Annual Report (ESEF) • Apr 26, 2024
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Overview of the Group 4 2. History 4 3. Group structure 5 4. Information on Socfinasia’s holdings 6 International market for rubber and palm oil 17 1. Rubber 17 2. Palm oil 20 Environment and social responsibility 23 Key figures 24 1. Activity indicators 24 2. Key figures from the consolidated income statement and consolidated statement of cash flows 25 3. Key figures in the consolidated statement of financial position 25 Stock market data 26 Financial highlights of the year 26 Corporate governance statement 27 1. Introduction 27 2. Corporate governance chart 27 3. Board of Directors 27 4. Committees of the Board of Directors 31 4.1 Audit Committee 31 4.2 Appointment and Remuneration Committee 31 5. Remuneration 31 6. Shareholding status 32 7. Financial calendar 32 8. External audit 32 9. Corporate, social and environmental responsibility 33 10. Other information 33 Statement of compliance 34 Consolidated management report 35 Auditor’s report on the consolidated financial statements 39 Consolidated financial statements 44 1. Consolidated statement of financial position 44 2. Consolidated income statement 46 3. Consolidated statement of comprehensive income 47 4. Consolidated statement of cash flows 48 5. Consolidated statement of changes in equity 49 6. Notes to the consolidated financial statements 50 Note 1. Overview and material accounting policies 50 Note 2. Subsidiaries and associates 61 Note 3. Leases 63 Note 4. Intangible assets 65 Note 5. Property, plant and equipment 66 Note 6. Biological assets 67 Note 7. Depreciation and impairment 68 Note 8. Impairment of assets 68 Note 9. Non-wholly owned subsidiaries in which non-controlling interests G are significant 70 Note 10. Investments in associates 71 Note 11. Financial assets at fair value through other comprehensive income G 75 Note 12. Long-term advances 75 Note 13. Deferred taxes 75 Note 14. Current tax assets and liabilities 77 Note 15. Income tax expense 77 Socfinasia | ANNUAL REPORT 2023 | 3 TABLE OF CONTENTS Note 16. Inventories 79 Note 17. Trade receivables (current assets) 80 Note 18. Other receivables (current assets) 80 Note 19. Cash and cash equivalents 80 Note 20. Share capital 81 Note 21. Reserve 81 Note 22. Pension obligations 82 Note 23. Financial debts 84 Note 24. Trade and other payables 87 Note 25. Financial instruments 88 Note 26. Staff costs and average number of staff 90 Note 27. Other financial income 90 Note 28. Financial expenses 91 Note 29. Net earnings per share 91 Note 30. Dividends and directors’ fees 91 Note 31. Information on related party 92 Note 32. Off balance sheet commitments 94 Note 33. Segment information 94 Note 34. Risk management 99 Note 35. Profit before interest, taxes, depreciation and amortisation 102 Note 36. Contingent liabilities 102 Note 37. Political and economic environment 104 Note 38. Events after the closing date 104 Note 39. Auditor’s fees 104 Company’s management report 105 Report on the audit of the financial statements 111 Company financial statements 115 1. Balance sheet as at 31 December 2023 115 2. Profit and loss account for the year ended 31 December 2023 117 3. Notes to the financial statements for the year 2023 119 Note 1. Overview 119 Note 2. Accounting principles, rules and methods 119 Note 3. Financial fixed assets 121 Note 4. Amounts owed by affiliated undertakings 123 Note 5. Equity 124 Note 6. Other payables 125 Note 7. Income from participating interests 125 Note 8. Income from other investments and loans forming part of the fixed assets 125 Note 9. Taxation 125 Note 10. Remuneration of the Board of Directors 125 Note 11. Political and economic environment 126 Note 12. Off-balance sheet commitments 126 Note 13. Significant events after the year end 126 Glossary 127 4 | ANNUAL REPORT 2023 | Socfinasia Portrait du GroupeGroup profile 1. Overview of the Group Socfinasia S.A. is a Luxembourgish holding company with its registered address at 4 Avenue Guillaume, L 1650 Luxembourg. It was incorporated on 20 November 1972 and is listed on the Stock Exchange of Luxembourg. Socfinasia’s principal activity is to manage a portfolio of shares focused on the operation of more than 52,000 hectares of tropical palm oil and rubber plantations in South-East Asia. As of 2023, Socfinasia employs 9,686 people and has achieved a consolidated turnover of EUR 179 million over that same year. 2. History • 20/11/1972 Incorporation of Socfinasia as a Luxembourg holding company through the contribution of shares in PT Socfindo. • 30/06/1973 Since its incorporation, Socfinasia has invested, amongst others, in Fininter (Belgium) and Socfinal (Luxembourg). • 23/01/1974 The shares of Socfinasia have been listed on the Stock Exchange of Luxembourg. • 30/06/1975 The portfolio includes new investments: Socfin (Belgium), Plantations Nord Sumatra (Belgium) and Selangor Plantations Cy (Malaysia). • 30/06/1977 Socfinasia invests in Sennah Rubber Cy, New African Plantations Cy, la Banque d’Investissements Privés and Socficom. It disposes of its stakes in Socfin (Belgium) and Socfinal. • 04/12/1979 PT Socfindo increases its share capital through capitalisation of reserves. Free allotment of 1,166 shares in PT Atmindo. • 31/12/1980 Acquisition of shares in Selangor Holding, a Luxembourgish company listed on the Stock Exchange of Luxembourg. • 24/04/1989 PT Socfindo increases its share capital through the capitalisation of the revaluation reserve of its fixed tangible assets. • 31/03/1996 Acquisition of shares in Intercultures, a Luxembourgish company listed on the Stock Exchange of Luxembourg. • 31/03/1997 Initially, Socfinasia increases its stake in its Indonesian subsidiaries: PT Socfindo and PT Atmindo. Thereafter, Socfinasia incorporates Plantations Nord Sumatra Limited, to which it transferred its Indonesian subsidiaries. • 31/03/1999 Increase in the subscribed capital of Intercultures. • 05/02/2000 Takeover bid/public exchange offer by Selangor Holding for Sennah Rubber Cy which will be liquidated in August 2000. • 01/04/2000 Increase in subscribed capital to EUR 25,062,500 and the accounting par to 1,002,500 shares. • 26/06/2000 Takeover bid by Socfinasia on the shares of Selangor Holding which will be liquidated in May 2001. • 17/10/2000 Change in financial year-end to 31 December. • 31/12/2001 PNS Ltd has acquired 30% of PT Socfindo from the Indonesian state. • 31/12/2006 Restructuring of the subsidiaries within the Socfinal Group, including the distribution of shares of Intercultures by Socfinasia (spin-off) and repositioning of the operational companies within the Group. • 31/12/2007 Incorporation of Socfin-KCD (Cambodia). • 17/03/2010 Disposal of Socfinaf Cy (Kenya). • 10/01/2011 Extraordinary General Meeting which ratified abandon of the holding 29 status. • 01/07/2011 Share split by 20. • 13/08/2013 Socfinasia acquires, through its subsidiary PNS Ltd, 90% of Coviphama Co, a company incorporated under the Cambodian Law, benefitting from a new grant of 5,300 hectares. • 30/07/2015 Acquisition of shares in Socfin-KCD to increase the percentage holding to 100%. Group profile Socfinasia | ANNUAL REPORT 2023 | 5 3. Group structure Holding companiesHolding companies SOCFIN Luxembourg SOCFIN Luxembourg SOCFINDE Luxembourg SOCFINDE Luxembourg 58% SOCFINASIA Luxembourg SOCFINASIA Luxembourg PNS LTD Luxembourg PNS LTD Luxembourg 100%100% 100% 100% 100%90% 80% 48% 35% 15% 50% 50% 50% 50% 50% 35% 19% 10% 50% 50% 30% 10% Group profile 6 | ANNUAL REPORT 2023 | Socfinasia 4. Information on Socfinasia’s holdings Portfolio Number of shares Direct % Cambodia Socfin-KCD Co 2,000 100.00% Luxembourg PNS Ltd 27,780,000 100.00% Socfinde 199,790 79.92% Management Associates 1,500 15.00% Terrasia 4,781 47.81% Induservices 3,500 35.00% Belgium Centrages 7,500 50.00% Immobilière de la Pépinière 3,333 50.00% Socfinco 8,750 50.00% Switzerland Sogescol FR 2,650 50.00% Socfinco FR 650 50.00% Sodimex FR 675 50.00% Induservices FR 700 50.00% The following pages contain a summary of the activity and comments on the financial information for the past two financial years in which Socfinasia holds a direct or indirect participation. Unless indicated otherwise, equity includes capital, reserves and the results brought forward before allocation of current year results. Corporate data refers to consolidated data. The balance sheet figures are presented in the functional currency of the respective entities. Group profile Socfinasia | ANNUAL REPORT 2023 | 7 PT SOCFIN INDONESIA “SOCFINDO” PT Socfindo is an Indonesian company which manages oil palm and rubber plantations in North Sumatra, Indonesia. Key data Area (hectares) Planted area As at 31 December 2023 Mature Immature Total Rubber 5,232 1,090 6,322 Palm 34,511 4,988 39,499 TOTAL 39,743 6,078 45,821 Concessions G (terms having a G are explained part “Glossary” at the end of the annual report): 47,532 ha Permanent staff as at 31 December 2023: 8,559 Production and turnover As at 31 December 2023 2022 Production (tons) Rubber 6,397 6,896 Palm oil 188,527 179,516 Seeds (thousands) 9,190 13,189 Turnover (EUR 000) 166,006 193,796 Result (EUR 000) 52,960 71,954 Average selling price (EUR / kg) Rubber 1.54 2.05 Palm oil 0.8 0.95 Seeds (EUR / 1,000) 704 564 Average rate EUR / IDR 16,471 15,648 Closing rate EUR / IDR 17,140 16,713 Key figures (IDR million) As at 31 December 2023 2022 Non-current assets 1,627,575 1,526,371 Current assets 597,901 609,115 Shareholder’s Equity () 1,189,091 994,045 Debt, provisions and third parties () 1,036,385 1,141,440 Profit / (loss) for the period 872,310 1,125,920 Dividend per share (USD) () () Interim dividend per share (USD) 300 400 PNS Ltd’s stake (%) 89.98 89.98 () After interim dividend, before profit allocation. () Not known to-date. Group profile 8 | ANNUAL REPORT 2023 | Socfinasia PT SOCFIN INDONESIA “SOCFINDO” STATEMENT OF FINANCIAL POSITION As at 31 December 2023 and 2022 (Expressed in IDR 000, unless otherwise stated) Exchange rate: EUR 1 = IDR 17,140 16,713 Average rate: EUR 1 = IDR 16,471 15,648 ASSETS 31/12/2023 31/12/2022 CURRENT ASSETS Cash and cash equivalents 170,239,908 185,733,528 Receivables Trade receivables Amount from related parties 15,425,141 20,381,992 Amount due from customers 10,395,468 21,720,236 Trade receivables – invoices to send 9,569,212 0 Tax debtors 11,537,415 0 Other receivables 22,252,523 4,986,085 Inventories 212,841,578 207,972,126 Advance payment on order 0 8,192,643 Deferred and accruals 145,639,562 160,128,112 TOTAL CURRENT ASSETS 597,900,806 609,114,722 NON-CURRENT ASSETS Fixed assets 1,618,686,580 1,521,296,612 Rights-of-use of assets 1,470,849 2,941,698 Deferred tax assets 7,406,744 2,121,243 Other 11,100 11,100 TOTAL NON-CURRENT ASSETS 1,627,575,273 1,526,370,652 TOTAL ASSETS 2,225,476,080 2,135,485,374 Group profile Socfinasia | ANNUAL REPORT 2023 | 9 LIABILITIES AND EQUITY 31/12/2023 31/12/2022 LIABILITIES CURRENT LIABILITIES Amount payable to suppliers 48,703,174 32,906,833 Invoices to be received 42,584,997 0 Other payables Amount due to third parties 12,085,274 12,019,642 Amount due to related parties 1,680,718 1,082,630 Accruals 285,793,275 324,622,563 Advances and payments on work in progress 24,075,765 27,449,274 Employee benefit obligations 4,018,788 3,433,799 Current tax liabilities 25,556,956 166,607,114 TOTAL CURRENT LIABILITIES 444,498,949 568,121,855 NON-CURRENT LIABILITIES Employee benefit obligations 591,886,519 573,318,210 TOTAL LIABILITIES 1,036,385,468 1,141,440,065 Equity Share capital Type A 2,385 2,385 Type B 265 265 Type C 7,947,350 7,947,350 Type D 34,300,000 34,300,000 Total share capital 42,250,000 42,250,000 Share premium 3,670,500 3,670,500 Retained earnings Allocated to the general reserve 270,860,290 -177,794,840 Retained earnings not allocated 872,309,822 1,125,919,650 TOTAL EQUITY 1,189,090,612 994,045,310 TOTAL LIABILITIES AND EQUITY 2,225,476,080 2,135,485,374 Group profile 10 | ANNUAL REPORT 2023 | Socfinasia STATEMENT OF OPERATIONS AND OTHER COMPREHENSIVE INCOME G As at 31 December 2023 and 2022 (Expressed in IDR 000, unless otherwise stated) 2023 2022 Revenue 2,734,321,376 3,011,660,868 Cost of sales -1,192,582,816 -1,050,595,306 GROSS PROFIT 1,541,738,560 1,961,065,562 Selling expenses -59,591,271 -48,099,014 General and administrative overheads () -415,742,621 -494,204,078 Other income 85,972,560 86,128,668 Other expenses -17,563,555 -47,880,050 Gain / (loss) arising from change in fair value of biological assets -14,865,352 -40,755,194 OPERATING PROFIT 1,119,948,321 1,416,255,894 Finance Income 7,751,179 7,407,886 PROFIT BEFORE TAX 1,127,699,500 1,423,663,780 Income tax expense -247,629,294 -316,637,933 Profit / (loss) for the period 880,070,206 1,107,025,847 Comprehensive income Revaluation of post-employment benefits -7,760,384 18,893,803 TOTAL COMPREHENSIVE INCOME 872,309,822 1,125,919,650 () These amounts include emoluments paid to the directors of PT Socfindo who are members of the Board of Directors of Socfinasia (2023 = IDR 64,787,211,746 and 2022 = 135,314,429,990). Group profile Socfinasia | ANNUAL REPORT 2023 | 11 SOCFIN-KCD Co Ltd Share capital: KHR 160,000,000,000. Socfin-KCD is a Cambodian company involved in the production of rubber. Key data Area (hectares) Planted area As at 31 December 2023 Mature Immature Total Rubber 3,662 30 3,692 Concessions G : 6,659 ha (including subsidiaries) Permanent staff as at 31 December 2023: 816 Production and turnover As at 31 December 2023 2022 Production (tons) Rubber 8,853 6,018 Turnover (EUR 000) 10,777 8,164 Result (EUR 000) 576 -1,402 Average selling price (EUR / kg) Rubber 1.22 1.36 Average rate EUR / USD 1.08 1.05 Closing rate EUR / USD 1.10 1.07 Key figures (USD 000) As at 31 December 2023 2022 Fixed assets 47,648 49,833 Current assets 4,170 3,475 Equity () 32,573 31,950 Borrowing, provisions and third-parties () 19,245 21,358 Profit / (loss) for the period 624 -1,469 Socfinasia’s holding (%) 100.00 100.00 () Before profit allocation. Group profile 12 | ANNUAL REPORT 2023 | Socfinasia COVIPHAMA Co Ltd Share capital: KHR 8,640,000,000. Coviphama is a Cambodian company involved in the production of rubber. Key data Area (hectares) Planted area As at 31 December 2023 Mature Immature Total Rubber 2,532 695 3,227 Concessions G : 5,345 hectares Permanent staff as at 31 December 2023: 311 2023 2022 Average rate EUR / USD 1.08 1.05 Closing rate EUR / USD 1.10 1.07 Key figures (USD 000) As at 31 December 2023 2022 Fixed assets 22,542 22,710 Current assets 1,083 572 Equity -2,174 -1,603 Borrowing, provisions and third-parties 25,799 24,884 Profit / (loss) for the period -571 -1,156 Socfinasia’s holding (%) 100.00 100.00 Group profile Socfinasia | ANNUAL REPORT 2023 | 13 PLANTATION NORD-SUMATRA “PNS” Ltd S.A. Share capital: USD 260,084,774. PNS Ltd’s is a holding company whose principal assets are its controlling interest of 89.98% in PT Socfindo, a 100% investment in Coviphama Co as well as a receivable from the latter. 2023 2022 Average rate EUR / USD 1.08 1.05 Closing rate EUR / USD 1.10 1.07 Key figures (USD 000) As at 31 December 2023 2022 Fixed assets 307,871 306,521 Current assets 816 37,660 Equity () 308,686 313,879 Borrowing, provisions and third-parties () 1 30,302 Profit / (loss) for the period 35,921 64,637 Distribution 41,114 61,116 Socfinasia’s holding (%) 100.00 100.00 () Before profit allocation. Group profile 14 | ANNUAL REPORT 2023 | Socfinasia SOCFINDE S.A. Share capital: EUR 1,250,000. Socfinde is a Luxembourgish holding company. Profit for the year ended on 31 December 2023 is EUR 644,758. The Board of Directors will not propose any dividend distribution at the Annual General Meeting. Key figures (EUR 000) As at 31 December 2023 2022 Fixed assets 2,992 9,962 Current assets 107,749 47,412 Equity 6,668 6,023 Borrowing, provisions and third-parties 104,073 51,350 Profit / (loss) for the period 645 140 Socfinasia’s holding (%) 79.92 79.92 Group profile Socfinasia | ANNUAL REPORT 2023 | 15 SOGESCOL FR S.A. Share capital: CHF 5,300,000. Sogescol FR is a Swiss company that trades in rubber and palm oil. Profit for the year that ended on 31 December 2023 amounted to USD 6,705,434. The Board of Directors will propose a dividend distribution of USD 8,000,000 at the Annual General Meeting. 2023 2022 Average rate EUR / USD 1.08 1.05 Closing rate EUR / USD 1.10 1.07 Key figures (USD 000) As at 31 December 2023 2022 Fixed assets 4,031 773 Current assets 49,001 50,991 Equity () 16,660 17,955 Borrowing, provisions and third-parties () 36,372 33,809 Profit / (loss) for the period 6,705 8,865 Distribution 8,000 8,000 Dividend per share (USD) 1,509 1,509 Socfinasia’s holding (%) 50.00 50.00 () Before profit allocation. Group profile 16 | ANNUAL REPORT 2023 | Socfinasia SOCFINCO FR Capital: CHF 1,300,000. Socfinco FR is a Swiss company that provides services, studies and management of agro-industrial plantations. Socfinco FR covers the agro-industrial sector of palm oil and rubber. The profit of the year that ended on 31 December 2023 is EUR 6,488,998. The Board of Directors will propose a dividend distribution of EUR 6,000,000 at the Annual General Meeting. Key Figures (EUR 000) As at 31 December 2023 2022 Fixed assets 5,444 4,309 Current assets 19,703 22,133 Equity () 14,921 16,432 Borrowing, provisions and third parties () 10,225 10,010 Sales and services 26,709 30,293 Profit / (loss) for the period 6,489 8,834 Distribution 6,000 8,000 Dividend per share (EUR) 4,615 6,154 Socfinasia’s holding (%) 50.00 50.00 () Before profit allocation. Socfinasia | ANNUAL REPORT 2023 | 17 International market for rubber and palm oil 1. Rubber SGX – NATURAL RUBBER – 5 years + SGX – NATURAL RUBBER – 1 year + $ct/Kg 50 100 150 200 250 300 50 100 150 200 250 300 RSS3 TSR20 $ct/Kg 100 120 140 160 180 200 220 100 120 140 160 180 200 220 RSS3 TSR20 Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 Jan 2024 Feb 2024 International market for rubber and palm oil 18 | ANNUAL REPORT 2023 | Socfinasia The international market in 2023 The average natural rubber price (TSR20 G 1st position on SGX G ) is USD 1,377/T FOB G Singapore compared with USD 1,548/T in 2022, a fall of 11%. Converted into euros, the average TSR20 G price in 2023 is EUR 1,273/T, compared with EUR 1,469/T in 2022. The end of 2022 was marked by the end of the ‘zero- covid’ policy in China and high stocks of natural rubber in consumer countries. China, the world’s leading consumer of natural rubber, saw one of its lowest rates of economic growth for 40 years in 2022, at 3%. Hopes of a recovery in Chinese economic activity at the start of the year enabled natural rubber prices to reach levels close to USD 1,450/T at the end of January 2023. Indeed, the lifting of public health measures was expected to go hand in hand with a spectacular upturn in the Chinese economy. In reality, however, the country has not recovered, faced with a major property crisis, falling exports and sluggish domestic consumption. Against this backdrop, and despite the start of the winter season in producing countries, prices remained under pressure from February onwards, fluctuating between USD 1,300 and USD 1,400/T against a backdrop of slowing consumption, the war in Ukraine, persistent inflationary pressures, restrictive monetary policies on the part of the main central banks and turbulence in the banking sector. In mid-August, natural rubber prices reached their lowest point of the year at USD 1,270/T. The fall in demand for natural rubber was particularly felt in the European and American markets, leading to an increase in inventories at tyre manufacturers’ plants. The fall in production in Indonesia and Malaysia, due in particular to a rubber tree disease, did not have a positive effect on natural rubber prices, as it was offset by increased production in other countries such as Côte d'Ivoire and Cambodia. In 2023, Côte d'Ivoire recorded its strongest annual production growth (+26%) for five years, consolidating its status as the world’s third producer with 1.68 million tons produced. From the end of August, natural rubber prices recovered following measures taken by the Chinese government to stimulate economic growth and downward revisions to production in Thailand and Indonesia due to heavy rains hampering harvests. At the end of December, natural rubber prices broke through the USD 1,500/T barrier and reached their highest level of the year at USD 1,561/T on the last closing day of 2023. In stark contrast to 2021 and the first half of 2022, global logistics improved at the end of 2022 and ocean freight rates fell steadily during 2023 to return to pre-COVID levels. Freight rates out of Asia have fallen faster than out of Africa, making Asian rubber more competitive with African rubber. However, the tensions that have arisen in the Red Sea have had an impact on freight rates from Asia to Europe, which began to rise sharply at the end of 2023. Shipowners are now having to divert their vessels to the Cape of Good Hope instead of the Suez Canal, and are imposing substantial freight surcharges for cargoes originating in Asia. According to the latest forecasts published by GlobalData in February 2024, world natural rubber production in 2023 will be 14.15 million tons, down 1.1% on 2022, while world consumption will be 14.03 million tons, up 2.3% on 2022, resulting in a surplus of 118,000 tons in 2023 compared with 596,000 tons in 2022. International market for rubber and palm oil Socfinasia | ANNUAL REPORT 2023 | 19 Outlook 2024 Natural rubber prices remained above USD 1,500/T at the start of the year, reaching USD 1,603/T at the end of February, their highest level since July 2022. Natural rubber prices should be supported in 2024 by tight supply and a recovery in demand. Poor weather conditions which disrupted production in the southern provinces of Thailand in late 2023 and early 2024 and the possibility of an early winter in the main producing countries linked to the El Nino phenomenon could amplify the natural rubber deficit forecast for 2024. The end of interest rate rises and, depending on inflation trends, a probable easing of monetary policy by central banks in the USA and Europe could encourage an economic recovery with a positive impact in terms of demand for natural rubber. Price trends will also depend on the effectiveness of the measures taken by the Chinese government to stimulate the economic recovery, which remains affected by an unprecedented property crisis and a global economic slowdown as a result of the fight against inflation. The entry into force at the end of 2024 of the European “EUDR” regulation aimed at banning certain raw materials derived from deforestation should change the structure of the market. The strong demand from tyre manufacturers for traceable natural rubber destined for mainland Europe should enable producers who can prove that their supply chain is legal and does not come from deforested areas to obtain a substantial premium over the reference market. Rubber producers who do not comply with the EUDR will be forced to sell their production outside the single market at a lower premium. According to the IRSG’s latest forecasts, published in August 2023, the IRSG estimates world production in 2024 at 14.90 million tons (up 2.2%) and world demand of around 14.95 million tons (up 2.7%), resulting in a rubber deficit of 48,000 tons. Consumption and production are therefore almost in balance. The TSR20 G 1st FOB G Singapore position on SGX G was quoted at USD 1,603/T on 23 February 2024. International market for rubber and palm oil 20 | ANNUAL REPORT 2023 | Socfinasia 2. Palm oil CIF ROTTERDAM – PALM OILS – 5 years + CIF ROTTERDAM – PALM OILS – 1 year + $/Mton 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 CPO CPKO $/Mton Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023 Jan 2024 Feb 2024 500 600 700 800 900 1,000 1,100 1,200 1,300 500 600 700 800 900 1,000 1,100 1,200 1,300 CPO CPKO International market for rubber and palm oil Socfinasia | ANNUAL REPORT 2023 | 21 World palm oil production in million tons (source: Oil World) 2024 () 2023 2022 2021 2020 2019 2018 2015 2005 1995 Indonesia 48.2 48.4 46.7 44.7 42.8 44.2 41.6 33.4 14.1 4.2 Malaysia 18.4 18.6 18.5 18.1 19.1 19.9 19.5 20.0 15.0 7.8 Other 14.8 14.4 14.0 13.1 12.2 12.4 11.9 9.1 4.8 3.2 TOTAL 81.4 81.6 79.2 75.9 74.1 76.5 73.0 62.5 33.9 15.2 () Estimated (December 2023). Production of main oils in million tons (source: Oil World) Oct 2023 to Sep 2024 () 2023 2022 2021 2020 2019 2018 2015 2005 1995 Palm 81.4 81.6 79.2 75.9 74.1 76.5 73.0 62.5 33.9 15.2 Soya 61.4 59.7 60.1 60.1 58.6 56.8 56.8 48.8 33.6 20.2 Rapeseed 30.9 30.6 25.7 26.9 25.3 24.9 25.6 26.3 16.2 10.8 Sunflower 22.3 22.3 19.7 18.9 21.3 20.7 19.0 15.1 9.7 8.7 Palm kernel 8.5 8.4 8.2 8.0 7.8 8.1 7.7 6.8 4.0 2.0 Cotton 4.5 4.4 4.4 4.4 4.6 4.6 4.7 4.7 5.0 3.9 Peanut 4.4 4.4 4.7 4.4 4.2 3.7 4.0 3.7 4.5 4.3 Copra 3.0 3.1 3.0 2.8 2.6 2.9 2.9 2.9 3.2 3.3 TOTAL 216.6 214.5 205.1 201.4 198.5 198.2 193.7 170.8 110.1 68.4 () Estimated (December 2023). The international market in 2023 The average price for CIF Rotterdam G crude palm oil in 2023 is USD 964/T, compared with USD 1,352/T in 2022. Whereas 2022 had been characterised by high price volatility, 2023 was marked by a degree of stability, with prices mostly fluctuating between USD 900 and USD 1,000/T. In 2022, prices rose spectacularly in the first half of the year, triggered by a sudden restriction in supply due to the Russian-Ukrainian conflict and protectionist measures taken by Indonesia. Then, in the second half of the year, rising stocks and the massive return of Indonesian palm oil to the markets created strong downward pressure on prices. After losing almost USD 500/T in the space of a few months, the price of CIF Rotterdam G crude palm oil ended 2022 at around USD 1,000/T. Over the first few months of 2023, prices stabilised at around USD 1,000/T, with the market torn between bullish and bearish news. The supply of vegetable oil on the markets remained strong, encouraging bearish sentiment. At the same time, fairly positive export statistics and difficult weather conditions likely to affect harvests helped to support prices during this period. After several months without much volatility, palm oil prices finally eroded in May, falling from USD 1,000/T to USD 850/T CIF Rotterdam G , before rebounding in June following announcements of a likely return of the El Niño weather phenomenon. In South-East Asia, El Niño is traditionally synonymous with drought, which can lead to sharp falls in production, and therefore a tightening of palm oil supply on the markets. However, while the occurrence of this climatic phenomenon has now been confirmed, the forecasts for a “strong” El Niño have gradually faded. The impact on palm oil production could be delayed and less severe than expected. International market for rubber and palm oil 22 | ANNUAL REPORT 2023 | Socfinasia Oil World forecasts global palm oil production at around 81.6 million tons in 2023. Demand remains strong, despite the slowdown in the Chinese economy. India remains the biggest importer, with almost 10 million tons expected to be imported by 2023. But the biggest consumer is Indonesia, which absorbs more than 20 million tons of palm oil a year, or 40% of its production. The proportion destined for the biofuel industry (11 million tons) now exceeds that destined for the food industry (9 million tons). At the end of 23 December 2023, the CIF Rotterdam G CPO G was trading at around USD 935/T. Outlook 2024 After rising sharply in recent years, global palm oil production is now running out of steam. The two main palm oil producing countries, Indonesia and Malaysia (85% of world production), are experiencing a slowdown in production growth, with fewer areas available for planting and labour shortages. In addition, the possible effects of the El Niño phenomenon on palm plantations could also have an impact on palm oil production in 2024. The available supply of palm oil could therefore prove insufficient to satisfy the growth in world demand. Demand remains strong, thanks in particular to the increase in the world’s population and the continuing rise in demand for vegetable oils in developing countries. Given the current global economic slowdown, however, demand could show signs of weakening, even if the main importing countries, led by India and China, do not see their consumption fall significantly. The biofuels industry’s increasingly ambitious programmes (B20 in Malaysia, B35 in Indonesia) should provide some support for palm oil prices. By 2023, it is estimated that over 20 million tons of palm oil (25% of global production) will have been used to make biodiesel. Some experts also believe that the entry into force of the European regulation on imported products (EUDR) could create a two-tier palm oil market. From the end of 2024, this law will prohibit the arrival on European soil of raw materials originating from deforestation zones after 2020. This restrictive legislation could split the palm oil market in two: on the one hand, traceable palm oil produced by the largest plantations capable of complying with European regulations, and on the other, downgraded oil produced by smaller players that will be sold outside the European Union. This “non-labelled” oil would then see its price fall in relation to “EUDR” palm oil. Palm oil prices are also likely to be affected by the trend in soya prices in 2024. Brazil, which accounts for almost 40% of global soya production, is currently experiencing severe weather problems (dry weather in Mato Grosso and heavy rain in Paraná) that are likely to affect the 2024 harvest and influence the overall supply of vegetable oils on the markets. On 23 February 2024, the CIF Rotterdam G CPO G was quoted at around USD 960/ton. Socfinasia | ANNUAL REPORT 2023 | 23 Environment and social responsibility Along with its specific commitment to transparency, the Group has built a responsible management policy around its three pillars of commitment, namely: rural development, workers and local communities, and environment. These commitments form the basis of key initiatives that are aimed at improving long-term economic performance, social well-being, health, safety and natural resource management. An implementation plan for this policy was defined and implemented since 2022. A regularly updated dashboard, as well as a separate annual report (“Sustainable Development Report”), details the efforts and actions undertaken by the Socfin Group in this area. The responsible management policy, the dashboard and the annual sustainable development report are available on the Group’s website. 24 | ANNUAL REPORT 2023 | Socfinasia Key figures 1. Activity indicators Area (hectares) Rubber Palm As at 31 December 2023 Immatures (by year of planting) 2023 244 1,979 2022 167 1,724 2021 120 1,286 2020 189 0 2019 155 0 2018 215 0 2015 609 0 2014 74 0 2012 3 0 2011 38 0 2010 2 0 Total immatures 1,816 4,989 Young (from 6 to 11 years) 2,900 (from 3 to 7 years) 7,521 Prime (from 12 to 22 years) 8,290 (from 8 to 18 years) 11,644 Old (above 22 years) 236 (above 18 years) 15,346 Total in production 11,426 34,511 TOTAL 13,243 39,499 Area (hectares) 2023 2022 2021 2020 2019 Palm 39,499 39,279 39,089 38,727 38,447 Rubber 13,243 13,523 13,886 14,414 14,829 TOTAL 52,742 52,802 52,975 53,141 53,276 Production 2023 2022 2021 2020 2019 Palm Oil (tons) Own production G 188,527 179,516 180,584 182,577 189,462 Rubber (tons) Own production G 15,250 12,914 15,430 15,110 15,123 Seeds (thousands) Own production G 9,190 13,189 11,668 8,042 6,308 Key figures Socfinasia | ANNUAL REPORT 2023 | 25 Turnover (EUR million) 2023 2022 2021 2020 2019 Palm 151 171 141 105 99 Rubber 21 22 21 18 19 Other agricultural products 7 7 5 4 4 Other 1 1 1 0 0 TOTAL 179 202 168 127 122 Staff 2023 2022 2021 2020 2019 Average workforce 9,686 9,595 10,168 10,363 10,567 2. Key figures from the consolidated income statement and consolidated statement of cash flows (EUR million) 2023 2022 2021 2020 2019 Turnover 179 202 168 127 122 Operating income 62 56 73 34 21 Profit / (loss) for the period attributable to the Group 46 48 57 16 14 Net cash flows from operating activities 63 91 69 36 25 Free cash flows G 122 152 60 25 12 3. Key figures in the consolidated statement of financial position (EUR million) 2023 2022 2021 2020 2019 Bearer biological assets 92 90 115 107 117 Other non-current assets 126 183 256 154 87 Current assets 146 145 115 75 143 Total equity 256 280 296 247 255 Non-current liabilities 39 40 121 37 45 Current liabilities 69 99 70 52 47 26 | ANNUAL REPORT 2023 | Socfinasia Stock market data (EUR) 2023 2022 2021 2020 2019 Number of shares 19,594,260 19,594,260 19,594,260 19,594,260 19,594,260 Equity attributable to the owners of the Company 247,910,360 273,585,223 289,258,777 241,466,670 247,709,358 Undiluted net profit per share 2.35 2.45 2.93 0.84 0.73 Dividend per share 4.00 3.50 1.40 0.80 0.80 Share price Minimum 14.70 14.20 13.10 11.10 11.70 Maximum 17.20 18.80 17.80 17.80 16.40 Closing 15.40 16.50 14.30 14.50 16.30 Market capitalisation G 301,751,604 323,305,290 280,197,918 284,116,770 319,386,438 Dividend paid / net profit attributable to the owners of the Company 170.00% 143.03% 47.78% 95.36% 109.27% Dividends / market capitalisation G 25.97% 21.21% 9.79% 5.52% 4.91% Market price / undiluted net profit per share 6.55 6.74 4.88 17.28 22.26 Financial highlights of the year No material events occurred during the financial period. Socfinasia | ANNUAL REPORT 2023 | 27 1. Introduction Socfinasia pays close attention to the evolution of the ten principles of corporate governance of the Luxembourg Stock Exchange. It commits to providing the necessary explanations for a comprehensive understanding on how the Company functions. Corporate governance is a set of principles and rules whose main objective is to contribute to long- term value creation. It allows the Board to promote the interests of the Company and its shareholders while putting in place effective control systems, management of risks and conflicts of interests. 2. Corporate governance chart The Board of Directors adopted the corporate governance chart on 21 November 2018. It was updated on 27 March 2024 and is available on the Group’s website. 3. Board of Directors Composition of the Board of Directors Name Nationality Year of Birth Position First nomination Term of Office Mr. Hubert Fabri Belgian 1952 Chairman (a) AGO 1980 AGO 2027 Mr. Vincent Bolloré French 1952 Director (a) AGE 1990 AGO 2029 Mr. Cyrille Bolloré French 1985 Director (a) AGO 2019 AGO 2025 Administration and Finance Corporation “AFICO” represented by Régis Helsmoortel Belgian 1961 Director (b) AGO 1997 AGO 2028 Mr. François Fabri Belgian 1984 Director (b) AGO 2014 AGO 2026 Mr. Philippe Fabri Belgian 1988 Director (b) AGO 2018 AGO 2024 Mrs. Valérie Hortefeux French 1967 Director (c) AGO 2019 AGO 2025 (a) Non-Executive non-independent Director (b) Executive non-independent Director (c) Independent Director The mandate of Mr. Philippe Fabri, outgoing director, is eligible for re-election. The Board will propose the renewal of this term of office at the next general meeting. This renewal will hold for a period of six years, until the General Meeting of 2030. Corporate governance statement 28 | ANNUAL REPORT 2023 | Socfinasia Corporate governance statement Other mandates held by the directors in listed companies Hubert Fabri Chairman Positions and offices held in Luxembourg companies • Chairman and director of the Board of Directors of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia. Positions and offices held in foreign companies • Chairman and Director of the Board of Directors of Palmeraies de Mopoli; • Vice-Chairman of Société des Caoutchoucs du Grand Bereby “SOGB”; • Vice-Chairman and member of the Supervisory Board of Compagnie du Cambodge; • Director of Compagnie de l’Odet, Financière Moncey, Okomu Oil Palm Company, S.A.F.A. Cameroon “Safacam”, Société Industrielle et Financière de l’Artois and La Forestière Equatoriale; • Permanent representative of Administration and Finance Corporation “AFICO” at the Board of Société Camerounaise de Palmeraies “Socapalm”. Vincent Bolloré Director Positions and offices held in Luxembourg companies • Director of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia. Positions and offices held in foreign companies • Chairman Chairman and Chief Executive Officer of Compagnie de l'Odet; • Vice-Chairman of Société des Caoutchoucs du Grand Bereby “SOGB”; • Director of Compagnie de l'Odet; • Permanent representative of Bolloré Participations SE on the Boards of Directors of S.A.F.A. Cameroon “Safacam”, Société des Caoutchoucs du Grand Bereby “SOGB” and Société Camerounaise de Palmeraies “Socapalm”. Cyrille Bolloré Director Positions and offices held in Luxembourg companies • Director of Société Financière des Caoutchoucs “Socfin” and Socfinasia; • Permanent representative of Bolloré Participations SE on the Board of Directors of Socfinaf. Positions and offices held in foreign companies • Chairman and Chief Executive Officer of the Board of Directors of Bolloré SE; • Member of the Supervisory Board of Compagnie du Cambodge; • Vice-Chairman of Compagnie de l’Odet; • Director of Bolloré SE, Compagnie de l'Odet and Société Industrielle et Financière de l’Artois; • Permanent representative of Compagnie du Cambodge on the Board of Financière Moncey; • Member of the Supervisory Board of Vivendi SE; • Non-Executive Director and member of the Compensation Committee of UMG N.V. Corporate governance statement Socfinasia | ANNUAL REPORT 2023 | 29 Administration and Finance Corporation “AFICO” Director Positions and offices held in Luxembourg companies • Director of Socfinasia. Positions and offices held in foreign companies • Director of Société des Caoutchoucs du Grand Bereby “SOGB”, Société Industrielle et Financière de l’Artois and Société Camerounaise de Palmeraies “Socapalm”. François Fabri Director Positions and offices held in Luxembourg companies • Director of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia; • Executive Director of Socfinaf. Positions and offices held in foreign companies • Permanent Representative of Administration and Finance Corporation “AFICO” on the Board of Société des Caoutchoucs du Grand Bereby “SOGB” and Société Industrielle et Financière de l’Artois; • Managing Director of Palmeraies de Mopoli; • Director of S.A.F.A. Cameroon “Safacam” and Société Camerounaise de Palmeraies “Socapalm”. Philippe Fabri Director Positions and offices held in Luxembourg companies • Director of Société Financière des Caoutchoucs “Socfin”, Socfinaf and Socfinasia; • Executive Director of Société Financière des Caoutchoucs “Socfin”. Positions and offices held in foreign companies • Member of the Supervisory Board of Palmeraies de Mopoli; • Permanent representative of Société Anonyme Forestière et Agricole “SAFA” on the board of S.A.F.A. Cameroon “Safacam”. Valérie Hortefeux Director Positions and offices held in Luxembourg companies • Director of Socfinasia. Positions and offices held in foreign companies • Director of Mediobanca and Compagnie de l’Odet. Corporate governance statement 30 | ANNUAL REPORT 2023 | Socfinasia Appointments of Directors The Board of Directors proposes the appointment of the Directors at the Annual General Meeting of shareholders. In the event of a vacancy due to the passing of or following the resignation of one or more Directors, the remaining Directors will proceed to temporary co-optations. These co-optations will be subject to the approval of the Annual General Meeting of shareholders at its following meeting. The Director appointed to replace another Director will complete the term of his predecessor. Role and powers of the Board of Directors The Board of Directors is the body responsible for the management of the Company and the control of day-to-day management. It acts in the interest of the Company. The Board of Directors ensures that all financial and human resources are available and that all the necessary structures are in place to achieve its objectives and secure long-term value creation. The Articles of Association empower the Board of Directors to perform all actions necessary to achieve the corporate purpose. Activity report of the Board of Directors Number of meetings There are at least two meetings for the year-end and mid-year evaluations. During the 2023 financial year, the Board of Directors met 5 times. Topics generally discussed Periodic accounting situations; Portfolio movements; Inventory and valuation of the portfolio; Evolution of significant holdings; Management report; Investment projects; Corporate, social and environmental responsibility. Average attendance rate of Directors - 2023: 96% - 2022: 95% - 2021: 98% - 2020: 100% - 2019: 91% Corporate governance statement Socfinasia | ANNUAL REPORT 2023 | 31 4. Committees of the Board of Directors 4.1 Audit Committee The Committee consists of three members, of which 2 are independent and one is assigned as President of the Audit Committee. The Members of the Audit Committee are appointed for one year and are eligible for re-election. This Audit Committee is effective as of 1 January 2023 and has been in charge of supervising the preparation of the financial information for the year 2023. The Board of Directors has proposed that its constitution will be as follows: • Mrs. Valérie Hortefeux (Independent Member) - Chairperson • Mr. Frédéric Lemaire (Independent Member) • Mr. Philippe Fabri (Director) The appointment of the non-executive members will be confirmed at the General Meeting of Shareholders on 29 May 2024. The Audit Committee assists the Board of Directors in its supervisory function and is responsible of the monitoring of the financial reporting, the audit process, the analysis and the control of financial risks. The Audit Committee shall meet three times a year. 4.2 Appointment and Remuneration Committee The principal shareholders set the remuneration of the operational management of Socfinasia. The Board of Directors does not consider it necessary to set up a Remuneration Committee. Similarly, for practical reasons and due to the size of the Company, the Board of Directors has chosen not to set up a Nomination Committee. 5. Remuneration The remuneration allocated to the members of the Board of Directors of Socfinasia for the financial year 2023 amounts to EUR 11,674,417 compared to EUR 15,278,115 in 2022. The Directors of Socfinasia did not receive any other payment in shares (stock options). Corporate governance statement 32 | ANNUAL REPORT 2023 | Socfinasia 6. Shareholding status Shareholder Number of shares held = Number of voting rights Percentage holding Date of notification Socfin L-1650 Luxembourg 11,324,179 57.79 01/02/2017 Bolloré Participations F-29500 Ergué Gaberic 200 0.001 22/10/2018 Bolloré F-29500 Ergué Gaberic 3,358,100 17.138 22/10/2018 Compagnie du Cambodge F-92800 Puteaux 1,002,500 5.116 22/10/2018 Total Bolloré interests (direct and indirect) 4,360,800 22.255 7. Financial calendar 29 May 2024 Annual General Meeting at 11.00 am 14 June 2024 Payment of the balance of dividend for 2023 (coupon number 84) End of September 2024 Half year stand alone and consolidated results at 30 June 2024 Mid-November 2024 Interim Management statement for 3 rd quarter of 2024 End of March 2025 Annual stand alone results at 31 December 2024 Mid-April 2025 Consolidated annual results at 31 December 2024 Mid-May 2025 Interim Management statement for the 1 st quarter of 2025 28 May 2025 Annual General Meeting at 11.00 am The Company’s results are published on the Luxembourg Stock Exchange website www.bourse.lu and on the Company’s website www.socfin.com. 8. External audit Independent statutory auditor (Réviseur d’entreprises agréé) Ernst & Young “EY” 35E Avenue John F. Kennedy L-1855 Luxembourg. In 2023, the audit fees amounted to EUR 375,814 VAT included. The audit fees include all fees paid to the independent statutory auditor of the Group, as well as those paid to member firms within their network for the year. No consulting work or other non-audit services have been performed by those companies in 2023. Corporate governance statement Socfinasia | ANNUAL REPORT 2023 | 33 9. Corporate, social and environmental responsibility Along with its specific commitment to transparency, the responsible management policy embodies the Group’s three pillars of commitment: rural development, workers and local communities, and environment. These commitments form the basis of key initiatives aimed at improving long-term economic performance, social well-being, health, safety and natural resource management. An implementation plan for this policy has been defined and implemented since 2022. The efforts and actions undertaken by the Socfin Group in this area are detailed in a regularly updated dashboard as well as in a separate annual report ("Sustainable Development Report"). The responsible management policy, the dashboard and the annual sustainable development report are available on the Group’s website. 10. Other information Following the Regulation 2016/347 of the European Commission of 10 March 2016, which specifies the modalities for updating insider lists, a list of insiders has been drawn up and is kept continuously up to date. The persons concerned were informed of their inclusion on this list. 34 | ANNUAL REPORT 2023 | Socfinasia Statement of compliance Mr. Philippe Fabri, Director and Mr. Daniel Haas, Chief Financial Officer, indicate that, to their knowledge: (a) in accordance with the international accounting standards adopted by the European Union, the consolidated financial statements prepared for the year that ended on 31 December 2023, give a true and fair view of the assets and liabilities, the financial position and the profit or loss of Socfinasia and of all the entities included in consolidation, and (b) the management report presents the following information in a fairly manner: the evolution and results of the Company, the financial position of the Group and all the entities that are included in the consolidation, as well as a description of the main risks and uncertainties they face. Socfinasia | ANNUAL REPORT 2023 | 35 Portrait du GroupeConsolidated management report Directors’ report on the consolidated financial statements presented by the Board of Directors to the Annual General Meeting of the Shareholders of 29 May 2024 Ladies and Gentlemen, 1. Consolidated financial statements The consolidated financial statements as at 31 December 2023 include the financial statements of Socfinasia, and of all subsidiaries and direct and indirect associate companies. The details are given in Note 2 of the Notes to the consolidated financial statements. As stated in Note 1 to the consolidated financial statements, the consolidated financial statements have been prepared in accordance with International Financial Reporting Standards or IFRS G (terms having a G are explained part “Glossary” at the end of the annual report) as adopted by the European Union. Socfinasia (the Group) adopted IFRS G standards for the first time in 2005, and implemented all the standards applicable to the Group as at 31 December 2023 have been implemented. Consolidated results For the 2023 financial year, the result attributable to the Group amounted to EUR 46.1 million compared to EUR 47.9 million in 2022. This resulted in earnings per share attributable to the Group of EUR 2.35 compared to EUR 2.45 in 2022. The consolidated revenue amounted to EUR 178.5 million in 2023 compared to EUR 202.0 million in 2022, thus a decrease of EUR 23.5 million. This decrease in revenue was mainly due to a fall in the price (EUR -23.9 million), and the variation of the Indonesian Rupiah versus the Euro (EUR -9.2 million), whereas quantities sold during the period increased (EUR +12.0 million). The operating profit increased to EUR 62.0 million compared to EUR 55.7 million in 2022. As a reminder, the fixed assets were subject to a non-recurring impairment of EUR 27.3 million in 2022. Other financial income decreased to EUR 12.1 million compared to EUR 26.8 million in 2022 and consisted mainly of EUR 4.6 million of interest on long-term advances to Socfin and interest on short-term deposits for EUR 4.3 million. Financial expenses amounted to EUR 7.5 million compared to EUR 8.8 million in 2022 and consisted mainly of foreign exchange losses for EUR 5.7 million. Furthermore, the tax expense decreased, with income taxes amounting to EUR 20.1 million compared to EUR 28.3 million in 2022. Profit for the year from associates attributable to the Group decreased to EUR 5.9 million compared to EUR 10.8 million in 2022. Consolidated statement of financial position Socfinasia’s assets consist of: - non-current assets of EUR 217.6 million compared to EUR 273.1 million in 2022, a decrease of EUR 55.6 million mainly due to a decrease in long-term advances towards Socfin of EUR 50.0 million and in other non-current assets of EUR 7.0 million; - current assets for EUR 145.8 million compared to EUR 145.4 million in 2022, mainly linked to the decrease in other receivables for EUR 18.5 million and to the increase in cash and cash equivalents of EUR 19.9 million. The shareholders’ equity attributable to the Group amounted to EUR 247.9 million compared to EUR 273.6 million in 2022. The decrease in the shareholders’ equity of EUR -25.7 million is mainly due to the profit for the period (EUR +46.1 million) and to the allocation of the net results (EUR -68.6 million, final dividend 2022 and interim dividend 2023 included). Based on the consolidated shareholders’ equity, the net value per share G attributable to the Group, before the distribution of the balance of the dividend, was EUR 12.65 compared to EUR 13.96 a year earlier. As at 31 December 2023, the share price stood at EUR 15.40. Current and non-current liabilities decreased to EUR 107.8 million compared to EUR 138.6 million in the previous year. The other payables increased at EUR 59.7 million compared to EUR 54.8 million in the previous year, whereas financial debts decreased at EUR 0 million compared to EUR 27.9 million in the previous year. Statement of compliance 36 | ANNUAL REPORT 2023 | Socfinasia Consolidated cash flow As at 31 December 2023, cash and cash equivalents amounted to EUR 114.6 million, an increase of EUR 19.9 million for the period compared to an increase of EUR 21.2 million in the previous financial year. Net cash flows from operating activities amount to EUR 62.8 million in 2023 (EUR 91.3 million in 2022) and cash flows from operating activities amount to EUR 85.7 million compared to EUR 107.9 million during the previous financial year. Cash flows from investing activities show a net inflow, amounting to EUR 58.9 million compared to a net inflow of EUR 60.9 million in 2022, due to the partial reimbursement of the long-term advance from Socfin. Cash flows from financing activities amounted to EUR 101.3 million (EUR 132.0 million in 2022) of which EUR 72.7 million of dividends (EUR 66.3 million in 2022) and EUR 27.5 million repayment of borrowings. 2. Financial instruments The financial risk management policies are described in the notes to the consolidated financial statements of the Company (see notes 23 and 34). 3. Outlook 2024 The results for the next financial year will largely depend on factors which are external to the management of the Group, such as the political and economic conditions in the countries where the subsidiaries are established, the changes in the price of rubber and palm oil, and the evolution of the Indonesian Rupiah and the US dollar against the Euro. The Group, for its part, maintains its policy of keeping cost prices as low as possible and of improving its production capacity. 4. Political and economic environment The Company holds interests in subsidiaries operating in South-East Asia. Given the economic and political instability of some of these countries, these investments present a risk in terms of exposure to political and economic changes. Geopolitical uncertainties In February 2022, a number of countries (including the US, UK and EU) enforced sanctions against certain entities and individuals in Russia as a result of the official recognition of the Donetsk People Republic and Lugansk People Republic by the Russian Federation. Following the military operations initiated by Russia against Ukraine on 24 February 2022, potential additional sanctions were announced. On 7 October 2023 Palestinian militant groups led by Hamas launched a coordinated surprise offensive on Israel resulting in more than 1,200 deaths, primarily Israeli citizens. Following this attack, Israel declared itself in a state of war for the first time since the Yom Kippur War in 1973. Due to the geopolitical tensions, since February 2022, there has been a significant increase in volatility on the securities and currency markets. The conflicts have had a significant impact on the financial markets, with many investors concerned about the risk of further escalation and the ensuing impact on global trade and economic growth. Although neither the company’s operations nor its performance and going concern have been significantly impacted by the above in 2023, the Board of Directors continues to monitor the evolving situation and the possible effects on the financial position and results of the company. Statement of compliance Socfinasia | ANNUAL REPORT 2023 | 37 5. Events after the closing date There are no material events after the closing date to mention. 6. Corporate governance The Board of Directors implements the corporate governance rules that are applicable in the Grand Duchy of Luxembourg into the Group’s financial structure and reports. Further information on how these rules are implemented is available in the corporate governance statement of the annual report and in the management report on the Company’s stand alone financial statements. 7. General internal control system adapted to the group’s specific activities Segregation of functions The segregation of the operational, commercial and financial functions implemented at each level of the Group encourages an autonomous model of internal control. In each of their area of responsibility, these different functions ensure the completeness and reliability of information. They provide regular updates on this aspect to local managers and to the Group’s headquarters, on information related to agricultural and industrial production, trade, human resources, finance, etc. Autonomy and accountability of subsidiaries The operational entities have a large degree of autonomy in their management due to geographical distances. In particular, they are responsible for the implementation of an internal control system, which is adapted not only to the nature and extent of their activity, but also to the optimisation of their operations and financial performances, the protection of their assets and the management of their risks. This autonomy allows the entities to be more accountable and to ensure consistency between their practices and the legal framework of their host country. Centralised control The top management of the entities within the Group carry out/adhere to a Human Resources Management policy, which is centralised at the Group’s headquarters. This policy contributes to the smooth running of the internal control system and ensures its effectiveness through different practices such as independent/ autonomous recruiting processes, the harmonisation of all segregated functions, as well as annual evaluations and training programs. The operational, commercial and financial functions centrally define a set of standard reports which ensure that information originating from the subsidiaries is presented homogenously. Treasury reporting process The treasury department organises, supervises and controls the reporting of the subsidiaries’ daily information and weekly indicators. In particular, it monitors the position of the cash flow, the evolution of net debt and the expenses related to the investments. Statement of compliance 38 | ANNUAL REPORT 2023 | Socfinasia Financial reporting process The financial department organises, supervises and controls the reporting of monthly accounting, budgetary and financial information. It distributes condensed reports for use by the Group’s operational management. Twice per year, it includes this information in the long- term development plan of the subsidiaries. It also ensures the implementation of the financial decisions taken by the subsidiaries’ Board of Directors. Preparation of consolidated accounts The consolidated financial statements are prepared on a half-yearly basis. On a yearly basis, they are audited annually by the external auditors as part of a financial audit of subsidiaries, which covers both the statutory accounts of the entities in the scope of consolidation and the consolidated financial statements. Once approved by the Board of Directors, they are published. The consolidation department of the Group guarantees homogeneity and treatment monitoring for all companies within the scope of consolidation. It strictly adheres to the accounting standards in force relating to consolidation operations. It uses a standard consolidation tool to ensure a number of procedures, such as the secure processing of information feedback from subsidiaries, the transparency and relevance of automatic consolidation processes and the consistency of the accounting aggregates’ presentation in the annual report. Lastly, due to the complexity of the accounting standards in force and the many specificities around their implementation, the consolidation service centralises the adjustments specific to the valuation rules applicable to the consolidated financial statements. 8. Environment and social responsibility Along with its specific commitment to transparency, the responsible management policy embodies the Group’s three pillars of commitment: rural development, workers and local communities, and environment. These commitments form the basis of key initiatives aimed at improving long-term economic performance, social well-being, health, safety and natural resource management. An implementation plan for this policy was defined and implemented since 2022. A regularly-updated dashboard as well as a separate annual report (“Sustainable Development Report”) detail the efforts and actions undertaken by the Socfin Group in relation to this policy. The responsible management policy, the dashboard and the annual sustainable development report are available on the Group’s website. The Board of Directors Socfinasia | ANNUAL REPORT 2023 | 39 Portrait du GroupeAuditor’s report on the consolidated financial statements To the Shareholders SOCFINASIA S.A. 4, Avenue Guillaume L-1650 Luxembourg REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS Opinion We have audited the consolidated financial statements of Socfinasia S.A. (the “Company”) and its subsidiaries (the “Group”), which comprise the consolidated statement of financial position as at 31 December 2023, and the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial statements, including material accounting policy information. In our opinion, the accompanying consolidated financial statements give a true and fair view of the consolidated financial position of the Company as at 31 December 2023, and of its consolidated financial performance and consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union. Basis for opinion We conducted our audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (“Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier” (“CSSF”). Our responsibilities under the EU Regulation Nº 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the “Responsibilities of the “réviseur d’entreprises agréé” for the audit of the consolidated financial statements” section of our report. We are also independent of the Company in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the consolidated financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of the audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Valuation of biological assets Risk identified As at 31 December 2023, the value of the Group’s biological assets amounted to EUR 91.8 million out of total assets of EUR 363.4 million. The Group owns biological assets in Asia. These biological assets, which consist mainly of oil palm and rubber plantations, are valued in accordance with the principles defined in IAS 16 “Property, Plant and Equipment”. These assets are recognised at cost less accumulated depreciation and any impairment losses. The note 8 “Impairment of assets” of the consolidated financial statements describes the methodology used by Group management to assess whether there is any indicator of impairment or any indicator of impairment reversal at the balance sheet date. When an indicator is identified, Group management determines the recoverable amount Auditor’s report on the consolidated financial statements 40 | ANNUAL REPORT 2023 | Socfinasia Auditor’s report on the consolidated financial statements of the biological assets and thus determines the impairment loss or the reversal of impairment to be recognised, if any. The indicators used by Group Management are: • a decrease or an increase of the listed price of natural rubber (TSR20 1st position on SGX) and the listed price of crude palm oil (CIF Rotterdam) at the balance sheet date higher than 15% compared to a five-year average of the prices observed on those markets • a decrease or an increase of the six-month average of the prices observed of those markets higher than 15% compared to a five-year average of the prices observed on those markets • a decrease or an increase of the twelve-month average of the prices observed of those markets of more than 15% compared to a five-year average of the prices observed on those markets For palm oil, which is mainly sold on local markets, Group Management also analyses local sales prices, considering that a decrease or an increase in these prices at the balance sheet date higher than 15% compared to a five-year average value of the local prices constitutes an indicator of impairment or an indicator of impairment reversal respectively. In addition to these external factors, the Group analyses the following internal performance indicators: - Specificities of the local market (evolution of supply and demand, ...); - Physical indications of impairment; - Significant changes in the plantations that could have a material impact on future cash flows. The recoverable amount is determined as the higher of the value in use and the fair value less costs of disposal. The value in use is defined in terms of discounted future net cash flows and involves significant judgements and estimations by Group Management, including financial forecasts and the utilization of appropriate discount rates. We considered the valuation of biological assets to be a key audit issue because of : - their significance in relation to the Group’s total assets - the assessment of whether there is any indicator of impairment or any indicator of impairment reversal; and - the determination of their recoverable amount which involves significant judgements and estimates. Audit response In order to assess the reasonableness of an indicator of impairment or an indicator of impairment reversal and, where appropriate, to determine the recoverable amount of biological assets, we performed the following audit procedures : • Assess the compliance of Group’s management’s methodology with the provisions of IAS 36 “Impairment of Assets”; • Analyze the methodology used with a particular focus on the indicators of impairment or on the indicators of impairment reversal; • Analyze the completeness of indicators of impairment or indicators of impairment reversal: - Evaluating the assessment performed by Group management to identify the existence of indicators of impairment or indicators of impairment reversal by comparing the underlying data of the analysis with the source of the data used; - Comparing the evolution of yields per hectare; and - Overseeing the audit work of the components auditors of material subsidiaries to identify any indicators of impairment or any indicators of impairment reversal, including that site visits of the plantations have been carried out; • In case of identification of an indicator of impairment or an indicator of impairment reversal, we: - Assess the appropriateness of the methodology applied by Group Management to determine the recoverable value of the biological assets and the accuracy of any impairment loss or any impairment reversal recorded; - Analyze the reasonableness of the cash flow forecasts used by Group Management to determine the value in use of the biological assets; Auditor’s report on the consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 41 - Assess the reasonableness of the assumptions and inputs used by Group management; and - Reconcile the key inputs used in the model with information audited by the components auditors of material subsidiaries. • Assess whether the disclosures required by IAS 36 “Impairment of Assets” for biological assets are properly disclosed in the notes of the consolidated financial statements. Other information The Board of Directors is responsible for the other information. The other information comprises the information included in the consolidated management report and the corporate governance statement but does not include the consolidated financial statements and our report of “réviseur d’entreprises agréé” thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and of those charged with governance for the consolidated financial statements The Board of Directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS as adopted by the European Union, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is also responsible for presenting and marking up the consolidated financial statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format, as amended (“ESEF Regulation”). In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Company’s financial reporting process. Responsibilities of the “réviseur d’entreprises agréé” for the audit of the financial statements The objectives of our audit are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and with the ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, Auditor’s report on the consolidated financial statements 42 | ANNUAL REPORT 2023 | Socfinasia design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. • Conclude on the appropriateness of Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of the “réviseur d’entreprises agréé” to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of the “réviseur d’entreprises agréé”. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Assess whether the consolidated financial statements have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate to them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter. Report on other legal and regulatory requirements We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the Shareholders on 26 May 2020 and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 4 years. The consolidated management report is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements. The accompanying corporate governance statement on pages 27 to 33 is the responsibility of the Board of Directors. The information required by article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002 on the commercial and companies register and on the accounting records and annual Auditor’s report on the consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 43 accounts of undertakings, as amended, is consistent with the consolidated financial statements and has been prepared in accordance with applicable legal requirements. We have checked the compliance of the consolidated financial statements of the Company as at 31 December 2023 with relevant statutory requirements set out in the ESEF Regulation that are applicable to the financial statements. For the Company, it relates to : • Financial statements prepared in valid xHTML format; • The XBRL markup of the consolidated financial statements using the core taxonomy and the common rules on markups specified in the ESEF Regulation. In our opinion, the consolidated financial statements of the Company as at 31 December 2023, identified as Socfinasia 2023 Annual Report.zip, have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation. We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent. We confirm that the prohibited non-audit services referred to in EU Regulation No 537/2014 were not provided and that we remained independent of the Company in conducting the audit. Ernst & Young Société anonyme Cabinet de révision agréé Anthony Cannella Luxembourg 44 | ANNUAL REPORT 2023 | Socfinasia Portrait du GroupeConsolidated financial statements 1. Consolidated statement of financial position 31/12/2023 31/12/2022 ASSETS Note EUR EUR Non-Current Assets Right-of-use assets 3 2,693,850 1,866,143 Intangible assets 4 301,923 237,776 Property, plant and equipment 5 39,209,888 40,992,845 Biological assets 6 91,842,656 90,355,051 Investments in associates 10 22,687,671 25,588,659 Financial assets at fair value through other comprehensive income G 11 5,231,277 773,528 Long-term advances 12 50,500,175 100,503,325 Deferred tax assets 13 5,105,504 5,817,338 Other non-current assets 0 7,000,000 217,572,944 273,134,665 Current Assets Inventories 16 16,916,698 15,945,854 Current biological assets 1,386,059 1,684,003 Trade receivables 17 2,259,161 3,141,096 Other receivables 18 9,924,598 28,426,558 Current tax assets 14 743,616 1,574,532 Cash and cash equivalents 19 114,574,658 94,648,047 145,804,790 145,420,090 TOTAL ASSETS 363,377,734 418,554,755 The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 45 1. Consolidated statement of financial position 31/12/2023 31/12/2022 ASSETS Note EUR EUR Non-Current Assets Right-of-use assets 3 2,693,850 1,866,143 Intangible assets 4 301,923 237,776 Property, plant and equipment 5 39,209,888 40,992,845 Biological assets 6 91,842,656 90,355,051 Investments in associates 10 22,687,671 25,588,659 Financial assets at fair value through other comprehensive income G 11 5,231,277 773,528 Long-term advances 12 50,500,175 100,503,325 Deferred tax assets 13 5,105,504 5,817,338 Other non-current assets 0 7,000,000 217,572,944 273,134,665 Current Assets Inventories 16 16,916,698 15,945,854 Current biological assets 1,386,059 1,684,003 Trade receivables 17 2,259,161 3,141,096 Other receivables 18 9,924,598 28,426,558 Current tax assets 14 743,616 1,574,532 Cash and cash equivalents 19 114,574,658 94,648,047 145,804,790 145,420,090 TOTAL ASSETS 363,377,734 418,554,755 The accompanying notes are an integral part of these consolidated financial statements. 31/12/2023 31/12/2022 EQUITY AND LIABILITIES Note EUR EUR Equity attributable to the owners of the Parent Share capital 20 24,492,825 24,492,825 Legal reserve 21 2,449,283 2,449,283 Consolidated reserves 299,889,982 321,299,102 Translation reserves -125,025,089 -122,604,832 Profit / (loss) for the period 46,103,360 47,948,844 247,910,361 273,585,222 Non-controlling interests G 9 7,663,646 6,404,183 Total Equity 255,574,007 279,989,405 Non-Current Liabilities Deferred tax liabilities 13 3,626,925 4,856,278 Employee benefits obligations 22 34,533,436 34,304,488 Long-term debt, net of current portion 23 0 9,375,586 Long-term lease liabilities 3 356,638 397,717 38,516,999 48,934,069 Current Liabilities Short-term debt and current portion of long-term debt 23 0 18,522,296 Short-term lease liabilities 3 27,258 28,105 Trade payables 24 7,345,213 4,333,217 Current tax liabilities 14 2,197,336 11,928,558 Other payables 24 59,716,921 54,819,105 69,286,728 89,631,281 TOTAL EQUITY AND LIABILITIES 363,377,734 418,554,755 The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements 46 | ANNUAL REPORT 2023 | Socfinasia 2. Consolidated income statement 2023 2022 Note EUR EUR Revenue 33 178,523,977 201,959,951 Change in inventories of finished products and work in progress -704,274 -772,075 Other operational income 1,545,489 3,767,343 Raw materials G and consumables used 33 -23,405,777 -18,516,134 Other expenses 33 -17,110,218 -14,928,608 Staff costs 26 -65,035,465 -73,053,902 Depreciation and impairment expense 7 -10,799,732 -37,867,992 Other operating expenses 33 -1,028,843 -4,843,681 Operating profit / (loss) 61,985,157 55,744,902 Other financial income 27 12,105,421 26,794,435 Gain on disposals 0 382,822 Loss on disposals -1,023,704 -301,923 Financial expenses 28 -7,542,460 -8,794,505 Profit / (loss) before taxes 65,524,414 73,825,731 Income tax expense 15 -20,108,323 -28,346,768 Deferred tax (expense) / income 15 412,214 -1,042,777 Share of the Group in the result from associates 10 5,890,456 10,844,143 Profit / (loss) for the period 51,718,761 55,280,329 Profit / (loss) attributable to non-controlling interests G 5,615,401 7,331,485 Profit / (loss) attributable to the owners of the Parent 46,103,360 47,948,844 Basic earnings per share undiluted 29 2.35 2.45 Number of Socfinasia’s shares 19,594,260 19,594,260 Basic earnings per share 2.35 2.45 Diluted earnings per share 2.35 2.45 The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 47 3. Consolidated statement of comprehensive income 2023 2022 Note EUR EUR Profit / (loss) for the period 51,718,761 55,280,329 Other comprehensive income G Actuarial gains / (losses) 22 -604,037 1,548,009 Deferred tax on actuarial losses and gains 132,888 -285,761 Fair value changes of securities measured at fair value through other comprehensive income G , before taxes 11 -42,251 -27,554 Deferred tax on fair value changes of securities measured at fair value through other comprehensive income G 10,537 6,872 Subtotal of items that cannot be reclassified to profit or loss -502,863 1,241,566 Gains / (losses) on exchange differences on translation of subsidiaries -2,610,919 -6,643,883 Share of other comprehensive income G related to associates 10 -337,884 443,738 Subtotal of items eligible for reclassification to profit or loss -2,948,803 -6,200,145 Total other comprehensive income G -3,451,666 -4,958,579 Total comprehensive income 48,267,095 50,321,750 Comprehensive income attributable to non-controlling interests G 5,371,255 7,263,233 Comprehensive income attributable to the owners of the Parent 42,895,840 43,058,517 The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements 48 | ANNUAL REPORT 2023 | Socfinasia 4. Consolidated statement of cash flows 2023 2022 Note EUR EUR Operating activities Profit / (loss) attributable to the owners of the Parent 46,103,360 47,948,844 Profit / (loss) attributable to non-controlling shareholders 5,615,401 7,331,485 Income from associates 10 -5,890,456 -10,844,143 Dividends received from associates 10 8,292,174 7,126,982 Fair value of agricultural production -1,213,115 -2,378,830 Other adjustments having no impact on cash position 1,281,260 -9,102,961 Depreciation, impairment, provisions and allowances 10,761,550 38,118,718 Net loss on disposals of assets 1,023,704 344,053 Income tax expense and deferred tax 15 19,696,109 29,389,545 Cash flows from operating activities 85,669,987 107,933,693 Interest expense / (income) 27, 28 -7,820,796 -5,700,645 Income tax paid 15 -27,880,824 -28,346,768 Change in inventory 765,945 1,391,037 Change in trade and other receivables 3,575,746 4,985,088 Change in trade and other payables 9,529,156 9,619,162 Change in accruals and prepayments -1,081,260 1,444,533 Change in working capital requirement 12,789,587 17,439,820 Net cash flows from operating activities 62,757,954 91,326,100 Investing activities Acquisitions / disposals of intangible assets -1,172,057 -635,933 Acquisitions of property, plant and equipment and biological assets 5, 6 -15,837,340 -13,786,271 Disposals of property, plant and equipment 661,527 2,534,443 Acquisitions / disposals of financial assets and loans with shareholder 31 66,359,340 67,069,288 Interest received 27 8,885,904 5,700,645 Net cash flows from investing activities 58,897,374 60,882,172 Financing activities Dividends paid to the owners of the Parent 30 -68,579,910 -58,782,780 Dividends paid to non-controlling shareholders 9 -4,111,803 -7,521,462 Proceeds from borrowings 23 3,130 0 Repayment of borrowings 23 -27,484,691 -65,642,097 Repayment of lease liabilities -27,689 -28,470 Interest paid 28 -1,065,108 0 Net cash flows from financing activities -101,266,071 -131,974,809 Effect of exchange rate fluctuations -462,646 1,009,875 Net cash flow 19,926,611 21,243,338 Cash and cash equivalents as at 1 January 19 94,648,047 73,404,709 Cash and cash equivalents as at 31 December 19 114,574,658 94,648,047 Net increase / (decrease) in cash and cash equivalents 19,926,611 21,243,338 The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 49 5. Consolidated statement of changes in equity EUR Share capital Legal reserve Translation reserves Consolidated reserves Equity attributable to the owners of the Parent Non- controlling interests G TOTAL EQUITY Balance as at 1 January 2022 24,492,825 2,449,283 -116,151,273 378,467,941 289,258,776 6,662,431 295,921,207 Profit / (loss) for the period 47,948,844 47,948,844 7,331,485 55,280,329 Actuarial (losses) / gains 1,136,023 1,136,023 126,225 1,262,248 Change in fair value of securities at fair value through other comprehensive income G -16,529 -16,529 -4,153 -20,682 Foreign currency translation adjustments -6,453,559 -6,453,559 -190,324 -6,643,883 Share in other comprehensive income G from associates 443,738 443,738 443,738 Total comprehensive income G -6,453,559 49,512,076 43,058,517 7,263,233 50,321,750 Dividends (Note 30) -19,594,260 -19,594,260 -5,521,954 -25,116,214 Interim dividends (note 30) -39,188,520 -39,188,520 -1,999,508 -41,188,028 Other movements 50,709 50,709 -19 50,690 Transactions with shareholders -58,732,071 -58,732,071 -7,521,481 -66,253,552 Balance as at 31 December 2022 24,492,825 2,449,283 -122,604,832 369,247,946 273,585,222 6,404,183 279,989,405 Balance as at 1 January 2023 24,492,825 2,449,283 -122,604,832 369,247,946 273,585,222 6,404,183 279,989,405 Profit / (loss) for the period 46,103,360 46,103,360 5,615,401 51,718,761 Actuarial (losses) / gains -424,034 -424,034 -47,115 -471,149 Change in fair value of securities at fair value through other comprehensive income G -25,345 -25,345 -6,369 -31,714 Foreign currency translation adjustments -2,420,257 -2,420,257 -190,662 -2,610,919 Share in other comprehensive income G from associates -337,884 -337,884 -337,884 Total comprehensive income G -2,420,257 45,316,097 42,895,840 5,371,255 48,267,095 Dividends (Note 30) -29,391,390 -29,391,390 -2,705,086 -32,096,476 Interim dividends (Note 30) -39,188,520 -39,188,520 -1,406,717 -40,595,237 Other movements 9,209 9,209 11 9,220 Transactions with shareholders -68,570,701 -68,570,701 -4,111,792 -72,682,493 Balance as at 31 December 2023 24,492,825 2,449,283 -125,025,089 345,993,342 247,910,361 7,663,646 255,574,007 The accompanying notes are an integral part of these consolidated financial statements. Consolidated financial statements 6. Notes to the consolidated financial statements 50 | ANNUAL REPORT 2023 | Socfinasia Note 1. Overview and material accounting policies 1.1. Overview Socfinasia S.A. (the “Company") was incorporated on 20 November 1972. Its corporate purpose qualifies it as a soparfi G (terms having a G are explained part “Glossary” at the end of the annual report) since the Annual General Meeting of 10 January 2011. The registered office is established at 4, avenue Guillaume, L-1650 in Luxembourg. The main activity of the Company and its subsidiaries (the “Group") is the management of a portfolio of interests that mainly focuses on the operation of tropical oil palm and rubber plantations mainly in South-East of Asia. Socfinasia is controlled by Société Financière des Caoutchoucs, abbreviated as “Socfin” which is the largest entity that consolidates. The registered office of the latter company is also located in Luxembourg. The Company is registered in the commercial register under the number B10534 and is listed on the Luxembourg Stock Exchange under ISIN code: LU0092047413. 1.2. Statement of complaince The consolidated financial statements have been prepared on a going concern basis and in accordance with International Financial Reporting Standards (IFRS G ) as adopted by the European Union. The consolidated financial statements are presented in euros and rounded to the nearest whole number, the euro being the functional currency of the parent company Socfinasia and of the Group’s presentation currency. On 27 March 2024, the Board of Directors approved the consolidated financial statements. In conformity with the current legislation existing in the Grand Duchy of Luxembourg, the financial statements will be approved by the shareholders during the Annual General Meeting. The official version of these financial statements is the ESEF G version available with the Officially Appointed Mechanism (OAM) tool. New standards and amendments issued but not yet effective on 1 January 2023: The Group does not expect the adoption of the standards and amendments described below to have a material impact on its consolidated financial statements, nor does it anticipate the early adoption of new accounting standards, amendments and interpretations. - In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS G 1 “Presentation of Financial Statements” to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: • What is meant by a right to defer settlement • That a right to defer must exist at the end of the reporting period • That classification is unaffected by the likelihood that an entity will exercise its deferral right • That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is classified as non-current and the entity’s right to defer settlement is contingent on compliance with future covenants within twelve months. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must be applied retrospectively. - In September 2022, the IASB issued amendments to IFRS G 16 to specify the requirements that a seller- lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use G it retains. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must applied retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS G 16. Earlier application is permitted and that fact must be disclosed. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 51 New IFRS G standards, amendments and interpretations not yet endorsed by the European Union: The Group does not expect the adoption of the standards and amendments described below to have a material impact on its consolidated financial statements, nor does it anticipate the early adoption of new accounting standards, amendments and interpretations. - On 25 May 2023, the IASB issued amendments to IAS G 7 and IFRS G 7 “Supplier Finance Arrangements”: the amendments clarify the characteristics of an arrangement for which an entity is required to provide the information. They also require entities to disclose information that allows users to assess how supplier finance arrangements affect an entity’s liabilities, cash flows and exposure to liquidity risk. Such information may consist of the terms and conditions of these arrangements and the carrying amount of the supplier finance arrangement financial liabilities. The amendments will be applied to annual reporting periods beginning on or after 1 January 2024, with early adoption permitted. - On 25 August 2023, the IASB issued amendments to IAS G 21 “Lack of Exchangeability”. The amendments clarify how an entity should assess whether a currency is exchangeable, and how it should determine a spot exchange rate when exchangeability is lacking. They also explain how an entity should specify information disclosures so that they help users of financial statements understand the impact of a currency that is not exchangeable. The amendments will be applied prospectively to annual reporting periods beginning on or after 1 January 2025, with early adoption permitted. 1.3. Presentation of the consolidated financial statements The consolidated financial statements are presented in euros (EUR or €). They are prepared based on historical cost with the exception of the following assets: - Biological assets (current) (IAS G 2, IAS G 41), securities measured at fair value through other comprehensive income G , all of which are recognised at fair value; - Property, plant and equipment acquired as part of a business combination (IFRS G 3), which are measured initially at their fair value at the date of acquisition. The accounting principles and rules are applied in a consistent and permanent way within the Group. The consolidated financial statements are prepared for the accounting year ending on 31 December 2023, and are presented before the Annual General Meeting of shareholders that approves the allocation of the parent company’s income. As of 1 January 2023, the Group adopted the following amendments without any material impact on the Group’s consolidated financial statements: o IFRS G 17 “Insurance Contracts” and its amendments: establishes principles for the recognition, measurement and presentation of insurance contracts. Under IFRS G 17, insurance performance should be measured at its current execution value and provide a more consistent measurement and presentation method for all types of insurance contracts. IFRS G 17 replaces IFRS G 4 “Insurance contracts” and its interpretations. o Amendments to IAS G 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”: the amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of IAS G 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. o Amendments to IAS G 8 Definition of Accounting Estimates: the amendments to IAS G 8 clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates. o Amendments to Amendments to IAS G 1 and IFRS G Practice Statement 2 Disclosure of Accounting Policies: the amendments to IAS G 1 and IFRS G Practice Statement 2 Making Materiality Judgements provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures. Consolidated financial statements 52 | ANNUAL REPORT 2023 | Socfinasia o Amendments to IAS G 12 “International Tax Reform – Pilar Two Model Rules”: on 23 May 2023, the IASB issued amendments to IAS G 12 in order to respond to concerns about the potential implications of the OECD Pillar Two model rules. The amendments introduce, in IAS G 12, a mandatory exception from recognising and disclosing deferred tax assets and liabilities related to Pillar Two income taxes on the one hand, and disclosure requirements on the other. The latter are intended for affected entities to help users of the financial statements have a better understanding of the exposure to Pillar Two income taxes that arise from that legislation, in particular before its effective date. The consequences of this amendment are further disclosed in Note 13. 1.4. Consolidation principles The consolidated financial statements include the financial statements of the parent company Socfinasia as well as those of the companies controlled by the parent ("subsidiaries") and those of the companies in which Socfinasia exercises significant influence ("associates"), all of which constitute the “Group”. All companies included in the scope of consolidation as of 31 December 2023 close their accounts on 31 December. a) Subsidiaries In accordance with IFRS G 10, an investor has control when it fulfills three conditions: 1) it holds power over the entity; 2) it is entitled to or is exposed to variable returns from its involvement; 3) it has the ability to use its power over the entity to affect returns. Currently, the Group holds the majority of the voting rights in the entities. Income and expenses from subsidiaries acquired or sold during the year are included in the consolidated income statement, respectively, from the date of acquisition to the date of disposal. Profit or loss and components of other comprehensive income G are attributed to the equity holders of the parent of the Group and to the non-controlling interests G , even if this results in the non-controlling interests G having a deficit balance. Where appropriate, restatements are made to the financial statements of the subsidiaries to align the accounting principles used with those of the Group. All intra-group balances and transactions are eliminated upon consolidation. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest G and other components of equity. Any residual gain or loss is recognised in profit or loss, while any investment retained is recognised at fair value. b) Investments in associates and joint ventures An associate is a company over which the Group exercises significant influence through its participation in the financial and operational decisions of this company, but over which it has no control. Significant influence is presumed when the Group holds, directly or indirectly through its subsidiaries, between 20% and 50% of the voting rights. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement (i.e. decisions require unanimous consent of the parties sharing control). Associates and joint ventures are accounted for using the equity method. Under this method, the Group’s interest in the associate and joint venture is initially recognised at cost in the statement of financial position and subsequently adjusted to recognise the Group’s share of movements in profit and loss and other comprehensive income G . The profit or loss statement reflects the Group’s share in the results of the associate or joint venture’s operations. Any change in other comprehensive income G of those investees is presented as part of the Group’s other comprehensive income G . Unrealised gains and losses resulting from transactions between the Group and the associate or joint venture are eliminated to the extent of the interest in the associate or joint venture. Investments in associates and joint ventures are included in the consolidated financial statements using the equity method from the date on which significant influence begins until the date when this influence ceases. The carrying amount of positive goodwill that results from the acquisition of associates and joint ventures is included in the carrying amount of the investment and is not tested for impairment separately. An impairment test Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 53 is performed if an objective indication of impairment is identified. Impairment is recognised, if necessary, in the income statement under the heading “Share of the Group in the result from associates”. The list of subsidiaries and associated companies (including joint ventures) of the Group is presented in note 2. 1.5. Changes in accounting policies, errors and changes in estimates A change in accounting policy is applicable only if it meets the requirements of a standard or an interpretation or allows more reliable and relevant information. Changes in accounting policies are accounted for retrospectively, except in the case of transitional provisions specific to the standard or interpretation. A material error, when discovered, is also adjusted retrospectively. Uncertainties inherent to the activity require the use of estimates when preparing financial statements. The estimates are based on judgements intended to give a reasonable assessment of the latest reliable information available. An estimate is revised to reflect changes in circumstances, new information available and the effects of experience. 1.6. Business combinations IFRS G 3 “Business Combinations” provides the accounting basis for recognising business combinations and changes in interests in subsidiaries after obtaining control. For each business combination, the Group elects whether to measure the non-controlling interests G in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Changes in interest in a subsidiary that do not result in loss of control are accounted for as equity transactions. 1.7. Goodwill Goodwill is the difference on the date of acquisition between the fair value of the consideration given in exchange for taking control, the value of non- controlling interests G , the fair value of previous equity investments and the fair value of identifiable assets and liabilities and contingent liabilities of the acquiree. When disposing of a subsidiary, the residual amount of goodwill attributable to the subsidiary is included in the calculation of the disposal’s result. 1.8. Gain on a bargain purchase Gain on a bargain purchase represents the excess of the Group’s interest in t e fair value of identifiable assets and liabilities, and the contingent liabilities of a subsidiary or associate on the cost of acquisition on the acquisition date. Insofar as gain on a bargain purchase remains after considering and reassessing the fair value of identifiable assets and liabilities as well as of contingent liabilities of a subsidiary or associate, it is recognised directly as an income in the income statement. 1.9. Foreign currency conversion In the financial statements of Socfinasia and of each subsidiary, transactions in foreign currency are recorded, upon initial recognition, in the functional currency of the company concerned. The exchange rate in force is applied on the transaction date. At closing, monetary assets and liabilities denominated in foreign currencies are converted on the last day of the year. Gains and losses arising from the realisation or translation of monetary items denominated in foreign currencies are recorded in the income statement for the year. On consolidation, the assets and liabilities of companies whose accounts are held in a currency other than the euro are translated into euros at the exchange rate prevailing on the closing date. Income and expenses are converted into euros at the average exchange rate for the year. Any exchange differences are classified as equity under “Translation differences”. In the event of a disposal, the translation differences relating to the company concerned are recognised in the income statement for the year in which the sale occurred. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Pag Consolidated financial statements 54 | ANNUAL REPORT 2023 | Socfinasia The following exchange rates have been used for the conversion of the consolidated financial statements: Closing rate Average Rate 1 euro equals to: 31/12/2023 31/12/2022 2023 2022 Euro 1.000 1.000 1.000 1.000 Indonesian rupiah 17,140 16,713 16,471 15,648 American dollar 1.1050 1.0666 1.0826 1.0479 1.10. Intangible assets Intangible assets are stated at their acquisition cost less accumulated depreciation and any impairment losses. Amortisation is applied on a straight-line basis based on an estimate of the useful life of the asset in question. Intangible assets are not subject to revaluation. When the recoverable value of an asset is lower than its book value, the latter is reduced to reflect this loss in value. The estimated useful lives are as follows: Patents 3 to 5 years Other intangible assets 3 to 5 years Software 3 to 5 years Concessions G Length of the concessions G Amortisation starts from the date when the asset is available to use. Gains or losses arising from derecognition of assets (i.e. the difference between the disposal proceeds and the carrying amount of the asset) are included in the income statement when assets are derecognised. 1.11. Property, plant and equipment Tangible fixed assets are recorded at their acquisition cost less accumulated amortisation and any impairment losses. Property, plant and equipment in progress is carried at cost less any identified impairment. Depreciation is applied on a straight-line basis, according to an estimate of the useful life for each significant component of the asset in question. When the recoverable value of an asset is lower than its book value, the latter is reduced to reflect this loss in value. The estimated useful lives are as follows: Buildings 20 to 50 years Technical installations 3 to 20 years Furniture, vehicles and others 3 to 20 years Depreciation starts from the date that the assets are available to use. Land is not subject to depreciation. Gains or losses arising from the derecognition of assets (i.e. the difference between the disposal proceeds and the carrying amount of the asset) are included in the income statement when assets are derecognised. 1.12. Bearer biological assets The Group has biological assets in South-East Asia. These biological assets, mainly consisting of palm oil and rubber plantations, are valued according to the principles defined in IAS G 16 “Property, plant and equipment". Biological assets at the time of harvest, in particular for palm bunches, palm oil and rubber, are evaluated according to the principles defined by IAS G 41 “Agriculture". Bearer biological assets Producer biological assets are recorded at acquisition cost, less accumulated amortisation and any impairment losses. Depreciation is applied according to the straight-line method based on an estimate of the useful life. When the recoverable amount of an asset is less than its carrying amount, the carrying amount is reduced to reflect that impairment. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 55 The estimated useful lives are as follows: Bearer plants – Palm 20 to 25 years Bearer plants – Rubber 20 to 25 years The depreciation starting date is the date of transfer of biological assets in production (asset being mature). This transfer takes place in the third year after palm oil tree planting and in the seventh year after rubber tree planting. For each entity, the operating period can be adapted according to the particular circumstances. Agricultural production Agricultural production at harvest is valued at fair value less the estimated costs necessary to complete the sale. There are no observable data for agricultural production (palm harvest, latex). The World Bank publishes price forecasts for dry rubber G (finished product). These forecasts are based on the RSS3 G grade (smoked sheet G ) that is not produced by the Group. Lastly, and even more so, there are no observable prospective data relating to the Group’s agricultural production. The price of a standard product in a global market is not sufficiently representative of the economic reality in which the various entities of the Group intervene. This price can hence not be used as a reference for valuation. As a result, each entity determines the fair value of agricultural production based on actual market prices obtained over the past year. The Group considers produce that grows on mature plantations (oil in the palm fruits and produce of rubber) as biological assets, in accordance with IAS G 41 principles. This produce is measured at fair value until the point of harvest. Any resultant gains or losses arising from changes in fair value are recognised in the income statement. 1.13. Leases The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group applies a single recognition and measurement approach for all leases, except for short- term leases and leases of low-value assets (mainly IT equipment), for which payments associated are recognised as an expense in the income statement. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. The Group leases offices and agricultural land for terms ranging from 1 to 99 years, as well as vehicles and equipment for terms ranging from 1 month to 5 years. The Group’s lease contracts are standard contracts that do not include additional non-leasing components, except for some vehicle lease contracts that include a maintenance service. The Group has used the practical expedient that allows the non-segregation of the lease component from the non-lease component for these contracts. Assets and liabilities related to lease contracts are initially measured at the present value of the fixed payments, including in-substance fixed payments less any lease incentives receivable. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. To this purpose, the management considers all facts and circumstances that may create an incentive to exercise a renewal option or not to exercise an early termination option. The lease liability is remeasured if there is a change in the lease term, in the lease payment or in the assessment of an option to purchase the underlying asset. As the implicit interest rate is unknown for all the Group’s contracts, the incremental borrowing rate was used to discount the lease payments. The incremental borrowing rate is the rate that the lessee would have to pay to borrow, for a similar term and with a similar guarantee, the funds necessary to acquire an asset whose value is similar to the asset under the right-of- use in a similar economic environment. In determining the incremental borrowing rate, the Group: - where possible, uses the most recent financing received by the lessee as a starting point, which was adjusted to reflect the change in financing conditions since the financing was received; - uses a build-up approach starting with a risk-free rate which was adjusted for credit risk for leases for entities with no recent external financing; - makes lease specific adjustments (such as term, country, currency and collateral). Consolidated financial statements 56 | ANNUAL REPORT 2023 | Socfinasia The discount rates used by the Group range between 1.75% and 14.1%. Lease payments are allocated between the repayment of the principal amount of the lease liabilities and interest expense. Interest expense is recognised in the income statement for the period over the term of the lease. Right-of-use assets are depreciated on a straight-line basis over the shortest of useful life and lease term. The Group applies IAS G 36 to determine whether a right-of-use asset is impaired and recognises any impairment loss as described in Note 8: Impairment of assets. 1.14. Impairment of assets Goodwill is not amortised, but is tested for impairment at least once a year, and whenever there is an indication of impairment. In addition, at each reporting date, the Group reviews the carrying amounts of its intangible and tangible assets, including its organic producing assets, in order to assess whether there is any indication that its assets may have lost value. If there is such an indication, the recoverable amount of the asset is estimated to determine, if applicable, the amount of the loss or impairment. The recoverable amount is the highest of the fair value less the costs to sell the asset and the value in use. The fair value of property, plant and equipment and intangible assets is the present value of estimated future cash flows expected from the use of an asset or cash-generating unit. When it is not possible to estimate the recoverable amount of an isolated asset, the Group determines the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset (or a cash- generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. Impairment losses are immediately recognised as expenses in the income statement. When an impairment loss which was recognised in a prior period no longer exists or needs to be written down, the carrying amount of the asset (cash- generating unit) is increased to the extent of the revised estimate of its recoverable amount. However, this increased carrying amount may not exceed the carrying amount that would have been determined if no impairment loss had been recognised for the asset (cash-generating unit) in prior years. The reversal of an impairment loss is recognised immediately in income in the income statement. It is not possible to subsequently reverse an impairment loss recorded on goodwill. 1.15. Inventories Inventories are recorded at the lower of cost and net realisable value. Cost includes direct material costs and, if applicable, direct labour costs and directly attributable overhead costs. Where specific identification is not possible, the cost is determined based on the weighted average cost method. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to complete the sale (primarily selling expenses). Impairment or loss on inventory to net realisable value is recognised as an expense in the period in which the impairment or loss occurred. As explained in Note 1.12. Bearer biological assets, agricultural production is measured at fair value less estimated costs necessary to make the sale. 1.16. Trade receivables Trade receivables are valued at their nominal value and do not bear interest. The Group applies a simplified approach and records a provision for expected losses over the life of the receivables. This provision for losses is an amount that the Group considers a reliable estimate of the inability of its customers to make the required payments (refer to Note 34). approach and records a provision for expected losses 1.17. Cash and cash equivalents Cash and cash equivalents include cash, demand deposits, short-term deposits of less than 3 months, as well as investments that are subject to a negligible risk of change in value and are easily convertible into a known amount of cash, having a maturity of three months or less. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 57 1.18. Financial instruments Financial assets and liabilities are recognised in the consolidated statement of the financial position when the Group becomes a party to the contractual provisions of the instrument. Loans The Group’s business model for financial assets management describes the way it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from the collection of contractual cash flows, from the disposal of financial assets, or both. Financial assets classified and measured at amortised cost are held in a business model with the aim to hold financial assets and collect contractual cash flows. Long-term advances and other receivables are held for the sole purpose of collecting principal and interest. As such, they comply with the “Solely Payments of Principal and Interest” (SPPI G ) model. They are accounted for using the amortised cost method. Loans bearing interest are recorded at the net value of the amounts given, less direct costs of issue. Financial income is added to the carrying amount of the instrument to the extent that it is not received in the period in which it occurs. Interest is calculated using the effective interest rate method. The Group applies the low credit risk simplification: at every reporting date, the Group evaluates whether the debt instrument is considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. In making that evaluation, the Group reassesses the internal credit rating of the debt instrument. In addition, the Group considers that there has been a significant increase in credit risk when contractual payments are more than 30 days past due. Interest-bearing borrowings and overdrafts are recorded for the net value of amounts received, minus direct issue costs. Financial expenses are recognised in income statement and are added to the carrying amount of the instrument to the extent that they are unpaid in the year in which they occur. The carrying amount is a reasonable approximation of fair value in the case of financial instruments such as borrowings and debts with short-term maturity. The fair value measurement of borrowings and debts with financial institutions, other than in the short term, depends both on the specifics of the loans and on current market conditions. The fair value was calculated by discounting the expected future cash flows at the re-estimated interest rates prevailing at the balance sheet date over the remaining term of repayment of the loans (refer to Note 25). The Group relied on the evolution of the interest rate of the European Central Bank adjusted for the specific risk inherent in each financial instrument, as a reasonable benchmark for estimating the fair value of such borrowings (see Note 25). Financial assets designated at fair value through OCI (equity instruments) Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at fair value through OCI if they meet the definition of equity under IAS G 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis. Gains and losses on these financial assets are never recycled into profit or loss. Dividends are recognised as other income in the statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment. The Group elected to classify irrevocably its non- listed equity investments under this category. Other financial assets and liabilities Other financial assets and liabilities are recorded at their acquisition cost. The fair value of other financial assets and liabilities is estimated to be close to the carrying amount. The receivables are valued at their nominal value (at cost) minus any write-downs covering amounts considered as non-recoverable if the Group deems it necessary. Impairment of assets is recognised in the income statement under “Other operating income/ expenses". The Group has established a provision matrix, based on its historical credit loss experience Consolidated financial statements 58 | ANNUAL REPORT 2023 | Socfinasia (average default over several years), which was adjusted for prospective factors specific to the debtors and the economic environment. The carrying amount of the asset is reduced using a provision account, and the amount of the loss is recognised in the consolidated income statement. The Board of Directors of each subsidiary evaluates the receivables individually. Value adjustments are determined by taking into account the local economic reality of each country. They are reviewed at the reception of new events and at least annually. 1.19. Provisions Provisions occur when the Group has a present obligation (legal or constructive) as a result of a past event. This present obligation will probably lead to an outflow of economic benefits, insofar as they can be reasonably estimated. Restructuring provisions occur when the Group has come up with a formal and detailed plan for the restructuring, which has been notified to the affected parties. 1.20. Pension obligations Defined contribution plans The defined contribution plans designate the post- employment benefit plans under which the Group pays defined contributions to external insurance companies for certain categories of employees. Payments made under these pension plans are recognised in the income statement in the year when they are due. As these plans do not generate future commitments for the Group, they do not give rise to provisions. Defined benefit plans The defined benefit plans refer to post-employment benefit plans that provide additional income to certain categories of employees for services rendered during the year and prior years. This guarantee of additional resources is a future expenditure for the Group for which a commitment is calculated by independent actuaries at the end of each financial year. The actuarial assumptions used to determine the liabilities vary according to the prevailing economic conditions in the country in which the plan is located. The discount rates applicable to post-employment benefit obligations should be determined by reference to the market yields on high quality corporate bonds that are appropriate/relevant to the estimated timing of benefit payments at the balance sheet date. The Group decided to calculate discount rates using an economic approach for high-quality corporate bonds whose duration corresponds to the terms of employee benefits in the countries concerned. In the countries where there is no active market for such obligation, the Group refers to the market yields (at the end of the reporting period) of government bonds. The currency and duration of these corporate or government bonds must correspond to the currency and estimated duration of the post-employment benefit obligations. The cost of corresponding commitments is determined by using the projected unit credit method, with a discounted value calculation at the balance sheet date in accordance with the principles of IAS G 19 “Employee Benefits". All changes in the amount of defined benefit pension obligations are recognised as soon as they occur. Remeasurements of defined benefit pension obligations, including actuarial gains and losses, should be recognised immediately in “Other comprehensive income" G . The costs of services rendered during the period, past service costs (plan amendment) and net interest are recognised as an expense immediately. The amount recognised in the statement of financial position consists of the present value of the defined benefit plans’ pension obligations. This value has been adjusted for actuarial gains and losses, minus the fair value of plan assets. 1.21. Revenue recognition The Group’s revenues derive from the performance obligation to transfer the control of products under arrangements. According to these arrangements, the transfer of control and the fulfilment of the performance obligation occur at the same time. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 59 The point of control of the asset by the customer depends on the moment when the goods are made available to the carrier or when the buyer takes possession of the goods. This also depends on the delivery conditions. With regards to the Group’s activities, the recognition criteria are generally met: (a) for export sales, where the time of the transfer of deed is based on the incoterms; (b) for local sales, depending on the delivery conditions, either when the goods leave the premises or when the customer takes possession of the goods. This is the moment when the Group has fulfilled its performance obligations. Revenues are valued at the transaction price of the consideration received or receivable, to which the company expects to be entitled. The selling price is determined at the market price and, in a few cases, is contractually determined on a provisional basis using a reliable estimate. In the latter case, price adjustments can then take place depending on the movements between the reference price and the final price, as recognised. The Group considers itself to be the principal in its revenue arrangements, because it controls the goods sold before transferring them to the customers. As at 31 December 2023, revenue from the major customer within the Group accounted for approximately EUR 83.8 million (2022: EUR 96.2 million) of total Group revenue. 1.22. Taxes Current tax is the amount of tax payable or recoverable on the profit or loss of a financial year. Temporary differences between the book values of assets and liabilities on the one hand, and their tax bases on the other hand, lead to the recognition of a deferred tax using the tax rates which are applicable when the temporary differences disappear, as adopted on the closing date. A deferred tax is recognised for all taxable temporary differences, unless the deferred tax is generated: - by goodwill or; - by the initial recognition of an asset or liability in a transaction which is not acquired through a business combination, does not affect neither the accounting profit nor the taxable profit (tax loss), nor gives rise to equal taxable and deductible temporary differences at the time of the transaction. A deferred tax liability is recognised for all taxable temporary differences related to investments in subsidiaries and associates, unless the date on which the temporary difference will be reversed can be controlled and it will most likely not be reversed in the foreseeable future. A deferred tax asset is recognised in order to carry forward unused tax losses and tax credits, so that future taxable profits, on which these unused tax losses and tax credits can be charged, will likely be available. Deferred tax is recognised in the income statement, unless it relates to items that have been directly recognised, either in equity or in other comprehensive income G . The Group applies the mandatory exception to recognise and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes (refer to Note 13). 1.23. Segment information IFRS G 8 – Operating Segments requires operating segments to be identified based on an internal reporting. This internal reporting is analysed by the entity’s chief operating decision-maker, in order to assess performance and make resource decisions for the segments. The identification of these operational sectors follows from the information analysed by the management. This information is based on the geographic distribution of political and economic risks, as well as on the analysis of individual social accounts at historical cost. 1.24. Use of estimates For the preparation of consolidated financial statements in accordance with IFRS G , the Group’s Consolidated financial statements 60 | ANNUAL REPORT 2023 | Socfinasia Management has made use of its best estimates to make assumptions on the following aspects, and to what extent they were affected: the carrying amount of assets and liabilities, information on assets and liabilities, contingent liabilities and the carrying amount of income and expenses recorded during the period. Depending on the evolution of these assumptions or different economic conditions, the amount that will appear in the Group’s future consolidated financial statements may differ from current estimates. Material accounting policies, for which the Group has made estimates, mainly concern the application of IAS G 19 – Employee Benefits (Note 22), IAS G 41 – Agriculture and IAS G 2 – Inventories (Note 16), IAS G 16 – Property, Plant and Equipment (Note 5), IAS G 36 – Impairment of Assets (Notes 6 and 8), IFRS G 9 – Financial Instruments (Notes 25 and 34) and IFRS G 16 – Leases (Note 3). In the absence of observable data within the scope of IFRS G 13 – Fair Value Measurement, the Group makes use of a model developed with the aim to assess the fair value of agricultural production, using local production costs and conditions and local sales (Refer to Note 1.12). This method is inherently more volatile than assessment at historical cost. 1.25. Climate effect The Group considered the potential impact of climate change, which may affect positively or negatively the Group’s biological assets, and thus the financial performance of the Group. Among climate factors, the distribution of rainfall and sunshine are the most important ones. The Group considered climatic events such as severe wind or fires in the valuation of the biological assets. However, given current knowledge, distinguishing the impact of natural climate changes from climate impact caused by anthropic activity remains difficult. The Management Board considered various documentation in its assessment of the impact, such as the last Intergovernmental Panel on Climate Change (IPCC) reports but also the data coming from the agronomic departments which reflect the potential effect of climate change over the past years. Budgets are adjusted to integrate the operational needs that may result of the impact of those changes and the value in use of the biological assets is aligned consequently (Note 1.14 and Note 8). From a social stand point, the effect of climate change are integrated through the regular updates of the data used for the calculation of the employee benefit provision (Note 22). The Management Board will continue to consider the potential impact of climate change in its assessments, and will integrate any new potential impact that could lead to a material change in the Group’s financial statements. 1.26. Geopolitical uncertainties In February 2022, a number of countries (including the US, UK and EU) imposed sanctions against certain entities and individuals in Russia as a result of the official recognition of the Donetsk People Republic and Lugansk People Republic by the Russian Federation. Announcements of potential additional sanctions were made following military operations initiated by Russia against Ukraine on 24 February 2022. On 7 October 2023 Palestinian militant groups led by Hamas launched a coordinated surprise offensive on Israel resulting in more than 1,200 deaths, primarily Israeli citizens. Following this attack, Israel declared itself in a state of war for the first time since the Yom Kippur War in 1973. Due to the geopolitical tensions, since February 2022, there has been a significant increase in volatility on the securities and currency markets. The conflicts have had a significant impact on the financial markets, with many investors concerned about the risk of further escalation and the ensuing impact on global trade and economic growth. Although the aforementioned aspects have not significantly impacted the company’s operations nor performance and going concern during 2023, the Board of Directors continues to monitor the evolving situation and its impact on the company’s financial position and results. 1.27. Environmental, Social and Governance The Group has described its ambitions and objectives in terms of environment, social responsibilities and Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 61 governance in a separate Sustainability Report that can be accessed on Socfinasia website. Management has performed a preliminary assessment to measure the financial impacts of those objectives on the consolidated financial statements. Based on this assessment, Management was able to conclude that most of the commitments described in the Sustainability Report have already been incorporated in the budgets of the subsidiaries of the Group. Those budgets are mainly used for determination of internal indicators of impairment but also as a basis for the determination of the expected growth rates of the companies. A further description for the assessment of impairment indicators is provided Notes 1.14 and 8. Note 2. Subsidiaries and associates % Group Interest % Group Control Consolidation Method () % Group Interest % Group Control Consolidation Method () 2023 2023 2023 2022 2022 2022 ASIA Rubber and palm PT SOCFIN INDONESIA “SOCFINDO" 90.00 90.00 FI 90.00 90.00 FI Rubber SETHIKULA CO LTD 100.00 100.00 FI 100.00 100.00 FI SOCFIN-KCD CO LTD 100.00 100.00 FI 100.00 100.00 FI VARANASI CO LTD 100.00 100.00 FI 100.00 100.00 FI COVIPHAMA CO LTD 100.00 100.00 FI 100.00 100.00 FI EUROPE Other activities CENTRAGES S.A. 50.00 50.00 EM 50.00 50.00 EM IMMOBILIERE DE LA PEPINIERE S.A. 50.00 50.00 EM 50.00 50.00 EM INDUSERVICES S.A. 35.00 35.00 EM 35.00 35.00 EM INDUSERVICES FR S.A. 50.00 50.00 EM 50.00 50.00 EM PLANTATION NORD-SUMATRA LTD “PNS Ltd” S.A. 100.00 100.00 FI 100.00 100.00 FI SOCFINCO S.A. 50.00 50.00 EM 50.00 50.00 EM SOCFINCO FR S.A. 50.00 50.00 EM 50.00 50.00 EM SOCFINDE S.A. 79.92 79.92 FI 79.92 79.92 FI SODIMEX FR S.A. 50.00 50.00 EM 50.00 50.00 EM SOGESCOL FR S.A. 50.00 50.00 EM 50.00 50.00 EM TERRASIA S.A. 47.81 47.81 EM 47.81 47.81 EM () Consolidation method: FI: Full Integration, EM: Equity Method, NC: Not Consolidated Consolidated financial statements 62 | ANNUAL REPORT 2023 | Socfinasia List of subsidiaries and associated companies * CENTRAGES S.A. is a company under Belgian law providing administrative and accounting services and which owns three floors of office space in Brussels. * COVIPHAMA CO LTD is a company under Cambodian law active in the production of rubber. * IMMOBILIERE DE LA PEPINIERE “PEPINIERE” S.A. is a company under Belgian law which owns three floors of office space in Brussels. * INDUSERVICES S.A. is a company under Luxembourgish law whose purpose is to provide all administrative services to all companies and organisations, including all services relating to documentation, bookkeeping and register services, as well as all representation, study, consultation activities and assistance. * INDUSERVICES FR S.A. is a company under Swiss law whose purpose is to provide all administrative services to all companies and organisations, including all services relating to documentation, bookkeeping and register services, as well as all representation, study, consultation activities and assistance. In addition, it provides all of the Group’s companies with access to the general IT platform. * PLANTATION NORD-SUMATRA LTD “PNS” S.A. is a holding company under Luxembourgish law which holds stakes in PT Socfindo and Coviphama Co. * PT SOCFIN INDONESIA “SOCFINDO” is a company under Indonesian law active in the production of palm oil and rubber. * SETHIKULA CO LTD is a company under Cambodian law holding concessions G of agricultural land. * SOCFIN CONSULTANT SERVICES “SOCFINCO” S.A. is a company established in Belgium providing technical assistance, agronomic and financial services. * SOCFIN-KCD CO LTD is a company under Cambodian law active in the production of rubber products. * SOCFINCO FR S.A. is a Swiss company providing services, studies and management of agro-industrial plantations. * SOCFINDE S.A. is a finance holding company under Luxembourgish law. * SODIMEX FR S.A. is a Swiss company active in the purchase and sale of equipment for plantations. * SOGESCOL FR S.A. is a Swiss company active in the tropical products trade. * TERRASIA S.A is a company under Luxembourgish law owning office space. * VARANASI Co LTD is a company under Cambodian law holding concession G of agricultural land. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 63 Note 3. Leases The amounts recognised in the balance sheet, related to leases under IFRS G 16 are as follows: Right-of-use assets EUR Buildings Land and concession G of agricultural area TOTAL Gross value as at 1 January 2022 300,283 1,260,658 1,560,941 Additions 0 1,171,888 1,171,888 Foreign exchange differences 18,581 -90,767 -72,186 Gross value as at 31 December 2022 318,864 2,341,779 2,660,643 Accumulated depreciation as at 1 January 2022 -130,611 -520,264 -650,875 Depreciation -28,424 -112,901 -141,325 Transfer 0 -14,218 -14,218 Foreign exchange differences -7,584 19,502 11,918 Accumulated depreciation as at 31 December 2022 -166,619 -627,881 -794,500 Net book value as at 31 December 2022 152,245 1,713,898 1,866,143 Gross value as at 1 January 2023 318,864 2,341,779 2,660,643 Additions 0 1,047,577 1,047,577 Foreign exchange differences -11,081 -101,983 -113,064 Gross value as at 31 December 2023 307,783 3,287,373 3,595,156 Accumulated depreciation as at 1 January 2023 -166,619 -627,881 -794,500 Depreciation -27,513 -105,996 -133,509 Foreign exchange differences 6,347 20,356 26,703 Accumulated depreciation as at 31 December 2023 -187,785 -713,521 -901,306 Net book value as at 31 December 2023 119,998 2,573,852 2,693,850 Lease liabilities 31/12/2023 31/12/2022 EUR EUR Long-term lease liabilities 356,638 397,717 Short-term lease liabilities 27,258 28,105 TOTAL 383,896 425,822 Consolidated financial statements 64 | ANNUAL REPORT 2023 | Socfinasia Long-term lease liabilities are payable as follows: 2022 EUR 2024 2025 2026 2027 2028 and above TOTAL Lease liabilities 28,239 28,374 28,511 28,649 283,944 397,717 2023 EUR 2025 2026 2027 2028 2029 and above TOTAL Lease liabilities 27,388 27,520 27,653 34 274,042 356,637 The amounts recognised in the income statement in relation with the lease contracts are detailed as follows: 2023 2022 EUR EUR Depreciation of right-of-use assets 133,509 141,325 Expenses related to short-term leases and leases of low-value assets 8,318 8,553 Interest expense (included in the financial expenses) 40,977 42,471 TOTAL 182,804 192,349 Agricultural land and concessions G The Group does not own all of the land on which its bio-based assets are planted. In general, these lands are subject to very long-term concessions G from the local public authority. These concessions G are renewable. Company Date of initial lease or renewal extension Duration of the initial lease Area conceded SETHIKULA 2010 99 years 4,273 ha VARANASI 2009 70 years 2,386 ha COVIPHAMA 2008 70 years 5,345 ha SOCFINDO 1990 to 2023 25 to 35 years 47,532 ha Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 65 Note 4. Intangible assets EUR Concessions G and patents Softwares TOTAL Cost as at 1 January 2022 615,096 1,689,291 2,304,387 Additions 582,356 53,577 635,933 Disposals -446 -591 -1,037 Transfer -1,171,888 0 -1,171,888 Foreign exchange differences 21,897 -59,530 -37,633 Cost as at 31 December 2022 47,015 1,682,747 1,729,762 Accumulated depreciation as at 1 January 2022 -58,474 -1,417,300 -1,475,774 Depreciation 0 -80,101 -80,101 Depreciation reversals 446 591 1,037 Transfer 14,218 0 14,218 Foreign exchange differences -3,205 51,841 48,636 Accumulated depreciation as at 31 December 2022 -47,015 -1,444,969 -1,491,984 Net book value as at 31 December 2022 0 237,778 237,778 Cost as at 1 January 2023 47,015 1,682,747 1,729,762 Additions 409 124,071 124,480 Disposals -122 0 -122 Foreign exchange differences -2,038 -46,353 -48,391 Cost as at 31 December 2023 45,264 1,760,465 1,805,729 Accumulated depreciation as at 1 January 2023 -47,015 -1,444,969 -1,491,984 Depreciation 0 -51,568 -51,568 Depreciation reversals 122 0 122 Foreign exchange differences 1,629 37,995 39,624 Accumulated depreciation as at 31 December 2023 -45,264 -1,458,542 -1,503,806 Net book value as at 31 December 2023 0 301,923 301,923 Consolidated financial statements 66 | ANNUAL REPORT 2023 | Socfinasia Note 5. Property, plant and equipment EUR Land and nurseries () Buildings Technical installations Furniture, vehicles and others Work in progress Advances and pre- payments TOTAL Cost as at 1 January 2022 4,631,730 71,227,704 66,035,129 2,207,097 31,348 4,249 144,137,257 Additions () 897,761 867,390 2,411,185 1,936,327 118,524 72,671 6,303,858 Disposals -814,455 -41,902 -387,475 -766,566 0 0 -2,010,398 Transfer -458,382 39,874 -12,788,979 12,788,688 -39,874 -1,550 -460,223 Foreign exchange differences 191,134 -999,343 -1,025,891 -870,621 561 -984 -2,705,144 Cost as at 31 December 2022 4,447,788 71,093,723 54,243,969 15,294,925 110,559 74,386 145,265,350 Accumulated depreciation as at 1 January 2022 -21,228 -49,032,994 -51,413,412 -2,361,173 0 0 -102,828,807 Depreciation 0 -1,972,066 -2,220,215 -1,305,477 0 0 -5,497,758 Depreciation reversals 22,946 39,989 381,523 731,185 0 0 1,175,643 Transfer 0 0 9,176,617 -9,174,777 0 0 1,840 Foreign exchange differences -1,718 1,270,341 980,800 627,153 0 0 2,876,576 Accumulated depreciation as at 31 December 2022 0 -49,694,730 -43,094,687 -11,483,089 0 0 -104,272,506 Net book value as at 31 December 2022 4,447,788 21,398,993 11,149,282 3,811,836 110,559 74,386 40,992,844 Cost as at 1 January 2023 4,447,788 71,093,723 54,243,969 15,294,925 110,559 74,386 145,265,350 Additions () 0 1,588,418 1,944,221 2,007,240 221,573 87,571 5,849,023 Disposals 0 -184,117 -687,127 -49,723 0 0 -920,967 Transfer -843,920 201,459 94,867 0 -209,181 -87,145 -843,920 Foreign exchange differences -124,922 -1,984,690 -1,451,509 -467,490 -4,093 -2,594 -4,035,298 Cost as at 31 December 2023 3,478,946 70,714,793 54,144,421 16,784,952 118,858 72,218 145,314,188 Accumulated depreciation as at 1 January 2023 0 -49,694,730 -43,094,687 -11,483,089 0 0 -104,272,506 Depreciation 0 -1,789,250 -2,273,315 -1,430,713 0 0 -5,493,278 Depreciation reversals 0 158,912 601,609 49,623 0 0 810,144 Foreign exchange differences 0 1,343,932 1,159,710 347,697 0 0 2,851,339 Accumulated depreciation as at 31 December 2023 0 -49,981,136 -43,606,683 -12,516,482 0 0 -106,104,301 Net book value as at 31 December 2023 3,478,946 20,733,657 10,537,738 4,268,470 118,858 72,218 39,209,887 () Additions for the period include capitalised costs. (**) Nurseries have been reclassified in 2023 from property, plant and equipment to biological assets, see Note 6. The accounting policies applicable to property, plant and equipment are detailed in Notes 1 and 8. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 67 Note 6. Biological assets Palm Rubber Nurseries and Others () TOTAL EUR Mature Immature Mature Immature Cost as at 1 January 2022 66,212,837 13,414,776 65,313,189 21,236,412 0 166,177,214 Additions () 0 6,199,700 0 1,282,713 0 7,482,413 Disposals -952,198 0 -905,821 -1,635,892 0 -3,493,911 Transfer () 7,424,736 -6,997,999 -4,213,088 -1,846,110 0 -5,632,461 Foreign exchange differences -2,597,597 -391,853 2,244,270 1,012,781 0 267,601 Cost as at 31 December 2022 70,087,778 12,224,624 62,438,550 20,049,904 0 164,800,856 Accumulated depreciation as at 1 January 2022 -29,181,051 0 -14,653,300 0 0 -43,834,351 Depreciation -3,500,858 0 -2,778,468 0 0 -6,279,326 Depreciation reversals 794,304 0 592,730 0 0 1,387,034 Transfer 0 0 65,294 0 0 65,294 Foreign exchange differences 1,135,500 0 -57,472 0 0 1,078,028 Accumulated depreciation as at 31 December 2022 -30,752,105 0 -16,831,216 0 0 -47,583,321 Accumulated impairment as at 1 January 2022 0 0 -4,711,086 -2,226,181 0 -6,937,267 Impairment (*) 0 0 -27,341,960 -182,149 0 -27,524,109 Impairment reversal 0 0 386,164 1,268,463 0 1,654,627 Transfer () 0 0 4,705,732 1,319,816 0 6,025,548 Foreign exchange differences 0 0 98,668 -179,948 0 -81,280 Accumulated impairment as at 31 December 2022 0 0 -26,862,482 1 0 -26,862,481 Net book value as at 31 December 2022 39,335,673 12,224,624 18,744,852 20,049,905 0 90,355,054 Cost as at 1 January 2023 70,087,778 12,224,624 62,438,550 20,049,904 0 164,800,856 Additions () 0 7,415,390 0 1,310,752 1,262,177 9,988,319 Disposals -1,908,203 0 -1,391,273 0 -444,953 -3,744,429 Transfer 4,755,361 -4,122,492 11,221,078 -11,103,067 93,040 843,920 Foreign exchange differences -1,856,675 -432,871 -2,161,294 -475,634 -23,572 -4,950,046 Cost as at 31 December 2023 71,078,261 15,084,651 70,107,061 9,781,955 886,692 166,938,620 Accumulated depreciation as at 1 January 2023 -30,752,105 0 -16,831,216 0 0 -47,583,321 Depreciation -3,406,818 0 -1,714,560 0 0 -5,121,378 Depreciation reversals 1,487,661 0 682,359 0 0 2,170,020 Foreign exchange differences 840,766 0 526,929 0 0 1,367,695 Accumulated depreciation as at 31 December 2023 -31,830,496 0 -17,336,488 0 0 -49,166,984 Accumulated impairment as at 1 January 2023 0 0 -26,862,482 1 0 -26,862,481 Impairment () 0 0 0 0 0 0 Foreign exchange differences 0 0 933,502 -1 0 933,501 Accumulated impairment as at 31 December 2023 0 0 -25,928,980 0 0 -25,928,980 Net book value as at 31 December 2023 39,247,765 15,084,651 26,841,593 9,781,955 886,692 91,842,656 () Additions for the period include capitalised costs. (**) Impairment test on biological assets is disclosed in Note 8. () During previous periods, a positive revaluation for EUR 5.8 million and an impairment for EUR 6.0 million had been booked on biological assets on the Cambodian segment. As those adjustments had no significant net impact, they were removed in 2022. (*) Nurseries have been reclassified in 2023 within biological assets. Accounting policy regarding current biological assets is disclosed in Note 1.12. Consolidated financial statements 68 | ANNUAL REPORT 2023 | Socfinasia Note 7. Depreciation and impairment 2023 2022 EUR EUR Depreciation Of right-of-use assets (Note 3) 133,509 141,325 Of intangible assets (Note 4) 51,568 80,101 Of property, plant and equipment excluding biological assets (Note 5) 5,493,278 5,497,758 Of biological assets (Note 6) 5,121,377 6,279,327 Impairment Of biological assets (Note 6) 0 27,524,109 Impairment reversal Of biological assets (Note 6) 0 -1,654,627 TOTAL 10,799,732 37,867,993 Note 8. Impairment of assets Intangible and tangible assets and right-of-use assets At each reporting date, the Group reviews the carrying amount of its intangible and tangible assets and right- of-use assets in order to assess whether there is any indication of impairment. If such indication arises, the recoverable amount of the asset is estimated to determine the amount of the impairment loss. As at 31 December 2023, no impairment was recognised on the above-mentioned assets. Bearer biological assets At each reporting date, the Group assesses if there is any indication that its biological assets may be impaired. For this purpose, the Group assesses several indicators: The significant and sustained decreasing trend in the prices of natural rubber (TSR20 G 1 st position on SGX G ) and crude palm oil (CIF Rotterdam G ) was considered as an observable sign that the biological assets may have been impaired. A decrease in these prices at reporting date greater than 15% compared to an average of 5-year value has been set by the Group as an impairment indicator. As at 31 December 2023, the closing prices did not exceed 15% of the average price over the past 5 years for the Rubber and Palm segments. The Group also considers, average prices over the six months before reporting date, and average prices over the last twelve months, instead of only closing prices. This is done in order to avoid seasonal fluctuations in the prices of supply materials. Moreover, the Group also reviews the prices of palm oil observed on local market and considers a decrease in these prices at the closing date of more than 15% compared to an average of values over 5 years, as an impairment indicator. Based on the above criteria, the review of global and local prices led to the conclusion that there are no external indicators of impairment. In addition to these external indicators, the Group considers the following indicators: - Internal performance indicators; - Criteria relating to the local market; - Physical indicators of impairment; - Significant changes in plantations that could have a material impact on their future cash flows. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 69 If an indication of impairment is identified, the recoverable amount of the producing biological assets is determined. Impairment tests must be performed on the smallest identifiable group of assets which generates cash flows independently of other assets or groups of assets and for which the Group prepares financial information for the Board of Directors. The identification of Cash Generating Units (CGUs) depends, in particular, on: - how the Group manages the activities of the entity; - the way in which decisions are made with regards to the pursuit or the disposal of its activities and; - the existence of an active market for all or part of the production. The Group considers the political and country specific risk factors while reviewing business evolution. Therefore, companies are grouped within the CGU country. The recoverable amount of bearer biological assets is determined through the calculation of value in use by using the most recent information approved by the local management. Those information comprise the measures taken that will help to prevent the effects of the climate change (maintenance program, land and field preparation against fire and / or flooding resulting from heavy rainfalls). The impacts on future cash- flows of the potential effects of climate change are therefore taken into consideration. Then the Group uses the discounted value of expected net cash flows which are discounted at a pre-tax rate. At reporting date, the financial projection incorporates the full exploitation of the younger bearer biological assets. The operational life G ranges from 25 to 30 years for both crops. This period can be adapted according to the particular circumstances for each entity. The value-in-use calculation has been very sensitive to: - changes in the margins achieved by the entity and - changes related to discount rates. This sensitivity analysis is performed whenever an impairment test is performed after impairment indicators are identified. Changes in realised margins Initially, the Group determines separately the expected production of each category of biological assets within the entity over their remaining life. This expected production is estimated through the surface areas planted on the reporting date, as well as through the actual crop yield recorded during the financial year. The latter depends on the maturity of the bearer biological asset. Production is then valued on an average basis of five-year of the margins achieved by the entity in relation to agricultural activities. The value-in-use of the biological asset is then obtained by discounting these cash flows. Average margins are considered constant over the duration of the financial projection. No indexing factor is considered. As at 31 December 2023, accumulated impairment losses amounted to EUR 18.0 million for Socfin KCD and EUR 8.0 million for Coviphama (Note 6). No further impairment or impairment reversal indicators have been identified during the year. Consolidated financial statements 70 | ANNUAL REPORT 2023 | Socfinasia Note 9. Non-wholly owned subsidiaries in which non-controlling interests G are significant Interests of non-controlling interests G in the activities of the Group Subsidiary Main location Percentage of equity shares of non-controlling interest G Percentage of voting rights of non-controlling interests G 2023 2022 2023 2022 Production of palm oil and rubber SOCFINDO Indonesia 10% 10% 10% 10% Subsidiary Net income attributed to non-controlling interests G in the subsidiary during the financial period Accumulated non-controlling interests G in the subsidiary 2023 2022 2023 2022 EUR EUR EUR EUR SOCFINDO 5,490,432 7,307,921 6,710,938 5,570,075 Subsidiaries that hold non-controlling interests G that are not significant individually 952,708 834,108 Non-controlling interests G 7,663,646 6,404,183 Summary financial information concerning subsidiaries whose interests of non-controlling interests G are significant for the Group excluding intragroup eliminations Subsidiary Current assets Non-current assets Current liabilities Non-Current Liabilities EUR EUR EUR EUR SOCFINDO 2022 36,446,379 91,330,388 33,993,571 34,304,495 2023 34,884,343 94,960,391 25,934,158 34,533,441 Subsidiary Revenue from ordinary activities Net income for the period Comprehensive income for the period Dividends paid to non-controlling interests G EUR EUR EUR EUR SOCFINDO 2022 193,795,921 71,954,260 71,954,260 5,525,070 2023 166,005,846 52,959,587 52,959,587 2,705,085 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 71 Subsidiary Net cash inflows (outflows) Net cash inflows (outflows) Operating activities Investing activities Financing activities EUR EUR EUR EUR SOCFINDO 2022 78,446,226 -12,561,950 -75,245,783 -9,361,507 2023 65,138,520 -15,351,501 -41,118,016 8,669,003 The nature and evolution of the risks associated with the interests held by the Group in the subsidiaries remained stable over the financial period compared to the previous year. Note 10. Investments in associates 2023 2022 EUR EUR Value as at 1 January 25,588,658 21,934,906 Income from associates 5,890,456 10,844,143 Dividends -8,292,174 -7,126,982 Share in other comprehensive income G from associates -337,884 443,737 Scope exits (Note 2) 0 -442,029 Other movements -161,385 -65,117 Value as at 31 December 22,687,671 25,588,658 Value of investment in associates Income from associates Value of investment in associates Income from associates 31/12/2023 2023 31/12/2022 2022 EUR EUR EUR EUR Centrages 3,344,822 79,639 3,365,183 132,473 Immobilière de la Pépinière 1,794,038 -71,861 1,866,129 1,962 Induservices 170,144 55,471 114,673 30,840 Induservices FR 0 125,258 0 -108,679 Management Associates 0 0 0 154,201 Socfinco 313,853 -4,683 318,537 -256,646 Socfinco FR 7,106,126 2,558,601 8,639,420 5,223,770 Sodimex 0 0 0 -49,895 Sodimex FR 2,116,830 342,281 2,183,194 451,950 Sogescol FR 7,533,893 2,791,818 8,807,490 5,249,578 Terrasia 307,966 13,933 294,033 14,590 TOTAL 22,687,672 5,890,457 25,588,659 10,844,144 Consolidated financial statements 72 | ANNUAL REPORT 2023 | Socfinasia Total assets Revenue Total assets Revenue 31/12/2023 2023 31/12/2022 2022 EUR EUR EUR EUR Centrages 3,973,190 3,921,004 4,106,686 3,880,683 Immobilière de la Pépinière 3,738,399 512,571 4,019,267 591,134 Induservices 1,080,076 2,240,040 815,459 2,700,576 Induservices FR 7,823,488 3,651,270 6,629,460 2,937,282 Socfinco 1,581,948 0 1,589,976 169 Socfinco FR 25,146,251 26,708,826 26,442,122 30,292,559 Sodimex FR 8,126,993 21,344,372 10,279,841 21,313,415 Sogescol FR 47,993,053 326,642,221 48,532,250 411,044,829 Terrasia 655,210 0 624,891 0 TOTAL 100,118,608 385,020,304 103,039,952 472,760,647 Main data of significant associates accounted for using the equity method Associate company Main location Main activity Dividend received Dividend received 31/12/2023 31/12/2022 EUR EUR Socfinco Belgium Rendering of services 0 200,000 Socfinco FR Switzerland Rendering of services 4,000,000 4,000,000 Sodimex FR Switzerland Purchase and sale of equipment 375,000 250,000 Sogescol FR Switzerland Trade of tropical products 3,744,267 2,476,982 TOTAL 8,119,267 6,926,982 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 73 Summary financial information of interests held in associates – Statement of financial position Associate company Current assets Non-current assets Current liabilities Non-current liabilities 31/12/2022 EUR EUR EUR EUR Centrages 2,209,820 1,896,866 728,645 0 Socfinco FR 22,132,936 4,309,187 6,658,770 3,351,275 Sodimex FR 10,245,556 34,286 5,825,789 0 Sogescol FR 47,807,127 725,123 31,698,353 0 TOTAL 82,395,439 6,965,462 44,911,557 3,351,275 31/12/2023 EUR EUR EUR EUR Centrages 2,473,196 1,499,994 677,627 0 Socfinco FR 19,702,567 5,443,685 8,691,698 1,533,477 Sodimex FR 8,104,378 22,616 3,492,398 301,364 Sogescol FR 44,344,968 3,648,084 32,518,033 0 TOTAL 74,625,109 10,614,379 45,379,756 1,834,841 Summary financial information of interests held in associates – Income statement Associate company Profit from operations Net income for the period Other comprehensive income for the period Total comprehensive income for the period 2022 EUR EUR EUR EUR Centrages 223,191 223,191 0 223,191 Socfinco FR 8,833,675 8,833,675 51,338 8,885,013 Sodimex FR 905,204 905,204 90,864 996,068 Sogescol FR 8,459,383 8,459,383 192,819 8,652,202 TOTAL 18,421,453 18,421,453 335,022 18,756,475 2023 EUR EUR EUR EUR Centrages 217,890 117,522 0 117,522 Socfinco FR 7,755,033 6,488,998 -91,830 6,397,168 Sodimex FR 712,284 609,180 -33,645 575,535 Sogescol FR 7,990,852 6,193,674 -87,087 6,106,587 TOTAL 16,676,059 13,409,374 -212,563 13,196,811 Consolidated financial statements 74 | ANNUAL REPORT 2023 | Socfinasia Reconciliation of the financial information summarised above to the carrying amount of the investments in the consolidated financial statements Associate company Net assets of the associate % stake held by the Group Other IFRS G adjustments Value of stake held by the Group 31/12/2022 EUR EUR EUR Centrages 3,378,041 50% 1,676,163 3,365,183 Socfinco FR 16,432,078 50% 423,381 8,639,420 Sodimex FR 4,454,053 50% -43,833 2,183,194 Sogescol FR 16,833,897 50% 390,542 8,807,490 TOTAL 41,098,069 2,446,253 22,995,287 31/12/2023 EUR EUR EUR Centrages 3,295,563 50% 1,697,041 3,344,822 Socfinco FR 14,921,076 50% -354,412 7,106,126 Sodimex FR 4,333,232 50% -49,786 2,116,830 Sogescol FR 15,475,019 50% -203,617 7,533,893 TOTAL 38,024,891 1,089,226 20,101,671 There is no goodwill attributed to the above associates. Aggregated information relating to associates that are not significant individually 2023 2022 EUR EUR Share of profit from continued operations attributable to the Group 118,118 -213,627 Share of other comprehensive income G attributable to the Group -125,259 108,679 Share of total comprehensive income G attributable to the Group -7,141 -104,948 Total book value of investments in associates held by the Group 2,586,000 2,593,372 Profit after tax from discontinued operations for 2023 and 2022 are nil for all associate companies of the Group. The nature, extent and financial impact of the interests held in associates by the Group, including the nature of relationships with other investors, remained stable over the financial period compared to the previous year. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 75 Note 11. Financial assets at fair value through other comprehensive income G 2023 2022 EUR EUR Fair value as at 1 January 773,528 501,082 Change in fair value () -42,251 -27,554 Increase () 4,500,000 300,000 Fair value as at 31 December 5,231,277 773,528 () The variation in the fair value of the financial assets is accounted under the Other Comprehensive Income G . () Movement in 2023 corresponds to Management Associates capital increase. EUR Cost (historical) Fair value 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Financial assets at fair value through other comprehensive income G 5,271,587 771,587 5,231,277 773,528 Note 12. Long-term advances As at 31 December 2023, the long-term advances consist mainly of a receivable from Socfin for a nominal amount of EUR 50,000,000 (2022: EUR 100,412,500). This receivable bears interest at a rate of 6% per annum (2022: rate of 4% per annum), and is repayable within 3 years. Note 13. Deferred taxes * Components of deferred tax assets and liabilities 31/12/2023 31/12/2022 EUR EUR IAS G 2 / IAS G 41: Agricultural production -1,476,045 -1,430,218 IAS G 16: Property, plant and equipment -4,600,547 -4,455,862 IAS G 19: Pension obligations 7,597,356 7,546,987 IAS G 12: Tax latencies () 3,571,683 4,148,849 IFRS G 16: Leases 5,463 10,525 IAS G 12: Withholding Tax -3,626,925 -4,856,278 IFRS G 9: Financial assets measured at fair value through other comprehensive income 7,594 -2,943 Balance as at 31 December 1,478,579 961,060 Of which Deferred Tax Assets 5,105,504 5,817,338 Of which Deferred Tax Liabilities -3,626,925 -4,856,278 () Mainly linked to Socfinasia's losses carried forward activated. Consolidated financial statements 76 | ANNUAL REPORT 2023 | Socfinasia The above deferred taxes are presented per category of deferred taxes resulting from consolidation adjustments. They are calculated company per company and the net position between deferred tax liabilities and deferred tax assets is presented. The Group Socfinasia is within the scope of the OECD Pillar Two model rules. Pillar Two legislation was enacted or substantively enacted in certain jurisdictions where the Group operates to come into effect in January 2024. Since the Pillar Two legislation was not effective at the reporting date, the Group has no related current tax exposure. The Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 published in May 2023 and adopted by the EU in November 2023. Based on preliminary analysis, the Company should qualify as a "partially-owned parent entity" (POPE) due to the fact that more than 20% of the ownership interest in its profit is held, directly or indirectly, by one or several persons that are not constituent entities of the Group. As a POPE, the Company should be subject to IIR based on its allocable share of the top-up tax (if any) of its low-tax constituent entities. The Company is controlled by Société Financière des Caoutchoucs, abbreviated as “Socfin” which is the largest entity that consolidate, and which should qualify as the Ultimate Parent Entity (UPE) for Luxembourg Pillar Two purpose. The UPE, Socfin, would be subject to IIR but would apply the IIR Offset Mechanism. However, the Pillar Tow rules were enacted in Luxembourg close to the reporting date. There are significant complexities inherent in applying the legislation and performing the Pillar Two calculations, therefore the quantitative impact of the Pillar Two rules is not reasonably estimable at this time. In addition, quantitative information to indicate potential exposure to Pillar Two income taxes is not currently known or reasonably estimable. Therefore, the Company (in its potential condition as a POPE) is still in process of assessing the potential exposure (if any) to Pillar Two income taxes as at 31 December 2023. The Group applies the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes, as provided in the amendments to IAS 12 published in May 2023 and adopted by the EU in November 2023. The Company will report the potential exposure in its next Annual Report for the period ending 31 December 2024. * Contingent tax assets and liabilities Some of the subsidiaries have accumulated tax losses that are or are not limited over time or capital allowances that are or are not limited over time. PNS Ltd, Socfin KCD and Coviphama have unused tax losses for respectively EUR 14.8 million, EUR 4.8 million and EUR 2.2 million. Due to the instability that may exist in these countries with regards to the evolution of tax legislation or its application, no deferred tax assets have been booked related to these tax losses. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 77 Note 14. Current tax assets and liabilities * Components of current tax assets 2023 2022 EUR EUR Current tax assets as at 1 January 1,574,531 1,228,967 Tax income 3,390,475 11,108 Taxes paid or recovered -2,263,556 323,667 Transfer () -2,067,475 3,004 Foreign exchange differences 109,639 7,785 Current tax assets as at 31 December 743,614 1,574,531 () Corresponds to offset of tax assets and tax liabilities. * Components of current tax liabilities 2023 2022 EUR EUR Current tax liabilities as at 1 January 11,928,557 16,005,952 Tax expense 21,416,571 32,284,407 Other taxes 2,075,670 68,832 Taxes paid or recovered -31,244,084 -35,985,895 Transfer () -2,062,429 -3,049 Foreign exchange differences 83,049 -441,690 Current tax liabilities as at 31 December 2,197,334 11,928,557 () Corresponds to offset of tax assets and tax liabilities. Note 15. Income tax expense * Components of the tax expense 2023 2022 EUR EUR Current income tax expense () 20,108,323 28,346,768 Deferred tax expense / (income) -412,214 1,042,777 Tax expense as at 31 December 19,696,109 29,389,545 () Withholding tax on dividends is presented within income tax expense. Consolidated financial statements 78 | ANNUAL REPORT 2023 | Socfinasia * Components of the deferred tax expense / (income) 2023 2022 EUR EUR IAS G 12: Income Tax () -644,705 339,175 IAS G 19: Pension obligations -115,122 13,070 IAS G 2 / IAS G 41: Fair value of agricultural produce 84,754 230,832 IAS G 16: Tangible assets 265,647 382,839 IFRS G 16: Leases 4,694 -386 IAS G 37 : Provisions for risks and charges -7,482 0 Others 0 77,247 Deferred tax expense / (income) as at 31 December -412,214 1,042,777 () Of which impact of losses carried forward activated for EUR 0.6 million (EUR 1.1 million in 2022), and withholding tax for EUR -1.2 million (EUR -0.7 million in 2022). * Reconciliation between income statement and cash flow statement 2023 2022 EUR EUR Income tax expense paid during the period -20,108,323 -28,346,769 Income tax movement on financial position () -7,772,501 0 Income tax paid -27,880,824 -28,346,769 () Income tax paid has been reclassified in 2023 from change in working capital to income tax paid. * Reconciliation of income tax expense 2023 2022 EUR EUR Profit before tax from continuing operations 65,524,414 73,825,731 Nominal tax rate of the parent company 24.94% 24.94% Nominal tax rate of subsidiaries from 20% to 24.94% from 20% to 24.94% Income tax at nominal tax rates of subsidiaries 14,216,425 17,052,299 Unfunded taxes 579 -20,640 Definitively taxed income / (expense) -47,609 -1,568,319 Use of capital allowances -586,234 745,288 Specific tax regimes in foreign countries 4,029,637 7,061,849 Non-taxable income -269,907 -1,937,160 Non-deductible expenses 2,936,893 7,914,796 Use of unrecognised accumulated tax losses -754,926 -263,288 Unrecognised losses carried forward 170,599 379,823 Impact of change in tax rate 0 25,110 Other adjustments 652 -213 Tax expense as at 31 December 19,696,109 29,389,545 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 79 Note 16. Inventories * Carrying value of inventories by category 31/12/2023 31/12/2022 EUR EUR Raw materials G 550,516 768,403 Consumables 5,443,932 3,537,708 Spare parts 1,361,118 2,066,773 Production in progress G 5,184,375 2,693,651 Finished products 4,377,247 7,608,564 Gross amount (before impairment) as at 31 December 16,917,188 16,675,099 Inventory write-downs -489 -729,244 Net amount as at 31 December 16,916,699 15,945,855 * Reconciliation of inventories 2023 2022 EUR EUR Situation as at 1 January 16,675,099 16,706,227 Change in inventory -765,945 -1,413,348 Fair value of agricultural products 1,479,483 1,754,937 Foreign exchange differences -471,449 -372,717 Gross amount (before impairment) as at 31 December 16,917,188 16,675,099 Inventory write-downs -489 -729,244 Net amount as at 31 December 16,916,699 15,945,855 * Quantity of inventory by category 31/12/2022 Raw Materials G Production-in-progress Finished goods G Crude Palm Oil / Palm Kernel Oil G (tons) 0 0 5,868 Rubber (tons) 710 0 2,459 Others (units) 0 10,043,350 0 31/12/2023 Raw Materials G Production-in-progress Finished goods G Crude Palm Oil / Palm Kernel Oil G (tons) 0 0 3,773 Rubber (tons) 677 0 1,631 Others (units) 0 26,517,167 0 Consolidated financial statements 80 | ANNUAL REPORT 2023 | Socfinasia Note 17. Trade receivables (current assets) 31/12/2023 31/12/2022 EUR EUR Trade receivables 2,250,462 2,645,367 Advances and prepayments 8,698 495,729 TOTAL 2,259,160 3,141,096 Note 18. Other receivables (current assets) 31/12/2023 31/12/2022 EUR EUR Social security 12,018 8,860 Other receivables () 9,856,820 28,371,836 Accrued charges 55,760 45,859 TOTAL 9,924,598 28,426,555 () The "other receivables" consist mainly of cash pooling receivables at Socfinde for EUR 8.5 million (EUR 13.4 million in 2022). The accounting policy and risk management applicable to receivables are detailed in Notes 1 and 34. Note 19. Cash and cash equivalents * Reconciliation with the amounts in the statement of financial position 31/12/2023 31/12/2022 EUR EUR Current account 114,574,658 94,648,047 TOTAL 114,574,658 94,648,047 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 81 * Reconciliation with the cash flow statement 31/12/2023 31/12/2022 EUR EUR Current account 114,574,658 94,648,047 TOTAL 114,574,658 94,648,047 Note 20. Share capital Issued and fully paid capital amounted to EUR 24.5 million as at 31 December 2023 (no change compared to 2022). As at 31 December 2023, the share capital is represented by 19,594,260 shares without nominal value. Ordinary shares 31/12/2023 31/12/2022 Number of shares as at 31 December 19,594,260 19,594,260 Number of fully paid shares issued without designation of par value 19,594,260 19,594,260 Note 21. Reserve Legal reserve In accordance with Luxembourgish commercial law, the company is required to allocate a minimum of 5% of its net profit for each financial year to a legal reserve. This requirement ceases to be necessary once the balance on the legal reserve reaches 10% of the issued share capital. The legal reserve is not available for distribution to the shareholders. Consolidated financial statements 82 | ANNUAL REPORT 2023 | Socfinasia Note 22. Pension obligations * Defined benefit pension plan and post-employment sickness The Group provides a defined benefit pension plan to its employees in its Indonesian subsidiary. The latter pay benefits which are payable in the event of retirement or voluntary resignation. The benefits paid are calculated as a percentage of the salary and are based on the number of years of service. The plan finds its legitimacy in the employment contract for the employees and on the collective agreements for the labourers. No specific asset against the provisions finance the benefits payable to the employees. 2023 2022 EUR EUR Assets and liabilities recognised in the statement of financial position Present value of obligations 34,533,436 34,304,488 Net amount recognised in the statement of financial position for defined benefit plans 34,533,436 34,304,488 Components of net charge Current service costs 1,834,219 2,028,323 Financial costs 2,106,160 1,894,992 Present Value of Benefit obligation following employee mutation 664,750 0 Past service costs 23,790 0 Defined benefit plan costs 4,628,919 3,923,315 Movements in liabilities / net assets recognised in the statement of financial position As at 1 January 34,304,488 36,912,326 Costs as per income statement 4,628,919 3,923,315 Contributions -4,105,636 -3,859,526 Actuarial gains and losses of the year recognised in other comprehensive income G 604,036 -1,548,010 Foreign exchange differences -898,371 -1,123,617 As at 31 December 34,533,436 34,304,488 Provisions are based on actuarial valuation reports prepared in January 2024. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 83 * Actuarial gains and losses recognised in other comprehensive income G 2023 2022 EUR EUR Adjustments of liabilities related to experience -2,150,024 533,879 Changes in financial assumptions related to recognised liabilities 1,545,988 1,014,131 Actuarial gains and losses recognised during the period in other comprehensive income G -604,036 1,548,010 * Actuarial valuation assumptions 2023 2022 ASIA Average discount rate from 6.37% to 7.10% from 5.52% to 7.44% Expected long-term returns of plan assets N/A N/A Future salary increases 6.50% 6.50% Average remaining active life of employees (in years) 13.49 13.10 * Sensitivity analysis of the present value of defined benefit obligations 2023 2022 EUR EUR Actuarial value of the obligation - Pension plan 32,801,665 32,563,604 - Other Long-term benefits 1,731,771 1,740,884 Total as at 31 December 34,533,436 34,304,488 Actuarial rate (on pension plan) Increase of 0.5% 33,382,168 33,188,601 Decrease of 0.5% 35,753,213 35,486,229 Expected future salary increases (on pension plan) Increase of 0.5% 35,658,854 35,408,582 Decrease of 0.5% 33,461,593 33,252,768 The sensitivity analysis are based on the same actuarial method used to measure the obligations of the defined benefit plans. The mortality rate which can be impacted by the effect of the climate change is included in this sensitivity analysis. * Impact of the defined benefit pension plan on future cash flows 2023 2022 Estimated contributions for the next financial year (in euros) 4,267,713 2,924,588 2023 2022 Weighted average duration of defined benefit plan obligations (in years) 13.04 12.85 Consolidated financial statements 84 | ANNUAL REPORT 2023 | Socfinasia Note 23. Financial debts 31/12/2022 EUR < 1 year > 1 year TOTAL Loans held by financial institutions 18,522,074 9,375,586 27,897,660 Other loans 222 0 222 Lease liabilities 28,105 397,717 425,822 TOTAL 18,550,401 9,773,303 28,323,704 31/12/2023 EUR < 1 year > 1 year TOTAL Loans held by financial institutions 0 0 0 Other loans 0 0 0 Lease liabilities 27,258 356,638 383,896 TOTAL 27,258 356,638 383,896 * Long-term debt analysis by interest rate 31/12/2022 EUR Fixed Rate Rate Floating rate Rate TOTAL Loans held by financial institutions Luxembourg 0 - 9,375,586 3-month + 5% SOFR G 9,375,586 TOTAL 0 9,375,586 9,375,586 31/12/2023 EUR Fixed Rate Rate Floating rate Rate TOTAL Loans held by financial institutions Luxembourg 0 0 0 0 0 TOTAL 0 0 0 In 2023, the Group has no longer any long-term loans held by financial institutions. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 85 * Long-term debt analysis by currency 31/12/2022 USD TOTAL EUR Loans held by financial institutions 9,375,586 9,375,586 Lease liabilities 397,716 397,716 TOTAL 9,773,302 9,773,302 31/12/2023 USD TOTAL EUR Lease liabilities 356,638 356,638 TOTAL 356,638 356,638 * Long-term debt analysis by maturity 31/12/2022 EUR 2024 2025 2026 2027 2028 and above TOTAL Loans held by financial institutions 9,375,586 0 0 0 0 9,375,586 Lease liabilities 28,239 28,374 28,511 28,649 283,944 397,717 TOTAL 9,403,825 28,374 28,511 28,649 283,944 9,773,303 31/12/2023 EUR 2025 2026 2027 2028 2029 and above TOTAL Lease liabilities 27,388 27,520 27,653 34 274,042 356,637 TOTAL 27,388 27,520 27,653 34 274,042 356,637 Consolidated financial statements 86 | ANNUAL REPORT 2023 | Socfinasia * Net cash surplus / (Net debt) 31/12/2023 31/12/2022 EUR EUR Cash and cash equivalents 114,574,658 94,648,047 Long-term debt net of current portion 0 -9,375,586 Short-term debt and current portion of long-term debt 0 -18,522,296 Lease liabilities -383,896 -425,822 Net cash surplus / (Net debt) 114,190,763 66,324,343 Cash and cash equivalents 114,574,658 94,648,047 Loan bearing interest at a variable rate 0 -27,897,882 Lease liabilities -383,896 -425,822 Net cash surplus / (Net debt) 114,190,763 66,324,343 * Reconciliation of net cash surplus / (net debt) Cash and cash equivalents Long-term debt, net of current portion Short-term debt and current portion of long- term debt Debt related to leases TOTAL As at 1 January 2022 73,404,709 -78,136,408 -8,853,829 -427,354 -14,012,882 Cash flows 20,233,462 66,817,381 -1,175,284 28,468 85,904,027 Foreign exchange differences 1,009,876 -6,148,630 -384,269 -26,936 -5,549,959 Transfers 0 8,092,070 -8,108,913 0 -16,843 As at 31 December 2022 94,648,047 -9,375,586 -18,522,296 -425,822 66,324,343 Cash flows 20,389,257 -3,130 27,484,691 27,687 47,898,505 Foreign exchange differences -462,646 138,684 274,183 14,240 -35,539 Transfers 0 9,236,798 -9,236,578 0 220 Other movements with no impact on cash flows 0 3,234 0 0 3,234 As at 31 December 2023 114,574,658 0 0 -383,895 114,190,763 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 87 Note 24. Trade and other payables 31/12/2023 31/12/2022 EUR EUR Trade payables 7,345,213 4,333,218 Staff cost liabilities () 16,985,833 18,161,954 Other payables () 42,470,901 34,838,679 Accruals 260,188 1,818,472 TOTAL 67,062,135 59,152,323 (*) Debts towards employees (EUR 17.7 million in 2022) have been reclassified from “other payables” to “staff cost liabilities” in 2022. () Other payables consist mainly of debts of EUR 31.5 million (EUR 24.2 million in 2022) relating to the cash pooling at Socfinde. Consolidated financial statements 88 | ANNUAL REPORT 2023 | Socfinasia Note 25. Financial instruments 31/12/2022 Loans and borrowings Financial assets at fair value through other comprehensive income G Other financial assets and liabilities TOTAL Loans and borrowings () Other financial assets and liabilities () EUR At cost At fair value At cost At fair value At fair value Assets Financial assets at fair value through other comprehensive income G 0 773,528 0 773,528 0 0 Long-term advances 100,412,500 0 90,824 100,503,324 100,412,500 90,824 Other non-current assets 7,000,000 0 0 7,000,000 7,000,000 0 Trade receivables 0 0 3,141,096 3,141,096 0 3,141,096 Other receivables 0 0 28,426,554 28,426,554 0 28,426,554 Cash and cash equivalents () 0 0 94,648,047 94,648,047 0 94,648,047 Total Assets 107,412,500 773,528 126,306,521 234,492,549 107,412,500 126,306,521 Liabilities Long-term debts () 9,375,586 0 0 9,375,586 9,375,586 0 Short-term debts () 0 0 18,522,296 18,522,296 0 18,522,296 Trade payables (current) 0 0 4,333,218 4,333,218 0 4,333,218 Other payables (current) 0 0 54,819,105 54,819,105 0 54,819,105 Total Liabilities 9,375,586 0 77,674,619 87,050,205 9,375,586 77,674,619 (*) For information purposes. () See Note 23. 31/12/2022 Fair Value EUR Level 1 Level 2 Level 3 TOTAL Financial assets at fair value through other comprehensive income G 0 0 773,528 773,528 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 89 31/12/2023 Loans and borrowings Financial assets at fair value through other comprehensive income G Other financial assets and liabilities TOTAL Loans and borrowings () Other financial assets and liabilities () EUR At cost At fair value At cost At fair value At fair value Assets Financial assets at fair value through other comprehensive income G 0 5,231,277 0 5,231,277 0 0 Long-term advances 50,412,500 0 87,675 50,500,175 50,412,500 87,675 Trade receivables 0 0 2,259,161 2,259,161 0 2,259,161 Other receivables 0 0 9,924,597 9,924,597 0 9,924,597 Cash and cash equivalents () 0 0 114,574,658 114,574,658 0 114,574,658 Total Assets 50,412,500 5,231,277 126,846,091 182,489,868 50,412,500 126,846,091 Liabilities Short-term debts () 0 0 0 0 0 0 Trade payables (current) 0 0 7,345,213 7,345,213 0 7,345,213 Other payables (current) 0 0 59,716,922 59,716,922 0 59,716,922 Total Liabilities 0 0 67,062,135 67,062,135 0 67,062,135 () For information purposes. () See Note 23. 31/12/2023 Fair Value EUR Level 1 Level 2 Level 3 TOTAL Financial assets at fair value through other comprehensive income G 0 0 5,231,277 5,231,277 The Group did not identify significant differences between the carrying amount of the loans and their fair value. Consolidated financial statements 90 | ANNUAL REPORT 2023 | Socfinasia Note 26. Staff costs and average number of staff 2023 2022 Average number of employees Directors 194 195 Employees 2,590 2,253 Workers (including temporary workers) 6,902 7,147 TOTAL 9,686 9,595 2023 2022 Staff costs EUR EUR Remuneration 58,505,265 67,263,579 Social security and pension expenses 6,530,200 5,790,322 TOTAL 65,035,465 73,053,901 Note 27. Other financial income 2023 2022 EUR EUR On non-current assets / liabilities Interest on other investments () 4,629,133 7,720,339 On current assets / liabilities Interest from receivables and cash and cash equivalents 4,256,771 1,555,214 Exchange gains 3,184,412 17,463,418 Others 35,104 55,464 TOTAL 12,105,420 26,794,435 () Interests mainly relating to the long-term advances towards Socfin (see Note 31). Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 91 Note 28. Financial expenses 2023 2022 EUR EUR On non-current assets / liabilities Impairment on non-current assets 170,407 30,000 Interest expense on lease liabilities 40,977 42,471 On current assets / liabilities Interest and finance expense 1,024,131 3,532,438 Impairment on current assets 2,897 -4,258 Exchange losses 5,693,613 3,614,032 Others 610,435 1,579,822 TOTAL 7,542,460 8,794,505 Note 29. Net earnings per share Undiluted net earnings per share (basic) is the profit for the year attributable to ordinary shareholders divided by the average number of ordinary shares outstanding during the year. As there are no potential dilutive ordinary shares, the diluted net earnings per share is identical to the undiluted net earnings per share. 2023 2022 Net profit / (loss) for the period (in euros) 46,103,360 47,948,844 Average number of shares 19,594,260 19,594,260 Net earnings per share undiluted (in euros) 2.35 2.45 Note 30. Dividends and directors’ fees The Board will propose at the Annual General Meeting of 29 May 2024 the payment of a total dividend of EUR 4.00 per share, out of which an interim dividend of EUR 2.00 per share was paid in November 2023. If the proposed dividend is approved by the general meeting of shareholders, a balance of EUR 2.00 per share for a total amount of EUR 39.2 million would therefore remain payable. 2023 2022 Dividends and interim dividends distributed during the period 68,579,910 58,782,780 Number of shares 19,594,260 19,594,260 Dividend per share distributed during the period 3.50 3.00 In addition, in accordance with the statutory provisions, 1/9 th of the gross dividend is allocated to the Board of Directors. Consolidated financial statements 92 | ANNUAL REPORT 2023 | Socfinasia Note 31. Information on related party * Directors’ remuneration 2023 2022 EUR EUR Short-term benefits 11,674,417 15,278,115 * Other related party transactions 31/12/2022 EUR Parent Associates Other related parties TOTAL Non-current assets Long-term advances (Note 12) 100,000,000 132,500 280,000 100,412,500 Other non-current assets 0 0 7,000,000 7,000,000 100,000,000 132,500 7,280,000 107,412,500 Current assets Trade receivables 0 1,308,312 37,405 1,345,717 Other receivables (Note 18) 14,498,034 6,016,300 7,520,601 28,034,935 14,498,034 7,324,612 7,558,006 29,380,652 Current liabilities Trade payables 0 102,981 0 102,981 Other payables (Note 24) 1,914,036 7,780,667 15,313,990 25,008,693 1,914,036 7,883,648 15,313,990 25,111,674 2022 EUR Parent Associates Other related parties TOTAL Income statement Services and goods delivered 0 13,371,056 167,896 13,538,952 Services and goods received 0 5,596,574 447,562 6,044,136 Financial income 7,682,513 4,004,774 311,305 11,998,592 Financial expenses 2,220 30,020 71,073 103,313 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 93 31/12/2023 EUR Parent Associates Other related parties TOTAL Non-current assets Long-term advances (Note 12) 50,000,000 132,500 280,000 50,412,500 50,000,000 132,500 280,000 50,412,500 Current assets Trade receivables 0 1,078,622 6,988 1,085,610 Other receivables (Note 18) 900,000 8,505,786 0 9,405,786 900,000 9,584,408 6,988 10,491,396 Current liabilities Trade payables 0 18,167 0 18,167 Other payables (Note 24) 5,885,386 8,280,574 18,178,167 32,344,127 5,885,386 8,298,741 18,178,167 32,362,294 2023 EUR Parent Associates Other related parties TOTAL Income statement Services and goods delivered 0 8,217,506 74,431 8,291,937 Services and goods received 0 5,018,633 359,324 5,377,957 Financial income 4,520,047 4,270,504 254,465 9,045,016 Financial expenses 44,921 279,709 278,840 603,470 Related party transactions are made at arm’s length. As at 31 December 2023, Socfinasia has an amount receivable of EUR 50 million from Socfin. This receivable bears interest at 6%. The amount of interest recognised for the year 2023 is EUR 4.1 million. As at 31 December 2023, PNS has no more receivable towards Socfin, following the repayment of EUR 14.1 million from Socfin in February 2023. The amount of interest recognised for the year 2023 is EUR 0.4 million. No other significant transaction has been noted with the parent company Socfin, with the exception of the payment of dividends by Socfinasia amounting to EUR 34.2 million in 2022 and EUR 39.9 million in 2023. In addition, Socfinde has a payable of EUR 5.9 million with the parent company as at 31 December 2023. As at 31 December 2023, Socfinde has an amount payable of EUR 15.9 million towards Socfinaf and its subsidiaries (2022: EUR 0.3 million). Consolidated financial statements 94 | ANNUAL REPORT 2023 | Socfinasia Note 32. Off balance sheet commitments In February 2023, PNS Ltd fully reimbursed the remaining balance (USD 30 million) of the USD 100 million loan obtained in 2021. Following this reimbursement, the Group no longer has material off balance sheet commitments as at 2023 year-end. Note 33. Segment information In accordance with IFRS G 8, the analysis of information by management is based on the geographical distribution of political and economic risks. As a result, the sectors are Indonesia, Cambodia and Europe. The products of the operating sector from Indonesia come from sales of palm oil and rubber. Those from Cambodia come exclusively from the sale of rubber, those from Europe from the provision of administrative services, assistance in managing the areas under plantation and the marketing of products outside of the Group. The segment profit of the Group is the profit from operations. The stated figures originate from internal reporting. Since they do not reflect any consolidation or IFRS G adjustments or adjustments, they are not directly comparable to amounts reported in the consolidated statement of the financial position and income statement. * Segmental breakdown of profit / (loss) as at 31 December 2022 EUR Revenue from ordinary business with external customers Revenue from ordinary business between segments Segmental profit / (loss) () Europe 0 0 -2,502,234 Cambodia 8,164,138 0 -2,490,942 Indonesia 193,795,812 0 91,818,347 TOTAL 201,959,951 0 86,825,171 Depreciation, amortisation and impairment of bearer plants -25,063,440 Fair value of agricultural production 1,754,937 Other IFRS G adjustments -1,509,266 Consolidation adjustments (intra-group and others) -6,262,500 Financial income and gain on disposals 27,177,257 Financial expenses and loss on disposals -9,096,429 Group share of income from associates 10,844,143 Income tax expense and deferred tax (expense) / income -29,389,546 Net Profit / (loss) for the period 55,280,328 () Profit / (loss) for the period include other expenses for EUR 14.9 million, corresponding mainly to external services invoiced to plantations and related directly to the operational activity (road maintenance, …), and other operating expenses for EUR 4.8 million not related directly to the operational activity (other taxes, property taxes, …). Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 95 * Segmental breakdown of profit/(loss) as at 31 December 2023 EUR Revenue from ordinary business with external customers Revenue from ordinary business between segments Segmental profit / (loss) () Europe 0 0 -2,750,620 Cambodia 10,777,027 0 160,349 Indonesia 167,746,950 0 68,542,397 TOTAL 178,523,977 0 65,952,125 Depreciation, amortisation and impairment of bearer plants 896,304 Fair value of agricultural production 1,479,483 Other IFRS G adjustments 641,536 Consolidation adjustments (intra-group and others) -6,984,289 Financial income and gain on disposals 12,105,421 Financial expenses and loss on disposals -8,566,165 Group share of income from associates 5,890,456 Income tax expense and deferred tax (expense) / income -19,696,109 Net Profit / (loss) for the period 51,718,763 () Profit / (loss) for the period include other expenses for EUR 17.1 million, corresponding mainly to external services invoiced to plantations and related directly to the operational activity (road maintenance, …), and other operating expenses for EUR 1.0 million not related directly to the operational activity (other taxes, property taxes, …). Consolidated financial statements 96 | ANNUAL REPORT 2023 | Socfinasia * Total segmental assets G 31/12/2023 31/12/2022 EUR EUR Europe 102,405,662 82,675,979 Cambodia 64,227,738 67,618,326 Indonesia 118,943,164 117,769,545 TOTAL 285,576,563 268,063,851 IFRS G 3 / IAS G 16: Bearer plants -23,403,793 -25,178,480 IAS G 2 / IAS G 41: Agricultural production 3,130,129 1,752,466 Other IFRS G adjustments -2,365,866 -1,494,716 Consolidation adjustments (intra-group and others) 3,554,009 3,861,555 Total consolidated segmental assets G 266,491,043 247,004,675 Consolidated assets not included in segmental assets G Right-of-use assets 2,693,850 1,866,143 Investments in associates 22,687,671 25,588,659 Financial assets at fair value through other comprehensive income G 5,231,277 773,528 Long-term advances 50,500,175 100,503,325 Deferred tax 5,105,504 5,817,339 Other non-current assets 0 7,000,000 Consolidated non-current assets 86,218,478 141,548,993 Other debtors 9,924,597 28,426,554 Current tax assets 743,616 1,574,532 Consolidated current assets 10,668,213 30,001,086 Total of consolidated assets in the segmental assets G 96,886,691 171,550,080 Total assets 363,377,733 418,554,755 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 97 * Total segmental liabilities G 31/12/2023 31/12/2022 EUR EUR Europe 101,153,425 48,589,840 Cambodia 1,239,938 1,318,995 Indonesia 24,537,641 24,094,356 TOTAL 126,931,004 74,003,191 Other IFRS G adjustments 0 0 Consolidation adjustments (intra-group and others) -59,868,869 -14,850,869 Total consolidated segmental liabilities G 67,062,135 59,152,322 Consolidated equity and liabilities not included in segmental liabilities G Total equity 255,574,006 279,989,406 Non-current liabilities 38,516,999 48,934,068 Current financial debts 0 18,522,296 Current lease liabilities 27,258 28,105 Current tax liabilities 2,197,335 11,928,558 Total consolidated equity and liabilities not included in segmental liabilities G 296,315,599 359,402,433 Total equity and liabilities 363,377,733 418,554,755 * Costs incurred for acquisition of segmental assets G during 2022 EUR Intangible assets Tangible assets Biological assets TOTAL Cambodia 0 417,668 469,391 887,059 Indonesia 635,933 5,886,190 7,013,022 13,535,145 TOTAL 635,933 6,303,858 7,482,413 14,422,204 * Costs incurred for acquisition of segmental assets G during 2023 EUR Intangible assets Tangible assets Biological assets TOTAL Cambodia 0 480,750 426,311 907,061 Indonesia 1,172,057 5,368,272 9,562,007 16,102,337 TOTAL 1,172,057 5,849,022 9,988,318 17,009,398 Consolidated financial statements 98 | ANNUAL REPORT 2023 | Socfinasia * Information by category of revenue 2023 2022 EUR EUR Palm 150,895,839 170,873,347 Rubber 20,651,439 22,322,007 Other agricultural activities 6,468,850 7,435,188 Others 507,849 1,329,409 TOTAL 178,523,977 201,959,951 * Information by geographical region EUR 2022 Geographical location Origin Europe Africa Asia America TOTAL Asia 13,092,428 785,781 187,277,153 804,588 201,959,951 EUR 2023 Geographical location Origin Europe Africa Asia America TOTAL Asia 8,949,515 228,540 169,310,539 35,384 178,523,978 * Information by business segment by revenue category EUR 2022 Category Business Segment Palm Rubber Other agricultural products TOTAL Indonesia 170,873,251 14,157,861 8,764,701 193,795,812 Cambodia 0 8,164,138 0 8,164,138 TOTAL 170,873,251 22,322,000 8,764,701 201,959,951 EUR 2023 Category Business Segment Palm Rubber Other agricultural products TOTAL Indonesia 150,895,828 9,874,419 6,976,703 167,746,950 Cambodia 0 10,777,027 0 10,777,027 TOTAL 150,895,828 20,651,446 6,976,703 178,523,977 Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 99 Note 34. Risk management Capital management The Group manages its capital and adapts according to changes in economic conditions and investment opportunities. To maintain or adjust the capital structure, the Group may issue new shares, repay part of the capital or adjust the payment of dividends to shareholders. The Group also manages its capital by closely monitoring the ratio of debt over equity. Financial risk The financial risk for the companies within the Group originates mainly from changes in the selling price of agricultural commodities, foreign exchange and, to a lesser extent, interest rate movements. Potential risks None of the countries where the Group operates has a hyperinflationary economy or suffers from an immediate threat of price devaluation. Nevertheless, in a minority of those countries, the political system and economic stability remain fragile and could lead to currency devaluation or hyperinflation. Risk management and opportunities The Group regularly reviews its sources of financing as well as currency movements. Moreover, its decisions are based on a variety of risks and opportunities, which themselves depend on several factors, including interest rates, currency and counterparties. Market risk * Price risk in commodities market Potential risk The Group markets its finished products at prices that may be influenced by commodity prices in international markets. It therefore faces the risk of volatility in the prices of these commodities. Risk management and opportunities The main policy of the Group’s companies has always been to control its production costs. It aims to generate margins for the viability of structures in the event of a significant drop in the selling prices of raw materials G and, conversely, to generate profit margins during the market downturns. In parallel with this main policy, secondary policies have also been implemented to improve or consolidate profit margins, such as: - the production of agricultural products of superior quality and branded, in particular for rubber and; - the use of the Group’s expertise in the commercial sector. The Group reduces its exposure to price risk by investing into different geographical markets and products. * Foreign currency risk Potential risk The Group carries out transactions in local currencies, the main ones being US dollar and Indonesian rupiah. In addition, financial instruments hedging against fluctuations in exchange rate may not be available for certain currencies. This creates exposure to exchange rate fluctuations, which may have an impact on the financial result denominated in euro. Risk management and opportunities Apart from the current currency hedging instruments for operational transactions,which is relatively limited, the main policy of the Group to finance its development projects in the local currencies of the region. This practice is favourable for the significant investments made in the plantations, as an attempt to reduce borrowings wherever possible. * Interest rate risk Potential risk The first risk linked to the interest rate denotes a change in cash flows relating to short-term borrowings, often on a variable rate, as well as a relatively high level of base interest rates on cash and cash equivalents. The second risk , is linked to developing markets, when borrowing in a local currency. Risk management and opportunities The first risk is maintained under control by an active policy of monitoring the evolution of local financial markets on the one hand and, when necessary, short- Consolidated financial statements 100 | ANNUAL REPORT 2023 | Socfinasia term debt consolidation in the long term on the other. Another systematic policy keeps an eye on the second risk, by putting local and international banks in competition with international lenders who can offer real investment and development opportunities at attractive rates. Credit risk Potential risk Credit risk arises from the potential inability of clients to meet their contractual obligations. Risk management and opportunities To manage credit risk, the Group ensures the payment of local sales in cash or the guarantee of the receivables by obtaining approved bills of exchange. The export sales of the plantations are centralised in the Group’s sales structure, which applies either a cash payment policy or a commercial credit policy whose limits are defined by its Board of Directors. Details on impairment of financial assets and liabilities, including measurement of expected credit losses, are disclosed in Note 1.18. Liquidity risk Potential risk Liquidity risk is defined as the risk that the Group cannot meet its obligations in time or at a reasonable price. This risk mainly affects plantations, which are both the main source of cash and financing needs. Risk management and opportunities Given the specific economic and technological environment of each plantation, the Group manages the liquidity risk in a decentralised manner. However, both the available cash and the implementation of the financing are supervised by the Group Management. The Group chooses, whenever possible, to maintain/ claim financial liabilities and cash position (as mentioned respectively in Notes 23 and 19) with low credit risk institutions. Emerging market risks Potential risk Current or future political instability in certain countries in which the Group operates may affect the Group’s profitability and its ability to do business and generate revenue. The political system in some of the Group’s markets is relatively fragile and can be potentially threatened by cross-border conflicts or wars between rival groups. Risk management and opportunities Through its activities, the Group contributes to the improvement of the quality of life in the countries in which it operates. It also focuses on improving the stability of its markets, which may lead to an appreciation in the value of the Group’s local companies. By diversifying the countries, economies and currencies in which the Group generates its revenues and cash flows, it reduces its exposure to emerging market risk. The Group is aware of its environmental and social responsibility towards the local population and is continually implementing initiatives to this end. Risk of expropriation Potential risk Certain countries in which the Group operates have political regimes that may call into question foreign commercial interests by limiting their activities and may attempt to exert control over the Group’s assets. This is known as the risk of expropriation. Risk management and opportunities The diversified geographical distribution of the countries in which the Group generates its revenues and its cash flows reduces its exposure to this risk. Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 101 Credibility risk Potential risk With the Group being linked to the state of the financial markets, the Group may be exposed to a credibility risk when said markets lose confidence. This depends on the Group’s ability to maintain sound financial health considering: - its environmental impact, - its social responsibility and - the economic and geopolitical risks that certain Group entities may face. Risk management and opportunities The Group has published its responsible management policy in 2017, which was updated in 2022. This complements the Group’s sustainable development commitments, formalised in 2012. The Group’s initiatives to monitor this risk are detailed in the information provided in the annual sustainable development report available on request at Group headquarters. Risk sensitivity * Exchange rate risk The Group is exposed to changes in value arising from fluctuations in exchange rates, which are generated by its operating activities. However, as local turnover was made in the local currency and export sales are made in US dollar, the Group’s exposure is limited to fluctuations in dollar against the euro. The impact on the result of a 10% increase or decrease (EUR/USD) in foreign currency financial instruments amounts to EUR 6.0 million. In the case where the currency of sale is not the functional currency of the Company, and it is linked to a strong currency, the conversion is ensured at the time of the conclusion of the contract. The local sales concluded in the local currency in 2023 amounted to EUR 169.3 million. Socfinasia’s companies have a cash position of USD 65.9 million at 2023 year-end. * Interest rate risk The breakdown of fixed rate loans and variable rate loans is described in Note 23. Due to the cash pooling centralised, the Group is exposed to interest rate risk. To control this risk, the management closely monitors the interest rate’s evolution. * Credit risk On 31 December 2023, the trade receivables from global customers amounted to EUR 1.1 million and to EUR 1.2 million for local customers. Accounts receivable from global customers are mainly receivables related to the sale of rubber. Palm oil is sold locally to local players (wide range of customers). The marketing of rubber is entrusted to Sogescol FR (equity accounted company). It trades either on the physical markets or directly with end customers. The outstanding trade receivables are not significant. 2023 2022 EUR EUR Trade receivables 2,259,161 3,141,096 Other receivables 9,924,597 28,426,554 Long-term advances 50,500,175 100,503,325 Total net receivables 62,683,933 132,070,975 Amount not yet due 60,299,632 132,070,975 Amount due less than 6 months 2,384,301 0 Total net receivables 62,683,933 132,070,975 Consolidated financial statements 102 | ANNUAL REPORT 2023 | Socfinasia Note 35. Profit before interest, taxes, depreciation and amortisation EBITDA G 2023 2022 EUR EUR Profit after tax (Group’s share) 46,103,360 47,948,844 Profit share of non-controlling interests G 5,615,402 7,331,484 Income from associates -5,890,456 -10,844,143 Dividends received from associates 8,292,174 7,126,982 Fair value of biological assets -1,213,115 -2,378,830 Depreciation, amortisation and provisions 11,284,832 38,054,928 Gains and losses on disposals of assets 1,023,704 344,053 Tax charge 19,696,109 29,389,546 Other financial income -12,105,421 -26,794,436 Financial expenses 7,542,460 8,794,506 Financial expenses included in amortisation and provisions -173,304 -25,742 Impact of lease restatement on EBITDA G -174,486 -183,797 TOTAL 80,001,259 98,763,396 Note 36. Contingent liabilities 1 Litigation against the Belgian Federal Public Service Finance (Corporate Tax) The company SOCFICOM (“Socficom”), a public limited company incorporated under Liechtenstein law and a subsidiary of the Group, was the subject of criminal proceedings initiated by the Belgian Public Prosecutor’s Office. The main accusation against Socficom was that the Belgian Public Prosecutor’s Office considered that Socficom was a “Belgian resident company”, subject to Belgian corporate income tax. Socficom was acquitted, following a ruling by the 11th Chamber of the Brussels Court of Appeal, sitting in correctional matters, dated from 23 October 2018. The Court ruled that “it is clear from all these elements that the real seat of the defendant Socficom is indeed established in Liechtenstein and that nothing allows it to be located in Brussels”. The Public Prosecutor’s Office did not appeal against this judgement and this decision is therefore final. However, the Federal Public Service Finance, relied exclusively on the investigation file submitted by the Belgian Public Prosecutor’s Office in criminal matters. The former therefore maintains that Socficom meets the conditions to be liable to corporate income tax in Belgium. The Federal Public Service Finance considers that Socficom is effectively managed from Belgium and that all its activities are carried out there. Socficom was therefore automatically assessed with corporate income tax on 4 January 2012, for the tax years 2004 to 2009 for an amount of EUR 77,343,783, excluding late payment interest at an annual rate of 7% reduced to 4% as from 1 January 2018. On 5 April 2013, Socficom filed a tax claim against the 6 ex officio tax assessments. These 6 claims were declared admissible, but were rejected. Socficom filed an action before the “Tribunal de première instance francophone” of Brussels. The “Tribunal de première instance francophone” of Brussels, by judgement dated from 26 April 2019, declared the claim admissible and partially founded Consolidated financial statements Socfinasia | ANNUAL REPORT 2023 | 103 insofar as it ordered the partial relief of the disputed taxes. Socficom considers that this decision, although partially favourable to the argument it defended before the Court, is not satisfactory, given the acquittal decision referred to above. The tax authorities want to tax Socficom exclusively on the basis of the elements in the criminal file, as the tax file does not contain any “new claims” in relation to the criminal proceedings. The facts judged in the tax proceedings have already been decided by the Court of Appeal (correctional chamber) which acquitted Socficom and the other defendants. The Court could therefore not agree with the tax office on the basis of documents, observations or findings, without taking into consideration the judgement of the Court of Appeal of 23 October 2018. The Brussels Tax Court has “re-heard” the criminal case ignoring the acquittal of the 11th Chamber of the Brussels Court of Appeal. Socficom has therefore decided to appeal against the tax judgement in order to request that the Court grants the request initially formulated by the company, i.e. to order the complete cancellation of the relief of the disputed taxes. Tax judgements that are appealed against are not enforceable until the Court has ruled on them. The amounts initially claimed by the tax authorities from Socficom amounted to EUR 77,343,783, excluding interest (see above), from which it must be deducted the relief granted by the Court amounting to EUR 50,000,000. The company’s counsel and Group management are of the opinion that the Court of Appeal should fully cancel these taxes, based on the acquittal decision of the Court of Appeal, Correctional Chamber, dating from 23 October 2018 which confirms: “that the real seat of the defendant Socficom is indeed established in Liechtenstein and that there is no reason to locate it in Brussels”. Based on these elements, the management is of the opinion that no provision should be recorded as the probability of an outflow of financial resources by the Group is low. The findings of the Court of Appeal are not expected before 2024. 2. Litigation against the Belgian Federal Public Service Finance (VAT) As described above, the Federal Public Service Finance maintains that Socficom is a Belgian resident company. The tax authorities are claiming VAT of EUR 3,054,160.15 for the years 2006, 2007, 2008 and 2009, adding to this tax fines and interest at a rate of 0.8% per month as from 20 January 2010. The amounts claimed amount to EUR 10,310,844.61, split as follows: - EUR 3,054,160 for VAT - EUR 1,148,364 in interest - EUR 6,108,320 in fines - plus interest for late payment to be calculated on the VAT due from 21 December 2013. Socficom contested this tax before the Brussels Court of First Instance. The Court declared the claim admissible and partially founded insofar as it cancelled the fines of EUR 6,108,320 and the interest charged on this amount. Socficom considers that this decision, although partially favorable to the case it defended before the Court, is not satisfactory since it was granted the acquittal following the judgement rendered by the 11th Chamber of the Brussels Court of Appeal dating from 23 October 2018. In order to claim the disputed VAT from Socficom, the tax authorities based themselves exclusively on the criminal file. However, the Brussels Court could not ignore the acquittal decision and condemn Socficom without taking into account the final and res judicata judgement of the Brussels Court of Appeal. In the absence of new elements brought by the tax authorities and having an impact on the outcome of the trial, the decision of the Court of Appeal of 23 October 2018 could not be challenged and is binding on the Court. Socficom therefore decided to appeal the tax ruling in order to request that the Court to grant the request initially made by the company, i.e. to order a tax relief for the disputed taxes. Consolidated financial statements 104 | ANNUAL REPORT 2023 | Socfinasia The Company’s counsel and the Group’s management are of the opinion that the Court of Appeal should fully cancel these taxes, based on the acquittal decision of the Court of Appeal, Correctional Chamber, dating from 23 October 2018, which confirms: “that the real seat of the defendant Socficom is indeed established in Liechtenstein and that there is no reason to locate it in Brussels". Based on these elements, management is of the opinion that no provision should be recorded as the probability of an outflow of financial resources by the Group is low. The findings of the Court of Appeal are not expected before 2024. Note 37. Political and economic environment The Company holds interests in subsidiaries operating in South-East Asia. Given the economic and political instability in some of these countries, these investments represent a risk in terms of exposure to political and economic changes. Note 38. Events after the closing date There are no material events after the closing date to mention. Note 39. Auditor’s fees 2023 2022 EUR EUR Audit (VAT included) 375,814 394,614 The audit fees include all fees paid to the independent statutory auditor of the Group namely EY as well as those paid to member firms within EY’s network for the relevant years. No consulting work or other non- audit services have been performed by this firm in 2023 or in 2022. Socfinasia | ANNUAL REPORT 2023 | 105 Portrait du GroupeCompany’s management report Presented by the Board of Directors at the Annual General Meeting of 29 May 2024 Ladies and gentlemen, We are pleased to present our annual report and to submit for your approval the annual accounts of our Company as at 31 December 2023. Activities Socfinasia S.A. holds financial interests in portfolio companies which operate directly or indirectly in South-East Asia in the rubber and palm oil sectors. The result of the year The profit and loss account for the year, compared to that of the previous year, is as follows: (EUR million) 2023 2022 INCOME Value adjustments in respect of financial assets 0.0 0.3 Income from participating interests Derived from affiliated undertakings 50.5 69.0 Other interest receivable and similar income 2.4 5.5 Total income 52.9 74.8 EXPENSES Other external expenses 2.2 2.0 Interest payable and similar expenses 1.9 1.4 Income tax 0.7 0.7 Total expenses 4.8 4.1 PROFIT FOR THE FINANCIAL YEAR 48.1 70.7 As at 31 December 2023, the income from financial fixed assets amounted to EUR 50.5 million compared to EUR 69 million in 2022. The decrease is mainly due to decreased revenues from Indonesia. The profit of the year, after structural charges and costs, stood at EUR 48.1 million compared to EUR 70.7 million as at 31 December 2022. Company’s management report 106 | ANNUAL REPORT 2023 | Socfinasia Balance sheet As at 31 December 2023, Socfinasia’s total assets amounted to EUR 430.2 million compared to EUR 457.7 million in 2022. Socfinasia’s assets mainly consist of financial fixed assets of EUR 357.7 million, receivables and cash at Bank of EUR 72.6 million. Shareholders’ equity, before allocation of the remaining dividend, amounts to EUR 424.1 million. Portfolio Movements During the year, the company has participated in the capital increase of Management Associates. Valuation Unrealised capital gains on the portfolio of participating interests are estimated at EUR 62.4 million as at 31 December 2023 compared with EUR 101.9 million at the end of the previous year. Investments The main investments have evolved as follows during the period: PT Socfindo (Indonesia) 90% subsidiary of PNS Limited which itself is 100% owned by Socfinasia. Area (ha) at 31/12/2023 Planted area Mature Immature Total Rubber 5,232 1,091 6,323 Palm 34,511 4,989 39,500 Total 39,743 6,080 45,823 Key figures Realised 2023 Realised 2022 Difference (%) Production (tons) Rubber 6,397 6,896 -7.2 Palm oil 188,527 179,516 +5.0 Turnover (EUR 000) Rubber 9,871 14,140 -30.2 Palm tree 150,842 170,656 -11.6 Seeds 5,234 7,426 -29.5 Total 165,947 192,222 -13.7 Result (EUR 000) 52,960 71,954 -26.4 Company’s management report Socfinasia | ANNUAL REPORT 2023 | 107 Socfin-KCD Co Ltd (Cambodia) – 100% owned subsidiary of Socfinasia and Coviphama Co Ltd (Cambodia) – 100% owned subsidiary of PNS Ltd, which itself is 100% owned by Socfinasia. The production of rubber processed by Socfin KCD during the year 2023 is up by 47% due to higher production of Coviphama. Revenue was also up (+32%) due to higher volume (+51%), partially offset by lower selling prices (-13%). This had a positive impact on net income and also benefited from a more favourable unit margin than last year. At Coviphama, raw rubber production up (+267%) due to the opening of new agricultural plots for tapping. Sales were also up (+238%) due to an increase in sales volume (+267%), partially offset by a lower selling price (-8%). Allocation of profit The profit for the year of EUR 48,129,963 increased by retained earnings of EUR 229,326,834, give a total earnings of EUR 277,456,797 which was proposed to allocate as follows: Earnings allocation EUR Retained earnings 190,371,197 From the balance : 10% to the Board of Directors 8,708,560 90% to 19,594,260 shares 78,377,040 representing EUR 4.00 per share of which EUR 2.00 already paid at the end of 2023 277,456,797 As a reminder, the dividend relating to the previous year was EUR 3.50. After this allocation of earnings, the reserves will be as follows: Reserves EUR Legal reserve 2,449,282 Statutory reserve 125,993,370 Other reserves 30,070,910 Other available reserves 7,153,910 Retained earnings 190,371,197 356,038,669 If this distribution is approved, Coupon No. 86 of EUR 2.00 gross will be declared on 5 June 2024 and payable as of 7 June 2024. Company’s management report 108 | ANNUAL REPORT 2023 | Socfinasia Own shares During the year 2023, the Company did not buy back any of its shares. Research and development During the year 2023, Socfinasia did not incur any expenses relating to research and development. Financial instruments Socfinasia’s treasury holds USD 59,8 million in its position as at 31 December 2023. The purpose of holding this currency is to cover dollar related investments and expenses. Financial risk management policies are described in the notes to the Company’s consolidated financial statements. Branch The Company has a permanent establishment in Fribourg (CH). Mentions required by Art. 11 (1) points a) to k) of the law of 19 May 2006 concerning Public Takeover Bids a) b) and f) The issued capital of the Company is set at EUR 24,492,825 represented by 19,594,260 shares without par value, fully paid up. Each share entitles the holder to one vote without limitation or restriction. c) On 1 February 2017, Socfin declared that it holds 57.79% direct stake in Socfinasia. On 22 October 2018, Bolloré Participations declared that it holds a direct and indirect stake of 22.255% in Socfinasia, of which 17.138% via Bolloré and 5.116% via Compagnie du Cambodge. h) Art. 13. of the statutes: “The Company is administered by a Board composed of at least three members, whether natural or legal persons. The Directors are appointed for a period of six years by the General Meeting of Shareholders. They are eligible for re-election. The Directors are renewed by lottery, so that at least one Director will be leaving each year. Art. 22. of the statutes: “In the event of vacancy of one or more director’s seat, it may be provisionally replaced by complying with the formalities provided for by law.” Art. 31. of the statutes: “The present statutes can be modified by decision of the General Meeting specially convened for this purpose, in the forms and conditions prescribed by articles 450-1 and 450-8 of the law of 10 August 1915 on the commercial companies, as amended.” i) The powers of the members of the Board of Directors are defined in Art. 17 and seq. of the statutes of the Company. They provide in particular that: “The Board of Directors is vested with the broadest powers for the administration of the Company. All matters not expressly reserved to the General Meeting by the statutes Company’s management report Socfinasia | ANNUAL REPORT 2023 | 109 or the law fall within the competence of the Board”. In addition, the Articles provide in Art. 6: “In the event of a capital increase, the Board of Directors shall determine the conditions of issue of the shares. The new shares to be paid up in cash shall be offered in preference to the current shareholders, in accordance with the law. In the event of the issue of shares by contribution in cash or in the event of the issue of instruments which fall within the scope of application of article 420-27 of the law on companies and which are paid for in cash, including and in a non-exhaustive manner, convertible bonds allowing their holder to subscribe to shares or to be allocated shares, shareholders have preferential subscription rights in proportion to their participation with regard to all these issues in accordance with the provisions of company law. The General Meeting called to deliberate, under the conditions required for the amendment of the Articles of Association, on the increase in the share capital or on the authorisation to increase the capital in accordance with Article 420-23 of the law of commercial companies, may limit or cancel the preferential subscription right or authorise the Board to do so in the manner and under the conditions provided for by law.” The other points of Art. 11 (1) are not applicable, namely: • the holding of shares giving special control rights; • the existence of a staff shareholding system; • shareholder agreements that may result in restrictions on the transfer of securities or voting rights; • the agreements to which the Company is party, and which take effect are modified or terminated in the event of a change of control of the Company following a takeover bid; • the indemnities provided in the event of the resignation or dismissal of members of the Board of Directors or staff following a takeover bid. Responsible management policy The responsible management policy is based on the Group’s three pillars of commitment, alongside its specific commitment to transparency: rural development, workers and local communities, and environment. These commitments form the basis of key initiatives aimed at improving long-term economic performance, social well-being, health, safety and natural resource management. An implementation plan for this policy was defined and implemented throughout 2023. The efforts and actions undertaken by the Socfin Group in this area are detailed in a regularly updated dashboard as well as in a separate annual report (“Sustainable Development Report”). The responsible management policy, the dashboard and the annual sustainable development report are available on the Group’s website. Estimated value of the share (company accounts) The estimated value of Socfinasia as at 31 December 2023 before allocation of the result and after the interim dividend payment for the financial year amounts to EUR 486.5 million. This valuation incorporates the unrealised capital gains of the portfolio. As a reminder, the share price as at 31 December 2023 was EUR 15.40 compared to EUR 14.80 the previous year. Company’s management report 110 | ANNUAL REPORT 2023 | Socfinasia Significant events after the end of the year As at 31 December 2023 and 2022, the Company had no significant off-balance sheet commitments. Main risks and uncertainties It must be emphasised that the Group’s investments in South-East Asia may be subject to political and economic risks. On-site executives and managers follow the day-to-day evolution of the situation. In addition, the Company may be exposed to foreign exchange risks on long-term advances to subsidiaries. The assessment of this risk is described in the notes to the Company’s statutory financial statements. Perspectives The result for the 2024 financial year will largely depend on the dividend distributions of the subsidiaries. Statutory appointments Mr. Philippe Fabri, outgoing director, is eligible for re- election. The Board will propose to the next General Meeting the renewal of this term of office for a period of six years. The Board of Directors Socfinasia | ANNUAL REPORT 2023 | 111 Report on the audit of the financial statements To the Shareholders SOCFINASIA S.A. 4, Avenue Guillaume L-1650 Luxembourg REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS Opinion We have audited the financial statements of Socfinasia S.A. (the “Company”), which comprise the balance sheet as at 31 December 2023, and the profit and loss account for the year then ended, and the notes to the financial statements, including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Company as at 31 December 2023, and of the results of its operations for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements. Basis for opinion We conducted our audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 on the audit profession (“Law of 23 July 2016”) and with International Standards on Auditing (“ISAs”) as adopted for Luxembourg by the “Commission de Surveillance du Secteur Financier” (“CSSF”). Our responsibilities under the EU Regulation Nº 537/2014, the Law of 23 July 2016 and ISAs as adopted for Luxembourg by the CSSF are further described in the “Responsibilities of the “réviseur d’entreprises agréé” for the audit of the financial statements” section of our report. We are also independent of the Company in accordance with the International Code of Ethics for Professional Accountants, including International Independence Standards, issued by the International Ethics Standards Board for Accountants (“IESBA Code”) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of the audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Valuation of shares in affiliated undertakings Risk identified As at 31 December 2023, the shares in affiliated undertakings amounts to 294 million euros and represents 68% of the total assets of the balance sheet. Shares in affiliated undertakings are valued at historical acquisition cost, respectively their nominal value, which includes incidental expenses. In the case of durable depreciation in value according to the opinion of the Board of Directors, value adjustments are made in respect of financial fixed assets, so that they are valued at the lower figure to be attributed to them at the balance sheet date. These value adjustments are not continued if the reasons for which the value adjustments were made have ceased to apply. In the event of an impairment that, in the opinion of the Board of Directors, is of a lasting nature, these financial assets are subject to value adjustments in order to give them the lower value that should be attributed to them on the balance sheet date, as determined by the Board of Directors. The assessment of the durable depreciation in value of these shares in affiliated undertakings requires the exercise of the Board of Directors’ judgement in its choice of the elements to be considered according to the shares in affiliated undertakings, whether market elements (shares price when applicable) and/ or historical elements (adjusted net equity) and/or forecast elements (discounted future cash flows to shareholders). Report on the audit of the financial statements 112 | ANNUAL REPORT 2023 | Socfinasia Due to the size of the balance and judgement included, we considered this area to be a key audit matter. Our answer Our audit procedures over the impairment of the shares in affiliated undertakings and of the loans to affiliated undertakings included amongst other : • Assessing the accounting policies determined by the Board of Directors, as described in the note 2 of the financial statements, to determine the value adjustments to be recorded on shares in the affiliated undertakings ; • Ensuring that the accounting policies used by the Board of Directors were properly applied: - when the Board of Directors relied on market data, we reconciled the share prices as at 31 December 2023 used for the valuation of shares in affiliated undertakings to the official stock markets quotations ; - when the Board of Directors relied on historical data, we reconciled the adjusted net equity used in the valuation of the shares in affiliated undertakings as at 31 December 2023 to the financial information of the related affiliated undertakings and assessed the appropriateness of evidence supporting the adjustments made to the net equity, if any. • Assessing the appropriateness of the disclosures made in the Note 3 of the financial statements. Other information The Board of Directors is responsible for the other information. The other information comprises the information included in the annual reporting including the management report and the corporate governance statement but does not include the financial statements and our report of “réviseur d’entreprises agréé” thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. Responsibilities of the Board of Directors and of those charged with governance for the financial statements The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. The Board of Directors is also responsible for presenting and marking up the financial statements in compliance with the requirements set out in the Delegated Regulation 2019/815 on European Single Electronic Format, as amended (“ESEF Regulation”). In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Responsibilities of the “réviseur d’entreprises agréé” for the audit of the financial statements The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of the “réviseur d’entreprises agréé” that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and with the ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to Report on the audit of the financial statements Socfinasia | ANNUAL REPORT 2023 | 113 influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with EU Regulation N° 537/2014, the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors. • Conclude on the appropriateness of Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of the “réviseur d’entreprises agréé” to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our report of the “réviseur d’entreprises agréé”. However, future events or conditions may cause the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Assess whether the financial statements have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate to them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes public disclosure about the matter. Report on other legal and regulatory requirements We have been appointed as “réviseur d’entreprises agréé” by the General Meeting of the Shareholders on 26 May 2020 and the duration of our uninterrupted engagement, including previous renewals and reappointments, is 4 years. The management report is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. The accompanying corporate governance statement on pages 27 to 33 is the responsibility of the Board of Directors. The information required by article 68ter paragraph (1) letters c) and d) of the law of 19 December 2002 on the commercial and companies register and on the accounting records and annual accounts of undertakings, as amended, is consistent with the financial statements and has been prepared in accordance with applicable legal requirements. Report on the audit of the financial statements 114 | ANNUAL REPORT 2023 | Socfinasia We have checked the compliance of the financial statements of the Company as at 31 December 2023 with relevant statutory requirements set out in the ESEF Regulation that are applicable to the financial statements. For the Company, it relates to : • Financial statements prepared in valid xHTML format In our opinion, the financial statements of the Company as at 31 December 2023, have been prepared, in all material respects, in compliance with the requirements laid down in the ESEF Regulation. We confirm that the audit opinion is consistent with the additional report to the audit committee or equivalent. We confirm that the prohibited non-audit services referred to in EU Regulation No 537/2014 were not provided and that we remained independent of the Company in conducting the audit. Ernst & Young Société anonyme Cabinet de révision agréé Anthony CANNELLA Luxembourg Socfinasia | ANNUAL REPORT 2023 | 115 Portrait du GroupeCompany financial statements 1. Balance sheet as at 31 December 2023 2023 2022 ASSETS Note EUR EUR FIXED ASSETS Financial assets 3 Shares in affiliated undertakings 294,122,628.31 289,622,628.31 Loans to affiliated undertakings 63,581,947.65 116,045,211.05 357,704,575.96 405,667,839.36 CURRENT ASSETS Debtors Amounts owed by affiliated undertakings Becoming due and payable within one year 4 67,260,251.61 12,794,759.27 Other debtors Becoming due and payable within one year 2,065,605.05 1,553,016.15 69,325,856.66 14,347,775.42 Cash at bank and in hand 3,226,692.02 37,681,058.52 72,552,548.68 52,028,833.94 TOTAL ASSETS 430,257,124.64 457,696,673.30 The accompanying notes form an integral part of the financial statements. Company financial statements 116 | ANNUAL REPORT 2023 | Socfinasia 2023 2022 CAPITAL, RESERVES AND LIABILITIES Note EUR EUR CAPITAL AND RESERVES 5 Issued capital 24,492,825.00 24,492,825.00 Reserves Legal reserve 2,449,282.50 2,449,282.50 Reserves provided for by the articles of association 125,993,370.46 125,993,370.46 Other reserves, including the fair value reserve Other available reserves 37,224,819,43 37,224,819.43 165,667,472.39 165,667,472.39 Profit brought forward 229,326,833.87 234,841,827.35 Profit for the financial year 48,129,963.38 70,684,906.52 Interim dividends -43,542,800.00 -43,542,800.00 424,074,294.64 452,144,231.26 CREDITORS Amounts owed to credit institutions Becoming due and payable within one year 0.00 9.04 Trade creditors Becoming due and payable within one year 233,943.47 226,872.44 Amounts owed to affiliated undertakings Becoming due and payable within one year 603.00 1,872.00 Other creditors Tax authorities 2,476,680.00 1,852,680.00 Other creditors Becoming due and payable within one year 6 3,471,603.53 3,471,008.56 6,182,830.00 5,552,442.04 TOTAL CAPITAL, RESERVES AND LIABILITIES 430,257,124.64 457,696,673.30 The accompanying notes form an integral part of the financial statements. Company financial statements Socfinasia | ANNUAL REPORT 2023 | 117 2. Profit and loss account for the year ended 31 December 2023 2023 2022 Note EUR EUR Other operating income 0.00 175,99 Raw materials G and consumables and other external expenses Other external expenses -2,146,274.69 -1,922,242.44 Other operating expenses -101,860.81 -107,709.95 Income from participating interests derived from affiliated undertakings 7 46,464,771.90 65,053,599.02 Income from other investments and loans forming part of the fixed assets derived from affiliated undertakings 8 4,121,111.11 3,972,222.23 Other interest receivable and other similar income derived from affiliated undertakings 2,247,994.95 5,183,952.87 other interests and financial income 139,784.85 264,535.28 Value adjustments in respect of financial assets and of investments held as current assets 0.00 347,589.84 Interest payable and similar expenses derived from affiliated undertakings -1,354,353.05 -492,636.07 other interest and similar charges -582,060.65 -883,552.26 Tax on profit -39,182.31 -80,175.06 Profit after taxation 48,749,931.30 71,335,759.45 Other taxes not shown above -619,967.92 -650,852.93 Profit for the financial year 48,129,963.38 70,684,906.52 Company financial statements 118 | ANNUAL REPORT 2023 | Socfinasia Allocation of profit 2023 2022 EUR EUR Retained earnings 190,371,197.25 229,326,833.87 From the balance: 10% to the Board of Directors 8,708,560.00 7,619,990.00 90% to 19,594,260 shares 78,377,040.00 68,579,910.00 277,456,797.25 305,526,733.87 Dividend per share 4.00 3.50 The accompanying notes form an integral part of the financial statements. Company financial statements Socfinasia | ANNUAL REPORT 2023 | 119 3. Notes to the financial statements for the year 2023 Note 1. Overview SOCFINASIA, (the “Company’’) was incorporated on 20 November 1972 as a public limited company and adopted the status of “Soparfi" G on 10 January 2011. The duration of the company is unlimited, and its registered office is established in Luxembourg. The company is registered in the Register of Commerce and Companies under number B10534, and is listed on the Luxembourg Stock Exchange under ISIN number LU0092047413. The object of the company is (i) the acquisition, holding and disposal, in any form whatsoever and by any means, directly or indirectly, of participations, rights and interests, as well as bonds of Luxembourg or foreign companies, (ii) the acquisition by contribution, purchase, subscription or otherwise, as well as the disposal by sale, transfer, exchange or otherwise, of shares, interests, bonds, debts, notes and other securities or financial instruments of any kind (in particular bonds or shares issued by Luxembourg or foreign collective investment funds or any other similar body), loans or any other credit line, as well as contracts relating thereto and (iii) the holding, administration, development and management of a portfolio of assets (composed in particular of the assets described in points (i) and (ii) above). The company may also acquire and develop any patents and other rights relating to or supplementing those patents. The company may borrow in any form whatsoever. It may enter into any kind of loan agreement and may issue debt securities, bonds, certificates, shares, profit shares, warrants and all kinds of debt and equity securities, including by virtue of one or several issue programmes. The company may lend funds, including those resulting from borrowings and/or securities issues, to its subsidiaries, affiliates and any other company. Although the company is included in the consolidated financial statements of Société Financière des Caoutchoucs, abbreviated as “Socfin", which is the largest entity in which the company is consolidated, the Company also prepares consolidated financial statements which are published in accordance with the law and which are available at the company’s registered office (4, avenue Guillaume, L-1650 Luxembourg) or on the Internet site: www.socfin.com. The financial year begins on 1 January and ends on 31 December. Note 2. Accounting principles, rules and methods General principles The annual financial statements are prepared in accordance with Luxembourgish legal and regulatory requirements in force in Luxembourg under the historical cost convention. The accounting policies and valuation principles are, apart from the rules imposed by the law of 19 December 2002, determined and implemented by the Board of Directors. The preparation of the annual financial statements involves the use of a number of critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the application of accounting principles. Any change in assumptions may have a significant impact on the financial statements for the period in which the assumptions are changed. The Board of Directors believes that the underlying assumptions are appropriate and that the financial statements give a true and fair view of the financial position and results of the Company. Currency conversion The Company keeps its accounts in euros (EUR); the annual accounts are expressed in the same currency. Transactions in a currency other than the balance sheet currency are converted into the balance sheet currency at the exchange rate prevailing on the date of the transaction. Company financial statements 120 | ANNUAL REPORT 2023 | Socfinasia At the balance sheet date: - the acquisition price of the financial assets, expressed in a currency other than the currency of the balance sheet, remain converted at the historical exchange rate. The current portion of receivables is one exception to this, as it is valued individually at the lowest of their historical exchange rate value or their value determined on the basis of the exchange rate prevailing at the balance sheet date; - bank accounts expressed in a currency other than the currency of the balance sheet are valued on the basis of the exchange rate prevailing on the balance sheet date. Foreign exchange gains and losses are recognised in the current period; - all other assets, expressed in a currency other than the currency of the balance sheet, are valued individually at the lowest of their value at the historical exchange rate or their value determined on the basis of the exchange rate prevailing at the balance sheet date; - all liability items, expressed in a currency other than the currency of the balance sheet, are valued individually. For this, the highest amount is used between their value at the historical exchange rate and their value determined on the basis of the exchange rate prevailing on the balance sheet. Realised foreign exchange gains and losses and unrealised losses are recognised in the profit and loss account. Unrealised foreign exchange gains are not recognised. If there is an economic link between two transactions, unrealised exchange differences are recognised at the corresponding unrealised exchange loss. Valuation of financial assets Shares in affiliated undertakings are valued at acquisition cost, which includes incidental expenses. Receivables from affiliated companies are valued at their nominal value, which includes incidental expenses. In the event of an impairment that, in the opinion of the Board of Directors, is of a lasting nature, these financial fixed assets are subject to value adjustments. The aim of the latter is to give them the lowest value that should be attributed to them on the balance sheet date, as determined by the Board of Directors. In order to determine the value adjustments that are permanent at the balance sheet date, the Board of Directors carries out the following analyses for each investment on an individual basis: 1/ For investments listed on public markets, the Board of Directors compares the net book value of the investment with its shares in the market based on the stock market price at the closing date. When the market value is greater than or equal to the net book value, the Board of Directors considers that no value adjustment needs to be recorded at the closing date. However, when the market value is lower than the net book value, the Board of Directors tests the net book value against the share in the revalued net assets of the investment. 2/ If the net book value exceeds the market value or the equity value for unlisted investments, the Board of Directors compares the net book value with the share held in the revalued net assets as well as in the consolidated net assets (i.e. equity attributable to owners of the parent company) if the subsidiary prepares consolidated accounts. If either the market or the equity values is greater than or equal to the net book value of the investment, no value adjustment is recognised. 3/ When both values are lower than the net book value of the investment: - for support companies (other than plantations or industrial companies), the Board of Directors records the value adjustment resulting from the smallest difference between the net book value of the investment and the share held in the revalued net assets or in the consolidated net assets; - for investments in plantations or industrial companies, the Board of Directors makes a value adjustment to adjust the carrying value to the enterprise value which is calculated on the basis of the discounted future cash flows available to the shareholders. These discounted future cash flows take into account the foreseeable development of the business of the investments under test. However, the Board of Directors may take other factors into consideration and, in particular, in view of the very long period of immaturity of young plantation, it considers that the value adjustment is not permanent for a plantation where more than half of the planted area is not being used. Loans to affiliated companies are subject to a value adjustment in the event that the net book value test by discounting future cash flows to shareholders does not support the full repayment of the receivable. These value adjustments are not maintained when the reasons for which they were established have ceased to exist. Company financial statements Socfinasia | ANNUAL REPORT 2023 | 121 Receivables Receivables are recorded at their nominal value. They are subject to value adjustments when their recovery is compromised. These value adjustments are not continued if the reason for which the value adjustments were made are no longer applicable. Securities Securities are valued at the lower of cost, including incidental costs or market value. A value adjustment is recorded when the market price is lower than the purchase price. Value adjustments are not maintained if the reasons for their negotiations have ceased to exist. Liabilities Debts are recorded at their reimbursement value. When the amount to be repaid on the debts exceeds the amount received, the difference is recorded to the profit and loss account. Geopolitical uncertainties In February 2022, a number of countries (including the US, UK and EU) imposed sanctions against certain entities and individuals in Russia as a result of the official recognition of the Donetsk People Republic and Lugansk People Republic by the Russian Federation. Announcements of potential additional sanctions were made following military operations initiated by Russia against Ukraine on 24 February 2022. On 7 October 2023, Palestinian militant groups led by Hamas launched a coordinated surprise offensive on Israel resulting in more than 1,200 deaths, primarily Israeli citizens. Following this attack, Israel declared itself in a state of war for the first time since the Yom Kippur War in 1973. Due to the geopolitical tensions, since February 2022, there has been a significant increase in volatility on the securities and currency markets. The conflicts have had a significant impact on the financial markets, with many investors concerned about the risk of further escalation and the ensuing impact on global trade and economic growth. Although the aforementioned aspects have not significantly impacted the company’s operations nor performance and going concern has during 2023, the Board of Directors continues to monitor the evolving situation and its impact on the company’s financial position and results. Note 3. Financial fixed assets Shares in affiliated undertakings Loans to affiliated undertakings Total 2023 2022 2023 2022 2023 2022 EUR EUR EUR EUR EUR EUR Acquisition cost/nominal value at the beginning of the year 290,868,480.28 291,418,270.12 116,045,211.05 120,642,097.14 406,913,691.33 412,060,367.26 Increases 4,500,000.00 0.00 0.00 0.00 4.500.000,00 0.00 Decreases 0.00 -549,789.84 -52,463,263.40 -4,596,886.09 -52,463,263.40 -5,146,675.93 Acquisition cost/nominal value at the end of the year 295,368,480.28 290,868,480.28 63,581,947.65 116,045,211.05 358,950,427.93 406,913,691.33 Value adjustments at the beginning of the year -1,245,851,97 -1,593,441.81 0.00 0.00 -1,245,851.97 -1,593,441.81 Impairment 0.00 0.00 0.00 0.00 0.00 0.00 Reversal 0.00 347,589.84 0.00 0.00 0.00 347,589.84 Value adjustments at the end of the year -1,245,851.97 -1,245,851.97 0.00 0.00 -1,245,851.97 -1,245,851.97 Net book value at the end of the year 294,122,628.31 289,622,628.31 63,581,947.65 116,045,211.05 357,704,575.96 405,667,839.36 Company financial statements 122 | ANNUAL REPORT 2023 | Socfinasia Note 3. Financial fixed assets (continued) Information on companies in which the Company holds at least 20% of the capital Name Country % held NET BOOK VALUE EUR Year end Currencies of the annual accounts Net equity as at 31/12/2023 in foreign currency (including net income) () Net result as at 31/12/2023 in foreign currencies () Induservices Luxembourg 35.00 35,000 31.12.2023 EUR 486,125 158,489 Plantation Nord-Sumatra Ltd Luxembourg 100.00 244,783,208 31.12.2023 USD 308,685,671 35,920,808 Socfinde Luxembourg 79.92 1,072,391 31.12.2023 EUR 6,667,848 644,758 Terrasia Luxembourg 47.81 118,518 31.12.2023 EUR 644,145 29,142 Induservices FR Switzerland 50.00 642,202 31.12.2023 EUR 877,365 -218,056 Socfinco FR Switzerland 50.00 486,891 31.12.2023 EUR 14,921,076 6,488,998 Sogescol FR Switzerland 50.00 1,985,019 31.12.2023 USD 16,660,468 6,705,434 Sodimex FR Switzerland 50.00 621,424 31.12.2023 EUR 4,313,232 609,180 Centrages Belgium 50.00 4,074,315 31.12.2023 EUR 3,295,563 117,522 Immobilière de la Pépinière Belgium 50.00 3,015,798 31.12.2023 EUR 3,518,757 -136,790 Socfinco Belgium 50.00 750,365 31.12.2023 EUR 1,527,706 -9,367 Socfin-KCD Cambodia 100.00 31,685,450 31.12.2023 USD 32,573,266 623,629 289,270,582 () Based on unaudited financial statements as at 31 December 2023. Information on movements during the year During the year, the company has participated in the capital increase of Management Associates for an amount of EUR 4,500,000. Valuation of shares in affiliated undertakings As at 31 December 2023, the Board of Directors is of the opinion that there is no permanent value decrease for the shares in affiliated undertakings. Company financial statements Socfinasia | ANNUAL REPORT 2023 | 123 Note 3. Financial fixed assets (continued) Valuation of loans to affiliated undertakings As at 31 December 2023, loans to affiliated undertakings are as follows: Related parties Currency Balance Balance Unrealised exchange gains / (losses) * in currency in EUR EUR Induservices EUR 132,500 132,500 0 Socfin EUR 50,000,000 50,000,000 0 Socfin-KCD Co USD 15,503,890 13,169,448 861,222 Management Associates EUR 280,000 280,000 0 TOTAL 63,581,948 861,222 * In accordance with Luxembourgish legal and regulatory provisions and generally accepted accounting practices, loans to affiliated undertakings are translated at the historical exchange rate. The unrealised foreign exchange gain or loss is not recognised in the profit and loss account, with the exception of the current portion of receivables, which is valued individually at the lower of their historical exchange rate value or their value determined by the exchange rate prevailing at the balance sheet date. During the year, the company has received a reimbursement of EUR 50,000,000 from Socfin and EUR 2,463,263 from Socfin KCD. As at 31 December 2023, the Board of Directors is of the opinion that these receivables do not show any permanent impairment losses and consequently no impairment has been recorded. Note 4. Amounts owed by affiliated undertakings As at 31 December 2023, this item consists mainly of: - receivables from the subsidiary Socfinde corresponding to the cash pooling balance of EUR 64,236,749 (2022: EUR 3,482,992). This increase is mainly due to the reimbursement from Socfin. As at 31 December 2023, the Board of Directors is of the opinion that the amounts are fully recoverable. As such, no impairment loss has been accounted for. Company financial statements 124 | ANNUAL REPORT 2023 | Socfinasia Note 5. Equity Issued capital EUR Legal reserves EUR Other reserves EUR Retained earnings EUR Profit for the year EUR Interim dividend paid EUR Balance as at 1 January 2022 24,492,825.00 2,449,282.50 163,218,189.89 220,321,607.44 45,000,179.91 -8,708,560.00 Allocation of the result for the 2021 financial year following decision of the General Meeting held on 31 May 2022 • Retained earnings 14,520,219.91 -14,520,219.91 • Dividends -19,594,260.00 • Directors’ fees -2,177,140.00 • 2021 interim dividend -8,708,560.00 8,708,560.00 Interim dividend as per decision of the Board of Directors held on 27 October 2022 -43,542,800.00 Results for the financial year 70,684,906.52 Balance as at 31 December 2022 24,492,825.00 2,449,282.50 163,218,189.89 234,841,827.35 70,684,906.52 -43,542,800.00 Allocation of the result for the 2022 financial year following decision of the General Meeting held on 30 May 2023 • Retained earnings -5,514,993.48 5,514,993.48 • Dividends -29,391,390.00 • Directors’ fees -3,265,710.00 • 2022 interim dividend -43,542,800.00 43,542,800.00 Interim dividend as per decision of the Board of Directors held on 26 October 2023 -43,542,800.00 Results for the financial year 48,129,963.38 Balance as at 31 December 2023 24,492,825.00 2,449,282.50 163,218,189.89 229,326,833.87 48,129,963.38 -43,542,800.00 Issued capital As at 31 December 2023 and 2022, the issued and fully paid share capital is EUR 24,492,825 represented by 19,594,260 shares without nominal value. Legal reserve The annual profit is subject to a levy of 5% to be allocated to a legal reserve. This allocation ceases to be compulsory as soon as the reserve reaches 10% of the share capital. The legal reserve cannot be distributed. Statutory reserves The statutory reserve includes an unavailable reserve of EUR 125,993,370 (2022: EUR 125,993,370), relating to the profit earned at the time of the formation of Plantation Nord-Sumatra Ltd. in 1997. Pursuant Article 33 of the Company’s coordinated Articles of Association, this reserve is not available for distribution to shareholders. Company financial statements Socfinasia | ANNUAL REPORT 2023 | 125 Note 6. Other payables As at 31 December 2023, this item includes interest payable for EUR 3,471,604 (2022: EUR 3,471,008). Note 7. Income from participating interests 2023 2022 EUR EUR Dividends received () 46,549,758 65,034,849 Capital gain on disposal of financial fixed assets () 5,013 18,750 46,554,772 65,053,599 () This amount corresponds to the dividend received from the affiliated undertakings (Note 3). (**) This amount corresponds to a remaining amount form prior year disposal. Note 8. Income from other investments and loans forming part of the fixed assets 2023 2022 EUR EUR Interest on related companies’ receivables 4,121,111 3,972,222 Note 9. Taxation The Company is subject to all taxes to which Luxembourgish commercial companies are subject. Based on the last filed tax return, the management of the company recognises that the company has EUR 14,130,263 of carried forward tax losses available as at 31 December 2022. Regarding the portion of the aforementioned losses that have been generated as from tax year 2017 (approximately EUR 8,443,201) that amount can be carried forward for the seventeen years following the tax year in which the losses arose. Note 10. Remuneration of the Board of Directors During 2023, the members of the Board of Directors received EUR 9,688 (2022: EUR 12,500) as attendance fees and EUR 7,704,990 (2022: EUR 6,616,420) as directors’ fees. During 2023, no advances or loans were granted to the Board members. Company financial statements 126 | ANNUAL REPORT 2023 | Socfinasia Note 11. Political and economic environment The Company directly and indirectly holds interests in companies operating in Indonesia and Cambodia. Given the political instability that exists in these countries and their economic fragility, the investments held by the Company present a risk in terms of exposure to political and economic fluctuations. Note 12. Off-balance sheet commitments As at 31 December 2023 and 2022, the Company had no significant off-balance sheet commitments. Note 13. Significant events after the year end There are no significant post-closing events affecting the Company. Socfinasia | ANNUAL REPORT 2023 | 127 Glossary CIF Rotterdam – Cost Insurance & Freight Rotterdam, corresponds to: - The cost of the good/oil; - The insurance cost for the whole consignment right from port of loading until arrived and delivered; - Freight: the carrying cost from port of loading all the way up to Rotterdam. In other words, the seller pays for the goods, transportation to the port of destination, and marine insurance. CONCESSION – Contract, signed with local authorities, giving specific rights to control an area of land and for the conduct of specific activities in that area, during a defined period. CPO – Crude Palm Oil is edible oil which is extracted from the pulp of fruit of oil palm trees. CPKO – Crude Palm Kernel Oil is the light crude oil, extracted from the Oil Palm kernels, containing mainly lauric acid. DAP – Delivered At Place is an international commercial term (Incoterm) that refers to the idea that the seller takes on all the risks and costs of delivering goods to an agreed-upon location. DRY RUBBER – This is the weight of natural rubber produced, determined at the end of the milling and drying process. After tapping, liquid latex drips from the rubber trees in the field, mostly harvested after in-field coagulation. However, the “wet rubber” still contains water and many other natural components apart from the rubber particles. Natural rubber is marketed as “dry rubber” – after processing – to be used in numerous industrial value chains among which the manufacturing of tyres is the most important. EBIT – This abbreviation is defined as earnings before the financial result and tax. It is the result of ordinary business activities and is used to assess operational profitability. EBITDA – This abbreviation is defined as earnings before financial result, tax, depreciation and amortisation. This key figure is used to assess operational profitability. ESEF – European Single Electronic Format is the electronic reporting format in which issuers whose securities are admitted to trading on EU regulated markets must prepare their annual financial reports to facilitate accessibility, analysis and comparability of annual financial reports. EXW – Ex works is an Incoterm, in which a seller makes a product directly available from the factory or place of manufacture. The buyer of the product must cover the transport costs. FINISHED GOODS – Goods that have completed the manufacturing process but have not yet been sold or distributed to the end user (for example dry rubber G , crude palm oil, seeds, palm kernel oil, palm kernel cake). FOB – Free On Board is an Incoterm that means the seller is responsible for loading the purchased goods onto the ship, and all costs associated. As soon as the goods are safe aboard the vessel, the risk transfers to the buyer, who assumes the responsibility of the remainder of the transport. FREE CASH FLOWS – Free cash flows are the sum of cash flows arising from operating activities and cash flows arising from investing activities. Also referred to as cash flows before financing activities. Free cash flows are used to assess financial performance. GPSNR – Global Platform for Sustainable Natural Rubber. GPSNR is an international, multistakeholder, voluntary membership organisation, whose mission is to lead improvements in the socioeconomic and environmental performance of the natural rubber value chain. IAS – International Accounting Standards. Accounting standards issued by the International Accounting Standards Board (IASB), which have been replaced by IFRS G in 2001. IFRS – International Financial Reporting Standards are accounting rules for public companies, with the goal of making company financial statements consistent, transparent, and easily comparable around the world. IFRS are issued by the IASB. IFRS include IAS G (older standards), the interpretations of the IFRS Interpretations Committee or of the predecessor IFRIC as well as the former SIC. Glossary 128 | ANNUAL REPORT 2023 | Socfinasia IRSG – International Rubber Study Group. It is an inter-governmental organisation composed of rubber producing and consuming stakeholders. Located in Singapore, IRSG was established in 1944. MARKET CAPITALISATION – The product of the number of shares multiplied by the closing market price. NET VALUE PER SHARE – Equity attributable to the owners of the Parent at closing period, divided by the number of shares. Allows readers of the financial statements to compare easily the share price at closing period with its value within the financial statements. As an example, value as at 31 December 2023 is obtained by dividing EUR 247,910,361 (value of Equity attributable to the owners of the Parent) by 19,594,260 (number of shares). NON-CONTROLLING INTEREST – Equity in a subsidiary not attributable, directly or indirectly, to a parent. OPERATIONAL LIFE – Length of time during which a tangible or intangible asset can be used economically before breakdown. Operational life does not include post-closure activities. As an example, rubber and palm trees have an estimated operational life between 20 and 33 years. OTHER COMPREHENSIVE INCOME – Items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other IFRSs G . OWN PRODUCTION – Quantities of raw materials G (Fresh Fruit Bunches, wet rubber, …) milled that have been harvested on own plantations managed by the Group. PRODUCTION-IN-PROGRESS – Inventory that has begun the manufacturing process and is no longer included in raw materials G inventory, but is not yet a completed product. In the financial statements, production in progress is classified within current assets, with other items of inventory. RAW MATERIALS – Raw materials are the input goods or inventory that a company needs to manufacture its products (for example Fresh Fruit Bunches, wet rubber, …). RIGHT OF USE ASSET – Asset that represents the lessee’s right to use an underlying asset over the duration of the lease. RSS3 – Ribbed Smoked Sheet G is rubber coagulated from high quality natural rubber. Rubber is then processed into sheet, dried, smoked, and visually graded. RSS3 rubber sheets are used in the production of tyres, tread carcass, footwear, … SGX – Singapore Exchange is Singapore’s primary asset exchange. The SGX lists stocks, bonds, options contracts, foreign currency exchanges and commodities, representing in 2021 the largest stock market exchange in South-East Asia. SEGMENTAL ASSETS / SEGMENTAL LIABILITIES – Segmental assets and segmental liabilities are not part of internal reporting, they are included to meet the requirements of IFRS G 8: - Segmental assets include fixed assets, biological assets, trade receivables, inventories, cash and cash equivalents. They do not include any consolidation nor IFRS G adjustments; - Segmental liabilities include only trade payables and other payables. They do not include any consolidation nor IFRS G adjustments. SMOKED SHEET – It is a type of crude natural rubber in the form of brown sheets obtained by coagulating latex with an acid, rolling it into sheets, and drying over open wood fires. It is the main raw material for natural rubber products. Also called: ribbed and smoked sheet. SOFR – The Secured Overnight Financing Rate (SOFR) is a broad measure of the cost of borrowing cash overnight collateralised by United States Treasury securities SOPARFI – SOciété de PARticipations FInancières. SOPARFIs are fully taxable ordinary commercial companies, whose corporate purpose consists in the holding of participations and related financing activities. Glossary Socfinasia | ANNUAL REPORT 2023 | 129 SPPI – Solely Payments of Principal and Interest. It is in the context of IFRS G 9 one of the two required conditions for classifying an instrument at amortised cost. It specifies that the contractual terms of the lending agreement gives rise on specified dates of contractual cash flows that are either: - repayments of the borrowed principal or, - interest on the principal amount outstanding. TAPPER – Agricultural worker trained and qualified to “tap” a tree with a special knife. Trees are tapped at regular interval (4-7 days), releasing the latex from the latex vessels situated in the soft outer bark of the tree. THIRD PARTY PURCHASES – Business deal that involves a person or entity other than a Group company. Typically, third-party purchases are made with small local growers. TRADING ACTIVITIES – The activity of selling, buying or exchanging goods and services in order to generate profit. This commercial activity is mainly centralised within Sogescol FR. TSR20 – Technically Specified Rubber graded corresponds to block rubber made by crashing, cleaning and drying solid rubber. Major producing countries have their own TSR standard (STR in Thailand, SIR in Indonesia, …). TSR are graded according to a variety of factors, including volatile matter, ash content, color, viscosity… 130 | ANNUAL REPORT 2023 | Socfinasia
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