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