Socfin

2023ANNUAL REPORT

SOCIETE FINANCIERE DES CAOUTCHOUCS

Table of contents

Group profile

4

1.

Overview of the Group

4

2.

History

4

3.

Group structure

5

4.

Information on the holdings of Socfin

6

International market for rubber and palm oil

9

1.

Rubber

9

2.

Palm oil

12

Environment and social responsibility

15

Key figures

16

1.

Activity Indicators

16

2.

Key figures in the consolidated income statement

17

3.

Key figures in the consolidated statement of financial position

17

Stock market data

18

Corporate governance statement

19

1.

Introduction

19

2.

Corporate governance chart

19

3.

Board of Directors

19

4.

Committees of the Board of Directors

22

4.1. Audit Committee

22

4.2. Appointment and Remuneration Committee

22

5.

Remunerations

23

6.

Shareholding status

23

7.

Financial calendar

24

8.

External audit

24

9.

Corporate, social and environmental responsibility

24

10.  Other information

24

Statement of compliance

25

Consolidated management report

26

Auditor's report on the consolidated financial statements

30

Consolidated financial statements

35

1.

Consolidated statement of financial position

35

2.

Consolidated income statement

37

3.

Consolidated statement of comprehensive income

38

4.

Consolidated statement of cash flows

39

5.

Consolidated statement of changes in equity

40

6.

Notes to the consolidated financial statements

41

Note 1. Overview and material accounting policies

41

Note 2. Subsidiaries

53

Note 3. Restatement and reclassification

56

Note 4. Goodwill

57

Note 5. Leases

58

Note 6. Intangible assets

60

Note 7. Property, plant and equipment

61

Note 8. Biological assets

63

Note 9. Depreciation and impairment

64

Note 10. Impairment of assets

64

Note 11. Investment properties

66

Note 12. Non-wholly owned subsidiaries in which non-controlling interests are significant

67

Note 13. Financial assets at fair value through other comprehensive income

70

Note 14. Deferred taxes

71

Note 15. Current tax assets and liabilities

72

Note 16. Income tax expense

73

2 | ANNUAL REPORT 2023 | Socfin

Table of contents

Note 17. Inventories

75

Note 18. Trade receivables (current assets)

76

Note 19. Other receivables (current assets)

76

Note 20. Cash and cash equivalents

77

Note 21. Share capital and share premium

77

Note 22. Legal reserve

77

Note 23. Pension obligations

78

Note 24. Financial debts

81

Note 25. Trade and other payables

85

Note 26. Financial Instruments

86

Note 27. Staff costs and average number of staff

88

Note 28. Other financial income

88

Note 29. Financial expenses

89

Note 30. Net earnings per share

89

Note 31. Dividends and directors' fees

89

Note 32. Information on related party

90

Note 33. Off balance sheet commitments

91

Note 34. Segment information

91

Note 35. Risk management

99

Note 36. Contingent liabilities

102

Note 37. Political and economic environment

104

Note 38. Events after the closing date

104

Note 39. Assets classified as held for sale

105

Note 40. Auditor's fees

105

Company's management Report

106

Audit report on the Company's financial statements

112

Company's financial statements

116

1. Balance sheet as at 31 December 2023

116

2. Income statement for the year ended 31 December 2023

118

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

122

Note 4. Amounts owed by affiliated undertakings

123

Note 5. Equity

123

Note 6. Amounts to affiliated undertakings

124

Note 7. Income from participating interests

124

Note 8. Income from other investments and loans forming part of the fixed assets

124

Note 9. Taxation

124

Note 10. Remuneration of the Board of Directors

125

Note 11. Political and economic environment

125

Note 12. Off-balance sheet commitments

125

Note 13. Significant events after the year end

125

Glossary

126

Socfin | ANNUAL REPORT 2023 | 3

GroupPortraitprofiledu Groupe

1. Overview of the Group

Société Financière des Caoutchoucs S.A., abbreviated as "Socfin", is a Luxembourgish company (the "Company"), with its registered office at 4 avenue Guillaume, L-1650 Luxembourg. It was incorporated on 5 December 1959 and is listed on the Luxembourg Stock Exchange.

Socfin's principal activity is the management of a portfolio of shares. These shares mainly focus on the exploitation of more than 190,000 hectares of tropical palm oil plantations and rubber trees, located in Africa and South-East Asia. As of 2023, Socfin employs 33,809 people and has achieved a consolidated revenue of EUR 863 million over that same year.

2. History

  • 05/12/1959 Constitution of the Société Financière Luxembourgeoise S.A., abbreviated as "Socfinal" in the form of a holding company.
  • 09/06/1960 The Socfinal shares are listed on the Luxembourg Stock Exchange.
  • 31/12/1960 Since its formation, Socfinal has invested, among others, in the following companies: Société Financière des Caoutchoucs "Socfin" (Belgium); Plantations Nord-Sumatra (Belgium); Selangor Plantations Company Berhad (Malaysia); Sennah Rubber Company Ltd (England) and various societies of Congolese equatorial cultures.
  • 31/12/1965 The portfolio includes new investments in Indonesia, such as : Société de Cultures Asahan; Société de Cultures Batangara; Huileries de Deli and Société de Cultures Sungei Liput
  • 31/12/1971 Socfinal invests in the Compagnie Internationale de Cultures "Intercultures" (former name of Socfinaf), a Luxembourgish company listed on the Luxembourg Stock Exchange; Socfin Industrial Development "Socfinde" (Luxembourg) and in Compagnie du Cambodge (France).
  • 31/12/1972 Socfinal participates in the formation of Socfinasia (Luxembourg) in exchange for the shares of Indonesian companies Asahan, Batangara, Huileries de Deli and Sungei Liput. Socfinasia will be listed on the Luxembourg Stock Exchange in 1973.
  • 31/12/1975 Disposal of Socfin (Belgium) shares from the portfolio.
  • 31/12/1980 Acquisition of Selangor Holding shares, a Luxembourgish company listed on the Luxembourg Stock Exchange.
  • 31/12/1994 Socfinal invests 60% in the capital of SOGB (Côte d'Ivoire) following the privatisation of this Ivorian plantation. This participation will be transferred to Intercultures.
  • 31/12/1999 Sale of holdings Selangor Holding and Plantations Nord-Sumatra
  • 31/12/2000 Sale of Sennah Rubber Company shares following the public tender on these shares.
  • 15/11/2006 Following the distribution of Intercultures shares by Socfinasia (spin-off), Socfinal directly holds, onthe one hand, Socfinasia (Asia), and on the other, Intercultures (Africa).
  • 10/01/2011 Extraordinary General Meeting, which ratified the abandonment of the holding 29 status, and the change of the name to Société Financière des Caoutchoucs, abbreviated as "Socfin". The name of Intercultures is changed to Socfinaf.
  • 01/07/2011 The share is split by 20
  • 29/08/2014 Socfin exchanges 9% of Socfinaf's shares against 100% of the shares of Société Anonyme Forestière and Agricole SAFA, the company incorporated under French law. The latter owns 68.93% of
    Safacam, a Cameroonian plantation company that exploits 5,400 hectares of palm oil trees and
    4,400 hectares of rubber trees. Following this exchange, Socfin still holds 55.08% of Socfinaf.
  • 31/12/2014 The SAFA participation is brought into Socfinaf through a capital increase by contribution in kind. Socfin holds 56.48% of Socfinasia's capital and 58.79% of Socfinaf's capital.

4 | ANNUAL REPORT 2023 | Socfin

Group profile

3. Group structure

SOCFINAF

Luxembourg

100%

93%

100%

87%

BEREBY-

FINANCES

Côte d'Ivoire

70%

73%

100%

66%

STP INVEST

100% 100%

SAFA

Belgique

France

88%

69%

100%

100% 67%

100%

65%

SOCFIN

58%

Luxembourg

20% SOCFINDE 80%

Luxembourg

33% 19%

48%

30%

35%

35%

15%

30%

10%

15%

100%

10%

50%

50%

50% 50%

50% 50%

50% 50%

50% 50%

50% 50%

50% 50%

SOCFINASIA

Luxembourg

100%

100%

100%

PNS LTD

100%

Luxembourg

90%

100%

Holding companies

Socfin | ANNUAL REPORT 2023| 5

Group profile

4. Information on the holdings of Socfin

Portfolio

Number of shares

Direct %

1) Listed shares

Luxembourg

Socfinasia

11,413,822

58.25%

Socfinaf

11,528,898

64.64%

2) Non-listed shares

Luxembourg

Terrasia

1,891

18.91%

Induservices

3,500

35.00%

Management Associates

3,000

30.00%

The following pages contain a summary of the subsidiaries' activity. It also includes comments on the financial information regarding the past two financial years of the main companies in which Socfin holds a direct or indirect participation.

Unless indicated otherwise, equity includes capital, reserves and the results that were brought forward before the allocation of current year results.

Corporate data refers to consolidated data.

The balance sheet displays figures in the functional currency of the respective entities.

  • | ANNUAL REPORT 2023 | Socfin

Group profile

SOCFINASIA

SOCFINASIA is a Luxembourgish entity with stakes in companies that operate directly or indirectly in SouthEast Asia, namely in the rubber and palm oil sectors.

Share capital: EUR 24,492,825.

Key figures (thousands of EUR)

At at 31 December

Fixed assets

Current assets

Equity (*)

Borrowings, provisions and third parties

Profit / (loss) for the period

Distribution

Share price (EUR)

Dividend per share (EUR)

Dividend / market capitalisationG (%)

Socfin's stake (%)

(*) Before profit allocation but after interim dividend.

The profit for the year, which ended on 31 December 2023, amounts to EUR 48,129,963. At the Annual General Meeting, which will take place on 29 May 2024, the Board of Directors will propose the payment of a dividend of EUR 4.00 per share. From this, EUR 2.00 per share has already been paid at the end of 2023 as an interim dividend for the financial year of 2023.

20232022

357,705405,668

72,55352,029

424,074452,144

6,1835,552

48,13070,685

87,08676,200

15.4014.80

4.003.50

25.9723.65

58.2558.25

Socfin | ANNUAL REPORT 2023 | 7

Group profile

SOCFINAF

SOCFINAF is a Luxembourgish entity with stakes in companies that operate directly or indirectly in tropical Africa, mainly in the rubber and palm oil sectors.

Share capital: EUR 35,673,300.

The profit for the year, which ended on 31 December 2023 amounts to EUR 2,658,856. At the Annual General Meeting, which will take place on 29 May 2024, the Board of Directors will propose not to pay any dividend for the financial year of 2023.

Key figures (thousands of EUR)

At at 31 December

2023

2022

Fixed assets

317,047

361,924

Current assets

32,231

36,676

Equity

223,913

221,254

Borrowings, provisions and third parties

125,366

177,347

Profit / (loss) for the period

2,659

-37,543

Distribution

0

0

Share price (EUR)

10.80

11.80

Dividend per share (EUR)

0

0

Dividend / market capitalisationG (%)

0

0

Socfin's stake (%)

64.64

64.64

8 | ANNUAL REPORT 2023 | Socfin

International market for rubber and palm oil

1. Rubber

SGX - NATURAL RUBBER - 5 years +

$ct/Kg

300

RSS3

300

250

200

150

100

50

TSR20

250

200

150

100

50

SGX - NATURAL RUBBER - 1 year +

$ct/Kg

220

RSS3

220

200

TSR20

200

180

180

160

160

140

140

120

120

100

100

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb

2023 2023 2023

2023

2023 2023 2023

2023 2023 2023

2023 2023 2024

2024

Socfin | ANNUAL REPORT 2023 | 9

International market for rubber and palm oil

The international market in 2023

The average natural rubber price (TSR20G 1st position on SGXG) for the year 2023 is USD 1,377/T FOBG Singapore compared with USD 1,548/T in 2022, a fall of 11%.

Converted into euros, the average TSR20G 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.

10 | ANNUAL REPORT 2023 | Socfin

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SOCFIN - Société Financière des Caoutchoucs SA published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 13:51:02 UTC.