Restatement of Prior Year Results

Notes

1.  Accounting policies

Anglo-Eastern Plantations Plc ("AEP") is a company incorporated in the United Kingdom under the Companies Act 2006 and is listed on the London Stock Exchange.  The registered office of AEP is located at Quadrant House, 6^th Floor, 4 Thomas More Square, London E1W 1YW, United Kingdom. The principal activity of the Group is plantation agriculture.

Basis of preparation

The annual financial statements of Anglo-Eastern Plantations Plc are prepared in accordance with IFRSs as adopted by the European Union. The financial information for the year ended 31 December 2012 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2012 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2012 was qualified on the basis of a limitation in scope, did not draw attention to any matters by way of emphasis, and contained statements under 498(2) or 498(3) of the Companies Act 2006.

Except for the measurement of notional rent, the same accounting policies, presentation and methods of computation are followed in these restated consolidated financial statements as were applied in the Group's annual audited financial statements. The Company's accounting policy for biological assets, set out below, is unchanged. 

The 2012 Annual Report stated that the Company was in the process of resolving a query from the Financial Reporting Council ("FRC") concerning the measurement of the notional rent used in the valuation of the Group's biological assets. Following further discussion with the FRC, the Group has changed the determination of notional rent, one of the assumptions used in the valuation of the Group's biological assets in accordance with its stated policy to reflect current market data in the estimate of the cost for the use of the land. The change in measurement of the notional rent has significant impact on the carrying amount of biological asset and thus the accounts for years ended 31 December 2012 and 2011 were restated. The restatements and related adjustments are disclosed in these accounts in note 2.

Biological assets

Biological assets comprise oil palm trees and nurseries. The biological process commences with the initial preparation of land and planting of seedlings and ceases with the delivery of crop in the form of fresh fruit bunches ("FFB") to the manufacturing process in which crude palm oil and palm kernel are extracted from the FFB.

Biological assets are carried at fair value less costs to sell determined on the basis of the net present value of cash flows arising in producing FFB. No account is taken in the valuation of future replanting. Biological assets are valued at each accounting date based upon a valuation of the planted areas using a discounted cash flow method by reference to the FFB expected to be harvested over the full remaining productive life of the trees up to 20 years. Areas are included in the valuation once they are planted. However oil palm which are not yet mature at the accounting date, and hence are not producing FFB, are valued on a similar basis but with the discounted value of the estimated cost to complete planting and to maintain the assets to maturity being deducted from the discounted FFB value. Movement in valuation surplus of biological assets is charged or credited to the income statement for the relevant period (BA adjustment).

2.  Prior year restatement

The 2012 Annual Report stated that the Company was in the process of resolving a query from the Financial Reporting Council ("FRC") concerning the measurement of the notional rent used in the valuation of the Group's biological assets. In October 2013, the Group engaged a professional valuer in the United Kingdom ('UK valuer') for an independent opinion on the measurement of the notional rent. As a result, the Group has adopted a notional rent equivalent to 9% of the value of planted land value as proposed by the UK valuer in valuing its biological asset. This resulted in the accounts for the years ended 31 December 2012 and 2011 being restated and the closure of discussions with the FRC. The effect of the restatements is summarised below.

The effect of these prior year adjustments had a negative impact on the earnings per share of 3.69cts (2011: 8.10cts) for the year to 31 December 2012.