | ( | ( |
Share premium | 27 | ||
Capital redemption reserve | |||
Exchange reserves | ( | ( | |
Retained earnings | |||
Non-controlling interests | |||
Total equity |
154
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 31 DECEMBER 2025
| Capital | Non- | |||||||||||
| Share | Treasury | Share | redemption | Exchange | Retained | controlling | Total | |||||
| capital | shares | premium | reserve | reserves | earnings | Total | interests | equity | ||||
| Note | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |||
Balance at 31 December 2023 | ( | ( | ||||||||||
| Items of other comprehensive (loss)/ | income | |||||||||||
- | Remeasurement of retirement benefit | |||||||||||
plan, net of tax | 23 | |||||||||||
- | (Loss)/gain on exchange translation of | |||||||||||
foreign operations | ( | ( | ( | |||||||||
Total other comprehensive (loss)/income | ( | ( | ( | |||||||||
Profit for the year | ||||||||||||
| Total comprehensive (loss)/income for | the year | ( | ||||||||||
Acquisition of non-controlling interests | 32 | ( | ( | ( | ||||||||
Transactions with owners in their Share buy back | capacity as owners | ( | ( | ( | ||||||||
Dividends paid | ( | ( | ( | |||||||||
Balance at 31 December 2024 | ( | ( | ||||||||||
| Items of other comprehensive (loss)/ | income | |||||||||||
- | Remeasurement of retirement benefit | |||||||||||
plan, net of tax | 23 | |||||||||||
- | (Loss)/gain on exchange translation | |||||||||||
of foreign operations | ( | ( | ( | |||||||||
| Total other comprehensive (loss)/ | income | ( | ( | ( | ||||||||
Profit/(loss) for the year | ( | |||||||||||
Total comprehensive (loss)/income for Transactions with owners in their | the year | ( | ( | |||||||||
| capacity as owners | ||||||||||||
Share buy back | ( | ( | ( | |||||||||
Dividends paid | ( | ( | ( | |||||||||
Balance at | ( | ( | ||||||||||
The accompanying notes are an integral part of this consolidated statement of changes in equity.
155
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025
| 2025 | 2024 | ||
| Note | $000 | $000 | |
| Cash flows from operating activities | |||
Profit before tax | |||
| Adjustments for: | |||
Changes in fair value of biological assets | 18 | ( | |
Gain on disposal of property, plant and equipment | ( | ( | |
Depreciation | 11 | ||
Retirement benefit provisions | 23 | ||
Finance income | 4 | ( | ( |
Finance expense | 4 | ||
Unrealised (gain)/loss in foreign exchange | ( | ||
Loss/(gain) arising from fair value | 14 | ( | |
Property, plant and equipment written off | 11 | ||
(Reversal of impairment)/impairment loss | 11 | ( | |
Reversal for expected credit loss | 19 | ( | ( |
Operating cash flows before changes in working capital | |||
Increase in inventories | ( | ( | |
(Increase)/Decrease in non-current, trade and other receivables | ( | ||
Increase/(Decrease) in trade and other payables | ( | ||
Cash inflows from operations | |||
Retirement benefits paid | ( | ( | |
Overseas tax paid | ( | ( | |
Net cash generated from operating activities | |||
| Investing activities | |||
Acquisition of associates | 13 | ( | |
| Property, plant and equipment | |||
- purchases | ( | ( | |
- sale proceeds | |||
| Intangible assets | |||
- purchases | 12 | ( | |
Interest received | 4 | ||
Additions to receivables from cooperatives under Plasma scheme | ( | ( | |
Repayment from cooperatives under Plasma scheme | |||
Investment in investment portfolio or bond portfolio | 14 | ( | ( |
Disposal of investment portfolio | 14 | ||
Placement of fixed deposits with original maturity of more than three months | ( | ( | |
Withdrawal of fixed deposits with original maturity of more than three months | |||
Net cash used in investing activities | ( | ( |
156
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
| 2025 | 2024 | ||
| Note | $000 | $000 | |
| Financing activities | |||
Dividends paid to the holders of the parent | ( | ( | |
Repayment of lease liabilities - principal | ( | ( | |
Repayment of lease liabilities - interest | ( | ( | |
Acquisition of non-controlling interests | ( | ||
Share buy back | 24 | ( | ( |
Net cash used in financing activities | ( | ( | |
Net increase in cash and cash equivalents | |||
| Cash and cash equivalents | |||
At beginning of year | |||
Exchange losses | ( | ( | |
At end of year | |||
| Comprising: | |||
Cash at end of year | 20 |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2025 (CONTINUED)
The accompanying notes are an integral part of this consolidated statement of cash flows.
157
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
158
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1 Basis of preparation (continued)
159
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
160
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
(d) Revenue recognition (continued)
161
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
162
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
163
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
(i) Leases (continued)
Right-of-Use Assets (continued)
164
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
(l) Financial assets (continued)
165
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
166
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
167
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
2 Material accounting policies (continued)
(r) Fair Value Measurement (continued)
168
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3 Revenue (continued)
| CPO | |||||||
| and | |||||||
| palm | Shell | Biogas | |||||
| Year to 31 December | kernel | FFB | Rubber | nut | products | Others | Total |
| 2025 | $000 | $000 | $000 | $000 | $000 | $000 | $000 |
| Contract | |||||||
| counterparties | |||||||
Government | - | - | - | - | 495 | - | 495 |
| Non-government | |||||||
- Wholesalers | 437,976 | 21,446 | - | 5,288 | - | 6 | 464,716 |
437,976 | 21,446 | - | 5,288 | 495 | 6 | 465,211 | |
Timing of transfer of goods | |||||||
| Delivery to customer | |||||||
premises | - | 21,446 | - | - | - | - | 21,446 |
Delivery to port of departure | 83,113 | - | - | - | - | - | 83,113 |
Customers collect from our mills/estates | 354,863 | - | - | 5,288 | - | - | 360,151 |
| Upon generation/ | |||||||
others | - | - | - | - | 495 | 6 | 501 |
437,976 | 21,446 | - | 5,288 | 495 | 6 | 465,211 | |
| Year to 31 December | |||||||
| 2024 | |||||||
Contract counterparties | - | - | - | - | 637 | - | 637 |
| Government | |||||||
| Non-government | |||||||
- Wholesalers | 358,745 | 8,923 | 112 | 3,840 | - | 6 | 371,626 |
358,745 | 8,923 | 112 | 3,840 | 637 | 6 | 372,263 |
169
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3 Revenue (continued)
Disaggregation of Revenue (continued)
| CPO | |||||||
| and | |||||||
| palm | Shell | Biogas | |||||
| kernel | FFB | Rubber | nut | products | Others | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| Year to 31 December | |||||||
| 2024 (continued) | |||||||
Timing of transfer of goods | |||||||
| Delivery to customer | |||||||
premises | - | 8,923 | 112 | - | - | - | 9,035 |
Delivery to port of departure | 74,767 | - | - | - | - | - | 74,767 |
Customers collect from our mills/estates | 283,978 | - | - | 3,840 | - | - | 287,818 |
| Upon generation/ | |||||||
others | - | - | - | - | 637 | 6 | 643 |
358,745 | 8,923 | 112 | 3,840 | 637 | 6 | 372,263 |
| 2025 | 2024 | |
| $000 | $000 | |
| Finance income | ||
| Interest receivable on: | ||
Credit bank balances and time deposits | 7,997 | 5,365 |
| Finance expense | ||
| Interest payable on: | ||
Interest expense in lease liabilities (note 22) | (44) | (65) |
Net finance income recognised in income statement | 7,953 | 5,300 |
170
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| $000 | $000 | |
| Profit before tax is stated after charging: | ||
Purchase of FFB | 224,355 | 174,022 |
Depreciation (note 11) | 18,958 | 18,986 |
(Reversal of impairment)/impairment losses (note 11) | (710) | 133 |
Reversal for expected credit loss (note 19) | (85) | (9) |
Exchange loss/(gains) | 176 | (1,056) |
Staff costs (note 7) | 66,290 | 59,266 |
Remuneration received by the Group’s auditor or associates of the Group’s auditor: | ||
- Audit of parent company | 5 | 5 |
- Audit of consolidated financial statements | 444 | 289 |
- Audit of consolidated financial statements (previous auditor in prior year) | 409 | - |
- Audit of UK subsidiaries | 13 | 13 |
Subtotal - audit services (Group auditor) | 871 | 307 |
| Non-audit service | ||
- Audit related assurance service (interim review) | - | 13 |
Subtotal - non-audit service | - | 13 |
| Audit of overseas subsidiaries | ||
- Malaysia | 36 | 27 |
- Indonesia | 182 | 150 |
- Indonesia (prior year) | 28 | - |
Subtotal - overseas audit services | 246 | 177 |
Total auditor’s remuneration | 1,117 | 497 |
| Administrative expense | ||
Legal and professional fees | 1,406 | 1,371 |
Auditor’s remuneration | 1,117 | 497 |
Property, plant and equipment written off | 904 | 451 |
Indonesian operations | 8,442 | 5,297 |
Malaysia operations | 287 | 276 |
Head office | 2,030 | 1,468 |
14,186 | 9,360 |
171
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
172
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6 Segment information (continued)
| North | Total | ||||||||||
| Sumatera | Bengkulu | Riau | Bangka | Kalimantan | Indonesia | Malaysia | UK | Total | |||
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |||
| 2025 | |||||||||||
| Total sales revenue (all external) | |||||||||||
- | CPO and palm kernel | 172,049 | 137,421 | 60,179 | - | 68,327 | 437,976 | - | - | 437,976 | |
- | FFB | 102 | - | - | 6,602 | 11,286 | 17,990 | 3,456 | - | 21,446 | |
- | Shell nut | 2,421 | 1,416 | 1,412 | - | 39 | 5,288 | - | - | 5,288 | |
- | Biogas products | 3 | 133 | - | - | 359 | 495 | - | - | 495 | |
- | Others | - | - | - | - | - | - | 6 | - | 6 | |
Total revenue | 174,575 | 138,970 | 61,591 | 6,602 | 80,011 | 461,749 | 3,462 | - | 465,211 | ||
| Profit/(loss) before tax for the | year per consolidated income | ||||||||||
statement | 54,534 | 25,427 | 13,372 | 1,671 | 27,339 | 122,343 | (1,086) | (1,927) | 119,330 | ||
Interest income | 5,070 | 1,247 | 926 | 2 | 249 | 7,494 | 26 | 477 | 7,997 | ||
Interest expense | (8) | - | - | - | - | (8) | (19) | (17) | (44) | ||
Depreciation | (7,114) | (3,634) | (841) | (561) | (6,349) | (18,499) | (336) | (123) | (18,958) | ||
| Reversal of impairment / | (impairment losses) | - | - | - | - | 711 | 711 | (1) | - | 710 | |
| Reversal/(Provision) for expected | credit loss | 92 | (3) | - | - | (4) | 85 | - | - | 85 | |
Inter-segment transactions | 5,835 | (2,678) | (1,000) | (448) | (3,024) | (1,315) | 1,040 | 275 | - | ||
| Inter-segmental revenue | (eliminated within segments) | 25,292 | 2,439 | - | - | 7,355 | 35,086 | - | - | 35,086 | |
Tax expense | (15,181) | (4,954) | (3,005) | (249) | (5,276) | (28,665) | (179) | (4,171) | (33,015) | ||
Total assets | 270,277 | 104,340 | 63,272 | 19,832 | 152,042 | 609,763 | 21,536 | 4,610 | 635,909 | ||
Non-current assets | 76,011 | 56,699 | 8,515 | 16,669 | 105,799 | 263,693 | 8,469 | 385 | 272,547 | ||
Non-current assets - additions | 6,070 | 10,272 | 1,589 | 1,022 | 10,478 | 29,431 | 404 | 55 | 29,890 | ||
Total liabilities | (18,736) | (13,459) | (5,760) | (590) | (10,812) | (49,357) | (802) | (823) | (50,982) | ||
173
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2
3
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5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6 Segment information (continued)
| North | Total | ||||||||||
| Sumatera | Bengkulu | Riau | Bangka | Kalimantan | Indonesia | Malaysia | UK | Total | |||
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |||
| 2024 | |||||||||||
| Total sales revenue (all external) | |||||||||||
- | CPO and palm kernel | 134,013 | 96,639 | 59,405 | - | 68,688 | 358,745 | - | - | 358,745 | |
- | FFB | - | - | - | 3,212 | 2,821 | 6,033 | 2,890 | - | 8,923 | |
- | Rubber | 112 | - | - | - | - | 112 | - | - | 112 | |
- | Shell nut | 1,281 | 1,148 | 1,368 | - | 43 | 3,840 | - | - | 3,840 | |
- | Biogas products | 87 | 216 | - | - | 334 | 637 | - | - | 637 | |
- | Others | - | - | - | - | - | - | 6 | - | 6 | |
Total revenue | 135,493 | 98,003 | 60,773 | 3,212 | 71,886 | 369,367 | 2,896 | - | 372,263 | ||
| Profit/(loss) before tax for the | year per consolidated income | ||||||||||
statement | 43,663 | 11,281 | 13,351 | (731) | 22,941 | 90,505 | (857) | (1,558) | 88,090 | ||
Interest income | 3,569 | 877 | 792 | 3 | 70 | 5,311 | 49 | 5 | 5,365 | ||
Interest expense | (22) | - | - | - | - | (22) | (23) | (20) | (65) | ||
Depreciation | (7,281) | (3,703) | (831) | (598) | (6,200) | (18,613) | (277) | (96) | (18,986) | ||
Impairment losses | - | - | - | - | - | - | (133) | - | (133) | ||
| (Provision)/Reversal for expected | credit loss | (4) | 1 | - | (1) | 13 | 9 | - | - | 9 | |
Inter-segment transactions | 6,354 | (2,804) | (802) | (455) | (3,059) | (766) | 715 | 51 | - | ||
| Inter-segmental revenue | (eliminated within segments) | 23,812 | 2,489 | - | - | 12,899 | 39,200 | - | - | 39,200 | |
Tax (expense)/credit | (11,607) | (1,723) | (3,066) | 268 | (4,180) | (20,308) | (167) | (3) | (20,478) | ||
Total assets | 251,963 | 113,498 | 40,488 | 20,079 | 145,586 | 571,614 | 25,259 | 3,759 | 600,632 | ||
Non-current assets | 80,473 | 52,375 | 8,171 | 16,838 | 105,239 | 263,096 | 7,621 | 453 | 271,170 | ||
Non-current assets - additions | 7,021 | 9,823 | 1,199 | 1,576 | 9,009 | 28,628 | 287 | 208 | 29,123 | ||
Total liabilities | (16,097) | (11,222) | (5,164) | (534) | (7,624) | (40,641) | (865) | (668) | (42,174) | ||
174
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6 Segment information (continued)
| North | Total | ||||||||
| Sumatera | Bengkulu | Riau | Bangka | Kalimantan | Indonesia | Malaysia | UK | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| 2025 | |||||||||
Customer 1 | 12,715 | 35,498 | 13,774 | - | 29,397 | 91,384 | - | - | 91,384 |
Customer 2 | 21,371 | - | 15,682 | - | - | 37,053 | - | - | 37,053 |
Customer 3 | - | 34,859 | - | - | - | 34,859 | - | - | 34,859 |
Customer 4 | 29,771 | - | - | - | - | 29,771 | - | - | 29,771 |
63,857 | 70,357 | 29,456 | - | 29,397 | 193,067 | - | - | 193,067 |
| North | Total | ||||||||
| Sumatera | Bengkulu | Riau | Bangka | Kalimantan | Indonesia | Malaysia | UK | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| 2024 | |||||||||
Customer 1 | 14,772 | 19,944 | 20,968 | - | 28,948 | 84,632 | - | - | 84,632 |
Customer 2 | - | 31,809 | - | - | - | 31,809 | - | - | 31,809 |
Customer 3 | 26,392 | 6 | - | - | - | 26,398 | - | - | 26,398 |
Customer 4 | 14,943 | - | 7,973 | - | - | 22,916 | - | - | 22,916 |
56,107 | 51,759 | 28,941 | - | 28,948 | 165,755 | - | - | 165,755 |
175
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2
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SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6 Segment information (continued)
| North | Total | ||||||||
Sumatera | Bengkulu | Riau | Bangka | Kalimantan | Indonesia | Malaysia | UK | Total | |
% | % | % | % | % | % | % | % | % | |
| 2025 | |||||||||
Customer 1 | 2.7 | 7.6 | 3.0 | - | 6.3 | 19.6 | - | - | 19.6 |
Customer 2 | 4.6 | - | 3.4 | - | - | 8.0 | - | - | 8.0 |
Customer 3 | - | 7.5 | - | - | - | 7.5 | - | - | 7.5 |
Customer 4 | 6.4 | - | - | - | - | 6.4 | - | - | 6.4 |
13.7 | 15.1 | 6.4 | - | 6.3 | 41.5 | - | - | 41.5 | |
| 2024 | |||||||||
Customer 1 | 4.0 | 5.4 | 5.6 | - | 7.8 | 22.8 | - | - | 22.8 |
Customer 2 | - | 8.5 | - | - | - | 8.5 | - | - | 8.5 |
Customer 3 | 7.1 | - | - | - | - | 7.1 | - | - | 7.1 |
Customer 4 | 4.0 | - | 2.1 | - | - | 6.1 | - | - | 6.1 |
15.1 | 13.9 | 7.7 | - | 7.8 | 44.5 | - | - | 44.5 |
176
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| Number | Number | |
| Average numbers employed (primarily overseas) during the year: | ||
- full-time | 7,407 | 7,486 |
- part-time field workers | 7,807 | 7,954 |
15,440 |
| 2025 | 2024 | |
| $000 | $000 | |
| Staff costs comprise: | ||
Wages and salaries | 59,604 | 53,622 |
Social security costs | 4,025 | 3,798 |
| Retirement benefit costs | ||
- United Kingdom | - | - |
- Indonesia | 2,528 | 1,776 |
- Malaysia | 133 | 70 |
66,290 | 59,266 |
| 2025 | 2024 | |
| $000 | $000 | |
Directors’ emoluments | 710 | 444 |
| 2025 | 2024 | |
| $000 | $000 | |
| Remuneration expense for key management personnel comprise: | ||
Short-term employee benefits | 2,571 | 2,478 |
Post-employment benefits | - | - |
2,571 | 2,478 |
177
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| $000 | $000 | |
Foreign corporation tax - current year | 29,932 | 18,163 |
Foreign corporation tax - prior year | 1,821 | 828 |
Deferred tax adjustment - reversal of temporary differences (note 16) | 1,044 | 1,628 |
Deferred tax - prior year (note 16) | 218 | (141) |
Total tax charge for year | 33,015 | 20,478 |
| 2025 | 2024 | |
| $000 | $000 | |
Profit before tax | 119,330 | 88,090 |
| Profit before tax multiplied by standard rate of Indonesia | ||
corporation tax of 22% (2024: 22%) | 26,253 | 19,380 |
| Effects of: | ||
Irrecoverable withholding tax | 4,765 | 782 |
Group accounting adjustments not subject to tax | 1,315 | (136) |
Expenses not allowable for tax | 100 | 860 |
Deferred tax assets not recognised | 53 | 89 |
Income not subject to tax | (1,510) | (1,184) |
Under provision of prior year income tax | 1,821 | 828 |
Under/(over) provision of prior year deferred tax | 218 | (141) |
Total tax charge for year | 33,015 | 20,478 |
178
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8 Tax expense (continued)
| 2025 | 2024 | |
| $000 | $000 | |
| Tax Receivables | ||
Income tax | 4,992 | 18,316 |
Other taxes | 41,863 | 43,749 |
46,855 | 62,065 | |
| Tax Liabilities | ||
Income tax | (10,173) | (5,466) |
Other taxes | (814) | (1,201) |
(10,987) | (6,667) |
9 Earnings per ordinary share (“EPS”)
| 2025 | 2024 | |
| $000 | $000 | |
Earnings used in basic and diluted EPS | 90,882 | 67,514 |
| 2025 | 2024 | |
| Number | Number | |
| ‘000 | ‘000 | |
| Weighted average number of shares in issue in the year | ||
- used in basic EPS | 39,272 | 39,510 |
- dilutive effect of outstanding share options | - | - |
- used in diluted EPS | 39,272 | 39,510 |
Basic and diluted EPS | 231.42cts | 170.88cts |
179
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| $000 | $000 | |
| Paid during the year | ||
| Final dividend of 51.0cts per ordinary share for the year ended | ||
31 December 2024 (2023: 15.0cts) | 20,091 | 5,923 |
| Interim dividend of 37.3cts per ordinary share for the year ended | ||
31 December 2025 (2024: 0cts) | 14,558 | - |
| Proposed final dividend of | ||
ended 31 December 2025 (2024: |
180
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11 Property, plant and equipment
| Estate | Office | ||||||||
| plant, | plant, | Right- | |||||||
| Leasehold | equipment | equipment | of-use | Construction | |||||
| Plantations | Mill | land | Buildings | & vehicle | & vehicle | assets # | in progress | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| Cost | |||||||||
At 1 January 2024 | 198,766 | 79,254 | 53,123 | 63,971 | 17,262 | 2,121 | 1,572 | 23,846 | 439,915 |
Exchange translations | (8,628) | (4,111) | (1,770) | (2,977) | (692) | (57) | (4) | (719) | (18,958) |
Reclassification | - | 21,757 | - | 5,793 | 47 | - | - | (27,597) | - |
Additions | 348 | 3,964 | 2,641 | 477 | 1,644 | 464 | 82 | 8,039 | 17,659 |
| Development costs | |||||||||
capitalised | 11,464 | - | - | - | - | - | - | - | 11,464 |
Disposals | (1,344) | (1,352) | - | - | (121) | (26) | - | - | (2,843) |
Written off | (2,431) | (1,150) | (3) | (528) | (984) | (81) | - | - | (5,177) |
At 31 December 2024 | 198,175 | 98,362 | 53,991 | 66,736 | 17,156 | 2,421 | 1,650 | 3,569 | 442,060 |
Exchange translations | (6,097) | (3,675) | (594) | (2,377) | (440) | 23 | 63 | (222) | (13,319) |
Reclassification | - | 1,893 | - | 4,652 | 22 | - | - | (6,567) | - |
Additions | 175 | 2,983 | 1,109 | 130 | 1,966 | 485 | 49 | 11,427 | 18,324 |
| Development costs | |||||||||
capitalised | 11,566 | - | - | - | - | - | - | - | 11,566 |
Disposals | - | (1,507) | - | - | (103) | (80) | - | - | (1,690) |
Written off | (2,539) | (1,325) | - | (192) | (650) | (707) | (94) | - | (5,507) |
At 31 December 2025 | 201,280 | 96,731 | 54,506 | 68,949 | 17,951 | 2,142 | 1,668 | 8,207 | 451,434 |
181
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11 Property, plant and equipment (continued)
| Estate | Office | ||||||||
| plant, | plant, | Right- | |||||||
| Leasehold | equipment | equipment | of-use | Construction | |||||
| Plantations | Mill | land | Buildings | & vehicle | & vehicle | assets # | in progress | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| Accumulated | |||||||||
depreciation and impairment | |||||||||
At 1 January 2024 | 82,534 | 34,880 | 3,810 | 29,511 | 13,218 | 970 | 610 | - | 165,533 |
Exchange translations | (3,196) | (1,682) | 52 | (1,339) | (503) | (17) | - | - | (6,685) |
Reclassification | - | (18) | - | 4 | 14 | - | - | - | - |
Charge for the year | 7,761 | 6,092 | 113 | 3,146 | 1,308 | 267 | 299 | - | 18,986 |
Impairment losses | - | - | - | 67 | 1 | - | 65 | - | 133 |
Disposal | (882) | (1,327) | - | - | (120) | (22) | - | - | (2,351) |
Written off | (2,289) | (1,037) | - | (381) | (941) | (78) | - | - | (4,726) |
At 31 December 2024 | 83,928 | 36,908 | 3,975 | 31,008 | 12,977 | 1,120 | 974 | - | 170,890 |
Exchange translations | (1,800) | (1,432) | 325 | (1,047) | (290) | 14 | 42 | - | (4,188) |
Reclassification | - | - | - | - | - | - | - | - | - |
Charge for the year | 7,567 | 6,091 | 121 | 3,299 | 1,310 | 283 | 287 | - | 18,958 |
| Impairment loss/ | |||||||||
(reversal) | - | - | (711) | - | 1 | - | - | - | (710) |
Disposal | - | (1,320) | - | - | (84) | (56) | - | - | (1,460) |
Written off | (2,351) | (1,248) | - | (142) | (627) | (108) | (127) | - | (4,603) |
At 31 December 2025 | 87,344 | 38,999 | 3,710 | 33,118 | 13,287 | 1,253 | 1,176 | - | 178,887 |
| Carrying amount | |||||||||
At 31 December 2023 | 116,232 | 44,374 | 49,313 | 34,460 | 4,044 | 1,151 | 962 | 23,846 | 274,382 |
At 31 December 2024 | 114,247 | 61,454 | 50,016 | 35,728 | 4,179 | 1,301 | 676 | 3,569 | 271,170 |
At 31 December 2025 | 113,936 | 57,732 | 50,796 | 35,831 | 4,664 | 889 | 492 | 8,207 | 272,547 |
#
Right-of-use assets have been disclosed in note 22.
182
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11 Property, plant and equipment (continued)
183
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
11 Property, plant and equipment (continued)
184
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | |
| $000 | |
Beginning of year | - |
Additions | 262 |
End of year | 262 |
| Amortisation: | |
Beginning/end of year | - |
| Carrying amount: | |
At 31 December 2025 | 262 |
At 31 December 2024 | - |
| 2025 | |
| $000 | |
Acquisition during the year | 1 |
Share of profit for the year | - |
| 1 |
| Country of | ||||
| Issued | incorporation | |||
| fully-paid | and principal | |||
| Unlisted | up capital | % held | place of business | Principal activities |
Re Kemaman Sdn Bhd | RM 10,000 | 20 | Malaysia | Operation of generation |
| facilities that produce | ||||
| electric energy | ||||
Re Kemaman II Sdn Bhd | RM 10,000 | 20 | Malaysia | Operation of generation |
| facilities that produce | ||||
| electric energy |
185
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| $000 | $000 | |
Non- current | 45 | 5,111 |
Current | 22,000 | 23,976 |
22,045 | 29,087 |
| 2025 | 2024 | |
| $000 | $000 | |
1 January | 29,087 | 10,035 |
Additions | 29,068 | 45,990 |
Disposal | (36,003) | (28,069) |
Change in fair value recognised in profit and loss | (107) | 1,131 |
31 December | 22,045 | 29,087 |
| 2025 | 2024 | |
| $000 | $000 | |
| Quoted: | ||
Equity securities – United Kingdom | 45 | 27 |
Bonds - Indonesia | 18,000 | 18,014 |
Bond - Singapore | 4,000 | - |
Treasury Bills – United States | - | 5,962 |
| Unquoted: | ||
Investment portfolio - Luxembourg | - | 5,084 |
22,045 | 29,087 |
| 2025 | 2024 | |
| $000 | $000 | |
| Currency | ||
Sterling | 45 | 27 |
US Dollar | 22,000 | 29,060 |
22,045 | 29,087 |
186
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
14 Investment (continued)
| 2025 | 2024 | |
| $000 | $000 | |
| Due from cooperatives under Plasma scheme | ||
Current (note 19) | 2,220 | 2,278 |
Non-current | 17,800 | 19,363 |
20,020 | 21,641 |
187
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| $000 | $000 | |
At 1 January | (325) | 1,313 |
Recognised in income statement | (1,262) | (1,487) |
Recognised in other comprehensive income | (522) | (95) |
Exchange differences | 21 | (56) |
At 31 December | (2,088) | (325) |
| (Charged)/ | |||||
| credited | (Charged)/ | ||||
| to income | credited | ||||
| Asset | Liability | Net | statement | to equity | |
| $000 | $000 | $000 | $000 | $000 | |
| 2025 | |||||
Impairment of land | - | - | - | (212) | - |
Retirement benefits | 1,452 | - | 1,452 | (4) | (522) |
Biological assets | - | (1,407) | (1,407) | 308 | - |
Unutilised tax losses | 528 | - | 528 | (601) | - |
Unremitted earnings | - | (2,107) | (2,107) | (746) | - |
| Other temporary | |||||
differences | 1,116 | (1,670) | (554) | (7) | - |
Tax assets/(liabilities) | 3,096 | (5,184) | (2,088) | (1,262) | (522) |
Set off of tax | (2,122) | 2,122 | - | - | - |
Net tax assets/(liabilities) | 974 | (3,062) | (2,088) | (1,262) | (522) |
| 2024 | |||||
Impairment of land | 159 | - | 159 | - | - |
Retirement benefits | 2,036 | - | 2,036 | 299 | (95) |
Biological assets | - | (1,757) | (1,757) | (630) | - |
Unutilised tax losses | 1,152 | - | 1,152 | 417 | - |
Unremitted earnings | - | (1,360) | (1,360) | - | - |
| Other temporary | |||||
differences | 638 | (1,193) | (555) | (1,573) | - |
Tax assets/(liabilities) | 3,985 | (4,310) | (325) | (1,487) | (95) |
Set off of tax | (2,085) | 2,085 | - | - | - |
Net tax assets/(liabilities) | 1,900 | (2,225) | (325) | (1,487) | (95) |
188
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
16 Deferred tax (continued)
| 2025 | 2024 | |
| $000 | $000 | |
Year | $000 |
2027 | 321 |
2029 | 207 |
| 528 |
17 Inventories
| 2025 | 2024 | |
| $000 | $000 | |
Estate and mill consumables | 9,048 | 6,902 |
Processed produce for sale | 18,604 | 11,865 |
27,652 | 18,767 |
189
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
17 Inventories (continued)
| 2025 | 2024 | |
| $000 | $000 | |
As at 1 Jan | 18,767 | 16,684 |
Purchase of FFB | 224,355 | 174,022 |
Labour and production overheads | 125,376 | 115,468 |
Total purchase production cost | 349,731 | 289,490 |
Less: cost of sales recognised in income statement | (339,982) | (286,583) |
Exchange differences | (864) | (824) |
27,652 | 18,767 |
| 2025 | 2024 | |
| $000 | $000 | |
At 1 January | 8,057 | 5,419 |
Changes in fair value less cost to sell | 155,386 | 165,924 |
Decreases due to harvest | (156,794) | (162,982) |
Fair value (loss)/gain recognised in the income statement | (1,408) | 2,942 |
Exchange differences | (266) | (304) |
At 31 December | 6,383 | 8,057 |
190
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
18 Biological assets (continued)
| Inter-relationship between | |||||
| Valuation | key unobservable inputs | ||||
| Item | approach | Inputs used | and fair value | ||
| Biological assets | Based on FFB | FFB weight: | The higher the weight, the | ||
| - Unharvested | weight multiplied | approximately 40,190 mt | higher the fair value | ||
| produce | by the sum of | (2024: | 41,957 mt) | ||
| FFB selling price | |||||
| less harvesting | FFB selling price: | The higher the selling | |||
| cost | USD 150 – USD 233/mt | price, the higher the fair | |||
| (2024: $157 – $244/mt) | value | ||||
| Harvesting costs: | The higher the harvesting | ||||
| $10 – $74/mt | cost, the lower the fair | ||||
| (2024: $9 – $61/mt) | value | ||||
| 2025 | 2024 | |
| $000 | $000 | |
Trade receivables | 764 | 458 |
Other receivables | 3,637 | 852 |
Prepayments | 2,424 | 3,474 |
Due from cooperatives under Plasma scheme (note 15) | 2,220 | 2,278 |
9,045 | 7,062 |
191
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
19 Trade and other receivables
192
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
19 Trade and other receivables (continued)
| 2025 | 2024 | |
| $000 | $000 | |
At 1 January | 476 | 508 |
Reversal of loss provision during the year | (85) | (9) |
Exchange difference | (17) | (23) |
At 31 December | 374 | 476 |
| Gross | Net | ||
| carrying | Loss | carrying | |
| amount | provision | amount | |
| $000 | $000 | $000 | |
| 2025 | |||
Trade receivable | 771 | (7) | 764 |
Other receivables | 3,645 | (8) | 3,637 |
| Receivables: non-current (note 15) | |||
- Due from cooperatives under Plasma scheme | 20,377 | (357) | 20,020 |
24,793 | (372) | 24,421 | |
Financial guarantee contracts (note 28) | - | (2) | (2) |
24,793 | (374) | 24,419 |
| Gross | Net | ||
| carrying | Loss | carrying | |
| amount | provision | amount | |
| $000 | $000 | $000 | |
| 2024 | |||
Trade receivables | 462 | (4) | 458 |
Other receivables | 857 | (5) | 852 |
| Receivables: non-current (note 15) | |||
- Due from cooperatives under Plasma scheme | 22,105 | (464) | 21,641 |
23,424 | (473) | 22,951 | |
Financial guarantee contracts (note 28) | - | (3) | (3) |
23,424 | (476) | 22,948 |
193
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| $000 | $000 | |
Cash at bank available on demand | 166,637 | 103,866 |
Short-term deposits | 65,196 | 77,988 |
Cash in hand | 12 | 54 |
As reported in statement of financial position | 231,845 | 181,908 |
Short-term investments | 500 | 1,253 |
232,345 | 183,161 |
| 2025 | 2024 | |
| $000 | $000 | |
Property, plant and equipment purchased but not yet paid at year end | - | 81 |
194
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
20 Notes supporting statement of cash flows (continued)
| Non- | |||
| current | Current | ||
| lease | lease | ||
| liabilities | liabilities | Total | |
| $000 | $000 | $000 | |
At 1 January 2025 | (453) | (307) | (760) |
Cash Flows | - | 365 | 365 |
| Non-cash flows | |||
- Effect of foreign exchange | (24) | (28) | (52) |
- New lease | (25) | (24) | (49) |
| - Lease liabilities classified as non-current at 31 | |||
December 2024 becoming current during 2025 | 164 | (164) | - |
- Interest accruing during the year | - | (44) | (44) |
(338) | (202) | (540) |
| Non- | |||
| current | Current | ||
| lease | lease | ||
| liabilities | liabilities | Total | |
| $000 | $000 | $000 | |
At 1 January 2024 | (709) | (300) | (1,009) |
Cash Flows | - | 405 | 405 |
| Non-cash flows | |||
- Effect of foreign exchange | - | (9) | (9) |
- New lease | (25) | (57) | (82) |
- Lease liabilities classified as non-current at 31 December 2023 becoming current during 2024 | 281 | (281) | - |
- Interest accruing during the year | - | (65) | (65) |
(453) | (307) | (760) |
195
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| 2025 | 2024 | |
| $000 | $000 | |
Trade payables | 8,938 | 6,900 |
Other payables | 833 | 442 |
Contract liabilities | 5,032 | 4,637 |
Accruals | 13,553 | 9,424 |
28,356 | 21,403 |
| 2025 | 2024 | |
| $000 | $000 | |
| Lease liabilities analysed as: | ||
Non-current | 338 | 453 |
Current | 202 | 307 |
540 | 760 |
| 2025 | 2024 | |
| $000 | $000 | |
Depreciation expense on right-of-use assets (note 11) | (287) | (299) |
Interest expense on lease liabilities (note 4) | (44) | (65) |
Expense relating to short-term leases | (12) | (12) |
Expense relating to leases of low value assets | - | (4) |
(343) | (380) |
196
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
22 Leases (continued)
| Land | Building | Total | |
| $000 | $000 | $000 | |
At 1 January 2025 | - | 676 | 676 |
Additions | - | 49 | 49 |
Amortisation | - | (287) | (287) |
Written off | - | 33 | 33 |
Effect of foreign exchange | - | 21 | 21 |
At 31 December 2025 | - | 492 | 492 |
| Land | Building | Total | |
| $000 | $000 | $000 | |
At 1 January 2024 | - | 962 | 962 |
Additions | 82 | - | 82 |
Amortisation | (16) | (283) | (299) |
Impairment losses | (65) | - | (65) |
Effect of foreign exchange | (1) | (3) | (4) |
At 31 December 2024 | - | 676 | 676 |
| Land | Building | Total | |
| $000 | $000 | $000 | |
At 1 January 2025 | (42) | (718) | (760) |
Additions | - | (49) | (49) |
Interest expense | (2) | (42) | (44) |
Lease payments | 21 | 344 | 365 |
Effect of foreign exchange | (5) | (47) | (52) |
At 31 December 2025 | (28) | (512) | (540) |
197
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
22 Leases (continued)
| Land | Building | Total | |
| $000 | $000 | $000 | |
At 1 January 2024 | (30) | (979) | (1,009) |
Additions | (82) | - | (82) |
Interest expense | (2) | (63) | (65) |
Lease payments | 75 | 330 | 405 |
Effect of foreign exchange | (3) | (6) | (9) |
At 31 December 2024 | (42) | (718) | (760) |
2025 | 2024 | |
Rate of increase in wages | 6.5% | 8.0% |
Discount rate | 6.5% | 7.3% |
Mortality rate* | 100% TMI4 | 100% TMI4 |
Disability rate | 10% TMI4 | 10% TMI4 |
198
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
23 Retirement benefits (continued)
| 2025 | 2024 | |
| $000 | $000 | |
| Service cost | ||
Current service cost | 1,655 | 1,703 |
Past service cost | 69 | 473 |
Net interest expense | 686 | 664 |
Remeasurements on net defined benefit liability | (163) | (76) |
Total employee benefits expense | 2,247 | 2,764 |
| 2025 | 2024 | |
| $000 | $000 | |
| Included in other comprehensive income: | ||
Remeasurement of retirement benefit plan | (2,374) | (473) |
Deferred tax on retirement benefits | 522 | 95 |
Remeasurement of retirement benefit plan, net of tax recognised in other comprehensive income | (1,852) | (378) |
199
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
23 Retirement benefits (continued)
Defined benefit obligation | Fair value of scheme assets | Net defined scheme liability | ||||||||
| Funded | Unfunded | Funded | Unfunded | Funded | Unfunded | |||||
| scheme | scheme | Total | scheme | scheme | Total | scheme | scheme | Total | ||
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | ||
At 1 January 2024 | (7,379) | (5,699) | (13,078) | 1,780 | - | 1,780 | (5,599) | (5,699) | (11,298) | |
Service cost - current | (1,131) | (572) | (1,703) | - | - | - | (1,131) | (572) | (1,703) | |
Service cost - past | (291) | (182) | (473) | - | - | - | (291) | (182) | (473) | |
| Adjustment due to change | ||||||||||
in attribution method | (3,014) | 3,014 | - | - | - | - | (3,014) | 3,014 | - | |
Interest (cost)/income | (607) | (189) | (796) | 132 | - | 132 | (475) | (189) | (664) | |
| Remeasurements on net | ||||||||||
defined benefit liability | - | 76 | 76 | - | - | - | - | 76 | 76 | |
Included in income statement | (5,043) | 2,147 | (2,896) | 132 | - | 132 | (4,911) | 2,147 | (2,764) | |
| Remeasurement (loss)/gain | ||||||||||
| Actuarial (loss)/gain from: | ||||||||||
Adjustments (experience) | 3 | 120 | 123 | - | - | - | 3 | 120 | 123 | |
Financial assumptions | 403 | (20) | 383 | - | - | - | 403 | (20) | 383 | |
| Return on plan assets | ||||||||||
(exclude interest) | - | - | - | (33) | - | (33) | (33) | - | (33) | |
Included in other comprehensive income | 406 | 100 | 506 | (33) | - | (33) | 373 | 100 | 473 | |
Effect of movements in exchange rates | 419 | 217 | 636 | (107) | - | (107) | 312 | 217 | 529 | |
Employer contribution | - | - | - | 1,562 | - | 1,562 | 1,562 | - | 1,562 | |
Benefits paid | 644 | 121 | 765 | (343) | - | (343) | 301 | 121 | 422 | |
Other | 223 | (239) | (16) | 19 | - | 19 | 242 | (239) | 3 | |
Other movements | 1,286 | 99 | 1,385 | 1,131 | - | 1,131 | 2,417 | 99 | 2,516 | |
At 31 December 2024 | (10,730) | (3,353) | (14,083) | 3,010 | - | 3,010 | (7,720) | (3,353) | (11,073) | |
200
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
23 Retirement benefits (continued)
(i) Reconciliation of defined benefit obligation and fair value of scheme assets (continued)
Defined benefit obligation | Fair value of scheme assets | Net defined scheme liability | ||||||||
| Funded | Unfunded | Funded | Unfunded | Funded | Unfunded | |||||
| scheme | scheme | Total | scheme | scheme | Total | scheme | scheme | Total | ||
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | $000 | ||
At 1 January 2025 | (10,730) | (3,353) | (14,083) | 3,010 | - | 3,010 | (7,720) | (3,353) | (11,073) | |
Service cost - current | (1,385) | (270) | (1,655) | - | - | - | (1,385) | (270) | (1,655) | |
Service cost - past | - | (69) | (69) | - | - | - | - | (69) | (69) | |
| Adjustment due to change | ||||||||||
in attribution method | (1,464) | 1,464 | - | - | - | - | (1,464) | 1,464 | - | |
Interest (cost)/income | (791) | (135) | (926) | 240 | - | 240 | (551) | (135) | (686) | |
| Remeasurements on net | ||||||||||
defined benefit liability | - | 163 | 163 | - | - | - | - | 163 | 163 | |
Included in income statement | (3,640) | 1,153 | (2,487) | 240 | - | 240 | (3,400) | 1,153 | (2,247) | |
| Remeasurement (loss)/gain | ||||||||||
| Actuarial (loss)/gain from: | ||||||||||
Adjustments (experience) | 904 | 123 | 1,027 | - | - | - | 904 | 123 | 1,027 | |
Demographic assumptions | 317 | 69 | 386 | - | - | - | 317 | 69 | 386 | |
Financial assumptions | 734 | 191 | 925 | - | - | - | 734 | 191 | 925 | |
| Return on plan assets | ||||||||||
(exclude interest) | - | - | - | 36 | - | 36 | 36 | - | 36 | |
Included in other comprehensive income | 1,955 | 383 | 2,338 | 36 | - | 36 | 1,991 | 383 | 2,374 | |
Effect of movements in exchange rates | 410 | 94 | 504 | (146) | - | (146) | 264 | 94 | 358 | |
Employer contribution | - | - | - | 2,322 | - | 2,322 | 2,322 | - | 2,322 | |
Benefits paid | 915 | 79 | 994 | (700) | - | (700) | 215 | 79 | 294 | |
Other movements | 1,325 | 173 | 1,498 | 1,476 | - | 1,476 | 2,801 | 173 | 2,974 | |
At 31 December 2025 | (11,090) | (1,644) | (12,734) | 4,762 | - | 4,762 | (6,328) | (1,644) | (7,972) | |
201
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5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
23 Retirement benefits (continued)
| 2025 | 2024 | |
| $000 | $000 | |
| Bonds | ||
- Government bonds | 2,083 | 1,529 |
2,083 | 1,529 | |
Cash/deposits | 2,679 | 1,481 |
4,762 | 3,010 |
Reasonably | Defined benefit obligation | ||
| Possible | Increase | Decrease | |
| Change | $000 | $000 | |
Discount rate | (+/- 1%) | (932) | 1,032 |
Growth in wages | (+/- 1%) | 1,076 | (986) |
| 2025 | |
| $000 | |
Within 1 year | 117 |
Between 2 – 5 years | 562 |
Between 6 – 10 years | 1,085 |
Beyond 10 years | 6,208 |
Total | 7,972 |
202
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ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| Issued and | Issued and | Issued and | ||||
| Authorised | fully paid | Authorised | fully paid | Authorised | fully paid | |
| Number | Number | £000 | £000 | $000 | $000 | |
Ordinary shares of 25p each Beginning and end | ||||||
of year | 60,000,000 | 39,976,272 | 15,000 | 9,994 | 23,865 | 15,504 |
| Cost | Cost | |||||
| 2025 | 2024 | 2025 | 2024 | |||
| Number | Number | $000 | $000 | |||
| Treasury shares: | ||||||
Beginning of year | 487,678 | 415,826 | (2,487) | (1,847) | ||
Share buy back | 707,762 | 71,852 | (11,353) | (640) | ||
End of year | 1,195,440 | 487,678 | (13,840) | (2,487) |
Market value of treasury shares: | $000 |
Beginning of year (654.0p/share) | 3,996 |
End of year (1,370.0p/share) | 22,029 |
203
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SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
26 Related party transactions (continued)
| 2025 | 2024 | |
| $000 | $000 | |
| Capital commitments at 31 December | ||
Contracted but not provided - normal estate operations | - | 184 |
Contracted but not provided – mill development | 878 | - |
Authorised but not contracted - plantation and mill development | 34,251 | 45,790 |
204
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ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
28 Guarantees and other financial commitments (continued)
| Financial | ||||
| Fair value | Financial | liabilities | ||
| through | assets at | at | Total | |
| profit and | amortised | amortised | carrying | |
| loss | cost | cost | value | |
| $000 | $000 | $000 | $000 | |
| 2025 | ||||
Investments | 22,045 | - | - | 22,045 |
Non-current receivables | - | 17,800 | - | 17,800 |
Trade and other receivables | - | 6,621 | - | 6,621 |
Short-term investments | - | 500 | - | 500 |
Cash and cash equivalents | - | 231,845 | - | 231,845 |
Trade and other payables | - | - | (23,324) | (23,324) |
22,045 | 256,766 | (23,324) | 255,487 |
| Financial | ||||
| Fair value | Financial | liabilities | ||
| through | assets at | at | Total | |
| profit and | amortised | amortised | carrying | |
| loss | cost | cost | value | |
| $000 | $000 | $000 | $000 | |
| 2024 | ||||
Investments | 29,087 | - | - | 29,087 |
Non-current receivables | - | 19,363 | - | 19,363 |
Trade and other receivables | - | 3,588 | - | 3,588 |
Short-term investments | - | 1,253 | - | 1,253 |
Cash and cash equivalents | - | 181,908 | - | 181,908 |
Trade and other payables | - | - | (16,766) | (16,766) |
29,087 | 206,112 | (16,766) | 218,433 |
205
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SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
29 Disclosure of financial instruments and other risks
206
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ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
29 Disclosure of financial instruments and other risks (continued)
Currency risk (continued)
| Net foreign currency | |||
| assets/(liabilities) | |||
| US Dollar | Sterling | Total | |
| Functional currency of Group operation | $000 | $000 | $000 |
| 2025 | |||
Rupiah | 91,801 | - | 91,801 |
US Dollar | - | 873 | 873 |
Ringgit | 7,528 | - | 7,528 |
Total | 99,329 | 873 | 100,202 |
| 2024 | |||
Rupiah | 17,853 | - | 17,853 |
US Dollar | - | 2,621 | 2,621 |
Ringgit | 15,582 | - | 15,582 |
Total | 33,435 | 2,621 | 36,056 |
2025 | 2024 | |||||
| Carrying | -10% in | +10% in | Carrying | -10% in | +10% in | |
| Amount | Rp : $ and | Rp : $ and | Amount | Rp : $ and | Rp : $ and | |
| US$ | RM : $ | RM : $ | US$ | RM : $ | RM : $ | |
| $000 | $000 | $000 | $000 | $000 | $000 | |
| Financial Assets | ||||||
Non-current receivables | 17,800 | (1,618) | 1,978 | 19,363 | (1,760) | 2,151 |
Trade and other receivables | 6,621 | (547) | 669 | 3,588 | (320) | 391 |
Short-term investments | 500 | (45) | 56 | 1,253 | - | - |
| Cash and cash | ||||||
equivalents | 231,845 | (20,751) | 25,363 | 181,908 | (16,359) | 19,995 |
| Financial Liabilities | ||||||
Trade and other payables | (23,324) | 2,073 | (2,533) | (16,766) | 1,493 | (1,825) |
| Total (decrease)/ | ||||||
increase | (20,888) | 25,533 | (16,946) | 20,712 |
207
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SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
29 Disclosure of financial instruments and other risks (continued)
| Between | Between | ||||
| Less than | 1 and 2 | 2 and 5 | More than | ||
| 1 year | years | years | 5 years | Total | |
| $000 | $000 | $000 | $000 | $000 | |
| At 31 December 2025 | |||||
Trade and other payables | (9,771) | - | - | - | (9,771) |
Accruals | (13,553) | - | - | - | (13,553) |
Lease liabilities | (229) | (218) | (137) | - | (584) |
(23,553) | (218) | (137) | - | (23,908) | |
| At 31 December 2024 | |||||
Trade and other payables | (7,342) | - | - | - | (7,342) |
Accruals | (9,424) | - | - | - | (9,424) |
Lease liabilities | (347) | (199) | (291) | - | (837) |
(17,113) | (199) | (291) | - | (17,603) |
208
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
29 Disclosure of financial instruments and other risks (continued)
2025 | 2024 | |||||
| -1% in | +1% in | -1% in | +1% in | |||
| Carrying | interest | interest | Carrying | interest | interest | |
| amount | rate | rate | amount | rate | rate | |
| $000 | $000 | $000 | $000 | $000 | $000 | |
| Financial Assets | ||||||
| Short-term | ||||||
investments | 500 | (5) | 5 | 1,253 | (10) | 6 |
| Cash and cash | ||||||
equivalents | 231,845 | (2,259) | 2,336 | 181,908 | (1,681) | 1,799 |
| Total (decrease)/ | ||||||
increase | (2,264) | 2,341 | (1,691) | 1,805 |
209
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5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
29 Disclosure of financial instruments and other risks (continued)
Credit risk (continued)
210
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
29 Disclosure of financial instruments and other risks (continued)
Credit risk (continued)
211
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2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
| Non-controlling | |||||
| Country of | Proportion of | interests ownership/ | |||
| incorporation and | ownership interest | voting interest at | |||
| principal place of | at 31 December | 31 December | |||
| Name | business | 2025 | 2024 | 2025 | 2024 |
| Principal sub-holding | |||||
| company | |||||
| Anglo-Indonesian Oil Palms | |||||
Limited* | United Kingdom | 100% | 100% | - | - |
| Management company | |||||
| AEP Plantations | |||||
Management Sdn Bhd* | Malaysia | 100% | 100% | - | - |
| PT Anglo Eastern Plantations | |||||
Management Indonesia | Indonesia | 100% | 100% | - | - |
| Operating companies | |||||
AEP Plantations (M) Sdn Bhd* | Malaysia | 55% | 55% | 45% | 45% |
All For You Sdn Bhd | Malaysia | 100% | 100% | - | - |
PT Alno Agro Utama | Indonesia | 100% | 100% | - | - |
PT Anak Tasik | Indonesia | 100% | 100% | - | - |
PT Bangka Malindo Lestari | Indonesia | 100% | 100% | - | - |
PT Bina Pitri Jaya | Indonesia | 100% | 100% | - | - |
PT Cahaya Pelita Andhika | Indonesia | 100% | 100% | - | - |
PT Hijau Pryan Perdana | Indonesia | 100% | 100% | - | - |
PT Kahayan Agro Plantation | Indonesia | 100% | 100% | - | - |
PT Mitra Puding Mas | Indonesia | 100% | 100% | - | - |
PT Musam Utjing | Indonesia | 100% | 100% | - | - |
| PT AEP Nusantara | |||||
Plantations Tbk | Indonesia | 100% | 100% | - | - |
PT Simpang Ampat | Indonesia | 100% | 100% | - | - |
PT Tasik Raja | Indonesia | 100% | 100% | - | - |
| PT United Kingdom | |||||
Indonesia Plantations | Indonesia | 100% | 100% | - | - |
212
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
30 Subsidiary companies (continued)
| Non-controlling | ||||||
| Country of | Proportion of | interests ownership/ | ||||
| incorporation and | ownership interest | voting interest at | ||||
| principal place of | at 31 December | 31 December | ||||
| Name | business | 2025 | 2024 | 2025 | 2024 | |
| Dormant companies | ||||||
| The Ampat (Sumatra) Rubber | ||||||
Estate (1913) Limited | United Kingdom | 100% | 100% | - | - | |
| Gadek Indonesia (1975) | ||||||
Limited | United Kingdom | 100% | 100% | - | - | |
Mergerset (1980) Limited | United Kingdom | 100% | 100% | - | - | |
Musam Indonesia Limited | United Kingdom | 100% | 100% | - | - | |
Indopalm Services Limited* | United Kingdom | 100% | 100% | - | - | |
| AEP Strategic Investments | ||||||
Sdn Bhd # | Malaysia | - | 100% | - | - | |
| AEP Nusantara Holdings | ||||||
Limited # | Hong Kong | - | 100% | - | - | |
AEP Sumatra Holdings Limited # | Hong Kong | - | 100% | - | - | |
Subsidiaries by country | Registered address | |
UK registered subsidiaries | Quadrant House, 6th Floor | |
| 4 Thomas More Square | ||
| London E1W 1YW | ||
| United Kingdom | ||
Malaysia registered subsidiaries | 7 th Floor, Wisma Equity | |
150 | Jalan Ampang | |
50450 | Kuala Lumpur | |
| Malaysia | ||
Indonesia registered subsidiaries | Sinar Mas Land Plaza, 3 rd Floor #301, Jl. Pangeran | |
| Diponegoro No. 18 | ||
| Kelurahan Madras Hulu, Kecamatan Medan Polonia | ||
Medan 20152, | North Sumatera | |
| Indonesia | ||
213
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2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
30 Subsidiary companies (continued)
| 2024 | |
| $000 | |
Consideration paid to non-controlling shareholders | 400 |
Carrying value of the additional net liability | 257 |
Difference recognised in retained earnings (Consolidated Statement of Changes in Equity) | 657 |
214
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
33 Events after the reporting period (continued)
215
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2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
COMPANY NUMBER: 01884630
Note
2025
$000
2024
$000
Non-current assets
Property, plant & equipment 4 385 453
Investments in subsidiaries 5 12,641 10,808
Investments 45 27
13,071 11,288
Current assets
Receivables 6 69,087 84,689
Short-term investments - 1,253
Cash at bank and in hand 3,582 1,956
72,669 87,898
Current liabilities
Other payables 7 (587) (383)
Lease liabilities 8 (84) (71)
(671) (454)
Net current assets 71,998 87,444
Non-current liabilities
Lease liabilities 8 (152) (214)
(152) (214)
Net assets 84,917 98,518
Capital and reserves
Share capital 9 15,504 15,504
Treasury shares 9 (13,840) (2,487)
Share premium 23,935 23,935
Capital redemption reserve 1,087 1,087
Exchange reserves 3,872 3,872
Retained earnings 54,359 56,607
Shareholders' funds 84,917 98,518
The profit after tax for the year for the Company in the consolidated financial statements was
$32,401,000 (2024: profit after tax $33,633,000).
The financial statements were approved and authorised for issue by the Board of Directors on 30 April
2026 and were signed on its behalf by:
Marcus Chan Jau Chwen
Executive Director of Corporate Affairs
The accompanying notes are an integral part of this statement of financial position.
216
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
Share
capital
$000
Treasury
shares
$000
Share
premium
$000
Capital
redemption
reserve
$000
Exchange
reserves
$000
Retained
earnings
$000
Total
$000
Balance at 31 December 2023 15,504 (1,847) 23,935 1,087 3,872 28,897 71,448
Comprehensive profit for the year - - - - - - -
Profit for the year - - - - - 33,633 33,633
Total comprehensive profit for the
year - - - - - 33,633 33,633
Share buy back - (640) - - - - (640)
Dividends paid - - - - - (5,923) (5,923)
Balance at 31 December 2024 15,504 (2,487) 23,935 1,087 3,872 56,607 98,518
Comprehensive profit for the year
Profit for the year - - - - - 32,401 32,401
Total comprehensive profit for the
year - - - - - 32,401 32,401
Share buy back - (11,353) - - - - (11,353)
Dividends paid - - - - - (34,649) (34,649)
Balance at 31 December 2025 15,504 (13,840) 23,935 1,087 3,872 54,359 84,917
The accompanying notes are an integral part of this statement of changes in equity.
217
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5
SECTION 4 :
FINANCIAL STATEMENTS
NOTES TO THE COMPANY FINANCIAL STATEMENTS
1 Basis of preparation
The financial statements have been prepared in accordance with Financial Reporting Standard 100
Application of Financial Reporting Requirements (“FRS 100”) and Financial Reporting Standard
101 Reduced Disclosure Framework (“FRS 101”).
Disclosure exemptions adopted
In preparing these financial statements the Company has taken advantage of all disclosure
exemptions conferred by FRS 101. Therefore, these financial statements do not include:
• certain comparative information as otherwise required by IFRS;
• certain disclosures regarding the Company’s capital;
• a statement of cash flows;
• the effect of future accounting standards not yet adopted;
• the disclosure of the remuneration of key management personnel; and
• disclosure of related party transactions with other wholly owned members of AEP Plantations
Plc group of companies.
• certain disclosures required by IAS 36 Impairment of Assets in respect of assets where the
recoverable amount is determined based on fair value less costs of disposal.
In addition, and in accordance with FRS 101 further disclosure exemptions have been adopted
because equivalent disclosures are included in the Company’s consolidated financial statements.
These financial statements do not include certain disclosures in respect of:
• financial instruments (other than certain disclosures required as a result of recording financial
instruments at fair value); or
• fair value measurement (other than certain disclosures required as a result of recording
financial instruments at fair value).
2 Material accounting policies
The material accounting policies adopted in the preparation of the financial statements are set out
below. The policies have been consistently applied to all the years presented unless otherwise stated.
(a) Basis of accounting
The separate financial statements of the Company are presented as required by the Companies
Act 2006. They have been prepared under the historical cost convention. The presentation
currency used is US Dollar and amounts have been presented in thousands (“$000”). The
principal accounting policies are summarised below.
(b) Foreign currency
The Company’s functional currency is the US Dollar, as it reflects the primary currency
that influences its financing activities, cost structure, and cash flows. Both dividends and
management fees, being the Company’s sources of income, are received in US Dollar, further
supporting the determination of US Dollar as the functional currency.
Foreign currency transactions are translated into US Dollar at the exchange rates prevailing
on the transaction dates. Monetary assets and liabilities denominated in foreign currencies are
translated at the closing rate at the balance sheet date. Exchange differences are recognised
in the income statement.
218
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ANNUAL REPORT 2025
2 Material accounting policies (continued)
(c) Investments
Investments in subsidiaries are stated at cost less provision for any impairment.
(d) Property, plant and equipment
All items of property, plant and equipment are initially measured at cost. Cost includes
expenditure that is directly attributable to the acquisition of the items. After initial recognition,
all items of property, plant and equipment are stated at cost less accumulated depreciation
and any accumulated impairment losses.
Office plant and equipment is depreciated using the straight-line method. The yearly rate of
depreciation is as follows:
Office plant, equipment & vehicles: 20% per annum
(e) Leases
The Company assesses whether a contract is or contains a lease, at inception of the contract.
The Company recognises a right-of-use asset and a corresponding lease liability with respect
to all lease arrangements in which it is the lessee, except for short-term leases (defined as
leases with a lease term of 12 months or less) and leases of low value assets (such as tablets
and personal computers, small items of office furniture and telephones). For these leases,
the Group recognises the lease payments as an operating expense on a straight-line basis
over the term of the lease unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted by using the rate implicit in the lease. If this rate
cannot be readily determined, the lessee uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• Fixed lease payments (including in-substance fixed payments), less any lease incentives
receivable.
The lease liability is presented as a separate line in the consolidated statement of financial
position.
The lease liability is subsequently measured by increasing the carrying amount to reflect
interest on the lease liability (using the effective interest method) and by reducing the
carrying amount to reflect the lease payments made.
The right-of-use assets comprise the initial measurement of the corresponding lease liability,
lease payments made at or before the commencement day, less any lease incentives received
and any initial direct costs. They are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of
the underlying asset which is 5 years. If a lease transfers ownership of the underlying asset or
the cost of the right-of-use asset reflects that the Company expects to exercise a purchase
option, the related right-of-use asset is depreciated over the useful life of the underlying
asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented together in property, plant and equipment in the
consolidated statement of financial position.
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
219
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
2 Material accounting policies (continued)
(f) Dividends
Equity dividends are recognised when they become legally payable. The Company may pay
an interim dividend each year. The final dividend becomes legally payable when approved by
the shareholders at the next annual general meeting.
(g) Deferred taxation
A deferred tax asset has not been recognised in relation to brought forward tax losses of
$14.7 million (2024: $13.7 million) because it is not certain those losses can be utilised in the
foreseeable future.
(h) Treasury shares
Consideration paid or received for the purchase or sale of the Company’s own shares for
holding in treasury is recognised directly in equity, where the cost is presented as the treasury
shares. Any excess of the consideration received on the sale of treasury shares over the
weighted average cost of shares sold is taken to the share premium account. Any shares held
in treasury are treated as cancelled for the purpose of calculating earnings per share.
(i) Financial guarantee contracts
Where the Company enters into financial guarantee contracts and guarantees the
indebtedness of other companies within the Group, these are accounted for under IFRS 9.
The details of financial guarantee contracts are disclosed in note 28 of the consolidated
financial statements.
(j) Critical accounting estimates and judgements
The Company makes certain estimates and assumptions regarding the future. Estimates
and judgements are continually evaluated based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under
the circumstances. In the future, actual experience may differ from these estimates and
assumptions. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Estimates and assumptions
• Recoverability of investments – estimate based on fair value less cost of disposal method
(note 5).
3 Income statement
As permitted by section 408 of the Companies Act 2006, a separate income statement dealing
with the results of the Company has not been presented. The profit before tax for the year for the
Company in the consolidated financial statements of the Company was $32,404,000 (2024: profit
before tax $33,636,000) and profit after tax for the year was $32,401,000 (2024: profit after tax
$33,633,000).
The remuneration of the directors of the Company is disclosed in note 7 to the consolidated
financial statements. Auditor’s remuneration is disclosed in note 5 to the consolidated financial
statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
220
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
4 Property, plant & equipment
Office
plant,
equipment
& vehicle
$000
Right-
of-use
assets*
$000
Total
$000
Cost
At 1 January 2024 3 362 365
Additions 208 - 208
At 31 December 2024 211 362 573
Additions 55 - 55
At 31 December 2025 266 362 628
Accumulated depreciation and impairment
At 1 January 2024 0 24 24
Charge for the year 24 72 96
At 31 December 2024 24 96 120
Charge for the year 50 73 123
At 31 December 2025 74 169 243
Carrying amount
At 31 December 2023 3 338 341
At 31 December 2024 187 266 453
At 31 December 2025 192 193 385
* Right-of-use assets has been disclosed in Note 8.
5 Investments in subsidiaries
2025
$000
2024
$000
Investments in subsidiary undertakings 13,716 13,716
Impairment loss (1,075) (2,908)
Net carrying amount 12,641 10,808
The Company’s impairment loss on subsidiaries were as follows:
2025
$000
2024
$000
At 1 January 2,908 2,908
Reversal of impairment loss (1,833) -
At 31 December 1,075 2,908
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
221
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
5 Investments in subsidiaries (continued)
The Company recognised a reversal of impairment loss of $1.8 million on its investment in AEP
Plantations (M) Sdn Bhd. The reversal was driven by an increase in the valuation of the subsidiary
based on a market approach, using comparable company multiples.
The recoverable amount as at 31 December 2025 was $10.3 million determined based on fair value
less costs of disposal (Level 3). The reversal resulted in an increase in net assets and equity, with
no impact on cash flows.
The details of the subsidiaries are disclosed in note 30 of the consolidated financial statements.
6 Receivables
2025
$000
2024
$000
Amounts owed by group undertakings:
AEP Plantations Management Sdn Bhd (formerly known as
Anglo-Eastern Plantations Management Sdn Bhd) 10,907 16,128
Anglo-Indonesian Oil Palms Limited 57,582 68,477
PT Anglo Eastern Plantations Management Indonesia - 14
68,489 84,619
Other receivables 598 70
69,087 84,689
The amounts owed by group undertakings arise as a result of advances made to subsidiary
companies and expenses paid on their behalf by the Company. These amounts are repayable
on demand and do not have fixed repayment terms. These advances are different to normal
intercompany loans as the advances are unsecured amounts, interest-free and they do not
represent formal loan arrangements.
Other receivables comprise non-trade amounts due from third parties, deposits, and advances,
which are measured at amortised cost and are expected to be recovered within twelve months,
unless otherwise stated.
A receivable is considered in default when it is over 90 days past due or there is evidence of
significant financial difficulty or unlikelihood of payment by the counterparty, triggering recognition
of lifetime expected credit losses (“ECL”) under IFRS 9. The Group applies the simplified ECL
approach, including for intercompany balances repayable on demand, where ECL is minimal if
the borrower can repay in full or recovery is expected over time. Receivables are written off when
recovery is no longer expected, with write-offs derecognised under IFRS 9 and any recoveries
recognised in profit or loss.
In accordance with IFRS 9, the Company assesses ECL on intercompany balances, including
those classified as repayable on demand. The ECL assessment follows a prudent, forward-looking
approach and considers the financial condition and liquidity of the counterparty at the reporting
date.
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
222
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
6 Receivables (continued)
The following key assumptions are applied in assessing ECL:
• If the borrower has sufficient accessible highly liquid assets to settle the balance in full if
demanded, the ECL is assessed as immaterial.
• If the borrower cannot repay on demand in full, the Company evaluates recovery strategies
(e.g. repayment over time or fire sale of less liquid assets).
• Where recovery is expected to be full under a reasonable timeframe, the ECL is considered
minimal.
As of the reporting date, based on an assessment of subsidiaries’ cash positions and financial
health, the Company concluded that all intercompany balances are fully recoverable. Accordingly,
only an ECL provision of $0.5 million (2024: $0.7 million) has been recognised in the year which is
deemed to be immaterial.
The details of other receivables related to ECL were disclosed in note 19 and note 29 of the
consolidated financial statements.
Movements on the Company’s loss provision on other receivables were as follows:
2025
$000
2024
$000
At 1 January 3,286 2,587
Loss provision during the year 545 699
At 31 December 3,831 3,286
At 31 December 2025, the expected loss provision for receivables was as follows:
Gross
carrying
amount
$000
Loss
provision
$000
Net
carrying
amount
$000
2025
Amounts owed by group undertakings 72,320 (3,831) 68,489
Other receivables 598 - 598
72,918 (3,831) 69,087
2024
Amounts owed by group undertakings: 87,905 (3,286) 84,619
Other receivables 70 - 70
87,975 (3,286) 84,689
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
223
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
7 Other payables
2025
$000
2024
$000
Accruals 587 383
587 383
The amounts owed to group undertakings arise as a result of advances from subsidiary companies
and expenses paid on our behalf. The amounts are unsecured, interest free and do not have fixed
repayment terms.
8 Leases
Lease liabilities analysed as:
2025
$000
2024
$000
Non-current (152) (214)
Current (83) (71)
(235) (285)
The weighted average incremental borrowing rate per annum was 6.6%.
Maturity analysis for the lease liabilities has been given. The following table sets out the
undiscounted contractual cashflows of lease liabilities:
2025
$000
2024
$000
Less than 1 year (96) (87)
Between 1 and 2 years (96) (87)
Between 2 and 5 years (64) (145)
Lease liabilities (256) (319)
Amounts recognised in income statement:
2025
$000
2024
$000
Depreciation expense on right-of-use assets (note 4) (73) (72)
Interest expense on lease liabilities (17) (20)
(90) (92)
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
224
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
8 Leases (continued)
At 31 December 2025, the Company has no short-term lease commitment (2024: nil).
All the leases are fixed payments. The total cash outflow for leases amount to $89,000 (2024:
$86,000).
The Company leases office premises. The remaining non-cancellable lease term is 8 months. The
lease includes an option to extend for a further 5 years, subject to mutually agreed rental terms.
This extension option has not been included in the lease term as it is not considered reasonably
certain to be exercised.
Right-of-Use assets
Building
$000
Total
$000
At 1 January 2025 266 266
Amortisation (73) (73)
At 31 December 2025 193 193
Building
$000
Total
$000
At 1 January 2024 338 338
Amortisation (72) (72)
At 31 December 2024 266 266
Lease liabilities
Building
$000
Total
$000
At 1 January 2025 (285) (285)
Interest expense (17) (17)
Lease payments 89 89
Effect of foreign exchange (22) (22)
At 31 December 2025 (235) (235)
Building
$000
Total
$000
At 1 January 2024 (342) (342)
Interest expense (20) (20)
Lease payments 86 86
Effect of foreign exchange (9) (9)
At 31 December 2024 (285) (285)
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
225
1
2
3
4
5
SECTION 4 :
FINANCIAL STATEMENTS
9 Share capital and treasury shares
The details of the share capital and treasury shares are disclosed in note 24 of the consolidated
financial statements.
10 Related party transactions
An office premises lease agreement was entered with Infra Sari Sdn Bhd, a company controlled
by late Madam Lim Siew Kim. The rental paid during the year was $89,000 (2024: $86,000). There
was no balance outstanding at the year end (2024: nil).
The details of the dividend payment to the related parties controlled by late Madam Lim Siew Kim
are disclosed in note 26 of the consolidated financial statements.
Transactions between the Company and its subsidiaries are disclosed below:
Nature of transactions Name
2025
$000
2024
$000
Management fees from
AEP Plantations Management Sdn Bhd
(formerly known as Anglo-Eastern
Plantations Management Sdn Bhd) 42 37
Commissioner services
income
PT Anglo Eastern Plantations Management
Indonesia - 14
Receivable from Subsidiaries (note 6) 68,965 84,619
The details of the intercompany receivables and payables are disclosed in note 6 and note 7 of the
Company financial statements respectively.
11 Employees’ and Directors’ remuneration
There are no other employees in the company other than directors. The Directors’ Remuneration
Report is presented on pages 122-134 of which pages 131 and 133 are audited.
12 Dividends
In 2025, the Company received ordinary dividends totalling $33,000,000 from its subsidiaries
(2024: $35,000,000). The details of the dividends declared by the Company are disclosed in note
10 of the consolidated financial statements.
13 Guarantees and other financial commitments
The Company has provided nil guarantees for loans to subsidiaries (2024: nil) as set out in note 28
of the consolidated financial statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
226
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
14 Ultimate controlling shareholder
At 31 December 2025, Genton International Limited (“Genton”), a company registered in Hong
Kong, held 20,247,814 (2024: 20,247,814) shares of the Company representing 52.2% (2024: 51.3%)
of the Company’s issued share capital, excluding treasury shares. Together with other deemed
interested parties, Genton‘s shareholding totals 20,551,914 or 53.0%. The ultimate beneficial
shareholders of Genton International Limited are vested in the estates of Madam Lim with the
application for probate in progress.
15 Events after the reporting period
The Company on 6 January 2026, announced that it has entered into an irrevocable commitment
with Panmure to manage a programme to repurchase up to 3,963,637 ordinary shares of 25 pence
each in the capital of the Company representing approximately 10% of the Ordinary Shares in
issued. This authority expires on 30 June 2026, of if earlier, at the conclusion of the forthcoming
annual general meeting. All such purchases will be market purchases made through the London
Stock Exchange. Companies can hold their own shares which have been purchased in this way in
treasury rather than having to cancel them.
Details of other subsequent events affecting the Group as a whole, including the parent company
and its subsidiaries, are disclosed in Note 33 of the consolidated financial statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)
227
1
2
3
4
5
SECTION 5 :
OTHER INFORMATION
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the 41
st
AGM of AEP Plantations Plc will be held at UHY Hacker Young
LLP, 6
th
floor Quadrant House, 4 Thomas More Square, London E1W 1YW on Monday 15 June 2026 at
11.00am (UK time).
AS ORDINARY RESOLUTIONS
Resolution Details
1 To receive and consider the accounts and the reports of the directors and auditor
for the year ended 31 December 2025.
2 To receive and consider the Directors' Remuneration Report as set out in the annual
report and accounts for the year ended 31 December 2025.
3 To approve the Directors’ Remuneration Policy set out on pages 123 to 130 of the
Annual Report to take effect from the conclusion of the AGM.
4 To increase the maximum aggregate fees payable to the Directors (other than
Directors holding executive office) from £250,000 per annum to £600,000 per
annum in accordance with Article 98 of the Company’s Articles of Association.
5 To re-elect Jonathan Law Ngee Song as a director.
6 To re-elect Marcus Chan Jau Chwen as a director.
7 To re-elect Michael Henry Stainer as a director.
8 To re-elect Farah Suhanah Tun Ahmad Sarji as a director.
9 To re-elect Onn Kien Hoe as a director.
10 To declare a final dividend.
11 To approve that each of the ordinary shares of 25p each in the capital of the Company
be sub-divided into 10 ordinary shares of 2.5p each, and that the Directors be
authorised to take all such steps as they consider necessary or appropriate to give
effect to the sub-division, including the treatment of any fractional entitlements.
12 To re-appoint MHA Audit Services LLP ("MHA") as auditors of the Company and to
authorise the Directors to determine their remuneration.
228
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)
Resolution Details
13 That the Company is hereby generally and unconditionally authorised to make one
or more market purchases (within the meaning of section 693 of the Companies
Act 2006 (“Act”)) of its ordinary shares of 25p each (or, if Resolution 11 is passed,
ordinary shares of 2.5p each) in the capital of the Company to be held as treasury
shares, provided that:
a) the maximum aggregate number of ordinary shares hereby authorised to be
purchased is 3,997,627 (or, if Resolution 11 is passed, 39,976,272);
b) the minimum price (exclusive of expenses) which may be paid for each share is
25p (or 2.5p if Resolution 11 is passed);
c) the maximum price (exclusive of expenses) which may be paid for each share
may not exceed the higher of:
i. 105% of the average of the middle-market quotations for such shares as
derived from the Daily Official List of the London Stock Exchange for the
five business days immediately preceding the day of purchase;
ii. an amount equal to the price of the last independent trade; and
iii. the highest current independent purchase bid on the London Stock
Exchange;
d) the authority hereby conferred shall expire at the conclusion of the next annual
general meeting of the Company or on 30 June 2027 whichever shall be the
earlier, save that the Company may, before the expiry of this authority, make a
contract of purchase which will or may be executed wholly or partly after such
expiry and may make a purchase of shares pursuant to any such contract.
14 That a general meeting of the Company, other than an AGM, may be called on not
less than 14 clear days’ notice.
By order of the Board.
CETC (Nominees) Limited
Company Secretary
30 April 2026
Notes:
1. Voting at the AGM will be conducted by way of a poll. This means that each shareholder present or represented
(in person or electronically) will be able to exercise one vote for each share held.
2. Resolution 3 seeks shareholder approval for the Directors’ Remuneration Policy as set out on pages 123 to
130 of the Annual Report. This is a binding vote. If approved, the policy will take effect from the conclusion
of the AGM and will apply for a period of up to three (3) years, unless a revised policy is approved earlier. The
Remuneration Committee has reviewed the policy to ensure it remains aligned with the Company’s strategy,
promotes long-term sustainable success and reflects current best practice. Payments to Directors may only
be made in accordance with an approved policy.
3. Under Article 98 of the Company’s Articles of Association, the aggregate annual fees payable to Directors
who do not hold executive office are currently capped at £250,000, unless increased by ordinary resolution of
shareholders. This limit was last set in 2023. Resolution 4 seeks shareholder approval to increase this limit to
£600,000 per annum. The Board considers it appropriate to increase this limit to provide flexibility to support
the Company’s current and future Board composition, including the potential appointment of additional
Non-Executive Directors, and to ensure that fees remain competitive with FTSE 250 market practice. The
proposed increase represents a maximum aggregate limit only and there is no intention to utilise the full
amount immediately.
AS SPECIAL RESOLUTIONS
229
1
2
3
4
5
SECTION 5 :
OTHER INFORMATION
4. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company has specified that
only those shareholders on the register of members of the Company at close of business on 11 June 2026
shall be entitled to vote in respect of the number of shares registered in their name at that time. Changes to
the register of members after 11 June 2026 or, if the meeting is adjourned, in the register of members at close
of business on the date which is two days before the day of the adjourned meeting shall be disregarded in
determining the rights of any person to vote at the meeting by proxy.
5. As at 20 April 2026 (being the latest practicable date prior to the publication of this notice), the Company’s
issued share capital comprised 39,976,272 Ordinary Shares of 25p each. Each share carries one vote except
1,526,031 shares held as treasury shares and therefore the total number of voting rights in the Company as
at 6:00pm (UK Time) on 20 April 2026 is 38,450,241.
6. A member of the Company may appoint one or more proxies to vote at the meeting. Where more than one
proxy is appointed in relation to the meeting, each proxy must be appointed to exercise rights attaching to
a different share or shares. You may not appoint more than one proxy to exercise rights attached to any one
share. A proxy need not be a member of the Company. Members are encouraged to appoint the Chairman of
the meeting as their proxy.
7. The instrument appointing a proxy must be deposited at the office of the Registrar by 11.00am (UK time) on
11 June 2026 not less than 48 hours before the time appointed for holding the meeting (or any adjournment
thereof).
8. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the
appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in
which the names of the joint holders appear in the Company’s register of members in respect of the joint
holding (the first-named being the most senior).
9. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment
service may do so for the annual general meeting to be held on 15 June 2026 and any adjournment thereof
by using the procedures described in the CREST Manual on the Euroclear website at http://www.euroclear.
com/CREST. CREST personal members or other CREST sponsored members and those CREST members
who have appointed a voting service provider should refer to their CREST sponsor or voting service
provider, who will be able to take the appropriate action on their behalf. In order for a proxy appointment
or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy
Instruction”) must be properly authenticated in accordance with Euroclear’s specifications and must contain
the information required for such instructions, as described in the CREST Manual. All messages relating to
the appointment of a proxy or an instruction to a previously appointed proxy must be transmitted so as to
be received by Computershare Investor Services PLC [CREST ID: 3RA50] by 11.00am on 11 June 2026. It is
the responsibility of the CREST member concerned to take such action as shall be necessary to ensure that
a message is transmitted by means of the CREST system by any particular time. In this connection, CREST
members and, where applicable, their CREST sponsors or voting service providers are referred, in particular,
to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The
Company may treat a CREST Proxy Instruction as invalid in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
10. You will receive hard copy or electronic copy via email of the proxy form for the 2026 AGM. You may submit
your proxy electronically using the link https://www.eproxyappointment.com. If not already registered, you
will need your Shareholder Reference Number (“SRN”) which is detailed on your share certificates.
11. Shareholders will also be able to vote electronically by visiting http://www.investorcentre.co.uk/eproxy.
Login details such as Control Number and Pin can be located on the Proxy Form included with this Notice.
Shareholders who have elected for electronic communication will receive their login details via email. Proxy
votes must be received no later than 11am (UK time) on Thursday, 11 June 2026. Holders receiving electronic
communication and those with deemed consent can request to receive physical copies by contacting the
Company’s Registrar.
NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)
230
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
12. The statement of the rights of shareholders in relation to the appointment of proxies does not apply to a
person who receives this notice of general meeting as a person nominated to enjoy “information rights” under
section 146 of the Companies Act 2006. If you have been sent this notice of meeting because you are such
a nominated person the following statements apply: (i) you may have a right under an agreement between
you and the registered shareholder by whom you were nominated to be appointed (or to have someone else
appointed) as a proxy for this general meeting and (ii) if you have no such a right, or do not wish to exercise
it, you may have a right under such an agreement to give instructions to that registered shareholder as to
the exercise of voting rights. Nominated persons should contact the registered member by whom they were
nominated in respect of these arrangements.
13. A member of the Company which is a corporation may authorise a person or persons to act as its
representative(s) at the meeting. In accordance with the provisions of the Companies Act 2006, each such
representative may exercise (on behalf of the corporation) the same powers as the corporation could exercise
if it were an individual member of the Company, provided that they do not do so in relation to the same
shares. It is no longer necessary to nominate a designated corporate representative.
14. Members satisfying the requirements of section 527 of the Companies Act 2006 may require the Company
to publish on a website a statement by them (at the Company’s cost) relating to the audit of the Company’s
accounts which are being laid before this meeting (including the auditor’s report and the conduct of the
audit) or, where applicable, any circumstances connected with an auditor of the Company ceasing to hold
office since the previous general meeting at which accounts were laid. Should such a statement be received,
it will be published on the Company’s website at https://www.aepplantations.com/. In those circumstances
the Company would be under an obligation to forward a copy of the statement to the auditor forthwith and
the statement would form part of the business which may be dealt with at this meeting.
15. Shareholders are welcomed to submit questions to the Board by email to stakeholder.relations@aepplantations.
com by 1 June 2026 and they will be answered after the AGM or at the AGM for those shareholders who are
in attendance. The Company must cause to be answered any such questions relating to the business being
dealt with at the meeting but no such answer need be given if (a) to do so would interfere unduly with the
preparation of the meeting or involve the disclosure of confidential information, (b) the answer has already
been given on a website in the form of an answer to a question, or (c) it is undesirable in the interests of the
Company or the good order of the meeting that the question be answered.
16. A copy of this notice and the other information required by section 311A of the Companies Act 2006 can be
found at http://www.aepplantations.com/.
17. If you are in any doubt as to any aspect of Resolutions or as to the action you should take, you are
recommended to seek your own independent advice from a stockbroker, solicitor, accountant or other
appropriately authorised independent financial advisor. The Board believes that these Resolutions are in the
best interests of the Company and shareholders as a whole.
18. If you have sold or otherwise transferred all your shares in the Company, please hand this document and
the accompanying form of proxy to the purchaser or transferee, or to the bank, stockbroker or other agent
through whom the sale or transfer was effected, for transmission to the purchaser or transferee. If you sell
or have sold or otherwise transferred only part of your holding of existing shares please consult the bank,
stockbroker or other agent through whom the sale or transfer was effected.
19. Copies of the Directors’ service contracts and Company’s Articles of Association will be available for
inspection at the registered office of the Company during normal business hours and at the place of the
meeting from 15 minutes prior to the meeting until its conclusion. The documents can also be obtained by
email to stakeholder.relations@aepplantations.com.
NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)
231
1
2
3
4
5
SECTION 5 :
OTHER INFORMATION
SHAREHOLDER INFORMATION
Website
http://www.aepplantations.com/
contains various details and information on AEP
and its operations, together with all the key
historical financial and regulatory information
on our Company. The website is updated on
a continuing basis incorporating all Company
announcements and other relevant developments,
including Environmental, Social and Governance
and share price movements. The website allows
shareholders and investors to select and receive
e-mail alerts from AEP on selected regulatory
news. Shareholders are encouraged to use e-mail
alerts to follow the development of AEP.
Investor Relations
Investors requiring further information on AEP
are invited to contact:
Stakeholder Relations
Email: stakeholder.relations@aepplantations.com
Amalgamation Of Accounts
Shareholders receiving multiple copies of our
Company mailings as a result of several accounts
being maintained in their name are invited to write
to the Company’s Registrar at the above address
to request that their accounts be amalgamated.
Payment Of Dividends
While the dividend is declared in US Dollars,
shareholders can elect to receive their dividends
in Pounds Sterling. In the absence of any specific
instruction up to the date of closing of the register
on 19 June 2026, shareholders with addresses in
the UK will be deemed to have elected to receive
their dividends in Pounds Sterling and those with
addresses outside the UK will be deemed to have
elected to receive their dividends in US Dollars.
For shareholders opting to receive their dividends
in Pounds Sterling, the final dividend of 43.7
cents will be converted at the exchange rate
prevailing on 19 June 2026 (the record date).
For illustration, based on the exchange rate at 14
April 2026 of $1.359/£, the equivalent dividend
per share would be 32.16p. Shareholders wishing
to change their currency election must do so by
19 June 2026.
Dividends will be paid electronically either
through the CREST system for participating
members or by direct bank transfer pursuant to
a dividend mandate provided by the shareholder
or custodian. In line with market practice,
international dividend cheque payments in
USD will be discontinued from 31 March 2026.
Shareholders are encouraged to update their
payment instructions and banking details through
the Computershare Investor Services website to
facilitate efficient and secure dividend payments.
Shareholders are encouraged to ensure their
payment instructions and banking details are
up to date through the Computershare Investor
Services website to facilitate efficient and
secure dividend payments. The use of electronic
payment methods, including CREST where
applicable, improves operational efficiency and
supports AEP’s sustainability commitments to
shareholders, investors and the wider market.
Electronic Communications
Computershare Investor Services PLC offers AEP
shareholders the opportunity to manage their
shareholding online, through the Investor Centre.
Registration is free and can be used to manage
shareholdings quickly and securely. To register
for this service, please go to https://www-uk.
computershare.com/investor/ and follow the
instructions.
232
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
SECRETARY AND REGISTERED OFFICE
AEP Plantations Plc (Number 01884630)
(Registered in England and Wales)
CETC (Nominees) Limited
Quadrant House, 6
th
Floor
4 Thomas More Square
London E1W 1YW United Kingdom
Tel : +44 (0)20 7216 4621
+44 (0)20 7216 4600
OPERATIONS
Malaysia
AEP Plantations Management Sdn Bhd
(formerly known as Anglo-Eastern Plantations
Management Sdn Bhd)
7
th
Floor, Wisma Equity
150 Jalan Ampang
50450 Kuala Lumpur
Malaysia
Tel : +60 (0)3 2715 0118
Indonesia
PT Anglo Eastern Plantations Management
Indonesia
Sinar Mas Land Plaza
Jl. P.Diponegoro No.18, 3
rd
Floor #301
Kelurahan Madras Hulu
Kecamatan Medan Polonia
Medan 20152
North Sumatra
Indonesia
Tel : +62 (0)61 452 8683
OUR OFFICES AND ADVISERS
ADVISERS
Independent auditor
MHA Audit Services LLP
2 London Wall Place
London EC2Y 5AU
United Kingdom
Registrar
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS13 8AE
United Kingdom
Tel : +44 (0) 370 703 0164
Email: web.corres@computershare.co.uk
Shareholders can view and update their
account details via the Computershare
website, details of which can be found at
https://www-uk.computershare.com/investor/
Stockbroker
Cavendish Capital Markets Limited
One Bartholomew Close
London EC1A 7BL
United Kingdom
233
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2
3
4
5
SECTION 5 :
OTHER INFORMATION
GLOSSARY
Terms Meaning
£/GBP British Pound Sterling
¢ Cents
$/USD United States Dollar
AEP/
Company
AEP Plantations Plc
AGM Annual General Meeting
BioCNG Bio Compressed Natural Gas
CPO Crude Palm Oil
CSA Climate Scenario Analysis
CSR Corporate Social Responsibility
DTR4 Disclosure And Transparency
Rules 4
EFB Empty Fruit Bunches
EHS Environment Health and Safety
EIA Environmental Impact
Assessment
EPS Earnings Per Share
ERMF Environmental Risk
Management Framework
ESG Environmental, Social and
Governance
EU European Union
EUDR European Union Deforestation
Regulation
FCA Financial Conduct Authority
FFB Fresh Fruit Bunches
FPIC Free, Prior and Informed
Consent
FRC Financial Reporting Council
GHG Greenhouse Gas
Group AEP group of companies
ha Hectare
HCSA High Carbon Stock Approach
HCV High Conservation Value
IAS International Accounting
Standards
Terms Meaning
IPCC Intergovernmental Panel on
Climate Change
ISCC International Sustainability and
Carbon Certification
ISPO Indonesian Sustainable Palm Oil
MSPO Malaysian Sustainable Palm Oil
mt Metric Tonne
MPM PT Mitra Puding Mas
NDPE No Deforestation, No Peat, and
No Exploitation
NGFS Network for Greening the
Financial System
NGO Non-Governmental Organisation
OER Oil Extraction Rate
p pence
PK Palm Kernel
Plasma Smallholders cooperative
plasma scheme
PLN Perusahaan Listrik Negara
POME Palm Oil Mill Effluent
PROPER Program for Pollution Control
Evaluation and Rating
RM Ringgit Malaysia
Rp Indonesian Rupiah
RSPO Roundtable on Sustainable Palm
Oil
SECR UK Streamlined Energy and
Carbon Reporting
SPOTT Sustainability Transparency
Toolkit
TCFD Taskforce on Climate Related
Financial Disclosure
TNFD Taskforce for Nature-related
Financial Disclosures
UK United Kingdom
WRI World Resource Institute
WWF World Wide Fund for Nature
234
AEP PLANTATIONS PLC
ANNUAL REPORT 2025
Region Plantation Also referred to as
Terengganu, Malaysia AEP Plantations (M) Sdn Bhd Cenderung
North Sumatra PT. Musam Utjing Sungei Musam
North Sumatra PT. United Kingdom Indonesia
Plantation
Blankahan
North Sumatra PT. Simpang Ampat Rambung
North Sumatra PT. Tasik Raja Tasik
North Sumatra PT. Anak Tasik Anak Tasik
North Sumatra PT. Cahaya Pelita Andhika CPA
North Sumatra PT. Hijau Pryan Perdana HPP
Bangka PT Bangka Malindo Lestari BML
Riau PT. Bina Pitri Jaya BPJ
Bengkulu PT. Mitra Puding Mas MPM
Bengkulu PT. Alno Agro Utama Alno
Kalimantan PT. AEP Nusantara Tbk AEPN
Kalimantan PT. Kahayan Agro Plantation KAP
GLOSSARY (CONTINUED)
