Camellia Annual Report 2020

Plain-text annual report

260881 Camellia R&A Cover Spread.qxp 30/04/2021 13:00 Page 1 CAMELLIA PLC C a m e l l i a P l c A n n u a l R e p o r t 2 0 2 0 Perivan 260881 2020 133 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 1 CAMELLIA PLC REPORT AND ACCOUNTS 2020 CONTENTS Camellia at a glance Directors and advisers Chairman’s statement Operational report Financial report Environmental and social report 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 page 2 4 5 6 13 16 22 31 35 40 41 43 44 45 46 47 48 49 50 64 117 130 1 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 2 CAMELLIA PLC CAMELLIA AT A GLANCE Camellia Plc is an international Group – a global family of diverse companies with a 133-year history employing approximately 76,000 people worldwide. Our operations are in Agriculture, Engineering, Food Service and Investments. From the start, Camellia’s ethos has been based on the highest moral and professional integrity, and a commitment to doing the right thing – ethically and commercially, globally and locally. Our business is built on two fundamental principles: n Long-termism. We are custodians, holding our business in trust for future generations. We have a responsibility to promote the stability, security and continuity of all our businesses, so they can be passed on to the next generation as enduring operations. We recognise that people and businesses take time to establish and grow to their full potential. We are committed to improving the long-term stability and well-being of our businesses, the communities and the environments in which we operate. n Sustainability. We are committed not only to the welfare of our employees but also to the communities in which they live. Our businesses can and should grow with respect and care for the environment rather than at a cost to it. We proactively invest in ensuring that the places where we operate are protected and improved, and seek to minimise the impact of our business on the environment. The Segment trading proﬁt and loss information set out below, including details of underlying proﬁt is extracted from note 1 on page 64 of the Accounts. Our business is made up as follows: AGRICULTURE 2020: Revenue – £247.2 million, Segment underlying trading proﬁt – £18.3 million, Segment trading proﬁt – £2.2 million Locations India, Bangladesh, Kenya, Malawi Kenya, Malawi, South Africa, Kenya Brazil Kenya, Malawi, Brazil Bangladesh South Africa Kenya Kenya Kenya Mature Area Ha 33,354 2,802 532 3,616 2,344 1,610 66 – Immature Area Ha 2,936 896 373 – 3,533 365 18 10 836 4,529 head Core crops Tea Macadamia Avocados Speciality crops Arable Forestry Rubber Wine grapes Blueberries Other Joint Projects Livestock 2 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 3 CAMELLIA PLC CAMELLIA AT A GLANCE ENGINEERING 2020: Revenue – £19.3 million, Segment trading loss – £1.5 million Subsidiary Locations Abbey Metal Finishing and Atﬁn UK, Germany A JT Engineering UK FOOD SERVICE 2020: Revenue – £23.6 million, Segment trading loss – £1.7 million Subsidiary ACS&T Jing Tea INVESTMENTS Locations UK UK Investment type Locations Investment Portfolio Investment Property Collections Global UK, Malawi, Brazil UK, India * Collections are stated at cost ASSOCIATES 2020: Share of results after taxation – £6.1 million Location Activity BF&M United Finance United Insurance Bermuda Bangladesh Bangladesh Life and Non-life insurance Banking Non-life insurance Market value at 31/12/20 £’m 50.6 23.9 9.8* Holding % 37.6 38.4 37.0 3 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 4 CAMELLIA PLC DIRECTORS AND ADVISERS Directors Malcolm Perkins Chris Relleen Tom Franks Graham Mclean Susan Walker Jonathon Bond Gautam Dalal William Gibson Simon Turner Frédéric Vuilleumier Chairman (iii) Deputy Chairman, independent non-executive Director and senior independent Director (i) (ii) (iii) Chief Executive Director of Agriculture Chief Financial Oﬃcer Independent non-executive Director (iv) Independent non-executive Director (i) Independent non-executive Director (i) (ii) (iii) (iv) Non-executive Director Independent non-executive Director (i) Audit committee (ii) Remuneration committee (iii) Nomination committee (iv) Safeguarding and Stewardship committee Group General Counsel & Company Secretary Amarpal Takk (iv) Registered oﬃce Linton Park Linton Maidstone Kent ME17 4AB Registered Number 00029559 Nominated adviser and broker Panmure Gordon (UK) Limited One New Change London EC4M 9AF Registrars Independent auditors PR Link Group 10th Floor Central Square 29 Wellington Street Leeds LS1 4DL Deloitte LLP Statutory Auditors 1 New Street Square London EC4A 3HQ Maitland/AMO The HKX Building 3 Pancras Square London N1C 4AG Website www.camellia.plc.uk 4 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 5 CAMELLIA PLC CHAIRMAN’S STATEMENT 2020 was a deeply challenging year for all of our operations, people and communities globally. The consequences of the pandemic have been unpredictable and have at times tested our resilience. However, it is testament to the quality of our management teams, our employees and our ﬁnancial prudence that we came through 2020 with an underlying operating proﬁt before tax of £13.2 million. The vast majority of our income arises from growing basic commodities and foodstuﬀs for which there will always be a demand. 2020 was marked by the very serious human rights abuse allegations made against our operations at Kakuzi in Kenya and in Malawi. We settled these claims and more importantly, have taken the opportunity to review the policies and procedures across the Group to ensure that they reﬂect international best practice. The relationship with the local communities across all our agricultural operations is critical to both our ethos and success; we continue to nurture them and have taken extensive steps to improve work practices and safeguarding measures (further discussed later in this report). The Board’s deep commitment to ensuring we live up to our aspirations in this area for the beneﬁt of all our employees and communities will be greatly assisted by our decision to establish a new Safeguarding and Stewardship Committee (involving independent experts) and a network of new grievance mechanisms on the ground. Climate change remains a major concern to the Group and continues to inﬂuence our long-term strategy. Reﬂecting this, we disposed of our interest in Horizon Farms in California. Concerns over water availability and long-term climate projections made this a good time to sell and we were pleased with the price achieved. Other strategic developments are covered in the Operational report. The results for 2020 reﬂect a proﬁt before tax of £7.8 million after signiﬁcant one oﬀ net costs amounting to £8.2 million (2019: proﬁt before tax from continuing operations £22.3 million, including provision releases and one-oﬀ items of £4.9 million). Dividend The Group is set up in a way that reﬂects our long-term approach, with ﬁnancial stability and sustainability at the heart of our philosophy. I was pleased that, having deferred the 2019 ﬁnal dividend until we could assess more clearly the impact of the pandemic, we were able to pay it in full. Your Board is recommending a ﬁnal dividend in respect of the year ended 31 December 2020 of 144p per share. Outlook At this stage, whilst there are signs of the world returning closer to normality with the roll out of vaccines, we do not believe that normal trading conditions will emerge until 2022, and certain businesses will continue to feel the eﬀect of the pandemic for some time thereafter. We remain ﬁnancially strong, with signiﬁcant net cash, and have the resources to withstand a further period of disruption. The demand for our agricultural produce will remain and we are managing the business in a manner which we believe will ensure our future prosperity, whilst taking the necessary steps to manage our costs in the short term. Directors Jonathon Bond, who joined the Board on 6 March 2020, is taking up a new executive role which necessitates him retiring from the Board at the AGM. I should like to thank him for his contribution and wish him well for the future. Staﬀ My gratitude and sincere thanks go out to all our staﬀ for their eﬀorts in 2020. It is thanks to their resilience, hard work and loyalty in this unprecedented and challenging year that the Group remains in such a strong position. Malcolm Perkins Chairman 3 May 2021 5 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 6 CAMELLIA PLC OPERATIONAL REPORT OVERVIEW 2020 was a diﬃcult year as a combination of the pandemic, litigation against the Group arising from allegations against our East African operations, poor tea prices and a possible no deal Brexit all had the potential to impact trading. Despite this, sales in our agriculture division grew and underlying proﬁts saw only a marginal decline. We also continued to implement our strategy of investing for long term growth and reﬁning our portfolio of businesses. COVID Whilst all our businesses were able to keep trading throughout the pandemic, they were all hit to some extent, whether through lockdowns preventing operations, or markets closing. However, I am proud of the eﬀorts that have been made by all of our employees to ensure continuity of operations no matter how tough the challenges. Whilst there is optimism that the impact of the vaccine will start to return things to normal, there remains no doubt that 2021 will also be challenging for some operations. Litigation concerning our East African operations In January 2020, the Company announced that it and certain UK subsidiary companies faced legal claims in the UK based on allegations against two businesses in its African operations, namely Kakuzi in Kenya and EPM in Malawi. These claims have now been resolved (without any admission of liability) through settlements of up to £4.6 million in relation to the Kenyan claims and £2.3 million in relation to the Malawian claims. These are in addition to £9.2 million of legal and other costs associated with the defence of these allegations which are also reﬂected in the 2020 results. We have also put in place signiﬁcant progressive measures around employee and community welfare, details of which are set out in the Environmental and Social report below. Such measures include, for example, building social centres, establishing a specialist female leadership programme and appointing female safety marshalls. Up to date information on progress on these measures can be found on the Camellia Group website. The serious human rights claims the Group faced relating to its operations in Kenya led to a number of European supermarket chains suspending Kakuzi as a supplier of avocados. We are proactively working to address these customer concerns, including with the assistance of leading human rights advisers and are pleased that a number of our customers intend to resume trade in the new season. Eastern Produce Malawi has established and Kakuzi is establishing an Operational-level Grievance Mechanism (OGM), as deﬁned by the UN Guiding Principles and by Human Rights specialists. Consequently, the claimants’ UK law ﬁrm has agreed it will not bring or support any other claims relating to or in connection with the Camellia Group's operations in Kenya or Malawi for a substantial period of time. This reﬂects their conﬁdence in the development of the Group’s OGMs. Tea prices The pandemic has interrupted both the supply and demand for tea in diﬀerent ways in diﬀerent countries. However, the world remains over-supplied with tea which, combined with a desire across the industry to raise wages and living standards could lead to a long-term decline in the proﬁtability of tea growing. We are pleased to see the major producing countries begin to take steps to help address this imbalance for the good of the industry and the hundreds of thousands of people who work in it and whose livelihoods depend on it. Brexit Our UK businesses in particular made extensive preparations for the impact of Brexit. Things have now settled down and we do not anticipate any material eﬀect on our trading operations. 6 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 7 CAMELLIA PLC OPERATIONAL REPORT INVESTMENTS AND DIVESTMENTS Despite the diﬃculties in doing business in 2020, we continued our strategy of diversifying our agricultural products and production base. During the year we replanted a total of 316Ha of tea, and established a further 98Ha of avocado and 36Ha of macadamia. Since the start of 2021 we have planted an additional 37Ha of avocado in Tanzania and 174Ha of tea in our India and Bangladesh operations. We continued to invest in our assets during the year and £10.7 million was spent on property, plant, equipment and investment property (2019: £14.5 million). Key projects are referred to in the operational reports below. A further £3.7 million (2019: £4.6 million) was invested in bearer crop and forestry plantings. We also announced the sale of our Horizon Farms property in California for a total cash consideration of $31 million. This was brought about by concerns over the long-term future of the farm given the scarcity of reliable sources of water. PERFORMANCE Agriculture In total, the Agriculture division made a segment trading proﬁt of £2.2 million (2019: £23.9 million) on revenue of £247.2 million (2019: £238.7 million), as set out in note 1 to the Accounts. This includes costs of £16.1 million (2019: £1.3 million) in respect of legal and other costs associated with the allegations arising from our East African operations. Agriculture’s underlying trading proﬁt was £18.3 million (2019: £19.0 million). Tea Production 2020 saw the Group produce slightly lower volumes of tea, due in part to the lockdown of the tea estates in India at the start of the pandemic although this was partially oﬀset by record production in Kenya. India Bangladesh Kenya Malawi Total own estates Bought Leaf production Managed Client production Total made tea produced Mature area Ha 15,940 8,339 3,943 5,132 –––––––– 33,354 –––––––– Immature area Ha 1,373 844 215 509 –––––––– 2,941 –––––––– 2020 Volume mkg 26.1 12.5 15.8 16.8 –––––––– 71.2 –––––––– 23.5 4.8 –––––––– 99.5 –––––––– 2019 Volume mkg 32.1 14.2 12.1 17.6 –––––––– 76.0 –––––––– 21.1 4.3 –––––––– 101.4 –––––––– Tea pricing and operations India Our own production in India was down by 19% against a national reduction of 22%. This was a result of a complete lockdown of all tea gardens in the early weeks of the pandemic followed by cyclone Amphan and an unusually severe monsoon season. The smallholder sector was particularly impacted and our Bought Leaf production was down by 40%. Prices for CTC teas however improved signiﬁcantly as domestic demand rose and supply fell. In the Dooars, prices were up 32% and in Assam 13%. In Darjeeling however, the loss of the lucrative ﬁrst ﬂush due to the lockdown resulted in average prices 12% down on the prior year. 7 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 8 CAMELLIA PLC OPERATIONAL REPORT Exports were well down on normal years as a result of strong local demand and the very high volumes emerging from Kenya. Due to the many disruptions to the estate operations as a result of COVID, it was agreed by all parties that wage increases would be suspended for 2020. Interim wage increases for West Bengal has been agreed at 14.8% for 2021 and in Assam the wage increase is subject to a court process. Packet tea sales volumes in India grew by 16% to 13.1mkg, reﬂecting our continued marketing eﬀorts. The high price of purchased tea however impacted margins. The replanting programme continued with 164Ha completed (2019: 239Ha) and a further 62Ha uprooted for replanting at a later date. In 2021 a total of 117Ha of replanting has been completed in the ﬁrst quarter. Bangladesh Our crop in Bangladesh was down by 12% as a result of a very slow start to the season caused by dry hot weather, followed by torrential downpours from cyclone Amphan. Average prices were down by 17% as tea consumption in Bangladesh relies heavily on the hot tea stalls, many of which were closed for a signiﬁcant part of the year. A wage award was agreed in the fourth quarter of 2020 with a 17.6% increase in the daily rate eﬀective from 1 January 2019 with the possible introduction of improved productivity measures later in 2021. The replanting and extension programme was scaled back in favour of inﬁlling young tea areas which had lost a high number of plants as a result of a very dry start to the year. A total of 105Ha of tea was planted in the year (2019: 161Ha) of which 95Ha was replanting and 10Ha of new planting. A total of 3.8 million bushes were planted to inﬁll existing ﬁelds. In the ﬁrst quarter of 2021 a total of 57Ha of replanting has been completed. Kenya Production (including smallholder and managed client volumes) was up by 36% which broke all records and was 11% above our previous best year in 2016. 2021 production volumes in the ﬁrst quarter are lower than last year, particularly in the West of Rift region. Pricing remains under pressure with average prices in quarter one of 2021 3% below the same period last year. The greatest gains were seen in the smallholder sector where our 2020 production was up 51% whilst our own estate volumes were up 34%. This picture was reﬂected across Kenya where smallholder volumes were up 25% overall against 23% from the commercial plantation sector. Such a huge supply of tea put signiﬁcant pressure on prices and our average price was down 12% on last year. However, our factories performed well in relative terms, with prices 17% above the average commercial plantation sector auction pricing. To help control the levels of production and prices, new tea regulations were proposed in early 2020 and resulted in the signing of the Tea Act 2020 in December. The new Act makes a number of signiﬁcant changes to the way in which the tea auction system and export markets work in Kenya and we await to see how they will impact the industry. There were no wage increases agreed with the unions during the year and discussions are ongoing. We replanted a total of 47Ha in 2020 (2019: 51Ha) and uprooted a further 50Ha for replanting in 2021. Malawi Production (including smallholder volumes) was down on 2019 by 5% due to the drier conditions experienced, particularly in the second quarter. Our production levels for the ﬁrst quarter of 2021 are 7% higher than last year. With the very large volumes of tea available in Kenya, pricing has been under pressure, and sales through the auction were suspended in April 2020. On resumption of the auction, prices improved signiﬁcantly in July and overall average prices for the year were in line with 2019 levels. Pricing in 2021 is slightly higher than the same period in 2020. 8 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 9 CAMELLIA PLC OPERATIONAL REPORT The newly elected Government of Malawi announced the implementation of a new minimum wage from the start of 2021. A wage increase reﬂecting this was subsequently agreed with the unions at 19% for 2021 alongside certain productivity improvements. As a result of cash conservation measures, no replanting nor any new irrigation schemes were carried out during the year. Macadamia Production Macadamia kernel volumes produced in 2020 decreased to 1.1mkg (2019: 1.3mkg). This 17% drop on 2019 was due to a period of very hot weather in Malawi and South Africa at the end of 2019 which aﬀected ﬂowering and nut set. Kenya’s volumes reﬂected an increase of 45% as the orchards continued to mature and beneﬁted from benign weather conditions throughout the year. Malawi South Africa Kenya Total Mature area Ha Immature area Ha 1,388 7161 698 –––––––– 2,802 –––––––– 140 422 334 –––––––– 896 –––––––– Volume 2020 Tonnes 403 196 455 –––––––– 1,054 –––––––– Volume 2019 Tonnes 503 459 313 –––––––– 1,275 –––––––– 1 Excludes 191Ha relating to Wales Estate which was vacated post completion of the 2020 harvest Macadamia Pricing The pandemic has resulted in reduced demand from tourism and the food service sector. Imports into two of our main markets (USA and Japan) were down signiﬁcantly. Despite this being partially oﬀset by increased demand from retail, macadamia kernel prices fell and averaged 4% below those of 2019. Due to the reduced demand in 2020, we believe that inventories of kernel from the 2020 season are higher than normal. Production in 2021 is also anticipated to be increasing which could bring prices under pressure for the new season depending on the speed of recovery in the hospitality sector. Macadamia Operations In total we planted another 36Ha of macadamia in South Africa, to which an additional 6Ha has been added in the ﬁrst quarter of 2021. We harvested our 2020 crop from Wales estate before vacating the property as planned and previously reported. Early indications from the 2021 season in Malawi show that kernel quality has been adversely impacted by pest and disease damage which could result in lower production volumes and reduced average prices. There are currently no indications of similar damage to the crop in Kenya and South Africa. Initial assessments of our overall production volumes from our orchards for the 2021 season indicate a higher crop than 2020. Avocado Production Avocado volumes from our own estates in 2020 increased to 10.9mkg (2019: 7.1mkg). This increase reﬂects the increase in mature hectarage and 2020 being an ‘on’ year for avocado. Kenya – own estates – smallholders and outgrowers Mature area Ha Immature area Ha 532 373 Volume 2020 mkg 10.9 1.1 Volume 2019 mkg 7.1 1.1 9 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 10 CAMELLIA PLC OPERATIONAL REPORT Avocado Pricing and Operations Average prices for Hass avocados (which made up 95% of our volumes) were down 41% on the record levels that we saw in 2019, partly due to the closure of the hotel and restaurant sector, but also due to record volumes of fruit from Peru overwhelming the European market during the summer. Prices recovered rapidly in the autumn once the excess fruit was sold. A total of 98Ha (2019: 79Ha) of avocado orchards were planted during the year of which 34Ha was the Carmen variety. We continue to monitor the 23Ha trial of avocados near Kitale in Kenya which we initiated in 2017. The ﬁrst export crop was completed in the year with satisfactory results. The timing of the production and harvest indicates a later market window than the Kakuzi fruit which will be beneﬁcial for prices. We expect to take a decision next year on whether to move forward with the full development. In Tanzania, the purchase of the Mgagao farm is complete. The ﬁrst 13Ha of avocado were planted in 2020 with an additional 37Ha planted in early 2021. In South Africa the land clearance on the new farm reported last year is under way and the ﬁrst 80Ha of avocado will be planted in 2022. Speciality Crops Production Arable (Brazil) Rubber (Bangladesh) Citrus (USA)1 Wine grapes (South Africa) Blueberries (Kenya) Pistachios (USA)1 Almonds (USA)1 Forestry (Kenya, Brazil, Malawi) Livestock Mature area Ha Immature area Ha 3,616 1,610 – 66 – – – – 365 – 18 10 – – Volume 2020 Tonnes 34,979 659 7,262 594 13 – – Volume 2019 Tonnes 27,829 650 6,665 394 4 10 131 m3 116,672* m3 86,710* No of head No of births No of births 4,529 956 827 * 1 Volumes quoted are for conversion to value addition products rather than fuel wood for our own use Sold in 2020 Speciality Crops, Pricing and Operations Arable We grow a variety of annual crops in Brazil including soya, sorghum, wheat, maize and barley. In 2020 all crops grew well and achieved good prices, assisted in part by the devaluation of the Brazilian Real. Rubber Rubber is grown on areas of the Bangladesh tea estates unsuited for growing tea. Volumes produced in 2020 were in line with 2019, as were average prices which remain below cost. Wine Although grape production was up 51% and wine sales up 63% compared with 2019, the continuing losses of the operation have necessitated implementing a restructuring process. In 2021 all grape production will be sold to third party wineries and branded sales will continue under an agency agreement. 10 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 11 CAMELLIA PLC OPERATIONAL REPORT Blueberries The blueberry trial continues – the ﬁrst commercial crop was harvested this year but, as previously indicated, volumes achieved were below expectations due to cool, wet weather and the crop was sold locally. Citrus, pistachios and almonds 2020 was an excellent citrus season for both the Murcott and Navel Orange crops. Following the sale of Horizon Farms during 2020, this will be the ﬁnal crop of citrus and there will be no further production of pistachios and almonds. Forestry Production of Eucalyptus in Brazil increased 53% in the year due to continued strong demand from the paper industry. Kakuzi saw a 17% decline in production of forestry products for the market in Kenya due to a reduction in demand resulting from COVID restrictions. Livestock Births were up this year due to benign weather conditions leading to excellent volumes of good quality grazing which ensured the cattle were in peak condition. Engineering In total, the Engineering division recorded a segment trading loss of £1.5 million (2019: £Nil million) on revenue of £19.3 million (2019: £22.1 million), as set out in note 1 to the Accounts. A JT Engineering had a successful year in the oilﬁeld services division. However, the site services division was largely closed from the middle of March 2020 until the end of the year, with much of the work postponed and with the engineers being unable to get on site. Despite this, total revenues were up by 1% to £15.2 million. Abbey Metal Finishing and its subsidiary Atﬁn both had a diﬃcult year as COVID related disruption to the aerospace market signiﬁcantly impacted demand and sales volumes. Combined revenues were down 33% with a consequent impact on proﬁtability. Food Service In total the Food Service division made a segment trading loss of £1.7 million (2019: £0.8 million proﬁt) on revenue of £23.6 million (2019: £29.8 million), as set out in note 1 to the Accounts. ACS&T saw reduced proﬁtability from 26% lower transport revenues as demand for frozen products from the restaurant sector fell. Jing Tea saw total revenues fall by 42% following closure of the hotel, restaurant and tourism sectors. However, sales through its online platform have increased by 33%. Investments Investment Portfolio. The loss on sales for the year was £0.1 million (2019: £1.1 million). Of this a gain of £0.2 million was reﬂected in the Income Statement and a loss of £0.3 million in the Statement of Comprehensive Income. The total value of the portfolio at 31 December 2020 was £50.6 million (2019: £47.0 million). The increase reﬂects the strength of global equity markets, particularly in the second half of 2020. Investment Property. Work continues on the development of the Linton Park Estate with an additional three properties redeveloped and let in 2020. Collections. The collections are held at cost. A number of minor additions and disposals were made during the year. 11 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 12 CAMELLIA PLC OPERATIONAL REPORT Associates In total, our share of the results of associates amounted to £6.1 million (2019: £4.6 million). BF&M beneﬁted from a signiﬁcantly reduced claims experience in its property, casualty, life and health businesses due to the impact of COVID and the lack of any major hurricane damage in the year. Gross premiums written decreased by 7% to Bermudian Dollar 308.1 million, driven by an expected shift of health premiums between the company and the amounts allocated to the Bermuda Government as part of Bermuda’s health ﬁnancing reforms, along with lower property and casualty premiums and life premiums. BF&M’s proﬁt for the year was Bermudian Dollar 21.6 million (2019: Bermudian Dollar 13.1 million). Looking ahead, BF&M expects to see an increase in claims activity as vaccination programmes are rolled out. Our two associate companies in Bangladesh, United Insurance and United Finance, produced lower results reﬂecting more challenging economic conditions in Bangladesh due to COVID. ON-GOING LITIGATION We previously disclosed that in 2018, the Kenyan National Land Commission was asked by a small number of claimant groups to investigate historical land injustice claims concerning lands registered in the name of Kakuzi and Eastern Produce Kenya. The land claims have been refuted through the Kenyan legal system. A constitutional petition has been ﬁled by us and also a request to stay the proceedings of the National Land Commission until the legal position has been determined. This matter is on-going and we continue to keep the situation under review. SUMMARY 2020 was a diﬃcult year for the Group for all the reasons set out above and 2021 to date continues to show some market disruption. We remain in hope that the impact of the vaccines will result in a return to normality but anticipate that this will not be possible in many countries before the end of next year. However, I am very pleased that we have been able to stay true to our strategy and to continue to invest for the future. I am also enormously grateful for the way that our people have tackled the pandemic and the signiﬁcant challenges that it has brought with it. We continue to invest in sustainability; our ESG report in 2020 showed the strength and depth of our commitment in this area and the steps that have been taken following the claims in Kenya and Malawi has helped strengthen our Human Rights processes and governance. Our balance sheet remains strong with £76.0 million of net cash in the Group and money market deposits amounting to £5.1 million at 31 March 2021. Whilst some of this cash is committed to long-term projects it gives us the scope and ﬁnancial resilience to continue to develop Camellia for the beneﬁt of all our stakeholders. Tom Franks Chief Executive 3 May 2021 12 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 13 CAMELLIA PLC FINANCIAL REPORT Overview of Results Revenue in Agriculture increased 3.5% to £247.2 million (2019: £238.7 million) in 2020 reﬂecting higher prices in India, increases in packet tea sales volumes and prices in India, and increased sales volumes of avocado, citrus and cereals. However, revenue from Food Service and Engineering were both adversely aﬀected by the pandemic which oﬀset the gains in Agriculture leaving total revenue at £291.2 million (2019: £291.5 million). Underlying proﬁt before tax was £16.0 million (2019: £17.4 million). Underlying proﬁt before tax is before a £8.2 million loss relating to a number of large separately disclosed items (2019: separately disclosed proﬁt of £4.9 million). Proﬁt before tax in 2020 was £7.8 million (2019: £22.3 million). This reduction in proﬁt before tax reﬂects, inter alia, generally lower average selling prices for tea, lower volumes and lower prices for our macadamia crop, higher volumes and lower prices for our avocado crop, improved proﬁts at BF&M, and a number of separately disclosed items: n n n A £14.4 million proﬁt on the sale of the property plant and equipment at Horizon Farms. £16.1 million of legal and other costs relating to the defence of the litigation concerning our East African operations, including the settlements of up to £4.6 million in relation to the Kenyan claims and £2.3 million in relation to the Malawian claims. Impairment charges in relation to the Jing Tea brand, investment properties, plant and equipment at Abbey Metal Finishing and elsewhere in the UK totalling £6.5 million. The loss after tax for the year ended 31 December 2020 was £0.8 million (2019: Proﬁt after tax £15.1 million). Equity attributable to the owners of Camellia was £376.6 million (2019: £395.7 million) with net cash and cash equivalents of £94.9 million (2019: £89.4 million) and ﬁnancial assets at fair value through proﬁt or loss (ie money market funds) of £5.3 million (2019: £6.2 million). Impairments The impairments to the Jing Tea brand, investment properties plant and equipment at Abbey Metal Finishing and elsewhere in the UK have arisen following revisions to our estimates of the future proﬁts and cashﬂows arising from those assets predominantly as a consequence of the impact of COVID. Key assumptions made in quantifying the scale of the impairments at Jing Tea and Abbey Metal Finishing relate to the speed of recovery of the travel and leisure and food service markets. COVID Impact As set out in the Operational report on page 6, our businesses are currently operating broadly as normal with the exception of our Food Service and Aerospace businesses. Our experience over the last year has given us valuable insight into how the pandemic impacts our markets and businesses. Despite this, it remains diﬃcult to predict with any certainty the impact of COVID on the Group during the remainder of this year. Accordingly, we continue to take actions to conserve cash by focusing on eﬃciencies, minimising our operating costs and focusing capital expenditure across the Group. However, with our substantial cash resources, our investment portfolio and limited gearing, we are well placed to withstand a further period of disruption to our operations and sales. Currencies Over the course of the year, Sterling strengthened against the majority of our operating currencies. This has resulted in a loss on foreign exchange translation of £22.6 million (2019: loss £16.7 million) which is reﬂected in the Statement of Comprehensive Income. Had we translated our proﬁt before tax for the year using the same average rates as last year, our results for 2020 would have been £1.3 million higher. Our proﬁt before tax includes an exchange gain of £2.2 million on transactions during the year (2019: loss £0.3 million). 13 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 14 CAMELLIA PLC FINANCIAL REPORT Cash The Group’s net cash position increased to £94.9 million at 31 December 2020 (2019: £89.4 million) reﬂecting, inter alia, net cash inﬂows from continuing operating activities of £12.9 million (2019: inﬂow £12.6 million) and the receipt of the proceeds of £21.6 million from the sale of Horizon Farms property. We spent £14.7 million on investment in our existing operations. We also increased our holding in BF&M at a cost of £0.3 million. The Group has loans outstanding of £4.8 million (2019: £6.9 million). We expect capital expenditure in 2021 to be closer to historical levels as we continue to invest in our key strategic growth priorities. As previously highlighted, a number of the Group’s key trading subsidiaries have minority shareholders such that when cash is repatriated to the UK by way of dividends, those minorities are entitled to their share of the relevant dividend. In a number of cases, withholding taxes are also payable from our share of those dividends. Funds are reserved within our subsidiary companies to ensure wherever possible a level of headroom exists against the risk of crop losses and adverse price movements, such as are possible as a result of COVID. In addition, funds are held for: n Long-term development projects related to the planned continued extension of our core crop portfolio, including in our new locations. n Disputed taxation assessments (see below). n Other contingent liabilities. These will reduce the net cash available to the Group in future years as they are spent or, in the case of the disputed tax assessments and contingent liabilities, if settlement is made. Taxation The Group’s eﬀective tax rate of 110.3% (2019: 32.3%) reﬂects the signiﬁcant losses which were incurred in the UK due to the pandemic, the cost of group legal claims in the UK for which no immediate tax relief is available and not being able to recognise the associated deferred tax asset on our balance sheet until it is suﬃciently clear when these UK tax losses will be utilised. Tax and Other Provisions As is normal at this time of the year, we have ongoing wage negotiations in Kenya, Bangladesh (some of which have since concluded) and India. We consider we have made adequate provision for the likely outcome of these. Provisions also include the estimates for the agreed settlements in respect of the litigation in East Africa and other costs related to the litigation which are expected to be paid in 2021 but which arise from events occurring prior to the year end. We continue to have a number of signiﬁcant uncertain tax situations, which have been disclosed previously: A provision of £1.3 million is held in respect of possible withholding taxes on branch remittances from Bangladesh where the Bangladesh Revenue Authority is contesting the applicable rate. In India assessments have been received for £3.5 million of excise duties, sales and entry tax £0.9 million and £1.1 million of income taxes. These are being contested and no provisions have been made. In India, the long running dispute between our local subsidiaries and the Government of West Bengal over the payment of a land tax, locally called ‘Salami’, remains unresolved. Lawyers have advised that payment of Salami does not apply, accordingly no provisions have been made. The sums contested amount to £1.2 million excluding penalties. n n n 14 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 15 CAMELLIA PLC FINANCIAL REPORT In Malawi the Revenue Authority (MRA) recently indicated that it intended to collect VAT on sales made at auction and under private treaty for export, in the period since 2017. Tea sales intended for the export market were subject to an industry wide agreement with the MRA and the Reserve Bank of Malawi reached at the time the auction was established, resulting in these deemed exports being zero rated for VAT. The MRA has raised an assessment for VAT against Eastern Produce Malawi in connection with this which has been appealed in light of the historic agreement and long-established custom and practice of the industry. Following discussions between the Malawi government, the MRA and the entire tea industry, the MRA has undertaken to investigate the sales process for export teas and to consider the implications of this on the VAT treatment of these deemed export sales. Pending conclusion of the review, the MRA has given permission for the auction to continue with teas deemed as export zero rated for VAT and the assessment raised against Eastern Produce Malawi has been suspended. Eastern Produce Malawi’s estimated contingent liability for VAT on these deemed export sales, excluding any penalties and interest, is approximately £7.8 million. Pensions and Other Employment Beneﬁts The Group operates a number of deﬁned beneﬁt pension schemes, the largest of which is in the UK. The 2020 triennial valuation for the UK scheme, which was closed to future accrual during 2016, has now been concluded and shows a funding surplus and no contributions are currently required to be made to the scheme for the next 3 years. The overseas deﬁned beneﬁt schemes are located in Bangladesh and India. Our businesses in Kenya, India and Bangladesh also have obligations to pay terminal gratuities based on years of service and, in some cases, based on salaries. In aggregate, our employee beneﬁt schemes currently show deﬁcits on an IAS 19 basis of £16.6 million (2019: £22.0 million deﬁcit). Accounting for deﬁned beneﬁt schemes is prescribed by IAS 19 and the quantum of the deﬁcit continues to be highly sensitive to small changes in assumptions as regards wage inﬂation and gilt yields in the relevant jurisdictions and to asset performance. This year a net actuarial gain of £4.3 million (2019: gain £3.5 million) is reﬂected in the Statement of Comprehensive Income. The net gain this year arises primarily from the UK scheme where strong asset performance was only oﬀset in part by the eﬀect of lower discount rates and lower inﬂation assumptions. Our Income Statement also reﬂects current and past service costs of £2.2 million (2019: net cost £1.6 million) and £0.7 million (2019: £1.1 million) in respect of employee beneﬁt interest cost. Susan Walker Chief Financial Oﬃcer 3 May 2021 15 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 16 CAMELLIA PLC ENVIRONMENTAL AND SOCIAL REPORT At Camellia, ESG is integral to our business. We believe that the success of all our operations is fundamentally connected to the communities and environments, including the wider supply chains, in which we operate. Our Group report (Custodianship) illustrates not only the ESG initiatives undertaken across the Group but also explains the Group’s approach to each of these principles. We have aligned ourselves to seven of the United Nations Sustainable Development Goals (SDGs): n n n n n n n SDG 3: Good health and well being SDG 4: Quality education SDG 5: Gender equality SDG 6: Clean water and sanitation SDG 8: Decent work and economic growth SDG 13: Climate action SDG 15: Life on land The Group’s ESG initiatives are based on our fundamental belief that we are custodians of our operations, ensuring they undergo a process of continuous improvement. This enables them to be passed on to the next generation whilst caring for the environments in which they are based and for those communities who depend on them. The Group’s approach to ESG is the responsibility of the Strategy Group (as described on page 36) which is supported in certain key areas by the Safeguarding and Stewardship Committee which is described in more detail below. The boards of the Group’s operating companies closely consider their respective governance protocols and the environmental impact of their ongoing operations and investment decisions, with regard to both Group requirements and local regulations and legislation. Environmental Climate change is a signiﬁcant risk to the Group’s agricultural operations which it aﬀects in diﬀerent ways and to diﬀering extents. We seek to mitigate this impact by diversifying our agricultural production by both origin and crop. We are also planting more drought resistant crop varieties and using other initiatives, such as restorative farming methods and sustainable irrigation, to manage the impact of climate change. We are committed to our goal of protecting the environment and minimising our environmental footprint. This is achieved through a range of resource eﬃciency initiatives with the ultimate intention of setting carbon reduction targets across our operations. In addition to minimising our environmental impact, we protect and enhance natural habitats such as forests and water bodies for local ﬂora and fauna. The material environmental impacts that arise from the Group’s operations fall broadly into three categories: (i) greenhouse gas emissions from on-site combustion of fuels to power the tea factory driers; (ii) use of fertilisers; and (iii) extraction of water for irrigation of crops. Water is extracted from a variety of sources, but we seek to maximise rainwater capture by creating large reservoirs from which to irrigate sustainably. The Group also oversees c.11,100Ha of indigenous forests and conservation areas plus a further 7,500Ha of commercial forestry. These areas, in combination with the large areas of perennial crops, have the potential to sequester signiﬁcant amounts of carbon and act as an important oﬀset against the Group’s carbon emissions. We have estimated the impact of sequestration on our core crops and our managed eucalyptus estates. We provide more detail on this below. 16 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 17 CAMELLIA PLC ENVIRONMENTAL AND SOCIAL REPORT We use appropriate partners to support the Group in achieving our environmental protection and environmental footprint initiatives. As an example, in 2020 an initiative between our Kenya tea operations and Cambridge University was established to investigate possible savings in thermal and electrical energy usage and thus a reduction in carbon emissions, in the manufacture of tea. The seed funding to launch this project was provided by our Chairman’s Fund which has allowed the initiative to proceed. Excellent progress has been made to identify possible signiﬁcant savings in both thermal and electrical energy usage in the two factories being trialled in the exercise. Environmental reporting During the ﬁnancial year we reported to the Environment Agency under ESOS (Energy Savings Opportunity Scheme), which included energy audits of our UK operations and the identiﬁcation of potential energy saving initiatives and investments. The Group’s UK operations are considering such initiatives and have included a selection in their future investment plans as set out below. 2020 is also the ﬁrst year for which the Group is required to report under SECR (Streamlined Energy & Carbon Reporting) Regulations, which is set out in the rest of this section. The Group has not been subject to any environmental ﬁnes during the reporting period. Global GHG emissions and energy use data for period 1 January 2020 to 31 December 2020 Emissions from activities which the company owns or controls including combustion of fuel & operation of facilities (Scope 1) (tCO2e) Emissions from purchase of electricity, heat, steam and cooling purchased for own use (Scope 2, location- based) (tCO2e) Total gross Scope 1 & Scope 2 emissions (tCO2e) Energy consumption used to calculate above emissions: (Scope 1) (kWh) Energy consumption used to calculate above emissions (Scope 2) (kWh) 2020 2019† Global (excluding UK and oﬀshore) UK and oﬀshore Global (excluding UK and oﬀshore) UK and oﬀshore 5,435 166,247 7,147 181,692 5,130 10,565 43,115 209,362 5,316 12,463 48,910 230,602 24.6m 678.3m 31.8m 704.0m Intensity ratio: Kg CO2e/Kg of made tea Not available 1.40 Not available 22.0m 91.2m 21.5m 97.4m 1.51 Emissions from purchase of electricity, heat, steam and cooling purchased for own use (Scope 2, market- based) (tCO2e*) 32 42,963 Not available Not available † 2019 was restated as a result of improvements in data quality and completeness * Note: 2020 is the ﬁrst reporting period for which we reported our scope 2 market-based emissions Methodology The scope of the reporting for SECR purposes was determined by including the businesses in which the Group owns majority holdings. It includes GHG (Greenhouse Gas) emissions and energy use of businesses that were divested during the reporting period up to the date of transfer of risk and reward pertaining to those businesses. The reporting period aligns with the Group’s ﬁnancial reporting period. The reported ﬁgures are an aggregation of emissions and energy consumption of the Group’s reporting units. A reporting unit is deﬁned as a geographically located operating entity or group of entities. For example, the Goodricke group of companies is deﬁned as one reporting unit. Within a reporting unit distinction is made between diﬀerent sites, ﬁeld operations and factory operations. 17 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 18 CAMELLIA PLC ENVIRONMENTAL AND SOCIAL REPORT The emission factors used in calculating the Group’s emissions are as per those published by the UK Department for Business, Energy & Industrial Strategy and the UK Department for Environment, Food and Rural Aﬀairs, which are in line with the GHG Protocol guidance. The non-UK electricity emission factors are sourced from the International Energy Agency for Scope 2 location-based reporting. For Scope 2 market-based reporting they are sourced directly from the electricity suppliers, where available. A standardised reporting tool is used to capture the Group’s environmental and energy data. Year on year trends in the data are analysed and understood. Where estimates are used these are disclosed and assessed in terms of magnitude as part of the overall data quality. Every eﬀort is made to ensure the environmental data that we report is accurate. However should more accurate or complete data be available for prior years, we will restate if it results in a movement of at least 5% in the reported data. We may restate carbon emissions even when there is no change in consumption data, due to corrections to the emissions factors provided by Defra. In relation to the 2019 data some improvements were made in terms of quality and completeness, which resulted in a 6% increase. Changes in Scope 1 and Scope 2 emissions The Group’s Scope 1 and 2 emissions reduced during the reporting period primarily due to lower production in India and Bangladesh. Total made tea production in India was down by 22% in 2020 and since these tea factories are primarily fuelled by coal, this reduction in production represents 59% of the drop in the Group’s total carbon footprint. The Group’s Bangladesh operations saw made tea production reduce by 12%. These tea factories are primarily fuelled by natural gas and this reduction in production represents a further 14% of the drop in the Group’s carbon footprint. One of the largest uses of energy in the Group is the requirement to process and dry our tea crop. We include the made tea intensity ratio (kg CO2e per kg of made tea) and we continue to invest to increase the carbon eﬃciency of our tea factories. We are happy to report that in 2020 there has been a 7% improvement in the Group’s made tea intensity ratio, mainly as a result of eﬃciency measures implemented at our Kenya and Malawi tea operations supported by a signiﬁcant increase in production by our Kenyan operations and lower production in India. This was partially oﬀset by the increased use of coal in India per kilo of Made Tea. As mentioned above, the Group’s perennial crops, sequester signiﬁcant amounts of carbon. Recently, we conducted a study using Ricardo Plc to estimate the amount the Group’s core crops and managed forestry sequester through the soil. On average, for our tea crop sequestration by the soil is estimated to oﬀset c.43% of the carbon emissions from ﬁeld production and land use change. Similarly, for our avocado and macadamia crops we estimate that soil sequestration oﬀsets c.64% and 28% of the 2020 carbon emissions from ﬁeld production respectively. There is also a large carbon stock that sits in the soil and that has built up over many years, which, as a Group, we have a duty to protect through the use of sustainable practices such as restorative agriculture techniques. We will continue to review our operations’ practices regarding the protection and enhancement of our soils and assess where we can make improvements. Environmental certiﬁcations All of the Group’s engineering businesses and ACS&T are ISO 140001 certiﬁed and many of our international operations are subject to stringent certiﬁcations that include environmental impact requirements. Energy eﬃciency action taken As noted above, an initiative between our Kenya tea operations and Cambridge University was established to investigate possible savings in thermal and electrical energy, and thus a reduction in energy use, in the manufacture of tea. 18 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 19 CAMELLIA PLC ENVIRONMENTAL AND SOCIAL REPORT In the period covered by the report, the Group’s operations have also implemented a range of other energy eﬃciency initiatives. We set out some of the key ones below: Operation Energy Saving Initiatives Eastern Produce Kenya ACS&T ACS&T A JT Installation of variable speed drives on the air inlet fans on the tea driers at one factory Upgrading storage lighting to LED at one cold store Installation of ﬁve fast close doors at ﬁve cold stores Review of temperature set-points of radiant heaters in main workshop spaces Expected Saving per annum 72 MWh 213 MWh 375 MWh 82 MWh In aggregate, we expect the above energy saving initiatives and a number of smaller initiatives to result in 873 MWh saving in energy per annum. In addition, the Group is continuing with its programme of replacing existing energy sources with renewable energy sources, which amounted to a further 490 MWh in 2020. The main initiatives taken to date include the installation of solar generation at a number of Duncan Brother’s tea estates, EPK in Kenya and at the Group’s farm in Brazil as well as the installation of hydro turbines at a number of Goodricke’s tea estates. All our UK operations have green tariﬀ electricity contracts. The Group’s operations have also made an assessment of potential energy eﬃciency initiatives that can be implemented over the next ﬁve years. The implementation of these initiatives is subject to approval by the respective operations’ boards and the Group’s annual budgeting process. We set out some of the key initiatives below: Operation Energy Saving Initiatives Eastern Produce Malawi Eastern Produce Malawi ACS&T ASC&T Goodricke Eastern Produce Kenya Eastern Produce Kenya Installation of new, more energy eﬃcient driers at a number of its tea factories Upgrading to lighter weight withering fans at a number of its tea factories and lighter weight fans at its macadamia factory Installation of fast close doors at cold stores, reducing the amount of ambient air ﬂow Enhanced transport ﬂeet training on driver behaviour and fuel consumption Upgrading steam traps at a number of its tea factories, reducing steam losses and increasing eﬃciency Installation of heat exchangers to recycle hot air from the boiler ﬂue gases, in order to preheat the air entering the driers at several its tea factories Installation of improved fuelwood storage at a number of its tea factories We expect the above initiatives to provide signiﬁcant savings in energy over the next ﬁve years. The Group will continue to replace existing energy sources with renewable energy sources where possible. Our ultimate intention is to set energy reduction targets across our operations. SOCIAL The Group’s businesses are fundamentally connected to the welfare of the communities and environments in which we operate. We proactively invest to ensure these environments are protected and improved. Our focus is on the long-term stability, security and continuity of our businesses and those communities. We support and integrate the SDGs into our sustainability strategy, which forms a key pillar in our overall strategy. The majority of our operations are based in developing countries. We make progress every year, not only in trying to increase wages, but also in improving housing, education and healthcare, all of which are important to improving livelihoods. To this end we are working with our supply chain, customers, national governments, trade unions and NGOs to improve living conditions of employees. 19 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 20 CAMELLIA PLC ENVIRONMENTAL AND SOCIAL REPORT The Group’s response to COVID The pandemic continues to be a global crisis and the situation remains uncertain but the increasing rate of vaccinations is encouraging. The Group’s operations reacted to the outbreak of the pandemic swiftly to protect its employees and communities. We have worked closely with local governments, communities and the Group’s clients. Measures and initiatives put in place have focused on training and education on sanitation, social distancing measures and the provision of medical and other equipment. Providing a safe place to work and supporting the Group’s local communities have been particularly important over the past year. Further information is available from the Group’s various social media platforms. Healthcare The majority of our tea estates in India and Bangladesh have a hospital and a qualiﬁed doctor, and our operations in these countries also have central hospitals. Our African operations run dispensaries established on their estates, oﬀering medical services and care to employees, their dependents and people from surrounding communities. These are manned by qualiﬁed medical personnel from our operations and services are free to employees and their dependents. The Group provides medical services including, where appropriate, antiretroviral drugs in those communities where HIV and AIDS are a concern. Medical support is also provided to schools that are either run locally or by our operations. Across the Group we own and/or operate 50 hospitals and 85 dispensaries. In 2020, the Group performed 878,744 patient treatments, of which 499,734 treatments were for Group employees, at its hospitals. The Group also owns and/or operates 176 nurseries and creches, 147 primary schools and 14 secondary schools. In total we educated more than 30,000 children. The Group owns c.48,000 houses and houses c.294,000 people, of which c.68,000 are employees. Human Rights We are determined to safeguard Human Rights across our own operations and supply chains. Many of the operations are subject to audit and certiﬁcation, where Human Rights are one aspect of such process. Following the allegations made against our East African operations, the Board decided to enhance the Group’s governance and safeguarding oversight functions to comply with the UN Guiding Principles on Business and Human Rights. The Board has established a Safeguarding and Stewardship committee which is further described on page 38. The committee shall promote the highest standards in protecting and promoting Human Rights across the Group and has appointed an internationally respected ﬁrm of specialists to review the Human Rights position of our larger operations and to make recommendations for improvements where necessary. In addition, we have started the process of putting in place Operational-level Grievance Mechanisms in many of our major countries of operation, which will be compliant with UN Guiding Principles and overseen by independent third-parties. We continue to review our Group Principal Policies to identify what, if any, changes should be made. We expect our investee companies similarly to review their own policies and procedures, including policies designed to ensure that support is provided to complainants where allegations of Human Rights violations arise. 20 260881 Camellia R&A pp01-pp21.qxp 04/05/2021 10:09 Page 21 CAMELLIA PLC ENVIRONMENTAL AND SOCIAL REPORT Progressive measures As described below, the Group has also implemented a signiﬁcant number of progressive measures in both Kenya and Malawi to help protect the rights of its employees and their communities. Up to date information on these measures and other initiatives implemented across the Group are set out on the Camellia Group website. Eastern Produce Malawi has established a Women's Empowerment Initiative which will fund projects to improve the skills, employment opportunities, and educational attainment of women and girls in and around its operations. These include: n Gender Equality Scholarships for women. n n n A specialist female leadership training programme to support the career progression of women into more senior positions. Funding community civic education programmes concentrating on Sexual Harassment and Gender Equality. Relocating and upgrading primary school facilities to include a community meeting hall. n Maintaining boreholes in locations designed to beneﬁt women and children locally to the estates. n Establishing three new victim support units at local police stations. In Kenya, Kakuzi has conﬁrmed that it will be putting in place certain measures, for the beneﬁt of the communities on and around its estate. These include: n n n n n n The provision of charcoal kilns and access to ﬁrewood so local communities can produce and sell sustainable charcoal for their own income generation. Building two social centres for community meetings. Employing predominantly female safety marshalls to give visible reassurance to those using access routes. Building three new roads accessible to the community without any requirement to obtain a licence to give people better access to local amenities. The establishment of a group to survey and demarcate land which has been previously donated by Kakuzi. The design and implementation of a Human Rights defenders policy. Kakuzi has also engaged an additional independent Human Rights consultancy to conduct a Human Rights impact assessment of its operations, so that local communities and commercial partners can have conﬁdence in Kakuzi's commitment to the highest standards of business and Human Rights. Approved by the Board Amarpal Takk Company Secretary 3 May 2021 21 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 22 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 2020 and a description of the principal risks and uncertainties facing the Group. A fair review of the business of the Group is incorporated within the Chairman’s Statement and the Operational report on pages 6 to 12. The Chairman’s Statement and the Operational report, together with information contained within the report of the Directors, highlight the key factors aﬀecting the Group’s development and performance. Further details of the ﬁnancial performance and position of the Group are set out in the Financial report on pages 13 to 15. Other matters are dealt with below. Group Strategy The Board has adopted the following strategy for the Group: n n n n n 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 the environment and sustainability of the communities in which we do business. Setting the principles which the operating companies need to achieve through their policies and procedures to ensure that the quality and safety of their 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 Operational report, the Environment and Social report, and within the Report of the Directors. Business Model The Group consists of operations engaged in Agriculture, Engineering and Food Service. The Group also holds a range of Investments. Operations are managed on a divisional basis with regular reports made to the Board on performance against the annual budget. Each division is expected to perform against an agreed strategy with goals and targets for the short, medium and long-term. These are summarised below. Agriculture Core crops. To focus on our core crops of tea, macadamia and avocado where we have scale and geographic diversity. Where appropriate opportunities arise, to add to our production capability in these three crops, as well as to make aligned acquisitions and investments to enable us to capture more of the value chain. To investigate the possibility of a fourth core crop if suitable opportunities present themselves. Speciality crops. To maintain our portfolio of speciality crops in order to retain the diversity of location and crop which has historically proven so valuable in spreading the Group’s political and commodity price risk. With all our agriculture operations we will have regard to the potential threats arising from politics and the impact of climate change, particularly in water stressed areas and will adapt our portfolio of operations accordingly. Engineering A JT Engineering. To maintain our presence in the oil services sector whilst diversifying into adjacent energy related sectors in order to create a sustainably proﬁtable engineering business focused on the wider energy sector. Abbey Metal Finishing and Atﬁn. To continue to grow both businesses as quality suppliers to the aerospace industry. The impact of the pandemic on the aerospace industry may render this strategy unachievable and wider strategic options are being assessed. 22 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 23 CAMELLIA PLC STRATEGIC REPORT Food Service ACS&T. To continue to operate as a niche high quality business in the storage and distribution of frozen foods, aiming to achieve critical mass by proﬁtable growth and if appropriate, acquisition. Jing Tea. To grow the existing respected small brand into a larger, more proﬁtable distributor and retailer of speciality teas internationally. Investments Investment Portfolio. The Group has a portfolio, principally of listed investments, the strategy for which remains to invest in high quality companies where we believe that there is long-term value. This portfolio also enables us to balance our geographic risk exposure. Investment Property. The strategy is to continue to invest in quality assets where an appropriate yield may be realised. The process of developing some of our existing properties to enhance yield will continue. Collections. The Group has collections of art, philately and manuscripts which are regularly reviewed and are added to or sold as appropriate. Associates The Group has three associate companies in the ﬁnancial services sector of which BF&M, the listed Bermudian insurance business is the most signiﬁcant. With all our associates, we continually monitor our investment and may increase or decrease our holding in the future. S172 Statement This section serves as the Company’s section 172 statement and should be read in conjunction with the whole of the Environmental and Social report, the Strategic report, the Corporate Governance report and the Statement of Directors’ Responsibilities. Section 172 of the Companies Act 2006 requires Directors to take into consideration the interests of stakeholders in their decision making. The Directors continue to have regard to the interests of the Company’s employees and other stakeholders, including the impact of its activities on the environment and the Company’s reputation, when making decisions. Acting in good faith and fairly between members, the Directors consider what is most likely to promote the success of the Company for its members in the long-term. The Board regularly considers the views of its principal stakeholders and how we engage with them. The stakeholder voice is brought into the boardroom throughout the annual cycle through information provided by management presentations, meetings and operational visits. There is on-going dialogue between members of the Board and signiﬁcant shareholders whose views are also reported to the Board. The Board continues to enhance its methods of engagement with the workforce. During 2019 it was concluded that the most eﬀective method to measure engagement across the Group’s UK staﬀ was to undertake an employee survey. This survey was conducted in 2020. We invited all UK employees to participate in an anonymous employee engagement survey called “Your Voice”. It asked a series of questions relating to recognition, development, leadership, wellbeing and opinions on how the companies are responding to the COVID pandemic. The results generated a number of follow up initiatives which have been raised with the boards of the respective operations. These include more opportunity for middle management development and enhanced Group-communications. The survey will be repeated in 2021 to track progress, monitor engagement levels, implement new initiatives, and promote a culture of ongoing feedback. 23 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 24 CAMELLIA PLC STRATEGIC REPORT Principal Risks and Uncertainties There are a number of possible risks and uncertainties that could impact the Group’s operations. The Group regularly monitors the risks at operational and Group level. Information on the Group’s ﬁnancial risks is disclosed in note 42 of the Accounts. The following material risks relating to the Group’s principal operations have been identiﬁed. Agriculture Risk Climate change Potential Impact Current agricultural patterns and practices become unsustainable. Land values and local communities are impacted. Flooding/ drought aﬀecting crop yields. Mitigation Geographical spread of operations to lessen the impact of extreme weather on the Group as a whole. Investment in irrigation, water storage and drought resistant crop varieties. Price volatility Fluctuations in commodity prices impact proﬁtability each season. In the event of a prolonged depression in the world tea market the impact on the Group would be material. Use of forward contracts, product and crop diversiﬁcation and building long-term strategic relationships with key customers. Currency ﬂuctuation Proﬁt volatility arising from sales in US Dollars and Euros where there is no natural hedge against the cost of production in local currency. Cost of production Increased cost of production and lower proﬁtability. Long-term political issues over land ownership Potentially losing access to farms and estates or paying more for existing property (for example if freeholds become leaseholds). Monitoring of foreign exchange rates and cash management. Introduction of more eﬃcient working practices and the increased use of mechanisation and automation. Monitoring changes to local land legislation with the assistance of lawyers and local trade associations. Maintaining collaborative relationships with governments at local and national levels. Periodic interruptions to the operation of the businesses at a local level. Increasing security for our workers and operations during times of civil unrest. Inability to carry on business in a manner which is legal and ethical. Vulnerability of the employees to injury at work due to the use of machinery and chemicals. Payment of ﬁnes and claims, criminal prosecutions and reputational damage. Strict adherence to anti-bribery legislation and the implementation of the Group Principal Polices. Strict compliance with legislation and training employees to adopt safe working practices. Regular external compliance reviews. Civil unrest and political instability Corruption Health and safety 24 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 25 CAMELLIA PLC STRATEGIC REPORT Agriculture (continued) Risk Potential Impact Mitigation Human Rights (current and historic) Adverse impact on ﬁnancial results from legal and reputational costs. Media and political pressure impacting operations or customers preparedness to buy products. On-going training and raising awareness across the employees. Providing appropriate mechanisms to bring forward any allegations and redress (such as whistleblowing and Operational-level Grievance Mechanisms). Engineering Risk Key customer dependence Dependence on the oil and gas and aerospace sectors Health and safety Food Service Risk Key customer dependence Health and safety Investments Risk Market Potential Impact Mitigation Losing a major customer. Diversiﬁcation of the customer base and careful customer relationship management. Changes in market conditions leading to lower demand for services. Diversiﬁcation into other sectors. Close monitoring of the current sectors. Vulnerability of the employees to injury at work due to the use of machinery and chemicals. Payment of ﬁnes and claims and reputational damage. Strict compliance with legislation and training employees to adopt safe working practices. Regular external compliance reviews. Potential Impact Losing a major customer. Vulnerability of the employees to injury at work due to the use of machinery and chemicals. Payment of ﬁnes and claims, criminal prosecutions and reputational damage. Mitigation Diversiﬁcation of the customer base and careful customer relationship management. Strict compliance with legislation and training employees to adopt safe working practices. Regular external compliance reviews. Potential Impact Mitigation Decline in the value of investments and property. Portfolio diversiﬁcation, careful stock selection, the regular monitoring of individual company stock performance and a diversiﬁed property portfolio. 25 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 26 CAMELLIA PLC STRATEGIC REPORT Potential Impact Mitigation Implementation of contingency plans. Cost reduction and cash management measures. Ongoing monitoring of banking partners and country credit ratings. Interruption to production and/or disruption of supply to customers. Volatile equity markets impacting the pension schemes’ deﬁcits with a resultant increase in the funding requirement. Increased risk of bank failure, and foreign exchange volatility resulting in increased costs. Risk of imposition of currency controls leading to the inability to remit funds from overseas operations. Increase in the pension schemes’ deﬁcits with a resultant increase in the funding requirement. Regular monitoring of and improvement to the investment strategy, the funding position of the pension schemes and investment performance. Contamination of local and wider environment due to the use of machinery and chemicals. Payment of ﬁnes and claims, criminal prosecutions and reputational damage. Strict compliance with legislation, training employees to adopt safe working practices and lessen the impact on the environment. Future adjustments to taxable income and expenses already recorded or increases to the cash tax costs incurred by the Group in future. Tax exposures are considered individually, and judgements made with support from experienced tax professionals and external advisors. Group Risk Prolonged impact of a pandemic UK and Overseas Pensions Increases in inﬂation and/or reductions in long- term government bond yields Lower than expected asset return Changes in local laws restricting the investment choices for the schemes’ assets Environmental Taxation Uncertainties in relation to the interpretation of complex tax legislation, or arising from changes in tax legislation Risk that the Group’s judgements are challenged by tax authorities 26 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 27 CAMELLIA PLC STRATEGIC REPORT Group (continued) Risk Legal Uncertainties in relation to the application of English or other law or changes in case law Potential cyber-threats such as computer viruses IT malfunctions or external cyber-attacks Potential Impact Mitigation Group legal risk in relation to the activities of overseas operations (including potential litigation in the UK) and incurring costs in relation to the same. Loss or theft of data. Interruption to services for customers and the business. Monitoring the interpretation of law and taking appropriate legal advice. Developing our technology systems. Investing in developing the IT skills and capabilities of our people. Actively monitoring and mitigating any cyber-threats and suspicious IT activity. Implementation of disaster recovery plans for business critical systems. Group Principal Policies – GPPs There are a range of issues that are important to the Group and to all of our operations, whatever sector they operate in. These are set out in the Group Principal Policies which are cascaded across the Group. Each operation is required to prescribe its own local policies based upon the Group Principal Policies. On an annual basis, each signiﬁcant operation conﬁrms to Group its adherence with the Group Principal Policies. Ultimately, our individual operations have experts who are best placed to identify how each policy can be implemented and applied which in turn enables them to operate responsibly and ethically over the long-term. Notwithstanding the fact that overall responsibility for the implementation and enforcement of the GPPs rests with the management of each operating company, certain GPPs (such as the Anti-Bribery and Corruption GPP, the Modern Slavery GPP and the Tax GPP) include provisions which are directly eﬀective. This is the case where observance of these provisions is required in order for Camellia Plc to comply with its own legal and regulatory obligations. The GPPs can therefore be grouped into the following four categories: n n n n The High-level GPPs The Compliance GPPs The Modern Slavery GPP The Tax Principles The High-level GPPs comprise the Certiﬁcation and Traceability GPP, the Health and Safety GPP, the Environment GPP, and the Employee Welfare GPP. The Compliance GPPs comprise the Anti-Bribery and Corruption GPP, and the Whistleblowing GPP. A summary of each principal policy is set out below and they are set out in full on our website. 27 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 28 CAMELLIA PLC STRATEGIC REPORT High-level GPPs Certiﬁcation and Traceability As part of our end to end supply chain, our operations are required to meet the requirements of our customers and suppliers in terms of certiﬁcations and traceability. The vast majority of our tea gardens are RFA certiﬁed and all our macadamia, avocado and winery processing facilities are FSSC 22000 certiﬁed. Across the Group, operations have also obtained ISO14001, ISO9001 and ISO45001 and many other appropriate accreditations. Health and Safety We take responsibility for our people by promoting good health and providing a safe and healthy workplace to protect all employees, contractors, visitors and the public from foreseeable work hazards. All operations are required to comply with local health and safety legislation, regulations and to obtain certiﬁcations from external authorities. Environmental We are mindful of the environment in which we operate, recognising that our operations require natural resources and that our operations generate emissions and waste. We understand and comply with current applicable legislation in the jurisdictions in which we operate. Our operations are each required to commit to policies which reduce their environmental footprint and which include (where appropriate), carbon, recycling, waste and water. As part of our wider drive towards greater sustainability, we are developing a range of mid to long-term targets to reduce the environmental impact of our operations. As an example, strategic improvements in our usage and sourcing of energy supports our ambition to align with Science-Based Targets. Targets adopted by the operations to reduce greenhouse gas emissions are considered ‘Science-Based’ if they are in line with the level of de-carbonisation required to keep the global temperature increase below 2ºC compared to pre-industrial temperatures. Employee Welfare Our employees are at the heart of what we do, and their safety and welfare is paramount, as described in Environmental and Social report. Operations are required to have policies and procedures in place which cover equality, health, personal development, training, diversity, and (where appropriate) education, housing and sanitation. We consciously and continuously work towards encouraging equality in management positions across our operations. The Group complies with local regulations to encourage employees with disabilities to work in our operations and where necessary, makes appropriate adjustments to working practices. Compliance GPPs Anti-Bribery and Corruption The Company has adopted an anti-bribery policy which complies primarily with the requirements of the UK Bribery Act 2010 although the Board also requires compliance with the laws of all countries in which the Group operates. All Group employees, oﬃcers and executives, and all those acting for or on the Group’s behalf are strictly prohibited from oﬀering, paying, soliciting or accepting bribes or kickbacks, including facilitation payments. Compliance with the anti-bribery policy is monitored by the individual operations and incidents are reported to the anti-bribery oﬃcer for such operation. In addition, the Board has adopted an anti-facilitation of tax evasion policy which complies with the requirements of the UK Criminal Finances Act 2017. The policy has been introduced across the Group and its compliance is monitored at Group and by individual operations. 28 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 29 CAMELLIA PLC STRATEGIC REPORT Whistleblowing Our whistleblowing policy provides guidelines for people who feel they need to raise certain issues in conﬁdence. It is designed to protect those raising a genuine concern, in line with the Public Interest Disclosure Act 1998 or other jurisdictional legislation. Each operation is required to have a designated Local Whistleblowing Oﬃcer. Group employees have access to the whistleblowing oﬃcer for the individual operation, as well as the Group Whistleblowing Oﬃcer or the chairman of the Audit committee. Modern Slavery GPP The Group continues to comply with the requirements of the Modern Slavery Act 2015, to ensure that modern slavery and human traﬃcking are not taking place either within the Group or in the supply chains of our operations. A copy of the statement for the year ended 31 December 2020 is available on the Company’s website. In some countries, it is both the cultural norm and permissible for parents to involve their children in the production process. We do not subscribe to this approach and the use of child labour is prohibited across the Group. All Group operations are required to conﬁrm this statement and adopt local policies and procedures to ensure continued compliance. This includes setting out codes of conduct when working alongside customers and suppliers. Tax Principles The Group’s tax principles include: compliance with applicable tax laws; payment of the correct tax amounts; interpretation of tax law; undertaking tax planning based on commercial rationale; and transparency with tax authorities. Key Financial Performance Indicators The nature of the Group’s principal activities is such that the Board takes a long-term view of its operations, particularly in Agriculture. The Board reviews monthly reports with a range of ﬁnancial and other indicators to monitor the performance of each division depending on the nature of its operations. For the Agriculture division, the Board receives monthly data on sales prices and volumes, costs of production and crop volumes against budget and on a per unit basis. Rainfall and other climate data are also considered. For the Engineering and Food Service divisions, the Board receives monthly proﬁt and operating performance information. For Investments, the value and performance of the share portfolio is reviewed quarterly. Certain of the key ﬁnancial performance indicators are included in the Operational report on pages 6 to 12. Non-Financial Performance Indicators Each operation has developed non-ﬁnancial KPIs that are relevant to it, these include: n Market trends – including tea auction volumes, demand for each product by country where available, supply data and market prices. n Health & Safety – including days lost to injury, number of accidents and fatalities, whistleblowing incidents and updates to legislation. n n Industrial disputes – including days lost to strike action and other signiﬁcant employee issues. Land and politics – including elections, material new regulation or case law. n Movements in key personnel – including promotions, resignations and retirements of senior management. n Weather and climate – including rainfall, temperatures and long-term meteorological trends. 29 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 30 CAMELLIA PLC STRATEGIC REPORT These are regularly monitored and used by local management. The Board considers such KPIs by exception where local operations notify that signiﬁcant material issues have emerged. Employees The Group keeps employees informed through internal publications, the website and social media on the performance of the Group and on matters aﬀecting them as employees and arrangements to that end are made by the local management. As set out in the Group’s Employee Welfare Policy, it is the Group’s policy that operating companies give due consideration to employment applications 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 2020. Men 9 40,513 Women 1 36,708 Company Directors All employees Approved by the Board Amarpal Takk Company Secretary 3 May 2021 30 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 14:16 Page 31 CAMELLIA PLC REPORT OF THE DIRECTORS The Directors present their report together with the audited consolidated accounts for the year ended 31 December 2020. Principal Activities The Company is a public company limited by shares, which is quoted on the AIM Market of the London Stock Exchange and incorporated and domiciled in England and Wales. The principal activities of its subsidiary undertakings comprise: Agriculture Engineering Food Service Investments Further details of the Group’s activities are included in the Operational report on pages 6 to 12. Results and Dividends The loss after tax for the year amounted to £0.8 million (2019: proﬁt after tax £15.1 million). The Board is proposing a ﬁnal dividend for the year 2020 of 144p per share payable on 9 July 2021 to holders of the ordinary shares registered at the close of business on 11 June 2021. Therefore, the total dividend payable for 2020 is 144p per share (2019: 42p per share). Details are shown in note 11 to the Accounts. Directors The Directors are listed on page 4. The following Directors had beneﬁcial interests in the shares of the Company. Camellia Plc ordinary shares of 10p each: Malcolm Perkins Tom Franks Susan Walker 31 December 2020 1 January 2020 1,673 200 220 1,673 100 100 Under the Company’s articles of association all the Directors are required to retire annually. Accordingly, Malcolm Perkins, Tom Franks, Susan Walker, Graham Mclean, Chris Relleen, Frédéric Vuilleumier, William Gibson, Gautam Dalal and Simon Turner will retire and, being eligible, will seek re-election at the AGM. Jonathon Bond is not seeking re-election as he will be taking up a new executive post which necessitates him stepping down from the Board. None of the Directors or their families had a material interest in any contract of signiﬁcance with the Company or any subsidiary during, or at the end of, the ﬁnancial year. Executive Directors Malcolm 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 and Chairman of the Nomination committee. Tom Franks was appointed as Chief Executive with eﬀect from 1 September 2015. He joined Camellia as Deputy Chief Executive in October 2014. He is a chartered accountant and a Fellow of the Chartered Institute of Securities and Investment. Graham Mclean, a qualiﬁed agriculturalist, was appointed as 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 more than 25 years. He is a non-executive director of Kakuzi PLC. Susan Walker was appointed Chief Financial Oﬃcer for the Group on 4 June 2015. She joined Camellia as Finance Director Designate on 1 July 2014. She is a chartered certiﬁed accountant and a non-executive director of Goodricke Group Limited and United Finance Limited. 31 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 32 CAMELLIA PLC REPORT OF THE DIRECTORS Non-Executive Directors Chris Relleen was formerly a partner at PricewaterhouseCoopers. He was appointed as an independent non-executive Director and Deputy Chairman in January 2006 having previously been a non-executive Director of Linton Park Plc. He is senior independent Director, chairman of the Audit committee and a member of the Nomination and Remuneration committees. William Gibson was appointed as an independent non-executive Director in September 2014. He 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, chairman of the Safeguarding and Stewardship committee (appointed in December 2020), and a member of the Audit and Nomination committees. Frédéric Vuilleumier was appointed as an independent non-executive Director in March 2013. He is a partner of Oberson Abels SA, a law oﬃce based in Geneva, Switzerland. He was a member of the Audit committee until April 2019. Gautam Dalal was appointed as an independent non-executive Director in March 2018. He was previously a partner at KPMG and a founder-director of the UK India Business Council, a member of the Asian Business Association and a director of AMREF Health Africa’s International Board. He is a member of the Audit committee. Jonathon Bond was appointed as an independent non-executive Director in March 2020. Jonathon has spent 25 years in the private equity industry with a particular focus on raising standards of governance and performance. He is also a senior independent director of Jupiter Fund Management plc, a non- executive director of Standard Life Private Equity Trust plc and Scottish Widows/Lloyds Bank Insurance. He was appointed a member of the Safeguarding and Stewardship committee in December 2020. Simon Turner was appointed as a non-executive Director in March 2020. After an earlier career in the legal profession, he is now president of the board of the trustee of The Camellia Foundation. Company Secretary Amarpal Takk was appointed as Group General Counsel and Company Secretary in April 2018. He is a qualiﬁed solicitor of England and Wales. He was appointed a member of the Safeguarding and Stewardship committee in December 2020. Substantial Shareholdings As at 6 April 2021 the Company has been advised of the following interests in its share capital: Beneﬁcial shareholder Shareholder No. of Shares Camellia Private Trust Company Limited Camellia Holding AG 1,427,000 Fide Holding NV* Quaero Capital SA *Controlled by Nokia Pensioenfonds VZW Lynchwood Nominees Limited 360,500 HSBC Global Custody Nominee (UK) Limited 147,598 % of total voting rights 51.67 13.05 5.34 Share Capital and Purchase of Own Shares The Company’s share capital comprises one class of ordinary shares of 10p per share 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 36 to the Accounts. 32 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 33 CAMELLIA PLC REPORT OF THE DIRECTORS At the AGM in 2020, shareholders gave authority for the Company to purchase up to 276,200 of its own shares. This authority expires at the conclusion of this year’s AGM at which a resolution proposing renewal of the authority will be submitted to shareholders. Auditors A resolution proposing the reappointment of Deloitte LLP will be put to the AGM. Each of the persons who were Directors at the time when this Directors’ report was approved has conﬁrmed that: n n So far as each Director is aware, there is no relevant audit information of which the Company’s auditors are unaware. 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. Energy and Carbon Disclosure In compliance with the SECR requirements, our greenhouse gas emissions, energy consumption and energy reduction initiatives are reported within the Environment and Social report on pages 16 to 21. Employees Details in relation to employees are set out on page 30. R&D The Group undertakes some R&D projects within its operations in order to improve eﬃciency and grow revenues. Future Development Details of future developments are set out in the Operational report. Going Concern The Directors, at the time of approving the ﬁnancial statements, considered the Group’s business activities together with the main trends and factors likely to aﬀect the Group, the most recent business performance of the Group, including the impacts of the pandemic, as described in the Operational report on pages 6 to 12. The Directors considered the impact of the current COVID environment on the business for the next 15 months. We have considered several variables which may impact on revenue, proﬁts and cash ﬂows. In light of the nature of our business and our experience of trading through the pandemic over the last year, we expect our agriculture businesses will continue to operate broadly as currently. In the UK we have assumed that the food service market begins to recover gradually over the course of the next two years and that the aerospace market recovery to pre-COVID levels is delayed until 2026. At 31 December 2020, the Group had cash and cash equivalents of £94.9 million with loans outstanding of £4.8 million. In addition, the Group had undrawn short-term loan and overdraft facilities of £23.7 million and a portfolio of liquid investments with a fair market value of £50.6 million. We have modelled various severe but plausible scenarios using assumptions including the combined eﬀect of reduced sales volumes for tea, reduced avocado exports and reduced sales volumes for macadamia during 2021. The revenue and operational impact of such volume reductions across our operations would have a substantially negative impact on Group proﬁtability. We have also considered the risk of price reductions during 2021 for our tea, macadamia and avocado crops. 33 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 34 CAMELLIA PLC REPORT OF THE DIRECTORS Historically in the tea sector, restrictions on, or reductions in the supply of tea either regionally or globally have led to higher selling prices and this was borne out in India during 2020. However, for prudence for the purposes of our downside scenario planning we have not reﬂected increased selling prices for tea nor any signiﬁcant reduction to our operating cost base. Under both the base case and the downside scenario, the Group is expected to continue to have suﬃcient headroom relative to the funding available to it. The Directors believe that the Company and the Group are well placed to manage their ﬁnancing and other business risks satisfactorily and, have a reasonable expectation that the Company and the Group will have adequate resources to continue in operational existence for the foreseeable future. The Directors therefore continue to adopt the going concern basis in preparing the ﬁnancial statements. Financial Risk Management Information on the Group’s ﬁnancial risk management objectives and policies and on the exposure of the Group to relevant risks in respect of ﬁnancial instruments is set out in note 42 of the accounts. Corporate Governance The Company’s statement on corporate governance can be found in the Corporate Governance report on pages 35 to 39. Political Donations The Company has no political aﬃliations and does not make political donations. Its operations work with governments and other parties around the world on issues that are important to our customers, and stakeholders, communities and to the interests of the business. Approved by the Board Amarpal Takk Company Secretary 3 May 2021 34 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 35 CAMELLIA PLC CORPORATE GOVERNANCE Statement of Compliance The Company fully complies with the Quoted Companies Alliance’s Corporate Governance Code for Small and Mid-size Quoted Companies (“QCA Code”). The Chairman considers the application of standards of corporate governance that are appropriate for the Group’s nature, status, proﬁle, size and circumstances to be important in ensuring the Group is managed for the long-term beneﬁt of all stakeholders. There are ten principles of the QCA Code which the Company complies with in full. The table on our website sets out how we comply. The Group consists of a portfolio of businesses which are grouped into independently managed divisions. These divisions report into the Board by function against a variety of metrics including budgets and business plans. The Board The Board currently comprises ten Directors, six of whom are non-executive Directors. The remaining Directors are executive Directors, including the Chairman. Chris Relleen, the Deputy Chairman, has been designated as the senior independent Director. The names and brief biographical details of each Director appear on pages 31 and 32. The Board has established Remuneration, Audit and Nomination committees. Terms of reference of each of the committees can be viewed on the Company’s website. The Board has also established the Safeguarding and Stewardship committee. 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 periodically and covers, inter alia, the following areas: n n n n n n n n n 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 is provided to Directors each month. Each Director has suﬃcient information in advance of Board meetings to enable informed judgements to be made on matters referred to the Board. The Board met 10 times in 2020. Attendance by Directors at Board and committee meetings held during the year was as follows: Director Malcolm Perkins Chris Relleen Tom Franks Graham Mclean Susan Walker William Gibson Frédéric Vuilleumier Gautam Dalal Simon Turner Jonathon Bond Board 10/10 10/10 10/10 10/10 10/10 10/10 10/10 10/10 9/10 9/10 Audit Remuneration Nomination – 4/4 – – – 4/4 – 4/4 – – – 2/2 – – – 2/2 – – – – 1/1 1/1 – – – 1/1 – – – – 35 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 36 CAMELLIA PLC CORPORATE GOVERNANCE Board Evaluation The Board has agreed to undertake a performance evaluation by way of internal review every three years. The last evaluation was conducted in 2018. Details of the next review will be disclosed when the next review is completed at the end of 2021. Executive Committees The Board has established the Strategy Group, consisting of the Chairman, the executive Directors of the Board and the Group General Counsel. The Board has also established two Executive Committees. The Agriculture Executive Committee is chaired by the Director of Agriculture and includes the Chief Executive, Chief Financial Oﬃcer, the Group General Counsel and heads of all the key agricultural operations. The Engineering and Food Service Executive Committee is chaired by the Chief Executive and includes the Chief Financial Oﬃcer, the Managing Directors of UK businesses, the Group General Counsel, the UK Investment Manager and the UK Head of HR. Investments and Associates report directly to the Chief Executive. Nomination Committee The committee is chaired by Malcolm Perkins. Its other members are William Gibson and Chris Relleen. The principal responsibilities of the committee are set out below: n n n 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. The committee met once during the year to consider the composition of the Audit committee. Audit Committee The committee is chaired by Chris Relleen. The other members of the committee during the year were Gautam Dalal and William Gibson. During 2020, the committee met on three occasions. The principal responsibilities of the committee are set out below and were undertaken during the year: n Monitor the eﬀectiveness of the Group’s risk management practices. n n Review the 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. Review and monitor the ﬁnancial statements of the Company and the audit of those statements and to monitor compliance with relevant ﬁnancial reporting requirements and legislation. n Monitor the eﬀectiveness and independence of the external auditors. n Review non-audit services provided by the external auditors. Signiﬁcant issues considered by the Audit Committee The Audit committee assesses whether suitable accounting policies have been adopted and whether management has made appropriate estimates and judgements. In the year under review, the Audit committee considered the following matters in relation to the ﬁnancial statements: 36 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 37 CAMELLIA PLC CORPORATE GOVERNANCE Going concern The committee considered the appropriateness of the going concern principle of accounting used in preparing the ﬁnancial statements in the context, in particular, of the ongoing impact of the pandemic on the Group’s cash requirements. Biological assets One of the key areas of judgement that the committee considered in reviewing the ﬁnancial statements was the valuation of biological assets in accordance with IAS 41. Valuations are based on discounted cash ﬂows or are carried out by external professional valuers. These were considered for consistency of approach and assumptions agreed as reasonable. For more details see note 19 to the Accounts. Pensions A key area of judgement is in relation to the valuation of the pension schemes obligations. Whilst this is conducted by independent actuaries, the size of the obligation means that a relatively minor diﬀerence in the assumptions could result in a material change in the quantum of the obligation. The committee considered the competence of the actuaries and the key assumptions adopted and concluded that the work performed is suﬃcient to support the valuation. Carrying value of intangible assets The Group’s carrying value of the Jing and Tea City brands and of the goodwill relating to the two Assam estates purchased in 2019 were discussed in light of the trading of those businesses and the uncertainties regarding timing of recovery from the impact of COVID and future revenue growth rates for Jing. The committee considered the fair value of the Group’s holdings and whether any impairment in the carrying value had occurred and agreed that apart from a £3.5 million provision for impairment of the Jing brand, no impairment provision was required. Carrying value of tangible assets The committee considered the fair value of the Group’s investment property portfolio, the carrying value of plant and equipment at the engineering subsidiaries, and other ﬁxtures and ﬁttings in the UK in the context of COVID and third party valuations and agreed that an impairment of £3.0 million had occurred. Carrying value of BF&M The Group’s carrying value of BF&M was higher than the share price for BF&M at 31 December 2020. The committee considered the fair value of the Group’s holding and whether any impairment in the carrying value had occurred and in view of the increase in the share price post year end and the control premium associated with our holding concluded that no impairment is required. Costs relating to the litigation relating to East Africa The committee considered the recognition criteria, quantiﬁcation and accounting treatment of the expected legal and other costs of the litigation relating to Kakuzi and Eastern Produce Malawi, with reference to costs incurred to 31 December 2020, the agreed settlements in each case and the legal costs expected to be incurred during 2021 in ﬁnalising and withdrawing the court action. This included consideration of the appropriate classiﬁcation of the expected liabilities between trade creditors, accruals and provisions. Provisions The basis of provisions for material uncertain tax situations were considered by the committee as were the provisions for wage increases in Kenya, Bangladesh and India. Consideration was given to the accounting implications of the recent VAT changes in Malawi and management’s judgement that it should be disclosed as a contingent liability. The committee is satisﬁed that the provisions represent best estimates of the likely liabilities. 37 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 38 CAMELLIA PLC CORPORATE GOVERNANCE External auditor 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 the auditor’s objectivity, Deloitte operates a ﬁve-year rotation policy for audit partners for a listed entity. 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. Remuneration Committee The committee is chaired by William Gibson and the other member is Chris Relleen. The responsibilities of the committee include: n n n The review of the Group’s policy relating to remuneration of the Chairman, executive Directors and the Company Secretary. To determine the terms of employment and remuneration of the Chairman, executive Directors and Company Secretary with a view to ensuring that those individuals are fairly and responsibly rewarded. To approve compensation packages or arrangements following the severance of any executive Director’s service contract. The Remuneration report appears on pages 41 to 42. Safeguarding & Stewardship Committee In 2020, the Company established a Safeguarding and Stewardship Committee to promote its mission to meeting the highest standards in protecting and promoting Human Rights across the Group. The committee meets regularly throughout the year and is chaired by William Gibson. Other members of the committee are Jonathon Bond, Amarpal Takk and Louise Nicholls (the former head of Human Rights and food sustainability at a leading UK supermarket). Malcolm Perkins will join the committee in June, following the resignation of Jonathon Bond. The principal objectives of the committee are set out below: n Identify and mitigate signiﬁcant social and governance risks. n Monitor the management of personal and process safety risk, security and environment risks. n Work with industry experts to put in place processes to identify and mitigate such social and governance risks which are appropriate in their design and eﬀective in their implementation. Insurance The Company purchases insurance to cover its Directors and oﬃcers, and those of its subsidiaries in respect of legal actions against them in their capacity as Directors of the Company. All Directors have access to independent professional advice at the Company’s expense. Share Capital Structure The share capital of the Company is set out in note 36. 38 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 39 CAMELLIA PLC CORPORATE GOVERNANCE 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 control, the principal features of which are described below. The key management philosophy of the Company is that the responsibility for eﬃcient day to day operations remains with the local management. Accountability and delegation of authority are clearly deﬁned with regular communication between Group head oﬃce and the management of the individual operations. Our key operations have internal audit functions reporting to local audit committees. The performance of each operation is continually monitored centrally including a critical review of annual budgets, forecasts and monthly sales, proﬁts and cash reports. Financial results and key operational statistics and variances from approved plans are carefully monitored. Group senior management regularly visit operations. However, any system of internal control can provide only reasonable, and not absolute, assurance against material mis-statement or loss. Approved by the Board Amarpal Takk Company Secretary 3 May 2021 39 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 40 CAMELLIA PLC STATEMENT OF DIRECTORS’ RESPONSIBILITIES The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable law and regulations. Company law requires the Directors to prepare ﬁnancial statements for each ﬁnancial year. Under that law the Directors are required to prepare the Group ﬁnancial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The ﬁnancial statements also comply with International Financial Reporting Standards (IFRSs) as issued by the IASB. Under Company law the Directors must not approve the accounts unless they are satisﬁed that they give a true and fair view of the state of aﬀairs of the company and of the proﬁt or loss of the Company for that period. In preparing these ﬁnancial statements, International Accounting Standard 1 requires that Directors: n n n Properly select and apply accounting policies. Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information. Provide additional disclosures when compliance with the speciﬁc requirements in IFRSs are insuﬃcient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s ﬁnancial position and ﬁnancial performance. n Make an assessment of the Company’s ability to continue as a going concern. 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 enable them to ensure that the ﬁnancial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and ﬁnancial information included on the company’s website. Legislation in the UK governing the preparation and dissemination of ﬁnancial statements may diﬀer from legislation in other jurisdictions. Responsibility Statement We conﬁrm that to the best of our knowledge: n n n The Financial Statements, prepared in accordance with International Financial Reporting Standards, give a true and fair view of the assets, liabilities, ﬁnancial position and proﬁt or loss of the Company and the undertakings included in the consolidation taken as a whole. The Strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face. The Annual Report and Accounts, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s position and performance, business model and strategy. Approved by the Board Malcolm Perkins Chairman 3 May 2021 40 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 41 CAMELLIA PLC REMUNERATION REPORT This report is drawn up in accordance with the Companies Act 2006 and the AIM Rules for Companies. Remuneration Committee Details of the Remuneration committee are set out on page 38. Policy on Directors’ Remuneration The policy agreed by the committee is as follows: n n n To seek to provide remuneration packages that will attract, retain and motivate the right people for the roles. So far as is practicable to align the interests of the executives with those of shareholders. To reﬂect the overriding remuneration philosophy and the principles of the wider Group. In implementing the second point, the Company does not operate proﬁt related bonus, share option or share incentive schemes for Directors as the Group’s activities are based largely on agriculture, which is highly dependent on factors outside management control such as the weather and market prices. The policy is designed to ensure that the Directors manage the Group’s businesses for the long-term in line with the strategy of the Group. In determining this remuneration policy and the remuneration of Directors, consideration has been given to the relevant provisions of the QCA Guidelines. The remuneration policy was approved by shareholders at the 2017 AGM and applied for a period of three years until 2020. The committee considers any views of the shareholders expressed on Directors’ remuneration. At the AGM on 10 June 2020, the Remuneration Report for the year to 31 December 2019 was approved by shareholders with 99.97% of the votes cast in favour, 0.03% of the votes cast against and 585 votes withheld. Service Contracts Malcolm Perkins, Tom Franks, Graham Mclean and Susan Walker are each employed on rolling service contracts. Director Malcolm Perkins Tom Franks Graham Mclean Susan Walker Date of Service Contract 25 April 2002 8 April 2015 10 April 2015 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. The Company has in place appropriate director’s and oﬃcers’ liability insurance cover in respect of legal action against its executive and non-executive Directors, amongst others. 41 260881 Camellia R&A pp22-pp42.qxp 04/05/2021 10:08 Page 42 CAMELLIA PLC REMUNERATION REPORT There are no speciﬁc contractual provisions for compensation upon early termination of a non-executive Director’s employment. The following sections on Directors’ remuneration and pensions have been audited. Directors’ Remuneration Executive Malcolm Perkins Tom Franks Susan Walker Graham Mclean Non-executive William Gibson Chris Relleen Frédéric Vuilleumier Gautam Dalal Simon Turner Jonathon Bond Total Remuneration 2020 £ 2019 £ Beneﬁts in Kind 2019 2020 £ £ Total 2020 £ 2019 £ 261,006 611,820 373,890 402,215 442,344 594,000 363,000 390,500 15,140 38,453 28,057 29,866 30,172 42,582 34,306 51,006 276,146 650,273 401,947 432,081 472,516 636,582 397,306 441,506 49,000 50,470 53,000 54,590 50,000 51,500 46,000 47,380 – 38,815 – 38,815 –––––––– –––––––– 1,930,501 1,987,844 –––––––– –––––––– – – – – – – –––––––– 111,516 –––––––– 49,000 50,470 – 53,000 54,590 – 50,000 51,500 – 46,000 47,380 – – 38,815 – – 38,815 – –––––––– –––––––– –––––––– 158,066 2,042,017 2,145,910 –––––––– –––––––– –––––––– Notes (i) The executive Directors’ beneﬁts in kind include the value attributed to medical insurance, permanent health insurance, spouse/partner travel and cash alternatives to company cars. (ii) Chris Relleen received an additional annual fee for his Chairmanship of the Audit committee. (iii) William Gibson received an additional annual fee for his Chairmanship of the Remuneration committee. Directors’ Pensions Malcolm Perkins received no payment for pensionable service during 2020. Tom Franks, Graham Mclean and Susan Walker receive an excess non-pensionable salary supplement equivalent to 10% of base salary. In addition to the above, an unfunded pension of US$200,000 per annum is paid to Gordon Fox, a former Director of the Company. Approved by the Board Amarpal Takk Company Secretary 3 May 2021 42 260881 Camellia R&A pp43-pp49.qxp 04/05/2021 10:08 Page 43 CAMELLIA PLC CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2020 2020 Separately disclosed Underlying items (note 4) (note 4) £’m £’m Notes 2019 Separately disclosed Underlying items (note 4) (note 4) £’m £’m £’m £’m – – – 2 291.2 (227.7) 63.5 3.0 (16.2) 291.2 291.5 291.5 (227.7) (224.1) 6.2 (217.9) –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 63.5 67.4 6.2 73.6 4.0 (15.0) (46.1) –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 1,3 6.9 (16.1) (9.2) 11.6 4.9 16.5 4.6 – – 3 (43.4) (16.1) (59.5) (44.8) (1.3) 3.0 4.0 (16.2) (15.0) 6.1 4.6 5 6.1 – – – – – – 14.4 14.4 – – – – 0.2 (6.5) (6.5) 0.2 – 0.2 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 5.0 16.4 4.9 21.3 0.7 0.6 0.7 – 0.2 13.2 (8.2) 0.6 – – – – – – – – – – 8 2.3 8 (1.6) 8 2.2 8 (0.7) 8 2.2 2.3 3.9 (1.6) (2.2) 2.2 (0.3) (0.7) (1.1) 2.2 0.3 3.9 (2.2) (0.3) (1.1) 0.3 –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– –––––––––– 16.0 (8.2) 7.8 17.4 4.9 22.3 (7.2) –––––––––– 15.1 –––––––––– (8.6) –––––––––– (0.8) –––––––––– – – – – – 9 Continuing operations Revenue Cost of sales Gross proﬁt Other operating income Distribution costs Administrative expenses Trading (loss)/proﬁt Share of associates’ results Proﬁt on disposal of property, plant and equipment 6 Impairments of intangible assets, investment properties and plant and equipment Proﬁt on disposal of ﬁnancial assets 7 Operating proﬁt Investment income Finance income Finance costs Net exchange gain/(loss) Employee beneﬁt expense Net ﬁnance income Proﬁt before tax Taxation (Loss)/proﬁt after tax (Loss)/proﬁt attributable to: Owners of Camellia Plc Non–controlling interests (Loss)/earnings per share – basic and diluted 12 (5.0) 4.2 –––––––––– (0.8) –––––––––– (181.0)p 8.3 6.8 –––––––––– 15.1 –––––––––– 300.5p 43 260881 Camellia R&A pp43-pp49.qxp 04/05/2021 10:08 Page 44 CAMELLIA PLC STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2020 Group (Loss)/proﬁt for the year Other comprehensive income/(expense): Items that will not be reclassiﬁed subsequently to proﬁt or loss: Financial assets at fair value through other comprehensive income: Fair value adjustment released on disposal Proﬁt on disposal Changes in the fair value of ﬁnancial assets Deferred tax movement in relation to fair value adjustments 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 Share of other comprehensive income of associates Other comprehensive expense for the year, net of tax Total comprehensive (expense)/income for the year Total comprehensive (expense)/income attributable to: Owners of Camellia Plc Non-controlling interests Company Proﬁt for the year Total comprehensive income for the year Notes 2020 £’m 2019 £’m (0.8) ––––––––––– 15.1 ––––––––––– 23 23 35 34 (1.1) 0.8 ––––––––––– (0.3) 2.3 (0.7) 4.3 (0.3) 1.2 ––––––––––– 0.9 6.9 (0.9) 3.5 0.6 ––––––––––– 6.2 ––––––––––– (0.5) ––––––––––– 9.9 ––––––––––– (22.6) 0.3 ––––––––––– (22.3) ––––––––––– (16.1) ––––––––––– (16.9) ––––––––––– (16.6) (0.3) ––––––––––– (16.9) ––––––––––– 4.5 ––––––––––– 4.5 ––––––––––– (16.7) 0.3 ––––––––––– (16.4) ––––––––––– (6.5) ––––––––––– 8.6 ––––––––––– 4.2 4.4 ––––––––––– 8.6 ––––––––––– 4.2 ––––––––––– 4.2 ––––––––––– 44 260881 Camellia R&A pp43-pp49.qxp 04/05/2021 10:08 Page 45 CAMELLIA PLC CONSOLIDATED BALANCE SHEET at 31 December 2020 ASSETS Non-current assets Intangible assets Property, plant and equipment Right-of-use assets Investment properties Biological assets Investments in associates Financial assets at fair value through other comprehensive income Financial asset at fair value through proﬁt or loss Financial assets at amortised cost Other investments - heritage assets Retirement beneﬁt surplus Trade and other receivables Total non-current assets Current assets Inventories Biological assets Trade and other receivables Current income tax assets Cash and cash equivalents (excluding bank overdrafts) Total current assets LIABILITIES Current liabilities Financial liabilities - borrowings Lease liabilities 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 Financial liabilities - borrowings Lease liabilities Deferred tax liabilities Employee beneﬁt obligations Total non-current liabilities Net assets EQUITY Called up share capital Share premium Reserves Equity attributable to owners of Camellia Plc Non-controlling interests Total equity Notes 2020 £’m 2019 £’m 15 16 17 18 19 22 23 24 25 26 35 28 27 19 28 29 31 32 30 35 33 31 32 34 35 36 6.6 198.3 16.6 19.1 12.7 67.6 42.6 5.3 2.7 9.8 0.1 2.4 ––––––––––– 383.8 ––––––––––– 47.5 7.1 43.7 1.7 98.5 ––––––––––– 198.5 ––––––––––– (5.7) (1.2) (50.9) (10.3) (1.1) (19.0) ––––––––––– (88.2) ––––––––––– 110.3 ––––––––––– 494.1 ––––––––––– (2.7) (10.3) (39.5) (15.6) ––––––––––– (68.1) ––––––––––– 426.0 ––––––––––– 0.3 15.3 361.0 ––––––––––– 376.6 49.4 ––––––––––– 426.0 ––––––––––– 10.3 222.5 18.5 18.3 14.6 66.0 37.8 6.2 3.0 9.8 0.7 2.8 ––––––––––– 410.5 ––––––––––– 49.3 9.1 44.3 1.2 91.4 ––––––––––– 195.3 ––––––––––– (5.6) (1.2) (48.6) (4.2) (0.7) (8.9) ––––––––––– (69.2) ––––––––––– 126.1 ––––––––––– 536.6 ––––––––––– (3.3) (11.8) (47.1) (22.0) ––––––––––– (84.2) ––––––––––– 452.4 ––––––––––– 0.3 15.3 380.1 ––––––––––– 395.7 56.7 ––––––––––– 452.4 ––––––––––– 45 260881 Camellia R&A pp43-pp49.qxp 04/05/2021 10:08 Page 46 CAMELLIA PLC COMPANY BALANCE SHEET at 31 December 2020 ASSETS Non-current assets Investments in subsidiaries Other investments – heritage assets Total non-current assets Current assets Trade and other receivables Current income tax asset Amounts due from group undertakings Total current assets LIABILITIES Current liabilities Trade and other payables Amounts due to group undertakings Provisions 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 2020 £’m 2019 £’m 21 26 28 30 33 34 36 73.5 11.0 ––––––––––– 84.5 ––––––––––– 0.6 0.1 2.2 ––––––––––– 2.9 ––––––––––– (0.8) (16.1) (1.9) ––––––––––– (18.8) ––––––––––– (15.9) ––––––––––– 68.6 ––––––––––– (0.2) ––––––––––– (0.2) ––––––––––– 68.4 ––––––––––– 0.3 15.3 52.8 ––––––––––– 68.4 ––––––––––– 73.5 11.0 ––––––––––– 84.5 ––––––––––– – 0.1 – ––––––––––– 0.1 ––––––––––– (0.6) (17.0) – ––––––––––– (17.6) ––––––––––– (17.5) ––––––––––– 67.0 ––––––––––– (0.2) ––––––––––– (0.2) ––––––––––– 66.8 ––––––––––– 0.3 15.3 51.2 ––––––––––– 66.8 ––––––––––– The proﬁt for the company is shown in note 10. The notes on pages 50 to 116 form part of the ﬁnancial statements. The ﬁnancial statements on pages 43 to 116 were approved on 3 May 2021 by the board of Directors and signed on their behalf by: M C Perkins Chairman Registered Number 00029559 46 260881 Camellia R&A pp43-pp49.qxp 04/05/2021 10:08 Page 47 CAMELLIA PLC CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2020 Cash generated from operations Cash ﬂows from operating activities Interest received Interest paid Income taxes paid Net cash ﬂow from operating activities Notes 37 Cash ﬂows from investing activities Purchase of intangible assets Purchase of property, plant and equipment Proceeds from sale of non-current assets Proceeds from sale of non-current assets - non recurring Additions to investment property Biological assets: non-current - disposals /(additions) Payment for acquisition of a businesses/subsidiary net of cash acquired Proceeds from sale of assets held for sale – investment property Investment in associates Dividends received from associates Purchase of investments Proceeds from sale of investments Income from investments Purchase of other investments – heritage assets Net cash ﬂow from investing activities Cash ﬂows from ﬁnancing activities Equity dividends paid Dividends paid to non-controlling interests New loans Loans repaid Payments of lease liabilities Net cash ﬂow from ﬁnancing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange losses on cash Cash and cash equivalents at end of year 38 38 38 29 29 2020 £’m 2019 £’m 19.3 2.4 (1.6) (7.2) ––––––––––– 12.9 ––––––––––– (0.3) (13.5) 0.5 21.6 (0.9) 0.7 – – (0.3) 3.2 (12.4) 9.1 0.6 – ––––––––––– 8.3 ––––––––––– (2.8) (7.0) 1.9 (3.6) (0.9) ––––––––––– (12.4) ––––––––––– 8.8 89.4 (3.3) ––––––––––– 94.9 ––––––––––– 21.2 4.0 (1.7) (10.9) ––––––––––– 12.6 ––––––––––– (0.1) (18.4) 1.7 – (0.5) 0.7 (9.4) 0.8 (1.3) 3.1 (11.4) 10.3 0.7 (0.3) ––––––––––– (24.1) ––––––––––– (4.0) (4.5) 3.6 (0.6) (0.4) ––––––––––– (5.9) ––––––––––– (17.4) 109.6 (2.8) ––––––––––– 89.4 ––––––––––– For the purposes of the cash ﬂow statement, cash and cash equivalents are included net of overdrafts repayable on demand. 47 260881 Camellia R&A pp43-pp49.qxp 04/05/2021 10:08 Page 48 CAMELLIA PLC COMPANY CASH FLOW STATEMENT for the year ended 31 December 2020 Cash generated from operations Proﬁt before tax Adjustments for: Interest income Dividends from group companies Increase in trade and other receivables Increase in trade and other payables Movement in provisions Net movement in intra-group balances Cash used in operations Interest received Net cash ﬂow from operating activities Cash ﬂows from investing activities Purchase of other investments – heritage assets 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 Cash and cash equivalents at end of year 2020 £’m 4.5 (0.2) (10.0) (0.6) 0.2 1.9 (3.1) ––––––––––– (7.3) 0.2 ––––––––––– (7.1) ––––––––––– – 10.0 ––––––––––– 10.0 ––––––––––– (2.9) ––––––––––– (2.9) ––––––––––– – – ––––––––––– – ––––––––––– 2019 £’m 4.2 (0.2) (5.3) – – – 0.1 ––––––––––– (1.2) 0.2 ––––––––––– (1.0) ––––––––––– (0.3) 5.3 ––––––––––– 5.0 ––––––––––– (4.1) ––––––––––– (4.1) ––––––––––– (0.1) 0.1 ––––––––––– – ––––––––––– 29 29 48 260881 Camellia R&A pp43-pp49.qxp 04/05/2021 10:08 Page 49 CAMELLIA PLC STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2020 Share Other Share Treasury Retained capital premium shares earnings reserves £’m £’m £’m £’m £’m Non- controlling interests £’m Total £’m Total equity £’m Group At 1 January 2019 Total comprehensive income/(expense) for the year Dividends At 31 December 2019 Total comprehensive income/(expense) for the year Dividends Share of associate's other equity movements At 31 December 2020 Company At 1 January 2019 Total comprehensive income for the year Dividends At 31 December 2019 Total comprehensive income for the year Dividends At 31 December 2020 0.3 15.3 (0.4) 350.7 29.6 395.5 56.8 452.3 – – ––––––– 0.3 – – ––––––– 15.3 – – ––––––– (0.4) 11.9 (4.0) ––––––– 358.6 (7.7) – ––––––– 21.9 4.2 (4.0) ––––––– 395.7 4.4 (4.5) ––––––– 56.7 8.6 (8.5) ––––––– 452.4 – – – – – – 0.3 (2.8) (16.9) – (16.6) (2.8) (0.3) (7.0) (16.9) (9.8) – ––––––– 0.3 ––––––– – ––––––– 15.3 ––––––– – ––––––– (0.4) ––––––– 0.3 ––––––– 356.4 ––––––– – ––––––– 5.0 ––––––– 0.3 ––––––– 376.6 ––––––– – ––––––– 49.4 ––––––– 0.3 ––––––– 426.0 ––––––– 0.3 15.3 – 39.0 12.1 66.7 – 66.7 – – ––––––– 0.3 – – ––––––– 0.3 ––––––– – – ––––––– 15.3 – – ––––––– 15.3 ––––––– – – ––––––– – – – ––––––– – ––––––– 4.2 (4.1) ––––––– 39.1 – – ––––––– 12.1 4.2 (4.1) ––––––– 66.8 – – ––––––– – 4.2 (4.1) ––––––– 66.8 4.5 (2.9) ––––––– 40.7 ––––––– – – ––––––– 12.1 ––––––– 4.5 (2.9) ––––––– 68.4 ––––––– – – ––––––– – ––––––– 4.5 (2.9) ––––––– 68.4 ––––––– Other reserves of the group include net exchange diﬀerences of £50.8 million deﬁcit (2019: £33.0 million deﬁcit). Group retained earnings includes £157.3 million (2019: £168.4 million) which would require exchange control permission for remittance as dividends. 49 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 50 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), IFRS interpretations Committee (IFRS IC) and the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated ﬁnancial statements comply with IFRS as issued by the International Accounting Standards Board (IASB). The consolidated ﬁnancial statements have been prepared on the historical cost basis as modiﬁed by the revaluation of biological assets, ﬁnancial assets and ﬁnancial liabilities and assets held for sale. Where necessary, comparative ﬁgures have been adjusted to conform with changes in presentation in the current year. In current year, comparative ﬁgure of £1.3 million has been represented as a separately disclosed item within administrative expenses to be consistent with the treatment in 2020 of the disclosure of the legal and other costs relating to the defence of the litigation concerning our East African operations. As a result of this presentational change underlying proﬁt before tax for 2019 has changed from £16.1 million as previously reported to £17.4 million. The representation had no impact upon the net proﬁt for the period. 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. See additional disclosure on page 33. 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 the 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 50 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 51 CAMELLIA PLC ACCOUNTING POLICIES 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. 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 the following ﬁve core principles of the model framework have been delivered: n n n n n the identiﬁcation of contract(s) with customers; the identiﬁcation of the performance obligations in the contract; the determination of the transaction price; the allocation of the transaction price to the performance obligations in the contract; and the recognition of revenue when (or as) a performance obligation has been satisﬁed. In respect of agricultural produce, revenue is recognised at the point in time that control of goods is transferred 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 at either the point in time that the customer has accepted return of the asset or control of the asset has been re-established and there is a present obligation to pay for services rendered or revenue is recognised based upon the stage of completion and includes costs incurred to date, plus accrued proﬁts. In respect of rental income, revenue is recognised on a straight-line basis over the lease term. Investment income Investment income is recognised when the right to receive payment of a dividend is established. Segmental reporting 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 Strategy Group led by the CEO. Inter segment sales are not signiﬁcant. 51 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 52 CAMELLIA PLC ACCOUNTING POLICIES Government grants Government grants are recognised when there is reasonable assurance that the conditions associated with the grants have been complied with and the grants will be received. Government grants are recognised in the Income Statement within other operating income so as to match with the related costs for which they are intended to compensate. Grants for the purchase or construction of property, plant and equipment are deducted from the cost of the related assets and reduce future depreciation expense accordingly. 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. 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. (ii) Identiﬁable intangible assets Indeﬁnite life identiﬁable intangible assets include certain brands acquired. They are not amortised but tested for impairment annually or more frequently if an impairment indicator is triggered, any impairment is charged to the income statement as it arises. The assessment of the classiﬁcation of intangible assets as indeﬁnite is reviewed annually. Finite life identiﬁable intangible assets include certain brands, 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. Expenditure on research activities is recognised as an expense in the period in which it is incurred. (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 Property, plant and equipment includes biological assets (bearer plants) which are accounted for under IAS 16. 52 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 53 CAMELLIA PLC ACCOUNTING POLICIES 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. On the application of the amendments to IAS 41 Agriculture and IAS 16 Property, plant and equipment the Directors elected to state the Group's bearer plants at deemed cost being the fair value recognised as at 1 January 2015 less the fair value at that date of the growing produce which is disclosed in current assets under biological assets. Additions after that date are recognised at historical 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:- Biological assets (Bearer plants) Freehold and long leasehold buildings Other short leasehold land and buildings Plant, machinery, ﬁxtures, ﬁttings and equipment 20 to 50 years nil to 50 years unexpired term of the lease 3 to 25 years No depreciation is provided on bearer plants until maturity when commercial levels of production have been reached. 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. Investment properties Properties held to earn rental income rather than for the purpose of the Group’s principal activities are classiﬁed as Investment properties. Investment properties are recorded at cost less accumulated depreciation and any recognised impairment loss. The depreciation policy is consistent with those described for other Group properties. Income from Investment properties is disclosed in ‘Revenue’. The related operating costs are immaterial and are included within administrative expenses. Biological assets: non-current Biological assets are measured at each balance sheet date at fair value and are generally valued at each year end by independent professional valuers. Any changes in fair value are recognised in the Income Statement in the year in which they arise. Costs of new areas planted are included as “new planting additions” in the biological assets note. As timber is harvested the value accumulated to the date of harvest is treated as “decrease due to harvesting” and charged to cost of sales in the Income Statement. Biological assets: current Produce is valued on the basis of net present values of expected future cash ﬂows and includes certain assumptions about yields, selling prices, costs and discount rates. As the crop is harvested it is transferred to inventory at fair value. 53 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 54 CAMELLIA PLC ACCOUNTING POLICIES Financial assets Classiﬁcation of ﬁnancial assets (i) Equity instruments designated as at fair value through other comprehensive income (FVTOCI) On initial recognition, the Group made an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVTOCI. Investments in equity instruments designated as FVTOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the investment revaluation reserve. The cumulative gain or loss is not reclassiﬁed to proﬁt or loss on disposal of the equity investments, instead, it is transferred to retained earnings. Dividends on these investments in equity instruments are recognised in proﬁt or loss in accordance with IFRS 9, unless the dividends clearly represent a recovery of part of the cost of the investment. Dividends are included as investment income in the consolidated income statement. (ii) Financial assets at fair value through proﬁt or loss (FVTPL) Financial assets that do not meet the criteria for being measured FVTOCI or at amortised cost (see (i) above and (iii) below) are measured at FVTPL. Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value gains or losses recognised in proﬁt or loss to the extent they are not part of a designated hedging relationship. (iii) Amortised cost and eﬀective interest method The amortised cost of a ﬁnancial asset is the amount at which the ﬁnancial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the eﬀective interest method of any diﬀerence between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a ﬁnancial asset is the amortised cost of a ﬁnancial asset before adjusting for any loss allowance. The eﬀective interest method is a method of calculating the amortised cost and of allocating interest income over the relevant period. Interest income is recognised in proﬁt or loss and is included in the “ﬁnance income – interest income” line item (note 8). Impairment of ﬁnancial assets The Group recognises a loss allowance for expected credit losses (ECL) on investments in debt instruments that are measured at amortised cost, lease receivables, trade receivables and contract assets. The amount of expected credit losses is updated at each reporting date to reﬂect changes in credit risk since initial recognition of the respective ﬁnancial instrument. Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a ﬁnancial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a ﬁnancial instrument that are possible within 12 months after the reporting date. The Group always recognises lifetime ECL for trade receivables, contract assets and lease receivables. The expected credit losses on these ﬁnancial assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for factors that are speciﬁc to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. 54 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 55 CAMELLIA PLC ACCOUNTING POLICIES For all other ﬁnancial instruments, the Group recognises lifetime ECL when there has been a signiﬁcant increase in credit risk since initial recognition. However, if the credit risk on the ﬁnancial instrument has not increased signiﬁcantly since initial recognition, the Group measures the loss allowance for that ﬁnancial instrument at an amount equal to 12-month ECL. (i) Signiﬁcant increase in credit risk In assessing whether the credit risk on a ﬁnancial instrument has increased signiﬁcantly since initial recognition, the Group compares the risk of a default occurring on the ﬁnancial instrument at the reporting date with the risk of a default occurring on the ﬁnancial instrument at the date of initial recognition. In making this assessment, the Group considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or eﬀort. Forward-looking information considered includes the future prospects of the industries in which the Group’s debtors operate, obtained from economic expert reports, ﬁnancial analysts, governmental bodies, relevant think-tanks and other similar organisations, as well as consideration of various external sources of actual and forecast economic information that relate to the Group’s core operations. In particular, the following information is taken into account when assessing whether credit risk has increased: n n n n n n An actual or expected signiﬁcant deterioration in the ﬁnancial instrument’s external (if available) or internal credit rating Signiﬁcant deterioration in external market indicators of credit risk for a particular ﬁnancial instrument Existing or forecast adverse changes in business, ﬁnancial or economic conditions that are expected to cause a signiﬁcant decrease in the debtor’s ability to meet its debt obligations An actual or expected signiﬁcant deterioration in the operating results of the debtor Signiﬁcant increases in credit risk on other ﬁnancial instruments of the same debtor An actual or expected signiﬁcant adverse change in the regulatory, economic, or technological environment of the debtor that results in a signiﬁcant decrease in the debtor’s ability to meet its debt obligations Irrespective of the outcome of the above assessment, the Group presumes that the credit risk on a ﬁnancial asset has increased signiﬁcantly since initial recognition when contractual payments are more than 30 days past due, unless the Group has reasonable and supportable information that demonstrates otherwise. Despite the foregoing, the Group assumes that the credit risk on a ﬁnancial instrument has not increased signiﬁcantly since initial recognition if the ﬁnancial instrument is determined to have low credit risk at the reporting date. A ﬁnancial instrument is determined to have low credit risk if: (i) The ﬁnancial instrument has a low risk of default, (ii) The debtor has a strong capacity to meet its contractual cash ﬂow obligations in the near term, and (iii) Adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulﬁl its contractual cash ﬂow obligations. The Group considers a ﬁnancial asset to have low credit risk when the asset has external credit rating of ‘investment grade’ in accordance with the globally understood deﬁnition or if an external rating is not available, the asset has an internal rating of ‘performing’. Performing means that the counterparty has a strong ﬁnancial position and there is no past due amounts. The Group regularly monitors the eﬀectiveness of the criteria used to identify whether there has been a signiﬁcant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying any signiﬁcant increase in credit risk before the amount becomes past due. 55 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 56 CAMELLIA PLC ACCOUNTING POLICIES (ii) Deﬁnition of default The Group considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that ﬁnancial assets that meet either of the following criteria are generally not recoverable: n When there is a breach of ﬁnancial covenants by the debtor; or n Information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full (without taking into account any collateral held by the Group). Irrespective of the above analysis, the Group considers that default has occurred when a ﬁnancial asset is more than 90 days past due unless the Group has reasonable and supportable information to demonstrate that diﬀerent default criterion is more appropriate. (iii) Credit-impaired ﬁnancial assets A ﬁnancial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash ﬂows of that ﬁnancial asset have occurred. Evidence that a ﬁnancial asset is credit-impaired includes observable data about the following events: (a) signiﬁcant ﬁnancial diﬃculty of the issuer or the borrower; (b) a breach of contract, such as a default or past due event (see (ii) above); (c) the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s ﬁnancial diﬃculty, having granted to the borrower a concession(s) that the lender(s) would not otherwise consider; (d) it is becoming probable that the borrower will enter bankruptcy or other ﬁnancial reorganisation; or (e) a disappearance of an active market for that ﬁnancial asset because of ﬁnancial diﬃculties. (iv) Write-oﬀ policy The Group writes oﬀ a ﬁnancial asset when there is information indicating that the debtor is in severe ﬁnancial diﬃculty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or in the case of trade receivables, when the amounts are over two years past due, whichever occurs sooner. Financial assets written oﬀ may still be subject to enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in proﬁt or loss. (v) Measurement and recognition of expected credit losses The measurement of expected credit losses is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default, for ﬁnancial assets, this is represented by the assets’ gross carrying amount at the reporting date; for ﬁnancial guarantee contracts, the exposure includes the amount drawn down as at the reporting date, together with any additional amounts expected to be drawn down in the future by default date determined based on historical trend, the Group’s understanding of the speciﬁc future ﬁnancing needs of the debtors, and other relevant forward-looking information. For ﬁnancial assets, the expected credit loss is estimated as the diﬀerence between all contractual cash ﬂows that are due to the Group in accordance with the contract and all the cash ﬂows that the Group expects to receive, discounted at the original eﬀective interest rate. For a lease receivable, the cash ﬂows used for determining the expected credit losses is consistent with the cash ﬂows used in measuring the lease receivable in accordance with IAS 17 Leases. 56 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 57 CAMELLIA PLC ACCOUNTING POLICIES The Group recognises an impairment gain or loss in proﬁt or loss for all ﬁnancial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognised in other comprehensive income and accumulated in reserves, and does not reduce the carrying amount of the ﬁnancial asset in the balance sheet. Derecognition of ﬁnancial assets The Group derecognises a ﬁnancial asset only when the contractual rights to the cash ﬂows from the asset expire, or when it transfers the ﬁnancial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred ﬁnancial asset, the Group continues to recognise the ﬁnancial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a ﬁnancial asset measured at amortised cost, the diﬀerence between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in proﬁt or loss. In addition, on derecognition of an investment in a debt instrument classiﬁed as at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassiﬁed to proﬁt or loss. In contrast, on derecognition of an investment in equity instrument which the Group has elected on initial recognition to measure at FVTOCI, the cumulative gain or loss previously accumulated in the investments revaluation reserve is not reclassiﬁed to proﬁt or loss, but is transferred to retained earnings. Other investments – heritage assets Other investments comprise ﬁne art, 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 non-ﬁnancial assets The Group has signiﬁcant investments in intangible assets, property, plant and equipment, investment properties, biological assets, associated companies, ﬁnancial assets and other investments. These assets are tested for impairment when circumstances indicate there may be a potential impairment. Goodwill and intangible assets with an indeﬁnite useful life are tested for impairment at least annually. Factors considered which could trigger an impairment review include a 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. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash ﬂows are discounted to their present value using a pre-tax discount rate that reﬂects current market assessments of the time value of money and the risks speciﬁc to the asset for which the estimates of future cash ﬂows have not been adjusted. Where the asset does not generate cash ﬂows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identiﬁed, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identiﬁed. 57 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 58 CAMELLIA PLC ACCOUNTING POLICIES If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in proﬁt or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease and to the extent that the impairment loss is greater than the related revaluation surplus, the excess impairment loss is recognised in proﬁt or loss. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in proﬁt or loss to the extent that it eliminates the impairment loss which has been recognised for the asset in prior years. Any increase in excess of this amount is treated as a revaluation increase. Inventories Agricultural produce included within inventory largely comprises stock of ‘black’ tea. In accordance with IAS 41, on initial recognition, agricultural produce is required to be measured at fair value less estimated point of sale costs. 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. 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. 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. 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. 58 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 59 CAMELLIA PLC ACCOUNTING POLICIES 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 and workers proﬁt participation at the balance sheet date is recognised as an accrual. 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. 59 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 60 CAMELLIA PLC ACCOUNTING POLICIES 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 judgements and key sources of estimation uncertainty In the view of the Directors, the following accounting judgements and estimations have been made in the process of applying the Group’s accounting policies which have a signiﬁcant eﬀect on the amounts recognised in ﬁnancial statements. Critical judgements in applying the Group's accounting policies The following are critical judgements not being judgements involving estimations (which are dealt with below) that the Directors have made in the process of applying the Group's accounting policies. Accounting judgments Signiﬁcant judgement in determining the lease term of contracts with renewal options The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has the option, under some of its leases to lease the assets for additional terms. The Group applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a signiﬁcant event or change in circumstances that is within its control and aﬀects its ability to exercise (or not to exercise) the option to renew (e.g., a change in business strategy). Key sources of estimation uncertainty Estimates 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 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 assessment of the recoverable amount for each group of CGUs is subject to a number of assumptions. The Group has conducted an analysis of the sensitivity of the impairment test to changes in the key assumptions used to determine the recoverable amount for each of the group of CGUs to which intangible and tangible assets are allocated. 60 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 61 CAMELLIA PLC ACCOUNTING POLICIES The sensitivity of carrying amounts of intangible brand is set out at note 15 and of biological and ﬁnancial assets at notes 19 and 42 respectively. (ii) 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. Details of assumptions made and sensitivity analysis are given in note 19. (iii) 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, life expectancy and inﬂation rates. Details of assumptions made and sensitivity analysis are given in note 35. (iv) Taxation Income tax liabilities include a number of provisions based on management’s interpretation of country speciﬁc tax law and the likelihood of settlement. This can involve a signiﬁcant amount of judgement as tax legislation can be complex and open to diﬀerent interpretation. Management uses professional ﬁrms and previous experience when assessing tax risks. Where actual tax liabilities diﬀer from the provisions, adjustments are made which can have a material impact on the Group’s proﬁts for the year. It is not practicable to quantify the range of outcomes with the application of sensitivity analyses. Tax provision movements are disclosed in note 9. Signiﬁcant unprovided contingent tax liabilities are disclosed in note 41. (v) Provisions and other liabilities Provisions include a number of provisions in respect of ongoing wage and bonus negotiations which are based on management’s judgement of the expected outcome of these negotiations. Where actual wage and bonus awards diﬀer from the provisions, adjustments are made which can have a material impact on the Group’s proﬁts for the year. Provision movements are disclosed in note 33. (vi) COVID In addition in light of the current ongoing impact of the COVID pandemic, valuations of certain assets and liabilities are necessarily more subjective. 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 2020: Amendments to IFRS 3 Deﬁnition of a business The amendments clarify that while businesses usually have outputs, outputs are not required for an integrated set of activities and assets to qualify as a business. To be considered a business an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together signiﬁcantly contribute to the ability to create outputs. Additional guidance is provided that helps to determine whether a substantive process has been acquired. 61 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 62 CAMELLIA PLC ACCOUNTING POLICIES The amendments introduce an optional concentration test that permits a simpliﬁed assessment of whether an acquired set of activities and assets is not a business. Under the optional concentration test, the acquired set of activities and assets is not a business if substantially all of the fair value of the gross assets acquired is concentrated in a single identiﬁable asset or group of similar assets. The amendments are applied prospectively to all business combinations and asset acquisitions for which the acquisition date is on or after 1 January 2020. Amendments to IAS 1 and IAS 8 Deﬁnition of material The Group has adopted the amendments to IAS 1 and IAS 8 for the ﬁrst time in the current year. The amendments make the deﬁnition of material in IAS 1 easier to understand and are not intended to alter the underlying concept of materiality in IFRS Standards. The concept of ‘obscuring’ material information with immaterial information has been included as part of the new deﬁnition. The threshold for materiality inﬂuencing users has been changed from ‘could inﬂuence’ to ‘could reasonably be expected to inﬂuence’. The deﬁnition of material in IAS 8 has been replaced by a reference to the deﬁnition of material in IAS 1. In addition, the IASB amended other Standards and the Conceptual Framework that contain a deﬁnition of ‘material’ or refer to the term ‘material’ to ensure consistency. (ii) Standards, amendments and interpretations to existing standards that are not yet eﬀective and have not been adopted early by the Group At the date of authorisation of these ﬁnancial statements, the Group has not applied the following new and revised IFRS Standards that have been issued but are not yet eﬀective: IFRS 17 Insurance contracts Amendments to IAS 1 Classiﬁcation of Liabilities as Current or Non-current Amendments to IFRS 3 Reference to the Conceptual Framework Amendments to IAS 16 Property, Plant and Equipment Proceeds before Intended Use Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 Annual Improvements to IFRS 2018-2020 The Directors do not expect that the adoption of the Standards listed above will have a material impact on the ﬁnancial statements of the Group in future periods, except as noted below: Amendments to IAS 1 – Classiﬁcation of Liabilities as Current or Non-current The amendments to IAS 1 aﬀect only the presentation of liabilities as current or non-current in the statement of ﬁnancial position and not the amount or timing of recognition of any asset, liability, income or expenses, or the information disclosed about those items. The amendments clarify that the classiﬁcation of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period, specify that classiﬁcation is unaﬀected by expectations about whether an entity will exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are complied with at the end of the reporting period, and introduce a deﬁnition of ‘settlement’ to make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services. The amendments are applied retrospectively for annual periods beginning on or after 1 January 2023, with early application permitted. 62 260881 Camellia R&A pp50-pp63.qxp 04/05/2021 10:08 Page 63 CAMELLIA PLC ACCOUNTING POLICIES Amendments to IFRS 3 – Reference to the Conceptual Framework The amendments update IFRS 3 so that it refers to the 2018 Conceptual Framework instead of the 1989 Framework. They also add to IFRS 3 a requirement that, for obligations within the scope of IAS 37, an acquirer applies IAS 37 to determine whether at the acquisition date a present obligation exists as a result of past events. For a levy that would be within the scope of IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine whether the obligating event that gives rise to a liability to pay the levy has occurred by the acquisition date. Finally, the amendments add an explicit statement that an acquirer does not recognise contingent assets acquired in a business combination. The amendments are eﬀective for business combinations for which the date of acquisition is on or after the beginning of the ﬁrst annual period beginning on or after 1 January 2022. Early application is permitted if an entity also applies all other updated references (published together with the updated Conceptual Framework) at the same time or earlier. The amendments are eﬀective for annual periods beginning on or after 1 January 2022, with early application permitted. Annual Improvements to IFRS Standards 2018–2020 The Annual Improvements include amendments to four Standards. IFRS 9 Financial Instruments The amendment clariﬁes that in applying the ‘10 per cent’ test to assess whether to derecognise a ﬁnancial liability, an entity includes only fees paid or received between the entity (the borrower) and the lender, including fees paid or received by either the entity or the lender on the other’s behalf. The amendment is applied prospectively to modiﬁcations and exchanges that occur on or after the date the entity ﬁrst applies the amendment. The amendment is eﬀective for annual periods beginning on or after 1 January 2022, with early application permitted. IFRS 16 Leases The amendment removes the illustration of the reimbursement of leasehold improvements. As the amendment to IFRS 16 only regards an illustrative example, no eﬀective date is stated. IAS 41 Agriculture The amendment removes the requirement in IAS 41 for entities to exclude cash ﬂows for taxation when measuring fair value. This aligns the fair value measurement in IAS 41 with the requirements of IFRS 13 Fair Value Measurement to use internally consistent cash ﬂows and discount rates and enables preparers to determine whether to use pre-tax or post-tax cash ﬂows and discount rates for the most appropriate fair value measurement. The amendment is applied prospectively, i.e. for fair value measurements on or after the date an entity initially applies the amendment. The amendment is eﬀective for annual periods beginning on or after 1 January 2022, with early application permitted. 63 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 64 CAMELLIA PLC NOTES TO THE ACCOUNTS 1 Business and geographical segments The principal activities of the Group are as follows: Agriculture Engineering Food Service For management reporting purposes these activities form the basis on which the Group reports its primary divisions. In addition, the Group holds a number of investments. Segment information about these businesses is presented below: Agriculture 2019 £’m 2020 £’m Engineering 2019 2020 £’m £’m Food Service 2019 2020 £’m £’m Unallocated 2019 2020 £’m £’m Consolidated 2019 2020 £’m £’m Revenue External sales Underlying trading proﬁt/(loss) Separately disclosed items Trading (loss)/proﬁt Share of associates’ results Proﬁt on disposal of property, plant and equipment Impairment of intangible assets, investment properties and plant and equipment Proﬁt on disposal of ﬁnancial assets Operating proﬁt/(loss) Comprising – underlying operating proﬁt/(loss) 22.1 23.6 19.3 238.7 247.2 18.3 (16.1) 291.5 –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– 11.6 4.9 –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– 16.5 4.6 6.9 (16.1) (1.5) – (1.7) – (8.2) – (1.5) – (1.7) – (8.2) 6.1 (9.2) 6.1 (8.2) – (8.2) 4.6 19.0 4.9 23.9 – 2.2 – 0.8 – 0.8 – 291.2 29.8 1.1 0.9 – – – – 14.4 – – – – – – – 14.4 – – 0.2 (0.2) 0.2 – 0.2 –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– 21.3 (1.6) – (3.7) – (1.0) – (6.5) 0.2 (3.1) (5.4) (3.1) 16.6 (3.6) 24.1 5.0 0.8 – – – – – – – before tax 18.5 19.2 (1.5) – Proﬁt on disposal of property, plant and equipment – costs related to group claims – impairment of intangible assets and property, plant and equipment – release of provisions for wage increases – charge to workers proﬁt participation Investment income Net ﬁnance income Proﬁt before tax Taxation (Loss)/proﬁt after tax Other information Segment assets Investments in associates Unallocated assets Consolidated total assets Segment liabilities Unallocated liabilities Consolidated total liabilities Capital expenditure Depreciation Amortisation Impairments 64 14.4 (16.1) – (1.3) – – – – – (1.7) 0.8 (2.1) (3.6) 13.2 16.4 – – – – – – – – 14.4 (16.1) – (1.3) – – – – – – – – – 24.1 16.6 (3.1) – 9.8 (3.6) (1.6) – – (0.2) – – (6.5) – – (1.0) – – (3.7) – – – 9.8 (3.6) –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– 21.3 0.7 0.3 –––––– –––––– 22.3 (7.2) –––––– –––––– 15.1 –––––– –––––– 5.0 0.6 2.2 7.8 (8.6) (5.4) (3.1) (0.8) (3.6) 0.8 – 354.2 364.8 16.6 19.1 27.9 32.9 20.5 19.8 (60.3) (49.8) (11.8) (12.1) (6.4) (7.0) (2.9) (2.6) 11.3 (12.5) – (0.2) 15.3 (13.3) – (0.3) 0.6 (1.4) – (1.6) 0.6 (1.5) – – 1.3 (2.1) – (3.7) 2.3 (1.8) (0.3) – 1.2 (0.2) (0.3) (1.0) 0.7 (0.2) – – 582.3 (81.4) (74.9) 419.2 67.6 95.5 436.6 66.0 103.2 –––––– –––––– 605.8 –––––– –––––– (71.5) (81.9) –––––– –––––– (153.4) –––––– –––––– 18.9 (16.8) (0.3) (0.3) 14.4 (16.2) (0.3) (6.5) (156.3) 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 65 CAMELLIA PLC NOTES TO THE ACCOUNTS 1 Business and geographical segments (continued) Segment assets consist primarily of intangible assets, property, plant and equipment, investment properties, 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. 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 South Africa South America The Group derives revenue from the transfer of goods and services over time and at a point in time in the following major geographical regions: United Kingdom Continental Europe Bangladesh India Kenya Malawi North America South Africa South America Other At a point in time 2019 2020 £’m £’m Over time Total 2020 £’m 2019 £’m 2020 £’m 2019 £’m 49.8 26.6 23.3 99.9 32.0 13.7 14.7 2.2 6.4 21.5 –––––––––– 290.1 –––––––––– 56.5 24.0 23.9 92.4 30.2 11.0 14.0 3.0 5.9 29.7 –––––––––– 290.6 –––––––––– 1.0 – – – – 0.1 – – – – –––––––––– 1.1 –––––––––– 0.8 – – – – 0.1 – – – – –––––––––– 0.9 –––––––––– 50.8 26.6 23.3 99.9 32.0 13.8 14.7 2.2 6.4 21.5 –––––––––– 291.2 –––––––––– 57.3 24.0 23.9 92.4 30.2 11.1 14.0 3.0 5.9 29.7 –––––––––– 291.5 –––––––––– 65 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 66 CAMELLIA PLC NOTES TO THE ACCOUNTS 1 Business and geographical segments (continued) The following is an analysis of the carrying amount of segment assets and additions to property, plant and equipment and investment properties, analysed by the geographical area in which the assets are located: United Kingdom Continental Europe Bangladesh India Kenya Malawi Tanzania North America South Africa South America Carrying amount of segment assets 2020 £’m 2019 £’m Additions to property, plant and equipment 2019 £’m 2020 £’m Additions to investment properties 2019 £’m 2020 £’m 62.1 0.8 64.4 102.9 89.4 48.0 3.7 24.7 14.2 9.0 –––––––––– 419.2 –––––––––– 68.3 1.1 68.2 103.1 99.5 54.0 1.3 12.4 18.7 10.0 –––––––––– 436.6 –––––––––– 2.2 – 1.7 2.7 3.7 0.4 1.5 – 1.0 0.3 –––––––––– 13.5 –––––––––– 3.0 – 2.1 3.6 4.7 1.6 – – 3.1 0.3 –––––––––– 18.4 –––––––––– 0.9 – – – – – – – – – –––––––––– 0.9 –––––––––– 0.5 – – – – – – – – – –––––––––– 0.5 –––––––––– 2 Revenue An analysis of the Group’s revenue is as follows: Sale of goods Distribution and warehousing revenue Engineering services revenue Property rental revenue Total Group revenue Other operating income Investment income Interest income Total Group income Disaggregation of revenue from contracts with customers: 2020 £’m 2019 £’m 247.2 23.6 19.3 1.1 –––––––––– 291.2 3.0 0.6 2.3 –––––––––– 297.1 ––––––––––– 242.9 25.6 22.1 0.9 –––––––––– 291.5 4.0 0.7 3.9 –––––––––– 300.1 ––––––––––– At a point in time 2019 2020 £’m £’m Over time 2020 £’m 2019 £’m Sale of goods Distribution and warehousing revenue Engineering services revenue Property rental revenue Total Group revenue 66 247.2 23.6 19.3 – –––––––––– 290.1 242.9 25.6 22.1 – –––––––––– 290.6 – – – 1.1 –––––––––– 1.1 – – – 0.9 –––––––––– 0.9 ––––––––––– ––––––––––– ––––––––––– ––––––––––– 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 67 CAMELLIA PLC NOTES TO THE ACCOUNTS 3 Trading (loss)/proﬁt The following items have been included in arriving at trading (loss)/proﬁt: Employment costs (note 13) 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) Fair value gain included in Made Tea Depreciation of property, plant and equipment: Owned assets Right-of-use assets Amortisation of intangibles (included in administrative expenses) Impairment of intangibles (included in administrative expenses) Gain from change in fair value of non-current biological assets (Loss)/proﬁt on disposal of property, plant and equipment Repairs and maintenance expenditure on property, plant and equipment Government grant income (included in other operating income) 2020 £’m 2019 £’m 108.1 118.0 163.9 164.4 0.9 0.1 – 0.1 15.2 1.0 0.3 – 0.4 (0.1) 2.1 0.8 –––––––––– 15.8 0.9 0.3 0.3 1.4 0.5 5.4 – –––––––––– During the year the Group beneﬁtted from £0.8 million (2019: £nil) of government grants in the form of the UK Coronavirus Job Retention Scheme. In accordance with our accounting policy this credit is included in other operating income within the Income Statement over the same period as the staﬀ costs for which it compensates. Currency exchange (gains)/losses (credited)/charged to income include: Revenue Distribution costs Administrative expenses Investment income Finance income and costs (0.1) (0.1) (0.1) – (2.2) –––––––––– (2.5) ––––––––––– – – (0.2) (0.1) 0.3 –––––––––– – ––––––––––– 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 assurance services Tax compliance services 0.2 0.6 –––––––––– 0.8 – 0.1 –––––––––– 0.9 ––––––––––– 0.2 0.5 –––––––––– 0.7 0.1 0.1 –––––––––– 0.9 ––––––––––– 67 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 68 CAMELLIA PLC NOTES TO THE ACCOUNTS 4 Underlying performance The Group’s income statement and segmental analysis separately identify a number of Alternative Performance Measures (APMs) in addition to those reported under IFRS. The Directors believe that the presentation of the results in this way, which is not meant to be a substitute for or superior to IFRS measures, is relevant to an understanding of the Group’s underlying trends, ﬁnancial performance and position. These APMs are also used to enhance the comparability of information between reporting periods and the Group’s divisions, by adjusting for non-recurring or uncontrollable factors which aﬀect IFRS measures, to aid the user in understanding the underlying performance. Our KPIs are aligned to our strategy. Consequently, APMs are consistent with how the business performance is planned and reported internally to the Board and Operating Committees to aid their decision making. The following items have been excluded in arriving at the underlying proﬁt measure and have been separately disclosed: n n n A £14.4 million proﬁt from the disposal of the property, plant and equipment owned by Horizon Farms. £16.1 million (2019: £1.3 million) of legal and other costs relating to the defence of the litigation concerning our East African operations, including the settlements of up to £4.6 million in relation to the Kenyan claims and £2.3 million in relation to the Malawian claims. Impairment charges in relation to the Jing Tea brand, investment properties, plant and equipment at Abbey Metal Finishing and at Atﬁn and elsewhere in the UK totalling £6.5 million. See note 7. 5 Share of associates’ results The Group’s share of the results of associates is analysed below: Proﬁt before tax Taxation Proﬁt after tax 2020 £’m 2019 £’m 6.7 (0.6) –––––––––– 6.1 –––––––––– 5.3 (0.7) –––––––––– 4.6 –––––––––– 6 Proﬁt on disposal of property, plant and equipment A £14.4 million proﬁt was realised from the disposal of the property, plant and equipment owned by Horizon Farms in California. Total cash consideration was £21.6 million. 68 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 69 CAMELLIA PLC NOTES TO THE ACCOUNTS 7 Impairments of intangible assets, investment properties and plant and equipment Jing Tea is a UK subsidiary that operates within the global tourism and hospitality sector and also has a retail operation. These operations were severely aﬀected in 2020 by the pandemic and the measures taken to contain it. These measures, which included a signiﬁcant lockdown period, constituted a triggering event leading to an impairment test in the interim condensed ﬁnancial statements for the six months ended 30 June 2020, which resulted in a brand impairment of £3.2 million. The Group tests the carrying value of brands annually in December and this resulted in a further impairment of £0.3 million (2019: £nil). The assumptions used in performing the interim impairment test have been updated to reﬂect lower expected earnings in 2021–23 than previously assumed and a delay in the return to the pre-pandemic levels of turnover in the out of home market until 2023. A sensitivity analysis in relation to the brand impairment is set out in note 15. In addition, a £0.2 million impairment of ﬁxtures and ﬁttings relating to their retail store was also provided. Abbey Metal Finishing is a UK subsidiary and its German subsidiary Atﬁn provide specialist coating services for the aerospace sector. These companies operations were severely aﬀected in 2020 by the pandemic and the measures taken to contain it. These measures, which included a signiﬁcant lockdown period and curtailments to travel, constituted a triggering event leading to an impairment test in the interim condensed ﬁnancial statements for the six months ended 30 June 2020, which resulted in a plant and equipment impairment of £0.2 million. The Group tests for impairment triggers annually in December and this resulted in a further impairment of £1.4 million. The assumptions used in performing the interim impairment test have been updated to reﬂect an extended period of recovery and a delay in the return to the pre-pandemic levels of turnover until 2026. In addition, a £0.2 million impairment provision has been included in investment properties in relation to recently developed UK investment properties, a £0.8 million impairment on other UK ﬁxture and ﬁttings and a £0.2 million impairment on ﬁxture and ﬁxtures at EP Cape in South Africa. 8 Finance income and costs Interest payable on loans and bank overdrafts Interest payable on leases Finance costs Finance income - interest income on short-term bank deposits Net exchange gain/(loss) on foreign cash balances Employee beneﬁt expense (note 35) Net ﬁnance income 2020 £’m 2019 £’m (0.9) (0.7) –––––––––– (1.6) 2.3 2.2 (0.7) –––––––––– 2.2 –––––––––– (1.5) (0.7) –––––––––– (2.2) 3.9 (0.3) (1.1) –––––––––– 0.3 –––––––––– 69 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 70 CAMELLIA PLC NOTES TO THE ACCOUNTS 9 Taxation Analysis of charge in the year Current tax UK corporation tax UK corporation tax at 19.0 per cent. (2019: 19.0 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 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 of corporation tax in the UK of 19.00 per cent. (2019: 19.00 per cent.) 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 2020 £’m £’m 2019 £’m 0.3 (0.3) –––––––––– 13.2 - –––––––––– (0.7) (3.9) –––––––––– – 0.6 (0.6) –––––––––– – 8.7 (2.4) –––––––––– 13.2 –––––––––– 13.2 6.3 –––––––––– 6.3 (1.1) 2.0 –––––––––– 0.9 –––––––––– 7.2 –––––––––– (4.6) –––––––––– 8.6 –––––––––– 7.8 (6.1) –––––––––– 1.7 –––––––––– 22.3 (4.6) –––––––––– 17.7 –––––––––– 0.3 3.4 – 0.3 2.5 0.5 (0.6) 6.0 (0.4) –––––––––– 8.6 –––––––––– (2.4) 1.0 3.1 1.0 (0.5) 1.5 0.1 –––––––––– 7.2 –––––––––– In 2020, losses arising in the UK, including legal and other costs relating to the defense of the litigation concerning our East African operations, gave rise to a signiﬁcant increase in losses carried forward which cannot be recognised as a deferred tax asset. In 2020, a £14.4 million proﬁt on disposal of the property, plant and equipment owned by Horizon Farms gave rise to a corporation tax charge of £5.6 million oﬀset by a release of deferred tax of £1.7 million. In 2019, adjustment to tax in respect of prior years includes a credit of £2.3 million relating to a reversal of the provision previously carried relating to assessments raised by the Malawi Revenue Authority which are no longer required. In 2019, included within the tax charge is a provision amounting to £0.9 million relating to withholding tax on prior year branch proﬁt remittances from Bangladesh where the applicable rate of withholding tax is being contested. 70 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 71 CAMELLIA PLC NOTES TO THE ACCOUNTS 9 Taxation (continued) In 2019, also included within the tax charge is a credit to deferred tax of £1.3 million relating to the recognition of workers proﬁt participation liabilities in Bangladesh. The tax charge includes a credit of £0.7 million (2019: £0.9 million) relating to the recognition of deferred tax losses able to be utilised to oﬀset gains in value of ﬁnancial assets at fair value through other comprehensive income where the related equal and opposite charge arises in the Statement of Comprehensive Income. 10 Proﬁt for the year The proﬁt of the Company was: 2020 £’m 2019 £’m 4.5 –––––––––– 4.2 –––––––––– The Company has taken advantage of the exemption under Section 408 of the Companies Act 2006 not to disclose its income statement. 11 Equity dividends Amounts recognised as distributions to equity holders in the period: Final dividend for the year ended 31 December 2019 of nil (2018: 102p) per share Interim dividend for the year ended 31 December 2020 of nil (2019: 42p) per share Special interim dividend for the year ended 31 December 2020 of 102p (2019: nil) per share 2020 £’m 2019 £’m – – 2.8 1.2 2.8 –––––––––– 2.8 –––––––––– – –––––––––– 4.0 –––––––––– Dividends amounting to £0.1 million (2019: £0.1 million) 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 2020 of 144p (2019: nil) per share 4.1 –––––––––– – –––––––––– The proposed ﬁnal dividend is subject to approval by the shareholders at the AGM and has not been included as a liability in these ﬁnancial statements. 71 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 72 CAMELLIA PLC NOTES TO THE ACCOUNTS 12 Earnings /(loss) per share (EPS) 2020 Weighted average Earnings/ number of (loss) shares £’m Number 2019 Weighted average Earnings/ number of shares Number (loss) £’m EPS Pence EPS Pence (5.0) –––––––––– 2,762,000 –––––––––– (181.0) –––––––––– 8.3 –––––––––– 2,762,000 –––––––––– 300.5 –––––––––– Basic and diluted EPS Attributable to ordinary shareholders 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 36). 13 Employees Average number of employees by activity: Agriculture Engineering Food Service Central Management Employment costs: Wages and salaries Social security costs Employee beneﬁt obligations (note 35) – UK – Overseas – Overseas workers proﬁt participation 2020 Number 2019 Number 75,522 223 282 33 –––––––––– 76,060 –––––––––– 77,564 257 313 31 –––––––––– 78,165 –––––––––– 2020 £’m 97.1 2.4 1.8 6.8 2019 £’m 103.7 2.6 1.7 6.4 – –––––––––– 108.1 –––––––––– 3.6 –––––––––– 118.0 –––––––––– Total remuneration paid to key employees who are members of the Executive Committees, excluding Directors of Camellia Plc, amounted to £2.5 million (2019: £2.6 million). 14 Emoluments of the directors Aggregate emoluments excluding pension contributions 2020 £’m 2019 £’m 2.0 –––––––––– 2.1 –––––––––– Emoluments of the highest paid director excluding pension contributions were £0.7 million (2019: £0.6 million). Further details of directors’ emoluments are set out on pages 41 to 42. 72 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 73 CAMELLIA PLC NOTES TO THE ACCOUNTS 15 Intangible assets Group Cost At 1 January 2019 Exchange diﬀerences Additions Disposals Businesses joining the group At 1 January 2020 Exchange diﬀerences Additions At 31 December 2020 Amortisation At 1 January 2019 Charge for the year Impairment At 1 January 2020 Charge for the year Impairment provision At 31 December 2020 Net book value at 31 December 2020 Net book value at 31 December 2019 Goodwill £’m Brands £’m – – – – 1.4 –––––––––– 1.4 (0.1) – –––––––––– 1.3 –––––––––– – – 0.3 –––––––––– 0.3 – – –––––––––– 0.3 –––––––––– 1.0 –––––––––– 1.1 –––––––––– 8.9 (0.1) – – – –––––––––– 8.8 (0.1) – –––––––––– 8.7 –––––––––– – – – –––––––––– – – 3.5 –––––––––– 3.5 –––––––––– 5.2 –––––––––– 8.8 –––––––––– Computer software £’m 2.2 – 0.1 – – –––––––––– 2.3 – 0.3 –––––––––– 2.6 –––––––––– 1.6 0.3 – –––––––––– 1.9 0.3 – –––––––––– 2.2 –––––––––– 0.4 –––––––––– 0.4 –––––––––– Total £’m 11.1 (0.1) 0.1 – 1.4 –––––––––– 12.5 (0.2) 0.3 –––––––––– 12.6 –––––––––– 1.6 0.3 0.3 –––––––––– 2.2 0.3 3.5 –––––––––– 6.0 –––––––––– 6.6 –––––––––– 10.3 –––––––––– The Group’s impairment test in respect of goodwill 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 2020 (2019: £0.3 million). For the purpose of this impairment testing, the Group’s cash-generating unit (CGU) components represent the goodwill on the acquisition of tea estates in India by Goodricke Group Limited and Amgoorie India Limited. The Group’s impairment test in respect of brands allocated to each component of the 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. As a result of this testing, an impairment of £3.5 million was made in the year to 31 December 2020 (2019: £nil). The carrying amount of this asset is now £3.2 million. For the purpose of this impairment testing, the Group’s CGU components represent the brands owned by Jing Tea Limited and Goodricke Group Limited. Sensitivity analysis The fair value of the brand owned by Jing Tea was calculated using the Royalty Forgiven methodology. The key assumptions and sensitivities are set out below: Change in assumption Assumption Impact on impairment - 1% £’m 0.7 (0.2) Royalty rate Discount rate + 1% £’m (0.7) 0.2 4.30% 10.07% If forecasted revenues were to change by +/- 1 per cent. in every year it would have the eﬀect of a decrease/increase in the impairment of £0.2 million. If the post-pandemic recovery were to take one year longer than forecasted, it would increase the impairment by £0.3 million. 73 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 74 CAMELLIA PLC NOTES TO THE ACCOUNTS 16 Property, plant and equipment Group Deemed cost At 1 January 2019 Reclassiﬁcation to right-of-use assets Exchange diﬀerences Additions Disposals Businesses joining the group At 1 January 2020 Exchange diﬀerences Additions Disposals Reclassiﬁcation to investment properties At 31 December 2020 Depreciation At 1 January 2019 Reclassiﬁcation to right-of-use assets Exchange diﬀerences Charge for the year Disposals At 1 January 2020 Exchange diﬀerences Charge for the year Disposals Impairment provision At 31 December 2020 Net book value at 31 December 2020 Net book value at 31 December 2019 Bearer plants £’m 142.1 – (6.7) 4.4 (1.1) 2.6 –––––––––– 141.3 (8.5) 3.7 (5.7) Land and buildings machinery £’m Fixtures, Plant and ﬁttings and equipment £’m £’m 107.8 (2.0) (3.1) 5.8 (1.1) 1.6 –––––––––– 109.0 (4.6) 4.0 (1.1) 112.6 (0.1) (3.8) 6.6 (2.6) 1.4 –––––––––– 114.1 (5.7) 4.3 (6.8) 17.7 – (0.4) 1.6 (0.1) 0.1 –––––––––– 18.9 (0.7) 1.5 (0.6) Total £’m 380.2 (2.1) (14.0) 18.4 (4.9) 5.7 –––––––––– 383.3 (19.5) 13.5 (14.2) – –––––––––– 130.8 –––––––––– (0.1) –––––––––– 107.2 –––––––––– – –––––––––– 105.9 –––––––––– – –––––––––– 19.1 –––––––––– (0.1) –––––––––– 363.0 –––––––––– 23.0 51.7 70.9 8.3 153.9 – (1.2) 5.8 (0.9) –––––––––– 26.7 (2.0) 5.3 (1.4) – –––––––––– 28.6 –––––––––– 102.2 –––––––––– 114.6 –––––––––– (0.2) (1.2) 2.7 (0.7) –––––––––– 52.3 (1.7) 2.5 (0.2) – –––––––––– 52.9 –––––––––– 54.3 –––––––––– 56.7 –––––––––– – (2.3) 6.5 (2.0) –––––––––– 73.1 (3.5) 6.4 (4.7) 1.6 –––––––––– 72.9 –––––––––– 33.0 –––––––––– 41.0 –––––––––– – (0.3) 0.8 (0.1) –––––––––– 8.7 (0.4) 1.0 (0.2) 1.2 –––––––––– 10.3 –––––––––– 8.8 –––––––––– 10.2 –––––––––– (0.2) (5.0) 15.8 (3.7) –––––––––– 160.8 (7.6) 15.2 (6.5) 2.8 –––––––––– 164.7 –––––––––– 198.3 –––––––––– 222.5 –––––––––– The plant and machinery impairment provision of £1.6 million relates to Abbey Metal Finishing and its subsidiary company Atﬁn and has arisen due to the impact of COVID-19 on the aerospace industry. Details of the other impairments are set out in note 7. The amount of expenditure for property, plant and equipment in the course of construction (including immature bearer plants) amounted to £4.7 million (2019: £5.5 million). 74 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 75 CAMELLIA PLC NOTES TO THE ACCOUNTS 16 Property, plant and equipment (continued) Sensitivity analysis The carrying amount of the property, plant and equipment owned by Abbey Metal Finishing was calculated using the value-in-use methodology. The key assumptions and sensitivities are set out below: Change in assumption Assumption Impact on impairment - 1% £’m (0.6) + 1% £’m 0.5 Discount rate 10.54% If projected revenues in each year were to increase by 1 per cent. it would decrease the impairment by £0.4 million. If forecasted revenues were to decrease by 1 per cent. the impairment would increase by £0.1 million. 17 Right-of-use assets Group Deemed cost Impact on adopting IFRS 16 at 1 January 2019 Reclassiﬁcation from property, plant and equipment Reclassiﬁcation from prepaid operating leases Exchange diﬀerences Additions Businesses joining the group At 1 January 2020 Exchange diﬀerences Additions Disposals At 31 December 2020 Depreciation Reclassiﬁcation from property, plant and equipment Charge for the year At 1 January 2020 Exchange diﬀerences Charge for the year Disposals At 31 December 2020 Net book value at 31 December 2020 Net book value at 31 December 2019 Land and Plant and buildings machinery £’m £’m Total £’m 11.5 2.0 1.0 (0.2) 1.0 3.7 –––––––––– 19.0 (0.5) 0.4 (1.0) –––––––––– 17.9 –––––––––– 0.2 0.7 –––––––––– 0.9 (0.1) 0.8 (0.1) –––––––––– 1.5 –––––––––– 0.3 0.1 – – 0.2 – –––––––––– 0.6 – 0.1 (0.1) –––––––––– 0.6 –––––––––– – 0.2 –––––––––– 0.2 – 0.2 – –––––––––– 0.4 –––––––––– 11.8 2.1 1.0 (0.2) 1.2 3.7 –––––––––– 19.6 (0.5) 0.5 (1.1) –––––––––– 18.5 –––––––––– 0.2 0.9 –––––––––– 1.1 (0.1) 1.0 (0.1) –––––––––– 1.9 –––––––––– 16.4 ––––––––––– 0.2 ––––––––––– 16.6 ––––––––––– 18.1 ––––––––––– 0.4 ––––––––––– 18.5 ––––––––––– 75 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 76 CAMELLIA PLC NOTES TO THE ACCOUNTS 17 Right-of-use assets (continued) The Group leases many assets including land, buildings and plant. The average lease term is 99 years (2019: 87 years). Leases that expired in the year and were replaced by new leases for identical or the same underlying assets resulted in additions to right-of-use assets of £0.1 million (2019: £0.2 million). The maturity analysis of lease liabilities is presented in note 32. Amounts recognised in the consolidated income statement: Interest expense on lease liabilities Expense relating to short-term leases 18 Investment properties Group Cost At 1 January 2019 Impact on adopting IFRS 16 at 1 January 2019 Additions Disposals At 1 January 2020 Additions Reclassiﬁcation from property, plant and equipment At 31 December 2020 Depreciation At 1 January 2019 Charge for the year Disposals At 1 January 2020 Charge for the year Impairment provision At 31 December 2020 Net book value at 31 December 2020 Net book value at 31 December 2019 2020 £’m 2019 £’m 0.7 0.1 –––––––––– 0.7 0.1 –––––––––– £’m 19.8 0.7 0.5 (1.5) –––––––––– 19.5 0.9 0.1 –––––––––– 20.5 –––––––––– 1.8 0.1 (0.7) –––––––––– 1.2 – 0.2 –––––––––– 1.4 –––––––––– 19.1 –––––––––– 18.3 –––––––––– Included in revenue is £1.1 million (2019: £0.9 million) of rental income generated from investment properties. Direct operating expenses relating to the investment property, the majority of which generated rental income in the period, amounted to £0.1 million (2019: £0.2 million). At the end of the year the fair value of Investment properties was £23.9 million (2019: £23.1 million). Investment properties were valued by the Directors (fair value hierarchy Level 2). 76 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 77 CAMELLIA PLC NOTES TO THE ACCOUNTS 19 Biological assets Non-current: Group At 1 January 2019 Exchange diﬀerences Additions Gains arising from changes in fair value less estimated point-of-sale costs Decreases due to harvesting At 1 January 2020 Exchange diﬀerences Additions Gains arising from changes in fair value less estimated point-of-sale costs Decreases due to harvesting At 31 December 2020 Current: Group Tea Edible nuts Citrus Soya Avocado Other Forestry £’m Livestock £’m 13.5 (0.6) 0.2 1.0 – – Total £’m 14.5 (0.6) 0.2 1.0 (0.6) –––––––––– 13.5 (1.4) 0.2 0.1 (0.7) –––––––––– 11.7 –––––––––– 0.4 (0.3) –––––––––– 1.1 (0.1) – 0.3 (0.3) –––––––––– 1.0 –––––––––– 1.4 (0.9) –––––––––– 14.6 (1.5) 0.2 0.4 (1.0) –––––––––– 12.7 –––––––––– 2020 £’m 2019 £’m 0.4 2.0 – 2.9 1.8 – –––––––––– 7.1 –––––––––– 0.4 3.6 1.1 2.7 1.1 0.2 –––––––––– 9.1 –––––––––– 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. 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. There are no individually signiﬁcant unobservable inputs. The fair value of livestock is based on market prices of livestock of similar age and sex. New planting additions represent new areas planted to the particular crop at cost. As at 31 December 2020 the area planted to Forestry amounted to 5,877 Hectares (2019: 5,813) from which 203,541 cubic metres (2019: 173,867) were harvested during the year. Livestock numbers were 4,529 head (2019: 4,396) at 31 December 2020. 77 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 78 CAMELLIA PLC NOTES TO THE ACCOUNTS 19 Biological assets (continued) 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 page 53. Valuations by external professional valuers and those derived from discounted cash ﬂows both make assumptions based on observable 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 achievable. The fair value of biological assets is sensitive to these assumptions, the more signiﬁcant of which are as follows: Non-current: – Forestry - a 10% movement in the market price for trees or volume of trees assumed would result in a £1.2 million (2019: £1.4 million) increase/decrease in the fair value of forestry. Current: – Macadamia - a 10% increase/decrease in the volumes assumed would result in a £0.9 million (2019: £0.6 million) increase/decrease in the fair value of macadamia growing crop. A 10% increase/decrease in selling price assumed for macadamia would result in a £0.9 million (2019: £0.7 million) increase/decrease in the fair value. – Avocados - a 10% increase/decrease in the volume or the price assumed would result in a £0.2 million (2019: £0.2 million) increase/decrease in the fair value of Hass avocados growing crop. – Soya - a 10% increase/decrease in the volume or the price assumed would result in a £0.3 million (2019: £0.3 million) increase/decrease in the fair value of soya growing crop. Financial risk management strategies The Group is exposed to ﬁnancial risks arising from changes in the prices of the agricultural products it produces. 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 reviews 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. 78 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 79 CAMELLIA PLC NOTES TO THE ACCOUNTS 20 Prepaid operating leases Group Cost At 1 January 2019 Reclassiﬁcation to right-of-use assets At 1 January 2020 and 31 December 2020 Net book value at 31 December 2020 Net book value at 31 December 2019 21 Investments in subsidiaries Company Cost At 1 January and 31 December 22 Investments in associates Group At 1 January Exchange diﬀerences Share of proﬁt (note 5) Dividends Additions Other equity movements At 31 December Provision for diminution in value At 1 January Exchange diﬀerences At 31 December Net book value at 31 December Details of the Group’s associates are shown in note 43. £’m 1.0 (1.0) –––––––– – –––––––– – –––––––– – –––––––––– 2020 £’m 2019 £’m 73.5 –––––––––– 73.5 –––––––––– 2020 £’m 2019 £’m 92.9 (3.0) 6.1 (3.2) 0.3 0.6 –––––––––– 93.7 –––––––––– 26.9 (0.8) –––––––––– 26.1 –––––––––– 67.6 –––––––––– 93.6 (3.8) 4.6 (3.1) 1.3 0.3 –––––––––– 92.9 –––––––––– 27.9 (1.0) –––––––––– 26.9 –––––––––– 66.0 –––––––––– 79 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 80 CAMELLIA PLC NOTES TO THE ACCOUNTS 22 Investments in associates (continued) 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 £’m £’m £’m Interest Market value £’m held % Proﬁt £’m 2020 Listed BF&M United Finance Limited United Insurance Company Limited 2019 Listed BF&M United Finance Limited United Insurance Company Limited Bermuda Bangladesh 630.2 70.7 (549.0) (60.8) 68.1 2.8 5.2 0.7 Bangladesh 4.0 –––––––– 704.9 –––––––– (1.4) –––––––– (611.2) –––––––– 0.4 –––––––– 71.3 –––––––– 0.2 –––––––– 6.1 –––––––– Bermuda Bangladesh 779.1 73.4 (698.9) (63.3) 74.3 3.4 3.6 0.8 Bangladesh 3.7 –––––––– 856.2 –––––––– (1.1) –––––––– (763.3) –––––––– 0.4 –––––––– 78.1 –––––––– 0.2 –––––––– 4.6 –––––––– 37.6 38.4 37.0 49.7 11.0 7.8 –––––––– 68.5 –––––––– 37.8 38.4 37.0 52.3 11.1 8.6 –––––––– 72.0 –––––––– 23 Financial assets at fair value through other comprehensive income Group Company 2020 £’m 2019 £’m 2020 £’m 2019 £’m 40.0 (1.5) 2.3 6.5 (2.4) (1.1) –––––––––– 43.8 –––––––––– 2.2 – (1.0) –––––––––– 1.2 –––––––––– 42.6 –––––––––– 35.2 (1.5) 6.9 0.8 (1.1) (0.3) –––––––––– 40.0 –––––––––– 2.5 (0.1) (0.2) –––––––––– 2.2 –––––––––– 37.8 –––––––––– 0.2 – – – – – –––––––––– 0.2 –––––––––– 0.2 – – –––––––––– 0.2 –––––––––– – –––––––––– 0.2 – – – – – –––––––––– 0.2 –––––––––– 0.2 – – –––––––––– 0.2 –––––––––– – –––––––––– 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 Disposals At 31 December Net book value at 31 December 80 260881 Camellia R&A pp64-pp81.qxp 04/05/2021 10:07 Page 81 CAMELLIA PLC NOTES TO THE ACCOUNTS 23 Financial assets at fair value through other comprehensive income (continued) Financial assets at fair value through other comprehensive income include the following: Listed securities: Equity securities - Bermuda Equity securities - Japan Equity securities - Switzerland Equity securities - US Equity securities - India Equity securities - Europe Equity securities - United Kingdom Equity securities - Other Group 2020 £’m 2019 £’m 0.8 19.1 12.7 4.0 0.7 0.1 4.7 0.5 –––––––––– 42.6 –––––––––– 2.0 18.8 11.3 3.9 0.6 0.4 0.3 0.5 –––––––––– 37.8 –––––––––– Financial assets at fair value through other comprehensive income are denominated in the following currencies: Sterling US Dollar Euro Swiss Franc Indian Rupee Bermudian Dollar Japanese Yen Other 2020 £’m 4.7 4.0 0.1 12.7 0.7 0.8 19.1 0.5 –––––––––– 42.6 –––––––––– Group 2019 £’m 0.3 3.9 0.4 11.3 0.6 2.0 18.8 0.5 –––––––––– 37.8 –––––––––– 81 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 82 CAMELLIA PLC NOTES TO THE ACCOUNTS 24 Financial assets at fair value through proﬁt or loss At 1 January Exchange diﬀerences Fair value adjustment Additions Disposals At 31 December Financial assets at fair value through proﬁt or loss include the following: Listed securities: Money market - Bermuda Money market - US Money market - India Money market - Switzerland Group 2020 £’m 6.2 (0.2) 0.1 5.9 (6.7) –––––––––– 5.3 –––––––––– 2019 £’m 3.7 (0.3) – 10.6 (7.8) –––––––––– 6.2 –––––––––– Group 2020 £’m 2019 £’m 1.6 – 3.6 0.1 –––––––––– 5.3 –––––––––– 0.8 3.9 1.4 0.1 –––––––––– 6.2 –––––––––– Financial assets at fair value through proﬁt or loss are denominated in the following currencies: Group 2020 £’m 2019 £’m 1.7 3.6 –––––––––– 5.3 –––––––––– 4.8 1.4 –––––––––– 6.2 –––––––––– Group 2020 £’m 3.0 (0.3) – –––––––––– 2.7 –––––––––– 2019 £’m 3.2 – (0.2) –––––––––– 3.0 –––––––––– US Dollar Indian Rupee 25 Financial assets at amortised cost At 1 January Exchange diﬀerences Disposals At 31 December 82 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 83 CAMELLIA PLC NOTES TO THE ACCOUNTS 25 Financial assets at amortised cost (continued) Financial assets at amortised cost comprises: Treasury infrastructure bonds - 12.0% to 12.2% interest payable twice yearly and redeemable in November 2022 - Kenya Treasury infrastructure bonds - 12.0% to 12.2% interest payable twice yearly and redeemable in November 2024 - Kenya Non-Current 26 Other investments – heritage assets 2020 £’m 2019 £’m 1.4 1.5 1.3 –––––––––– 2.7 –––––––––– 2.7 –––––––––– 2.7 –––––––––– 1.5 –––––––––– 3.0 –––––––––– 3.0 –––––––––– 3.0 –––––––––– Cost At 1 January Additions At 31 December Group Company 2020 £’m 2019 £’m 2020 £’m 2019 £’m 9.8 – –––––––––– 9.8 –––––––––– 9.5 0.3 –––––––––– 9.8 –––––––––– 11.0 – –––––––––– 11.0 –––––––––– 10.7 0.3 –––––––––– 11.0 –––––––––– Heritage assets comprise the Group’s and Company’s investment in ﬁne art, philately, documents and manuscripts. The market value of these collections is expected to be in excess of book value. 27 Inventories Group Made Tea Other agricultural produce Work in progress Trading stocks Raw materials and consumables 2020 £’m 2019 £’m 28.3 4.7 0.1 0.5 13.9 –––––––––– 47.5 –––––––––– 28.6 5.9 0.1 1.5 13.2 –––––––––– 49.3 –––––––––– Made tea inventories include the fair value of green leaf which includes a fair value uplift of £0.1 million (2019: £0.1 million). 83 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 84 CAMELLIA PLC NOTES TO THE ACCOUNTS 28 Trade and other receivables Group Current: Trade receivables Amounts owed by associated undertakings Other receivables Prepayments and accrued income Non-current: Other receivables Group Company 2020 £’m 2019 £’m 2020 £’m 2019 £’m 31.3 0.1 5.4 6.9 –––––––––– 43.7 –––––––––– 30.0 0.1 5.8 8.4 –––––––––– 44.3 –––––––––– – – 0.6 – –––––––––– 0.6 –––––––––– – – – – –––––––––– – –––––––––– 2.4 –––––––––– 2.4 –––––––––– 2.8 –––––––––– 2.8 –––––––––– – –––––––––– – –––––––––– – –––––––––– – –––––––––– The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies: 2020 £’m 2019 £’m 2020 £’m 2019 £’m Current: Sterling US Dollar Euro Kenyan Shilling Indian Rupee Malawian Kwacha Bangladesh Taka South African Rand Brazilian Real Other Non-current: Kenyan Shilling Indian Rupee Malawian Kwacha Bangladesh Taka 0.6 – – – – – – – – – –––––––––– 0.6 –––––––––– – – – – – – – – – – –––––––––– – –––––––––– 11.6 4.8 0.3 2.3 19.7 1.5 2.0 0.2 0.7 0.6 –––––––––– 43.7 –––––––––– 0.5 1.2 0.4 0.3 –––––––––– 2.4 –––––––––– 13.4 2.8 0.1 3.1 18.9 2.1 1.6 0.2 1.4 0.7 –––––––––– 44.3 –––––––––– 0.5 1.4 0.6 0.3 –––––––––– 2.8 –––––––––– Included within trade receivables is a provision for doubtful debts of £0.6 million (2019: £0.5 million). All other trade receivables are with normal trading partners and there is no history of defaults. 84 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 85 CAMELLIA PLC NOTES TO THE ACCOUNTS 28 Trade and other receivables (continued) Trade receivables include receivables of £5.1 million (2019: £6.4 million) 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 29 Cash and cash equivalents (excluding bank overdrafts) Cash at bank and in hand Short-term bank deposits Short-term liquid investments 2020 £’m 2019 £’m 2.2 0.6 0.7 1.6 –––––––––– 5.1 –––––––––– 2.7 1.5 0.5 1.7 –––––––––– 6.4 –––––––––– Group 2020 £’m 2019 £’m 57.8 39.6 1.1 –––––––––– 98.5 –––––––––– 31.1 59.5 0.8 –––––––––– 91.4 –––––––––– Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash ﬂow statement: Cash and cash equivalents Bank overdrafts (note 31) Eﬀective interest rate: Short-term deposits Short-term liquid investments Average maturity period: Short-term deposits Short-term liquid investments 2020 £’m 2019 £’m 98.5 (3.6) –––––––––– 94.9 –––––––––– 91.4 (2.0) –––––––––– 89.4 –––––––––– 2020 2019 0.01 - 9.00% 0.85 - 12.00% 5.00% 2.50 - 7.00% 73 days 31 days 53 days 24 days 85 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 86 CAMELLIA PLC NOTES TO THE ACCOUNTS 30 Trade and other payables Current: Trade payables Other taxation and social security Other payables Accruals and deferred income Group Company 2020 £’m 2019 £’m 2020 £’m 2019 £’m 22.4 1.1 20.2 7.2 –––––––––– 50.9 ––––––––––– 20.6 0.9 20.5 6.6 –––––––––– 48.6 ––––––––––– 0.1 – 0.1 0.6 –––––––––– 0.8 ––––––––––– – – 0.2 0.4 –––––––––– 0.6 ––––––––––– Included in other taxation and social security is £0.7 million (2019: £nil) of VAT payable by the UK operations which was deferred from Q1 2020 as part of the UK Government deferral scheme in relation to COVID, of which £0.2 million was repaid by April 2021 and £0.5 million will be repaid using the deferral payment scheme during 2021. 31 Financial liabilities – borrowings Group Current: Bank overdrafts Bank loans Current borrowings include the following amounts secured on property, plant and equipment and investment properties: Bank overdrafts Bank loans Non-current: Bank loans Non-current borrowings include the following amounts secured on plant and equipment and investment properties: Bank loans 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 2020 £’m 2019 £’m 3.6 2.1 –––––––––– 5.7 –––––––––– 2.0 3.6 –––––––––– 5.6 –––––––––– 2.0 2.1 –––––––––– 4.1 –––––––––– 2.0 3.6 –––––––––– 5.6 –––––––––– 2.7 –––––––––– 3.3 –––––––––– 2.7 –––––––––– 3.3 –––––––––– 5.7 0.4 1.2 1.1 –––––––––– 8.4 –––––––––– 5.6 0.4 1.3 1.6 –––––––––– 8.9 –––––––––– 86 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 87 CAMELLIA PLC NOTES TO THE ACCOUNTS 31 Financial liabilities - borrowings (continued) The rates of interest payable by the Group ranged between: Bank overdrafts Bank loans 32 Lease liabilities Group Maturity analysis of lease liabilities is as follows: Within one year Between 1 – 2 years Between 2 – 5 years Onwards Analysed as: Current Non-current 2020 % 1.60 - 17.50 3.03 - 8.50 2019 % 2.50 - 18.50 3.03 - 9.10 2020 £’m 2019 £’m 1.2 1.1 2.3 6.9 –––––––––– 11.5 –––––––––– 1.2 1.2 2.1 8.5 –––––––––– 13.0 –––––––––– 1.2 10.3 –––––––––– 11.5 –––––––––– 1.2 11.8 –––––––––– 13.0 –––––––––– The Group does not face a signiﬁcant liquidity risk with regard to its lease liabilities. Lease liabilities are monitored within the individual subsidiaries’ ﬁnance functions. 87 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 88 CAMELLIA PLC NOTES TO THE ACCOUNTS 33 Provisions Group At 1 January 2019 Exchange diﬀerences Utilised in the period Provided in the period Businesses joining the group Unused amounts reversed in period At 1 January 2020 Exchange diﬀerences Utilised in the period Provided in the period Unused amounts reversed in period At 31 December 2020 Current: At 31 December 2020 At 31 December 2019 Wages and salaries £’m Legal claims £’m Others £’m Total £’m 17.4 (0.5) (6.3) 6.8 0.1 (9.8) –––––––––– 7.7 (0.5) (7.3) 10.5 (0.7) –––––––––– 9.7 ––––––––––– – – – – – – –––––––––– – – 8.2 – –––––––––– 8.2 ––––––––––– 1.1 – (0.1) 0.3 – (0.1) –––––––––– 1.2 – (0.3) 0.2 – –––––––––– 1.1 ––––––––––– 18.5 (0.5) (6.4) 7.1 0.1 (9.9) –––––––––– 8.9 (0.5) (7.6) 18.9 (0.7) –––––––––– 19.0 ––––––––––– 9.7 ––––––––––– 7.7 ––––––––––– 8.2 –––––––––– – –––––––––– 1.1 –––––––––– 1.2 –––––––––– 19.0 –––––––––– 8.9 –––––––––– The wages and salaries provisions are in respect of ongoing wage and bonus negotiations in India, Kenya and Bangladesh, the majority of which are expected to be utilised during 2021. Legal claims relate to the expected cost of the defence of the litigation concerning our East African operations, including settlements and progressive measures. Others relate to provisions for claims and dilapidations. Company At 1 January 2020 Provided in the period At 31 December 2020 Current: At 31 December 2020 At 31 December 2019 Legal claims £’m Total £’m – 1.9 –––––––––– 1.9 ––––––––––– – 1.9 –––––––––– 1.9 ––––––––––– 1.9 –––––––––– – ––––––––––– 1.9 –––––––––– – ––––––––––– Legal claims relate to the defense of the litigation concerning our East African operations. 88 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 89 CAMELLIA PLC NOTES TO THE ACCOUNTS 34 Deferred tax The net movement on the deferred tax account is set out below: Group Company 2020 £’m 2019 £’m 2020 £’m 2019 £’m 0.2 – – – –––––––––– 0.2 –––––––––– At 1 January Exchange diﬀerences (Credited)/charged to the income statement Charged to other comprehensive income Businesses joining the group At 31 December 47.1 (3.1) (4.6) 0.1 – –––––––––– 39.5 –––––––––– 46.3 (2.3) 0.9 1.4 0.8 –––––––––– 47.1 –––––––––– 0.2 – – – – –––––––––– 0.2 –––––––––– The movement in deferred tax assets and liabilities is set out below: Deferred tax liabilities At 1 January 2019 Exchange diﬀerences Charged/(credited) to the income statement Charged to other comprehensive income Businesses joining the group At 1 January 2020 Exchange diﬀerences Credited to the income statement Charged to other comprehensive income At 31 December 2020 Deferred tax assets oﬀset Net deferred tax liability after oﬀset Accelerated tax depreciation £’m Other £’m Total £’m 51.0 (2.4) 1.9 – 0.8 –––––––––– 51.3 (3.6) (3.4) – –––––––––– 44.3 –––––––––– 3.8 (0.1) (0.3) 0.9 – –––––––––– 4.3 0.1 (0.7) 0.7 –––––––––– 4.4 –––––––––– 54.8 (2.5) 1.6 0.9 0.8 –––––––––– 55.6 (3.5) (4.1) 0.7 –––––––––– 48.7 –––––––––– (9.2) –––––––––– 39.5 –––––––––– 89 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 90 CAMELLIA PLC NOTES TO THE ACCOUNTS 34 Deferred tax (continued) Deferred tax assets At 1 January 2019 Exchange diﬀerences Credited/(charged) to the income statement Charged to other comprehensive income At 1 January 2020 Exchange diﬀerences Credited/(charged) to the income statement Credited to other comprehensive income At 31 December 2020 Oﬀset against deferred tax liabilities Net deferred tax asset after oﬀset Pension scheme asset £’m 0.3 – 0.2 (0.2) –––––––––– 0.3 (0.1) (0.4) 0.6 –––––––––– 0.4 –––––––––– Tax losses £’m 3.0 – 1.5 – –––––––––– 4.5 – 0.3 – –––––––––– 4.8 –––––––––– Other £’m Total £’m 5.2 (0.2) (1.0) (0.3) –––––––––– 3.7 (0.3) 0.6 – –––––––––– 4.0 –––––––––– 8.5 (0.2) 0.7 (0.5) –––––––––– 8.5 (0.4) 0.5 0.6 –––––––––– 9.2 –––––––––– (9.2) –––––––––– – ––––––––––– Deferred tax liabilities of £25.5 million (2019: £24.9 million) 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. 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 £15.5 million (2019: £11.7 million) in respect of losses that can be carried forward against future taxable income. 35 Employee beneﬁt obligations (i) Pensions Certain Group subsidiaries operate deﬁned contribution and funded deﬁned beneﬁt pension schemes. The most signiﬁcant is the UK funded, deﬁned beneﬁt scheme. The assets of this scheme are administered by trustees and are kept separate from those of the Group. The performance of the assets is monitored on a regular basis by the trustees and their investment advisors. A full actuarial valuation was undertaken as at 1 July 2017 and updated to 31 December 2020 by a qualiﬁed independent actuary. The UK deﬁned beneﬁt pension scheme is closed to new entrants and with eﬀect from 1 November 2016, the scheme was closed to future accruals. Since that date members have participated in a deﬁned contribution scheme. The overseas schemes are operated in Group subsidiaries located in Bangladesh and India. Actuarial valuations for these schemes have been updated to 31 December 2020 by qualiﬁed actuaries. 90 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 91 CAMELLIA PLC NOTES TO THE ACCOUNTS 35 Employee beneﬁt obligations (continued) 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) 2019 % per annum % per annum 2020 N/a 2.05 - 5.00 1.25 2.05/2.75 N/a 2.10 - 5.00 1.90 2.10/3.10 Assumptions regarding future mortality experience are based on advice received from independent actuaries. The current mortality tables used are SAPS 3, males 113%/106% and females 112%/108%, on a year of birth basis, with CMI_2018 future improvement factors and subject to a long term annual rate of future improvement of 1.25% per annum, smoothing parameter of 7.0 and initial addition parameter of 0.25% pa. This results in males and females aged 65 having life expectancies of 21.6 years (2019: 21.4 years) and 22.5 years respectively (2019: 22.7 years). Overseas schemes Rate of increase in salaries 3.00- 6.00 Rate of increase to LPI (Limited Price Indexation) pensions in payment 0.00 - 3.00 Discount rate applied to scheme liabilities 5.80- 6.25 Inﬂation assumption 3.00- 6.00 2020 2019 % per annum % per annum 6.00 - 7.00 0.00 - 3.00 7.00 - 9.00 6.00 - 7.00 (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 3.00 - 20.00 Discount rate applied to scheme liabilities 5.80 - 13.30 Inﬂation assumptions 0.00 - 6.00 2020 2019 % per annum % per annum 6.00 - 7.50 7.00 - 13.00 0.00 - 7.50 (iii) Leave obligations Certain Group subsidiaries located in India have an obligation to pay leave beneﬁt, based on years of service. These obligations are estimated annually using the projected unit method by qualiﬁed independent actuaries. These schemes are unfunded. 91 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 92 CAMELLIA PLC NOTES TO THE ACCOUNTS 35 Employee beneﬁt obligations (continued) (iv) Proﬁt sharing obligations Certain Group subsidiaries located in Bangladesh may have an obligation to pay sums for workers proﬁt participation for prior years based on a rate of 5 per cent. of post tax proﬁt. Provisions have been made for these sums pending clariﬁcation of the applicability of the legislation. Sensitivity analysis The sensitivity of the UK deﬁned beneﬁt obligation to changes in the weighted principal assumptions is: Discount rate Discount rate Rate of RPI inﬂation Rate of RPI inﬂation Life expectancy Life expectancy Change in assumption Impact on deﬁned beneﬁt obligation 0.5% higher 0.5% lower 0.25% higher 0.25% lower +1 year -1 year 6.4% decrease 6.8% increase 1.6% increase 1.5% decrease 4.5% increase 4.5% decrease The above changes in assumptions may have an impact on the value of the scheme’s investment holdings. For example, the scheme holds a proportion of its assets in corporate bonds. A fall in the discount rate as a result of lower UK corporate bond yields would lead to an increase in the value of these assets, thus mitigating the increase in the deﬁned beneﬁt obligation to some extent. The sensitivities have been calculated by changing the key assumption only and leaving all others ﬁxed. Duration of the scheme liabilities The weighted average duration of the UK scheme’s liabilities is 15 years. Analysis of scheme liabilities The liabilities of the UK scheme are split as follows: Deferred pensioners Current pensioners Total membership % 48 52 –––––––––– 100 –––––––––– 92 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 93 CAMELLIA PLC NOTES TO THE ACCOUNTS 35 Employee beneﬁt obligations (continued) (v) Actuarial valuations Equities and property Bonds Diversiﬁed growth Cash 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 34) Net deﬁcit 2020 UK Overseas £’m £’m 57.0 74.4 42.9 21.7 –––––––– 196.0 1.9 23.0 – 15.2 –––––––– 40.1 Total £’m 58.9 97.4 42.9 36.9 –––––––– 236.1 2019 UK Overseas £’m £’m 87.8 50.8 39.9 1.2 –––––––– 179.7 0.9 18.8 – 9.1 –––––––– 28.8 (203.0) –––––––– (7.0) –––––––– (49.7) –––––––– (9.6) –––––––– (252.7) –––––––– (16.6) –––––––– (193.3) –––––––– (13.6) –––––––– (37.2) –––––––– (8.4) –––––––– – – 0.1 0.1 (1.1) (1.1) – – 0.7 (0.7) Total £’m 88.7 69.6 39.9 10.3 –––––––– 208.5 (230.5) –––––––– (22.0) –––––––– 0.7 (0.7) (7.0) –––––––– (7.0) – –––––––– (7.0) –––––––– (8.6) –––––––– (9.6) 0.4 –––––––– (9.2) –––––––– (15.6) –––––––– (16.6) 0.4 –––––––– (16.2) –––––––– (13.6) –––––––– (13.6) – –––––––– (13.6) –––––––– (8.4) –––––––– (8.4) 0.3 –––––––– (8.1) –––––––– (22.0) –––––––– (22.0) 0.3 –––––––– (21.7) –––––––– Movements in the fair value of scheme assets were as follows: At 1 January Reclassiﬁed from creditors* Expected return on plan assets Employer contributions Contributions paid by plan participants Beneﬁt payments Businesses joining the group Other adjustment Actuarial gains/(losses) Exchange diﬀerences At 31 December 2020 UK Overseas £’m £’m 179.7 – 3.3 – – (8.7) – – 21.7 – –––––––– 196.0 –––––––– 28.8 6.9 3.0 3.1 0.3 (2.7) – 0.4 2.3 (2.0) –––––––– 40.1 –––––––– Total £’m 208.5 6.9 6.3 3.1 0.3 (11.4) – 0.4 24.0 (2.0) –––––––– 236.1 –––––––– 2019 UK Overseas £’m £’m 162.1 – 4.3 – – (9.5) – – 22.8 – –––––––– 179.7 –––––––– 28.5 – 2.1 2.0 – (2.4) 0.7 – (0.4) (1.7) –––––––– 28.8 –––––––– Total £’m 190.6 – 6.4 2.0 – (11.9) 0.7 – 22.4 (1.7) –––––––– 208.5 –––––––– 93 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 94 CAMELLIA PLC NOTES TO THE ACCOUNTS 35 Employee beneﬁt obligations (continued) Movements in the present value of deﬁned beneﬁt obligations were as follows: At 1 January Reclassiﬁed from creditors* Current service cost Past service cost Interest cost Contributions paid by plan participants Beneﬁt payments Businesses joining the group Actuarial (losses)/gains Exchange diﬀerences At 31 December 2020 UK Overseas £’m £’m (193.3) – – (0.1) (3.6) – 8.7 – (14.7) – –––––––– (203.0) –––––––– (37.2) (7.0) (2.1) – (3.4) (0.3) 2.7 – (5.0) 2.6 –––––––– (49.7) –––––––– Total £’m (230.5) (7.0) (2.1) (0.1) (7.0) (0.3) 11.4 – (19.7) 2.6 –––––––– (252.7) –––––––– 2019 UK Overseas £’m £’m (178.6) (36.7) – – – (4.8) – 9.5 – (19.4) – –––––––– (193.3) –––––––– – (1.6) – (2.7) – 2.4 (1.2) 0.5 2.1 –––––––– (37.2) –––––––– Total £’m (215.3) – (1.6) – (7.5) – 11.9 (1.2) (18.9) 2.1 –––––––– (230.5) –––––––– * £0.1 million has been reclassiﬁed from other payables in relation to the provident fund schemes operated by some of the Group’s Indian subsidiaries. In 2018, the total fair value of plan assets was £190.6 million, the present value of deﬁned beneﬁt obligations was £215.3 million and the deﬁcit was £24.7 million. In 2017, the total fair value of plan assets was £206.6 million, the present value of deﬁned beneﬁt obligations was £237.5 million and the deﬁcit was £30.9 million and in 2016, the total fair value of plan assets was £194.1 million, the present value of deﬁned beneﬁt obligations was £260.8 million and the deﬁcit was £66.7 million. Income Statement The amounts recognised in the Income Statement are as follows: 2020 UK Overseas £’m £’m Total £’m 2019 UK Overseas £’m £’m Total £’m Amounts (charged)/credited to operating proﬁt: Current service cost Past service cost Total operating (charge)/credit Amounts charged to other ﬁnance costs: Interest expense Total (charged)/credited to income statement – (0.1) –––––––– (0.1) (2.1) – –––––––– (2.1) (2.1) (0.1) –––––––– (2.2) – (1.6) – –––––––– – – –––––––– (1.6) (1.6) – –––––––– (1.6) (0.3) –––––––– (0.4) –––––––– (0.7) –––––––– (0.5) –––––––– (0.6) –––––––– (1.1) –––––––– (0.4) –––––––– (2.5) –––––––– (2.9) –––––––– (0.5) –––––––– (2.2) –––––––– (2.7) –––––––– Employer contributions to deﬁned contribution schemes are charged to proﬁt when payable and the costs charged were £6.4 million (2019: £6.5 million). Liabilities for workers proﬁt participation in Bangladesh are charged to proﬁt when the obligation arises. 94 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 95 CAMELLIA PLC NOTES TO THE ACCOUNTS 35 Employee beneﬁt obligations (continued) Actuarial gains and losses recognised in the Statement of Comprehensive Income The amounts included in the Statement of Comprehensive Income: Remeasurements: Return on plan assets, excluding amount included in interest Gain from changes in demographic assumptions (Loss)/gain from changes in ﬁnancial assumptions Experience gains Actuarial gain/(loss) 2020 UK Overseas £’m £’m Total £’m 2019 UK Overseas £’m £’m 21.7 2.3 24.0 22.8 (0.4) (0.7) – (0.7) 2.2 – Total £’m 22.4 2.2 (14.0) – –––––––– 7.0 –––––––– (6.1) 1.1 –––––––– (2.7) –––––––– (20.1) 1.1 –––––––– 4.3 –––––––– (21.6) – –––––––– 3.4 –––––––– 0.4 0.1 –––––––– 0.1 –––––––– (21.2) 0.1 –––––––– 3.5 –––––––– Cumulative actuarial losses recognised in the Statement of Comprehensive Income are £17.9 million (2019: £22.2 million). As the UK deﬁned beneﬁt pension scheme is closed to future accrual and active members were transferred to a deﬁned contribution scheme, no employer contributions will be paid for the year commencing 1 January 2021. No additional funding contributions will be made, as the latest actuarial valuation shows a funding surplus. 36 Share capital Authorised: 2,842,000 (2019: 2,842,000) ordinary shares of 10p each Allotted, called up and fully paid: ordinary shares of 10p each: At 1 January and 31 December – 2,824,500 (2019: 2,824,500) shares 2020 £’m 2019 £’m 0.3 –––––––––– 0.3 –––––––––– 0.3 –––––––––– 0.3 –––––––––– Group companies hold 62,500 issued shares in the Company. These are classiﬁed as treasury shares. 95 260881 Camellia R&A pp82-pp96.qxp 04/05/2021 10:07 Page 96 CAMELLIA PLC NOTES TO THE ACCOUNTS 37 Reconciliation of proﬁt from operations to cash ﬂow Group Proﬁt from operations Share of associates’ results Depreciation and amortisation Depreciation of right-of-use assets Impairment of assets and provisions Realised movements on biological assets - non-current Financial assets fair value through proﬁt or loss - gain Loss/(proﬁt) on disposal of non-current assets Proﬁt on disposal - non recurring items Proﬁt on disposal of ﬁnancial assets Movement in provisions Decrease/(increase) in working capital Diﬀerence between employee beneﬁt obligations funding contributions and cost charged Cash generated from operations 2020 £’m 5.0 (6.1) 15.5 1.0 6.5 (0.4) (0.1) 0.1 (14.4) (0.2) 10.8 6.3 2019 £’m 21.3 (4.6) 16.2 0.9 0.3 (1.4) – (0.5) – (0.2) (9.0) (5.1) (4.7) –––––––––– 19.3 –––––––––– 3.3 –––––––––– 21.2 –––––––––– 96 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 97 CAMELLIA PLC NOTES TO THE ACCOUNTS 38 Changes in liabilities arising from ﬁnancing activities The table below details changes in the Group’s liabilities arising from ﬁnancing activities, including both cash and non-cash changes. Liabilities arising from ﬁnancing activities are those for which cash ﬂows were, or future cash ﬂows will be, classiﬁed in the Group’s consolidated cash ﬂow statement as cash ﬂows from ﬁnancing activities. Bank loans Bank loans Current Non-current £’m £’m Finance leases Finance leases Current Non-current £’m £’m Total £’m At 1 January 2019 On adoption of IFRS 16 Exchange diﬀerences New loans New ﬁnance leases Loans repaid Lease payments Transfers At 1 January 2020 Exchange diﬀerences New loans New ﬁnance leases Loans repaid Lease payments Lease disposal Transfers At 31 December 2020 0.6 – – 0.3 – (0.6) – 3.3 –––––––– 3.6 (0.3) 1.9 – (0.9) – – (2.2) –––––––– 2.1 –––––––– 3.3 – – 3.3 – – – (3.3) –––––––– 3.3 (0.1) – – (2.7) – – 2.2 –––––––– 2.7 –––––––– – 1.3 – – 0.1 – (0.3) 0.1 –––––––– 1.2 – – 0.5 – (1.4) – 0.9 –––––––– 1.2 –––––––– 0.1 10.9 (0.1) – 1.1 – (0.1) (0.1) 4.0 12.2 (0.1) 3.6 1.2 (0.6) (0.4) – –––––––– –––––––– 19.9 (0.6) 1.9 1.0 (3.6) (1.4) (0.9) – –––––––– –––––––– 16.3 –––––––– –––––––– 11.8 (0.2) – 0.5 – – (0.9) (0.9) 10.3 The cash ﬂows from bank loans, loans from related parties and other borrowings make up the net amount of proceeds from borrowings and repayments of borrowings in the cash ﬂow statement. Other changes include interest accruals and prepayments. 97 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 98 CAMELLIA PLC NOTES TO THE ACCOUNTS 39 Acquisition of businesses Fair value of assets and liabilities Property, plant and equipment Right of use asset Inventories Trade and other receivables Trade and other payables Employee beneﬁt obligations Deferred tax liability Identiﬁable intangible assets - Goodwill Satisﬁed by: Cash consideration and costs Net cash outﬂow arising on acquisitions Cash consideration 2019 £’m 5.7 3.7 0.1 0.1 (0.3) (0.5) (0.8) –––––––––– 8.0 1.4 –––––––––– 9.4 –––––––––– 9.4 –––––––––– (9.4) –––––––––– The acquisitions in 2019 related to tea estates in India which were purchased by our Indian subsidiaries for cash, funded in part by local borrowings. 40 Commitments Capital commitments Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows: Group Property, plant and equipment 41 Contingencies 2020 £’m 2019 £’m 0.8 –––––––––– 3.4 –––––––––– In Malawi the Revenue Authority (MRA) recently indicated that it intended to collect VAT on sales made at auction and under private treaty for export, in the period since 2017. Tea sales intended for the export market were subject to an industry wide agreement with the MRA and the Reserve Bank of Malawi reached at the time the auction was established, resulting in these deemed exports being zero rated for VAT. The MRA has raised an assessment for VAT against Eastern Produce Malawi in connection with this which has been appealed in light of the historic agreement and long-established custom and practice of the industry. Following discussions between the Malawi government, the MRA and the entire tea industry, the MRA has undertaken to investigate the sales process for export teas and to consider the implications of this on the VAT treatment of these deemed export sales. Pending conclusion of the review, the MRA has given permission for the auction to continue with teas deemed as export zero rated for VAT and the assessment raised against Eastern Produce Malawi has been suspended. Eastern Produce Malawi’s estimated contingent liability for VAT on these deemed export sales, excluding any penalties and interest, is approximately £7.8 million. 98 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 99 CAMELLIA PLC NOTES TO THE ACCOUNTS 41 Contingencies (continued) In India, assessments have been received for excise duties of £3.5 million, sales and entry tax of £0.9 million and of £1.1 million for income tax matters. These are being contested on the basis that they are without technical merit. In India, a long running dispute between our local subsidiaries and the Government of West Bengal over the payment of a land tax, locally called, “Salami”, remains unresolved. Lawyers acting for the Group have advised that payment of Salami does not apply, accordingly no provisions have been made. The sum in dispute, excluding ﬁnes and penalties, amounts to £1.2 million. The Group operates in certain countries where its operations are potentially subject to a number of legal claims. When required, appropriate provisions are made for the expected cost of such claims. 42 Financial instruments Capital risk management The Group manages its capital to ensure that it 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 and lease liabilities disclosed in notes 31 and 32, 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 debt as a percentage of tangible net assets does not exceed 50 per cent.. The ratio at the year end is as follows: Borrowings Lease liabilities Debt Tangible net assets Ratio 2020 £’m 8.4 11.5 –––––––––– 19.9 –––––––––– 370.0 –––––––––– 5.38% –––––––––– 2019 £’m 8.9 13.0 –––––––––– 21.9 –––––––––– 385.4 –––––––––– 5.68% –––––––––– Debt is deﬁned as long and short-term borrowings and lease liabilities as detailed in notes 31 and 32. Tangible net assets includes all capital and reserves of the Group attributable to equity holders of the parent less intangible assets. Debt as a percentage of tangible net assets has increased with the introduction of IFRS 16 Leases and recognition of previously oﬀ balance sheet operating leases. 99 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 100 CAMELLIA PLC NOTES TO THE ACCOUNTS 42 Financial instruments (continued) Financial instruments by category At 31 December 2020 Loans and receivables £’m Financial assets £’m Total £’m Group Assets as per Balance Sheet Financial assets at fair value through other comprehensive income Financial asset at fair value through proﬁt or loss Financial assets at amortised cost - non-current Trade and other receivables excluding prepayments Cash and cash equivalents – – – 39.2 98.5 –––––––––– 137.7 –––––––––– 42.6 5.3 2.7 – – –––––––––– 50.6 –––––––––– 42.6 5.3 2.7 39.2 98.5 –––––––––– 188.3 –––––––––– Group Liabilities as per Balance Sheet Borrowings Leases liabilities Trade and other payables Company Trade and other payables At 31 December 2019 Other ﬁnancial liabilities at amortised cost £’m Total £’m 8.4 11.5 50.9 –––––––––– 70.8 –––––––––– 8.4 11.5 50.9 –––––––––– 70.8 –––––––––– 0.8 –––––––––– 0.8 –––––––––– Loans and receivables £’m Available for sale £’m Total £’m Group Assets as per Balance Sheet Financial assets at fair value through other comprehensive income Financial asset at fair value through proﬁt or loss Financial assets at amortised cost - non-current Trade and other receivables excluding prepayments Cash and cash equivalents (excluding bank overdrafts) – – – 38.7 91.4 –––––––––– 130.1 –––––––––– 37.8 6.2 3.0 – – –––––––––– 47.0 –––––––––– 37.8 6.2 3.0 38.7 91.4 –––––––––– 177.1 –––––––––– 100 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 101 CAMELLIA PLC NOTES TO THE ACCOUNTS 42 Financial instruments (continued) Group Liabilities as per Balance Sheet Borrowings Leases liabilities Trade and other payables Company Trade and other payables Other ﬁnancial liabilities at amortised cost £’m Total £’m 8.9 13.0 48.6 –––––––––– 70.5 –––––––––– 8.9 13.0 48.6 –––––––––– 70.5 –––––––––– 0.6 –––––––––– 0.6 –––––––––– Fair value estimation The table below analyses ﬁnancial instruments carried at fair value, by valuation method. The diﬀerent levels have been deﬁned as follows: n Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1). n n 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). The following table presents the Group’s ﬁnancial assets and liabilities that are measured at fair value. See note 19 for disclosures of biological assets that are measured at fair value. At 31 December 2020 Assets Financial assets at fair value through other comprehensive income Financial asset at fair value through proﬁt or loss Financial assets at amortised cost At 31 December 2019 Assets Available-for sale ﬁnancial assets: - Equity securities Debt investments: - Debentures Level 1 £’m Level 2 £’m Level 3 £’m Total £’m 42.6 5.3 2.7 –––––––––– 50.6 –––––––––– – – – –––––––––– – –––––––––– – – – –––––––––– – –––––––––– 42.6 5.3 2.7 –––––––––– 50.6 –––––––––– Level 1 £’m Level 2 £’m Level 3 £’m Total £’m 37.8 6.2 3.0 –––––––––– 47.0 –––––––––– – – – –––––––––– – –––––––––– – – – –––––––––– – –––––––––– 37.8 6.2 3.0 –––––––––– 47.0 –––––––––– 101 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 102 CAMELLIA PLC NOTES TO THE ACCOUNTS 42 Financial instruments (continued) 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: n n 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 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 a signiﬁcant exposure to the US Dollar arising from a number of our operations having a signiﬁcant trading exposure to the Dollar and as a consequence the Group holds signiﬁcant US Dollar funds and Dollar denominated investments. If the exchange rate of the Dollar to Sterling were to move by 5 per cent, the Group's carrying value would increase/decrease by £2.0 million (2019: £1.6 million). In addition, the Group has signiﬁcant Japanese and Swiss ﬁnancial assets, if the exchange rates of the Japanese Yen and Swiss Franc to Sterling were to move by 5 per cent, the Group's carrying value would increase/decrease by £1.0 million (2019: £0.9 million) and £0.6 million (2019: £0.6 million) respectively. 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 ﬁnancial assets. 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, India, 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 carrying value would increase/decrease by £2.1 million (2019: £1.9 million). The Group’s exposure to commodity price risk is not signiﬁcant. 102 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 103 CAMELLIA PLC NOTES TO THE ACCOUNTS 42 Financial instruments (continued) (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. At 31 December 2020, 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 £0.3 million (2019: £0.3 million) higher/lower. The interest rate exposure of the Group’s interest bearing assets and liabilities by currency, at 31 December was: Sterling US Dollar Euro Kenyan Shilling Indian Rupee Malawian Kwacha Bangladesh Taka South African Rand Brazilian Real Bermudian Dollar Tanzanian Shilling Assets Liabilities 2020 £’m 2019 £’m 2020 £’m 2019 £’m 21.7 35.0 5.3 11.9 4.9 0.1 14.1 1.2 1.9 1.4 1.0 –––––––––– 98.5 –––––––––– 22.2 24.6 0.4 16.9 4.2 0.1 15.0 2.2 1.3 3.4 1.1 –––––––––– 91.4 –––––––––– 8.9 – – 0.2 8.0 1.6 1.2 – – – – –––––––––– 19.9 –––––––––– 13.3 – – 0.3 7.0 – 1.2 0.1 – – – –––––––––– 21.9 –––––––––– (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 has a large number of trade receivables, the largest ﬁve receivables at the year end comprise 22 per cent. (2019: 22 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. At 31 December 2020, the Group had undrawn committed facilities of £23.7 million (2019: £24.1 million), all of which are due to be reviewed within one year. 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. 103 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 104 CAMELLIA PLC NOTES TO THE ACCOUNTS 42 Financial instruments (continued) Less than 1 Between 1 Between 2 Over 5 year and 2 years and 5 years £’m £’m £’m years Undated £’m £’m Total £’m At 31 December 2020 Assets Financial assets at fair value through other comprehensive income Financial asset at fair value through proﬁt or loss Financial assets at amortised cost Trade and other receivables excluding prepayments Cash and cash equivalents Liabilities Borrowings Lease liabilities Trade and other payables excluding taxation At 31 December 2019 Assets Financial assets at fair value through other comprehensive income Financial asset at fair value through proﬁt or loss Financial assets at amortised cost Trade and other receivables excluding prepayments Cash and cash equivalents Liabilities Borrowings Lease liabilities Trade and other payables excluding taxation – 5.3 – – – – – 1.4 1.3 – – – 42.6 42.6 – – 5.3 2.7 36.8 98.5 –––––––– 140.6 –––––––– 2.4 – –––––––– 3.8 –––––––– – – – – –––––––– –––––––– – –––––––– –––––––– 1.3 – – –––––––– 42.6 –––––––– 39.2 98.5 –––––––– 188.3 –––––––– 5.7 1.2 0.4 1.1 1.2 2.3 1.1 6.9 – – 8.4 11.5 49.8 –––––––– 56.7 –––––––– – –––––––– 1.5 –––––––– – – –––––––– –––––––– 8.0 –––––––– –––––––– 3.5 – –––––––– – –––––––– 49.8 –––––––– 69.7 –––––––– – 6.2 – – – – – – 3.0 – – – 37.8 37.8 – – 6.2 3.0 35.9 91.4 –––––––– 133.5 –––––––– 2.8 – –––––––– 2.8 –––––––– – – – – –––––––– –––––––– – –––––––– –––––––– 3.0 – – –––––––– 37.8 –––––––– 38.7 91.4 –––––––– 177.1 –––––––– 5.6 1.2 0.4 1.2 1.3 2.1 1.6 8.5 – – 8.9 13.0 47.7 –––––––– 54.5 –––––––– – –––––––– 1.6 –––––––– – – –––––––– –––––––– 10.1 –––––––– –––––––– 3.4 – –––––––– – –––––––– 47.7 –––––––– 69.6 –––––––– Included in borrowings due in less than 1 year is £3.6 million (2019: £2.0 million) repayable on demand. 104 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 105 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings Subsidiary undertakings The subsidiary undertakings of the Group at 31 December 2020, which are wholly owned and incorporated in Great Britain by ordinary share capital unless otherwise stated, were: Principal country of Registered Oﬃce operation Agriculture Amgoorie India Limited (Incorporated in India - 99.8 per cent. holding) Amo Tea Company Limited C.C. Lawrie Comércio e Participacões Ltda. (Incorporated in Brazil) Chittagong Warehouse Limited (Incorporated in Bangladesh – 93.3 per cent. holding) Duncan Brothers Limited (Incorporated in Bangladesh) Eastern Produce Cape (Pty) Limited (Incorporated in South Africa) Eastern Produce Estates South Africa (Pty) Limited (Incorporated in South Africa - held by Eastern Produce South Africa (Pty) Limited) 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 Regional Services Limited (Incorporated in Kenya) Eastern Produce South Africa (Pty) Limited (Incorporated in South Africa – 73.2 per cent. holding) Eastland Camellia Limited (Incorporated in Bangladesh – 93.8 per cent. holding) EP(T) East Africa Limited (Incorporated in Tanzania) Goodricke Group Limited (Incorporated in India – 74.0 per cent. holding) Goodricke Tech Limited (Incorporated in India - 99.8 per cent. holding) Horizon Farms (An United States of America general partnership – 80 per cent. holding) Kakuzi Plc (Incorporated in Kenya – 50.7 per cent. holding) Koomber Tea Company Limited (Incorporated in India) Octavius Steel & Company of Bangladesh Limited (Incorporated in Bangladesh) Robertson Bois Dickson Anderson Limited Stewart Holl (India) Limited (Incorporated in India – 92.0 per cent. holding) Surmah Valley Tea Company Limited The Allynugger Tea Company Limited The Chandpore Tea Company Limited The Lungla (Sylhet) Tea Company Limited The Mazdehee Tea Company Limited Victoria Investments Limited (Incorporated in Malawi – 73.2 per cent. holding) Zetmac (Pty) Limited (Incorporated in South Africa - 55.8 per cent. held by Eastern Produce Estates South Africa (Pty) Limited) Engineering Abbey Metal Finishing Company Limited A JT Engineering Limited Atﬁn GmbH (Incorporated in Germany – 51.0 per cent. holding) Black Gold Oil Tools Limited India Bangladesh Brazil Bangladesh Bangladesh South Africa South Africa Kenya Malawi Kenya South Africa Bangladesh Tanzania India India USA Kenya India Bangladesh UK India Bangladesh Bangladesh Bangladesh Bangladesh Bangladesh Malawi South Africa UK UK Germany UK (ii) (i) (vi) (vii) (vii) (viii) (ix) (x) (xii) (x) (ix) (vii) (xviii) (iii) (iii) (xiii) (xi) (iv) (vii) (i) (v) (i) (i) (i) (i) (i) (xii) (ix) (i) (xiv) (xv) (xiv) 105 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 106 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Principal country of Registered Oﬃce operation Food Service Associated Cold Stores & Transport Limited Duncan Products Limited (Incorporated in Bangladesh) Jing Tea Limited (82.5 per cent. holding) Investment Holding Associated Fisheries (Europe) Limited Assam Dooars Investments Limited Associated Fisheries Limited Borbam Limited (Incorporated in India – 99.8 per cent. holding) Bordure Limited Duncan Properties Limited (Incorporated in Bangladesh) Eastern Produce Investments Limited Elgin Investments Limited (Incorporated in India – 99.8 per cent. holding) Endogram Limited EP USA Inc. (Incorporated in the United States of America) EP California Inc. (Incorporated in the United States of America) John Ingham & Sons Limited Koomber Properties Limited (Incorporated in India – 94.0 per cent. holding) Lawrie (Bermuda) Limited (Incorporated in Bermuda) Lawrie Group Plc (Owned directly by the Company) Lawrie International Limited (Incorporated in Bermuda) Lebong Investments Limited (Incorporated in India – 94.0 per cent. holding) Linton Park Plc (Owned directly by the Company) Lintak Investments Limited (Incorporated in Kenya) Longbourne Holdings Limited Plantation House Investments Limited (Incorporated in Malawi – 50.2 per cent. held by subsidiaries) Unochrome Industries Limited Western Dooars Investments Limited Other Hobart Place Limited (formerly Duncan Lawrie Limited) (in liquidation) Hobart Place Holdings Limited (formerly Duncan Lawrie Holdings Limited) (in liquidation) Hobart Place Nominees Limited Linton Park Services Limited UK Bangladesh UK UK UK UK India UK Bangladesh UK India India USA USA UK India Bermuda UK Bermuda India UK Kenya UK Malawi UK UK UK UK UK UK (i) (vii) (i) (i) (i) (i) (iii) (i) (vii) (i) (iii) (iii) (xiii) (xiii) (i) (iii) (xvii) (i) (xvii) (iii) (i) (x) (i) (xii) (i) (i) (i) (i) (i) (i) 106 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 107 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Principal country of Registered Oﬃce operation Dormant companies ACS&T Gloucester Limited ACS&T Grimsby Limited ACS&T Humberside Limited ACS&T Seamer Limited ACS&T Tewkesbury Limited ACS&T Wolverhampton Limited AKD Engineering Limited Alex Lawrie & Company Limited Amgoorie Investments Limited Assam-Dooars Holdings Limited Associated Fisheries (Scotland) Limited Banbury Tea Warehouses Limited Blantyre & East Africa Limited Blantyre Insurance & General Agencies Limited (Incorporated in Malawi – Eastern Produce Malawi Limited) Bonathaba Farms (Pty) Limited (Incorporated in South Africa) British African Tea Estates (Holdings) Limited British African Tea Estates Limited British Heat Treatments Limited (in liquidation) British Indian Tea Company Limited British United Trawlers Limited BTS Chemicals Limited (in liquidation) BUT Engineers (Fleetwood) Limited BUT Engineers (Grimsby) Limited Camellia Investments Limited Chisambo Holdings Limited Chisambo Tea Estate Limited Cholo Holdings Limited Craighead Investments Limited David Field Limited East African Tea Plantations Limited (Incorporated in Kenya – held by Eastern Produce Kenya Limited) Eastern Produce Africa Limited Eastern Produce Kakuzi Services Limited (Incorporated in Kenya – held by Kakuzi Limited) EP (RBDA) Limited (Incorporated in Malawi – Eastern Produce Malawi Limited) Estate Services Limited (Incorporated in Kenya – held by Kakuzi Limited) Feltham One Limited (in liquidation) Feltham Two Limited (in liquidation) Fescol Limited (in liquidation) G. F. Sleight & Sons Limited UK UK UK UK UK UK UK UK UK UK UK UK UK Malawi South Africa UK UK UK UK UK UK UK UK UK UK UK UK UK UK Kenya UK Kenya Malawi Kenya UK UK UK UK (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (xiv) (i) (xiv) (xii) (viii) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (x) (i) (x) (xii) (xi) (i) (i) (i) (i) 107 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 108 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Dormant companies (continued) Goodricke Lawrie Consultants Limited Gotha Tea Estates Limited Granton Transport Limited Hamstead Village Investments Limited Hellyer Bros Limited Horace Hickling & Co. Limited Hudson Brothers Trawlers Limited Humber Commercials Limited Humber - St. Andrew’s Engineering Company Limited Isa Bheel Tea Company Limited Jatel Plc Jetinga Holdings Limited Jetinga Valley Tea Company Limited Kaguru EPZ Limited (Incorporated in Kenya – held by Kakuzi Limited) Kapsumbeiwa Factory Company Limited Kip Koimet Limited (Incorporated in Kenya – held by Eastern Produce Kenya Limited) Kumadzi Tea Estates Limited Lankapara Tea Company Limited Lawrie Bhutan Limited (in liquidation) Lawrie Plantation Services Limited Leasing Investments Limited (in liquidation) Nasonia Tea Company Limited (Incorporated in Malawi) North West Proﬁles Limited (in liquidation) Octavius Steel & Company (London) Limited Robert Hudson Holdings Limited (in liquidation) Rosehaugh (Africa) Limited Ruo Estates Limited Ruo Estates Holdings Limited Sandbach Export Limited Sapekoe Pusela (Pty) Limited (Incorporated in South Africa - held by Eastern Produce South Africa (Pty) Limited) Silverthorne-Gillott Limited S.I.S. Securities Limited Sterling Industrial Securities Limited Stewart Holl Investments Limited The Amgoorie Tea Estates Limited The Bagracote Tea Company, Limited The Ceylon Upcountry Tea Estates Limited Dejoo Tea Company Limited The Dhoolie Tea Company Limited Principal country of Registered Oﬃce operation UK UK UK UK UK UK UK UK UK UK UK UK UK Kenya UK Kenya UK UK UK UK UK Malawi UK UK UK UK UK UK UK South Africa UK UK UK UK UK UK UK UK UK (i) (i) (xiv) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (xi) (i) (x) (i) (i) (i) (i) (i) (xii) (i) (i) (i) (i) (i) (i) (i) (ix) (i) (i) (i) (i) (i) (i) (i) (i) (i) 108 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 109 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Dormant companies (continued) The Doolahat Tea Company Limited The Eastern Produce and Estates Company Limited The Endogram Tea Company Limited Jhanzie Tea Association Ltd The Harmutty Tea Company Limited The Kapsumbeiwa Tea Company Limited Longai Valley Tea Company Limited The Tyspane Tea Company Limited Thyolo Highlands Tea Estates Limited Vaghamon (Travancore) Tea Company Limited Walter Duncan & Goodricke Limited WDG Properties Limited Western Dooars Tea Holdings Limited Principal country of Registered Oﬃce operation UK UK UK UK UK UK UK UK UK UK UK UK UK (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) (i) Summarised ﬁnancial information on subsidiaries with material non-controlling interests Summarised balance sheet 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 2019 2020 £’m £’m Eastern Produce Malawi Limited as at 31 December 2019 2020 £’m £’m 19.9 (14.6) –––––––––– 5.3 –––––––––– 28.5 (5.3) –––––––––– 23.2 –––––––––– 28.5 –––––––––– 24.4 (13.6) –––––––––– 10.8 –––––––––– 27.8 (6.5) –––––––––– 21.3 –––––––––– 32.1 –––––––––– 11.7 (10.2) –––––––––– 1.5 –––––––––– 33.8 (10.0) –––––––––– 23.8 –––––––––– 25.3 –––––––––– 12.9 (8.9) –––––––––– 4.0 –––––––––– 38.6 (11.6) –––––––––– 27.0 –––––––––– 31.0 –––––––––– 109 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 110 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Summarised balance sheet Current Assets Liabilities Total current net (liabilities)/assets 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 South Africa Limited as at 31 December 2019 2020 £’m £’m Goodricke Group Limited as at 31 December 2019 2020 £’m £’m 3.2 (3.7) –––––––––– (0.5) –––––––––– 8.8 (1.2) –––––––––– 7.6 –––––––––– 7.1 –––––––––– 6.1 (3.7) –––––––––– 2.4 –––––––––– 9.1 (2.0) –––––––––– 7.1 –––––––––– 9.5 –––––––––– 36.2 (24.2) –––––––––– 12.0 –––––––––– 36.0 (11.1) –––––––––– 24.9 –––––––––– 36.9 –––––––––– 33.0 (22.5) –––––––––– 10.5 –––––––––– 38.3 (12.0) –––––––––– 26.3 –––––––––– 36.8 –––––––––– Horizon Farms as at 31 December 2019 2020 £’m £’m Kakuzi Plc as at 31 December 2019 2020 £’m £’m 8.3 (6.8) –––––––––– 1.5 –––––––––– – – –––––––––– – –––––––––– 1.5 –––––––––– 5.3 (0.2) –––––––––– 5.1 –––––––––– 7.1 (1.7) –––––––––– 5.4 –––––––––– 10.5 –––––––––– 19.4 (2.5) –––––––––– 16.9 –––––––––– 26.8 (7.0) –––––––––– 19.8 –––––––––– 36.7 –––––––––– 19.3 (1.8) –––––––––– 17.5 –––––––––– 28.8 (7.5) –––––––––– 21.3 –––––––––– 38.8 –––––––––– 110 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 111 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Summarised income statement Eastern Produce Kenya Limited for year ended 31 December 2020 £’m 2019 £’m Eastern Produce Malawi Limited for year ended 31 December 2020 £’m 2019 £’m 39.4 –––––––––– 4.7 (1.1) (3.1) –––––––––– 0.5 –––––––––– 34.1 –––––––––– 11.1 (3.3) (0.7) –––––––––– 7.1 –––––––––– 23.1 –––––––––– (3.7) 1.1 (2.0) –––––––––– (4.6) –––––––––– 25.6 –––––––––– 2.0 (0.5) (1.6) –––––––––– (0.1) –––––––––– 0.2 1.2 2.1 2.1 (1.2) 0.3 – 1.1 Eastern Produce South Africa Limited for year ended 31 December 2019 2020 £’m £’m Goodricke Group Limited for year ended 31 December 2019 2020 £’m £’m 3.8 –––––––––– (2.2) 0.6 (0.2) –––––––––– (1.8) –––––––––– 5.6 –––––––––– 1.9 (0.5) – –––––––––– 1.4 –––––––––– 90.6 –––––––––– 2.7 (0.5) (2.1) –––––––––– 0.1 –––––––––– 90.5 –––––––––– 2.6 (0.2) (2.6) –––––––––– (0.2) –––––––––– (0.7) – 0.4 – – – – 0.2 Revenue Proﬁt/(loss) before tax Taxation Other comprehensive expense Total comprehensive income/(expense) Total comprehensive income/(expense) allocated to non-controlling interests Dividends paid to non-controlling interests Revenue (Loss)/proﬁt before tax Taxation Other comprehensive expense Total comprehensive (expense)/income Total comprehensive (expense)/income allocated to non-controlling interests Dividends paid to non-controlling interests 111 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 112 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Summarised income statement Revenue Proﬁt before tax Taxation Other comprehensive (expense)/income Total comprehensive income/(expense) Total comprehensive income/(expense) allocated to non-controlling interests Dividends paid to non-controlling interests Summarised cash ﬂows Cash ﬂows from operating activities Cash generated from operations Net interest received/(paid) Income tax paid Net cash generated from operating activities Net cash used in investing activities Net cash used in ﬁnancing activities Net decrease in cash and cash equivalents and bank overdrafts Cash, cash equivalents and bank overdrafts at beginning of year Exchange (losses)/gains on cash and cash equivalents Cash, cash equivalents and bank overdrafts at end of year Horizon Farms for year ended 31 December Kakuzi Plc for year ended 31 December 2020 £’m 2019 £’m 2020 £’m 2019 £’m 7.9 –––––––––– 18.9 (5.3) 0.2 –––––––––– 13.8 –––––––––– 4.8 –––––––––– 1.8 (1.1) (0.3) –––––––––– 0.4 –––––––––– 25.3 –––––––––– 5.3 (1.4) (4.0) –––––––––– (0.1) –––––––––– 21.2 –––––––––– 7.8 (2.3) (1.2) –––––––––– 4.3 –––––––––– 2.8 4.6 0.1 0.3 (0.1) 1.0 2.1 0.7 Eastern Produce Kenya Limited for year ended 31 December Eastern Produce Malawi Limited for year ended 31 December 2020 £’m 2019 £’m 2020 £’m 2019 £’m 6.6 0.7 (0.8) –––––––––– 6.5 –––––––––– (5.3) –––––––––– (4.1) –––––––––– 2.0 1.2 (1.2) –––––––––– 2.0 –––––––––– (1.4) –––––––––– (7.1) –––––––––– 1.1 (0.1) (1.0) –––––––––– – –––––––––– (0.3) –––––––––– (1.1) –––––––––– 6.4 0.1 (1.9) –––––––––– 4.6 –––––––––– (1.5) –––––––––– (4.2) –––––––––– (2.9) 15.7 (6.5) 22.8 (1.4) 0.1 (1.1) 1.2 (0.5) –––––––––– (0.6) –––––––––– 0.1 –––––––––– – –––––––––– 12.3 –––––––––– 15.7 –––––––––– (1.2) –––––––––– 0.1 –––––––––– 112 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 113 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Subsidiary undertakings (continued) Summarised cashﬂows Cash ﬂows from operating activities Cash generated from operations Net interest received Income tax paid Net cash (used in)/generated from operating activities Net cash used in investing activities Net cash generated from/(used in) ﬁnancing activities Net (decrease)/increase in cash and cash equivalents and bank overdrafts Cash, cash equivalents and bank overdrafts at beginning of year Exchange (losses)/gains on cash and cash equivalents Cash, cash equivalents and bank overdrafts at end of year Eastern Produce South Africa Limited for year ended 31 December Goodricke Group Limited for year ended 31 December 2020 £’m 2019 £’m 2020 £’m 2019 £’m (0.2) (0.1) – –––––––––– 3.2 (0.1) – –––––––––– 2.4 – (0.7) –––––––––– 9.1 – (0.5) –––––––––– (0.3) –––––––––– (0.7) –––––––––– 3.1 –––––––––– (2.8) –––––––––– 1.7 –––––––––– (2.0) –––––––––– 8.6 –––––––––– (6.1) –––––––––– – –––––––––– – –––––––––– 0.7 –––––––––– (0.8) –––––––––– (1.0) 2.8 0.3 2.5 0.4 0.1 1.7 (1.5) (0.4) –––––––––– – –––––––––– – –––––––––– (0.1) –––––––––– 1.4 –––––––––– 2.8 –––––––––– 0.5 –––––––––– 0.1 –––––––––– 113 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 114 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Cash ﬂows from operating activities Cash generated from operations Net interest received Income tax paid Net cash generated from operating activities Net cash generated from/(used in) investing activities Net cash used in ﬁnancing activities Net increase/(decrease) in cash and cash equivalents and bank overdrafts Cash, cash equivalents and bank overdrafts at beginning of year Exchange losses on cash and cash equivalents Cash, cash equivalents and bank overdrafts at end of year Horizon Farms for year ended 31 December 2019 2020 £’m £’m Kakuzi Plc for year ended 31 December 2020 £’m 2019 £’m 3.1 – – –––––––––– 3.1 –––––––––– 3.1 – (0.5) –––––––––– 2.6 –––––––––– 8.9 0.6 (1.5) –––––––––– 8.0 –––––––––– 9.3 0.9 (0.5) –––––––––– 9.7 –––––––––– 24.2 –––––––––– (22.8) –––––––––– (0.2) –––––––––– (1.4) –––––––––– (6.7) –––––––––– (2.0) –––––––––– (6.7) –––––––––– (1.4) –––––––––– 4.5 1.0 (0.7) 1.6 2.8 (0.3) –––––––––– 2.1 (0.3) –––––––––– 12.6 (0.7) –––––––––– 11.6 (0.6) –––––––––– 7.0 –––––––––– 2.8 –––––––––– 11.2 –––––––––– 12.6 –––––––––– Associated undertakings The principal associated undertakings of the Group at 31 December 2020 were: Insurance and banking BF&M Limited (Incorporated in Bermuda – common stock) United Finance Limited (Incorporated in Bangladesh – ordinary shares) United Insurance Company Limited (Incorporated in Bangladesh – ordinary shares) Principal country of operation Registered Oﬃce Group interest Accounting in equity capital date 2020 per cent. Bermuda (xvi) 31 December 37.6 Bangladesh (vii) 31 December 38.4 Bangladesh (vii) 31 December 37.0 114 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 115 CAMELLIA PLC NOTES TO THE ACCOUNTS 43 Subsidiary and associated undertakings (continued) Registered Oﬃces: (i) Linton Park Linton Maidstone Kent ME17 4AB England (ii) Amgoorie Tea Garden PO: Amguri Haloating - 785 681 Dist: Sibsagar Assam India (iii) Camellia House 14 Gurusaday Road Kolkata - 700019 West Bengal India (viii) Slangrivier Road Slangrivier Plaas Wellington 7655 South Africa (ix) 7 Windsor Street Tzaneen 850 Limpopo Province South Africa (x) New Rehema House Rhapta Road Westlands P O Box 45560 GPO 00100 Nairobi Kenya (iv) Koomber Tea Garden (xi) Main Oﬃce PO: Kumbhir Cachar - 788 108 Assam India (v) Sessa Tea Garden PO: Dibrugarh - 786001 Dist: Dibrugarh Assam India (vi) Fazenda Maruque s/n sala 03 Bairro Maruque Itaberá São Paulo Brazil (vii) Camellia House 22 Kazi Nazrul Islam Avenue Dhaka 1000 Bangladesh Punda Milia Road Makuyu P O Box 24 01000 Thika Kenya (xii) PO Box 53 Mulanje Malawi (xiii) 1368 W Herndon Ave #103 Fresno California 93711 USA (xiv) Craigshaw Crescent West Tullos Aberdeen AB12 3TB Scotland (xv) Robert-Drosten-Platz 1 D-82380 Peissenberg Germany (xvi) 112 Pitts Bay Road Pembroke Bermuda HM08 (xvii) Clarendon House 2 Church Street Hamilton Bermuda HM11 (xviii) 3rd Floor 180 Msasani Bay Msasani Dar es salaam Tanzania 115 260881 Camellia R&A pp97-pp116.qxp 04/05/2021 10:06 Page 116 CAMELLIA PLC NOTES TO THE ACCOUNTS 44 Control of Camellia Plc 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 other than Simon Turner, who is a director of The Camellia Private Trust Company and is the president of the board of the trustee of 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. 45 Related party transactions Group During the year the Group received rental income from the Foundation of £36,000 (2019: £36,000). During the year the Group paid contributions to the overseas pension and post-employment beneﬁt schemes of £3,101,125 (2019: £1,984,029). Company The Company receives ﬁnancial and secretarial services from Linton Park Plc, a directly owned subsidiary undertaking. The amount payable for these services for 2020 was £466,659 (2019: £447,121). At 31 December 2020 £8,351,312 (2019: £5,943,853) is owed to Linton Park Plc and is unsecured, interest free and has no ﬁxed terms of repayment Amounts due to Lawrie Group Plc, a directly owned subsidiary undertaking of £7,556,941 (2019: £10,876,941) include an unsecured loan note of £4,191,777 (2019: £4,191,777). The company received interest of £167,671 (2019: £167,671) on this unsecured loan note. The remaining balance is unsecured, interest free and has no ﬁxed terms of repayment. Balances receivable and payable from/to other Group companies at 31 December 2020 amounted to £2,223,733 (2019: £nil) and £193,187 (2019: £193,187) respectively and are unsecured, interest free and have no ﬁxed terms of repayment. 46 Subsequent events There were no adjusting post balance sheet events. 116 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 117 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CAMELLIA PLC Report on the audit of the ﬁnancial statements 1. Opinion In our opinion the ﬁnancial statements of Camellia Plc (the ‘parent company’) and its subsidiaries (the ‘Group’): n n n give a true and fair view of the state of the Group’s and of the parent company’s aﬀairs as at 31 December 2020 and of the Group’s loss for the year then ended; the Group ﬁnancial statements have been properly prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006; and the parent company ﬁnancial statements have been prepared in accordance with the requirements of the Companies Act 2006. We have audited the ﬁnancial statements which comprise: n n n n n n the consolidated income statement; the consolidated statement of comprehensive income; the consolidated and parent company balance sheets; the consolidated and parent company statements of changes in equity; the consolidated cash ﬂow statement; and the related notes 1 to 46. The ﬁnancial reporting framework that has been applied in their preparation is applicable law and international accounting standards in conformity with the requirements of the Companies Act 2006. 2. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the ﬁnancial statements section of our report. We are independent of the Group and the parent company in accordance with the ethical requirements that are relevant to our audit of the ﬁnancial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed entities, and we have fulﬁlled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is suﬃcient and appropriate to provide a basis for our opinion. 3. Summary of our audit approach Key audit matters The key audit matters that we identiﬁed in the current year were: n n n n Revenue recognition; Fair value of biological assets under IAS 41 ‘Agriculture’; Impairment of intangibles, factories and bearer plants; Provisions for tax, legal matters and employee beneﬁts. Within this report, key audit matters are identiﬁed as follows: Newly identiﬁed Increased level of risk Similar level of risk Decreased level of risk 117 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 118 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS Materiality Scoping The materiality that we used for the group ﬁnancial statements was £0.9m, which was determined on the basis of revenue. We consider the principal business units to reﬂect the components of the Group as this is how management monitor and control the business. Our scope covered 39 components of the Group. Of these, 29 were subjected to a full-scope audit whilst the 10 remaining were subject to speciﬁc procedures on certain account balances. Our scoping provides coverage of 99% of the Group’s revenue, 95% of the Group’s proﬁt before tax and 95% of the Group’s net assets from full scope audit and speciﬁed audit procedures. Signiﬁcant changes in our approach Materiality: In the current year, we have changed the basis for materiality. We have moved from a proﬁt before tax measure to revenue. Our rationale for this is that revenue has remained more stable than adjusted proﬁt before tax and is more representative of the size of the business. Component Scoping: The following components of the scope have come into scope this year to perform full scope procedures and speciﬁc procedures on certain account balances: n n n n Eastern Produce South Africa (Pty) Limited C.C. Lawrie Comércio e Participacões Ltda Eastern Produce Cape (Pty) Limited EP(T) East Africa Limited n Horizon Farms Key audit matters: n Our Key audit matter in relation to impairment of assets was updated to include intangible assets and was speciﬁcally focussed to key assumptions involved in the assessment of impairment in relation to (i) brand value relating to Jing Tea Limited and (ii) goodwill on the acquisition of tea estates in India by Goodricke Group Limited and Amgoorie India Limited. n Considering the current impact of Coronavirus pandemic (COVID) on the Group and the headroom in management’s going concern assessment, we no longer consider going concern to be a key audit matter. 4. Conclusions relating to going concern In auditing the ﬁnancial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of the ﬁnancial statements is appropriate. Our evaluation of the Directors’ assessment of the Group’s and parent company’s ability to continue to adopt the going concern basis of accounting included: n n n n Assessing the latest cash ﬂow forecasts of the Group to determine whether these are consistent with the forecasts used during the impairment review; and assess the Directors’ going concern assessment; Assessing copies of any existing and new facilities and assessing the Group’s cash forecasts against available facilities and the required repayment proﬁles of debt and interest; Assessing the facilities and their availability and compliance with covenants; Evaluating each of the sensitivities adopted by management and assessing downside scenarios of cash headroom over the forecast period by performing our own sensitivity analyses to gain adequate assurance regarding the solvency of the Group over the going concern review period. Our sensitivities included consideration of the impact of COVID lockdowns; 118 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 119 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS n n Assessing the reasonability of the assumptions that management have used in their cash forecasts; and Assessing the appropriateness of the ﬁnancial statement disclosures in relation to going concern. Based on the work we have performed, we have not identiﬁed any material uncertainties relating to events or conditions that, individually or collectively, may cast signiﬁcant doubt on the Group’s and parent company’s ability to continue as a going concern for a period of at least twelve months from when the ﬁnancial statements are authorised for issue. Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections of this report. 5. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most signiﬁcance in our audit of the ﬁnancial statements of the current period and include the most signiﬁcant assessed risks of material misstatement (whether or not due to fraud) that we identiﬁed. These matters included those which had the greatest eﬀect on: the overall audit strategy, the allocation of resources in the audit; and directing the eﬀorts of the engagement team. These matters were addressed in the context of our audit of the ﬁnancial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 5.1 Revenue recognition Key audit matter description The Group’s agricultural operations involve a wide range of customer delivery models, including auction and retail sales. Given the complexity of the Group’s operations and the terms of business with buyers, there is a risk of inappropriate cut-oﬀ of revenue recognition around the balance sheet date. The Group’s agricultural revenue is included within Sale of Goods of £247.2 million (2019: £242.9 million) disclosed in note 2 to the ﬁnancial statements. Further information regarding the agricultural revenue recognition policy is in the principal accounting policies disclosed in the ﬁnancial statements. How our scope of work responded to the key audit matter We have performed the following procedures in order to address the key audit matter: – We gained an understanding of the key processes and controls used to record revenue transactions. – We assessed commercial arrangements to determine the correct point of revenue recognition of diﬀerent type of shipments. – We performed detailed cut-oﬀ testing of revenue transactions during the period either side of the balance sheet date with reference to the relevant terms of business, dispatch or delivery documentation as appropriate. – We examined material journal entries that were posted to revenue accounts and obtained supporting evidence to test the appropriateness of revenue recognition. Key observations From the work performed, we are satisﬁed that revenue is appropriately recognised in the correct accounting period. 119 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 120 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS 5.2 Fair value of biological assets under IAS 41 ‘Agriculture’ Key audit matter description The Group holds £7.1 million (2019: £9.1 million) of biological assets as current assets. As required by IAS 41 ‘Agriculture’, management estimates the fair value of these assets through the use of valuation models and recent transaction prices. Signiﬁcant judgement is required for key assumptions for each model, including the life-span of the plantings, yields, selling prices, costs and discount rates. The valuation is sensitive to some of the underlying assumptions. Biological assets are disclosed in note 19 to the ﬁnancial statements, the valuation is discussed as a key source of estimation uncertainty and the valuation policy is disclosed in the principal accounting policies. How our scope of work responded to the key audit matter We have performed the following procedures in order to address the key audit matter: – We gained an understanding of key processes and controls around the valuation of biological assets. – We made enquiries of management to understand the rationale applied in the determination of key assumptions and any changes in the year; – We assessed the appropriateness of the logic and mechanical accuracy of the valuation models prepared and the valuation methodology applied – For the fair value models, n we assessed the inputs by assessing the historical accuracy of management’s forecasts and comparing to third-party and market data (where appropriate); n assessed the completeness and accuracy of disclosures made within the ﬁnancial statements in accordance with IAS 41. Key observations From the work performed, we are satisﬁed that the key assumptions applied in respect of the valuation of biological assets and the associated disclosures are appropriate. 5.3 Impairment of intangibles, factories and bearer plants Key audit matter description The Group holds £6.6 million (2019: £10.3 million) of Intangibles and £198.3 million (2019: £222.5 million) of property, plant and equipment (PP&E), which includes factories and bearer plants. For components in the Agriculture segment, management identiﬁed each estate as a cash generating unit (CGUs), which includes the associated factories and bearer plants and performed an annual review for indicators of impairment. The process for measuring and recognising impairment under IAS 36: ‘Impairment of Assets’ is complex and requires signiﬁcant judgement, including consideration of indicators such as underutilisation, adverse weather conditions and land use rights. The uncertainties inherent within the current economic environment caused by the Coronavirus pandemic have been included within management’s consideration of qualitative and qualitative impairment indicators. 120 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 121 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS The risk in relation to intangibles is speciﬁcally focussed to (i) brand value relating to Jing Tea Limited where the operations were unable to trade for a signiﬁcant period as a result of the COVID pandemic and (ii) goodwill on the acquisition of tea estates in India by Goodricke Group Limited and Amgoorie India Limited. There is a risk that these cash generating units (CGUs) or groups of CGUs may not achieve the anticipated business performance to support their carrying value, or that the estimated fair value of the CGUs may not support their carrying value. This could lead to an impairment charge that has not been recognised by management. Intangible assets are disclosed in note 15 PP&E is disclosed in note 16 to the ﬁnancial statements, the valuation is discussed as sources of estimation uncertainty, and the valuation policy is disclosed in the principal accounting policies. How our scope of work responded to the key audit matter We have performed the following procedures in order to address the risk: n We gained an understanding of key processes and controls around the identiﬁcation of impairment indicators for intangibles, factories and bearer plants. n We challenged management’s assessment as to whether indicators of impairment exist for factories and bearer plants through our consideration of operating losses incurred, disease or crop damage, long term commodity price reductions, underutilised plant or warehousing, loss of key customers, long term failure of water or power supply, variation in rights to land use, and signiﬁcant changes in tax or foreign exchange rates. n For the CGUs where there were indicators of impairment identiﬁed, we performed detailed testing to further assess and corroborate the key inputs to the valuations, which were utilised to determine the recoverable amount of the CGUs (which includes goodwill, intangibles and other allocated assets). Our challenge focused on: – obtaining an understanding of controls used in the preparation of the model; – assessing the appropriateness of the CGUs identiﬁed against IAS 36 Impairment of Assets through challenging management; – assessing and challenging the appropriateness of the discount rate used by independently benchmarking the discount rate against the wider peer group; – assessing the appropriateness of cash ﬂow projections relative to previous performance, current order book and general economic outlook for respective business sectors. – analysing the historical accuracy of budgets to actual results to determine whether forecast cash ﬂows are reliable based on past experience. – testing the mechanical accuracy and integrity of the models, performing our own sensitivity analyses, and working with our internal valuation specialists to assist in the assessment of the appropriateness of the discount rates. 121 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 122 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS – where recoverable value has been determined based on fair value of the assets, considering the evidence available as to whether the recoverable amount represents an appropriate estimate of a market participant’s valuation of the CGU by challenging the valuation reports issued by external valuers by comparing them with similar market transactions in past. We also held discussions with the valuers to challenge the methods used for determining fair value. – For Jing Tea, understanding and evaluating the economic recovery assumptions, comparing the forecasted sales to actual experience, contract wins and churn rates and the £3.5 million impairment recognised in the period. n We also assessed the appropriateness of the Group’s disclosures including the need to disclose further sensitivities for CGUs where a reasonably possible change in a key assumption would cause an impairment. Key observations From the work performed, we concur with management’s assessment of impairments recorded during the year. 5.4 Provision for tax, legal matters and employee beneﬁts Given the various jurisdictions in which the Group operates, as described in the principal risks and uncertainties on page 24 and 25, there is a risk relating to uncertainties in relation to the interpretation of complex tax legislation, or arising from changes in local regulation or law including those related to employee beneﬁts. Judgement is also applied in estimating amounts payable to legal regulatory or tax authorities in certain jurisdictions and relating to human rights issues. This gives rise to a risk over the accuracy and disclosure of provisions and contingent liabilities. There is also a risk that management may inﬂuence these signiﬁcant estimates and judgements in order to meet market expectations. At 31 December 2020, the Group has provided £8.2 million (2019: £Nil) in respect of the settled legal claims in the UK relating to allegations against its East African operations, namely Kakuzi in Kenya and EPM in Malawi. In addition, in certain overseas jurisdictions, interpreting and complying with taxation laws and regulations are complex. There is inherent judgment associated both with assessing and quantifying probable outcomes in relation to ongoing tax claims and with determining any exposure (and the need for provision) in areas where legal requirements are open to interpretation. In addition, possible outcomes need to be considered for disclosure as contingent liabilities. Unexpected adverse outcomes could materially impact the Group’s ﬁnancial performance and position. A contingent liability of £6.7 million in respect of India and £7.8 million in Malawi has been disclosed as relating to tax claims at 31 December 2020 (2019: £7.1 million in respect of India). Impact of litigation concerning the East African operations within the Operational Report disclosed on page 6 and Contingent liabilities are disclosed in note 41 to the ﬁnancial statements, their quantiﬁcation is discussed as sources of estimation uncertainty, and the accounting policy for provisions is disclosed in the principal accounting policies. Key audit matter description 122 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 123 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS How our scope of work responded to the key audit matter We have performed the following procedures in order to address the risk: n We gained an understanding of key processes and controls around identiﬁcation of tax, legal and employee beneﬁts matters across the key components of the Group. n We obtained and assessed management’s year end listing, tracking all litigations and reconciled this to the provisions recorded in order to check for completeness of provisions and contingent liabilities. n We challenged the appropriateness of the Group’s assumptions and estimates in relation to provisions and contingent liabilities, industry practice and the period to which any provision amounts relate. n We sent conﬁrmations to the Group’s legal counsel in the key jurisdictions as at 31 December 2020. We also spoke to legal counsel on selected key issues. n We also assessed the Group’s correspondence with regulatory and tax authorities and understood management’s interpretation and application of relevant laws and regulations. n With respect to litigation concerning the East African operations, in addition to the above procedures, we have obtained documentary evidence of the settlement agreements to test the completeness oﬀ the total settlement cost and related accruals for ongoing commitments. n We also assessed the appropriateness of disclosures in the ﬁnancial statements. From the evidence obtained, we were satisﬁed with (i) the adequacy of the Group’s provisions made at 31 December 2020 for the risks identiﬁed in the context of the Group ﬁnancial statements taken as a whole and (ii) the appropriateness of the contingent liability disclosures given the status, materiality and likely outcome of and exposures in areas where employee, legal and taxation requirements are open to interpretation. Key observations 6. Our application of materiality 6.1 Materiality We deﬁne materiality as the magnitude of misstatement in the ﬁnancial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or inﬂuenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the ﬁnancial statements as a whole as follows: Group ﬁnancial statements Parent company ﬁnancial statements Materiality £0.9 million (2019: £1.1 million) £0.3 million (2019: £0.4 million) Basis for determining materiality 0.4% of Revenue (2019: 5% of adjusted proﬁt before tax as disclosed in note 4.) 2% of net assets, capped at 35% of group materiality (2019: 2% of net assets, capped at 35% of group materiality) 123 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 124 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS Rationale for the benchmark applied Group ﬁnancial statements We have changed our basis for materiality for the current year, moving from a proﬁt before tax measure to a revenue measure by taking into account the previous two years and the current year forecasted revenue. Despite the fall in proﬁt before tax, we note that the overall size of the business, demonstrated by revenue, has remained broadly consistent with the prior year therefore the change in basis for materiality was deemed appropriate. Revenue is deemed an important benchmark for users to determine growth and performance of the Group. Parent company ﬁnancial statements We have used net assets measure given that the parent company is a holding company, generating no revenue. 6.2 Performance materiality We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the ﬁnancial statements as a whole. Performance materiality Basis and rationale for determining performance materiality Group ﬁnancial statements Parent company ﬁnancial statements 70% (2019: 70%) of group materiality 70% (2019: 70%) of parent company materiality In determining performance materiality, we have considered the following factors: n There have been no changes to the business in their operation or ﬁnancial reporting process. n The Group has a history of correcting most of the identiﬁed misstatements and the remaining uncorrected misstatements are historically below performance materiality. n The quality of the control environment, including impact of COVID, hence the decreased likelihood of signiﬁcant misstatements occurring. 6.3 Error reporting threshold We agreed with the Audit Committee that we would report to the Committee all audit diﬀerences in excess of £45,000 (2019: £52,500), as well as diﬀerences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identiﬁed when assessing the overall presentation of the ﬁnancial statements. 124 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 125 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS 7. An overview of the scope of our audit 7.1 Identiﬁcation and scoping of components Our group audit was scoped by obtaining an understanding of the Group and its environment, including group-wide controls, and assessing the risks of material misstatement at the group level. The Group undertakes agricultural operations in countries across Africa, North and South America, and Asia, with its principal crops grown in Bangladesh, India, Kenya and Malawi. The Group’s engineering and food service operations are located in Europe, principally in the UK. Our Group audit was scoped by obtaining an understanding of the Group and its environment, including Group-wide controls, and assessing the risks of material misstatement at the Group level. Of the Group’s 55 principal components, 29 were subject to a full audit and 10 were subject to speciﬁed audit procedures where the extent of our testing was based on our assessment of the risks of material misstatement and of the materiality of the Group’s operations at those locations. Our audit work on components in addition to the parent entity was executed to lower levels of materiality of £0.32 million (35%) of group materiality (2019: £0.4 million (35%)). The parent company is located in the UK and audited directly by the group audit team. At the parent entity level we tested the consolidation process and carried out analytical procedures to conﬁrm our conclusion that there were no signiﬁcant risks of material misstatement of the aggregated ﬁnancial information of the remaining components not subject to audit or audit of speciﬁed account balances. These 39 components represent the principal business units and account for 99% of the Group’s revenue and 95% of the Group’s proﬁt (based on absolute numbers) and 95% of the Group’s net assets. The remaining components were subject to analytical review procedures by the group audit team. %#%%# $#$$# ?;@;&1; !"#!!"#!"# ?&99!%&'()!,-/.# (#((# (#((# %*#%%*#%*# A.'-%5 B;-'.;(5+C ''$'$##'$# ()()##()# D;5(+,,;5, )(#))(#)(# ?&99!%&'()!,-/.# ?&99!%&'()!,-/.# @.#-(4(#'!%&'()!.+/-#'&+#, @.#-(4(#'!%&'()!.+/-#'&+#, @.#-(4(#'!%&'()!.+/-#'&+#, >#7(#2!%)!=+/&.!9#7#9 >#7(#2!%)!=+/&.!9#7#9 >#7(#2!%)!=+/&.!9#7#9 7.2 Our consideration of the control environment Our risk assessment procedures include obtaining an understanding of relevant controls to the audit. Consistent with previous years, we have obtained an understanding of relevant controls on the following areas: n n n Financial reporting process; Legal and regulatory reviews; and Impairment of intangibles. This covered some of the key accounting and reporting tools that are used by management and the interface between various systems. 125 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 126 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS 7.3 Working with other auditors Throughout the audit, we ensured that we held frequent discussions with our component teams. In September 2020, we held a group-wide planning meeting, in which we set out the materiality and scoping for component teams, as well as considering signiﬁcant risks across the Group. We also held planning meetings with each of our specialists, involving our component teams where relevant. During our interim and year-end audit, we held regular catch-up meetings with components to monitor progress and highlight any issues arising. The Senior Statutory Auditor participated in all of the ﬁnal close meetings of the Group’s signiﬁcant components. The Senior Statutory Auditor or another senior members of the group audit team carried out a review of the component auditor ﬁles. Our oversight of component auditors focused on the planning of their audit work and key judgements made. In particular, our supervision and direction focused on the work performed in relation to key audit matters by component teams including revenue recognition,fair value of biological assets, impairment of intangibles, factories and bearer plants, provisions for tax, legal and employee beneﬁts and going concern assessments. As part of our monitoring of component auditors, we have also attended key audit close meetings remotely through video calls. 8. Other information The other information comprises the information included in the annual report, other than the ﬁnancial statements and our auditor’s report thereon. The Directors are responsible for the other information contained within the annual report. Our opinion on the ﬁnancial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the ﬁnancial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the ﬁnancial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 9. Responsibilities of Directors As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the ﬁnancial statements and for being satisﬁed that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of ﬁnancial statements that are free from material misstatement, whether due to fraud or error. In preparing the ﬁnancial statements, the Directors are responsible for assessing the Group’s and the parent company’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the parent company or to cease operations, or have no realistic alternative but to do so. 126 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 127 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS 10. Auditor’s responsibilities for the audit of the ﬁnancial statements Our objectives are to obtain reasonable assurance about whether the ﬁnancial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements. A further description of our responsibilities for the audit of the ﬁnancial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 11. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. 11.1 Identifying and assessing potential risks related to irregularities In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: n n n n the nature of the industry and sector, control environment and business performance including the design of the Group’s remuneration policies, key drivers for Directors’ remuneration, bonus levels and performance targets; results of our enquiries of management and the Audit Committee about their own identiﬁcation and assessment of the risks of irregularities; any matters we identiﬁed having obtained and reviewed the Group’s documentation of their policies and procedures relating to: – identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of noncompliance; – detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; and – the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; and the matters discussed among the audit engagement team including signiﬁcant component audit teams and relevant internal specialists, including tax, valuations, IT and pensions specialists regarding how and where fraud might occur in the ﬁnancial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identiﬁed the greatest potential for fraud in the following areas: revenue recognition and impairment of intangibles, factories and bearer plants. In common with all audits under ISAs (UK), we are also required to perform speciﬁc procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions of those laws and regulations that had a direct eﬀect on the determination of material amounts and disclosures in the ﬁnancial statements. The key laws and regulations we considered in this context included the UK Companies Act, pensions and tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct eﬀect on the ﬁnancial statements but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. Those that are fundamental to the operations of the Group included the Bribery Act, employee laws, carbon reduction regulations, and health, safety and environment matters. 127 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 128 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS 11.2 Audit response to risks identiﬁed As a result of performing the above, we identiﬁed revenue recognition, impairment of intangibles, factories and bearer plants as key audit matters related to the potential risk of fraud. The key audit matters section of our report explains the matters in more detail and also describes the speciﬁc procedures we performed in response to those key audit matters. In addition to the above, our procedures to respond to risks identiﬁed included the following: n n n n n reviewing the ﬁnancial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct eﬀect on the ﬁnancial statements; enquiring of management, the Audit Committee and in-house legal counsel concerning actual and potential litigation and claims; performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; reading minutes of meetings of those charged with governance; and in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any signiﬁcant transactions that are unusual or outside the normal course of business. We also communicated relevant identiﬁed laws and regulations and potential fraud risks to all engagement team members including internal specialists and signiﬁcant component audit teams, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. 12. Opinions on other matters prescribed by the Companies Act 2006 In our opinion, based on the work undertaken in the course of the audit: n n the information given in the Strategic report and the Directors’ report for the ﬁnancial year for which the ﬁnancial statements are prepared is consistent with the ﬁnancial statements; and the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements. In the light of the knowledge and understanding of the Group and the parent company and their environment obtained in the course of the audit, we have not identiﬁed any material misstatements in the Strategic report or the Directors’ report. 13. Matters on which we are required to report by exception 13.1 Adequacy of explanations received and accounting records Under the Companies Act 2006 we are required to report to you if, in our opinion: n we have not received all the information and explanations we require for our audit; or n n adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or the parent company ﬁnancial statements are not in agreement with the accounting records and returns. We have nothing to report in respect of these matters. 128 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 129 CAMELLIA PLC REPORT OF THE INDEPENDENT AUDITORS 13.2 Directors’ remuneration Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of Directors’ remuneration have not been made. We have nothing to report in respect of this matter. 14. Use of our report This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Makhan Chahal ACA (Senior Statutory Auditor) Deloitte LLP Statutory Auditor London, United Kingdom 3 May 2021 129 260881 Camellia R&A pp117-end.qxp 04/05/2021 10:06 Page 130 CAMELLIA PLC FIVE YEAR RECORD 2020 £’m 2019 £’m 2018 £’m 2017 £’m Restated 2016 £’m Revenue-continuing operations 291.2 –––––––––– 291.5 –––––––––– 309.8 –––––––––– 298.3 –––––––––– 257.9 –––––––––– Proﬁt before tax Taxation (Loss)/proﬁt from continuing operations (Loss)/proﬁt from discontinued operation (Loss)/proﬁt attributable to owners of the parent Equity dividends paid Equity Called up share capital Reserves Total shareholders’ funds (Loss)/earnings per share (Loss)/earnings per share - continuing operations Dividend paid per share 7.8 (8.6) –––––––––– 22.3 (7.2) –––––––––– 52.5 (20.0) –––––––––– 27.6 (12.2) –––––––––– 26.5 (12.4) –––––––––– (0.8) –––––––––– 15.1 –––––––––– 32.5 –––––––––– 15.4 –––––––––– 14.1 –––––––––– – –––––––––– – –––––––––– (0.2) –––––––––– 14.8 –––––––––– (20.0) –––––––––– (5.0) –––––––––– 8.3 –––––––––– 25.2 –––––––––– 23.8 –––––––––– (10.7) –––––––––– 2.8 –––––––––– 4.0 –––––––––– 3.8 –––––––––– 3.6 –––––––––– 3.6 –––––––––– 0.3 376.3 –––––––––– 376.6 –––––––––– 0.3 395.4 –––––––––– 395.7 –––––––––– 0.3 395.2 –––––––––– 395.5 –––––––––– 0.3 368.1 –––––––––– 368.4 –––––––––– 0.3 330.5 –––––––––– 330.8 –––––––––– (181.0) p 300.5 p 912.4 p 861.7 p (387.4) p (181.0) p 102 p 300.5 p 919.6 p 138 p 144 p 325.9 p 132 p 336.7 p 130 p 130 260881 Camellia R&A Cover Spread.qxp 30/04/2021 13:00 Page 1 CAMELLIA PLC C a m e l l i a P l c A n n u a l R e p o r t 2 0 2 0 Perivan 260881 2020 133

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