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Camellia Plc
2014
127
Camellia Plc
Report and accounts 2014
Contents
page
Directors and advisers
Chairman’s statement
Strategic report
Report of the directors
Corporate governance
Statement of directors’ responsibilities
Remuneration report
Consolidated income statement
Statement of comprehensive income
Consolidated balance sheet
Company balance sheet
Consolidated cash flow statement
Company cash flow statement
Statement of changes in equity
Accounting policies
Notes to the accounts
Report of the independent auditors
Five year record
2
3
6
12
15
19
20
23
24
25
26
27
28
29
30
40
84
86
1
Camellia Plc
Directors and advisers
Directors
M C Perkins, FCA
C J Relleen, FCA
T K Franks, FCA
G H Mclean, MSc
C J Ames, MA FCA
P J Field
A K Mathur, FCA
S A Walker, FCCA
F Vuilleumier
W K Gibson
Chairman (iii)
Deputy chairman, independent non-executive
director and senior independent director (i) (ii) (iii)
Deputy chief executive
Joint Managing director
Joint managing director
Joint managing director
Finance director
Finance director designate
Independent non-executive director (i)
Independent non-executive director (i) (ii) (iii)
(i) Member of audit committee
(ii) Member of remuneration committee
(iii) Member of nomination committee
Chairman
Deputy chief executive
Joint managing director
Joint managing director
Joint managing director
Finance director
Finance director designate
Bangladesh
India
Group marketing executive
Company secretary
Secretary
Executive committee
Registered office
Nominated adviser and
broker
Registrars
J A Morton
M C Perkins
T K Franks
C J Ames
P J Field
G H Mclean
A K Mathur
S A Walker
I Ahmed
A Singh
R J Parry
J A Morton
Linton Park
Linton
Maidstone
Kent ME17 4AB
Registered Number 29559
Charles Stanley Securities
131 Finsbury Pavement
London EC2A 1NT
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4ZF
Independent auditors
PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
1 Embankment Place
London WC2N 6RH
Website
www.camellia.plc.uk
2
Chairman’s statement
The headline profit before tax for the year to 31 December 2014 amounted to £17.23 million compared with
£38.15 million in the previous year. Headline profit is a measure of underlying performance which is not impacted
by exceptional and other items considered non-operational in nature.
Profit before taxation included an amount of £8.82 million (2013: £21.09 million) arising from changes in the fair
value of biological assets. It is hoped that the year 2014 will be the last year in which IAS 41 will be relevant to the
majority of our agricultural operations. It is expected that from 2015 our permanent plantings will be classified
under IAS 16 as property, plant and equipment to be depreciated over their expected lifespan.
After taking account of exceptional and other one off items the profits before tax for the year to 31 December
2014 amounted to £21.98 million compared with £59.65 million in the previous year. This is a particularly
disappointing result, reasons for which may be briefly summarised as very poor tea sales prices in Kenya,
substantial losses associated with two onerous contracts at AKD, the ever increasing costs of regulation and
compliance at Duncan Lawrie and an exceptional provision against an investment in Bermuda. These items are
explained in more detail below.
Dividend
The board is recommending a final dividend of 92p per share which, together with the interim dividend already paid
of 34p per share, brings the total distribution for the year to 126p per share compared with 125p per share in 2013.
Agriculture and horticulture
In my Chairman’s Statement last year I warned of the potential impact of climatic conditions and the imbalance of
supply & demand, particularly for tea, on our profitability. Such circumstances prevailed in 2014, leading to the
profits of our agricultural operations being 35 per cent. below those of the previous year.
Tea
India
Adverse climatic conditions prevailed in India, particularly at the beginning of the year, resulting in a decline in
production which would have been considerably worse if it had not been for our extensive irrigation facilities. Sale
prices increased marginally over the previous year but the resultant profitability was 36 per cent. lower than that of
the previous year.
Bangladesh
Bangladesh also suffered from very dry conditions at the beginning of the year and production was significantly
reduced. Tea prices throughout the year were also substantially lower due to the reduction in import tax, allowing
the import of cheap tea from other origins. The partial reversal of this tax reduction came too late in the year to
have any meaningful impact. As a result profitability was 64 per cent. below that of the previous year. The ongoing
political unrest in the country is being monitored.
Kenya
Tea production again increased due to benign climatic conditions but the resulting oversupply resulted in tea
prices continuing at a very low level throughout the year, at times below the cost of production. We have therefore
witnessed a major reduction in the profits of our Kenya operation over the last two years. The profitability in 2014
was 48 per cent. lower than prior year.
Malawi
Production was reasonable in Malawi but again prices fell, being some 16 per cent. below that of the previous year.
Profitability was approximately 40 per cent. lower than last year.
3
Camellia Plc
Chairman’s statement
Edible nuts
Production of our pistachio nuts at Horizon Farms in California were roughly in line with expectations, 2014
being an ‘on’ year. The newly planted areas of almonds should produce a meaningful crop in 2015. California is
presently experiencing a major and prolonged drought and water restrictions have recently been imposed by the
State Governor. The consequences will be severe if the drought, now in its fourth year, persists much longer.
The macadamia production in Malawi and South Africa was in accordance with our expectations and prices in
dollar terms showed a reasonable increase. We are seeing pleasing increases in production from our investment
over recent years in macadamia plantings in Kenya and exported our first kernel with the cracking of the nuts
having been sub-contracted. We intend to continue our expansion of the planted area and expect to commence
construction of our own cracking facility during 2015.
Other horticulture
Our Avocado production, at Kakuzi, while ahead of the previous year was below expectations. Sale prices were
marginally reduced from last year.
Adverse climatic conditions impacted on our rubber production in Bangladesh and prices were significantly lower
than the previous year. This may be a continuing phenomenon whilst low oil prices increase the competitiveness of
synthetic rubber.
Our Brazilian operations harvested mainly soya during the year and production was good. Prices were also ahead
of the previous year.
Our citrus production at Horizon Farms was better than expected following the climatic damage suffered in the
early part of the year. Prices were 15 per cent. down on the prior year.
The wine grape harvest on our farm in South Africa improved during the year and we have been slightly more
successful in marketing our higher value products.
Food storage and distribution
The results from our food storage and distribution businesses were marginally lower during the year.
In the UK, Associated Cold Stores and Transport had a more difficult year, with competition in the market place
being fierce. In the Netherlands however trading conditions improved slowly, partially due to the reduction in the
cost of imported product, which resulted in those operations making a small profit.
Engineering
AKD Engineering at Lowestoft experienced yet another disastrous year mainly as a result of two large contracts
experiencing substantial losses. These contracts are now largely complete. The legal proceedings to which I have
referred previously were settled prior to going to court on the basis that the legal costs, both past and potentially in
the future, were totally disproportionate to the amount of claims that we may have been successful in establishing.
AKD’s business is totally dependent on the North Sea oil and gas market and due to the low price of crude oil, the
orders from the sector in which AKD operates have completely dried up. The unfortunate but inevitable decision
taken to close this business was announced on 7 April 2015. The likely losses that we would have experienced over
the forthcoming months, or indeed years, were deemed to be unsustainable. We expect to incur further losses in
2015 as we target to complete an orderly closure of this business by the end of the first half of the year.
Abbey Metal Finishing also experienced a difficult year in 2014. Part of the reason for this is the cost associated
with the new joint venture in Germany, where we are still awaiting final accreditation from our projected major
customer to utilise our facilities. The facilities at Hinckley are gradually clawing back previous lost business and
the efficiency ratios have increased during the last few months.
Results of AJT Engineering, although slightly lower than the previous year were also satisfactory but, again, the
effect of low oil prices on these operations is presently difficult to anticipate, but likely to be negative.
4
Chairman’s statement
BMT in Great Yarmouth, GU Cutting and Grinding and Loddon Engineering all produced results better than the
previous year.
As stated above, the impact of low crude oil prices is already having a major effect on the placement of orders by
our customers in the oil and gas sector. The on-going effect of this on a number of our engineering subsidiaries
cannot yet be quantified but is certain to be detrimental.
Banking and financial Services
Duncan Lawrie Private Bank has had a difficult year coping with the twin challenges of very low interest rates and
the conservative risk profile required by the group. This conservative approach to risk has long been a cornerstone
of the group’s policy at Duncan Lawrie, but with the low interest rate environment potentially extending into the
medium term, the group is now reviewing its options with regard to the ongoing development of Duncan Lawrie.
Associates and investments
Operations in Bangladesh remain difficult due to the continuing political unrest but our associated companies
United Finance (previously United Leasing) and United Insurance both produced reasonable results for the year.
Our listed investments generally performed well during the year with the exception of an investment in Bermuda,
which has now fallen below our cost and therefore an impairment of £2.33 million has had to be provided
through the profit and loss account.
Development
2014 was a difficult year. However, the difficulties have not prevented us from continuing with the organic
development of our operations and we must continue to invest in areas that will go towards mitigating the ever
increasing costs of production, particularly in our tea gardens. This is an ongoing commitment and a substantial
part of our profitability is reinvested in our operations in order to secure their long term future. We continue to
examine possible acquisitions in the sectors in which we operate, but the influence on the market of venture
capital funds who highly gear their investments and look for a short term exit make such acquisitions either too
expensive or very difficult to locate. We will continue to invest in good freehold or long leasehold properties where
circumstances are deemed appropriate.
Directors
Martin Dunki resigned as a director of your company in November 2014. Anil Mathur will retire at the
conclusion of the annual general meeting in June after having completed 35 years of loyal and valuable service to
the group. I would like to express my thanks to both gentlemen for their tireless contribution to the group.
William Gibson joined the board as a non-executive director in September 2014. Tom Franks and Graham
Mclean joined the board as Deputy Chief Executive Officer and Joint Managing Director for agriculture
respectively in October 2014. Susan Walker was appointed a director on 2 April 2015 and will assume the position
of Finance Director in June following Anil’s retirement
Staff
My thanks are due to all our staff throughout the world for their contribution in 2014.
M C Perkins
Chairman
23 April 2015
5
Camellia Plc
Strategic report
Business review
The company is required to set out in this report a fair review of the business of the group during the year ended
31 December 2014 and a description of principal risks and uncertainties facing the group. A fair review of the
business of the group is incorporated within the chairman’s statement on pages 3 to 5. The chairman’s statement
together with information contained within the report of the directors highlight the key factors affecting the
group’s development and performance. Other matters are dealt with below:
Group strategy
The board has adopted the following strategy for the group:
–
–
–
–
–
to develop a worldwide group of businesses requiring management to take a long term view,
the achievement of long-term shareholder returns through sustained and targeted investment,
investing in sustainability, the environment and the communities in which we do business,
ensuring that the quality and safety of our products and services meet the highest international standards,
the continuous refinement and improvement of the group’s existing businesses using our internal expertise and
financial strength.
The progress against this strategy during the year is set out in further detail in the chairman’s statement shown on
pages 3 to 5 and within the report of the directors.
Business model
The group consists of a portfolio of businesses mainly in agriculture and horticulture, private banking and
financial services, food storage and distribution and engineering. Each business is managed at local level with
independent management who report to the board regularly on performance against an annual budget.
Principal risks and uncertainties
There are a number of possible risks and uncertainties that could impact the group’s businesses. As the group’s
businesses are widely spread both in terms of activity and location, it is unlikely that any one single factor could
have a material impact on the group’s long-term performance. The following risks relating to the group’s principal
operations have been identified:
Agriculture and horticulture
The group’s agricultural based businesses are located in Bangladesh, Brazil, India, Kenya, Malawi, South Africa
and the USA. The success of these activities is greatly dependent on climatic conditions (including the impact of
climate change), the control of pests and plant disease, the cost of labour and the market price for the produce. We
export a considerable amount of produce through the port of Mombasa in Kenya. Such exports can be seriously
delayed by inefficiencies in the operation of the port. In addition, exports from these businesses are subject to
foreign exchange fluctuations as products, particularly those from Africa, are normally priced in US dollars.
In Kenya, Malawi and South Africa there are long-term issues concerning land ownership over which the group
has little control but monitors the situation closely.
The board continues to work with local management to monitor land ownership issues that may impact the
group’s operations. In Kenya, the length of the leases owned by non-Kenyan citizens and corporations has been
reduced from 999 years to 99 years in accordance with the new constitution. In South Africa, on land where
competing ownership claims have been made, any substantiated claim is required to be resolved on a willing buyer
willing seller basis and crops are generally only planted following notification to the Land Claims Commission.
In India, violence from separatist groups which has been a problem for some years has recently been greatly
reduced in Assam, Darjeeling and the Dooars. In Bangladesh, there were during 2014 and continue to be instances
of civil unrest, general strikes and blockades. The situation continues to be monitored and the group’s operations
in these regions have largely been able to trade normally.
6
Strategic report
UK engineering
A number of the UK engineering companies are dependent for a significant part of their revenue on the aerospace
and the oil and gas industries. A downturn in either of these sectors would have an impact on the level of activity
in these businesses.
Some of the processes used by the companies involved in metal treatment require high standards of health and
safety and environmental management. Failure to maintain these standards could give rise to accidents or
environmental damage.
Cold storage and transport
Cold storage and transport in the UK is a highly competitive industry and is largely dependent on the food
industry for the utilisation of cold stores.
Cold stores are heavy users of electricity and any significant movement in energy costs can affect the operation’s
profitability. Similarly, the transport division is affected by sharp movements in the cost of fuel and the cost of the
implementation of new regulations for drivers.
The business is dependent upon a sophisticated computer system. The failure of this system could have significant
consequences for the business although a disaster recovery plan is in place.
Banking and financial services
Duncan Lawrie Limited is regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation
Authority (PRA) and has a well-developed compliance process. The following risks have been identified:
–
–
–
compliance risk – the FCA and the PRA have the power to stop trading activity should there be a serious
breach of their regulations. Following the recent global banking crisis, there have been moves by the
authorities to tighten regulatory standards and this may lead to a requirement for further capital to be invested
in Duncan Lawrie Limited.
credit risk – the lending of money gives rise to a credit risk. It lends money to customers and places money
with other banks and holds interest bearing securities. This credit risk is managed by strict internal
procedures. It limits itself to lending to customers no more than its share capital and reserves.
liquidity, interest and foreign exchange rate risk – these risks are monitored closely and reported upon daily
against conservative exposure limits.
Duncan Lawrie Limited has no exposure to the sub-prime mortgage market but in periods of low interest rates or
low stock market values its income stream will inevitably be affected. Bank failures in the jurisdiction within which
Duncan Lawrie operates can also impact its results as a consequence of industry wide compensation schemes to
which it is required to contribute.
Further information on the group’s financial risks are disclosed in note 38 of the accounts.
Investments
The group owns a number of investments including listed investments. The value of these investments is therefore
likely to fluctuate in line with global stock market movements.
Pension schemes
There is one final salary scheme in the UK, following the merger of three schemes in 2011. It is closed to new
entrants and permits an element of future accrual for existing members in the defined benefit section. A material
proportion of the assets of the scheme are invested in equities and the value of these assets will fluctuate in line
with global equity markets. Continuing improvements in mortality rates and the impact of the real rate of return
may also increase the liabilities of the scheme.
Credit Risk
Credit control procedures are in place throughout the group but the risk remains that some customers may have
difficulty making payments.
7
Camellia Plc
Strategic report
Social and environmental responsibility
Background
The group has a wide range of businesses operating around the world in diverse commercial, cultural and
regulatory environments. These businesses encompass a correspondingly wide spectrum of employment and
environmental issues and our main challenge is to ensure that these are appropriately managed across the group.
The group’s businesses have a duty to meet local regulatory requirements and will always strive to do so. In this
respect, there is a distinction between our UK businesses and our agricultural and horticultural businesses based
mostly in developing countries. Whilst the UK businesses are subject to well-developed regulatory regimes in the
areas of employment and environmental protection, this is not necessarily the case elsewhere. Our agricultural and
horticultural businesses have responded to the increasing amount of relevant local legislation and to the demands
of the marketplace, as many of our major customers for agricultural products now expect us to meet their own
social and environmental standards, or to achieve certification against recognised international standards such as
‘Fairtrade’ labelling.
Particular challenges for the group lie in the following areas:
Child labour: We have a clear policy not to use child labour and all of our businesses meet local legal requirements.
The minimum legal working age varies around the world and in some countries it is both the cultural norm and
permissible for parents to involve their children in the productive process. We do not subscribe to this approach
and therefore translating our policy into unambiguous local rules and enforcing these rules requires vigilance.
Health and safety: Our UK, European and North-American businesses operate in a strong regulatory climate, and
have a good health and safety culture and record. Achieving equivalent standards of health and safety management
in our operations in some developing countries is a continuing challenge.
Medical care and education: In some countries, our workers and their children do not have access to good state
provision of medical or educational services. However, the majority of tea estates in India and Bangladesh have a
hospital and a qualified doctor and our operations in both these countries have central group hospitals to which
more serious illnesses are referred. A number of our African businesses report a high incidence of HIV/AIDS
related illnesses. We provide, as a minimum, medical services including where appropriate antiretroviral drugs,
implement immunisation programmes, pre and post natal care and give support to schools that are either run by
our companies, or in the local neighbourhood.
Casual labour: Some of our agricultural businesses rely on seasonal labour, notably at harvest time. Our
agricultural companies give casual and contract workers employment rights in accordance with local legislation.
Environmental management: Our UK-based engineering businesses have the greatest potential to create pollution
and hazardous waste and need to meet tight legislative standards. Where appropriate, our UK businesses have
formal environmental management systems in place and most are independently certified to the international
standard ISO 14001. The enforcement of environmental legislation in many countries where we operate is poor
and our businesses in these locations have to act on their own initiative to meet international standards of
environmental protection.
Greenhouse Gas (GHG) Emissions
Our emissions have been calculated based on the GHG Protocol Corporate Standard. Emissions reported
correspond with our financial year.
per annum
Tonnes of CO
2
CO
ouput per £m turnover
2
2014
2013
s
e
n
n
o
T
450
400
350
300
250
200
150
100
50
0
2014
2013
Agriculture and
Horticulture
Engineering
Food Storage
and Distribution
Banking and
Financial Services
Segment
Agriculture and
Horticulture
Engineering
Food Storage
and Distribution
Banking and
Financial Services
Segment
s
e
n
n
o
T
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
8
Strategic report
Our approach
We believe that good management of employment, social and environmental issues is essential in ensuring the
long-term success of our businesses. We are therefore committed to devoting the resources necessary to improve
continually our performance with the same vigour that we apply to other aspects of managing our business.
The board has a corporate social responsibility policy which is available on the company’s website and which has
been adopted across the group.
The board has adopted an anti-bribery policy which complies with the requirements of the Bribery Act 2010. The
policy has been introduced across the group and its implementation is being monitored. The board does not
permit bribery as part of its business practices.
Performance
There are no current employment or environmental issues that prejudice the continuing development of the
group. No group businesses were prosecuted for any significant breach of employment legislation during the year.
The executive committee has established a process for ensuring that the corporate social responsibility policy is
enforced across the group.
Key financial performance indicators
Return on segmental assets
The nature of the group’s principal activities is such that the board takes a long-term view on its operations,
particularly in agriculture. It is also concerned to improve the quality of the group’s assets over the long-term and
monitors that by reference to return on segmental assets achieved in the main segments of the business which are
then compared against budget. The returns achieved in the current and prior year were as follows:
Agriculture and
horticulture
Engineering
Food storage and
distribution
Banking and
financial services
2014
2013
2014
2013
2014
2013
2014
2013
Segment net assets (£’000)
259,157 242,981
18,800 19,982
17,190 17,592
37,054 39,045
Segment trading profit/(loss) (£’000)
27,204 41,383
(8,387)
(5,599)
Return on segmental net assets (%)
10.50
17.03
(44.61)
(28.02)
943
5.49
772
(2,496)
4.39
(6.74)
121
0.31
Segment net assets (segment assets less segment liabilities) and segment profit are as reported in the consolidated
accounts.
Group borrowings ratio
The board’s objective is to ensure that gross borrowings as a percentage of tangible net assets do not exceed 50 per cent.
The ratio achieved at 31 December 2014 was 0.92% (2013: 0.96%).
Gross borrowings and tangible net assets (share capital and reserves less goodwill and intangible assets) are derived
from the consolidated accounts.
9
Camellia Plc
Strategic report
Key non-financial performance indicators
The following information has been compiled based on data provided by the group’s subsidiary undertakings. The
board considers that this information demonstrates the level of compliance with important elements of its business
principles. The board will regularly review which key non-financial performance indicators are most appropriate.
Agriculture and
horticulture
2013
2014
2012
2014
Engineering
2013
2012
Food storage
and distribution
2013
2012
2014
Banking and
financial services
2013
2012
2014
–
–
–
–
–
–
–
–
1
1
–
–
1
–
–
–
–
1
–
–
3
–
–
–
–
–
–
–
–
1
–
–
–
–
2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
303
281
579
5
6
5
–
3
2
–
–
–
1 Compliance
a) Prosecutions The number of prosecutions
brought in the financial year
by the official regulatory bodies
responsible for enforcing
regulations in the areas of:
Employment
Worker health and safety
Environmental protection
The number of written
warnings during the financial
year by the official regulatory
bodies responsible for enforcing
regulations in the areas of:
Employment
Worker health and safety
Environmental protection
b) Formal
warnings
2 Child Labour
a) Minimum age The number of employees who
were less than 15 years old
during the financial year
The number of employees
who were younger than the
age for completing compulsory
education in their country
during the financial year
The number of injuries
received at work resulting in
either absence from work for more
than three days, or the injured
person being unable to do
the full range of their normal
duties for more than three days
b) Access to
education
3 Accidents
a) Injury
4 Health
a) Sickness
absence
b) Sickness
claims
The number of employee days
absence as a result of sickness
during the financial year
The number of claims for
compensation arising from
occupational health issues
received during the financial
year in respect of continuing
operations
238,487(i) 224,348(i) 228,411(i)
2,374
1,578 2,354
1,722
1,609
1,628
511
382
486
168
404
314
1
1
–
–
2
2
–
–
–
(i)
This excludes tea garden workers in India who have a contractual entitlement to fourteen days sickness absence. It should be noted that in Malawi there is
high level of sickness due to HIV/AIDS related conditions and malaria.
10
Strategic report
Employees
It is group policy to keep employees informed, through internal publications and other communications, on the
performance of the group and on matters affecting them as employees and arrangements to that end are made by
the management of individual subsidiary undertakings.
It is also group policy that proper consideration is given to applications for employment received from disabled
persons and to give employees who become disabled every opportunity to continue their employment.
The table below provides a breakdown of the gender of the directors and employees at 31 December:
Company directors (i)
Other senior managers (ii)
All employees
Men
Women
2014
2013
2014
2013
9
2
45,769
8
3
46,280
0
3
33,982
0
1
34,140
(i) Company directors consist of the company’s board as detailed on page 2, excluding Mrs S A Walker who was
appointed as a director on 2 April 2015.
(ii) “Other senior managers” is as defined in The Companies Act 2006 (Strategic report and directors report)
Regulations 2013, and includes persons responsible for planning, directing or controlling the activities of the
company, or a strategically significant part of the company, other than company directors and who are
members of the executive committee.
By order of the board
J A Morton
Secretary
23 April 2015
11
Camellia Plc
Report of the directors
The directors present their report together with the audited accounts for the year ended 31 December 2014.
Principal activities
The company is a holding company and its country of incorporation is England. The principal activities of its
subsidiary and associated undertakings comprise:
Agriculture and horticulture – the production of tea, edible nuts, avocados, citrus, rubber, fruits, other
horticultural produce and general farming
Engineering – metal finishing, precision engineering and heat treatment
Food storage and distribution
Private banking and financial services
The holding of property and investments
Further details of the group’s activities are included in the chairman’s statement on pages 3 to 5.
Results and dividends
The profit for the year amounted to £8,310,000 (2013: £37,543,000). The board has proposed a final dividend for the
year of 92p per share payable on 3 July 2015 to holders of ordinary shares registered at the close of business on 12 June
2015. The total dividend for 2014 is therefore 126p per share (2013: 125p per share). Details are shown in note 12.
Directors
The directors of the company are listed on page 2. The following directors had beneficial interests in the share
capital of the company:
Camellia Plc ordinary shares of 10p each:
M C Perkins
C J Ames
31 December
2014
1 January
2014
1,573
300
1,573
300
Under the company’s articles of association all the directors are required to retire annually. Accordingly,
Mr M C Perkins, Mr C J Ames, Mr P J Field, Mr C J Relleen, Mr F Vuilleumier will retire and, being eligible,
seek re-election at the AGM on 4 June 2015.
Mr T K Franks, Mr G H Mclean, Mrs S A Walker and Mr W K Gibson, having been appointed to the board since
the last annual general meeting, will seek election to the board.
Mr A K Mathur will not seek re-election at the next AGM and will retire as a director at the conclusion of the meeting.
None of the directors or their families had a material interest in any contract of significance with the company or
any subsidiary during and at the end of the financial year.
Executive directors
Mr M C Perkins was appointed a director in 1999 and chairman in 2001 having joined Eastern Produce
(Holdings) Limited (now Linton Park Plc) in 1972. He is a chartered accountant. Mr Perkins is chairman of the
nomination committee.
Mr C J Ames, a chartered accountant, is a joint managing director of Camellia Plc, a non-executive director of
Kakuzi Limited and a non-executive director of Duncan Lawrie Limited. He was previously managing director of
Douglas Deakin Young Limited which was acquired by the Camellia group in 2005. Prior to that he was a partner
of PricewaterhouseCoopers.
Mr P J Field is a joint managing director of Camellia Plc, is chairman of Goodricke Group Limited and a non-
executive director of Duncan Lawrie Limited. Before joining the group in 1987, Mr Field was with Grindlays
Bank engaged primarily with their business in the Indian subcontinent.
Mr A K Mathur, is a chartered accountant and joined the group in 1981. He was appointed finance director in
1999 and is also a director of Goodricke Group Limited. He will retire as a director at end of the AGM on 4 June
2015.
12
Report of the directors
Mr T K Franks, was appointed Deputy Chief Executive in October 2014. He is a non-executive director of
Duncan Lawrie Limited. He was previously Global Chairman of KPMG Corporate Finance and a Partner of
KPMG LLP having joined KPMG in 1988.
Mr G H Mclean, a qualified agriculturalist, was appointed Managing Director of Agriculture in October 2014. He
was previously regional director of the Group’s operations in Africa and has worked for the Group for 22 years.
Mrs S A Walker, joined Camellia on 1 July 2014 as Finance Director Designate. She was appointed executive
director in April 2015. She will formally take over as Finance Director on 4 June 2015, when Anil Mathur retires
from the Board. Prior to joining Camellia, she held various positions at KPMG over a 21 year period, latterly as
Director Corporate Finance and more recently was Director, Plc Advisory at BDO Corporate Finance.
Non-executive directors
Mr C J Relleen was formerly a partner in PricewaterhouseCoopers. He was appointed an independent non-
executive director and deputy chairman in January 2006 having previously been a non-executive director of Linton
Park Plc. Mr Relleen is also a non-executive director of Duncan Lawrie Limited. He is the senior independent
director, chairman of the Audit Committee and a member of the Nomination and Remuneration committees.
Mr W Gibson was appointed as an independent non-executive director from 1 September 2014. Mr Gibson was
previously Chairman and Managing Director of Westminster Press and an executive director of the Financial
Times Group. He is Chairman of the Remuneration Committee and a member of the Audit Committee.
Mr F Vuilleumier was appointed as a non-executive independent director on 7 March 2013. Mr Vuilleumier is a
partner of Oberson Avocats, a law office based in Geneva, Switzerland. He is also a Swiss Certified tax expert and a
lecturer in tax law at the University of Lausanne. He is a member of the Audit Committee.
Secretary
Mrs J A Morton was appointed as company secretary on 8 September 2011.
Substantial shareholdings
As at 23 April 2015 the company had been advised of the following interests in the share capital of the company:
Camellia Private Trust Company Limited held through its subsidiary, Camellia Holding AG 1,427,000 ordinary
shares (51.67 per cent. of total voting rights).
Alcatel Bell Pensioenfonds VZW held through HSBC Global Custody Nominees (UK) Limited 297,398 ordinary
shares (10.76 per cent. of total voting rights).
Taube Hodson Stonex & Partners held through State Street Nominees Limited 91,296 ordinary shares
(3.31 per cent. of total voting rights).
Share capital and purchase of own shares
The company’s share capital comprises one class of ordinary shares of 10 pence each which carry no restrictions on
the transfer of shares or on voting rights (other than as set out in the company’s articles of association). There are
no agreements known to the company between shareholders in the company which may result in restrictions on
the transfer of shares or on voting rights in relation to the company. Details of the issued share capital are
contained in note 33 to the accounts.
At the annual general meeting in 2014, shareholders gave authority for the company to purchase up to 276,200 of
its own shares. The company has purchased 5,200 of its own shares for cancellation since 1 January 2014. This
authority expires at the conclusion of this year’s annual general meeting on 4 June 2015. A resolution to renew the
authority is being put to shareholders at the forthcoming AGM.
Disclosure of information to auditors
PricewaterhouseCoopers LLP has expressed its willingness to continue as auditors of the company and a resolution
proposing PricewaterhouseCoopers LLP re-appointment will be put to the annual general meeting.
13
Camellia Plc
Report of the directors
Each of the persons who were directors at the time when this directors’ report was approved has confirmed that:
so far as each director is aware, there is no relevant audit information of which the company’s auditors are
(a)
unaware; and
(b) each director has taken all the steps that ought to have been taken as a director, including making appropriate
enquiries of fellow directors and of the company’s auditors for that purpose, in order to be aware of any
information needed by the company’s auditors in connection with preparing their report and to establish that
the company’s auditors are aware of that information.
Going concern
After reviewing the group’s budget for 2015 and other forecasts, the directors have a reasonable expectation that
the group has adequate resources to continue in operational existence for the foreseeable future. Therefore they
continue to adopt the going concern basis in preparing the accounts.
Corporate governance
The company’s statement on corporate governance can be found in the corporate governance report on pages 15
to 18.
By order of the board
J A Morton
Secretary
23 April 2015
14
Corporate governance
Statement of compliance
This statement describes how the company applies the main principles of UK Corporate Governance Code 2014
(“the Code”). In implementing the Code, the directors have taken account of the company’s size and structure and
the fact that there is a controlling shareholder. At the time of the company’s delisting from the main market of the
London Stock Exchange and listing on AIM in September 2014, it was stated that the board did not envisage that
there would be any significant alteration to the standards of reporting and governance which the company
maintains currently. AIM companies are not required to comply with the requirements of the Code. However, the
board is committed where practical to developing and applying high standards of corporate governance as detailed
below.
The company has complied with the relevant provisions set out in the Code throughout the year with the
exception of the following area of the Code that has not been implemented:
The roles of chairman and chief executive have continued to be fulfilled during the year by Mr Perkins and not
separated as required by the Code. Mr Franks was appointed as Deputy Chief Executive on 1 October 2014. In
addition, Mr Ames, Mr Field and Mr Mclean are joint managing directors and have responsibility for aspects of
the day to day management of the group.
The board
The board currently comprises ten directors. Three are non-executive directors, of which all are considered
independent. The remaining directors are executive directors, including the executive chairman. Mr Relleen, the
deputy chairman, has been designated as the senior independent director. The names and brief biographical details
of each director appear on pages 12 and 13.
There is on-going dialogue between the chairman and the majority shareholder whose views are reported to the
board. The company is also in contact with other significant shareholders.
The board has established a nomination committee chaired by Mr Perkins, the other members being Mr Relleen
and Mr Gibson.
The board has established a remuneration committee, audit committee and executive committee. Terms of
reference of each of these committees can be viewed on the company’s website.
The board is responsible for managing the group’s business and has adopted a schedule of matters reserved for its
approval. The schedule is reviewed annually and covers, inter alia, the following areas:
–
Strategy
– Acquisitions and disposals
–
–
Financial reporting and control
Internal controls
– Approval of expenditure above specified limits
– Approval of transactions and contracts above specified limits
– Responsibilities for corporate governance
– Board membership and committees
– Approval of changes to capital structure
A full copy of the schedule is available on the company’s website.
A report summarising the group’s financial and operational performance including detailed information on each of
its businesses is sent to directors each month. Each director is provided with sufficient information in advance of
board meetings to enable the directors to make informed judgments on matters referred to the board. The board
met eleven times in 2014.
15
Camellia Plc
Corporate governance
Attendance by directors at board and committee meetings held during the year was as follows:
M C Perkins
C J Relleen
T K Franks
C J Ames
P J Field
A K Mathur
G H Mclean
W Gibson
M Dünki
C P T Vaughan-Johnson
F Vuilleumier
Board
11/11
11/11
3/11(iii)
11/11
11/11
11/11
3/11(iv)
4/11(v)
10/11(vii)
3/11(ii)
10/11
Audit Remuneration Nomination
2/2
2/2
–
–
–
–
–
1/2
–
1/2(ii)
–
–
3/3
–
–
–
3/3(i)
–
1/3(vi)
–
1/3(ii)
3/3
–
1/1
–
–
–
–
–
1/1
–
–
–
(i) Mr Mathur attends meetings of the audit committee by invitation in his capacity as finance director.
(ii) Mr Vaughan-Johnson retired from the Board on 5 June 2014.
(iii) Mr Franks was appointed as a director on 1 October 2014.
(iv) Mr Mclean was appointed as a director on 1 October 2014.
(v) Mr Gibson was appointed as a director on 1 September 2014.
(vi) Mr Gibson was appointed as member of the audit committee from 1 September 2014.
(vii) Mr Dünki resigned from the Board on 24 November 2014.
Executive committee
The board has delegated the day to day management of the group’s operations to the executive committee which is
also responsible for implementing board policy. The members of the committee are:
M C Perkins
T K Franks(i)
C J Ames
P J Field
G H Mclean
A K Mathur
S Walker(ii)
I Ahmed
A Singh
R J Parry
J A Morton
Chairman
Deputy Chief Executive
Joint managing director
Joint managing director
Joint managing director
Finance
Finance
Bangladesh
India
Group marketing executive
Company secretary
(i)
(ii)
appointed with effect from 1 October 2014
appointed with effect from 1 July 2014
Nomination committee
The nomination committee is chaired by Mr Perkins. Its other members are Mr Gibson and Mr Relleen.
The principal responsibilities of the nomination committee are set out below:
review the balance and composition (including gender and diversity) of the board, ensuring that they remain
appropriate
be responsible for overseeing the board’s succession planning requirements including the identification and
assessment of potential board candidates and making recommendations to the board for its approval
keep under review the leadership needs of, and succession planning for, the group in relation to both its
executive and non-executive directors and other senior executives
–
–
–
16
Corporate governance
Audit committee
The audit committee is chaired by Mr Relleen. The other members of the committee are Mr Vuilleumier and
Mr Gibson. Mr Vaughan-Johnson was a member of the committee until he retired from the board on 5 June
2014. During 2014, the committee met on three occasions.
Principal responsibilities
The principal responsibilities of the audit committee which were undertaken during the year are set out below:
–
–
–
to review and monitor the financial statements of the company and the audit of those statements – to monitor
compliance with relevant financial reporting requirements and legislation
to monitor the effectiveness and independence of the external auditor
to review effectiveness of the group’s internal control system. The committee regularly reviews the effectiveness
of internal audit activities carried out by the group’s accounting function and senior management
Significant issues in relation to financial statements
The audit committee assesses whether suitable accounting policies have been adopted and whether management
have made appropriate estimates and judgements. In the year under review, the audit committee considered the
following significant matters in relation to the financial statements:
Biological assets – One of the key areas of judgment that the committee considered in reviewing the financial
statements was the valuation of biological assets in accordance with IAS 41. Valuations are carried out by external
professional valuers or are based on discounted cash flows. These were agreed for consistency of approach and the
assumptions were determined to be reasonable. For more details see note 18 to the accounts.
Pensions – A key area of judgment is in relation to the value of the pension scheme obligation. Whilst this is
conducted by independent expert actuaries, the nature of the obligation means that a relatively minor difference in
the assumptions could result in a material change in the obligation. The committee considered the competence of the
actuaries and the assumptions adopted and concluded that the work performed is sufficient to support the value.
Goodwill and intangibles – The value of goodwill and intangibles is inherently complex and relies on judgment
and estimation. The committee consider the performance of the underlying assets and their ability to continue to
support the carrying value. As a result, the committee is satisfied that the carrying value is supported.
External auditors
To assess the effectiveness of the external audit process, the external auditor is required to report to the audit
committee and confirm their independence in accordance with ethical standards and that they had maintained
appropriate internal safeguards to ensure their independence and objectivity. In addition to the steps taken by the
Board to safeguard auditor objectivity, PwC operates a five year rotation policy for audit partners for a listed entity.
The company’s external audit was last tendered in 2009, which resulted in a change to PwC at that point. We are
aware of the regulatory developments and transitional arrangements in relation to audit tendering provisions and
will continue to monitor guidance.
The committee reviewed those non-audit services provided by the external auditor and satisfied itself that the scale
and nature of those services were such that the external auditors objectivity and independence were safeguarded.
The committee confirms that the annual report and accounts, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the company’s performance,
business model and strategy.
17
Camellia Plc
Corporate governance
Remuneration committee
The committee comprises the board’s two independent non-executive directors, being Mr Gibson who is chairman
of the committee and Mr Relleen.
The committee’s full terms of reference are available on the company’s website. The responsibilities of the
committee include:
–
–
–
–
the review of the group’s policy relating to remuneration of the chairman, executive directors and members of
the executive committee
to determine the terms of employment and remuneration of the chairman, executive directors and those
members of the executive committee that are employed in the United Kingdom with a view to ensuring that
those individuals are fairly but responsibly rewarded
to approve compensation packages or arrangements following the severance of any executive director’s service
contract
at its discretion, the committee may make such enquiries as it sees fit concerning the remuneration packages
of those members of the executive committee that are employed outside the United Kingdom
The committee met once during 2014. The remuneration report appears on pages 20 to 22.
Insurance
The company purchases insurance to cover its directors in respect of legal actions against them in their capacity as
directors of the company. The level of cover is currently £20 million. All directors have access to independent
professional advice at the company’s expense.
Share capital structure
The share capital of the group is set out in note 33.
Internal control and risk management systems
The directors acknowledge that they are responsible for maintaining a sound system of internal control. During
the year, the audit committee, on behalf of the board, reviewed the effectiveness of the framework of the group’s
system of internal controls, the principal features of which are described below.
Decentralisation is a key management philosophy with responsibility for efficient day to day operations delegated
to local management. Accountability and delegation of authority are clearly defined with regular communication
between group head office and local management. The performance of each company is continually monitored
centrally including a critical review of annual budgets, revised forecasts and monthly sales, profits and cash reports.
Financial results and key business statistics and variances from approved plans are carefully monitored. Senior
management regularly visit and review the group’s operating units. However, any system of internal control can
provide only reasonable, and not absolute, assurance against material mis-statement or loss.
By order of the board
J A Morton
Secretary
23 April 2015
18
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report, the directors’ remuneration report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent company financial statements for each financial
year. Under that law the directors have prepared the group and parent company financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the European Union.
Under company law the directors must not approve the financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of both the group and the parent company and of the profit or loss of the
group and company for that period.
In preparing these financial statements, the directors are required to:
–
select suitable accounting policies and apply them consistently
– make judgements and accounting estimates that are reasonable and prudent
–
–
state whether applicable IFRSs as adopted by the European Union have been followed, subject to any material
departures disclosed and explained in the financial statements
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
company will continue in business
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
company’s transactions and disclose with reasonable accuracy at any time the financial position of the company
and the group and enable them to ensure that the financial statements and the directors’ remuneration report
comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets of the company and the group and hence for
taking reasonable steps for the prevention and detection of fraud and other irregularities.
Each of the directors, whose names and functions are listed on page 2 confirm that, to the best of their knowledge:
–
–
the group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU,
give a true and fair view of the assets, liabilities, financial position and profit of the group
the strategic report contained on pages 6 to 11 includes a fair review of the development and performance of
the business and the position of the group, together with a description of the principal risks and uncertainties
that it faces.
In addition, each of the directors considers that the annual report, taken as a whole, is fair, balanced and
understandable and provides the information necessary for shareholders to assess the company’s performance,
business model and strategy.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website.
On behalf of the board
M C Perkins
Chairman
23 April 2015
19
Camellia Plc
Remuneration report
This report is drawn up in accordance with the Companies Act 2006 and the AIM Rules for Companies.
Remuneration committee
A report of the proceedings during 2014 of the remuneration committee (“the committee”) is set out on page 18
and includes details of the membership of the committee.
Policy on directors’ remuneration
In determining remuneration policy and the remuneration of directors, full consideration has been given to the
relevant provisions of the UK Corporate Governance Code 2014. The committee seeks to provide remuneration
packages that will attract, retain and motivate the best possible person for each position. The committee also
wishes to align the interests of executives with shareholders. The group’s activities are based significantly on
agriculture and horticulture, which are highly dependent on factors outside management control (e.g. weather and
market prices for our produce), and this is a significant consideration as to why the company does not operate
profit related bonus, share option or share incentive schemes for directors.
The remuneration policy for executives reflects the overriding remuneration philosophy and principles of the
wider group. When determining the remuneration policy and arrangements for directors, the committee considers
pay and employment conditions elsewhere in the group to ensure that pay structures are appropriately aligned and
that levels of remuneration remain appropriate in this context. The remuneration policy was approved by
shareholders at the AGM held on 5 June 2014, and took effect from the date of that AGM, will be applied for a
period of 3 years until the AGM in 2017. This policy takes into account any views of the shareholders expressed to
the committee on directors’ remuneration.
At the AGM on 5 June 2014, the remuneration report for the year to 31 December 2013 was approved by
shareholders with 99.80 per cent. of the votes cast in favour, 0.15 per cent. of the votes cast against and 0.05 per
cent. of the votes withheld.
Service contracts
Messrs Perkins, Ames, Field, Mathur, Franks, Mclean and Mrs Walker are each employed on rolling service
contracts. Mr Perkins’s service contract is dated 25 April 2002, Mr Ames’s service contract is dated 24 April 2009,
Mr Field’s service contract is dated 19 December 2011, Mr Mathur’s service contract is dated 1 December 2003,
Mr Franks’ service contract is dated 8 April 2015, Mr Mclean’s service contract is dated 10 April 2015 and Mrs
Walker’s service contract is dated 14 April 2015. The service contracts are terminable at any time by a one year
period of notice from the company or the director. Following their initial appointment non-executive directors
may seek re-election by shareholders at each subsequent annual general meeting. Non-executive directors do not
have service agreements. There are no specific contractual provisions for compensation upon early termination of a
non-executive director’s employment. The remuneration committee reviews salaries annually and will seek
independent professional advice when appropriate.
20
Remuneration report
The following sections on directors’ remuneration and pensions have been audited.
Directors’ remuneration
Basic remuneration
2013
£
2014
£
Benefits in kind
2013
2014
£
£
433,671
96,250
281,007
265,692
248,860
65,500
423,094
–
235,654
259,212
242,790
–
32,519
6,974
26,161
26,113
42,268
89,111
62,694
–
25,702
34,637
26,706
–
Employer
pension contribution
2014
£
–
–
3,587
–
5,000
2013
£
–
–
41,997
–
–
–
Total
2014
£
2013
£
466,190
103,224
310,755
291,805
291,128
159,611
485,788
–
303,353
293,849
269,496
–
Executive
M C Perkins
T K Franks
C J Ames
P J Field
A K Mathur
G H Mclean
Non-executive
M Dünki
35,795
W K Gibson
14,167
62,500
C J Relleen
C P J Vaughan-Johnson 18,362
40,000
F Vuilleumier
35,000
–
53,750
37,500
29,462
35,000
–
–
–
53,750
–
56,037
18,537
29,462
–
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
1,561,804 1,316,462
41,997 1,793,537 1,526,735
––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– ––––––––––– –––––––––––
35,795
14,167
62,500
18,362
40,000
168,276
223,146
–
–
–
–
–
–
–
–
–
–
8,587
–
–
–
–
Notes:
1. The Executive directors’ benefits in kind include the value attributed to benefits such as medical insurance, permanent
health insurance, spouse/partner travel and cash alternatives to company cars. Mr Mclean received a payment of £82,455
for relocation expenses following his move from Kenya to the UK.
2. Mr Vaughan-Johnson retired as a director on 5 June 2014. Mr Franks and Mr Mclean were appointed as directors on
1 October 2014.
3. Mr Relleen receives an additional annual fee for his chairmanship of the Audit Committee and for his non-executive
directorship of Duncan Lawrie Limited.
4. Mr Gibson receives an additional annual fee for his chairmanship of the Remuneration Committee.
Directors’ pensions
Most UK employees, including executive directors, are eligible to join pension schemes operated within the group.
Mr Perkins was a member of The Linton Park Group Pension Scheme up until 28 February 2010. Mr Field and
Mr Mathur were members of the Linton Park Pension Scheme 2011 until 5 April 2012. This Pension Scheme was
formerly the Unochrome Group Pension Scheme and was merged with the Linton Park Pension Scheme and the
Lawrie Group Pension Scheme on 1 July 2011. Under The Linton Park Group Pension Scheme the normal
retirement age was 63 up until 31 December 2003 in respect of service up until that date. With effect from
1 January 2004 the normal retirement age was increased to 65.
From 1 May 2007 the normal retirement age of members of The Lawrie Group Pension Scheme was increased to
65. Pension benefits accrued prior to that date can be paid at age 63 without actuarial reduction. In a few cases
pensions can be paid from age 60 without actuarial reduction. The Linton Park Pension Scheme (2011) provides
for a lump sum death in service benefit of four times basic salary and a spouse’s pension of half of the member’s
pension, based on prospective service.
All benefits are subject to HM Revenue and Customs limits. Up until 6 April 2005, under The Linton Park Group
Pension Scheme, post retirement pension increases were based on the annual increase in the retail price index,
subject to a maximum of 5 per cent. From 6 April 2005, the maximum increase reduced to 2.5 per cent. per
annum in respect of pension accrued on or after that date. Also, under The Linton Park Group Pension Scheme
there is a minimum increase of 3 per cent. per annum in respect of service before 1 January 2002. Under The
Lawrie Group Pension Scheme for entrants prior to 1 January 1996, pension earned prior to April 2003 is subject
to a 5 per cent. increase per annum. From 1 May 2007, the maximum increase reduced to 2.5 per cent. in respect
of pension accrual on or after that date.
21
Camellia Plc
Remuneration report
Accrual for pension for Messrs Perkins, Field and Mathur has ceased and there was no pensionable service for these
directors during 2014.
Mr Franks receives an excess non-pensionable salary supplement equivalent to 10 per cent. of base salary.
Mr Mclean and Mrs Walker are members of the Linton Park Group Personal Pension Scheme. An excess
non-pensionable salary supplement equivalent to 25 per cent. of base salary is also paid to Mr Ames.
In addition to the above, an unfunded pension of US$200,000 per annum is paid to Mr G Fox, a former director
of the company.
Performance Review
The following graph shows the total return on an investment in the company’s shares over the 5 years ended
31 December 2014 compared with the return achieved by the FTSE AIM 100 Index. This index has been selected
as there is no specific index that is comparable to the activities of the company.
CAMELLIA - TOT RETURN IND
FTSE AIM 100 - TOT RETURN IND
170
160
150
140
130
120
110
100
90
80
2010
2011
2012
2013
2014
2015
By order of the board
J A Morton
Secretary
23 April 2015
22
Consolidated income statement
for the year ended 31 December 2014
Revenue
Cost of sales
Gross profit
Other operating income
Distribution costs
Administrative expenses
Trading profit
Share of associates' results
Impairment of available-for-sale financial assets
Impairment of property, plant and equipment and provisions
Profit on disposal of non-current assets
Profit on disposal of available-for-sale investments
Gain arising from changes in fair value of biological assets:
Excluding Malawi Kwacha exceptional gain
Malawi Kwacha gain
Profit from operations
Investment income
Finance income
Finance costs
Net exchange gain
Employee benefit expense
Net finance income
Profit before tax
Comprising
– headline profit before tax
– exceptional items, gain arising from changes in fair value
of biological assets and other financing gains and losses
Taxation
Profit for the year
Profit attributable to:
Owners of the parent
Non-controlling interests
Notes
2014
£’000
2013
£’000
2
3
5
6
7
8
18
9
9
9
9
9
4
4
10
238,868
(163,728)
–––––––––––
75,140
2,179
(12,700)
(53,507)
–––––––––––
11,112
1,092
(2,334)
(1,134)
–
447
7,842
978
8,820
–––––––––––
18,003
2,161
2,864
(608)
607
(1,044)
1,819
–––––––––––
21,983
251,267
(162,665)
–––––––––––
88,602
2,129
(12,264)
(47,284)
–––––––––––
31,183
980
–
–
542
1,349
10,061
11,032
21,093
–––––––––––
55,147
2,417
3,417
(878)
1,031
(1,486)
2,084
–––––––––––
59,648
17,228
38,150
4,755
–––––––––––
21,983
(13,673)
–––––––––––
8,310
–––––––––––
21,498
–––––––––––
59,648
(22,105)
–––––––––––
37,543
–––––––––––
2,836
5,474
–––––––––––
8,310
–––––––––––
28,297
9,246
–––––––––––
37,543
–––––––––––
Earnings per share – basic and diluted
13
102.7p
1,020.2p
23
Camellia Plc
Statement of comprehensive income
for the year ended 31 December 2014
Group
Profit for the year
Other comprehensive (expense)/income:
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of post employment benefit obligations
Deferred tax movement in relation to post employment benefit obligations
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences
Available-for-sale investments:
Valuation gains taken to equity
Transferred to income statement on sale
Tax relating to components of other comprehensive income
Other comprehensive expense for the year, net of tax
Total comprehensive (expense)/income for the year
Total comprehensive (expense)/income attributable to:
Owners of the parent
Non-controlling interests
Company
Profit for the year
Total comprehensive income for the year
Notes
2014
£’000
2013
£’000
8,310
–––––––––––
37,543
–––––––––––
32
31
22
22
(20,341)
698
–––––––––––
(19,643)
–––––––––––
11,611
14
–––––––––––
11,625
–––––––––––
7,533
(23,888)
2,822
(364)
72
–––––––––––
10,063
–––––––––––
(9,580)
–––––––––––
(1,270)
–––––––––––
3,367
(873)
(142)
–––––––––––
(21,536)
–––––––––––
(9,911)
–––––––––––
27,632
–––––––––––
(6,801)
5,531
–––––––––––
(1,270)
–––––––––––
23,143
4,489
–––––––––––
27,632
–––––––––––
3,610
–––––––––––
3,610
–––––––––––
4,411
–––––––––––
4,411
–––––––––––
24
Consolidated balance sheet
at 31 December 2014
Non-current assets
Intangible assets
Property, plant and equipment
Biological assets
Prepaid operating leases
Investments in associates
Deferred tax assets
Available-for-sale financial assets
Other investments
Retirement benefit surplus
Trade and other receivables
Total non-current assets
Current assets
Inventories
Trade and other receivables
Held-to-maturity financial assets
Current income tax assets
Cash and cash equivalents
Total current assets
Current liabilities
Borrowings
Trade and other payables
Current income tax liabilities
Employee benefit obligations
Provisions
Total current liabilities
Net current assets
Total assets less current liabilities
Non-current liabilities
Borrowings
Trade and other payables
Deferred tax liabilities
Employee benefit obligations
Other non-current liabilities
Provisions
Total non-current liabilities
Net assets
Equity
Called up share capital
Share premium
Reserves
Equity attributable to owners of the parent
Non-controlling interests
Total equity
Notes
2014
£’000
2013
£’000
16
17
18
19
21
31
22
24
32
26
25
26
23
27
29
28
32
30
29
28
31
32
30
33
7,072
104,923
139,999
900
8,664
184
63,488
8,864
805
23,303
–––––––––––
358,202
–––––––––––
41,841
63,292
–
548
257,164
–––––––––––
362,845
–––––––––––
(2,855)
(258,292)
(5,609)
(527)
(636)
–––––––––––
(267,919)
–––––––––––
94,926
–––––––––––
453,128
–––––––––––
(42)
(5,130)
(41,618)
(41,885)
(98)
–
–––––––––––
(88,773)
–––––––––––
364,355
–––––––––––
282
15,298
306,124
–––––––––––
321,704
42,651
–––––––––––
364,355
–––––––––––
7,349
95,840
127,215
890
7,343
212
60,001
8,745
653
4,113
–––––––––––
312,361
–––––––––––
38,820
69,754
1,000
433
289,623
–––––––––––
399,630
–––––––––––
(3,051)
(265,117)
(5,965)
(448)
(360)
–––––––––––
(274,941)
–––––––––––
124,689
–––––––––––
437,050
–––––––––––
(78)
(2,451)
(39,318)
(21,546)
(103)
(300)
–––––––––––
(63,796)
–––––––––––
373,254
–––––––––––
283
15,298
316,885
–––––––––––
332,466
40,788
–––––––––––
373,254
–––––––––––
25
Camellia Plc
Company balance sheet
at 31 December 2014
Non-current assets
Investments in subsidiaries
Available-for-sale financial assets
Other investments
Total non-current assets
Current assets
Amounts due from group undertakings
Current income tax asset
Total current assets
Current liabilities
Trade and other payables
Amounts due to group undertakings
Total current liabilities
Net current liabilities
Total assets less current liabilities
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Net assets
Equity
Called up share capital
Share premium
Reserves
Total equity
Notes
20
22
24
28
31
33
2014
£’000
2013
£’000
73,508
170
8,869
–––––––––––
82,547
–––––––––––
4,885
74
–––––––––––
4,959
–––––––––––
(134)
(21,483)
–––––––––––
(21,617)
–––––––––––
(16,658)
–––––––––––
65,889
–––––––––––
(240)
–––––––––––
(240)
–––––––––––
65,649
–––––––––––
282
15,298
50,069
–––––––––––
65,649
–––––––––––
73,508
170
8,750
–––––––––––
82,428
–––––––––––
1,512
74
–––––––––––
1,586
–––––––––––
(138)
(17,578)
–––––––––––
(17,716)
–––––––––––
(16,130)
–––––––––––
66,298
–––––––––––
(258)
–––––––––––
(258)
–––––––––––
66,040
–––––––––––
283
15,298
50,459
–––––––––––
66,040
–––––––––––
The notes on pages 30 to 83 form part of the financial statements.
The financial statements were approved on 23 April 2015 by the board of directors and signed on their behalf by:
M C Perkins
Chairman
Registered Number 29559
26
Consolidated cash flow statement
for the year ended 31 December 2014
Cash generated from operations
Cash flows from operating activities
Interest paid
Income taxes paid
Interest received
Dividends received from associates
Net cash flow from operating activities
Cash flows from investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Insurance proceeds for non-current assets
Proceeds from sale of non-current assets
Biological asset – new planting
Part disposal of subsidiaries
Non-controlling interest subscription
Purchase of own shares
Proceeds from sale of investments
Purchase of investments
Income from investments
Net cash flow from investing activities
Cash flows from financing activities
Equity dividends paid
Dividends paid to non-controlling interests
New loans
Loans repaid
Finance lease payments
Net cash flow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gains/(losses) on cash
Cash and cash equivalents at end of year
Notes
34
2014
£’000
2013
£’000
17,080
(655)
(11,595)
2,871
244
–––––––––––
7,945
–––––––––––
34,247
(1,189)
(12,653)
3,393
203
–––––––––––
24,001
–––––––––––
(66)
(19,019)
–
264
(5,072)
251
88
(471)
1,940
(434)
2,161
–––––––––––
(20,358)
–––––––––––
(3,452)
(3,990)
157
(202)
(15)
–––––––––––
(7,502)
–––––––––––
(19,915)
27
27
72,900
1,137
–––––––––––
54,122
–––––––––––
(399)
(17,290)
542
577
(4,817)
76
21
(1,107)
9,583
(14,032)
2,417
–––––––––––
(24,429)
–––––––––––
(3,388)
(3,480)
78
(56)
(38)
–––––––––––
(6,884)
–––––––––––
(7,312)
81,373
(1,161)
–––––––––––
72,900
–––––––––––
For the purposes of the cash flow statement, cash and cash equivalents are included net of overdrafts repayable on demand.
These overdrafts are excluded from the definition of cash and cash equivalents disclosed on the balance sheet.
Cash and cash equivalents held by the group’s banking subsidiaries are excluded.
27
Camellia Plc
Company cash flow statement
for the year ended 31 December 2014
Cash generated from operations
Profit before tax
Adjustments for:
Loss on disposal of investments
Interest income
Exchange gain on cash
Dividends from group companies
Decrease in trade and other receivables
Decrease in trade and other payables
Net movement in intra-group balances
Cash used in operations
Interest received
Net cash flow from operating activities
Cash flows from investing activities
Proceeds from sale of investments
Purchase of investments
Purchase of own shares
Dividends received
Net cash flow from investing activities
Cash flows from financing activities
Equity dividends paid
Net cash flow from financing activities
Net movement in cash and cash equivalents
Cash and cash equivalents at beginning of year
Exchange gain on cash
Cash and cash equivalents at end of year
28
Notes
2014
£’000
3,592
2013
£’000
4,389
2
(308)
–
(5,000)
–
(4)
532
–––––––––––
(1,186)
308
–––––––––––
(878)
–––––––––––
–
(365)
(193)
(6,000)
16
(22)
(9,123)
–––––––––––
(11,298)
365
–––––––––––
(10,933)
–––––––––––
5
(126)
(471)
5,000
–––––––––––
4,408
–––––––––––
10
(157)
(1,107)
6,000
–––––––––––
4,746
–––––––––––
(3,530)
–––––––––––
(3,530)
–––––––––––
–
(3,464)
–––––––––––
(3,464)
–––––––––––
(9,651)
27
27
–
–
–––––––––––
–
–––––––––––
9,458
193
–––––––––––
–
–––––––––––
Statement of changes in equity
for the year ended 31 December 2014
Group
At 1 January 2013
Total comprehensive income/(expense) for
the year
Dividends
Non-controlling interest subscription
Purchase of own shares
At 31 December 2013
Total comprehensive (expense)/income for
the year
Dividends
Non-controlling interest subscription
Purchase of own shares
At 31 December 2014
Company
At 1 January 2013
Total comprehensive income for the year
Dividends
Purchase of own shares
At 31 December 2013
Total comprehensive income for the year
Dividends
Purchase of own shares
At 31 December 2014
Share
capital premium
£’000
£’000
Share Treasury Retained
earnings
shares
£’000
£’000
Other
reserves
£’000
Non-
controlling
interests
£’000
Total
£’000
Total
equity
£’000
284
15,298
(400) 288,362
10,266 313,810
39,691 353,501
–
–
–
(1)
27,632
(6,868)
96
(1,107)
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
40,788 373,254
(16,662)
–
–
1
39,805
(3,388)
8
(1,107)
23,143
(3,388)
8
(1,107)
4,489
(3,480)
88
–
(6,395) 332,466
(400) 323,680
15,298
–
–
–
–
–
–
–
–
283
–
–
–
–
–
–
–
(1)
(1,270)
(7,442)
284
(471)
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
42,651 364,355
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
(16,458)
(3,452)
(38)
(471)
(6,801)
(3,452)
(38)
(471)
5,531
(3,990)
322
–
9,657
–
–
1
3,263 321,704
(400) 303,261
15,298
–
–
–
–
282
–
–
–
–
284
–
–
(1)
12,132
–
–
1
15,298
–
–
–
66,200
4,411
(3,464)
(1,107)
38,486
4,411
(3,464)
(1,107)
66,200
4,411
(3,464)
(1,107)
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
66,040
3,610
(3,530)
(471)
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
65,649
––––––– ––––––– ––––––– ––––––– ––––––– ––––––– ––––––– –––––––
38,326
3,610
(3,530)
(471)
66,040
3,610
(3,530)
(471)
15,298
–
–
–
12,133
–
–
1
283
–
–
(1)
15,298
65,649
37,935
12,134
–
–
–
–
–
–
–
–
–
–
–
–
282
–
–
Other reserves of the group and company includes a £33,000 (2013: £32,000) capital redemption reserve and, in respect of the
group, net exchange differences of £39,021,000 deficit (2013: £46,182,000 deficit).
Group retained earnings includes £143,122,000 (2013: £137,268,000) which would require exchange control permission for
remittance as dividends.
29
Camellia Plc
Accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have
been consistently applied to all years presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU, IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared on the historical cost basis as modified by the revaluation of
biological assets, available-for-sale investments, financial assets and financial liabilities.
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year.
Going concern
The directors have, at the time of approving the financial statements, a reasonable expectation that the company and the group
have adequate resources to continue to operate for the foreseeable future. They therefore continue to adopt the going concern
basis of accounting in preparing the financial statements.
Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial statements of the company and entities controlled by the
company (its subsidiaries) made up to 31 December each year.
On acquisition, the assets and liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the
cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income
statement in the period of acquisition. The group recognises any non-controlling interest in the acquiree on an acquisition-by-
acquisition basis, at the non-controlling interest's proportionate share of the recognised amounts of acquiree's identifiable net assets.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the
effective date of acquisition or disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line
with those used by the group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Associates
An associate is an entity over which the group is in a position to exercise significant influence, but not control or joint control,
through participation in the financial and operating policy decisions of that entity.
Investments in associates are accounted for by the equity method of accounting. Under this method the group's share of the
post-acquisition profits or losses of associates is recognised in the income statement and its share of post-acquisition movements
in reserves is recognised in reserves.
Foreign currency translation
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date. Translation differences on non-monetary items carried at fair value
are reported as part of the fair value gain or loss. Gains and losses arising on retranslation are included in the income statement,
except for exchange differences arising on non-monetary items where the changes in fair value are recognised directly in equity.
The consolidated financial statements are presented in sterling which is the company's functional and presentation currency.
On consolidation, income statements and cash flows of foreign entities are translated into pounds sterling at average exchange
rates for the year and their balance sheets are translated at the exchange rates ruling at the balance sheet date. Exchange
differences arising from the translation of the net investment in foreign entities and of borrowings designated as hedges of such
investments, are taken to equity. When a foreign entity is sold such exchange differences arising since 1 January 2004 are
recognised in the income statement as part of the gain or loss on disposal.
30
Accounting policies
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 exchange rate ruling on the date of acquisition. The group has elected to treat goodwill and
fair value adjustments arising on acquisitions prior to 1 January 2004, the date of the group's transition from UK GAAP to
IFRS, as sterling denominated assets and liabilities.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods
and services provided in the normal course of business, net of discounts, value added tax and other sales related taxes and after
eliminating intra-group sales.
Revenue from the sale of goods is recognised when all the following conditions are satisfied:
(i)
the group has transferred to the buyer the significant risks and rewards of ownership of the goods:
(ii)
the group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective
control over the goods sold;
(iii) the amount of revenue can be measured reliably;
(iv) it is probable that the economic benefits associated with the transaction will flow to the entity; and
(v) the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Invoices are raised when goods are despatched or when the risks and rewards of ownership otherwise irrevocably pass to
the customer.
In respect of food storage and distribution services, revenue for handling is recognised at the point that the goods are
actually handled.
In respect of engineering services, revenue is recognised based upon the stage of completion and includes costs incurred to date,
plus accrued profits.
In respect of banking and financial services, fees and commissions are generally recognised on an accrual basis when the service
has been provided.
Investment income
Investment income is recognised when the right to receive payment of a dividend is established.
Segmental reporting
The adoption of IFRS 8 requires operating segments to be identified on the basis of internal reports used to assess performance
and allocate resources by the chief operating decision maker. The chief operating decision maker has been identified as the
Executive Committee led by the Chairman. Inter segment sales are not significant.
Exceptional items
Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to enable a full
understanding of the group's financial performance. Full disclosure of exceptional items are set out in notes 6, 7 and 8.
Intangible assets
(i) Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the group's interest in the fair value of
the identifiable assets, liabilities and contingent liabilities of a subsidiary or associate at the date of acquisition.
Goodwill is recognised as an asset and reviewed for impairment at least annually or more frequently if events or changes in
circumstances indicate a potential impairment. Any impairment is recognised immediately in the income statement and is not
subsequently reversed.
On disposal of a subsidiary or associate, the attributable amount of goodwill is included in the determination of the profit or
loss on disposal.
31
Camellia Plc
Accounting policies
(ii) Identifiable intangible assets
Identifiable intangible assets include customer relationships and other intangible assets acquired on the acquisition of
subsidiaries. Acquired intangible assets with finite lives are initially recognised at cost and amortised on a straight-line basis over
their estimated useful lives, not exceeding 20 years. Intangible assets' estimated lives are re-evaluated annually and an
impairment test is carried out if certain indicators of impairment exist.
(iii) Computer software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. Computer software licences are held at cost and are amortised on a straight-line basis over 3 to 7 years.
Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.
Costs that are directly associated with identifiable and unique software products controlled by the group and which are
expected to generate economic benefits exceeding costs beyond one year, are recognised as an intangible asset and amortised
over their estimated useful lives.
Property, plant and equipment
Land and buildings comprises mainly factories and offices. All property, plant and equipment is shown at cost less subsequent
depreciation and impairment, except for land, which is shown at cost less impairment. Cost includes expenditure that is
directly attributable to the acquisition of these assets.
On transition to IFRS, the group followed the transitional provisions and elected that previous UK GAAP revaluations be
treated as deemed cost.
Subsequent costs are included in the assets' carrying amount, only when it is probable that future economic benefits associated
with the item will flow to the group and the cost of the item can be measured reliably. Repairs and maintenance are charged to
the income statement during the financial period in which they are incurred.
No depreciation is provided on freehold land. Depreciation of other property, plant and equipment is calculated to write off
their cost less residual value over their expected useful lives.
The rates of depreciation used for the other assets are as follows:-
Freehold and long leasehold buildings
Other short leasehold land and buildings
Plant, machinery, fixtures, fittings and equipment
nil to 10 per cent. per annum
unexpired term of the lease
4 to 33 per cent. per annum
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets, or, where
shorter, over the term of the relevant lease.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and
the carrying amount of the asset and is included in the income statement.
Biological assets
Biological assets are measured at each balance sheet date at fair value. Any changes in fair value are recognised in the income
statement in the year in which they arise. The basis under which fair value is determined for the group’s biological assets are
described below:
Tea and rubber are generally valued at each year end by independent professional valuers. The valuations take into account
assumptions about expected life span of plantings, yields, selling prices and sales of similar assets.
Costs of new areas planted are included as “new planting additions” in the biological assets note. Growing costs for tea and
rubber are accounted for as a cost of inventory in the year in which they are incurred. The group does not recognise the fair
value of harvested green leaf within cost of sales in the income statement. The increase in value is in effect offset against the fair
value movement in biological assets.
32
Accounting policies
Annually harvested horticultural assets such as edible nuts, citrus and avocados are generally valued on the basis of net present
values of expected future cash flows from those assets, discounted at appropriate pre-tax rates and including certain assumptions
about expected life span of the plantings, yields, selling prices, costs and discount rates. Growing costs incurred during the year
are treated as “capitalised cultivation costs” in biological assets. As the crop is harvested and sold these accumulated costs are
shown as “decrease due to harvesting” in biological assets and charged to cost of sales in the income statement.
Timber is valued on the basis of expected future cash flows from scheduled harvesting dates, discounted at appropriate pre-tax
rates and including certain assumptions about expected life span, yields, selling prices, costs and discount rates. Growing costs
incurred during the year are treated as “new planting additions” in biological assets. As the trees are harvested the value
accumulated to date of harvest is treated as “decrease due to harvesting” and charged to cost of sales in the income statement.
Agricultural crops such as soya and maize are valued at estimated selling price less future anticipated costs. Growing costs
incurred during the year are treated as “capitalised cultivation costs” in biological assets. As the crops are harvested the value
accumulated to date of harvest is treated as “decrease due to harvesting” and charged to cost of sales in the income statement.
Financial assets
The group classifies its financial assets in the following categories: loans and receivables, available-for-sale and held-to-maturity.
The classification depends on the purpose for which the financial assets were acquired. Management determines the
classification of its financial assets at initial recognition.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period.
These are classified as non-current assets. The group’s loans and receivables comprise ‘trade and other receivables’ and ‘cash and
cash equivalents’ in the balance sheet.
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless the investment matures or management intends to dispose of it
within 12 months of the end of the reporting period.
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that
the group’s management has the positive intention and ability to hold to maturity. Were the group to sell other than an
insignificant amount of held-to-maturity assets, the entire category would be tainted and reclassified as available-for-sale.
Regular purchases and sales of financial assets are recognised on the trade-date, the date on which the group commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets. Financial
assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the
group has transferred substantially all risks and rewards of ownership.
Available-for-sale financial assets are subsequently carried at fair value. Available-for-sale financial assets include shares of listed
and unlisted companies. The fair values of listed shares are based on current bid values. Shares in unlisted companies are
measured at cost as fair value cannot be reliably measured.
Changes in the fair value of monetary and non-monetary securities classified as available-for-sale are recognised in other
comprehensive income. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments
recognised in equity are included in the income statement as ‘Profit/(loss) on disposal of available-for-sale investments’.
Dividends on available-for-sale equity instruments are recognised in the income statement as part of investment income when
the group’s right to receive payments is established.
Loans and receivables and held to maturity investments are subsequently carried at amortised cost using the effective
interest method.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable
right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the
liability simultaneously.
33
Camellia Plc
Accounting policies
Other investments
Other investments comprise documents, manuscripts and philately which are measured at cost as fair value cannot be
reliably measured.
Investments in subsidiary companies
Investments in subsidiary companies are included at cost plus incidental expenses less any provision for impairment.
Impairment reviews are performed by the directors when there has been an indication of potential impairment.
Impairment of financial assets
(i) Assets carried at amortised cost
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of
financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if
there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset
(a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of
financial assets that can be reliably estimated.
For the loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount
and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at
the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is
recognised in the consolidated income statement.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the
previously recognised impairment loss is recognised in the consolidated income statement.
(ii) Assets classified as available-for-sale
In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the
security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial
assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognised in profit or loss is removed from equity and recognised in profit or
loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the
consolidated income statement. If, in a subsequent period, the fair value of a debt instrument classified as available-for-sale
increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or
loss, the impairment loss is reversed through the consolidated income statement.
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment and whenever
events or changes in circumstance indicate that the carrying amount may not be recoverable. Assets that are subject to
amortisation are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the amount by which the assets' carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an assets' fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash-generating units).
Leases
Leases of property, plant and equipment where the group has substantially all the risks and rewards of ownership are classified
as finance leases. Finance leases are capitalised at the inception of the lease at the lower of fair value and the estimated present
value of the underlying lease payments. Each lease payment is allocated between the liability and finance charges so as to
achieve a constant rate of interest on the finance balance outstanding. The corresponding rental obligations, net of finance
charges, are included in liabilities. The interest element of the finance cost is charged to the income statement over the lease
period. Property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset's useful life and
the lease term.
34
Accounting policies
Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases are charged to the income statement on a straight-line basis over the period of the lease.
Inventories
Agricultural produce included within inventory largely comprises stock of ‘black’ tea. This is valued at the lower of cost and net
realisable value. Cost includes the growing costs of ‘green leaf ’ up to the date of harvest and factory costs incurred to bring the
tea to its manufactured state.
In accordance with IAS 41, on initial recognition, agricultural produce is required to be measured at fair value less estimated
point of sale costs. Given that there is no open market for green leaf, this is recognised in inventory at the lower of cost or net
realisable value.
Other inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and
condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less
all estimated costs of completion and selling expenses.
Trade and other receivables
Trade receivables are carried at original invoice amount less provision made for impairment of these receivables. A provision for
impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all
amounts due according to the original terms. The amount of the provision is recognised in the income statement.
Amounts due from customers of banking subsidiaries consist of loans and receivables which are non-derivative financial assets
with fixed or determinable payments that are not quoted in an active market. They arise when the bank provides money, goods
or services directly to a customer with no intention of trading the receivable and are carried at amortised cost using the effective
interest method.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities on the balance sheet. In respect of the group's banking operation, cash and cash equivalents include cash and
non-restricted balances with central banks, treasury bills and other eligible bills, loans and advances to banks, amounts due
from other banks and short-term government securities.
Non-current assets held for sale
Non-current assets classified as held for sale are measured at the lower of the carrying amount and fair value less costs to sell.
Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than
through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for
immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for
recognition as a completed sale within one year from the date of classification.
Trade payables
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings
Interest-bearing bank loans and overdrafts are initially recorded at the proceeds received, net of direct issue costs. Finance
charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accrual basis
to the income statement using the effective interest method and are added to the carrying amount of the instrument to the
extent that they are not settled in the period in which they arise.
35
Camellia Plc
Accounting policies
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income
statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes
items that are never taxable or deductible. The group liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for
using the liability method. Deferred tax is not accounted for if it arises from initial recognition of an asset or liability in a
transaction, other than in a business combination, that at the time of the transaction affects neither accounting nor taxable
profit or loss. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the related tax asset is realised or the tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is
an intention to settle the balances on a net basis.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing
of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not
reverse in the foreseeable future.
Employee benefits
(i) Pension obligations
Group companies operate various pension schemes. The schemes are funded through payments to insurance companies or
trustee-administered funds. The group has both defined benefit and defined contribution plans.
A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate fund. The group
has no legal or constructive obligations to pay further contributions to the fund. Contributions are recognised as an expense in
the income statement when they are due.
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on
retirement, usually dependent on one or more factors such as age, years of service and compensation. The pension cost for
defined benefit schemes is assessed in accordance with the advice of qualified independent actuaries using the "projected unit"
funding method.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the balance sheet date less the fair value of plan assets. Independent actuaries calculate the obligation
annually using the "projected unit" funding method. Actuarial gains and losses arising from experience adjustments and
changes in actuarial adjustments are recognised in full in the period in which they occur, they are not recognised in the income
statement and are presented in the statement of comprehensive income.
Past service costs are recognised directly in the income statement.
(ii) Other post-employment benefit obligations
Some group companies have unfunded obligations to pay terminal gratuities to employees. Provisions are made for the
estimated liability for gratuities as a result of services rendered by employees up to the balance sheet date and any movement in
the provision is recognised in the income statement.
The estimated monetary liability for employees' accrued annual leave entitlement at the balance sheet date is recognised as
an accrual.
36
Accounting policies
Provisions
Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event, it is probable
that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.
The provision for onerous lease commitments is based on the expected vacancy period.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
Where any group company purchases the company’s equity share capital (treasury shares), the consideration paid, including
any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the company’s equity
holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net
of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to
the company’s equity holders.
Dividend distribution
Dividend distribution to the company’s shareholders is recognised as a liability in the group’s financial statements in the period
in which the dividends are approved by the company’s shareholders. Interim dividends are recognised when paid.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
The group makes estimates and assumptions concerning the future. The resulting accounting will, by definition, seldom equal
the actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are set out below.
(i) Impairment of assets
The group has significant investments in intangible assets, property, plant and equipment, biological assets, associated
companies and other investments. These assets are tested for impairment when circumstances indicate there may be a potential
impairment. Factors considered which could trigger an impairment review include the significant fall in market values,
significant underperformance relative to historical or projected future operating results, a major change in market conditions or
negative cash flows.
(ii) Depreciation and amortisation
Depreciation and amortisation is based on management estimates of the future useful life of property, plant and equipment and
intangible assets. Estimates may change due to technological developments, competition, changes in market conditions and
other factors and may result in changes in the estimated useful life and in the depreciation and amortisation charges.
(iii) Biological assets
Biological assets are carried at fair value less estimated point-of-sale costs. Where meaningful market-determined prices do not
exist to assess the fair value of biological assets, the fair value has been determined based on the net present value of expected
future cash flows from those assets, discounted at appropriate pre-tax rates. In determining the fair value of biological assets
where the discounting of expected future cash flows has been used, the directors have made certain assumptions about expected
life-span of the plantings, yields, selling prices, costs and discount rates.
(iv) Retirement benefit obligations
Pension accounting requires certain assumptions to be made in order to value obligations and to determine the impact on the
income statement. These figures are particularly sensitive to assumptions for discount rates, mortality, inflation rates and
expected long-term rates of return on assets. Details of assumptions made are given in note 32.
37
Camellia Plc
Accounting policies
(v) Taxation
The group is subject to taxes in numerous jurisdictions. Significant judgement is required in determining worldwide provisions
for taxes. There are many transactions and calculations during the ordinary course of business for which the ultimate tax
determination is uncertain.
(vi) Identifiable intangible assets – customer relationships
As described in note 16, goodwill and identifiable intangible assets relating to customer relationships acquired are valued using
industry average multiples of assets under management, with the assumption being made that the nature of the group’s assets
under management are not dissimilar from industry averages and therefore will be valued in a similar manner. The valuation
technique used is therefore sensitive to this assumption.
(vii) Investment in BF&M Limited
In 2013, the group re-evaluated its relationship with BF&M Limited. Although the group’s holding is in excess of 20 per cent.,
the directors concluded, and remain of the opinion, that the group is no longer able to exercise significant influence due to the
cumulative result of, inter alia, the composition of the board of BF&M and the inability of the group to be a party to
important strategic decisions concerning the operations and development of BF&M. Accordingly the group’s holding in
BF&M continues to be accounted for as an available-for-sale financial asset.
38
Accounting policies
Changes in accounting policy and disclosures
(i) New and amended standards adopted by the group
The group has adopted the following new and amended IFRSs as of 1 January 2014:
IFRS 10
Consolidated financial statements – effective from 1 January 2013
This standard builds on existing principles by identifying the concept of control as the
determining factor in which an entity should be included within the consolidated financial
statements. The standard provides additional guidance to assist in determining control where
this is difficult to assess. This standard has been endorsed by the EU with an effective date of
1 January 2014.
IFRS 12
Disclosures of interests in other entities – effective from 1 January 2013
This standard includes the disclosure requirements for all forms of interests in other entities,
including joint arrangements, associates, structured entities and other off balance sheet
vehicles. This standard has been endorsed by the EU with an effective date of 1 January 2014.
IAS 27 (revised 2011)
Separate financial statements – effective from 1 January 2013
This revision includes the requirements relating to separate financial statements. This revised
standard has been endorsed by the EU with an effective date of 1 January 2014.
(ii) Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted
early by the group
The following standards and amendments to existing standards have been published and are mandatory for the group’s
accounting periods beginning on or after 1 January 2015 or later periods, but the group has not adopted them early:
IAS 16 and IAS 41
(amendments)
Reporting for bearer plants – effective from 1 January 2016
These amendments change the reporting for bearer plants, such as tea bushes, macadamia and
rubber trees. Bearer plants should be accounted for under IAS 16 in the same way as property,
plant and equipment because their operation is similar to that of manufacturing. The produce
on bearer plants will remain in the scope of IAS 41. This standard has been not yet been
endorsed by the EU. Once endorsed early adoption is permitted and will have a material
impact on the results of the group, the effect of which is currently being assessed.
Annual improvements
2014
These annual improvements amend standards from the 2010-2012 reporting cycle and
include changes to:
– IFRS 5, ‘Non-current assets held for sale and discontinued operations’ regarding methods of
disposal.
– IAS 19, ‘Employee benefits’ regarding discount rates.
– IAS 34, ‘Interim financial reporting’ regarding disclosure of information.
The amendments are effective from 1 July 2016 but have not yet been endorsed by the EU.
They are not expected to have a material impact on the group.
39
Camellia Plc
Notes to the accounts
1
Business and geographical segments
The principal activities of the group are as follows:
Agriculture and horticulture
Engineering
Food storage and distribution
Banking and financial services
For management reporting purposes these activities form the basis on which the group reports its primary divisions.
Segment information about these businesses is presented below:
Agriculture and
horticulture
2014
£’000
2013
£’000
Engineering
2014
£’000
2013
£’000
Food storage
and distribution
2014
£’000
2013
£’000
Banking and
financial services Other operations
2013
£’000
2014
£’000
2014
£’000
2013
£’000
Consolidated
2014
£’000
2013
£’000
164,247 175,116
2,211 238,868 251,267
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
12,373 13,568
30,941 30,785
28,872 29,587
2,435
27,204 41,383
179
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
(5,599)
(2,496)
(8,387)
943
131
772
121
1,092
980
17,395 36,856
(6,283)
(5,673)
–––––– ––––––
11,112 31,183
980
1,092
(2,334)
(1,134)
–
–
–
542
447
1,349
8,820 21,093
2,417
2,161
2,084
1,819
–––––– ––––––
21,983 59,648
(13,673)
(22,105)
–––––– ––––––
8,310 37,543
–––––– ––––––
Revenue
External sales
Trading profit
Segment profit/(loss)
Unallocated corporate expenses*
Trading profit
Share of associates’ results
Impairment of available-for-sale
financial assets
Impairment of property, plant
and equipment and
provisions
Profit on disposal of
non-current assets
Profit on disposal of available-
for-sale investments
Gain arising from changes in
Investment income
Net finance income
Profit before tax
Taxation
Profit after tax
Other information
Segment assets
Investments in associates
Unallocated assets
Consolidated total assets
Segment liabilities
Unallocated liabilities
Consolidated total liabilities
fair value of biological assets
8,820 21,093
290,876 272,381
30,907 31,843
23,004 23,138 254,503 262,666
7,343
8,664
4,704
(31,719)
(29,400)
(12,107)
(11,861)
(5,814)
(5,546) (217,449) (223,621)
(1,110)
5,865 603,994 595,893
7,343
8,664
108,389 108,755
–––––– ––––––
721,047 711,991
–––––– ––––––
(1,172) (268,199) (271,600)
(88,493)
(67,137)
–––––– ––––––
(356,692) (338,737)
–––––– ––––––
2,435
(1,811)
3,015
(1,835)
(5)
2,734
(2,229)
(83)
2,213
(2,033)
(2)
(824)
8,492 10,955
(4,909)
(4,876)
(35)
(10)
Capital expenditure
Depreciation
Amortisation
Impairments
Segment assets consist primarily of intangible assets, property, plant and equipment, biological assets, prepaid operating
leases, inventories, trade and other receivables and cash and cash equivalents. Receivables for tax have been excluded.
Investments in associates, valued using the equity method, have been shown separately in the segment information.
Segment liabilities are primarily those relating to the operating activities and generally exclude liabilities for taxes, short-
term loans, finance leases and non-current liabilities.
*Unallocated corporate expenses include group marketing expenses of £nil (2013:£881,000) incurred of behalf of banking
and financial services and agriculture and horticulture segments.
19,019 17,290
(9,067)
(9,659)
(460)
(506)
(22)
(3,184)
589
(345)
(420)
193
(354)
(411)
5,387
(167)
296
(167)
(2,360)
(22)
40
Notes to the accounts
1 Business and geographical segments (continued)
Geographical segments
The group operations are based in nine main geographical areas. The United Kingdom is the home country of the parent.
The principal geographical areas in which the group operates are as follows:
United Kingdom
Continental Europe
Bangladesh
India
Kenya
Malawi
North America and Bermuda
South Africa
South America
The following table provides an analysis of the group’s sales by geographical market, irrespective of the origin of the
goods/services:
United Kingdom
Continental Europe
Bangladesh
India
Kenya
Malawi
North America and Bermuda
South Africa
South America
Other
2014
£’000
2013
£’000
67,478
21,396
16,645
58,828
25,933
6,092
11,475
1,168
5,125
24,728
––––––––––
238,868
––––––––––
71,320
27,548
21,437
62,078
24,329
6,107
11,448
621
5,093
21,286
––––––––––
251,267
––––––––––
The following is an analysis of the carrying amount of segment assets and additions to property, plant and equipment,
analysed by the geographical area in which the assets are located:
United Kingdom
Continental Europe
Bangladesh
India
Kenya
Malawi
North America and Bermuda
South Africa
South America
Carrying amount of
segment assets
2014
£’000
2013
£’000
Additions to property,
plant and equipment
2013
2014
£’000
£’000
304,876
5,590
52,663
79,712
66,189
62,005
11,170
10,347
11,442
––––––––––
603,994
––––––––––
315,251
5,812
50,257
71,200
69,691
53,848
8,634
9,599
11,601
––––––––––
595,893
––––––––––
10,052
412
988
2,883
1,335
1,746
670
507
426
––––––––––
19,019
––––––––––
4,539
1,662
1,474
3,574
1,508
2,526
445
259
1,303
––––––––––
17,290
––––––––––
41
Camellia Plc
Notes to the accounts
1 Business and geographical segments (continued)
Results of banking subsidiaries
Interest receivable
Interest payable
third parties
third parties
group companies
Net interest income
Fee and commission income
Fee and commission expense
Inter-segment net interest
Revenue
Other operating income
Operating expenses
Segment (loss)/profit
2
Revenue
An analysis of the group’s revenue is as follows:
Sale of goods
Distribution and warehousing revenue
Engineering services revenue
Banking service revenue
Agency commission revenue
Property rental revenue
Total group revenue
Other operating income
Investment income
Interest income
Total group income
42
2014
£’000
2013
£’000
2,415
(163)
(17)
––––––––––
2,235
10,707
(586)
17
––––––––––
12,373
211
––––––––––
12,584
(15,080)
––––––––––
(2,496)
––––––––––
3,303
(332)
(21)
––––––––––
2,950
11,067
(470)
21
––––––––––
13,568
107
––––––––––
13,675
(13,554)
––––––––––
121
––––––––––
2014
£’000
2013
£’000
165,768
30,941
28,872
12,373
644
270
––––––––––
238,868
2,179
2,161
2,864
––––––––––
246,072
––––––––––
176,561
30,785
29,587
13,568
490
276
––––––––––
251,267
2,129
2,417
3,417
––––––––––
259,230
––––––––––
Notes to the accounts
3 Trading profit
The following items have been included in arriving at trading profit:
Employment costs (note 14)
Inventories:
Cost of inventories recognised as an expense (included in cost of sales)
Cost of inventories provision recognised as an expense (included in cost of sales)
Cost of inventories provision reversed (included in cost of sales)
Business interruption income received from insurance claim
Depreciation of property, plant and equipment:
Owned assets
Under finance leases
Amortisation of intangibles (included in administrative expenses)
Impairment of available-for-sale financial assets (included in administrative expenses)
Profit on disposal of property, plant and equipment
Operating leases – lease payments:
Plant and machinery
Property
Repairs and maintenance expenditure on property, plant and equipment
Currency exchange (gains)/losses (credited)/charged to income include:
Revenue
Cost of sales
Distribution costs
Administrative expenses
Finance income
2014
£’000
2013
£’000
82,113
76,601
110,492
411
(19)
–
9,619
40
506
26
(125)
92,136
215
(59)
600
8,910
157
460
22
(250)
353
938
4,650
––––––––––
327
760
4,998
––––––––––
(652)
(16)
(173)
14
(607)
––––––––––
(1,434)
––––––––––
(803)
25
(78)
(721)
(1,031)
––––––––––
(2,608)
––––––––––
Included in the amounts above is an exchange gain of £1,879,000 (2013: £1,644,000 gain) relating to the Malawian
Kwacha.
During the year the group (including its overseas subsidiaries) obtained the following services from the company’s auditor
and its associates:
Audit services:
Statutory audit:
Parent company and consolidated financial statements
Subsidiary companies
Audit – related regulatory reporting
Tax services:
Compliance services
Advisory services
Other services not covered above
179
667
––––––––––
846
60
19
–
30
––––––––––
955
––––––––––
177
672
––––––––––
849
62
38
12
62
––––––––––
1,023
––––––––––
43
Camellia Plc
Notes to the accounts
4 Headline profit
The group seeks to present an indication of the underlying performance which is not impacted by exceptional items or
items considered non-operational in nature. This measure of profit is described as ‘headline’ and is used by management to
measure and monitor performance.
The following items have been excluded from the headline measure:
– Exceptional items, including profit and losses from disposal of non-current assets and available-for-sale investments and
impairments of non-current assets.
– Gains and losses arising from changes in fair value of biological assets, which are a non-cash item, and which the
directors believe should be excluded to give a better understanding of the group’s underlying performance.
– Financing income and expense relating to retirement benefits.
Headline profit before tax comprises:
Trading profit
Share of associates’ results
Investment income
Net finance income
Exclude
– Employee benefit expense
Headline finance income
Headline profit before tax
Non-headline items in profit before tax comprises:
Exceptional items
Impairment of available-for-sale financial assets
Impairment of property, plant and equipment
and provisions
Profit on disposal of non-current assets
Profit on disposal of available-for-sale investments
Gain arising from changes in fair value of biological assets
Employee benefit expense
Non-headline items in profit before tax
2014
£’000
£’000
11,112
1,092
2,161
2013
£’000
£’000
31,183
980
2,417
1,819
1,044
––––––––––
2,084
1,486
––––––––––
2,863
––––––––––
17,228
––––––––––
3,570
––––––––––
38,150
––––––––––
(2,334)
(1,134)
–
447
––––––––––
–
–
542
1,349
––––––––––
(3,021)
8,820
(1,044)
––––––––––
4,755
––––––––––
1,891
21,093
(1,486)
––––––––––
21,498
––––––––––
44
Notes to the accounts
5
Share of associates’ results
The group’s share of the results of associates is analysed below:
Profit before tax
Taxation
Profit after tax
2014
£’000
2013
£’000
1,814
(722)
––––––––––
1,092
––––––––––
1,643
(663)
––––––––––
980
––––––––––
6
7
Impairment of available-for sale financial assets
An impairment provision of £2,334,000 has been made against the group’s investment in Ascendant Group, a Bermudian
power company, following a significant long-term decline in the value of this investment.
Impairment of property, plant and equipment and provisions
Following the continuing losses at AKD Engineering Limited, a wholly owned subsidiary, an assessment of the impact on
the company’s balance sheet at 31 December 2014 was undertaken resulting in a charge of £1,134,000 being made. This
charge includes a £824,000 impairment provision against property, plant and equipment and £310,000 of provisions
including £267,000 in relation to an onerous lease. The continued poor performance has resulted in the decision by
AKD Engineering Limited to close with effect from the end of June 2015.
8 Profit on non-current assets
In 2013, a profit of £542,000 was realised following the part recovery of insurance claims received in relation to the
property, plant and equipment destroyed by the fire in 2011 at one of the tea processing factories owned by Eastern
Produce Malawi Limited.
9
Finance income and costs
Interest payable on loans and bank overdrafts
Interest payable on obligations under finance leases
Finance costs
Finance income – interest income on short-term bank deposits
Net exchange gain on foreign cash balances
Employee benefit expense (note 32)
Net finance income
The above figures do not include any amounts relating to the banking subsidiaries.
2014
£’000
2013
£’000
(607)
(1)
––––––––––
(608)
2,864
607
(1,044)
––––––––––
1,819
––––––––––
(874)
(4)
––––––––––
(878)
3,417
1,031
(1,486)
––––––––––
2,084
––––––––––
45
Camellia Plc
Notes to the accounts
10 Taxation
Analysis of charge in the year
Current tax
UK corporation tax
UK corporation tax at 21.5 per cent. (2013: 23.25 per cent.)
Double tax relief
Foreign tax
Corporation tax
Adjustment in respect of prior years
Total current tax
Deferred tax
Origination and reversal of timing differences
United Kingdom
Overseas
Total deferred tax
Tax on profit on ordinary activities
Factors affecting tax charge for the year
Profit on ordinary activities before tax
Share of associated undertakings profit
Group profit on ordinary activities before tax
Tax on ordinary activities at the standard rate
2014
£’000
£’000
2013
£’000
882
(882)
––––––––––
10,353
646
––––––––––
–
2,674
––––––––––
2,425
(2,425)
––––––––––
–
14,014
(73)
––––––––––
13,941
––––––––––
13,941
–
8,164
––––––––––
8,164
––––––––––
22,105
––––––––––
–
10,999
––––––––––
10,999
2,674
––––––––––
13,673
––––––––––
21,983
(1,092)
––––––––––
20,891
––––––––––
59,648
(980)
––––––––––
58,668
––––––––––
of corporation tax in the UK of 21.5 per cent. (2013: 23.25 per cent.)
4,492
13,640
Effects of:
Adjustment to tax in respect of prior years
Expenses not deductible for tax purposes
Adjustment in respect of foreign tax rates
Additional tax arising on dividends from overseas companies
Other income not charged to tax
Increase in tax losses carried forward
Movement in other timing differences
Total tax charge for the year
646
2,477
4,100
643
(1,787)
3,207
(105)
––––––––––
13,673
––––––––––
(73)
1,737
5,422
462
(691)
1,104
504
––––––––––
22,105
––––––––––
46
Notes to the accounts
11 Profit for the year
The profit of the company was:
2014
£’000
2013
£’000
3,610
––––––––––
4,411
––––––––––
The company has taken advantage of the exemption under Section 408 of the Companies Act 2006 not to disclose its
income statement.
12 Equity dividends
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2013 of
91p (2012: 88p) per share
Interim dividend for the year ended 31 December 2014 of
34p (2013: 34p) per share
2014
£’000
2013
£’000
2,513
2,446
939
––––––––––
3,452
––––––––––
942
––––––––––
3,388
––––––––––
Dividends amounting to £78,000 (2013: £76,000) have not been included as group companies hold 62,500 issued shares
in the company. These are classified as treasury shares.
Proposed final dividend for the year ended 31 December 2014 of
92p (2013: 91p) per share
2,599
––––––––––
2,575
––––––––––
The proposed final dividend is subject to approval by the shareholders at the annual general meeting and has not been
included as a liability in these financial statements.
13 Earnings per share (EPS)
2014
Weighted
average
number of
shares
Number
Earnings
£’000
2013
Weighted
average
number of
shares
Number
EPS
Pence
EPS
Pence
Earnings
£’000
Basic and diluted EPS
Attributable to ordinary shareholders
2,836
––––––––––
2,762,264
––––––––––
102.7
––––––––––
28,297
––––––––––
2,773,762
––––––––––
1,020.2
––––––––––
Basic and diluted earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares in issue during the period, excluding those held by the group as treasury
shares (note 33).
47
Camellia Plc
Notes to the accounts
14 Employees
Average number of employees by activity:
Agriculture and horticulture
Engineering
Food storage and distribution
Banking and financial services
Central management
Other
Employment costs:
Wages and salaries
Social security costs
Employee benefit obligations (see note 32) – UK
– Overseas
2014
Number
2013
Number
79,994
390
283
127
23
17
––––––––––
80,834
––––––––––
79,160
451
263
131
21
14
––––––––––
80,040
––––––––––
2014
£’000
2013
£’000
74,307
3,626
1,872
2,308
––––––––––
82,113
––––––––––
68,177
3,258
1,706
3,460
––––––––––
76,601
––––––––––
Total remuneration paid to key employees who are members of the executive committee, excluding directors of Camellia Plc,
amounted to £875,000 (2013: £646,000).
Further details of directors’ emoluments are set out on pages 20 to 22.
15 Emoluments of the directors
Aggregate emoluments excluding pension contributions
2014
£’000
2013
£’000
1,785
––––––––––
1,498
––––––––––
Emoluments of the highest paid director excluding pension contributions were £466,000 (2013: £486,000).
Further details of directors' emoluments are set out on pages 20 to 22.
48
Notes to the accounts
16 Intangible assets
Group
Cost
At 1 January 2013
Exchange differences
Additions
At 1 January 2014
Exchange differences
Additions
Reclassification from property, plant and equipment
At 31 December 2014
Amortisation
At 1 January 2013
Exchange differences
Charge for the year
At 1 January 2014
Exchange differences
Reclassification from property, plant and equipment
Charge for the year
At 31 December 2014
Net book value at 31 December 2014
Net book value at 31 December 2013
Goodwill
£’000
Customer
relationships
£’000
Computer
software
£’000
Total
£’000
3,978
–
–
––––––––––
3,978
–
–
–
––––––––––
3,978
––––––––––
–
–
–
––––––––––
–
–
–
–
––––––––––
–
––––––––––
3,978
––––––––––
3,978
––––––––––
4,814
–
–
––––––––––
4,814
–
–
–
––––––––––
4,814
––––––––––
1,593
–
240
––––––––––
1,833
–
–
241
––––––––––
2,074
––––––––––
2,740
––––––––––
2,981
––––––––––
2,098
(31)
399
––––––––––
2,466
9
66
2,503
––––––––––
5,044
––––––––––
1,884
(28)
220
––––––––––
2,076
8
2,341
265
––––––––––
4,690
––––––––––
354
––––––––––
390
––––––––––
10,890
(31)
399
––––––––––
11,258
9
66
2,503
––––––––––
13,836
––––––––––
3,477
(28)
460
––––––––––
3,909
8
2,341
506
––––––––––
6,764
––––––––––
7,072
––––––––––
7,349
––––––––––
Impairment testing
Timing of impairment testing
The group’s impairment test in respect of intangible assets allocated to each component of the cash-generating unit
(‘CGU’) is performed as at 31 December each year. In line with the accounting policy, impairment testing is also
performed whenever there is an indication that the assets may be impaired. There was no indication of impairment in the
year to 31 December 2014. For the purpose of this impairment testing, the group’s CGU components represent the
wealth management element of the holistic private banking service provided by Duncan Lawrie.
Basis of the recoverable amount – value in use or fair value less costs to sell
The recoverable amount of the CGU to which customer relationships and goodwill have been allocated was assessed at
each respective testing date in 2014 and 2013. The wealth management component of the CGU is assessed on the basis of
the fair value less costs to sell by applying industry average multiples to the value of assets under management.
Based on the conditions at the balance sheet date, a change in any of the key assumptions described above would not cause
an impairment to be recognised in respect of goodwill and customer relationships. The industry multiple applied would
have to reduce to 1 per cent. before any impairment of goodwill or customer relationships would arise.
49
Camellia Plc
Notes to the accounts
17 Property, plant and equipment
Group
Deemed cost
At 1 January 2013
Exchange differences
Additions
Disposals
At 1 January 2014
Exchange differences
Additions
Disposals
Reclassification to intangible assets
At 31 December 2014
Depreciation
At 1 January 2013
Exchange differences
Charge for the year
Disposals
At 1 January 2014
Exchange differences
Charge for the year
Disposals
Impairment provision
Reclassification to intangible assets
At 31 December 2014
Net book value at 31 December 2014
Net book value at 31 December 2013
Land and buildings at net book value comprise:
Freehold
Long leasehold
Short leasehold
Land and
buildings
£’000
Plant and
machinery
£’000
82,992
(3,848)
4,364
(588)
––––––––––
82,920
1,036
9,881
(466)
–
––––––––––
93,371
––––––––––
34,751
(1,346)
2,401
(557)
––––––––––
35,249
409
2,383
(452)
337
–
––––––––––
37,926
––––––––––
55,445
––––––––––
47,671
––––––––––
94,511
(6,144)
11,989
(1,332)
––––––––––
99,024
768
8,049
(1,234)
–
––––––––––
106,607
––––––––––
57,731
(3,197)
5,930
(1,038)
––––––––––
59,426
592
6,522
(1,157)
461
–
––––––––––
65,844
––––––––––
40,763
––––––––––
39,598
––––––––––
Fixtures,
fittings and
equipment
£’000
20,388
(325)
937
(591)
––––––––––
20,409
123
1,089
(153)
(2,503)
––––––––––
18,965
––––––––––
11,926
(235)
736
(589)
––––––––––
11,838
78
754
(105)
26
(2,341)
––––––––––
10,250
––––––––––
8,715
––––––––––
8,571
––––––––––
Total
£’000
197,891
(10,317)
17,290
(2,511)
––––––––––
202,353
1,927
19,019
(1,853)
(2,503)
––––––––––
218,943
––––––––––
104,408
(4,778)
9,067
(2,184)
––––––––––
106,513
1,079
9,659
(1,714)
824
(2,341)
––––––––––
114,020
––––––––––
104,923
––––––––––
95,840
––––––––––
2014
£’000
2013
£’000
33,779
20,630
1,036
––––––––––
55,445
––––––––––
27,162
19,416
1,093
––––––––––
47,671
––––––––––
Plant and machinery includes assets held under finance leases. The depreciation charge for the year in respect of these
assets was £9,000 (2013: £15,000) and their net book value was £14,000 (2013: £10,000).
The amount of expenditure for property, plant and equipment in the course of construction amounted to £948,000
(2013: £1,811,000).
50
Notes to the accounts
18 Biological assets
Group
At 1 January 2013
Exchange differences
New planting additions
Capitalised cultivation costs
Gains arising from changes in fair value
less estimated point-of-sale costs
Decreases due to harvesting
At 1 January 2014
Exchange differences
New planting additions
Capitalised cultivation costs
Gains arising from changes in fair value
less estimated point-of-sale costs
Decreases due to harvesting
At 31 December 2014
Tea
£’000
69,200
(9,308)
1,804
–
15,620
–
––––––––––
77,316
1,759
1,919
–
4,566
–
––––––––––
85,560
––––––––––
Edible
nuts
£’000
22,287
(5,032)
2,602
726
Timber
£’000
10,261
(958)
411
–
Other
£’000
17,945
(557)
–
4,718
Total
£’000
119,693
(15,855)
4,817
5,444
3,063
(2,327)
––––––––––
21,319
(380)
2,602
1,285
835
(356)
––––––––––
10,193
(67)
551
–
1,575
(5,294)
––––––––––
18,387
548
–
4,351
21,093
(7,977)
––––––––––
127,215
1,860
5,072
5,636
4,109
(2,969)
––––––––––
25,966
––––––––––
(29)
(496)
––––––––––
10,152
––––––––––
174
(5,139)
––––––––––
18,321
––––––––––
8,820
(8,604)
––––––––––
139,999
––––––––––
Other includes avocados, citrus, grapes, livestock, maize, pineapples, rubber and soya.
Biological assets are carried at fair value. Where meaningful market-determined prices do not exist to assess the fair value
of biological assets, the fair value has been determined based on the net present value of expected future cash flows from
those assets, discounted at appropriate pre-tax rates. At 31 December 2014 professional valuations were obtained on a
significant proportion of assets. In determining the fair value of biological assets where the discounting of expected future
cash flows has been used, the directors have made certain assumptions about the expected life-span of the plantings, yields,
selling prices and costs. The fair value of livestock is based on market prices of livestock of similar age and sex.
New planting additions represents new areas planted to the particular crop at cost.
For crops other than tea and rubber capitalised cultivation costs represent annual growing costs incurred. Growing costs
for tea and rubber are charged directly to inventory which are included in cost of sales and do not include any uplift on
initial recognition as no appropriate market value can be determined for green leaf and rubber produced at harvest prior to
manufacturing.
Decreases due to harvesting represent values transferred to cost of sales at the point of harvest for agricultural produce
other than tea and rubber.
The discount rates used reflect the cost of capital, an assessment of country risk and the risks associated with individual
crops. The range of discount rates used is:
2014
2013
Edible
nuts
%
12.0 - 17.5
12.0 - 17.5
Tea
%
13.5
13.5
Timber
%
10.5 - 17.5
10.5 - 17.5
Other
%
5.0 - 17.5
5.0 - 17.5
51
Camellia Plc
Notes to the accounts
18 Biological assets (continued)
During the year the Malawian kwacha depreciated in value from 712.19 (2013: 544.05) to the pound sterling at 1 January
2014 to 725.05 (2013: 712.19) to the pound sterling at 31 December 2014. The functional currency of our Malawian
subsidiaries is the kwacha. Our principal assets in Malawi are agricultural assets. As they generate revenues in currencies
other than the kwacha their value in hard currency has not fallen in the year. Accordingly, the revaluation of the agricultural
assets in kwacha under IAS 41 at 31 December 2014 has generated a credit of £6,546,000 (2013: £18,631,000) including a
gain of £978,000 (2013: £11,032,000) due to the currency devaluation which is included in the overall gain of £8,820,000
(2013: £21,093,000) credited to the income statement. This has been largely offset by a foreign exchange translation loss
charged to reserves.
Fair value measurement
All of the biological assets fall under level 3 of the hierarchy defined in IFRS 13.
The basis upon which the valuations are determined is set out in accounting policies on pages 32 and 33.
Valuations by external professional valuers and those derived from discounted cash flows both make assumptions based on
unobservable inputs of: yields, an increase in which will raise the value; costs, an increase in which will decrease the value;
market prices, an increase in which will raise the value; life span of the plantings, an increase in which will raise the value;
discount rates, an increase in which will decrease the value. These assumptions vary significantly across different countries,
crops and varieties. In preparing these valuations a long term view is taken on the yields and prices achieved.
Financial risk management strategies
The group is exposed to financial risks arising from changes in the prices of the agricultural products it produces. The
group does not anticipate that these prices will decline significantly in the foreseeable future. There are no futures markets
available for the majority of crops grown by the group. The group’s exposure to this risk is mitigated by the geographical
spread of its operations, selective forward selling in certain instances when considered appropriate, and regular review of
available market data on sales and production. The group monitors closely the returns it achieves from its crops and
considers replacing its biological assets when yields decline with age or markets change.
Further financial risk arises from changes in market prices of key cost components, such costs are closely monitored.
The estimated fair value of agricultural output from our tea operations after deducting estimated points of sales costs is
£73,457,000 (2013: £89,092,000) which includes a gain on initial recognition at the point of harvest of £13,093,000
(2013: £29,225,000).
52
Notes to the accounts
18 Biological assets (continued)
The areas planted to the various crop types at the end of the year were:
Tea
Macadamia
Pistachios
Almonds
Timber
Arable crops
Avocados
Citrus
Pineapples
Rubber
Wine grapes
Livestock numbers on hand at the end of the year
Output of agricultural produce during the year was:
Tea
Macadamia
Pistachios
Arable crops
Avocados
Citrus
Pineapples
Rubber
Wine grapes
Timber
2014
Hectares
2013
Hectares
34,345
3,060
130
56
5,822
3,528
414
178
50
1,901
75
––––––––––
34,591
2,956
130
56
6,498
3,530
414
178
48
1,901
72
––––––––––
2014
Head
2013
Head
3,874
––––––––––
4,659
––––––––––
2014
Metric
tonnes
2013
Metric
tonnes
67,855
1,222
621
12,838
6,339
5,618
1,552
601
718
––––––––––
2014
Cubic
metres
70,871
994
55
16,336
4,247
6,577
1,478
669
455
––––––––––
2013
Cubic
metres
122,768
––––––––––
117,463
––––––––––
53
Camellia Plc
Notes to the accounts
19 Prepaid operating leases
Group
Cost
At 1 January 2013
Exchange differences
At 1 January 2014
Exchange differences
At 31 December 2014
Amortisation
At 1 January 2013
Charge for the year
At 1 January 2014
Charge for the year
At 31 December 2014
Net book value at 31 December 2014
Net book value at 31 December 2013
20 Investments in subsidiaries
Company
Cost
At 1 January and 31 December
21 Investments in associates
Group
At 1 January
Exchange differences
Share of profit (note 5)
Dividends
At 31 December
54
£’000
929
(19)
––––––––––
910
11
––––––––––
921
––––––––––
19
1
––––––––––
20
1
––––––––––
21
––––––––––
900
––––––––––
890
––––––––––
2014
£’000
2013
£’000
73,508
––––––––––
73,508
––––––––––
2014
£’000
2013
£’000
7,343
473
1,092
(244)
––––––––––
8,664
––––––––––
6,549
17
980
(203)
––––––––––
7,343
––––––––––
Notes to the accounts
21 Investments in associates (continued)
Details of the group’s associates are shown in note 39.
The group’s share of the results of its principal associates and its share of the assets (including goodwill) and liabilities are
as follows:
Country of
incorporation
Assets Liabilities Revenues
£’000
£’000
£’000
Profit
£’000
Interest Market
value
£’000
held
%
2014
Listed
United Finance Limited*
Bangladesh
United Insurance Company Limited Bangladesh
2013
Listed
United Finance Limited*
Bangladesh
United Insurance Company Limited Bangladesh
49,411
2,269
––––––––
51,680
––––––––
(42,455)
(561)
––––––––
(43,016)
––––––––
5,942
270
––––––––
6,212
––––––––
949
143
––––––––
1,092
––––––––
38.4
37.0
10,607
3,709
––––––––
14,316
––––––––
41,152
2,087
––––––––
43,239
––––––––
(35,358)
(538)
––––––––
(35,896)
––––––––
5,832
269
––––––––
6,101
––––––––
817
163
––––––––
980
––––––––
38.4
37.0
10,212
4,445
––––––––
14,657
––––––––
* In November 2014, United Leasing Company Limited changed its name to United Finance Limited.
22 Available-for-sale financial assets
Cost or fair value
At 1 January
Exchange differences
Fair value adjustment
Additions
Disposals
Fair value adjustment for disposal
At 31 December
Provision for diminution in value
At 1 January
Exchange differences
Provided during year
At 31 December
Net book value at 31 December
Group
2014
£’000
2013
£’000
Company
2014
£’000
2013
£’000
61,697
3,793
2,822
308
(486)
(364)
––––––––––
67,770
––––––––––
1,696
226
2,360
––––––––––
4,282
––––––––––
63,488
––––––––––
52,205
(1,646)
3,367
12,875
(5,075)
(29)
––––––––––
61,697
––––––––––
1,704
(30)
22
––––––––––
1,696
––––––––––
60,001
––––––––––
170
–
–
–
–
–
––––––––––
170
––––––––––
170
–
–
–
–
–
––––––––––
170
––––––––––
170
––––––––––
170
––––––––––
55
Camellia Plc
Notes to the accounts
22 Available-for-sale financial assets (continued)
Available-for-sale financial assets include the following:
Listed securities:
Equity securities – UK
Equity securities – Bermuda
Equity securities – Japan
Equity securities – Switzerland
Equity securities – US
Equity securities – India
Equity securities – Europe
Equity securities – Other
Debentures with fixed interest of 12.5% and repayable
twice yearly until 31 October 2019 – Kenya
Unlisted investments
Company
2014
£’000
2013
£’000
Group
2013
£’000
845
36,910
9,794
6,553
2,869
1,230
363
348
2014
£’000
862
39,101
11,269
6,092
2,719
1,809
351
338
766
181
––––––––––
63,488
––––––––––
908
181
––––––––––
60,001
––––––––––
170
––––––––––
170
––––––––––
170
––––––––––
170
––––––––––
Available-for-sale financial assets are denominated in the following currencies:
Group
2014
£’000
2013
£’000
1,032
2,719
351
6,092
1,809
39,101
11,269
772
343
––––––––––
63,488
––––––––––
1,015
2,869
363
6,553
1,230
36,910
9,794
914
353
––––––––––
60,001
––––––––––
Sterling
US Dollar
Euro
Swiss Franc
Indian Rupee
Bermudian Dollar
Japanese Yen
Kenyan Shilling
Other
23 Held-to-maturity financial assets
Cost or fair value
At 1 January
Additions
Disposals
At 31 December
Net book value comprises:
Bank and building society certificates of deposit
Bank and building society certificates of deposit are held by the group’s banking operation.
56
Company
2014
£’000
170
2013
£’000
170
––––––––––
170
––––––––––
––––––––––
170
––––––––––
Group
2014
£’000
2013
£’000
1,000
–
(1,000)
––––––––––
–
––––––––––
3,993
1,000
(3,993)
––––––––––
1,000
––––––––––
–
––––––––––
1,000
––––––––––
Notes to the accounts
24 Other investments
Group
2014
£’000
2013
£’000
Company
2014
£’000
2013
£’000
Cost
At 1 January
Additions
Disposals
8,603
157
(10)
––––––––––
8,750
––––––––––
Other investments comprise the group’s and company’s investment in fine art, philately, documents and manuscripts. The
market value of collections is expected to be in excess of book value.
8,598
157
(10)
––––––––––
8,745
––––––––––
8,750
126
(7)
––––––––––
8,869
––––––––––
8,745
126
(7)
––––––––––
8,864
––––––––––
At 31 December
25 Inventories
Group
Made tea
Other agricultural produce
Work in progress
Trading stocks
Raw materials and consumables
2014
£’000
2013
£’000
24,417
979
2,773
2,659
11,013
––––––––––
41,841
––––––––––
22,734
828
3,096
2,416
9,746
––––––––––
38,820
––––––––––
Made tea is included in inventory at cost as no reliable fair value is available to reflect the uplift in value upon initial
recognition of harvested green leaf.
Included within the inventory value of made tea of £24,417,000 (2013: £22,734,000) are costs associated with the growing
and cultivation of green leaf from our own estates of £12,095,000 (2013: £10,604,000). This would increase by £2,516,000
(2013: £5,103,000) if estimated green leaf fair values at harvest were applied. The impact on the income statement would
be a decrease (2013 increase) in profit for the year to 31 December 2014 of £2,587,000 (2013: £1,061,000) and a decrease
(2013 increase) in taxation of £900,000 (2013: £370,000).
The year end inventories balance is stated after a write-down provision of £104,000 (2013: £117,000).
57
Camellia Plc
Notes to the accounts
26 Trade and other receivables
Group
Current:
Amounts due from customers of banking subsidiaries
Trade receivables
Amounts owed by associated undertakings
Other receivables
Prepayments and accrued income
Non-current:
Amounts due from customers of banking subsidiaries
Other receivables
2014
£’000
2013
£’000
16,688
28,976
–
8,532
9,096
––––––––––
63,292
––––––––––
29,930
27,137
34
6,792
5,861
––––––––––
69,754
––––––––––
22,066
1,237
––––––––––
23,303
––––––––––
3,036
1,077
––––––––––
4,113
––––––––––
The carrying amounts of the group’s trade and other receivables are denominated in the following currencies:
Current:
Sterling
US Dollar
Euro
Kenyan Shilling
Indian Rupee
Malawian Kwacha
Bangladesh Taka
South African Rand
Brazilian Real
Other
Non-current:
Sterling
US Dollar
Euro
Kenyan Shilling
Indian Rupee
Malawian Kwacha
Bangladesh Taka
2014
£’000
2013
£’000
33,501
5,791
1,487
1,741
16,188
1,183
2,144
127
508
622
––––––––––
63,292
––––––––––
21,912
154
–
340
403
230
264
––––––––––
23,303
––––––––––
45,670
3,176
1,104
1,538
14,467
899
2,070
65
548
217
––––––––––
69,754
––––––––––
1,920
464
652
272
370
185
250
––––––––––
4,113
––––––––––
Included within trade receivables is a provision for doubtful debts of £595,000 (2013: £450,000).
58
Notes to the accounts
26 Trade and other receivables (continued)
Trade receivables include receivables of £3,797,000 (2013: £3,710,000) which are past due at the reporting date against
which the group has not provided, as there has not been a significant change in credit quality and the amounts are still
considered recoverable. Ageing of past due but not provided for receivables is as follows:
Up to 30 days
30-60 days
60-90 days
Over 90 days
27 Cash and cash equivalents
Group
Cash at bank and in hand
Short-term bank deposits
Short-term liquid investments
2014
£’000
2013
£’000
2,308
510
496
483
––––––––––
3,797
––––––––––
2,450
639
365
256
––––––––––
3,710
––––––––––
2014
£’000
2013
£’000
190,542
36,290
30,332
––––––––––
257,164
––––––––––
218,611
51,611
19,401
––––––––––
289,623
––––––––––
Included in the amounts above are cash and short-term funds, time deposits with banks and building societies, UK
treasury bills and certificates of deposit amounting to £200,285,000 (2013: £213,785,000) which are held by the group’s
banking subsidiaries and which are an integral part of the banking operations.
Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow statement:
Cash and cash equivalents (excluding banking operations)
Bank overdrafts (note 29)
Effective interest rate:
Short-term deposits
Short-term liquid investments
Average maturity period:
Short-term deposits
Short-term liquid investments
2014
£’000
2013
£’000
56,879
(2,757)
––––––––––
54,122
––––––––––
75,838
(2,938)
––––––––––
72,900
––––––––––
2014
2013
0.40 – 12.00% 0.00 – 14.75%
0.00 – 0.77% 0.00 – 0.80%
77 days
16 days
67 days
20 days
59
Camellia Plc
Notes to the accounts
28 Trade and other payables
Current:
Amounts due to customers of banking subsidiaries
Trade payables
Other taxation and social security
Other payables
Accruals
Group
2014
£’000
2013
£’000
Company
2014
£’000
2013
£’000
209,677
23,913
2,304
14,640
7,758
––––––––––
258,292
––––––––––
219,517
22,609
2,061
12,629
8,301
––––––––––
265,117
––––––––––
–
–
–
134
–
––––––––––
134
––––––––––
–
–
–
138
–
––––––––––
138
––––––––––
Non-current:
Amounts due to customers of banking subsidiaries
5,130
––––––––––
2,451
––––––––––
–
––––––––––
–
––––––––––
29 Financial liabilities – borrowings
2014
£’000
2013
£’000
2,757
94
4
––––––––––
2,855
––––––––––
1,429
94
4
––––––––––
1,527
––––––––––
42
–
––––––––––
42
––––––––––
2,938
107
6
––––––––––
3,051
––––––––––
1,164
107
6
––––––––––
1,277
––––––––––
66
12
––––––––––
78
––––––––––
42
–
––––––––––
42
––––––––––
66
12
––––––––––
78
––––––––––
Group
Current:
Bank overdrafts
Bank loans
Finance leases
Current borrowings include the following amounts
secured on biological assets and property, plant and equipment:
Bank overdrafts
Bank loans
Finance leases
Non-current:
Bank loans
Finance leases
Non-current borrowings include the following amounts
secured on biological assets and property, plant and equipment:
Bank loans
Finance leases
60
Notes to the accounts
29 Financial liabilities – borrowings (continued)
The repayment of bank loans and overdrafts fall due as follows:
Within one year or on demand (included in current liabilities)
Between 1 – 2 years
Between 2 – 5 years
After 5 years
Minimum finance lease payments fall due as follows:
Within one year or on demand (included in current liabilities)
Between 1 – 2 years
Future finance charges on finance leases
Present value of finance lease liabilities
The present value of finance lease liabilities fall due as follows:
Within one year or on demand (included in current liabilities)
Between 1 – 2 years
The rates of interest payable by the group ranged between:
Overdrafts
Bank loans
Finance leases
2014
£’000
2013
£’000
2,851
12
14
16
––––––––––
2,893
––––––––––
4
–
––––––––––
4
–
––––––––––
4
––––––––––
3,045
22
25
19
––––––––––
3,111
––––––––––
7
12
––––––––––
19
(1)
––––––––––
18
––––––––––
4
–
––––––––––
4
––––––––––
6
12
––––––––––
18
––––––––––
2014
%
2013
%
2.25 – 36.00
9.00 – 13.00
18.00
2.25 – 35.00
9.00 – 13.00
6.25 – 18.00
61
Camellia Plc
Notes to the accounts
30 Provisions
Group
At 1 January 2013
Utilised in the period
Provided in the period
Unused amounts reversed in period
At 1 January 2014
Utilised in the period
Provided in the period
At 31 December 2014
Current:
At 31 December 2014
At 31 December 2013
Non-current:
At 31 December 2014
At 31 December 2013
Onerous lease
£’000
Others
£’000
Total
£’000
671
(150)
–
(71)
––––––––––
450
(450)
267
––––––––––
267
––––––––––
456
(206)
60
(100)
––––––––––
210
–
159
––––––––––
369
––––––––––
1,127
(356)
60
(171)
––––––––––
660
(450)
426
––––––––––
636
––––––––––
267
––––––––––
150
––––––––––
369
––––––––––
210
––––––––––
636
––––––––––
360
––––––––––
–
––––––––––
300
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
300
––––––––––
The provision for onerous lease of £450,000 brought forward related to a lease commitment for vacant warehouse
premises and during the period the property was subleased.
In the year, provision for an onerous lease totalling £267,000 has been made following continuing losses at AKD
Engineering which led to an assessment of the company balance sheet at 31 December 2014.
Others relate to provisions for claims and dilapidations.
31 Deferred tax
The net movement on the deferred tax account is set out below:
At 1 January
Exchange differences
Charged/(credited) to the income statement
(Credited)/charged to equity
At 31 December
Group
2014
£’000
2013
£’000
Company
2014
£’000
2013
£’000
39,106
424
2,674
(770)
––––––––––
41,434
––––––––––
35,911
(5,097)
8,164
128
––––––––––
39,106
––––––––––
258
–
(18)
–
––––––––––
240
––––––––––
280
–
(22)
–
––––––––––
258
––––––––––
62
Notes to the accounts
31 Deferred tax (continued)
The movement in deferred tax assets and liabilities is set out below:
Deferred tax liabilities
At 1 January 2013
Exchange differences
Charged/(credited) to the income statement
Credited to equity
At 1 January 2014
Exchange differences
Charged/(credited) to the income statement
Credited to equity
At 31 December 2014
Deferred tax assets offset
Net deferred tax liability after offset
Deferred tax assets
At 1 January 2013
Exchange differences
Credited/(charged) to the income statement
Charged to equity
At 1 January 2014
Exchange differences
Credited/(charged) to the income statement
Credited to equity
At 31 December 2014
Offset against deferred tax liabilities
Net deferred tax asset after offset
Accelerated
tax
depreciation
£’000
37,665
(5,187)
8,442
–
––––––––––
40,920
421
3,784
–
––––––––––
45,125
––––––––––
Pension
scheme
liability
£’000
272
3
28
(65)
––––––––––
238
13
102
(71)
––––––––––
282
––––––––––
Pension
scheme
asset
£’000
902
(57)
39
(51)
––––––––––
833
16
(579)
627
––––––––––
897
––––––––––
Tax losses
£’000
263
(45)
(5)
–
––––––––––
213
15
497
–
––––––––––
725
––––––––––
Other
£’000
Total
£’000
332
(68)
(60)
–
––––––––––
204
4
(208)
–
––––––––––
–
––––––––––
38,269
(5,252)
8,410
(65)
––––––––––
41,362
438
3,678
(71)
––––––––––
45,407
––––––––––
(3,789)
––––––––––
41,618
––––––––––
Other
£’000
Total
£’000
1,193
(53)
212
(142)
––––––––––
1,210
(17)
1,086
72
––––––––––
2,351
––––––––––
2,358
(155)
246
(193)
––––––––––
2,256
14
1,004
699
––––––––––
3,973
(3,789)
––––––––––
184
––––––––––
Included within deferred tax liabilities are £39,495,000 (2013: £35,937,000) of accelerated tax depreciation relating to
biological assets.
Deferred tax liabilities of £11,782,000 (2013: £10,827,000) have not been recognised for the withholding tax and other
taxes that would be payable on the unremitted earnings of certain subsidiaries. Such amounts are permanently reinvested.
63
Camellia Plc
Notes to the accounts
31 Deferred tax (continued)
Deferred tax assets are recognised for tax losses carried forward only to the extent that the realisation of the related tax
benefit through future taxable profits is probable. The group has not recognised deferred tax assets of £8,054,000 (2013:
£4,858,000) in respect of losses that can be carried forward against future taxable income.
32 Employee benefit obligations
(i) Pensions
Certain group subsidiaries operate defined contribution and funded defined benefit pension schemes. The most significant
is the UK funded, final salary defined benefit scheme. The assets of this scheme are administered by trustees and are kept
separate from those of the group. On 1 July 2011, the three UK defined benefit pension schemes were merged to form the
Linton Park Pension Scheme (2011). A full actuarial valuation was undertaken as at 1 July 2011 and updated to
31 December 2014 by a qualified independent actuary. The UK final salary defined benefit pension scheme is closed to
new entrants and new employees are eligible to join a group personal pension plan. From 1 July 2011, active members of
the Linton Park Pension Scheme (2011) earn accruals at a rate of 1/80th per year of service from a rate of 1/60th per year
of service previously earned as members of the Linton Park Pension Scheme or the Lawrie Group Pension Scheme.
The overseas schemes are operated in group subsidiaries located in Bangladesh, India and The Netherlands. Actuarial
valuations have been updated to 31 December 2014 by qualified actuaries for these schemes.
Assumptions
The major assumptions used in the valuation to determine the present value of the schemes’ defined benefit obligations
were as follows:
UK schemes
Rate of increase in salaries
Rate of increase to LPI (Limited Price Indexation) pensions in payment
Discount rate applied to scheme liabilities
Inflation assumption (CPI/RPI)
2014
2013
% per annum % per annum
2.00
2.00 – 5.00
3.50
2.00/3.00
2.50
2.50 – 5.00
4.50
2.50/3.50
Assumptions regarding future mortality experience are based on advice received from independent actuaries. The current
mortality tables used are S1PA, on a year of birth basis, with CMI_2010 future improvement factors and subject to a long
term annual rate of future improvement of 1 per cent. per annum. This results in males and females aged 65 having life
expectancies of 22 years and 24 years respectively.
Overseas schemes
Rate of increase in salaries
Rate of increase to LPI (Limited Price Indexation) pensions in payment
Discount rate applied to scheme liabilities
Inflation assumption
2.00 – 7.00
0.00 – 5.00
2.10 – 11.50
0.00 – 7.00
2.00 – 7.00
0.00 – 5.00
3.50 – 11.50
0.00 – 7.00
64
Notes to the accounts
32 Employee benefit obligations (continued)
(ii) Post-employment benefits
Certain group subsidiaries located in Kenya, India and Bangladesh have an obligation to pay terminal gratuities, based on
years of service. These obligations are estimated annually using the projected unit method by qualified independent actuaries.
Schemes operated in India are funded but the schemes operated in Kenya and Bangladesh are unfunded. Operations in India
and Bangladesh also have an obligation to pay medical benefits upon retirement. These schemes are unfunded.
Assumptions
The major assumptions used in the valuation to determine the present value of the post-employment benefit obligations
were as follows:
Rate of increase in salaries
Discount rate applied to scheme liabilities
Inflation assumptions
2014
2013
% per annum % per annum
6.00 – 10.00
8.00 – 13.50
0.00 – 10.00
6.00 – 10.00
5.00 – 13.50
0.00 – 10.00
Sensitivity analysis
The sensitivity of the UK defined benefit obligation to changes in the weighted principal assumptions is:
Pre-retirement discount rate
Post-retirement discount rate
Salary increase rate
Inflation rate
Long-term rate of improvement of mortality
Change
in assumption
Impact
on defined
benefit
obligation
1.0% lower
0.5% lower
0.2% lower
0.2% lower
0.5% higher
4.0% increase
5.0% increase
0.5% decrease
2.0% decrease
3.0% increase
The above sensitivity analysis assumes that each assumption is changed independently of the others. Therefore, the
disclosures are only a guide because the effect of changing more than one assumption is not cumulative. The sensitivity
analysis was calculated by rerunning the figures as at the last formal actuarial valuation at 1 July 2011. Therefore the
analysis is only approximate for the purpose of these IAS19 disclosures as they are on a different set of assumptions and do
not reflect subsequent scheme experience.
Duration of the scheme liabilities
The weighted average duration of the UK defined benefit obligation is 15 years.
Analysis of scheme liabilities
As at 1 July 2011 the allocation of the present value of the UK scheme liabilities was as follows:
Active members
Deferred pensioners
Current pensioners
Total membership
%
16
23
61
––––––––––
100
––––––––––
65
Camellia Plc
Notes to the accounts
32 Employee benefit obligations (continued)
(iii) Actuarial valuations
Equities and property
Bonds
Cash
Other
Total fair value of plan assets
Present value of defined benefit
obligations
Total deficit in the schemes
Amount recognised as asset
in the balance sheet
Amount recognised as current liability
in the balance sheet
Amount recognised as non-current
liability in the balance sheet
Related deferred tax asset (note 31)
Related deferred tax liability (note 31)
Net deficit
UK
£’000
93,247
52,088
4,359
–
––––––––
149,694
2014
Overseas
£’000
494
11,826
4,197
3,421
––––––––
19,938
Total
£’000
UK
£’000
93,741
63,914
8,556
3,421
––––––––
169,632
99,185
44,370
1,731
–
––––––––
145,286
2013
Overseas
£’000
454
11,652
3,035
3,607
––––––––
18,748
Total
£’000
99,639
56,022
4,766
3,607
––––––––
164,034
(184,326)
––––––––
(34,632)
––––––––
(26,913)
––––––––
(6,975)
––––––––
(211,239)
––––––––
(41,607)
––––––––
(162,294)
––––––––
(17,008)
––––––––
(23,081)
––––––––
(4,333)
––––––––
(185,375)
––––––––
(21,341)
––––––––
–
–
805
805
(527)
(527)
–
–
653
653
(448)
(448)
(34,632)
––––––––
(34,632)
–
–
––––––––
(34,632)
––––––––
(7,253)
––––––––
(6,975)
897
(282)
––––––––
(6,360)
––––––––
(41,885)
––––––––
(41,607)
897
(282)
––––––––
(40,992)
––––––––
(17,008)
––––––––
(17,008)
–
–
––––––––
(17,008)
––––––––
Movements in the fair value of scheme assets were as follows:
At 1 January
Expected return on plan assets
Employer contributions
Contributions paid by plan participants
Benefit payments
Actuarial gains
Exchange differences
At 31 December
UK
£’000
145,286
6,406
1,531
–
(7,410)
3,881
–
––––––––
149,694
––––––––
2014
Overseas
£’000
18,748
1,514
635
22
(1,336)
(106)
461
––––––––
19,938
––––––––
Total
£’000
UK
£’000
164,034
7,920
2,166
22
(8,746)
3,775
461
––––––––
169,632
––––––––
132,566
5,443
1,780
–
(7,704)
13,201
–
––––––––
145,286
––––––––
66
(4,538)
––––––––
(4,333)
833
(238)
––––––––
(3,738)
––––––––
2013
Overseas
£’000
18,994
1,345
1,206
22
(1,244)
94
(1,669)
––––––––
18,748
––––––––
(21,546)
––––––––
(21,341)
833
(238)
––––––––
(20,746)
––––––––
Total
£’000
151,560
6,788
2,986
22
(8,948)
13,295
(1,669)
––––––––
164,034
––––––––
Notes to the accounts
32 Employee benefit obligations (continued)
Movements in the present value of defined benefit obligations were as follows:
At 1 January
Current service cost
Past service cost
Contributions paid by plan participants
Interest cost
Benefit payments
Actuarial gains/(losses)
Exchange differences
At 31 December
UK
£’000
(162,294)
(769)
–
–
(7,137)
7,410
(21,536)
–
––––––––
(184,326)
––––––––
2014
Overseas
£’000
(23,081)
(909)
711
(22)
(1,827)
1,336
(2,580)
(541)
––––––––
(26,913)
––––––––
Total
£’000
UK
£’000
(185,375)
(1,678)
711
(22)
(8,964)
8,746
(24,116)
(541)
––––––––
(211,239)
––––––––
(160,427)
(883)
–
–
(6,576)
7,704
(2,112)
–
––––––––
(162,294)
––––––––
2013
Overseas
£’000
(23,730)
(989)
(266)
(22)
(1,698)
1,244
428
1,952
––––––––
(23,081)
––––––––
Total
£’000
(184,157)
(1,872)
(266)
(22)
(8,274)
8,948
(1,684)
1,952
––––––––
(185,375)
––––––––
In 2012, the total fair value of plan assets was £151,560,000, present value of defined benefit obligations was
£184,157,000 and the deficit was £32,597,000. In 2011, the total fair value of plan assets was £140,343,000, present
value of defined benefit obligations was £167,235,000 and the deficit was £26,892,000 and in 2010, the total fair value of
plan assets was £145,891,000, present value of defined benefit obligations was £158,260,000 and the deficit was
£12,369,000.
Income statement
The amounts recognised in the income statement are as follows:
Amounts charged to operating profit:
Current service cost
Past service cost
Total operating charge
Amounts charged to other finance costs:
Interest expense
Total charged to income statement
UK
£’000
2014
Overseas
£’000
Total
£’000
UK
£’000
2013
Overseas
£’000
Total
£’000
(769)
–
––––––––
(769)
(909)
711
––––––––
(198)
(1,678)
711
––––––––
(967)
(883)
–
––––––––
(883)
(989)
(266)
––––––––
(1,255)
(1,872)
(266)
––––––––
(2,138)
(731)
––––––––
(1,500)
––––––––
(313)
––––––––
(511)
––––––––
(1,044)
––––––––
(2,011)
––––––––
(1,133)
––––––––
(2,016)
––––––––
(353)
––––––––
(1,608)
––––––––
(1,486)
––––––––
(3,624)
––––––––
Employer contributions to defined contribution schemes are charged to profit when payable and the costs charged were
£3,213,000 (2013: £3,028,000).
67
Camellia Plc
Notes to the accounts
32 Employee benefit obligations (continued)
Actuarial gains and losses recognised in the statement of comprehensive income
The amounts included in the statement of comprehensive income:
Actual return less expected return on
pension scheme assets
Experience losses arising on
scheme liabilities
Changes in assumptions underlying
present value of scheme liabilities
Actuarial (loss)/gain
UK
£’000
2014
Overseas
£’000
Total
£’000
UK
£’000
2013
Overseas
£’000
Total
£’000
3,881
(106)
3,775
13,201
94
13,295
(2,501)
(312)
(2,813)
(2,398)
(612)
(3,010)
(19,035)
––––––––
(17,655)
––––––––
(2,268)
––––––––
(2,686)
––––––––
(21,303)
––––––––
(20,341)
––––––––
286
––––––––
11,089
––––––––
1,040
––––––––
522
––––––––
1,326
––––––––
11,611
––––––––
Cumulative actuarial losses recognised in the statement of comprehensive income are £44,115,000 (2013: £23,774,000).
The employer contributions to be paid to the UK defined benefit pension scheme for the year commencing 1 January
2015 is 19.8 per cent. for the period to 31 March 2015 and 20.0 per cent. from 1 April 2015 of pensionable salary for
active members plus £915,000 additional contribution to reduce the scheme’s funding deficit.
33 Share capital
Authorised: 2,842,000 (2013: 2,842,000) ordinary shares of 10p each
Allotted, called up and fully paid: ordinary shares of 10p each:
At 1 January – 2,829,700 (2013: 2,842,000) shares
Purchase of own shares – 5,200 (2013: 12,300) shares
At 31 December – 2,824,500 (2013: 2,829,700) shares
2014
£’000
2013
£’000
284
––––––––––
284
––––––––––
283
(1)
––––––––––
282
––––––––––
284
(1)
––––––––––
283
––––––––––
Group companies hold 62,500 issued shares in the company. These are classified as treasury shares.
On 6 June 2013 the directors were authorised to purchase up to a maximum of 277,950 ordinary shares and during the
period 5,200 shares were purchased. Total consideration was £471,000 (2013: £1,107,000). Upon cancellation of the
shares purchased, a capital redemption reserve is created representing the nominal value of the shares cancelled.
68
Notes to the accounts
34 Reconciliation of profit from operations to cash flow
Group
Profit from operations
Share of associates’ results
Depreciation and amortisation
Impairment of assets
Gain arising from changes in fair value of biological assets
Profit on disposal of non-current assets
Profit on disposal of investments
Profit on part disposal of subsidiary
Increase in working capital
Pensions and similar provisions less payments
Biological assets capitalised cultivation costs
Biological assets decreases due to harvesting
Net decrease/(increase) in funds of banking subsidiaries
35 Reconciliation of net cash flow to movement in net cash
Group
Decrease in cash and cash equivalents in the year
Net cash outflow from decrease in debt
Decrease in net cash resulting from cash flows
Exchange rate movements
Decrease in net cash in the year
Net cash at beginning of year
Net cash at end of year
2014
£’000
2013
£’000
18,003
(1,092)
10,165
3,494
(8,820)
(125)
(447)
(56)
(6,326)
(1,235)
(5,636)
8,604
551
––––––––––
17,080
––––––––––
55,147
(980)
9,527
22
(21,093)
(792)
(1,348)
–
(671)
(392)
(5,444)
7,977
(7,706)
––––––––––
34,247
––––––––––
2014
£’000
2013
£’000
(19,915)
60
––––––––––
(19,855)
1,128
––––––––––
(18,727)
72,709
––––––––––
53,982
––––––––––
(7,312)
16
––––––––––
(7,296)
(1,161)
––––––––––
(8,457)
81,166
––––––––––
72,709
––––––––––
69
Camellia Plc
Notes to the accounts
36 Commitments
Capital commitments
Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:
Group
Property, plant and equipment
2014
£’000
2013
£’000
824
––––––––––
1,812
––––––––––
Operating leasing commitments – minimum lease payments
The group leases land and buildings, plant and machinery under non-cancellable operating lease arrangements, which
have various terms and renewal rights.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Group
Land and buildings:
Within 1 year
Between 1 – 5 years
After 5 years
Plant and machinery:
Within 1 year
Between 1 – 5 years
2014
£’000
2013
£’000
826
2,206
12,875
––––––––––
15,907
––––––––––
99
128
––––––––––
227
––––––––––
817
1,940
13,675
––––––––––
16,432
––––––––––
81
80
––––––––––
161
––––––––––
The group’s most significant operating lease commitments are long term property leases with renewal terms in excess of
60 years.
37 Contingencies
The group operates in certain countries where its operations are potentially subject to a number of legal claims including
taxation. When required, appropriate provisions are made for the expected cost of such claims.
The Malawi Revenue Authority has made a claim of Malawi kwacha K1.5 billion (£2,069,000) against Eastern Produce
Malawi Limited for underpaid tax in prior years. The group has assessed the claim and provided for £680,000 of the
amount in the current year tax charge. The remaining £1,389,000 is strongly contested on the basis that the directors
believe it is without technical merit, and accordingly, no provision has been made.
70
Notes to the accounts
38 Financial instruments
Capital risk management
The group manages its capital to ensure that the group will be able to continue as a going concern, while maximising the
return to stakeholders through the optimisation of its debt and equity balance. The capital structure of the group consists
of debt, which includes the borrowings disclosed in note 29, cash and cash equivalents and equity attributable to equity
holders of the parent, comprising issued capital, reserves and retained earnings.
The board reviews the capital structure, with an objective to ensure that gross borrowings as a percentage of tangible net
assets does not exceed 50 per cent..
The ratio at the year end is as follows:
Borrowings
Tangible net assets
Ratio
2014
£’000
2013
£’000
2,897
––––––––––
3,129
––––––––––
314,632
––––––––––
325,117
––––––––––
0.92%
––––––––––
0.96%
––––––––––
Borrowings are defined as current and non-current borrowings, as detailed in note 29.
Tangible net assets includes all capital and reserves of the group attributable to equity holders of the parent less
intangible assets.
Financial instruments by category
At 31 December 2014
Assets as per balance sheet
Available-for-sale financial assets
Trade and other receivables excluding prepayments
Loans and advances to customers of banking subsidiaries
Cash and cash equivalents (excluding bank subsidiaries)
Loans and advances to banks by banking subsidiaries
Loans and Available for
sale
receivables
£’000
£’000
Held to
maturity
£’000
–
38,745
38,754
56,879
200,285
––––––––––
334,663
––––––––––
63,488
–
–
–
–
––––––––––
63,488
––––––––––
–
–
–
–
–
––––––––––
–
––––––––––
Total
£’000
63,488
38,745
38,754
56,879
200,285
––––––––––
398,151
––––––––––
71
Camellia Plc
Notes to the accounts
38 Financial instruments (continued)
Liabilities as per balance sheet
Borrowings (excluding finance lease liabilities)
Finance lease liabilities
Amounts due to customers of banking subsidiaries
Trade and other payables
Other non-current liabilities
At 31 December 2013
Assets as per balance sheet
Available-for-sale financial assets
Trade and other receivables excluding prepayments
Loans and advances to customers of banking subsidiaries
Held-to-maturity financial assets
Cash and cash equivalents (excluding bank subsidiaries)
Loans and advances to banks by banking subsidiaries
Liabilities as per balance sheet
Borrowings (excluding finance lease liabilities)
Finance lease liabilities
Amounts due to customers of banking subsidiaries
Trade and other payables
Other non-current liabilities
Other financial
liabilities at
amortised cost
£’000
2,893
4
214,807
46,311
98
––––––––––
264,113
––––––––––
Loans and Available for
sale
receivables
£’000
£’000
Held to
maturity
£’000
–
35,040
32,966
–
75,838
213,785
––––––––––
357,629
––––––––––
60,001
–
–
–
–
–
––––––––––
60,001
––––––––––
–
–
–
1,000
–
–
––––––––––
1,000
––––––––––
Other financial
liabilities at
amortised cost
£’000
3,111
18
221,968
43,539
103
––––––––––
268,739
––––––––––
Total
£’000
2,893
4
214,807
46,311
98
––––––––––
264,113
––––––––––
Total
£’000
60,001
35,040
32,966
1,000
75,838
213,785
––––––––––
418,630
––––––––––
Total
£’000
3,111
18
221,968
43,539
103
––––––––––
268,739
––––––––––
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been
defined as follows:
– Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
–
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(that is, as prices) or indirectly (that is, derived from prices) (Level 2).
–
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
72
Notes to the accounts
38 Financial instruments (continued)
The following table presents the group’s financial assets and liabilities that are measured at fair value. See note 18 for
disclosures of biological assets that are measured at fair value.
At 31 December 2014
Assets
Available-for sale financial assets:
– Equity securities
Debt investments:
– Debentures
At 31 December 2013
Assets
Available-for sale financial assets:
– Equity securities
Debt investments:
– Debentures
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
62,541
–
–
62,541
766
––––––––––
63,307
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
766
––––––––––
63,307
––––––––––
Level 1
£’000
Level 2
£’000
Level 3
£’000
Total
£’000
58,912
–
–
58,912
908
––––––––––
59,820
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
908
––––––––––
59,820
––––––––––
Financial risk management objectives
The group finances its operations by a mixture of retained profits, bank borrowings, long-term loans and leases. The objective
is to maintain a balance between continuity of funding and flexibility through the use of borrowings with a range of
maturities. To achieve this, the maturity profile of borrowings and facilities are regularly reviewed. The group also seeks to
maintain sufficient undrawn committed borrowing facilities to provide flexibility in the management of the group’s liquidity.
Given the nature and diversity of the group’s operations, the board does not believe a highly complex use of financial
instruments would be of significant benefit to the group. However, where appropriate, the board does authorise the use of
certain financial instruments to mitigate financial risks that face the group, where it is effective to do so.
Various financial instruments arise directly from the group’s operations, for example cash and cash equivalents, trade
receivables and trade payables. In addition, the group uses financial instruments for two main reasons, namely:
–
–
To finance its operations (to mitigate liquidity risk);
To manage currency risks arising from its operations and arising from its sources of finance (to mitigate foreign
exchange risk).
The group, including Duncan Lawrie, the group’s banking subsidiary, did not, in accordance with group policy, trade in
financial instruments throughout the period under review.
(A) Market risk
(i) Foreign exchange risk
The group has no material exposure to foreign currency exchange risk on currencies other than the functional currencies
of the operating entities, with the exception of significant Bermudian and Japanese available-for-sale financial assets. A
movement by 5 per cent. in the exchange rate of the Bermudian Dollar and Japanese Yen with Sterling would
increase/decrease profit and net assets by £1,955,000 (2013: £1,846,000) and £563,000 (2013: £490,000) respectively.
73
Camellia Plc
Notes to the accounts
38 Financial instruments (continued)
Currency risks are primarily managed through the use of natural hedging and regularly reviewing when cash should be
exchanged into either sterling or another functional currency.
(ii) Price risk
The group is exposed to equity securities price risk because of investments held by the group and classified on the
consolidated balance sheet as available-for-sale. To manage its price risk arising from investments in equity securities, the
group diversifies its portfolio.
The majority of the group’s equity investments are publicly traded and are quoted on stock exchanges located in Bermuda,
Japan, Switzerland, UK and US. Should these equity indexes increase or decrease by 5 per cent. with all other variables
held constant and all the group’s equity instruments move accordingly, the group’s equity balance would increase/decrease
by £3,127,000 (2013: £2,946,000).
The group’s exposure to commodity price risk is not significant.
(iii) Cash flow and interest rate risk
The group’s interest rate risk arises from interest-bearing assets and short and long-term borrowings. Borrowings issued at
variable rates expose the group to cash flow interest rate risk. The group has no fixed rate exposure.
At 31 December 2014, if interest rates on non-sterling denominated interest-bearing assets and borrowings had been
50 basis points higher/lower with all other variables held constant, post-tax profit for the year would have been £215,000
(2013: £296,000) higher/lower.
At 31 December 2014, if interest rates on sterling denominated interest-bearing assets and borrowings had been 50 basis
points higher/lower with all other variables held constant, post-tax profit for the year would have been £176,000 (2013:
£196,000) higher/lower.
The interest rate exposure of the group’s interest bearing assets and liabilities by currency, at 31 December was:
Assets
2014
£’000
2013
£’000
Liabilities
2014
£’000
2013
£’000
178,831
52,105
19,403
9,827
11,915
7,873
38
4,066
527
1,359
3,346
1,153
603
407
4,465
––––––––––
295,918
––––––––––
176,233
66,953
20,871
19,609
17,591
6,585
44
6,465
681
1,930
2,834
355
460
959
2,019
––––––––––
323,589
––––––––––
143,660
42,165
18,666
5,231
2
807
785
248
522
151
–
–
598
404
4,465
––––––––––
217,704
––––––––––
137,005
55,100
20,488
6,103
–
739
1,055
336
678
149
–
–
459
962
2,023
––––––––––
225,097
––––––––––
Sterling
US Dollar
Euro
Swiss Franc
Kenyan Shilling
Indian Rupee
Malawian Kwacha
Bangladesh Taka
Australian Dollar
South African Rand
Brazilian Real
Bermudian Dollar
Canadian Dollar
Japanese Yen
Other
74
Notes to the accounts
38 Financial instruments (continued)
(B) Credit risk
The group has policies in place to limit its exposure to credit risk. Credit risk arises from cash and cash equivalents,
deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables
and committed transactions. If customers are independently rated, these ratings are used. Otherwise if there is no
independent rating, management assesses the credit quality of the customer taking into account its financial position, past
experience and other factors and if appropriate holding liens over stock and receiving payments in advance of services or
goods as required. Management monitors the utilisation of credit limits regularly.
The group’s approach to customer lending through the group’s banking subsidiaries is risk averse with only 1.5 per cent. of
the customer loan book being unsecured. Collateralised loans are normally secured against cash or property, with property
loans being restricted to 70 per cent. of recent valuation although corporate or personal guarantees are also acceptable in
some instances.
The group has a large number of trade receivables, the largest five receivables at the year end comprise 21 per cent. (2013:
24 per cent.) of total trade receivables.
(C) Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of directors. The group manages liquidity risk
by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and
managing the maturity profiles of financial assets and liabilities.
The two subsidiary companies which are engaged in banking activities, Duncan Lawrie Limited and Duncan Lawrie
(IOM) Limited both have restrictions contained in their memorandum and articles of association which place a ceiling on
their levels of customer lending. Such restrictions effectively limit the customer loan book to the value of the share capital
and reserves of each banking subsidiary. This fact, in conjunction with the general matching of maturing customer
deposits with market placements and the general use of liquid assets such as certificates of deposit, results in significantly
reduced liquidity risk for Duncan Lawrie and the group.
At 31 December 2014, the group had undrawn committed facilities of £24,995,000 (2013: £23,998,000), all of which are
due to be reviewed within one year.
75
Camellia Plc
Notes to the accounts
38 Financial instruments (continued)
The table below analyses the group’s financial assets and liabilities which will be settled on a net basis into relevant
maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts
disclosed are the contractual undiscounted cash flows.
Less than 1
year
£’000
Between 1
and 2 years
£’000
Between 2
and 5 years
£’000
Over 5
years
£’000
Undated
£’000
Total
£’000
At 31 December 2014
Assets
Available-for-sale financial assets
Trade and other receivables
Loans and advances to customers
of banking subsidiaries
Cash and cash equivalents
(excluding bank subsidiaries)
Loans and advances to banks by
banking subsidiaries
Liabilities
Borrowings (excluding finance
lease liabilities)
Finance lease liabilities
Deposits by banks at banking subsidiaries
Customer accounts held at
banking subsidiaries
Trade and other payables
Other non-current liabilities
At 31 December 2013
Assets
Available-for-sale financial assets
Trade and other receivables
Loans and advances to customers
of banking subsidiaries
Held-to-maturity financial assets
Cash and cash equivalents
(excluding bank subsidiaries)
Loans and advances to banks by
banking subsidiaries
Liabilities
Borrowings (excluding finance
lease liabilities)
Finance lease liabilities
Deposits by banks at banking subsidiaries
Customer accounts held at
banking subsidiaries
Trade and other payables
Other non-current liabilities
153
37,508
153
1,237
460
–
–
–
62,722
–
63,488
38,745
14,345
5,998
15,163
905
2,343
38,754
56,879
–
–
–
–
56,879
200,131
––––––––
309,016
––––––––
–
––––––––
7,388
––––––––
–
––––––––
15,623
––––––––
–
––––––––
905
––––––––
154
––––––––
65,219
––––––––
200,285
––––––––
398,151
––––––––
2,851
4
1,023
12
–
1,160
14
–
–
16
–
–
–
–
–
2,893
4
2,183
208,620
46,311
–
––––––––
258,809
––––––––
970
–
–
––––––––
2,142
––––––––
2,916
–
–
––––––––
2,930
––––––––
84
–
98
––––––––
198
––––––––
34
–
–
––––––––
34
––––––––
212,624
46,311
98
––––––––
264,113
––––––––
151
33,963
26,967
1,000
75,838
151
1,077
928
–
–
455
–
2,013
–
–
151
–
95
–
–
59,093
–
2,963
–
60,001
35,040
32,966
1,000
–
75,838
213,545
––––––––
351,464
––––––––
–
––––––––
2,156
––––––––
–
––––––––
2,468
––––––––
–
––––––––
246
––––––––
240
––––––––
62,296
––––––––
213,785
––––––––
418,630
––––––––
3,045
6
2,465
216,989
43,539
–
––––––––
266,044
––––––––
22
12
–
25
–
–
19
–
–
–
–
–
1,729
–
–
––––––––
1,763
––––––––
627
–
–
––––––––
652
––––––––
95
–
103
––––––––
217
––––––––
63
–
–
––––––––
63
––––––––
3,111
18
2,465
219,503
43,539
103
––––––––
268,739
––––––––
76
Notes to the accounts
38 Financial instruments (continued)
Included in loans and advances to banks by banking subsidiaries repayable in less than 1 year is £170,486,000 (2013:
£196,505,000) repayable on demand, £29,645,000 (2013: £15,156,000) repayable within 3 months and £nil (2013:
£1,884,000) repayable between 3 and 12 months.
Included in loans and advances to customers of banking subsidiaries repayable in less than 1 year is £3,723,000 (2013:
£11,779,000) repayable on demand, £2,209,000 (2013: £5,905,000) repayable within 3 months and £8,420,000 (2013:
£9,283,000) repayable between 3 and 12 months.
Included in held-to-maturity financial assets repayable in less than 1 year is £nil (2013: £1,000,000) repayable between
3 and 12 months.
Included in deposits by banks at banking subsidiaries repayable in less than 1 year is £815,000 (2013: £2,268,000)
repayable on demand and £208,000 (2013: £197,000) repayable between 3 and 12 months.
Included in customer accounts held at banking subsidiaries repayable in less than 1 year is £179,179,000 (2013:
£163,143,000) repayable on demand, £25,871,000 (2013: £47,209,000) repayable within 3 months and £3,570,000
(2013: £6,637,000) repayable between 3 and 12 months.
Included in borrowings in less than 1 year is £2,757,000 (2013: £2,938,000) repayable on demand.
39 Principal subsidiary and associated undertakings
Subsidiary undertakings
The principal operating subsidiary undertakings of the group at 31 December 2014, which are wholly owned and
incorporated in Great Britain unless otherwise stated, were:
Agriculture and horticulture
Amgoorie India Limited (Incorporated in India - 99.8 per cent. holding)
C.C. Lawrie Comércio e Participacões Ltda. (Incorporated in Brazil)
Eastern Produce Cape (Pty) Limited (Incorporated in South Africa)
Eastern Produce Kenya Limited (Incorporated in Kenya – 70.0 per cent. holding)
Eastern Produce Malawi Limited (Incorporated in Malawi – 73.2 per cent. holding)
Eastern Produce South Africa (Pty) Limited (Incorporated in South Africa – 73.2 per cent. holding)
Goodricke Group Limited (Incorporated in India – 77.5 per cent. holding)
Horizon Farms (An United States of America general partnership – 80.0 per cent. holding)
Kakuzi Limited (Incorporated in Kenya – 50.7 per cent. holding)
Koomber Tea Company Limited (Incorporated in India)
Longbourne Holdings Limited
Stewart Holl (India) Limited (Incorporated in India – 92.0 per cent. holding)
Engineering
Abbey Metal Finishing Company Limited
AJT Engineering Limited
AKD Engineering Limited
Atfin GmbH (Incorporated in Germany – 51.0 per cent. holding)
British Metal Treatments Limited
GU Cutting and Grinding Services Limited
Loddon Engineering Limited
Principal
country of
operation
India
Brazil
South Africa
Kenya
Malawi
South Africa
India
USA
Kenya
India
Bangladesh
India
UK
UK
UK
Germany
UK
UK
UK
77
Camellia Plc
Notes to the accounts
39 Principal subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Food storage and distribution
Affish BV (Incorporated in The Netherlands)
Associated Cold Stores & Transport Limited
Wylax International BV (Incorporated in The Netherlands)
Trading and agency
Linton Park Services Limited
Robertson Bois Dickson Anderson Limited
Banking and financial services
Duncan Lawrie Limited
Duncan Lawrie Holdings Limited
Duncan Lawrie (IOM) Limited (Incorporated in Isle of Man)
Investment holding
Affish Limited
Assam Dooars Investments Limited
Associated Fisheries Limited
Bordure Limited
John Ingham & Sons Limited
Lawrie (Bermuda) Limited (Incorporated in Bermuda)
Lawrie Group Plc (Owned directly by the company)
Lawrie International Limited (Incorporated in Bermuda)
Linton Park Plc (Owned directly by the company)
Unochrome Industries Limited
Western Dooars Investments Limited
Other
XiMo AG (Incorporated in Switzerland – 51.0 per cent. holding)
78
Principal
country of
operation
The Netherlands
UK
The Netherlands
UK
UK
UK
UK
Isle of Man
UK
UK
UK
UK
UK
Bermuda
UK
Bermuda
UK
UK
UK
Switzerland
Notes to the accounts
39 Principal subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Summarised financial information on subsidiaries with material non-controlling interests
Summarised balance sheet
Current
Assets
Liabilities
Total current net assets/(liabilities)
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Eastern Produce
Kenya Limited
as at 31 December
2013
£’000
2014
£’000
Eastern Produce
Malawi Limited
as at 31 December
2013
£’000
2014
£’000
17,573
(9,802)
––––––––––
7,771
––––––––––
23,760
(10,177)
––––––––––
13,583
––––––––––
9,333
(12,811)
––––––––––
(3,478)
––––––––––
9,708
(9,991)
––––––––––
(283)
––––––––––
25,108
(6,861)
––––––––––
18,247
––––––––––
26,018
––––––––––
24,383
(6,507)
––––––––––
17,876
––––––––––
31,459
––––––––––
52,158
(14,756)
––––––––––
37,402
––––––––––
33,924
––––––––––
44,838
(12,933)
––––––––––
31,905
––––––––––
31,622
––––––––––
Eastern Produce
South Africa Limited
as at 31 December
2013
£’000
2014
£’000
Goodricke Group
Limited
as at 31 December
2013
£’000
2014
£’000
3,682
(643)
––––––––––
3,039
––––––––––
2,979
(326)
––––––––––
2,653
––––––––––
28,589
(14,463)
––––––––––
14,126
––––––––––
25,065
(13,619)
––––––––––
11,446
––––––––––
5,371
(1,345)
––––––––––
4,026
––––––––––
7,065
––––––––––
5,334
(1,342)
––––––––––
3,992
––––––––––
6,645
––––––––––
23,627
(6,787)
––––––––––
16,840
––––––––––
30,966
––––––––––
21,498
(4,647)
––––––––––
16,851
––––––––––
28,297
––––––––––
79
Camellia Plc
Notes to the accounts
39 Principal subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Summarised income statement
Revenue
Profit before tax
Taxation
Other comprehensive (expense)/income
Total comprehensive income
Total comprehensive income allocated to
non-controlling interests
Dividends paid to non-controlling interests
Horizon Farms
as at 31 December
2013
£’000
2014
£’000
Kakuzi Limited
as at 31 December
2013
£’000
2014
£’000
2,633
(318)
––––––––––
2,315
––––––––––
1,360
(411)
––––––––––
949
––––––––––
8,256
(1,316)
––––––––––
6,940
––––––––––
8,083
(1,089)
––––––––––
6,994
––––––––––
8,536
(829)
––––––––––
7,707
––––––––––
10,022
––––––––––
7,274
(781)
––––––––––
6,493
––––––––––
7,442
––––––––––
19,095
(4,924)
––––––––––
14,171
––––––––––
21,111
––––––––––
17,956
(4,662)
––––––––––
13,294
––––––––––
20,288
––––––––––
Eastern Produce
Kenya Limited
for year ended
31 December
Eastern Produce
Malawi Limited
for year ended
31 December
2014
£’000
27,783
––––––––––
4,936
(1,537)
(127)
––––––––––
3,272
––––––––––
2013
£’000
32,000
––––––––––
9,084
(2,754)
248
––––––––––
6,578
––––––––––
2014
£’000
18,113
––––––––––
10,858
(3,279)
–
––––––––––
7,579
––––––––––
2013
£’000
20,100
––––––––––
27,362
(8,101)
–
––––––––––
19,261
––––––––––
982
2,686
1,973
1,872
2,031
698
5,162
686
80
Notes to the accounts
39 Principal subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Eastern Produce
South Africa Limited
for year ended
31 December
Goodricke Group
Limited
for year ended
31 December
2014
£’000
4,448
––––––––––
975
(306)
–
––––––––––
669
––––––––––
2013
£’000
3,629
––––––––––
222
(130)
–
––––––––––
92
––––––––––
2014
£’000
59,569
––––––––––
5,157
(1,509)
(1,206)
––––––––––
2,442
––––––––––
2013
£’000
62,777
––––––––––
5,162
(1,872)
–
––––––––––
3,290
––––––––––
179
–
25
–
782
211
718
203
Horizon Farms
as at 31 December
2013
£’000
4,111
––––––––––
2,565
(907)
–
––––––––––
1,658
––––––––––
2014
£’000
5,101
––––––––––
3,246
(1,243)
–
––––––––––
2,003
––––––––––
Kakuzi Limited
as at 31 December
2013
£’000
8,385
––––––––––
1,769
(549)
83
––––––––––
1,303
––––––––––
2014
£’000
10,101
––––––––––
1,607
(501)
(41)
––––––––––
1,065
––––––––––
401
–
332
318
525
250
643
268
Revenue
Profit before tax
Taxation
Other comprehensive expense
Total comprehensive income
Total comprehensive income allocated to
non-controlling interests
Dividends paid to non-controlling interests
Revenue
Profit before tax
Taxation
Other comprehensive (expense)/income
Total comprehensive income
Total comprehensive income allocated to
non-controlling interests
Dividends paid to non-controlling interests
81
Camellia Plc
Notes to the accounts
39 Principal subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Summarised cash flows
Eastern Produce
Kenya Limited
for year ended
31 December
2014
£’000
Eastern Produce
Malawi Limited
for year ended
31 December
2014
£’000
Eastern Produce
South Africa Limited
for year ended
31 December
2014
£’000
Cash flows from operating activities
Cash generated from operations
Net interest received
Income tax paid
Net cash generated from operating activities
Net cash used in investing activities
Net cash (used in)/generated from financing
activities
Net increase in cash and cash
equivalents and bank overdrafts
Cash, cash equivalents and bank
overdrafts at beginning of year
Exchange gains/(losses) on
cash and cash equivalents
Cash, cash equivalents and bank
overdrafts at end of year
4,272
831
(1,462)
––––––––––
3,641
––––––––––
(856)
––––––––––
(8,954)
––––––––––
(6,169)
16,194
266
––––––––––
10,291
––––––––––
Goodricke Group Limited
for year ended
31 December
2014
£’000
3,929
–
(1,659)
––––––––––
2,270
––––––––––
(1,511)
––––––––––
(1,269)
––––––––––
Cash flows from operating activities
Cash generated from operations
Net interest received
Income tax paid
Net cash generated from operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase in cash and cash equivalents
and bank overdrafts
Cash, cash equivalents and bank
overdrafts at beginning of year
Exchange gains on cash and cash equivalents
Cash, cash equivalents and
bank overdrafts at end of year
82
4,602
815
(1,335)
––––––––––
4,082
––––––––––
(1,655)
––––––––––
(2,605)
––––––––––
(178)
(113)
9
––––––––––
(282)
––––––––––
Horizon Farms
for year ended
31 December
2014
£’000
1,939
–
(1,243)
––––––––––
696
––––––––––
(856)
––––––––––
–
––––––––––
9
64
–
––––––––––
73
––––––––––
(461)
––––––––––
13
––––––––––
(375)
2,221
(82)
––––––––––
1,764
––––––––––
Kakuzi Limited
for year ended
31 December
2014
£’000
3,196
585
(326)
––––––––––
3,455
––––––––––
(2,419)
––––––––––
(507)
––––––––––
(510)
(160)
529
341
1
––––––––––
(168)
––––––––––
1,005
53
––––––––––
898
––––––––––
6,330
37
––––––––––
6,896
––––––––––
Notes to the accounts
39 Principal subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Associated undertakings
The principal associated undertakings of the group at 31 December 2014 were:
Principal
country of
operation
Accounting
date
2014
Insurance and leasing
United Insurance Company Limited
(Incorporated in Bangladesh – ordinary shares)
Bangladesh 31 December
United Leasing Company Limited
(Incorporated in Bangladesh – ordinary shares)
Bangladesh 31 December
40 Control of Camellia Plc
Group
interest
in equity
capital
per cent.
37.0
38.4
Camellia Holding AG continues to hold 1,427,000 ordinary shares of Camellia Plc (representing 51.67 per cent. of the
total voting rights). Camellia Holding AG is owned by The Camellia Private Trust Company Limited, a private trust
company incorporated under the laws of Bermuda as trustee of The Camellia Foundation ("the Foundation"). The
Foundation is a Bermudian trust, the income of which is utilised for charitable, educational and humanitarian causes at
the discretion of the trustees.
The activities of Camellia Plc and its group (the “Camellia Group”) are conducted independently of the Foundation and
none of the directors of Camellia Plc are connected with The Camellia Private Trust Company Limited or the Foundation.
While The Camellia Private Trust Company Limited as a Trustee of the Foundation maintains its rights as a shareholder, it
has not participated in, and has confirmed to the board of Camellia Plc that it has no intention of participating in, the day
to day running of the business of the Camellia Group. The Camellia Private Trust Company Limited has also confirmed
its agreement that where any director of Camellia Plc is for the time being connected with the Foundation, he should not
exercise any voting rights as a director of Camellia Plc in relation to any matter concerning the Camellia Group’s interest
in any assets in which the Foundation also has a material interest otherwise than through Camellia Plc.
83
Camellia Plc
Report of the independent auditors
Independent auditors’ report to the members of Camellia Plc
Report on the financial statements
Our opinion
In our opinion:
–
–
–
–
the financial statements, defined below, give a true and fair view of the state of the group’s and of the company’s affairs as
at 31 December 2014 and of the group’s profit and the group’s and the company’s cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with International Financial Reporting
Standards (“IFRSs”) as adopted by the European Union;
the company financial statements have been properly prepared in accordance with International Financial Reporting
Standards (“IFRSs”) as adopted by the European Union and as applied in accordance with the provisions of the
Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and as
regards the group financial statements, Article 4 of the IAS Regulation.
This opinion is to be read in the context of what we say in the remainder of this report.
What we have audited
The group financial statements and company financial statements (the “financial statements”), which are prepared by
Camellia Plc, comprise:
–
–
–
–
–
–
the consolidated and company balance sheet as at 31 December 2014;
the consolidated income statement and the group and company statement of comprehensive income for the year then ended;
the consolidated and company cash flow statement and company cash flow statement for the year then ended;
the group and company statement of changes in equity for the year then ended;
the accounting policies; and
the notes to the financial statements, which include other explanatory information.
The financial reporting framework that has been applied in their preparation is applicable law and IFRSs as adopted by the
European Union and, as regards the company financial statements, as applied in accordance with the provisions of the
Companies Act 2006.
In applying the financial reporting framework, the directors have made a number of subjective judgements, for example in
respect of significant accounting estimates. In making such estimates, they have made assumptions and considered future events.
What an audit of financial statements involves
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”).
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an
assessment of:
–
–
–
whether the accounting policies are appropriate to the group’s and the company’s circumstances and have been consistently
applied and adequately disclosed;
the reasonableness of significant accounting estimates made by the directors; and
the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the Report and accounts to identify material
inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect
based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become
aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
84
Report of the independent auditors
Opinions on matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Report of the directors for the financial year for which the
financial statements are prepared is consistent with the financial statements.
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion:
–
–
–
we have not received all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received
from branches not visited by us; or
the company financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration
specified by law are not made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 19, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs
(UK & Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or
assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
John Ellis (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
23 April 2015
85
Camellia Plc
Five year record
2014
£’000
2013
£’000
2012
£’000
2011
£’000
2010
£’000
Revenue – continuing operations
238,868
––––––––––
251,267
––––––––––
261,529
––––––––––
246,849
––––––––––
251,181
––––––––––
Profit before tax
Taxation
Profit from continuing operations
21,983
(13,673)
––––––––––
8,310
––––––––––
59,648
(22,105)
––––––––––
37,543
––––––––––
69,710
(25,662)
––––––––––
44,048
––––––––––
58,650
(16,860)
––––––––––
41,790
––––––––––
73,141
(22,107)
––––––––––
51,034
––––––––––
Profit attributable to owners of the parent
2,836
––––––––––
28,297
––––––––––
31,210
––––––––––
33,086
––––––––––
41,984
––––––––––
Equity dividends paid
Equity
Called up share capital
Reserves
Total shareholders’ funds
3,452
––––––––––
3,388
––––––––––
3,224
––––––––––
3,057
––––––––––
2,891
––––––––––
282
321,422
––––––––––
321,704
––––––––––
283
332,183
––––––––––
332,466
––––––––––
284
313,526
––––––––––
313,810
––––––––––
284
321,308
––––––––––
321,592
––––––––––
284
329,209
––––––––––
329,493
––––––––––
Earnings per share
Dividend paid per share
102.7p
125p
1,020.2p
122p
1,122.9p
116p
1,190.4p
110p
1,510.5p
104p
86