M.P. Evans Group (LSE:MPE) — Annual General Meeting

0:01 Good afternoon, and welcome to the MPEvans Group PLC Annual General Meeting. Throughout this recorded meeting, attendees online will be in listen only mode. And a reminder that as set out in the notes of AGM, questions will not be taken during today's event. The AGM will commence shortly. It is now twelve noon, the time appointed for the Annual General Meeting, and I have great pleasure in welcoming you to the meeting.

1:03 In the flesh, it's lovely to see you all in this hall where we've had our AGMs for so many years. And I also have pleasure in welcoming those who are watching the proceedings online via the investor meat company platform. So thank you for joining us virtually. And perhaps we'll see some of you in person here next year. A quorum of two members is required, and I confirm that more than this number is present. As the notice of meeting has been in the hands of members for the statutory period, may I please take it as read? Thank you.

1:49 The independent orders report to the members of MPEvans Group PLC is set out on Pages 53 to 58 in the annual report and accounts. The report is on the group financial statements, including the parent company financial statements. May I take it as read? Thank you. The report and financial statements have been sent to all members, and I hope they provide shareholders with explanation of the group's strategy, its activities and its profit and financial position as at the 12/31/2021. Before putting a resolution to the meeting, I should like to refer to one or two matters. First of all, with much regret, sadly, our Senior Independent Director and Chair of our Audit Committee and Remuneration Committee, Joc Green Armitage, for unavoidable, very urgent reasons that he's had to attend to, he's unable to be with us. So he sends his apologies and regrets.

2:56 And of course, it's all the more of a shame that he can't be with us given that this will be his last AGM as a Director, given that, as you will have seen, he's scheduled to be stepping down at the end of September, but we hope he'll be reelected for that term until then. But I would like to just take the opportunity, and I'm sure I'll say some similarly nice words next year when he's here in person to thank Joc for his extraordinary contribution to MPEvans, not just over the last nine years, but for all the time that we've known him as an adviser, originally with Rothschilds going back some forty years.

3:43 And indeed, as a Director with Roe Evans Investments, I know he was a great assistance to my father. And we should, of course, stay closely in touch with him. But I'd like to thank him on behalf of us all for his excellent contribution, for his wisdom and all that he's provided to the group over so many years. I should take the opportunity to confirm, as will have been you were seen in the announcement, that Bruce Tozer, as from today, has taken over as Senior Independent Director and Chair of both the Audit and the Remuneration Committees. And I know he will discharge these responsibilities in his usual rigorous and independent minded way.

4:34 There have been, as again, a number of you will have noted, one or two other changes during the course of the year, perhaps in taking them in chronological order. Tristan Price, our Chief Executive, in July, so almost a year ago, left us to move on to the next stage in his career path. Having served with distinction for fifteen years, he played a very central role in helping to form, deliver, execute the group's strategy. He was always particularly strong on the CSR sustainability side of things. He helped us greatly in this area, and that legacy has been continued in a number of ways given its importance.

5:25 But I'd like to thank him and wish him well for all he is now doing. At the same time, Chandra, who has been with us since 2008 in his capacity as President and Director of our Indonesian operations and has played an absolutely critical part of everything that we do and helped us to expand so well and to such a high level in terms of the quality of our operations over the last fourteen years or so. So Chandra joined the Board in August, and we're already benefiting from his direct input into Board matters.

6:13 So I hope you have a chance to meet Chandra and indeed his wife, Nirmala. So they're over here for a couple of weeks. So thank you, Chandra. Matthew Coulson, who had been our Finance Director, was very deservedly, in my view and the Board's view, appointed as Chief Executive as of the first of January of this year. Matthew not only had performed an excellent role as Finance Director, but also as a key part of the leadership team. And we're delighted with the role that Matthew is playing, and we believe that he and we have a great future together looking forward.

7:04 In March, we were very sorry to lose Darian Doctor. Darian McBain, who also played a really important role in bringing all her vast experience and expertise in the field of sustainability, and she's a world expert in a number of areas. But she was employed on a full time executive basis, and she simply as reluctant as she was to give up her directorship, she was unable to continue with us. But for two years, we derive the benefit of her very significant contribution. So thank you to Darien for all that you have done for us as in your non executive capacity.

7:54 We continue to seek and we believe we are close to having secured a very worthy successor in a non executive capacity to Darien, somebody who is also very strong on sustainability. But we hope that's something which we can announce in due course. We are also looking forward to Michael Sherwin joining the Board as a Non Executive Director. Michael has had a distinguished career for some thirty five, forty years, both in an executive capacity as CFO and as a non executive director on a number of significant boards of listed companies. He's very good on regulatory control matters, risk management, corporate governance, which is such an important area these days.

8:47 So we're looking forward to having the benefit of his skills. He joins on the July 1. And finally, Matthew is relieved that he 'll have some assistance on the finance side because Matthew is effectively doing two jobs in many ways. I've been giving a bit of executive support, but not only in his capacity as Chief Executive, but also effectively running the finance side. But we have somebody who we have great hopes for called Luke Shaw, who he sadly can't be here. He's away for a long weekend. But his first job upon joining us will be to fly out and join Matthew and me in Jakarta. And it will actually be our first trip in well over two years.

9:37 Luke has had a senior finance role at Spectris. And he incidentally spent the latter teenage years living in both Kuala Lumpur and Jakarta, which I'm sure will also be of assistance. Let me now just touch on the trading statement that was released to the market at 7AM. I don't know how many of you have had chance to read this, but this is an update trading update with regards to the first five months to the end of May. And I'll just pick out one or two key points.

10:23 First of all, on crops for the first five months, by a strange coincidence, they are almost the nearest 0.02%, identical to what they were for the first five months of last year, both for the group's crops and for those crops that the group manages on behalf of our so called scheme smallholders. So the group's crops were just over 342,000 and the scheme smallholder crops were just under 101,000 tonnes, so almost identical to last year. Similarly, CPO production was very similar to last year. It was slightly lower, and that's partly explained by the fact that we bought in, in the last month or so, a little less fruit from the independent smallholders, partly as a result of the temporary ban on exports. And therefore, there was a little bit of a buildup in the tanks, and we had to look after our own needs. But we were still able to buy a reasonable amount, and those smallholders who didn't have anywhere else to send their fruit could turn to us generally.

11:37 But that has now been resumed. Are having actually started the year at the end of February, as you would have seen, our crops were some 10% behind what they were last year. But last year was an incredibly strong month, a surge of crops. I mean, crops move in cycles, although the crop trend is generally on the up, it sort of goes like that. So it's very much on the up cycle. Nonetheless, this year, we've caught up and we expect to forge ahead and to surpass last year's crop level and production level by the year end. We're also pleased to announce that the average ex Millgate selling price was significantly above what it was at this time last year, literally 51% higher than what we achieved last year. So although there was an impact from the export tax, from various other taxes, the export ban, actually, the net result as far as what we have achieved ex Milgate is still a very, very strong price indeed relative to previous years and all the more exciting given that the crop trend is still on the increase.

13:03 The current Millgate prices that we're achieving at the moment are around $8.50 but that even that is above the average of last year, which was a record year of $810 So this is all very positive news. As you know, sustainability lies at the heart of what we do, and I won't elaborate on that here. But the key four pillars of our strategy, of which the number one pillar is absolutely critical, is to be a responsible producer of sustainable Indonesian palm oil, striving for excellence in all our operations with a focus on continuing growth.

13:48 And growth comes from three sources: one is because we're on an upward growth path anyway two, because Chandra and his team are always striving to and succeeding in achieving higher and higher yields because of improving agronomic practices. It's never perfect. There's always room for further improvement And also because we continue to seek out new areas of land, incremental land around the current projects that we have so that we can maximize the use of our milling capacity. And that hunt goes on. I mean, is competitive at the moment because of the strong price environment. And we perhaps have to be patient, but we're confident we will get there and that we will acquire new additional areas to add to that growth, leading to enhanced yield and yield in this sense is dividend returns.

14:44 And as you know, an increased total dividend of 35p has been proposed in respect of 2021, and it very much remains the Board's intention to continue the group's long term trend of at least maintaining or increasing dividends for our shareholders. I think we're at the point now where I'm going to hand over to Matthew, if the appropriate time. So I will sit down and let Matthew give a presentation to you. Thank you, Peter, and good afternoon everybody. So I think at this stage what I'd like to do is just share a brief presentation with you all focusing on 2021 and thinking about our strategy, thinking about our operations and briefly touching on our results for 2021.

15:43 If we could turn to the first of the slides, this picks up on what Peter was just discussing around our strategy and those four key pillars. As Peter explained, key pillars are around responsibility, excellence, growth and yield. Peter was just talking to you about growth and yield in detail, so I won't go over those again, but perhaps just to highlight the first two of those pillars that enable us to deliver growth and yield. Everything starts with being a responsible operator. That means being a member of the RSPO, the roundtable on sustainable palm oil, and ensuring that we don't deforest, that we're committed to zero burning, we're committed to zero waste.

16:33 And that as a responsible operator, we provide housing and other community facilities for the people who work on our estates. Being a responsible operator means that we can move on to the second pillar of our strategy, which is striving for excellence. That means investing for the long term, not just investing in assets, but investing in our people as well. And by doing that long term investment, we're able to deliver those high yields and high extraction rates you see coming through in the results. As I say, I think Peter has covered very clearly what growth means for us, those three areas of growth and how that leads to the yield we can offer to our shareholders.

17:23 So if we turn to our next slide, this is focused very much on sustainability and what sustainability means for us. And and and and firstly, to be clear, sustainable palm oil provides a high yield and low cost solution to meeting growing demand while safeguarding people and our planet. And it's important to note that there there is an ongoing increase in demand for vegetable oils, and in particular, for palm oil. When you look at the vegetable oil market globally, palm oil is the biggest component of the vegetable oil market in the world.

18:12 And roughly, the palm oil market globally is 70,000,000 tonnes, a huge market for palm oil. And projecting forward up to 2,050, it's very hard to give a precise amount, and you look at what the ranges of estimates are that are made. But you can see that the demand for palm oil is only going to increase, some say to 120,000,000, some say as much as 150,000,000 or more tonnes that are going to be demanded by 2050. At the moment, only 20% of palm oil that is produced globally is currently certified as sustainable.

18:57 Now it's important to note that whilst that's a measure of certified sustainable palm oil, that that doesn't necessarily mean that that 80% of production global globally is done in an unsustainable way. It's about certified sustainable oil. We're we're committed to increasing our certified sustainable output. But importantly, we're committed on all of our operations to acting to certified sustainable standards. It's worth being clear the way in which the sustainability certification works. Certification is attached to mills, not to estates.

19:47 We've been extremely focused, as we'll come on to talk about in a bit more detail in a moment, on increasing our own milling capacity. It's very important for us to achieve a position where we're essentially milling all of our own harvest. As we've been working through that that program and moving towards that ambition, so we will be able to obtain certification for all of the mills that we've been building. There is a time lag. As when you open a new mill, it doesn't instantly become certified. Even though all of the estates that we develop, all of the estates from which we harvest and take fruit to our mills are absolutely run to sustainability standards.

20:44 We go through a process with the RSPO of audit and accreditation. That audit and accreditation is extremely thorough, extremely detailed, and takes a period of time as you might expect. This is what this is the fundamental reason why you see the difference between a 100% of the group's plantations being operated and developed to our SPO standards, and yet at the current time, our output is 55% certified. We expect to see that increase significantly as our mills are completed and then our mills achieve certification standard.

21:32 We expect to have two more mills achieve RSPO certification standard within the next twelve months. That will help move that move the dial with that 55%. We're pleased to be able to say that demand for sustainable palm oil is definitely increasing. And the evidence we can share for that is the way in which sustainability premia are increasing. So when we sell oil at our output, our CPO, the certified sustainable palm oil, we get a little bit extra. It's not a huge amount, but we get a little bit extra as a sustainability credit. And past. We've progress the past. Past. Of we've not only because it's the right thing to do, but the benefit financially of selling certified sustainable palm oil.

22:34 If we can move on to the next slide. What this slide shows us is the story of where we've been, where we are now, where we expect to be going to in terms of crop and importantly, in terms of milling capacity. The chart on the right hand side starts in 2010, and it shows the crop that we were able to harvest mill and the milling capacity that we had. So the bars show us the crop and the line shows us our milling capacity. Back at the start of the chart in 2010, we harvested and were able to process a little under 200,000 tonnes, And we had one mill.

23:24 If we move forward to where we are in 2021, which is the bars that are outlined in the red outline, we processed over 1,300,000 tonnes, and we had five operational mills by the end of the year, a significant change over that time period. And you can see as we then move forward over the next five years how we expect things to continue to develop. And we're able to look forward and think about how we expect things to develop because once you've planted an oil palm or an area of oil palm, there is a relatively high degree of predictability about how that crop is going to develop.

24:17 Because as plant an area and as you apply appropriate management techniques to that area, so you can see how the yield profile from that area will increase over time. And none of this chart is based upon increasing the area that we have, making acquisitions, developing something different within our strategy. This is based upon what we already have, and you can see what it means in terms of increasing harvest for us. And in terms of milling capacity, you can see the increase in milling capacity as we've moved from one to five mills operational, and we're busy developing our mill in South Sumatra at Musi Ravas right now, and we expect that to be on stream around the end of this year.

25:06 And importantly, as we build more mills and we have more mills on stream, so as we process our own crop, so be yet more margin as being the millers of our own crop. If we can move on, Mark. What we have here, and perhaps let's focus very much on the picture here, is an example of one of our estates and and one of our mills to share with you. This happens to be our estate and our mill in Bangkok, which is the the third mill in our journey of developing estates and developing mills that was opened in 2016. And hopefully, what you can see clearly from the picture is is a a large amount of planted area, well managed planting around the mill, and you can see planting, the the road network around the mill, and then the milling facility itself in the center of the picture.

26:11 And what's very important to us is when we build a mill, we build a fully integrated milling facility. As it says in the in the in the title of the slide, we we aim for a very much a holistic approach and a zero waste approach. And so as I say, in the center of the picture, you can see the mill itself, and underneath the mill, the yellow structures, the the storage facilities for the CPO that's produced. Then off to the left, you can just see the compost facility. So one one of the byproducts that comes comes out of the mill is is an empty fruit bunch. Once the fruitlets are removed from the bunches, you're left with an empty fruit bunch, and that empty fruit bunch is taken to a composting facility, which which generates it turns the empty fruit bunch into an organic compost, which is then sent back out into the field to then help improve the quality of the soil, to then help improve the yields from the fields, to then send more fruit back into the mill.

27:21 And then at the bottom of the picture, you can see the the the mill's associated biogas facility. That takes some of the waste from the mill, processes that waste, and turns turns mill waste into into green electricity. That green electricity then powers the mill, powers the entire estate, and then there's still surplus electricity left over, which is used to sell to the local grid to be to be used within the local community and to provide an extra income for the group, as well as sourcing crop from the estate itself to ensure that we're using the the the mill to its maximum efficiency, we source crop from independent growers nearby.

28:20 And in Bangkok, we've also been working with those independent growers near to the mill on something called RIS, which is the RSPO independent smallholder scheme, which seeks to support independent smallholders to enable those independent smallholders to become RSPO certified as well. So that whilst we can obtain independent we can obtain certification credits for our fruit, so those independent smallholders will be able to obtain certification credits for their fruit by going through training, by improving the way in which they go about the methods of farming on their smallholder areas. And we've been supporting and promoting that to the smallholders around our banker estate.

29:14 So hopefully, that gives you a sense of a fully integrated facility. And this is, if you like, the template for all of our facilities across Indonesia. And we will be aiming to do exactly the same in new project that we're building, the new mill that we're building in South Sumatra at Musirabhas. If we can move on to the next slide. A very brief word on the financial results for 2021, which I'm sure you've all had a chance to study in detail already by looking at the annual report. But important just to highlight, it's a story of increases across the board. So increasing revenue, increasing profit and increasing earnings per share. So revenue up by more than half to $276,000,000 obviously, because of the increase in our production, because of the increase in CPO prices and of course, again, just reminding you of the benefit of that additional element of increasing sustainability premia.

30:18 And then because of the increases in production, increases in prices, so we see that falling through to a big increase in gross profit, gross profit of over $100,000,000 in 2021. And then again, falling through to earnings per share of over £1 earnings per share of 115p in the year, a substantial increase on the previous year. Normal dividends up to 35 p and obviously the special dividend that was distributed in February in relation to the sale of Burton Estate. So moving on, this just covers the trading statement that I think Peter has already referred to in some detail.

31:09 So again, I won't dwell here. We've dealt with crop production prices. Important to note that we continue to be highly cash generative. At the end of 2021, we reported a very small remaining net debt position on the group's balance sheet. That has now become net cash very much. And so important to highlight the change that we've been through in the balance sheet of the group. When we came into the beginning of 2021, we had net debt of almost $80,000,000 that pretty much disappeared during the course of 2021. And as we move into 2022, you can see how we're becoming an even stronger position on the group balance sheet. And then as I've said, planting development of the mill continues in Musi Rauwas, but planting continues in Musi Rauwas to ensure that we will continue to have crop coming through to support that mill.

32:08 And as I mentioned, RSPO certification is coming along well at the mills that we opened in the last couple of years. And then the final point to leave you with is one on coming back to the point around yield and returns for shareholders. What you see on the chart here is the thirty year look back on what's happened to returns for shareholders. You can see here an unbroken track record over thirty years of increasing returns. And in particular, if if if you look over the last few years, how there's really been an acceleration of increasing returns for shareholders, really reflecting, again, coming back to the point about long term investment, and that long term investment really paying off now as those yields, as those crop increases come through and the cash flows come through supporting those increases in returns for shareholders.

33:16 And, of course, I think it goes without saying, but I'll say it anyway, that we would be very reluctant as a board to to to give away that long term trend of dividends only going in the one direction. So that's all I have from a presentation point of view, and I'll pass back to Peter. Thank you very much, Matthew. Well, I'm now pleased to be able to answer between me and my colleagues any questions, general ones or particular points on the report and financial statements. So if I can throw it open to the floor, and I think Mark is there ready with the microphone. So are there any questions?

34:07 Yes. Thank you very much. My name is Phil Clark. I'm an immensely happy shareholder. This has been a fabulous experience owning these shares. It's wonderful to see a board in the management team that actually actually has a strategy, executes it well. And more than that, it is also lucky in that when you've now got maximum production, you've also got high prices. This is a fabulous place you've taken the company to. So thank you very much for that. I'm also particularly pleased that actually we've moved to net cash rather than net debt. That's another great achievement, so well done for that.

34:53 But actually it does bring with it certain dilemmas. And so I want to talk to you about Resolution nine, The suggestion that we buy back our own shares. As a retail shareholder, I own shares in a number of companies. And my experience of share buybacks is immensely mixed. For example, BP, another oil company, although slightly different, in the decade up to the pandemic, bought back shares at an average price of about £5.50. During the pandemic, it could have bought back shares of £1.90, but didn't. And today, the share price is a whisker over £4. It's been an absolute disaster buying back shares. So my question to the board is, how will you be certain that any buybacks will really add value and won't look foolish in a few years' time when something changes and something works against us?

35:52 Can I also add to that is, personally, I'd much prefer that you actually reinvested in the business and grow the business? So it'd be interesting just to know a bit more about what you're doing to actually find further opportunities for investment. And finally, can I just say, as you're taking quite a risk in buying back shares, it might just be a better thing to pay special dividends to shareholders and let us take the risks and make our own mistakes rather than you risk doing it yourselves? So third question is, could you actually consider doing special dividends instead of buybacks? Thank you. Well, thank you very much and for those very kind words, which is much appreciated by us all. We've all been working hard towards what we have been achieving.

36:48 And actually, when you made the point that we've reached maximum production at maximum prices, actually, we still got some way to go. And that's just with what's in the ground. We're going to push on with increasing volumes because our plantings are still relatively young, and that's without any further acquisitions. So we still got some significant way to go in terms of increasing crops, increasing volumes of CPO production. So I'd make that point. And that actually provides some, if you like, protection in terms of the capacity to continue to pay dividends because even if the price comes down, if the crop volumes are increasing, then we can be at the sort of status quo in terms of the still significant margins of profits that are being earned from the higher volumes.

37:46 And as a general strategy, we have tended as a Board, which is one of the reasons why we've achieved that extraordinary record of only maintaining or increasing for thirty years, we have tended to be perhaps a little bit less full, less generous with our dividend payouts in the fuller, better, more profitable years and a little bit more generous in the leaner years. And just and I think generally, our shareholders have been very comfortable with that rather than a very up and down approach to dividends as a percentage of earnings. And we would very much seek to continue that trend. We certainly are continuing to seek suitable opportunities to acquire new projects, as Matthew has pointed out, to fill the current capacity to the full to get the maximum benefit from our mills, the throughput there and further down the track to make bigger acquisitions as well.

38:48 However, we think there's no better investment in terms of the absolutely first class quality of land that can be purchased than MPEvan's estates. I mean, I'm not saying that flippantly. We genuinely believe that. And even at, say, the current price of GBP 10 a share, I I don't know, Matthew, whether you can venture in terms of what that would I mean, obviously, it depends on how some of the assets are valued. But in terms of the value, in terms of dollars per hectare, it's certainly significantly less than the going rate for plantation land. So we're effectively buying land that we know well buying back by buying back our own shares.

39:37 And this is a genuine investment opportunity. It's not something to sort of prop up the share price. It's actually an investment opportunity. And we believe that the right thing is to for shareholders to support that because we're still at a significant discount, we believe, to its full value. Do you want to add anything there, Matthew? No. I think that's covered it very well. I mean, I suppose the only thing I would add is that present the sort of classic question of the choice we face as a Board, if you like, between share buyback, distribution to shareholders, investment in growth.

40:27 But in some senses, it's not an eitheror. I think we actually have the capacity to do some of all, if you like. Yes. And I mean, generally, the matter of special dividends, we've tended to pay special dividends as and when there's been a special situation that's arisen, for instance, of Bertam properties or the remainder of Bertam estate to Bertam properties, the sale of Agua Mukho, our share of Agua Mukho, the sale of NAPCO going back. We would like to use the cash to invest in new projects and other things. So for the moment, we'd like to continue that upward trend of normal dividends.

41:14 But it's not it's something which we wouldn't necessarily rule out, but that's not the current policy. Any more questions? Scott Wallisch, long time shareholder. I'd like to endorse Mr. Clarke's comments and compliment the Board for their good year. And I just wondered, I think in about four or five years ago, we received an approach for about GBP 11. I wonder if there have been any approaches since then. It wasn't GBP 11. It was an initial offer of GBP 6.40, followed by a renewed offer at GBP 7.4 We recommended to our shareholders, notwithstanding that the share price had been languishing at closer to GBP 4, and we recommended to you that you reject the offer, even the higher offer, and you 87% of you anyway, accepted our recommendation.

42:22 And I would like to think that we've been vindicated in that recommendation because the bidder was only too aware of the real value that was coming through. I mean, they are very shrewd plantation owners and operators with whom we've actually, strange enough, always had a good relationship. And they are now shareholders. They've come back afresh. They've acquired a share. They're our biggest shareholder with a 23% holding, but they are a very supportive significant minority shareholder, and they endorse everything that we're doing. And our relations with them are extremely good. So on the matter of I mean, obviously, I couldn't comment if there had been a recent approach, but I'd perhaps leave it there as response to that.

43:19 Any more questions? Thank you. I think it's a relatively small part of the operation now, but wanted to ask about Burton Properties. A little bit confused by the reference on this page where you refer to the geographical spread of things. Yeah. You've got Burstham State was wholly owned. Correct. And we've sold 70 hectares Yes. To Burstham Properties. Correct. And they now have 70 hectares more than they did before. Correct.

44:05 And we still own 40% of their company. Correct. Right. So it says the remaining developable area is two fourteen hectares. That's two fourteen out of Burton Properties, three eighteen, is it? Yes, I think that's right. The remainder that does refer to the Burton Properties area. Yes, it's the remainder of the area, which I mean, we sold Burton Estate twenty five years ago to Burton Properties. Properties. And at that point, it was some 4,000 acres, of which some 200 or 300 acres remain. And it's been topped up a little bit by this recent acquisition from the sale of Bertam Estate to Bertam Properties.

44:56 And so broadly speaking, Bertam Properties has another 300 or so acres left of what used to be some 4,000 acres, which over the last twenty five years has been developed into a new town. I mean, we have become passive, if you like, partners because it's not our area of expertise. But we have been shareholders, 40% shareholders in a very significant and profitable development. We never had to put new money in. We've only taken dividends out from the development and the sale of property, whether it's housing, industrial areas, shops, you name it. And that will be developed out within the next number of years. So when it says the developable area is two fourteen hectares and the total area is three eighteen, That's 100 hectares that's not developable, is it?

45:52 Because it's cliff land or something. Well, that may be the golf course. It's because it's a golf course. Sorry. That's the golf course. That's the golf course. Right. And this person properties, separately is quoted? No. It's a private company. It's owned 40% by us, 40% by the Urban Development Authority, one of the biggest federal housing developers in Malaysia, and also Jahore Corporation. And actually, the whole thing came about because of Jahore Corporation because they were originally shareholders in Bertam Holding, which was the Malaysian MPEvan sort of investing entity in Malaysia. And because of the relationship between Jahore and UDA, they approached us and we went for a sort of a tripartite development of our estate. And can I just ask the follow-up question?

46:45 I'm sure I can find it in the accounts if I look hard. But how much is the what is the current valuation of our minority share? Of our share? Is it around 50,000,000 or $60,000,000 It's not quite that much anymore. Not quite that much anymore. Of the sale. So it's on Page 96 of the annual report that the valuation of the 40% share of Bertam properties is $47,600,000 And what basis is it valued on? It's an independent valuation, isn't it? So it was done by a a Malaysian property valuer based upon the the the the value of the remaining development land. Sorry. Right. So it's not the value of the shares, it's the value of the underlying assets. Exactly.

47:33 It's the value of the remaining development land, the assets. Right. Thank you very much. Thank you. My name is John Crawford, and I noticed a lot of products, consumer products, saying no palm oil in this product, and they say 100% vegetable oil. Could you explain why you are not promoting the sustainable palm oil? Because, obviously, manufacturers are not using palm oil in some of their products. You just say, can we explain why we're not Promoting.

48:23 Promoting, right. Sustainable, palm oiling Yes. We try to. But I'll our Chief Executive have a turn and answer. Well, thank you very much. Yes. I mean I think you make a very good point about the approach taken by some consumer products companies. And I think it's extremely important for everybody involved in the palm oil industry to seek to get the message across about the importance of certified sustainable palm oil. We do everything we can as a relatively small company within a very big industry. And as I mentioned, palm oil marketplace currently is 70,000,000 tonnes, of which last year we produced about 300,000.

49:11 So you can do the maths to get a sense of what proportion of the world's palm oil we contribute. I But think your point is an extremely well made one, and I think it's for everybody in the industry to do as much as they can to get the message across about the part that certified sustainable oil certified sustainable palm oil has to play. I think it's shortsighted and I would say wrong to to seek to take out sustainable palm oil from your ingredient list and simply substitute in other vegetable oils, which may have no better environmental credentials than certified sustainable palm oil. So I agree with the sentiment behind your question entirely.

50:04 Any more questions? Thank you. Can you actually elaborate a little bit more on what happened in the temporary suspension by the Indonesian government on exports and what they've achieved and whether you foresee it happening again. Sure. Again, perhaps Matthew, would you like to take that one? Yes. Absolutely. So the Indonesian government made a decision at the end of April to, as you say, temporarily suspend or ban the export of palm oil and related products. They were very clear at the outset that it was going be a temporary ban, and their objective was to provide some support to the local market and to make palm oil and cooking oil more affordable for people in Indonesia given how fundamental and how much of a staple product it is for local consumers.

51:02 The ban was very short lived. It was lifted on the May 23. As to your question on whether it fully achieved its objectives, very difficult to say, questionable at best, I would suggest. And as for whether there are going to be any further measures of that type, no indication at this stage. I think the palm oil industry now is just working back towards normality at the refiner level. Obviously, were some significant delays, well stoppages of exports for refiners. Refiners are now just working through getting their stock levels back to normal. We very much hope to see normal activity from the refiners from this point onwards.

51:56 Do you have one? Yes. Davy is ordinary shareholder. Nice to see you again. Yeah. Thank you. And and you, all all of you. Yes. Who actually is this this body that certifies the, you know, the palm oil and all sorts of other sort of agricultural things as as sustainable? Who who is this body, and who certifies them, in other words, almost? I mean, there are there are actually two bodies, but the main one is the RSPO. But, Matthew, do you want to absolutely take that? Of course. So Peter's right. There there are there are two certifying bodies.

52:48 The The main one being the RSPO, there is another one called the ISCC. We are we are members well, we we we obtained certification from both, but the primary one to focus on perhaps is the RSPO, the roundtable on sustainable palm oil. That is a membership body with many hundreds of members, whether it's made up of producers, refiners, finance institutions, consumer products, companies, NGOs, etcetera, etcetera, etcetera. But as I mentioned, the way in which the RSPO worked is it will provide certification to to a mill that produces CPO.

53:36 So we work through a process with the RSPO to ensure that they certify all of our mills so that the output from those mills can be treated as certified sustainable palm oil. Now the RSPO publish a whole load of principles and criteria for enabling a palm oil mill and and the area that supplies a palm oil mill to become certified. It's extremely detailed, but requires you to go through a whole load of checks, audits, accreditation on an ongoing basis to demonstrate that you're acting in the way that you should be, that you are only using land that's appropriate for cultivation, that you have appropriate employment standards, that you are treating the local community in the right way, etcetera, etcetera. There there are numerous things that the RSPO will want to check and audit continually to support the fact that you are cert that you can be certified and can maintain your certification, which is why, as I said, it's not the case that the day after you open your mill, you can start selling your oil as certified sustainable.

54:49 It takes a year or more. Even though we will try and get through it as quickly as possible, it will take a year or more to do everything you have to do with the RSPA before they will give you their seal of approval, and you can then start selling as certified sustainable. Do you compete with other mills to buy the produce of the smallholders? And also, mister Walker of Iceland, which I shouldn't mention names probably, but he always all talking about not using palm oil. About a month ago, he came out and said he's reluctantly going to use palm oil. And, also, one other thing, the oil price generally is very volatile and has been for the last sort of, I don't know, twenty years, really. So you've had enormous spikes, enormous, you know, depths of cheap oil, and palm oil prices have tend tended to follow the crude oil price up to a point.

55:57 And I could visualize, you know, in a couple years' time, somebody they're going to flood the world with oil again, you know, crude oil, and which will drop all oil prices generally. So that that's just So so to to to deal with the points that you make, first of all, we compete with others for smallholder crops? When it comes to are two sorts of smallholder. There are our associated schemes, smallholders, who are attached and very much connected to our own areas. Do we compete with others for their crop? Basically, no. And they're they're very much connected to us.

56:43 Do we compete for independent smallholder crop? Yes. In the sense that they have no obligation to sell their crop to us, but we build relationships, of course, do with independent suppliers. And so we would hope that that accounts for something, but of course, it's a marketplace for independent crop. Mr. Walker from Iceland has said previously, obviously, he didn't want to have palm oil in his own brand product. He's, of course, at liberty to have that view in terms of how he approaches running his business. And it comes back to what we were just talking about earlier with people choosing not to use palm oil as an ingredient in their products. I think it's a shame, and I think there is a place, absolutely, there is a place for certified sustainable palm oil as a valid ingredient.

57:38 If you need if you need to use vegetable oil as an ingredient in a product, then don't discount using certified sustainable palm oil. It has a place, and it deserves to be a fatted ingredient in in your product mix. And your third question about the way in which the commodity price for for CPO moves is it's quality and of course, it's going to move. But the connection with mineral oil, there is in essence be a bit of a connection as use for for biofuel starts to increase, but it's still a relatively small part of the overall mix when it comes to using you know, what is what is palm oil get used for?

58:24 It it it's basic food stuff. It's a cooking oil. So what why yeah. Why is why does supply and demand drivers cause the price of palm oil to move? Well, it's supply and demand drivers to do with it being a cooking oil, I would suggest, rather than the fact that a small proportion of it is used as a fuel. Would you mind very much if we perhaps proceed with the formalities? And I'm just conscious time is moving on, unless somebody has a really burning question they'd like to ask in open forum. But we are all here as a Board to answer more questions more informally after this. So may I continue now with the formal procedure?

59:11 Thank you very much. All very good stimulating questions, and thank you very much for all of those. I now propose that the report of the directors and the audited financial statements for the year ended 12/31/2021, now late before the meeting, be received. I put the resolution to the meeting. Those in favor? Those against? I declare the resolution carried. In accordance with The UK corporate governance code, I announced that we've received proxies in respect of 28,000,006 and 23,193 shares, although voting on 7,280 shares has been withheld on Resolution one voting on 4,839 shares has been withheld on Resolution two voting on six twenty shares withheld on Resolution three voting on eleven twenty shares withheld on Resolution four voting on eleven twenty shares withheld on Resolution V voting on $2.65 shares withheld on Resolution VI. We're getting there. Voting on ten thousand four hundred and forty shares has been withheld on Resolution V voting on 4,691 shares withheld on Resolution eight and voting on $14.89 shares withheld on Resolution nine.

1:00:42 Notwithstanding this, all sorry, notwithstanding this, of the votes cast, not less than 99% are in favor and not more than 1% are against Resolutions one, two, three, four, six, seven, eight and nine, and not less than 96% are in favor and not more than 4% are against Resolution five. A schedule of the exact numbers for each resolution is available from our company secretary, Katya, to anybody who would like a copy. I now propose that the directors' remuneration report as set out in the annual report and order financial statements for the year ended 12/31/2020 Board Directors I have pleasure in proposing that Mr. K.

1:01:46 The Chandrasekaran be elected a Director of the company. I put the resolution to the meeting. Those in favor? Those against? I declare the resolution carried. I have pleasure in proposing that mister Jock Green Armitage, a director retiring in accordance with the company's articles of association, be reelected as director of the company. I put the resolution to the meeting. Those in favor? Those against? I declare that resolution carried. I have pleasure in proposing that mister Philip Fletcher, a director retiring in accordance with the company's articles, be reelected a director of the company. I put the resolution to meeting. Those in favor?

1:02:33 Those against? I declare the resolution carried. I now propose that a dividend of 25p per share be paid on or after the 06/17/2022 in respect of the year ended on 12/31/2021 to all holders of shares on the register of members of the company at the close of business on 04/29/2022. I put the resolution to the meeting. Those in favor? Those against? I declare that resolution carried. I now propose the total amount of fees payable annually to all of the nonexecutive directors, excluding any remuneration for special or additional services paid pursuant to Article 102, be increased to GBP 250,000.

1:03:28 Incidentally, this hasn't been reviewed since 2010. I put the resolution to the meeting. Those in favor? Those against? I declare the resolution carried. I now propose as an ordinary resolution that BDO LLP chartered accountants and registered auditors be appointed auditors of the company to hold office from the conclusion of the meeting until the conclusion of the next general meeting at which financial statements are laid before the meeting in accordance with Section 4,371, Companies Act 2,006, as a fee to be determined by the directors. I put the resolution to the meeting. Those in favor? Those against, I declare the resolution carried. I now move on to the special business of the meeting and propose as a special resolution.

1:04:17 The resolution is set out in the notice of Meeting nine. This resolution gives authority for the company to purchase up to 10% of its own shares during the coming year as and when the directors consider it appropriate. I put the resolution to the meeting. Those in favor? Those against? There was a majority. Yes. Yep. I declare the resolution carried. Before concluding the business of the meeting, it's always been customary for a vote of thanks to be proposed by a shareholder to our staff and workforces throughout the world who have continued to operate.

1:05:06 I mean, if you we've almost forgotten about COVID, but nonetheless, they continue to operate without interruption, continued to be challenges over and above the normal one under Chandra and his team. They've all done an excellent job and indeed, I believe, in our U. K. Office and also with our associated business in Malaysia. So if a shareholder were kind enough to propose, thank you very much, Chris. That's appreciated. We'll note that down. Chris Moore, thank you very much. So it just remains for me to thank you all very much for attending. As I say, in the flesh this year, it's been wonderful to see you all, and we look forward to chatting more over perhaps a glass of wine or two and a sandwich or two.

1:05:54 I think we've been blessed as we usually are with some, dare I say, verging on the tropical weather. Perhaps that's not quite as warm as that. But anyway, I look forward to chatting to you all further downstairs in a few minutes with my colleagues. So thank you all very much. Thank you to the board for updating attendees today. Could I please ask attendees online not to close this session as you now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few minutes to complete, and I'm sure it'll be greatly valued by the company. On behalf of the board of MPEvans Group PLC, we'd like to thank you for attending today's annual general meeting, and good afternoon to you all.