263134 Camellia R&A Cover Spread.qxp 24/05/2022 14:38 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
1
Perivan 263134
2021
134
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 1
CAMELLIA PLC
REPORT AND ACCOUNTS 2021
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
7
16
19
25
35
39
44
45
47
48
49
50
51
52
53
54
70
125
139
1
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 2
CAMELLIA PLC
CAMELLIA AT A GLANCE
We are an international Group – a global family of companies focussed on agriculture across the world.
Headquartered in the UK we are passionate about our produce, our communities and sustainable
agriculture worldwide.
We grow healthy life-enhancing products for a world hungry for ethically produced natural food.
Our purpose
We are committed to doing the right thing: ethically and commercially, globally and locally.
We invest for the long-term:
n Delivering performance for investors – but not at the expense of sustainability long-term
n
n
n
n
Treating our customers and suppliers fairly
Acting as a custodian of our agricultural resources
Being a responsible and forward-thinking employer
Behaving as a good citizen in the countries in which we operate
Sustainability
Our businesses can and should grow with respect and care for the environment and the communities in
which we operate rather than at a cost to them. We invest in innovative technology and cutting-edge
agricultural practices to ensure that these environments and communities are protected and enhanced.
Innovation
Research into, and development of, agricultural techniques and technology allows us to continually
improve efficiency and sustainability within our operations. Innovation is not only a driving force for
improved profitability but also a powerful tool to reduce our environmental impact and benefit our
communities.
Long-termism
We see ourselves as custodians, holding our business in trust for future generations. We have a
responsibility to ensure the growth and continuity of all our businesses.
Economic contribution
Each of our operations plays a significant role in its local economy, infrastructure and community. Our
contribution includes employee wages and benefits, smallholder crop procurement, training in agronomic
practices, contracting local service providers, capital investment, taxes, community projects and exports.
2
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 3
CAMELLIA PLC
CAMELLIA AT A GLANCE
Our business is made up as follows:
Agriculture
2021: Revenue – £238.8 million, adjusted trading profit* £13.1 million, trading profit £13.2 million
Tea
Production & Manufacturing
Instant Tea, Branded Tea &
Tea Rooms
Nuts & fruits
Macadamia
Avocado
Apple, Pear, Blueberry, Plum,
Cherry, Apricot, Grapes
Other agriculture
Forestry
Arable
Rubber
Livestock
Locations
India, Bangladesh, Kenya, Malawi
India, UK
Kenya, Malawi, South Africa
Kenya, Tanzania
UK, Kenya, South Africa
Kenya, Malawi, Brazil
Brazil
Bangladesh
Kenya
Mature
Area
Ha
34,097
Immature
Area
Ha
2,485
2,906
623
798
1,981
3,888
1,822
786
377
103
2,685
–
153
4,332 head
Other investments
Food Service and Engineering
2021: Revenue – £37.3 million, adjusted trading loss* £2.3 million, trading loss £2.3 million
A JT Engineering
ACS&T
Locations
UK
UK
Investments
Investment Portfolio
Investment Property
Collections
Locations
Global
UK, Malawi, Brazil
UK, India
Associates
2021: Share of results after taxation – £7.2 million
Locations
Holding %
BF&M (Life & Non-life insurance) Bermuda
United Finance (Banking)
United Insurance
(Non-life insurance)
Bangladesh
Bangladesh
37.4
38.4
37.0
*
Figures quoted above are extracted from note 1 to the Accounts
** Collections are stated at cost
Market value
at 31/12/2021
£’m
40.2
34.4
8.7**
Market value
at 31/12/2021
£’m
57.7
13.0
9.3
3
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 4
CAMELLIA PLC
DIRECTORS AND ADVISERS
Directors
Malcolm Perkins
Tom Franks
Graham Mclean
Susan Walker
Stephen Buckland*
Gautam Dalal
William Gibson
Chairman (iii) (iv)
Chief Executive
Director of Agriculture
Chief Financial Officer
Non-executive Director (i)
Independent non-executive Director (i)
Senior independent non-executive Director** (i)
(ii) (iii) (iv)
Non-executive Director (ii) (iii)
Independent non-executive Director
Senior independent non-executive Director
Independent non-executive Director (iv)
Independent non-executive Director
Simon Turner
Frédéric Vuilleumier
Chris Relleen***
Jonathan Bond****
Rachel English*****
(i) Audit committee
(ii) Remuneration committee
(iii) Nomination committee
(iv) Safeguarding and Stewardship committee
*From 1 November 2021
**From 11 August 2021
***Until 5 August 2021
****Until 3 June 2021
*****From 6 May 2022
Group General Counsel
& Company Secretary
Registered office
Amarpal Takk (iv)
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
Website
4
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
www.camellia.plc.uk
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 5
CAMELLIA PLC
CHAIRMAN’S STATEMENT
2021 has been another challenging year for all our staff and the communities in which we operate as they
have continued to work through the pandemic and the on-going impact it has had on operations globally.
We have seen inspiring collaboration with local governments and communities as they have pulled
together to deal with the consequences of the pandemic.
The results for 2021 reflect a profit before tax of £7.1 million after a number of one off items with an
aggregate net cost of £1.7 million (2020: profit before tax of £7.8 million after one off net costs of
£8.2 million). Profits were also impacted by the important long-term strategic changes made in the last
two financial years to the Agriculture portfolio.
Strategy
Despite the unprecedented challenges, the resilience and commitment of our people has enabled us to
continue to focus on our strategy of expansion in areas of expertise, while divesting non-core businesses.
We noted in our 2021 Interim Report that the Board was undertaking a series of measures aimed at
re-balancing the Group’s portfolio of investments in order to take better advantage of its strengths, and
thereby improve profitability and share price performance. Significant steps have been taken to diversify
our interests in agriculture where we have scale and expertise, and sell those businesses where we have
fewer long-term strategic advantages.
Further details are provided in the Operational report.
Dividend
Reflecting confidence in the Group’s long-term future, the Board is recommending a final dividend in
respect of the year ended 31 December 2021 of 102p per share increasing the total dividend for the year
to 146p per share.
Outlook
With significant uptake of vaccines, there are signs of the world returning to normality, but we do not
believe that normal trading conditions will emerge until 2023 at the earliest, and may be further delayed
by the disastrous war in Ukraine.
The substantial rise in energy prices will continue to affect our global supply chain, with an increase in the
cost of shipping affecting us and our customers alike. Linked to the increasing price of natural gas,
fertiliser prices have increased substantially with the impact being felt in the cost of production across all
our agricultural operations. Furthermore, rising inflation will to lead to further increases in wages.
On a more positive note, the year has started well for our agricultural operations with good prices being
achieved in the Kenya tea market and a strong opening for India and Bangladesh, albeit it is very early in
the season. The remaining crops are developing in line with what we would expect at this stage in the
growing cycle.
Directors
We were deeply saddened by the passing of Chris Relleen, Senior independent non-executive Director,
in August 2021. We shall all remember Chris’ contribution to the Board and miss his wise counsel,
humility and humour.
I am delighted to welcome our new non-executive Directors, Rachel English and Stephen Buckland.
Rachel English, a chartered accountant, has extensive international and general management experience,
having founded and served on the board of several significant businesses. She has a particular focus on
ESG matters. Stephen Buckland is a trustee of The Sir Percival Griffiths’ Tea Planters Trust and also The
Camellia Foundation, a UK charity whose primary donor of the same name is the ultimate majority
shareholder of Camellia Plc. Stephen previously held positions within the Camellia Group’s agricultural
and banking businesses.
5
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 6
CAMELLIA PLC
CHAIRMAN’S STATEMENT
As announced previously, Tom Franks, having substantially achieved the objective of focusing the Group’s
investments into the core activities of agriculture and food and beverage distribution, has indicated his
wish not to stand for re-election at the forthcoming Annual General Meeting in June. I would like to thank
Tom for his contribution to the business through a challenging few years and we wish him well for the
future. The Board is initiating a search process to identify a new CEO.
In addition, and as previously announced, two of our independent non-executive Directors, William
Gibson and Gautam Dalal, have also indicated that they will not be standing for re-election at the
forthcoming Annual General Meeting. I would like to thank both of them for their contributions to the
business. Further appointments of new non-executive Directors to the Board will be announced in due
course.
Staff
I am grateful to our staff around the world for their continued hard work and dedication in challenging
circumstances, and for the progress we have made together.
Malcolm Perkins
Chairman
30 May 2022
6
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 7
CAMELLIA PLC
OPERATIONAL REPORT
Overview
2021 was a challenging year, with the COVID pandemic continuing to impact trading. Poor weather
conditions in India and lower production in Kenya resulted in lower bought leaf volumes which contributed
to Group tea production being slightly lower than in 2020. Avocado revenues significantly reduced due to
lower volumes and prices. These falls were in part offset by revenues generated by Bardsley England,
which was acquired during the year but which saw volumes impacted by the late frost earlier in the
season. Revenue for 2020 included the results for Horizon Farm, which was sold during that year. Profits
were impacted by these important strategic changes to the Agriculture portfolio.
Strategic matters
As previously announced, the Group continues to focus on its strategy to expand the Agriculture division
continuing the further diversification of crop and location, and on disposing of non-core assets.
Acquisitions and divestments
At the end of July 2021 the Group acquired an 80% controlling stake in Bardsley England with the
remaining 20% stake purchased in November. The Group’s expertise in managing large scale bearer crops
and its existing relationships with Bardsley England’s customer base and other major UK retailers will
provide synergies. The acquisition provides a larger Group footprint in the UK, which will in time reduce
our effective corporation tax rate. The market for UK apples has good potential to grow significantly due
to increasing demand for local produce and a resulting reduction in apple imports.
In line with the Group’s strategy to focus on agriculture, the Group sold its interests in Abbey Metal
Finishing Company Limited in August 2021 and its subsidiary Atfin GmbH in Germany in July 2021. In late
December 2021, the BMT division of A JT Engineering was sold to its management. Part of the Camellia
Collection was sold at auction in the early part of 2022 with further items due to be sold later in the year.
Ukraine
We have all been deeply disturbed by the reports coming out of Ukraine, and I am pleased to say that our
Bardsley England operation in Kent has successfully accommodated a number of refugees and provided
employment.
The war is impacting the Group in a number of ways of which the following are the most significant at this
stage:
n
n
n
The price of energy has risen significantly since before the start of the war and continues to rise. This
is impacting directly on fuel and heating costs, and indirectly on the costs of other inputs, such as
fertiliser, which rely on natural gas as a raw material.
Shipping routes and supply chains which were already chaotic following the pandemic have been
thrown into further disarray with both shipping times and costs rising dramatically.
For the last few years Russia has been the world’s third largest importer of tea. Whilst there does not
appear to have been any impact on tea prices at this stage it remains early in the season for India
and the impact that sanctions will have on the market remains uncertain.
COVID
Whilst our businesses were able to keep trading throughout the pandemic, they were all affected to some
extent, whether through lockdowns and absences interrupting operations, or market disruption. The
Group’s operations continued to protect employees and communities, whilst taking account of a wide
variation in national and cultural responses to the pandemic. All our operations have continued to work
closely with local governments, communities and the Group’s clients in their response to the COVID
pandemic.
7
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 8
CAMELLIA PLC
OPERATIONAL REPORT
Human Rights
As a consequence of the allegations faced by the Group in 2020/21 which have now been finalised, we
have further enhanced our Human Rights commitment including greater governance, reporting and
training and we have established significant measures around employee and community welfare. Current
information on these measures can be found on the Camellia Plc website.
Brexit
Extensive preparations were undertaken ahead of Brexit to mitigate the impact on our UK businesses in
2021 and although the supply to the EU of our Jing branded tea was affected, we did not experience any
material effect on our trading operations as a whole.
Performance
Agriculture
In total, Agriculture made a trading profit of £13.2 million (2020: £nil) on revenue of £238.8 million
(2020: £249.6 million), as set out in note 1 to the Accounts. The release of provisions for wage agreements
offset by the restructuring costs for Bardsley England amounted to a net gain of £0.1 million (2020: £nil).
Our 2020 results were also impacted by a number of one off items, the largest of which were costs of
£16.1 million in respect of legal and other costs associated with the allegations arising from the actions
of certain of our African operations.
Agriculture’s adjusted trading profit* was £13.1 million (2020: £16.1 million).
Tea
Tea estate production Instant tea, branded
& manufacturing tea & tea rooms
2020
£’m
2020
£’m
2021
£’m
2021
£’m
Revenue
Adjusted trading profit/(loss)*
Trading profit/(loss)
161.5
10.7
11.3
163.9
7.1
(5.5)
34.7
(0.5)
(0.5)
37.0
(1.4)
(1.4)
* See note 1 to the Accounts
Estate production & manufacturing
Group tea production in 2021 was 99.1mkg, marginally down on 2020 levels (2020: 99.5mkg) due to lower
bought leaf volumes in India. However, we achieved record production in Bangladesh where the impact
of our investment in irrigation and replanting provided positive returns. Kenya and Malawi experienced
high crops, both nationally and at the Group’s operations.
Mature
area
Ha
Immature
area
Ha
16,400
8,591
3,891
5,215
––––––––
34,097
––––––––
1,125
683
267
410
––––––––
2,485
––––––––
2021
Volume
mkg
26.1
14.4
14.9
20.0
––––––––
75.4
19.2
4.5
––––––––
99.1
––––––––
2020
Volume
mkg
26.1
12.5
15.8
16.8
––––––––
71.2
23.5
4.8
––––––––
99.5
––––––––
India
Bangladesh
Kenya
Malawi
Total own estates
Bought leaf production
Managed client production
Total made tea production
8
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 9
CAMELLIA PLC
OPERATIONAL REPORT
Pricing and operations
Tea pricing for most operations was above that of last year, with our estates being rewarded for
concentrating their efforts on the production of high quality teas. Total sales volumes were lower.
Shipping logistics have been a challenge throughout the year with many delivery delays experienced by
customers. With volatile trading conditions persisting into 2022, shipping logistics will take some
considerable time to settle, particularly with the recent flooding impact at Durban Port in South Africa in
April 2022.
India
Our estate crop for 2021 was on par with last year. The impact of continued poor and varied weather
meant that our crop did not recover to 2019 levels.
Our net selling prices firmed significantly for both Dooars and Assam CTC teas from demand in the
internal packet tea market, up over 10% against the prior year. Darjeeling prices were up on prior year by
11%, due to good quality and improved first flush volumes. 2022 has seen the last of the limited tea
stocks left over from 2021 sold and the first auction of the new season opened in March 2022 with strong
pricing. The market has remained firm for the early part of the new season and going forward pricing will
be determined by regional production volumes and demand.
The Assam Orthodox (rolled leaf tea) market, however, was down 3% on prior year as it continued to be
impacted by ongoing political and economic volatility in Iran which subdued demand and kept prices
relatively flat.
North India market pricing overall has remained strong due to limited supply and is supported by 100%
import tariffs. North India export volumes were down c.9%, with prices in the export market remaining
under pressure with reduced sales of Orthodox tea.
State elections were held in Assam and West Bengal in March 2021, with no change to the incumbent
Governments in each State. Wage negotiations were concluded in both States resulting in 22% and 15%
increases in Assam and West Bengal respectively.
Investment in replanting continued with 167Ha of planting completed (2020: 164Ha) and a further 120Ha
uprooted in preparation for future planting.
Bangladesh
Despite a slow, dry start to the season, Bangladesh reported a record crop up 15% on the prior year.
The impact of several years of investment in replanting and irrigation contributed to our improved yields.
Our average net selling price remained strong through the season, up 20% on prior year, with limited
COVID restrictions allowing local demand to flourish whilst being supported by very low volumes of
imports.
National production achieved record levels at 12% up on prior year, principally as a result of a 40%
increase in bought leaf volumes. The continued rapid escalation of the bought leaf sector volumes, if left
unchecked, presents challenges to the market with a risk that potential oversupply results in downward
pressure on pricing.
2022 has seen prices remain under pressure for prior season teas due to the high volumes of inventory
carried forward. The market for new season teas has started firm and is expected to remain relatively
stable as stocks are now depleted and the new season production has yet to gain momentum. Pricing
thereafter will be driven by the level of production over the summer months.
Wage negotiations for 2021/2022 are ongoing between the Bangladesh Tea Association and the Trade
Unions and are due to be settled imminently. Provisions have been made for expected increases relating
to 2021.
Having reduced replanting in 2020 to concentrate on infilling young tea areas, the total area planted in
2021 was increased to 143Ha (2020: 105Ha), of which 131Ha was replanting and 12Ha was newly
planted areas.
9
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 10
CAMELLIA PLC
OPERATIONAL REPORT
Kenya
Our Kenyan estates produced their second highest ever crop in 2021, albeit down 8% on the previous
year. The national crop was also the second highest on record.
As a part of many ongoing initiatives to address structural issues within the tea industry in Kenya, the
Government in July implemented a reserve pricing mechanism for The Kenya Tea Development Agency
(“KTDA”) teas which make up over c.66% of the national production. This intervention has had a positive
impact on prices for higher quality teas within the Kenyan market, including those produced by the
Group. The “all average price” at Mombasa auction was 3% up on 2020, driven principally by improved
quality teas. Export levels were c.9% up on 2020 with strong demand from Pakistan, Egypt, Russia, UAE
and Sudan. Low retail pricing and increased competition from other beverages in western markets
continues to be a challenge for the industry.
Our average selling price in 2021 was up on prior year by 6%. We have continued to outperform our
commercial grower competitors in the district with a price differential of 16%, by concentrating on quality.
In 2022 our prices continued to firm initially but then weakened towards the end of the first quarter with
predictions of a normal long rains season. In aggregate, our average selling prices in the five months to
the end of May 2022 were significantly higher than the same period of 2021 though the benefit of this
has been partially offset by lower production volumes. Pricing levels looking forward will depend on
production volumes and the impact of the reserve pricing policy for KTDA teas.
Wage rates increased by 7% for 2020 and 2021 and negotiations are ongoing for 2022 and 2023.
We replanted a total of 50Ha (2020: 47Ha) whilst uprooting 52Ha for replanting in 2022.
Malawi
Our Malawi crop in 2021 was the second highest on record, up 15% on 2020, with strong cropping
throughout the year and good out of season rains at the mid-year point.
Fertiliser prices in 2021 increased by 45%. The impact of this on the cost of production was mitigated by
careful management of usage.
Malawi prices remained under pressure for much of the year with teas from the plainer West of Rift
Kenyan’s still proving a value substitute to buyers. Our average selling price was 3% down on 2020 due to
the lag effect of prices responding to an improving Kenyan market. The auction was temporarily
suspended in the early part of 2021 due to the previously reported lack of clarity around interpretation of
VAT rules on local sales for export.
Global logistics issues, including a lack of containers and delayed shipping times, has resulted in
deliveries taking much longer to reach customers.
While selling prices in 2022 in Malawi have firmed, they are below those of the same period of 2021.
The market is expected to be volatile for a period due to uncertainty relating to logistics and will also be
influenced by the general direction of the Kenya market. Our production volumes in Malawi for the year
so far are in line with that of last year.
A minimum wage was implemented for the tea industry in Malawi in January 2021. Negotiations are
ongoing with the union, with further increases expected from August 2022.
On 26 May 2022, the Reserve Bank of Malawi announced that it will stop supporting the currency and
allow the exchange rate to reflect market fundamentals. This is expected to result in a devaluation of the
Kwacha of c.25%.
There was no replanting in Malawi for a second successive year, a decision taken to conserve resources in
light of difficult trading conditions.
10
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 11
CAMELLIA PLC
OPERATIONAL REPORT
Instant tea, branded tea & tea rooms
India
Sales volumes of our packet tea in India fell by 14%, whilst net prices increased by 11%. Despite increasing
demand for tea, packet sales have come under pressure due to fierce competition in the branded market.
However, the packet tea operation has continued to innovate with new product development and the
release of new product lines in Ready to Drink, fortified (health) teas and premium tea bags.
Instant tea production in 2021 was up marginally on the previous year. Sales volumes and average prices
however were both down 10% due to lower demand from a key customer, leading to a lower contribution
from the operation.
Due to COVID lockdowns, our tea lounges and kiosks were closed periodically during 2021. These outlets
continue to be developed as part of the India marketing and value addition strategy.
UK
Trading improved for Jing Tea as COVID restrictions were eased in many of its markets, but revenue
remained below pre-pandemic levels. Supplies into the EU have also been impacted by Brexit with the
business contracting for EU warehousing space during the year to alleviate import complexities. Jing
launched its Ready to Drink Jasmine Pearls Sparkling Tea in 2021, which has gained initial positive traction
in the market.
Nuts & fruits
Macadamia Avocado Other fruits
2021
£’m
Revenue
10.8
Adjusted trading profit/(loss)* 2.7
Trading profit/(loss) 2.7
* See note 1 to the Accounts
Macadamia
2020
£’m
13.0
1.0
(0.1)
2021
£’m
11.1
(0.5)
(0.5)
2020
£’m
16.8
3.9
1.9
2021
£’m
9.3
(4.1)
(4.6)
2020
£’m
8.7
2.9
2.9
Malawi
South Africa
Kenya
Total
Mature
Area
Ha
Immature
Area
Ha
2021
Tonnes
2020
Tonnes
1,388
751
767
––––––––
2,906
––––––––
125
396
265
––––––––
786
––––––––
438
375
492
––––––––
1,305
––––––––
403
196
455
––––––––
1,054
––––––––
The Group’s production volumes increased 24% on 2020 due to improved weather in South Africa, and an
increased crop in Kenya with further areas of maturing orchard coming into bearing and increasing
maturity of existing orchards.
Overall, our average net selling price was down 16% on 2020, which was in part due to the large volume of
nuts of industrial grade from the Group’s Malawian operation. Sales volumes were up 60% on 2020.
Profits benefitted from the efficiencies generated by higher production and favourable sales mix.
Harvesting of the 2022 crop is underway and the indications are that volumes will be ahead of 2021 levels.
Global production volumes were up on prior year with the two major producers, Australia and South
Africa up 10% and 11% respectively. Higher carryover stocks from Australia and Kenya are anticipated in
2022 with downward pressure on prices, particularly on grades for the ingredients market.
11
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 12
CAMELLIA PLC
OPERATIONAL REPORT
The Nut in Shell market in China was over supplied and prices declined mid-year leading to surplus kernel
supply, particularly for the ingredients grades which further suppressed the market.
The global macadamia kernel market remains under pressure due to the ongoing impact of COVID on
certain market segments. In the USA, import levels were similar to 2020 but remain approximately 30%
below 2018/19 levels.
Avocado
Kenya – Estate Hass
Kenya – Estate Pinkerton
Tanzania – Estate Hass
Total own estate production
Smallholder and outgrowers
Mature
Area
Ha
Immature
Area
Ha
560
63
–
––––––––
623
––––––––
257
70
50
––––––––
377
––––––––
2021
mkg
2020
mkg
7.5
1.0
–
––––––––
8.5
––––––––
0.6
––––––––
10.1
0.8
–
––––––––
10.9
––––––––
1.1
––––––––
Our own Avocado production was down 22% on last year, due in large part to the biannual nature of the
production and this also impacted the volumes packed for smallholders and outgrowers. Our pricing was
down 9% on last year, due to high volumes in the market from Peru and Colombia during a critical sales
window. Unfortunately, due to the lower volumes the season could not be extended to take advantage of
improved pricing at the end of Q3.
The Pinkerton harvest is well advanced with volumes ahead of 2021, however we expect prices to be
lower. The Hass season has now started with volumes expected to be significantly ahead of 2021
reflecting the fact that it is an ‘on year’ for Hass.
We continue to strengthen our avocado growth strategy by diversifying our origin portfolio, with further
plantings in Tanzania and Kenya. We planted 37Ha (2020: 13Ha) at our new farm in Tanzania and a further
44Ha (2020: 85Ha) in Kenya. In 2022 to date 96Ha have been planted in Tanzania. At Beja farm in South
Africa 80Ha has been prepared to be planted in 2022, of which 38Ha has already been planted.
Other fruits
Apples – own estate
Apples – partner growers
Pears – own estate
Pears – partner growers
Cherries
Grapes
Blueberries
Other
Mature
Area
Ha
Immature
Area
Ha
2021
Tonnes
2020
Tonnes
404
96
20
71
10
197
61
2
–
18
–
22
11,845
1,428
1,395
266
106
644
42
n/a
n/a
n/a
n/a
n/a
594
13
Apples & Pears
Bardsley England was acquired at the end of July and we have taken significant steps to improve costs and
profitability including closing one of its two packhouses and streamlining its administrative operations.
The benefit of these will be seen in 2022. The orchards were severely affected in April 2021 by frost
resulting in a lower than expected level of apple production. Partner grower crops were also similarly
adversely affected.
The last of the 2021 season stock is being sold at prices in line with our expectations. It is too early to
predict the crop profile for 2022.
12
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 13
CAMELLIA PLC
OPERATIONAL REPORT
Grapes
Grape production at our South African operation was up 8% on 2020. The grapes were high quality and
were sold to local commercial-scale winemakers. The 2022 harvest in South Africa has resulted in a record
production, well ahead of expectation.
Blueberries
2021 was the second year of full production of our 10Ha trial in Kenya, with production rising steadily,
although it is still below where we would like it to be. The majority of the crop was sold locally at good
prices.
Indications from the trial are that the variety planted does not perform optimally in Kenyan conditions
and that other varieties will have to be considered. There are already other varieties being trialled in small
areas and at least one of these is showing much greater potential than the current dominant variety
planted. The reason for establishing a trial was to test plant establishment, agronomy practices and
varieties and this is being achieved very successfully, particularly on the initial two objectives. The results
indicate further work is required on optimal variety selection, which will continue to be the focus going
forward.
Other agriculture
2021: Revenue – £11.4 million (2020: £10.2 million), trading profit £4.8 million (2020: £2.2 million)
Arable
Rubber
Forestry
Livestock
Mature
Area
Ha
Immature
Area
Ha
3,888
1,822
–
153
1,981
2,685
2021
Tonnes
34,769
690
m3
46,079
2020
Tonnes
34,979
659
m3
116,672
799 Births
956 Births
Arable
Despite some challenging weather, we were overall very pleased with our soya, maize and sorghum crop
production results. Prices for our soya crop were 60% higher than the prior year and our sorghum prices
more than doubled, reflecting global markets. This led to substantially increased profits for our operation
in Brazil.
Rubber
Production was up 5%, with pricing up 39% on last year, due to increased demand from manufacturing
sectors and also an increased price for petroleum-based synthetic rubber products. However, prices
remain lower than the cost of production.
Forestry
Kakuzi’s forestry volumes were on par with last year with the main focus on fence post sales. The
production of quality timber products are also being investigated as a potential diversified and value-
added product line.
Our Brazil operations had no eucalyptus timber sales during the year but expects to restart these in 2022.
Pine timber sales were more than double the previous year and resin sales continued throughout the
year, both providing a useful contribution to profits.
Livestock
Births were down significantly on last year, however, revenues were up on last year as COVID restrictions
were eased.
Goat production was introduced at Kakuzi during the year. It is anticipated that the herd will provide a
diversified source of revenue to complement beef sales.
13
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 14
CAMELLIA PLC
OPERATIONAL REPORT
Other investments
Engineering – AJT Engineering, Abbey Metal Finishing and Atfin
A trading loss of £2.3 million (2020: £1.5 million loss) on revenue of £15.3 million (2020: £19.3 million) was
recorded across this group of companies, as set out in note 1 to the Accounts.
A JT Engineering has continued to experience lower activity from the oil and gas sector, but its site
services division has seen an increase in trading as COVID related restrictions were lifted and access to
client sites was restored.
In line with our strategy, the Group sold its interests in Abbey Metal Finishing Company Limited and its
subsidiary Atfin GmbH in Germany during the year.
A JT Engineering’s BMT division was sold to its management in December 2021.
Food Service – ACS&T
ACS&T broke even in the year (2020: £0.5 million trading profit) on revenue of £22.0 million
(2020: £21.2 million).
ACS&T’s trading was challenging as a result of the impact of the COVID pandemic on the UK food service
sector. The national LGV driver shortage in the UK has also affected margins in its transport division,
though volumes have increased. 2022 has started much stronger following the lifting of COVID restrictions.
Associates
2021 Share of results: £7.2 million
BF&M
BF&M made a substantial contribution to our performance in 2021 recording net income up 19% at
Bermudian $25.7 million (2020: Bermudian $21.6 million) due to a 15% uplift in gross premiums written
in the period compared to the prior year. This was driven by increased property and group health
premiums and new business. Short term claims and adjustment expenses increased by 53% to Bermudian
$14.8 million while life and health policy benefits decreased by 24% to Bermudian $77.5 million.
United Finance and United Insurance
Our two associate companies in Bangladesh, United Insurance and United Finance, produced lower
results reflecting more challenging economic conditions in Bangladesh due to the COVID pandemic.
The underwriting profit for United Insurance decreased due to a decrease in gross premiums, higher
claims and increased cost of reinsurance.
While United Finance’s net operating income was 6% higher than that of the prior year due to an increase
in the number of new loans sanctioned and lower borrowing costs, margins were impacted due to the
effect of inflation on the overhead base.
Investment portfolio
The total value of the portfolio at 31 December 2021 was £40.2 million (2020: £50.6 million). During the
year a net £12.4 million was realised from the investment portfolio in part to fund the acquisition and
refinancing of Bardsley England.
Investment property
Work continues on the development of the Linton Park estate. The development of two properties into
three residential units started in May 2021 and these are due for completion by mid-2022. Following
refurbishment in 2020, a further investment property in central London was let during the year.
Renovation work commenced at Wrotham Place during the year to convert it to residential use.
14
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 15
CAMELLIA PLC
OPERATIONAL REPORT
In terms of the Group’s London property portfolio, the decision was made during the year to close the
Group’s offices at 1 Hobart Place. A residential property in central London was sold in February 2022.
Both these properties were categorised as “held for sale” at 31 December 2021.
Collections
Part of the art and manuscript collection with a net book value of £2.7 million was classified as held for
sale on the Group’s balance sheet at the end of 2021, and is scheduled for sale during 2022. To date,
a portion of this has been sold realising proceeds of £3.0 million and generating a gain on sale of
£1.0 million which will be reflected in our 2022 results.
Tom Franks
Chief Executive
30 May 2022
15
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 16
CAMELLIA PLC
FINANCIAL REPORT
Overview of results
Revenue for the Group fell to £277.2 million from £291.2 million in 2020. This reflected the 4% reduction
in revenue in Agriculture to £238.8 million (2020: £249.6 million) as a result of lower tea crops, reduced
packet tea sales volumes at improved prices in India, and reduced production volumes and prices of
avocado, offset in part by the revenues of Bardsley England acquired part way through the year. 2020
revenue also reflected the results of Horizon Farms which was sold during that year. Revenue at ACS&T
improved in the year despite the challenges presented by COVID lockdowns. Revenue from Engineering
was down reflecting the sales of Abbey Metal Finishing and Atfin.
Adjusted profit before tax was £8.8 million (2020: £16.0 million). Adjusted profit before tax is before net
costs of £1.7 million relating to a number of large separately disclosed items, further details of which are
set out in note 4 to the Accounts and below. (2020: separately disclosed net loss of £8.2 million also
relating to a number of large separately disclosed items).
Profit before tax in 2021 was £7.1 million (2020: £7.8 million). This decrease in profit before tax reflects,
inter alia, the effect of the lower profits from tea and avocado and the impact of the Bardsley England
acquisition offset in part by improved profits from tea and at BF&M. The 2020 results included profits for
Horizon Farms of £4.5 million which was sold during 2020 due to concerns about the severe climate risks
in California. In addition 2021 profit before tax reflects a number of separately disclosed items:
n
n
n
n
Restructuring costs at Bardsley England of £0.5 million
Costs of acquisition of Bardsley England of £1.2 million
A gain resulting from wage provision releases following wage agreements reached in the year of
£0.6 million
Impairment charges in relation to the property, plant and equipment relating to Abbey Metal
Finishing and a related loss on sale of that business as reported in our interim results, totalling
£0.6 million
The profit after tax for the year ended 31 December 2021 was £4.5 million (2020: Loss after tax
£0.8 million).
In addition, our financial assets recorded at fair value through other comprehensive income (part of the
investment portfolio) recorded a post tax gain of £1.8 million which has been reflected in Other
Comprehensive Income.
Equity attributable to the owners of Camellia was up at £388.6 million (2020: £376.6 million) with net cash
and cash equivalents net of borrowings of £54.0 million (2020: £90.1 million) and financial assets at fair
value through profit or loss (money market funds) of £9.9 million (2020: £5.3 million).
Acquisition
The acquisition and subscription for new shares to obtain an 80% interest in Bardsley England on 31 July
2021 resulted in goodwill arising on acquisition of £3.6 million. £2.2 million of the purchase price is
deferred with part payable in 2022 and the balance due in 2023.
In November 2021, the remaining 20% was acquired for £1.7 million in cash. At the same time, a loan due to
Bardsley England by BX Technologies (previously part of the Bardsley family’s group) of £1.1 million was repaid.
Impairments
The impairment to the goodwill relating to Abbey Metal Finishing arises from the losses incurred in the
period prior to sale.
16
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 17
CAMELLIA PLC
FINANCIAL REPORT
COVID and Ukraine impacts
As set out in the Operational report on page 7, our businesses are currently operating broadly as normal
despite the ongoing pandemic and the uncertainty arising from the war in Ukraine. Our experience over
the last two years has given us valuable insight into how the pandemic impacts our markets and our
operations. Although the war in Ukraine has had limited impact on the Group to date, there remains
uncertainty about how it might impact the tea market and input costs going forwards. 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 continue
to be 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 £4.0 million (2020: loss £22.6 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 2021 would have been £1.7 million higher. Our
profit before tax includes an exchange gain of £0.4 million on transactions during the year (2020: gain
£2.2 million).
On 26 May 2022, the Reserve Bank of Malawi announced that it will stop supporting the currency and
allow the exchange rate to reflect market fundamentals. This is expected to result in a devaluation of the
Kwacha of c.25%.
Cash
The Group’s net cash position reduced to £59.9 million at 31 December 2021 (2020: £94.9 million)
reflecting, inter alia, net cash outflows from continuing operating activities of £11.9 million (2020: inflow
£12.9 million).
We spent £11.6 million on investment in our existing operations and investment property and incurred a
net cash outflow in the year of £9.6 million acquiring 100% of Bardsley England. Investment portfolio
disposals net of reinvestments contributed £12.4 million to financing cashflows in the year.
Group borrowings in the form of loans amounted to £5.9 million at the end of the year (2020: £4.8
million).
We expect capital expenditure in 2022 to be higher than our depreciation charge and in excess of recent
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 and the Ukraine conflict and to fund long-term development projects.
Taxation
The Group’s effective tax rate of 36.6% (2020: 110.3%) reflects the use of current year UK trading losses to
offset taxable gains arising on investment disposals. The tax charge also reflects the recognition of a
significant deferred tax liability relating to the surplus on the UK Pension Scheme.
The acquisition of Bardsley England will bring a UK profit stream for the Group which is expected to assist
in reducing the Group’s effective tax rate in future.
Following discussions with the Bangladesh Revenue Authority regarding the withholding tax rate
applicable to branch remittances, this liability has increased to £3.4 million. These discussions have
facilitated the remittance of significant funds to the UK.
17
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 18
CAMELLIA PLC
FINANCIAL REPORT
Tax and other provisions
As is normal at this time of the year, we have ongoing wage negotiations relating to prior periods in
Bangladesh and India. We consider we have made adequate provision for their likely outcome.
Despite progress being made during 2021, we continue to have a number of significant uncertain tax
situations totalling £13.7 million, which have been disclosed previously and which are detailed in note 41
to the Accounts.
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, concluded early in 2021, shows a funding surplus and no
contributions are required to be made to the scheme for the next three years. On an IAS 19 basis, at the
end of 2021 the UK scheme had a surplus of £14.7 million.
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 a net surplus on an IAS 19 basis of
£5.1 million (2020: £16.6 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 £20.4 million (2020: gain
£4.3 million) is reflected in the Statement of Comprehensive Income. The net gain this year arises
primarily from the UK scheme where strong asset performance and the effect of higher interest rates
benefited the Scheme.
Our Income Statement also reflects current and past service costs of £1.8 million (2020: net cost
£2.2 million) and £0.8 million (2020: £0.7 million) in respect of employee benefit interest cost.
Susan Walker
Chief Financial Officer
30 May 2022
18
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 19
CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
At Camellia, ESG (Environmental, Social and Governance) 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 ESG report (“Custodianship”)
published in 2020 illustrates not only the ESG initiatives undertaken across the Group but also explains
the Group’s approach to each of these principles. We intend to publish our next edition of Custodianship
later this year. 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 40) 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. The Group’s
approach to Governance is set out in the Corporate Governance report.
Environmental
Climate change is a significant risk to the Group’s agricultural operations. We seek to mitigate the impact
of this risk by diversifying our agricultural production in both origin and crop. We also continue to plant
more drought resistant crop varieties and use other initiatives, such as restorative farming methods and
sustainable irrigation.
In addition to minimising our environmental impact, we protect and enhance 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 wherever possible from which to irrigate sustainably.
The Group also oversees c.11,100Ha of indigenous forests and conservation areas and a further 7,500Ha
of commercial forestry (eucalyptus, pine, cypress). These areas, in combination with fields of perennial
crops sequester significant amounts of carbon and act as an important carbon sink, which once
quantified will offset some of the Group’s emissions. We have estimated sequestration of our core crops
and our managed eucalyptus estates, which we comment on in more detail below.
We use appropriate partners to support the Group in achieving environmental protection and emission
footprint reduction initiatives and are continuously exploring technologies that can reduce our
environmental footprint. In addition to minimising our environmental impact, we protect and enhance
forests and water bodies for local flora and fauna.
19
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 20
CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
Environmental reporting
The Group continues 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 (excluding UK) and energy use data for the year to 31 December
Reporting year
Group sectors reported
2021
Global
(Excluding UK)
2020***
Global
(Excluding UK)
2019***
Global
(Excluding UK)
Emissions from combustion of LPG and
Natural gas (Scope 1) (tCO2e)
Emissions from combustion of diesel and petrol
for transport and onsite combustion (Scope 1) (tCO2e)
Emissions from the combustion of coal
(Scope 1) (tCO2e)
Emissions from combustion of firewood and
other fuels (Scope 1) (tCO2e)
Emissions from fertilisers, waste, livestock, land use
change and refrigerants (Scope 1) (tCO2e)
Emissions from purchase of electricity for own use
(Scope 2, location-based) (tCO2e)
Emissions from purchase of electricity for own use
(Scope 2, market-based*) (tCO2e)
Emissions from purchase of electricity, heat, steam,
and cooling purchased for own use
(Scope 2, location- based) (tCO2e)
Emissions from business travel in rental cars or
employee-owned vehicles where company is
responsible for purchasing the fuel (Scope 3) (tCO2e)**
Total gross Scope 1 & Scope 2 emissions
(location-based) (tCO2e)
Total gross Scope 1 & Scope 2 emissions
(market-based) (tCO2e)
Intensity ratio: Kg CO2e/Kg of made tea
Energy equivalent from combustion of LPG and
Natural gas (Scope 1) (GWh)
Energy equivalent from combustion of diesel and
petrol for transport and onsite combustion
(Scope 1) (GWh)
Energy equivalent from the combustion
of coal (Scope 1) (GWh)
Energy equivalent from combustion of firewood and
other fuels (Scope 1) (GWh)
Electricity purchased for own use (Scope 2) (GWh)
Renewable electricity generated for own use
(Scope 2) (Gwh)
Energy equivalent from business travel in rental cars
or employee-owned vehicles where company is
responsible for purchasing the fuel (Scope 3) (GWh)**
24,008
14,866
71,000
3,816
43,163
41,958
41,942
21,555
15,324
80,217
3,819
43,312
42,717
42,717
25,350
17,501
88,377
3,558
46,290
47,625
47,625
41,958
42,717
47,625
132
198,811
198,795
1.29
130.5
61.5
219.4
250.9
91.4
0.9
0.5
n/a
206,944
206,944
1.40
117.0
62.8
250.4
247.2
90.5
0.9
n/a
n/a
228,701
228,701
1.51
137.2
71.0
266.3
227.7
95.5
0.6
n/a
* 2020 is the first reporting period for which we reported our scope 2 market-based emissions
** 2021 is the first reporting period for which we reported our scope 3 business travel in rental cars or employee-
owned vehicles
*** Due to increased granularity of our Scope 1 and 2 reporting we have restated 2019 and 2020
20
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 21
CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
Changes in Scope 1 & Scope 2 emissions
The Group’s Scope 1 & 2 location-based emissions (excluding UK) reduced by 4% during the reporting
period. This was primarily due to a reduction in volumes of made tea produced in India, partially offset by
an increase in volumes in Bangladesh. In the tea drying process the Indian operations rely on coal and
the Bangladesh operations rely on natural gas. Where possible, and with infrastructure permitting,
cleaner fuel sources and efficiency improvements are being implemented. For example, installation of
natural gas turbines, and investments in hydro-electric generators.
We report the made tea intensity ratio (2021:1.29kg CO2e per kg of made tea; 2020: 1.40kg) and we
continue to invest to improve the carbon efficiency of our tea factories. We are happy to report that in
2021 there has been an 8% decrease in the Group’s location-based made tea carbon intensity, mainly due
to lower production in India. We are also pleased to observe that our Kenyan and Malawian tea
operations have continued to improve both thermal and electrical energy efficiency in their tea factories.
As mentioned above, the Group’s perennial crops sequester significant amounts of carbon. In last year’s
annual report, we reported that we conducted a study with Ricardo Plc to estimate the volume of carbon
sequestered by the Group’s key crops and managed forestry. Sequestration forms an integral part of the
Group’s ambitions to become net zero and we are assessing how to implement this.
67
362
4,408
4,087
1,202
2021
UK
UK GHG emissions and energy use data for the year to 31 December
Reporting year
Group sectors reported
Emissions from combustion of LPG and
Natural gas (Scope 1) (tCO2e)
Emissions from combustion of diesel and petrol for
transport and onsite combustion (Scope 1) (tCO2e)
Emissions from combustion of other fuels
(Scope 1) (tCO2e)
Emissions from fertilisers, waste, livestock, land use
change, and refrigerants (Scope 1) (tCO2e)
Emissions from purchase of electricity for own use
(Scope 2, location-based) (tCO2e)
Emissions from purchase of electricity for own use
(Scope 2, market-based*) (tCO2e)
Emissions from purchase of electricity, heat,
steam and cooling purchased for own use
(Scope 2, location- based) (tCO2e)
Emissions from business travel in rental cars or
employee-owned vehicles where company is
responsible for purchasing the fuel**(Scope 3) (tCO2e)
Total gross Scope 1 & Scope 2 emissions
(location-based) (tCO2e)
Total gross Scope 1 & Scope 2 emissions
(market-based) (tCO2e)
Energy equivalent from combustion of LPG and
Natural gas (Scope 1) (GWh)
Energy equivalent from combustion of diesel and
petrol for transport and onsite combustion
(Scope 1) (GWh)
Energy equivalent from combustion of other fuels
(Scope 1) (GWh)
Electricity purchased for own use (Scope 2) (GWh)
Energy equivalent from business travel in rental cars or
employee-owned vehicles where company is responsible
for purchasing the fuel (Scope 3) (GWh)
1.4
20.8
10,126
4,408
1,171
6,889
17.3
0.01
6.5
15
2020
UK
1,591
3,744
88
13
5,130
32
5,130
n/a
10,566
5,468
8.6
15.6
0.3
22.0
n/a
2019
UK
1,939
5,069
122
17
5,316
n/a
5,316
n/a
12,463
n/a
10.5
20.8
0.5
21.5
n/a
21
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 22
CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
* 2020 is the first reporting period for which we reported our Scope 2 market-based emissions. The increase in
market-based emissions in 2021 was primarily due to the inclusion of Bardsley England.
** 2021 is the first reporting period for which we reported our Scope 3 business travel in rental cars or employee-owned
vehicles.
Environmental certifications
A JT Engineering and ACS&T are ISO 14001 certified. The framework of which helps the entities improve
building energy efficiency, reduce waste streams, and increases awareness of potential environmental
risk factors. Many of our global operations are Rainforest Alliance certified and some are GlobalG.A.P.
certified.
Energy efficiency action taken
In the period covered by the report, the Group’s operations have implemented a range of energy
efficiency initiatives. We set out some of the key examples below:
Operation Energy Saving Initiatives
Expected Saving
per annum
(MWh)
Kenya
UK
Kenya
India
Installation of a heat exchanger to recycle hot air from the boiler
chimney, preheating the air entering driers at one of its tea factories
Installation of fast close doors at cold stores, reducing the amount of
ambient air flow
Variable speed drives fitted to air inlet fans on tea driers at four of its tea factories
Upgrading steam traps at one tea estate, reducing steam losses,
and increasing efficiency
680
600
249
230
In aggregate, we expect the above energy saving initiatives and several smaller initiatives to result in
2.3 GWh saving in energy per annum.
In addition, the Group is continuing with its programme of replacing existing energy sources with
renewable energy sources, amounting to an additional 227 MWh in 2021. The main initiatives to date
include the installation of solar generation at several operations in India, Bangladesh, Kenya and Brazil,
as well as the installation of hydro turbines in India. In the UK most sites are on green tariff electricity
contracts. The Group’s operations have also assessed potential energy efficiency initiatives that can be
implemented over the next five years. We set out examples of the key initiatives below:
Operation Energy Saving Initiatives
Malawi Replacing steel withering fans with lightweight alternatives
Malawi Introduction of more energy efficient driers at its tea factories
Kenya Improved fuelwood management and site suitability at all tea factories
Kenya Variable speed drives fitted to air inlet fans for tea driers
Kenya Installation of heat exchangers to recycle exhaust heat
Kenya Conversion of inefficient irrigation water pumps to energy efficient units
India Replacement of lighting with more energy efficient LED lighting
UK Replacement of the transport fleet with more fuel-efficient vehicles
UK Installation of fast close doors at cold stores, reducing the amount of ambient air flow
We expect the above initiatives to provide significant savings in energy over the next five years. The Group
will continue with its program of replacing existing energy sources with renewable energy sources where
possible. Our ultimate intention is to set energy use 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
22
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 23
CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
communities. To this end we are working with our supply chain, customers, national governments, trade
unions and NGOs to improve of the livelihoods of our employees and their communities.
Healthcare, education and housing
Healthcare, education and housing continue to be integral parts of the Group’s operations. For example,
the majority of our tea estates in India and Bangladesh have a hospital and a qualified doctor, in addition
to central referral hospitals owned and managed by the operations. Our African businesses 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. Across the
Group we continue to operate 50 hospitals and 85 dispensaries that we either own and/or operate. In
2021, the Group performed 880,000 patient treatments, of which 515,000 treatments were for Group
employees, at its hospitals.
In many of our operations we provide childcare and education to our employee’s families from nursery
up to secondary school. During the year we continued to run 178 nurseries and creches, 76 primary
schools and six secondary schools. In total we educated more than 32,000 children. In certain
circumstances, our operations will provide land or other resources to contribute to the running of local
schools which are not owned and/or operated by us.
We also provide housing to a large number of employees and their families. The housing is owned and
managed by our Group operations and is provided and maintained in line with widely recognised
international certifications. The Group owns c.48,000 houses accommodating c.291,000 people, of whom
c.67,000 are employed.
2021 continued to be a year impacted by the effects of the COVID pandemic. Our operations have made
significant efforts to provide safe working and living environments for our employees as well as the wider
communities in which we operate. More information on these initiatives is contained in our ESG report.
Human Rights
We are determined to promote the safeguarding of Human Rights across our Group and its supply
chains.
The Board has decided to enhance its governance and safeguarding oversight functions to comply with
the UN Guiding Principles on Business and Human Rights and has established a Safeguarding and
Stewardship committee which is further described on page 42. The purpose of the committee is to
promote the highest standards in protecting and promoting Human Rights across the Group and an
internationally respected firm of specialists has been appointed to enable our larger Group companies to
review their Human Rights positions and to assist them in making improvements where necessary. Our
Group wide Human Rights Policy and Social Code of Conduct is also designed to support Group
companies in their efforts to continually improve the development and operation of their individual
policies and procedures in this regard.
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
23
263134 Camellia R&A pp01-pp24.qxp 30/05/2022 19:10 Page 24
CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
Appendix to Environmental & Social report
SECR reporting methodology
The scope of the reporting for SECR purposes was determined by including the businesses in which the Group
owns majority holdings and/or fully operates. It includes GHG (Greenhouse Gas) emissions and energy use by
businesses that were divested during the reporting period up to the date of transfer of risk and reward
pertaining to those businesses. Similarly, it includes business that were acquired during the reporting period
from 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 by the Group’s reporting units. A reporting unit is defined as a geographically located operating
entity or group of entities. For example, the India group of companies is defined as one reporting unit. Within a
reporting unit distinction is made between different sites, field operations and factory operations.
The conversion and 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 (Defra), 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. For global (excluding UK)
market-based emissions in regions where renewable energy certificate (“REC”) systems are not developed,
market-based emission factors are calculated using location-based grid average emission factors. For UK
market-based emissions, where supplier specific emission rates could not be determined due to unavailability
of data, UK residual mix emission factors were used.
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.
The Scope 3 element pertaining to energy use and CO2e emissions from rental cars or employee-owned vehicles
where the company is responsible for purchasing the fuel or where the company reimburses the employee for
the fuel has been estimated based on an estimate of the kilometres travelled by employees under this category.
We did not estimate this category for prior years since its share of the Group’s total carbon footprint is relatively
immaterial.
24
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 25
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 2021 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 5 to 18. 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 16 to 18. 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
Environmental and Social report, and within the Report of the Directors.
Business model
The Group consists of operations engaged in Agriculture, Other Investments and Associates. These
operations are managed on a divisional basis with regular reports made to the Board on performance
against the annual budget. Each operation is expected to perform against an agreed strategy with goals
and targets for the short, medium and long-term. These are summarised below.
Agriculture
To focus on our tea, macadamia, avocado and newly acquired apple crops, where we have scale and
geographic diversity, and further maintain our portfolio of crops and products 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. Where appropriate opportunities arise, to add to our production capability in bearer plant
agriculture, as well as to make aligned acquisitions and investments to enable us to capture more of the
value chain.
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.
Other investments & Associates
A JT Engineering. To keep our presence in the oil services sector under review, in line with our strategy of
expansion in areas of expertise, while divesting in non-core businesses.
ACS&T. To keep our presence in the cold storage and transport sector under review in line with our Group
strategy to focus on core areas of expertise.
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. Maintain the existing portfolio and maximise returns from it. Part of the portfolio
may be sold to accelerate the Group’s investment in agriculture.
25
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 26
CAMELLIA PLC
STRATEGIC REPORT
Collections. The Group has collections of art, philately and manuscripts, part of which may be realised to
facilitate the increased focus on our core agricultural business.
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 172 statement should be read in conjunction with the Environmental and Social report, this
Strategic report, the Corporate Governance report and the Statement of Directors’ Responsibilities.
In performing their duty under section 172(1) (a) to (f) of the Companies Act 2006, Directors have acted in
a way that they have considered, in good faith, to promote the success of the Group as a whole, whilst
carefully considering the interests of shareholders and other stakeholders which have an impact on the
long-term success and sustainability of the Group, including suppliers, customers, employees, the
communities in which the Group operates and the impact on the environment.
Long-term
The Board has undertaken a series of measures aimed at re-balancing the Group’s portfolio of
investments in order to take better advantage of its strengths, and thereby to improve profitability. This
included investment in social and environmental initiatives, in particular, to mitigate the impact of climate
change. These measures include accelerating agricultural diversification and divesting of certain assets
which we consider to be non-core, details of which are covered elsewhere in this report. Key risks,
potential impact and mitigations are included in the “Principal Risks and Uncertainties” section below.
Stakeholders
The Board recognises the value of stakeholder relationships and the key role that these play in the
Group’s sustainability and success over the longer term. Good progress has been reported from the
Safeguarding and Stewardship committee as it continues to support members of the Group in initiatives
to protect and promote Human Rights and a peaceful, long-term and mutually beneficial relationship
between the activities of businesses within the Group and the communities affected by them. Many
environmental and social initiatives are initiated by staff in our operations each year, which we highlight
on our website, various social media platforms and in the Group’s ESG report. Further information can be
found in the Environmental and Social report.
In order to track progress made, and in line with our culture of ongoing feedback, a second annual
employee engagement survey, Your Voice, was undertaken during 2021. The survey gathered anonymous
and open feedback from employees to support local management decisions as well as to provide Board
insights. All employees in the UK were invited to respond, including from Bardsley England. Key questions
from the survey were also put to a proportion of employees in our largest companies outside of the UK,
which provided further insight. The results of the survey are continuing to be used to plan key initiatives and
track progress on key areas such as recognition, development, leadership, mental health and wellbeing and
feedback on how employees feel their company has continued to respond to the COVID pandemic. The
positive trends identified included confidence in the communications and working practices related to the
COVID pandemic, understanding of company goals and values and how individual performance contributes
to the success of the Group. Opportunities to improve were agreed in partnership with employees at a
company level and examples include continued clear and open communication, ongoing performance
management and feedback, and a continued focus on learning and development. Your Voice will be
repeated in 2022 to continue the momentum of ongoing employee feedback.
We have worked closely with our suppliers and customers to manage the challenges and disruption
caused by the COVID pandemic and have continued to develop our relationship with these stakeholders
across our operations through consistent engagement and regular meetings.
26
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 27
CAMELLIA PLC
STRATEGIC REPORT
Further examples of how the views of stakeholders are provided to the Board include the annual cycle of
information from management reporting, committees and meetings and operational visits in the UK and
abroad. The Board conducts regular reviews of how to continue to engage effectively with stakeholders
and there is on-going dialogue between members of the Board and stakeholders.
Principal risks and uncertainties
There are a number of possible risks and uncertainties that could impact the Group’s operations. The
Group regularly monitors these risks at operational and Group level, i.e. operational risks are raised by
the operations directly to members of the Strategy group; Group risks are reviewed by the Group General
Counsel and raised to the Audit committee; and risks considered and raised to the Strategy group are
further raised to the Board. Information on the Group’s financial risks is disclosed in note 42 of the
Accounts.
Material risks relating to the Group’s principal operations, with additions and updates for 2021, are noted
in the table below. Whilst there has been a decrease in the overall risk and potential impact to the Group
in relation to UK and Overseas Pensions, Legal & Regulation and prolonged impact of a pandemic, the
Group considers that there has been an increase in overall risk and potential impact in relation to the cost
of production (increased cost of fuel and fertiliser) and from the war in Ukraine. The overall materiality of
individual risks or magnitude of impact on the Group as a whole in other areas has not changed
significantly from the previous year.
Agriculture
Risk
Climate change
Price volatility
Currency
fluctuation
Cost of
production
Potential Impact
Mitigation
Current agricultural patterns and practices
become unsustainable.
Land values and local communities are
impacted.
Flooding/drought/frost affecting crop
yields.
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.
Profit volatility arising from sales in US
Dollars and Euros where there is no
natural hedge against the cost of
production in local currency.
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.
Investment in sustainable water solutions,
soil management, energy saving initiatives
and renewable energy sources.
Use of forward contracts, product and
crop diversification and building long-term
strategic relationships with key customers.
Monitoring of foreign exchange rates and
cash management.
Increased wage costs, cost of inputs and
other costs of production resulting in
lower profitability.
Introduction of more efficient working
practices and the increased use of
mechanisation and automation.
Wage costs and inputs have been included
in 2021.
Securing fertiliser and chemical supply
contracts in advance of delivery
requirement has been included in 2021.
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 changes to local land
legislation with the assistance of lawyers
and local trade associations. Maintaining
collaborative relationships with
governments at local and national levels.
27
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 28
CAMELLIA PLC
STRATEGIC REPORT
Agriculture (continued)
Risk
Potential Impact
Mitigation
Periodic interruptions to the operation of
the businesses at a local level.
Increasing security for our workers and
operations during times of civil unrest.
Supply chain disruption, lack of availability
of key inputs.
Maintain market supply options and
carrying buffer stocks.
Reduced demand for products.
Maintaining diverse customer base.
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.
Adverse impact on financial results from
legal and reputational costs. Media and
political pressure impacting operations or
customers preparedness to buy products.
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.
The following has been updated in 2021:
Understanding the salient Human Rights
risks (via audits and assessments).
Implementing measures to mitigate and
prevent such risks from crystalising.
Provide on-going training and raising
awareness across the Group and
communities.
Strengthening governance protocols, by
way of policies and increased reporting.
Providing appropriate mechanisms to
bring forward any allegations and redress
(such as whistleblowing and operational-
level grievance mechanisms).
Mitigation
Diversification of the customer base and
careful customer relationship
management.
AJT Engineering
Risk
Potential Impact
Losing a major customer.
Changes in market conditions leading to
lower demand for services.
Diversification into other sectors. Close
monitoring of the oil and gas sector.
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.
Civil unrest,
political
instability and
war
War has been
included as a
potential risk
in 2021
Corruption
Health and
safety
Human Rights
(current and
historic)
Key customer
dependence
Dependence on
the oil and gas
sector
Health and
safety
28
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 29
CAMELLIA PLC
STRATEGIC REPORT
ACS&T
Risk
Key customer
dependence
Health and
safety
Potential Impact
Mitigation
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.
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.
Investments & Associates
Risk
Potential Impact
Market
Decline in the value of investments and
property.
Risk of substantial claims materially
reducing profits.
Mitigation
Portfolio diversification, careful stock
selection, the regular monitoring of
individual company stock performance
and a diversified property portfolio.
Maintaining strong capital base and use of
underwriting and reinsurance to
reduce risk.
Adverse
weather
events in the
Caribbean
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
Potential Impact
Mitigation
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.
Implementation of contingency plans.
Cost reduction and cash management
measures.
Ongoing monitoring of banking partners
and country credit ratings.
The following has been updated in 2021:
Regular monitoring of the funding
position of the pension schemes and their
investment performance. Improvement
to the investment strategy and hedging
key exposures when appropriate.
Changes in local
laws restricting the
investment choices
for the schemes’
assets
29
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 30
CAMELLIA PLC
STRATEGIC REPORT
Group (continued)
Risk
Potential Impact
Environmental
Contamination of local and wider
environment due to the use of machinery
and chemicals. Payment of fines and
claims, criminal prosecutions and
reputational damage.
Mitigation
Strict compliance with legislation, training
employees to adopt safe working
practices and lessen the impact on the
environment.
Proactively seek to reduce our 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 legal risk in relation to the activities
of overseas operations (including potential
litigation in the UK) and incurring costs in
relation to the same.
The following has been updated in 2021:
Monitoring the interpretation of law and
taking appropriate advice and monitoring
and auditing compliance with new
developments.
Loss or theft of data.
Developing our technology systems.
Interruption to services for customers and
the business.
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.
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
Legal &
Regulation
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
30
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 31
CAMELLIA PLC
STRATEGIC REPORT
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 periodically 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 High-level GPPs
n
Compliance GPPs
n Modern Slavery GPP
n
Tax Principles
The High-level GPPs comprise the Certification and Traceability GPP, the Health and Safety GPP, the
Environment GPP, the Employee Welfare GPP and Social Code of Conduct 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.
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, many operations have also obtained ISO14001, ISO9001 and ISO45001 and
many other appropriate accreditations, such as Red Tractor for our Bardsley England operation.
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.
31
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 32
CAMELLIA PLC
STRATEGIC REPORT
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.
Social code of conduct
As an international Group, we have interests in companies in various countries with very different levels
of income and education. We believe that it is critical that we respect the cultures of the people of those
countries but we also recognise the important role our Group companies and their suppliers play in
helping us to source sustainably and responsibly. Our social code of conduct (‘Code’) provides the
foundation for our engagement with our Group and its supply chains. It sets out our broad expectations
for their independently-developed policies and procedures regarding basic compliance with applicable
law, respect for the workforce and their Human Rights, environmental management and anti-corruption.
Human Rights
We respect and support Group companies’ efforts to respect the dignity, wellbeing and Human Rights of
the Group’s employees, the communities in which the Group operates and those who may be impacted
by the Group’s operations. Our commitment to respecting internationally recognised Human Rights in
line with the principles and guidance contained in the UN Guiding Principles on Business and Human
Rights is set out in our Human Rights Policy, which underpins principles of internationally recognised
Human Rights as relevant to our Group’s operations, including those set out in the International Bill of
Human Rights and the International Labour Organisation’s Declaration on Fundamental Principles and
Rights at Work and OECD Guidelines for Multinational Enterprises. We recognise that while states have a
duty to protect Human Rights, companies have a responsibility to respect Human Rights and this means
acting with due diligence to avoid infringing the Human Rights of others and addressing the adverse
impacts companies may have caused, be connected to, or be linked to.
Respecting Human Rights is not only important to us and Group employees but is of importance to all of
our shareholders, investors, customers, consumers, the communities where the Group operates and civil
society groups. There is both a business and a moral case for supporting the promotion of Human Rights
across the Group and its supply chain and our Group-wide Human Rights Policy is therefore designed to
support Group companies in their development and operation of policies and procedures addressing
these standards. We understand that Human Rights often compete, and that the resolution of these
conflicts may be impossible for Group companies to achieve to everyone’s satisfaction. We also
understand that no amount of work on the part of the Group in promoting Human Rights can wholly
eradicate the risk of Human Rights being breached by someone intent on causing harm, or careless as to
whether harm is caused. We therefore recognise this is a journey and that our performance will evolve as
we mature our practices. Despite the possibility of imperfect outcomes we will continuously seek to
improve our Human Rights efforts.
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.
32
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 33
CAMELLIA PLC
STRATEGIC REPORT
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.
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 2021 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 profit and operating performance information,
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.
For Associates, the Board receives revenue and profitability information when those companies release
information to their respective shareholders.
Certain of the key financial performance indicators are included in the Operational report on pages 7 to 15.
Non-financial performance indicators
Operations have developed non-financial KPIs that are relevant to it, these are regularly monitored and
include:
n Market trends – including tea auction volumes, demand for each product by country where available,
supply data and market prices
33
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 34
CAMELLIA PLC
STRATEGIC REPORT
n Health & Safety – including days lost to injury, number of accidents and fatalities, whistleblowing
incidents and updates to legislation
n Grievances – including employee, welfare and social issues
n
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
Changes in key personnel – including promotions, resignations and retirements of senior
management
n Weather and climate – including rainfall, temperatures and long-term meteorological trends
The Board, or the Strategy group (as appropriate), considers such KPIs by exception where local
operations notify that significant material issues have emerged.
Employees
Employees are kept informed on matters affecting them and the performance of the Group by their local
management as well as through internal publications, the Camellia Plc website, social media and
operational visits. A new communication tool was implemented at the Camellia Head Office and two UK
companies in 2021, which provides a portal of news, updates, policies and social media feeds, as well as
the opportunity to book annual leave and access key work related information on an automated system.
Kenyan and Indian operations have social media platforms which support employee engagement and
Kakuzi uses YouTube videos to communicate news and information about staff and their roles within the
operation.
As set out in the Group’s Employee Welfare Policy, operating companies give due consideration to
employment applications received from disabled persons and 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 on 31 December
2021.
Men
9
65,229
Women
1
72,931
Company Directors
All employees
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
34
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 35
CAMELLIA PLC
REPORT OF THE DIRECTORS
The Directors present their report together with the audited consolidated accounts for the year ended
31 December 2021.
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:
n
Agriculture
n Other Investments and Associates
Fostering business relationships is of paramount importance to the Directors, as set out in the s172
Statement in the Strategic report. Further details of the Group’s activities are included in the Strategic
report and the Operational report.
Results and dividends
The profit after tax for the year amounted to £4.5 million (2020: loss after tax £0.8 million). The Board is
proposing a final dividend for the year 2021 of 102p per share payable on 29 July 2022 to holders of the
ordinary shares registered at the close of business on 8 July 2022. Therefore, the total dividend payable
for 2021 is 146p per share (2020: 144p 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
2021
1 January
2021
1,673
200
220
1,673
200
220
Under the Company’s articles of association all the Directors are required to retire annually. Accordingly,
Malcolm Perkins, Susan Walker, Graham Mclean, Frédéric Vuilleumier, Simon Turner and Stephen
Buckland will retire and, being eligible, will seek re-election at the forthcoming Annual General Meeting
(“AGM”). Tom Franks, William Gibson and Gautam Dalal have indicated that they do not wish to stand for
re-election at the AGM. Rachel English was appointed as an independent non-executive Director effective
from 6 May 2022 and will seek election to the Board at the AGM.
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, a member of the
Safeguarding and Stewardship committee and Chairman of the Nomination committee.
Tom Franks, a chartered accountant, was appointed as Chief Executive with effect from 1 September
2015. He joined Camellia as Deputy Chief Executive in October 2014.
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.
35
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 36
CAMELLIA PLC
REPORT OF THE DIRECTORS
Non-executive Directors
William Gibson was appointed as an independent non-executive Director in September 2014 and was
appointed as the senior independent non-executive director in September 2021. 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, 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 was
appointed chairman of the Audit committee in September 2021.
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. He became
a member of the Remuneration and Nomination committees in September 2021.
Stephen Buckland was appointed as a non-executive Director in November 2021. He previously held
positions within the Camellia Group’s agricultural and banking businesses. He is a trustee of two
charities: The Sir Percival Griffiths’ Tea Planters Trust and The Camellia Foundation, a UK charity whose
primary donor of the same name is the ultimate majority shareholder of Camellia Plc. He became a
member of the Audit committee in December 2021.
Rachel English was appointed as an independent non-executive Director in May 2022. She is a chartered
accountant and has extensive international and general management experience, having founded and
served on the board of several significant businesses, including as chair of Acacia, a FTSE 250 company,
and previously served on the audit committee of the UK Department for International Development.
She has substantial experience and interest in ESG matters.
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 May 2022 the Company has been advised of the following interests in its share capital:
Shareholder
Camellia Holding AG
Fide Holding NV
Quaero Capital SA
No. of Shares
% of total
voting rights
1,427,000
360,500
151,098
51.67
13.05
5.47
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.
36
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 37
CAMELLIA PLC
REPORT OF THE DIRECTORS
At the AGM in 2021, 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 19 to 24.
Employees & stakeholders
The Directors have had regard to the need to foster the Company’s business relationships with
employees, suppliers, customers and others, and the effect of that regard, including on the principal
decisions taken by the Company during the financial year. Details in relation to employees and
stakeholders are set out in the s172 Statement on page 26 and the Employee section on page 34.
R&D
The Group invests in research and development projects within its operations in order to improve
efficiency and grow revenues. In Kenya, Malawi and India technical departments are focussed on various
projects to improve harvesting efficiency, pest and disease identification and control, energy efficiency
and implement colour sorting technology. New agricultural technologies are also being trialled where
possible, including the use of drones, robotics and automated manufacturing systems.
We continue to collaborate with various organisations, for example, the Cambridge Environmental
Sustainability Strategy committee and working with the Gatsby Foundation on potential value-added
ventures. In Kenya we use precision specification eucalyptus trees for furniture and other construction
applications. In Kenya we are running a commercial blueberry trial to evaluate the viability of different
varieties. In Brazil, research and development is ongoing into water saving irrigation systems, and
satellite imaging for soil, nutrient and crop profiling help to identify climate impact and plant nutrient
requirements. These initiatives will help to inform our decisions on the implementation of precision
farming technologies.
Future development
Details of future developments are set out in the Operational report and the Strategic 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 7 to 15.
The Directors considered the impact of the current COVID environment and the Ukraine conflict on the
business for the next 15 months.
37
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 38
CAMELLIA PLC
REPORT OF THE DIRECTORS
The Directors 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 two
years, we expect our Agriculture businesses will continue to operate broadly as currently. In the UK we
have assumed that the food service market recovers gradually over the course of the next year.
At 31 December 2021, the Group had cash and cash equivalents net of borrowings of £54.0 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 £40.2 million.
The Directors have modelled various severe but plausible scenarios using assumptions including the
combined effect of reduced sales volumes for tea, reduced avocado exports, reduced sales volumes for
macadamia and reduced partner grower apple volumes during 2022. 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 2022 for our tea,
macadamia and avocado crops combined with higher than expected energy and fertiliser costs across
all operations.
Historically in the Tea division 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 and 2021 and in
Bangladesh in 2021. However, for prudence for the purposes of our downside scenario planning we
have not reflected increased selling prices for tea nor any significant mitigating reductions to our
operating cost base in our tea operations. We have however assumed that in certain scenarios aspects
of our investment programme would be curtailed.
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 39 to 43.
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
30 May 2022
38
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 39
CAMELLIA PLC
CORPORATE GOVERNANCE
Statement of compliance
The Company is committed to complying with the Quoted Companies Alliance’s (“QCA”) 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. The table on our website sets out how we comply with the ten principles of
the QCA Code.
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 as set out on
page 4. The remaining Directors are executive Directors, including the Chairman. William Gibson has been
designated as the senior independent non-executive Director. The names and brief biographical details of
each Director appear on pages 35 and 36. Following the decision of three Directors not to stand for
re-election at the AGM, a recruitment process is underway.
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 Board 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 13 times in 2021.
Attendance by Directors at Board and committee meetings held during the year was as follows:
Director
Audit Remuneration*
Board
Nomination
Malcolm Perkins
Chris Relleen
Tom Franks
Graham Mclean
Susan Walker
William Gibson
Frédéric Vuilleumier
Gautam Dalal
Simon Turner
Jonathan Bond
Stephen Buckland
13/13
8/13
13/13
13/13
13/13
12/13
13/13
13/13
13/13
5/13
2/13
–
1/3
–
–
–
3/3
–
3/3
–
–
1/3
–
0/3
–
–
–
2/3
–
–
2/3
–
* Where a meeting was not quorate, decisions were raised to and approved by the Board.
1/1
-
–
–
–
1/1
–
–
1/1
–
39
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 40
CAMELLIA PLC
CORPORATE GOVERNANCE
Board evaluation
An internal review, led by the Company Secretary and the Chairman, was undertaken this year. This was
based upon a series of questions and each Director had the opportunity to contribute and challenge,
which enabled a constructive and quality debate during Board meetings. In order to enhance and further
strengthen the Board, the decision was taken to appoint a new independent non-executive Director.
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 the UK businesses, the Group General Counsel, the UK
Investment Manager and the UK Head of Human Resources.
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 Simon Turner.
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 appointment of Stephen Buckland. Other
matters were raised to and approved by the Board.
Audit committee
The committee is chaired by Gautam Dalal (Chris Relleen chaired the committee up to 5 August 2021).
The other members of the committee during the year were Stephen Buckland and William Gibson. During
2021, 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
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
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:
40
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 41
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 potential impact of the pandemic
and the conflict in Ukraine 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
The valuation of the pension schemes obligations is conducted by independent actuaries and due to the
size of the obligation a relatively minor change to the assumptions made 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.
Accounting for the acquisition of Bardsley England
A detailed exercise was undertaken to identify and allocate a fair value to the separately identifiable
assets and liabilities relating to the Bardsley England business at the date of acquisition. The committee
considered the assumptions made and concluded that the basis of allocation of the purchase price to the
assets and liabilities acquired was appropriate.
Carrying value of intangible assets
The Group’s carrying values 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. In particular
consideration was given to the uncertainties regarding timing of recovery from the impact of COVID and
the range of future revenue growth rates for Jing.
The carrying value of the goodwill relating to Bardsley England which arose on the acquisition of that
group of companies during 2021 was also considered in context of the future expectations of growth
rates for partner grower volumes and the potential impact of inflation on margins.
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 the £0.5 million impairment in respect of Abbey
Metal Finishing, no impairment provisions were 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 the carrying value of certain of the Indian
and Bangladeshi estates in the context of COVID impacts on trading and third party valuations and
agreed that no impairment had occurred during the year.
Carrying value of BF&M
The Group’s carrying value of BF&M was lower than the share price for BF&M at 31 December 2021. 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 expected control premium associated with our holding concluded
that no impairment is required.
Provisions
The bases of provisions for material uncertain tax situations were considered by the committee as were
the provisions for wage increases in Bangladesh and India. Consideration was given to the accounting
implications of the recent VAT assessment in Malawi and management’s judgement that it should
continue to be disclosed as a contingent liability. The committee is satisfied that the provisions represent
best estimates of the likely liabilities.
41
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 42
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 Simon Turner (Chris Relleen was a
member up to 5 August 2021).
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 45 to 46.
Safeguarding & Stewardship committee
The Safeguarding and Stewardship committee has continued to promote its mission of 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
Malcolm Perkins and Amarpal Takk. Louise Nicholls and Vinita Singh are independent members of the
committee. Louise is the managing director of a Human Rights and sustainability management
consultancy in the UK, prior to which she was the head of sustainability for a large UK supermarket and
Vinita has previously worked on empowering individuals and workers within supply chains based in India
and across a variety of sectors, including helping businesses to understand how they can contribute to
improving working conditions.
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.
42
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 43
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 at the operational level. 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
30 May 2022
43
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 44
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 United Kingdom adopted 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. The Directors have also chosen to prepare
the parent company financial statements under United Kingdom adopted international accounting
standards. 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 IFRSs, 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
This responsibility statement was approved by the Board of Directors on 30 May 2022.
Malcolm Perkins
Chairman
30 May 2022
44
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 45
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 42.
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 2020 AGM and applies for a period of
three years until 2023. The committee considers any views expressed by shareholders on Directors’
remuneration.
At the AGM on 3 June 2021, the Remuneration Report for the year to 31 December 2020 was approved by
shareholders with 99.90% of the votes cast in favour, 0.03% of the votes cast against and 508 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.
45
263134 Camellia R&A pp25-pp46.qxp 30/05/2022 19:11 Page 46
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 (up to 31 August 2021)
Frédéric Vuilleumier
Gautam Dalal
Simon Turner
Jonathon Bond (up to 3 June 2021)
Stephen Buckland (from 1 November 2021)
Total
Remuneration
2021
£
2020
£
Benefits in Kind
2021
£
2020
£
Total
2021
£
2020
£
200,560
611,820
373,890
402,215
261,006
611,820
373,890
402,215
11,525
38,269
28,010
29,792
15,140
38,453
28,057
29,866
212,085
650,089
401,900
432,007
276,146
650,273
401,947
432,081
50,470
53,470
54,590
36,393
51,500
51,500
47,380
49,047
38,815
47,380
38,815
21,573
–
7,897
––––––––
––––––––
1,855,745 1,930,501
––––––––
––––––––
–
–
–
–
–
–
–
––––––––
107,596
––––––––
50,470
53,470
–
54,590
36,393
–
51,500
51,500
–
47,380
49,047
–
38,815
47,380
–
38,815
21,573
–
–
7,897
–
––––––––
––––––––
––––––––
111,516 1,963,341 2,042,017
––––––––
––––––––
––––––––
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) Gautam Dalal 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 and the
Safeguarding and Stewardship committee
Directors’ pensions
Malcolm Perkins received no payment for pensionable service during 2021. Tom Franks, Graham Mclean
and Susan Walker receive an excess non-pensionable salary supplement equivalent to 10% of base salary.
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
46
263134 Camellia R&A pp47-pp53.qxp 30/05/2022 19:12 Page 47
CAMELLIA PLC
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2021
2021 2020
Separately Separately
Adjusted disclosed Adjusted disclosed
profit items profit items
(note 4) (note 4) (note 4) (note 4)
Notes £’m £’m £’m £’m £’m £’m
Continuing operations
Revenue 2 277.2 – 277.2 291.2 – 291.2
Cost of sales (215.7) 0.3 (215.4) (227.7) – (227.7)
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Gross profit 61.5 0.3 61.8 63.5 – 63.5
Other operating income 2.6 – 2.6 3.0 – 3.0
Distribution costs (14.5) – (14.5) (16.2) – (16.2)
Administrative expenses 3 (47.6) (1.4) (49.0) (43.4) (16.1) (59.5)
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Trading profit/(loss) 1,3 2.0 (1.1) 0.9 6.9 (16.1) (9.2)
Share of associates' results 5 7.2 – 7.2 6.1 – 6.1
Profit on disposal of
property, plant and equipment 6 – – – 14.4 14.4
Impairments of intangible assets,
investment properties and
property, plant and equipment 7 – (0.5) (0.5) – (6.5) (6.5)
Loss on disposal of subsidiaries – (0.1) (0.1) – – –
Profit on disposal of financial assets 0.2 - 0.2 0.2 – 0.2
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Operating profit 9.4 (1.7) 7.7 13.2 (8.2) 5.0
Investment income 0.5 – 0.5 0.6 – 0.6
Finance income 8 2.2 – 2.2 2.3 – 2.3
Finance costs 8 (2.9) – (2.9) (1.6) – (1.6)
Net exchange gain 8 0.4 – 0.4 2.2 – 2.2
Employee benefit expense 8 (0.8) – (0.8) (0.7) – (0.7)
Net finance (costs)/income 8 (1.1) – (1.1) 2.2 – 2.2
–––––––––– –––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
Profit before tax 8.8 (1.7) 7.1 16.0 (8.2) 7.8
Taxation 9 (2.6) (8.6)
–––––––––– ––––––––––
Profit/(loss) after tax 4.5 (0.8)
–––––––––– ––––––––––
Profit/(loss) attributable to:
Owners of Camellia Plc 2.3 (5.0)
Non-controlling interests 2.2 4.2
–––––––––– ––––––––––
4.5 (0.8)
–––––––––– ––––––––––
Earnings/(loss) per share –
basic and diluted 12 83.3p
(181.0)p
47
263134 Camellia R&A pp47-pp53.qxp 30/05/2022 19:12 Page 48
CAMELLIA PLC
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2021
Group
Profit/(loss) for the year
Notes
2021
£’m
2020
£’m
4.5
–––––––––––
(0.8)
–––––––––––
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 for the financial assets disposed
Corporation tax arising on financial asset disposals before
utilisation of losses
Unwind of deferred tax on financial assets
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
22
35
34
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences
Share of other comprehensive income of associates
Other comprehensive income/(expense) for the year, net of tax
Total comprehensive income/(expense) for the year
Total comprehensive income/(expense) attributable to:
Owners of Camellia Plc
Non-controlling interests
Company
Profit for the year
Total comprehensive income for the year
1.0
(2.2)
2.2
0.8
–
20.4
(0.3)
–
–
2.3
(0.7)
4.3
(3.9)
–––––––––––
18.3
–––––––––––
0.6
–––––––––––
6.2
–––––––––––
(4.0)
0.2
–––––––––––
(3.8)
–––––––––––
14.5
–––––––––––
19.0
–––––––––––
18.4
0.6
–––––––––––
19.0
–––––––––––
(22.6)
0.3
–––––––––––
(22.3)
–––––––––––
(16.1)
–––––––––––
(16.9)
–––––––––––
(16.6)
(0.3)
–––––––––––
(16.9)
–––––––––––
6.5
–––––––––––
6.5
–––––––––––
4.5
–––––––––––
4.5
–––––––––––
48
263134 Camellia R&A pp47-pp53.qxp 30/05/2022 19:12 Page 49
CAMELLIA PLC
CONSOLIDATED BALANCE SHEET
at 31 December 2021
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
Financial asset at fair value through profit or loss
Financial assets at amortised cost
Current income tax assets
Cash and cash equivalents (excluding bank overdrafts)
Assets classified as held for sale
Total current assets
LIABILITIES
Current liabilities
Financial liabilities - borrowings
Lease liabilities
Trade and other payables
Current income tax liabilities
Employee benefit obligations
Provisions
Liabilities related to assets classified as held for sale
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
2021
£’m
2020
£’m
15
16
17
18
19
21
22
23
24
25
35
27
26
19
27
23
24
28
29
31
32
30
35
33
29
31
32
34
35
36
10.1
202.1
28.8
23.1
13.4
72.6
27.7
7.2
1.3
8.7
14.8
2.7
–––––––––––
412.5
–––––––––––
51.7
7.8
48.5
2.7
1.3
0.6
61.8
–––––––––––
174.4
6.6
–––––––––––
181.0
–––––––––––
(3.3)
(3.2)
(59.2)
(3.0)
(1.1)
(11.8)
–––––––––––
(81.6)
(2.0)
–––––––––––
(83.6)
–––––––––––
97.4
–––––––––––
509.9
–––––––––––
(4.5)
(21.5)
(38.0)
(8.6)
–––––––––––
(72.6)
–––––––––––
437.3
–––––––––––
0.3
15.3
373.0
–––––––––––
388.6
48.7
–––––––––––
437.3
–––––––––––
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
–
–––––––––––
198.5
–––––––––––
(5.7)
(1.2)
(50.9)
(10.3)
(1.1)
(19.0)
–––––––––––
(88.2)
–
–––––––––––
(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
–––––––––––
49
263134 Camellia R&A pp47-pp53.qxp 30/05/2022 19:12 Page 50
CAMELLIA PLC
COMPANY BALANCE SHEET
at 31 December 2021
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
Cash and cash equivalents
Assets classified as held for sale
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
2021
£’m
2020
£’m
20
25
27
28
29
30
33
34
36
73.5
8.8
–––––––––––
82.3
–––––––––––
0.2
0.1
1.9
0.7
–––––––––––
2.9
2.1
–––––––––––
5.0
–––––––––––
(0.9)
(16.6)
–
–––––––––––
(17.5)
–––––––––––
(12.5)
–––––––––––
69.8
–––––––––––
(0.2)
–––––––––––
(0.2)
–––––––––––
69.6
–––––––––––
0.3
15.3
54.0
–––––––––––
69.6
–––––––––––
73.5
11.0
–––––––––––
84.5
–––––––––––
0.6
0.1
2.2
–
–––––––––––
2.9
–
–––––––––––
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
–––––––––––
The profit for the company is shown in note 10.
The notes on pages 54 to 124 form part of the financial statements.
The financial statements on pages 47 to 124 were approved on 30 May 2022 by the board of Directors
and signed on their behalf by:
M C Perkins
Chairman
Registered Number 00029559
50
263134 Camellia R&A pp47-pp53.qxp 30/05/2022 19:12 Page 51
CAMELLIA PLC
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2021
Cash generated from/(used in) operations
Cash flows from operating activities
Interest received
Interest paid
Income taxes paid
Net cash flow from operating activities
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
Proceeds from sale of heritage assets
Additions to investment property
Biological assets: non-current - disposals
Payment for acquisition of a businesses/subsidiary net of cash acquired
Purchase of non-controlling interest
Investment in associates
Dividends received from associates
Purchase of investments
Proceeds from sale of investments
Income from investments
Net cash flow from investing activities
Cash flows from financing activities
Equity dividends paid
Dividends paid to non-controlling interests
New loans
Loans repaid
Payments of lease liabilities
Net cash flow from financing activities
Net (decrease)/increase 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
Notes
37
39
39
38
38
38
28
28
2021
£’m
2020
£’m
1.9
2.1
(2.9)
(13.1)
–––––––––––
(12.0)
–––––––––––
–
(10.7)
0.7
–
0.1
(0.9)
0.5
(3.7)
(5.9)
–
3.0
(8.9)
21.3
0.5
–––––––––––
(4.0)
–––––––––––
(5.2)
(1.9)
3.8
(13.1)
(2.0)
–––––––––––
(18.4)
–––––––––––
(34.4)
94.9
(0.6)
–––––––––––
59.9
–––––––––––
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
–––––––––––
For the purposes of the cash flow statement, cash and cash equivalents are included net of overdrafts
repayable on demand.
51
263134 Camellia R&A pp47-pp53.qxp 30/05/2022 19:12 Page 52
CAMELLIA PLC
COMPANY CASH FLOW STATEMENT
for the year ended 31 December 2021
Cash generated from operations
Profit before tax
Adjustments for:
Interest income
Dividends from group companies
Decrease/(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
Proceeds from sale 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
Notes
2021
£’m
2020
£’m
10
6.5
4.5
(0.3)
(8.0)
0.4
0.1
(1.9)
0.8
–––––––––––
(2.4)
0.3
–––––––––––
(2.1)
–––––––––––
0.1
8.0
–––––––––––
8.1
–––––––––––
(5.3)
–––––––––––
(5.3)
–––––––––––
0.7
–
–––––––––––
0.7
–––––––––––
(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)
–––––––––––
–
–
–––––––––––
–
–––––––––––
28
28
52
263134 Camellia R&A pp47-pp53.qxp 30/05/2022 19:12 Page 53
CAMELLIA PLC
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Share
capital premium
£’m
Share Treasury Retained
earnings
shares
£’m
£’m
£’m
Notes
Other
reserves
£’m
Non-
controlling
interests
£’m
Total
£’m
Total
equity
£’m
0.3
–
15.3
–
(0.4)
–
358.6
(5.0)
21.9
–
395.7
(5.0)
56.7
4.2
452.4
(0.8)
11
–
–
–
–
–
–
5.3
(2.8)
(16.9)
–
(11.6)
(2.8)
(4.5)
(7.0)
(16.1)
(9.8)
Group
At 1 January 2020
Loss for the year
Other comprehensive
income/(expense) for the year
Dividends
Share of associate's
other equity movements
–
–––––––
0.3
–
–
–––––––
15.3
–
–
–––––––
(0.4)
–
0.3
–––––––
356.4
2.3
–
–––––––
5.0
–
0.3
–––––––
376.6
2.3
–
–––––––
49.4
2.2
0.3
–––––––
426.0
4.5
At 31 December 2020
Profit for the year
Other comprehensive
income/(expense) for the year
Transfer of realised gains
on disposal of financial assets
Dividends
Companies joining the Group
Adjustment arising from change in
non-controlling interest – – – (1.4) – (1.4) 1.4 –
(11.0)
–
–
11.0
(5.2)
–
–
(1.9)
5.3
–
(5.2)
–
–
(7.1)
5.3
11
39
13.8
14.5
(1.6)
16.1
2.3
–
–
–
–
–
–
–
–
–
–
–
–
Purchase of
non-controlling interests
At 31 December 2021
Company
At 1 January 2020
Profit for the year
Other comprehensive
income for the year
Dividends
39
–
–––––––
0.3
–––––––
–
–––––––
15.3
–––––––
–
–––––––
(0.4)
–––––––
0.2
–––––––
377.1
–––––––
–
–––––––
(3.7)
–––––––
0.2
–––––––
388.6
–––––––
(6.1)
–––––––
48.7
–––––––
(5.9)
–––––––
437.3
–––––––
0.3
–
15.3
–
–
–
39.1
4.5
12.1
–
66.8
4.5
–
–
66.8
4.5
At 31 December 2020
Profit for the year
Other comprehensive income
for the year – – – – – – – –
–
–
–––––––
0.3
–
–
–
–––––––
15.3
–
–
–
–––––––
–
–
–
(2.9)
–––––––
40.7
6.5
–
–
–––––––
12.1
–
–
(2.9)
–––––––
68.4
6.5
–
–
–––––––
–
–
–
(2.9)
–––––––
68.4
6.5
11
Dividends
At 31 December 2021
11
–
–––––––
0.3
–––––––
–
–––––––
15.3
–––––––
–
–––––––
–
–––––––
(5.3)
–––––––
41.9
–––––––
–
–––––––
12.1
–––––––
(5.3)
–––––––
69.6
–––––––
–
–––––––
–
–––––––
(5.3)
–––––––
69.6
–––––––
In relation to the reserves of the Company, £41.9 million is distributable. Other reserves of the Company
include capital redemption and revaluation reserves.
Other reserves of the Group include fair value reserves and net exchange differences of £53.5 million deficit
(2020: £50.8 million deficit).
Group retained earnings includes £162.1 million (2020: £157.3 million) which would require exchange control
permission for remittance as dividends.
53
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 54
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 United Kingdom adopted
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 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 the current year, Jing Tea has been included in agriculture instead of food service and
comparative figures in note 1 have been adjusted. This reclassification 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.
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. Subsidiaries are those
entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns through its power over the entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
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. Any difference that arises from the acquisition of
additional shares of an already consolidated subsidiary is taken directly to equity.
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.
54
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 55
CAMELLIA PLC
ACCOUNTING POLICIES
Foreign currency translation
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on
the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date.
Translation differences on non-monetary items carried at fair value are reported as part of the fair value
gain or loss. Gains and losses arising on retranslation are included in the income statement, except for
exchange differences arising on non-monetary items where the changes in fair value are recognised
directly in equity.
The consolidated financial statements are presented in sterling which is the Company's functional and
presentation currency. On consolidation, income statements and cash flows of foreign entities are
translated into pounds sterling at average exchange rates for the year and their balance sheets are
translated at the exchange rates ruling at the balance sheet date. Exchange differences arising from the
translation of the net investment in foreign entities 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
The recognition of revenue when (or as) a performance obligation has been satisfied
In respect of agricultural produce, revenue is recognised when the performance obligations have been
satisfied, which is once control of the produce has transferred from the Group to the buyer. Revenue is
measured based on the consideration specified in the contract with a customer and excludes amounts
collected on behalf of third parties. Revenue related to the sale of produce is recognised when the
product is delivered to the destination specified by the customer, which is typically the vessel on which it
is shipped, the destination port or the customer’s premises and the buyer has gained control through
their ability to direct the use of and obtain substantially all the benefits from the asset.
In respect of warehousing 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. Contingent
rent, being lease payments that are based on the future amount of a factor that changes other than with
the passage of time, is recognised when it is received or receivable.
55
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 56
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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.
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 that they are intended to compensate for. Grants for the purchase or
production of property, plant and equipment are deducted from the cost of the related assets and reduce
future depreciation expense accordingly.
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.
56
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 57
CAMELLIA PLC
ACCOUNTING POLICIES
Property, plant and equipment
Property, plant and equipment includes biological assets (bearer plants) which are accounted for under
IAS 16.
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 and assets under construction, which
are 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.
Right-of-use assets
The Group recognises right-of-use assets for land and buildings and plant and machinery at the
commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date, less any lease incentives received. Unless
the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the
recognised right-of-use asset is depreciated over the shorter of its estimated useful life and lease term.
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.
57
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 58
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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.
58
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 59
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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.
59
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 60
CAMELLIA PLC
ACCOUNTING POLICIES
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.
(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.
60
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 61
CAMELLIA PLC
ACCOUNTING POLICIES
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 IFRS 16 Leases.
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.
61
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 62
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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, which are
integral to the Group’s cash management activities. Bank overdrafts are shown within borrowings in
current liabilities on the balance sheet.
Assets classified as held for sale
Assets classified as held for sale are measured at the lower of the carrying amount and fair value less
costs to sell.
Assets are classified as held for sale if their carrying amount will be recovered through a sale transaction
rather than through continuing use. This condition is regarded as met only when the sale is highly
probable and the asset is available for immediate sale in its present condition. Management must be
committed to the sale which should be expected to qualify for recognition as a completed sale within
one year from the date of classification.
62
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 63
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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.
63
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 64
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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.
64
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 65
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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) Estimation of useful lives of bearer plants
Estimates and assumptions made to determine bearer plants carrying values and related depreciation
are significant to the Group’s financial position and performance. The annual depreciation charge is
determined after estimating an asset’s expected useful life and its residual value at the end of its life. The
useful lives and residual values of the Group’s assets are determined by management at the time the
asset is acquired or bearer plant is planted and reviewed annually for appropriateness. The Group
derives useful economic lives based on experience of similar assets, including use of third party experts
at the time of acquisition of assets. Emerging governmental policies relating to climate change are also
considered when reviewing the appropriateness of useful economic lives. A decrease in the average
useful life by 10% would result in additional depreciation of £0.5 million.
(ii) Fair value of assets acquired and liabilities assumed in a business combination
Business combinations are recorded in accordance with IFRS 3 using the acquisition method. The Group
estimates the excess purchase price in accordance with IFRS3 as the difference of the consideration paid
for the acquisition and the net asset of the target company at the acquisition date. Under this method,
the identifiable assets acquired and the liabilities assumed are recognised at their fair value at the
acquisition date. Therefore, through a number of different approaches and with the assistance of
external independent valuation experts for acquisitions as considered appropriate by management, the
Group identifies what it believes is the fair value of the assets acquired and liabilities assumed at the
acquisition date. These valuations involve the use of judgement and include a number of estimates.
Specifically in relation to the value of bearer plants this includes assumptions on useful lives, yield
profiles, costs and future selling prices of the produce.
(iii) 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.
65
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 66
CAMELLIA PLC
ACCOUNTING POLICIES
(iv) 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.
(v) 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.
(vi) Taxation and other liabilities
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.
(vii) 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.
Changes in accounting policy and disclosures
(i) New and amended standards adopted by the Group
There were no new or amended IFRSs effective for the current year which had a material impact on the
financial statements of the Group.
The IFRS interpretations committee (IFRIC) published an agenda decision which clarified how a customer
should account for the costs of configuring or customising the suppliers application software in a
software as a service arrangement. As a result the Group has revised its accounting policy. This had no
material impact on the results.
66
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 67
CAMELLIA PLC
ACCOUNTING POLICIES
(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
Amendments to IAS 1
Amendments to IFRS 3
Amendments to IFRS 10 and IAS 28
Amendments to IAS 16 Property, Plant and Equipment
Amendments to IAS 37
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Annual Improvements to IFRS 2018-2020
Insurance contracts
Classification of Liabilities as Current or Non-
current
Reference to the Conceptual Framework
Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
Proceeds before Intended Use
Cost of fulfilling a contract
Interest Rate Benchmark Reform – Phase 2
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 balance
sheet 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.
Amendments to IFRS 10 and IAS 28 – Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture
The amendments to IFRS 10 and IAS 28 deal with situations where there is a sale or contribution of assets
between an investor and its associate or joint venture. Specifically, the amendments state that gains or
losses resulting from the loss of control of a subsidiary that does not contain a business in a transaction
with an associate or a joint venture that is accounted for using the equity method, are recognised in the
parent’s profit or loss only to the extent of the unrelated investors’ interests in that associate or joint
venture. Similarly, gains and losses resulting from the remeasurement of investments retained in any
former subsidiary (that has become an associate or a joint venture that is accounted for using the equity
method) to fair value are recognised in the former parent’s profit or loss only to the extent of the
unrelated investors’ interests in the new associate or joint venture.
The effective date of the amendments has yet to be set by the Board; however, earlier application of the
amendments is permitted. The Directors of the Company anticipate that the application of these
amendments may have an impact on the Group's consolidated financial statements in future periods
should such transactions arise.
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
67
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 68
CAMELLIA PLC
ACCOUNTING POLICIES
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.
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.
Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making
Materiality Judgements—Disclosure of Accounting Policies
The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The
amendment replaces all instances of the term 'significant accounting policies' with 'material accounting
policy information'. Accounting policy information is material if, when considered together with other
information included in an entity’s financial statements, it can reasonably be expected to influence
decisions that the primary users of general purpose financial statements make on the basis of those
financial statements.
The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that
relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed.
Accounting policy information may be material because of the nature of the related transactions, other
events or conditions, even if the amounts are immaterial. However, not all accounting policy information
relating to material transactions, other events or conditions is itself material.
The Board has also developed guidance and examples to explain and demonstrate the application of the
'four-step materiality process' described in IFRS Practice Statement 2.
The amendments to IAS 1 are effective for annual periods beginning on or after 1 January 2023, with
earlier application permitted and are applied prospectively. The amendments to IFRS Practice Statement 2
do not contain an effective date or transition requirements.
68
263134 Camellia R&A pp54-pp69.qxp 30/05/2022 19:13 Page 69
CAMELLIA PLC
ACCOUNTING POLICIES
Amendments to IAS 8 Accounting Policies Changes in Accounting Estimates and Errors—Definition
of Accounting Estimates
The amendments replaces the definition of a change in accounting estimates with a definition of
accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial
statements that are subject to measurement uncertainty”.
The definition of a change in accounting estimates was deleted. However, the IASB retained the concept
of changes in accounting estimates in the Standard with the following clarifications:
–
–
A change in accounting estimate that results from new information or new developments is not the
correction of an error; and
The effects of a change in an input or a measurement technique used to develop an accounting
estimate are changes in accounting estimates if they do not result from the correction of prior period
errors.
The IASB added two examples (Examples 4-5) to the Guidance on implementing IAS 8, which accompanies
the Standard. The IASB has deleted one example (Example 3) as it could cause confusion in light of the
amendments.
The amendments are effective for annual periods beginning on or after 1 January 2023 to changes in
accounting policies and changes in accounting estimates that occur on or after the beginning of that
period, with earlier application permitted.
Amendments to IAS 12 Income Taxes—Deferred Tax related to Assets and Liabilities arising from a
Single Transaction
The amendments introduce a further exception from the initial recognition exemption. Under the
amendments, an entity does not apply the initial recognition exemption for transactions that give rise to
equal taxable and deductible temporary differences.
Depending on the applicable tax law, equal taxable and deductible temporary differences may arise on
initial recognition of an asset and liability in a transaction that is not a business combination and affects
neither accounting nor taxable profit. For example, this may arise upon recognition of a lease liability and
the corresponding right-of-use asset applying IFRS 16 at the commencement date of a lease.
Following the amendments to IAS 12, an entity is required to recognise the related deferred tax asset and
liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12.
The IASB also added an illustrative example to IAS 12 that explains how the amendments are applied.
Following the amendments to IAS 12, an entity is required to recognise the related deferred tax asset and
liability, with the recognition of any deferred tax asset being subject to the recoverability criteria in IAS 12.
The amendments apply to transactions that occur on or after the beginning of the earliest comparative
period presented. In addition, at the beginning of the earliest comparative period an entity recognises:
–
A deferred tax asset (to the extent that it is probable that taxable profit will be available against which
the deductible temporary difference can be utilised) and a deferred tax liability for all deductible and
taxable temporary differences associated with:
n
n
Right-of-use assets and lease liabilities
Decommissioning, restoration and similar liabilities and the corresponding amounts recognised
as part of the cost of the related asset
–
The cumulative effect of initially applying the amendments as an adjustment to the opening balance
of retained earnings (or other component of equity, as appropriate) at that date
The amendments are effective for annual reporting periods beginning on or after 1 January 2023, with
earlier application permitted.
69
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 70
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. Following a change in management
reporting the figures for 2020 have been restated to move results for Jing Tea to Agriculture from
Food Service.
Agriculture
2021
£’m
2020
£’m
Restated
Engineering
2021
£’m
2020
£’m
Food Service
2021
£’m
2020
£’m
Restated
Unallocated
2021
£’m
2020
£’m
Consolidated
2020
2021
£’m
£’m
Revenue
External sales
Adjusted trading profit/(loss)
Separately disclosed items
Trading profit/(loss)
Share of associates’ results
Profit on disposal of property, plant and
equipment
Impairment of intangible assets, investment
properties and plant and equipment
Loss on disposal of subsidiaries
Profit on disposal of financial assets
Operating profit/(loss)
Comprising
– adjusted operating profit/(loss) before tax
– profit on disposal of property, plant and
equipment
– costs related to group claims
– impairment of intangible assets and
property, plant and equipment
– Loss on disposal of subsidiaries
– release of provisions for wage increases
– acquisition costs
– restructuring costs
Investment income
Net finance (costs)/income
Profit before tax
Taxation
Profit/(loss) 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
70
19.3
15.3
22.0
249.6
238.8
13.1
0.1
291.2
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
6.9
(16.1)
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
(9.2)
6.1
(10.0)
7.2
16.1
(16.1)
(2.3)
–
(2.3)
–
2.0
(1.1)
(8.8)
(1.2)
13.2
–
(1.5)
–
(1.5)
–
(8.2)
6.1
(8.2)
–
0.9
7.2
0.5
–
0.5
–
277.2
21.2
1.1
1.1
–
–
–
–
–
–
–
14.4
–
–
–
–
–
–
–
14.4
–
–
0.2
(0.2)
–
0.2
(6.5)
–
0.2
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
5.0
(1.6)
–
–
(3.7)
–
–
(1.0)
–
–
(0.5)
(0.1)
0.2
(0.5)
(0.1)
–
(2.9)
(2.8)
13.4
(3.2)
(3.1)
(3.1)
14.4
–
–
–
–
–
–
7.7
–
13.3
16.3
(2.3)
(1.5)
–
–
14.4
(16.1)
–
–
–
–
–
–
–
0.5
(1.6)
(2.1)
9.4
13.2
–
–
–
–
–
–
–
–
14.4
(16.1)
13.4
–
–
–
–
–
(0.2)
–
–
–
–
(1.0)
–
–
–
–
(3.7)
–
–
–
–
(1.6)
–
–
–
–
(0.5)
(0.1)
–
–
–
–
–
–
(1.2)
–
–
–
0.6
–
(0.5)
(6.5)
–
–
–
–
–––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
5.0
0.6
2.2
–––––– ––––––
7.8
(8.6)
–––––– ––––––
(0.8)
–––––– ––––––
(0.5)
(0.1)
0.6
(1.2)
(0.5)
7.7
0.5
(1.1)
7.1
(2.6)
(2.9)
(2.8)
(3.1)
(3.1)
(3.2)
14.4
4.5
–
385.4
355.9
10.6
16.6
18.9
26.2
24.5
20.5
(77.7)
(61.0)
(8.0)
(11.8)
(5.7)
(5.7)
(0.8)
(2.9)
9.4
(11.9)
–
–
11.4
(12.7)
–
(0.2)
0.3
(1.0)
–
(0.5)
0.6
(1.4)
–
(1.6)
0.9
(1.9)
(0.1)
–
1.2
(1.9)
–
(3.7)
1.0
(0.1)
–
–
1.2
(0.2)
(0.3)
(1.0)
593.5
(92.2)
(64.0)
439.4
72.6
81.5
419.2
67.6
95.5
–––––– ––––––
582.3
–––––– ––––––
(81.4)
(74.9)
–––––– ––––––
(156.3)
–––––– ––––––
14.4
(16.2)
(0.3)
(6.5)
11.6
(14.9)
(0.1)
(0.5)
(156.2)
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 71
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 eight 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
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
2020
2021
£’m
£’m
Over time
Total
2021
£’m
2020
£’m
2021
£’m
2020
£’m
52.1
20.2
24.0
97.9
32.2
13.1
7.0
1.5
8.5
19.6
––––––––––
276.1
––––––––––
49.8
26.6
23.3
99.9
32.0
13.7
14.7
2.2
6.4
21.5
––––––––––
290.1
––––––––––
1.0
–
–
–
–
0.1
–
–
–
–
––––––––––
1.1
––––––––––
1.0
–
–
–
–
0.1
–
–
–
–
––––––––––
1.1
––––––––––
53.1
20.2
24.0
97.9
32.2
13.2
7.0
1.5
8.5
19.6
––––––––––
277.2
––––––––––
50.8
26.6
23.3
99.9
32.0
13.8
14.7
2.2
6.4
21.5
––––––––––
291.2
––––––––––
71
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 72
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
2021
£’m
2020
£’m
Additions to property,
plant and equipment
2020
£’m
2021
£’m
Additions to
investment properties
2020
£’m
2021
£’m
113.0
–
64.3
97.2
89.5
46.8
2.8
0.1
14.6
11.1
––––––––––
439.4
––––––––––
62.1
0.8
64.4
102.9
89.4
48.0
3.7
24.7
14.2
9.0
––––––––––
419.2
––––––––––
1.5
–
1.9
2.2
2.7
0.1
0.9
–
1.1
0.3
––––––––––
10.7
––––––––––
2.2
–
1.7
2.7
3.7
0.4
1.5
–
1.0
0.3
––––––––––
13.5
––––––––––
0.9
–
–
–
–
–
–
–
–
–
––––––––––
0.9
––––––––––
0.9
–
–
–
–
–
–
–
–
–
––––––––––
0.9
––––––––––
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:
2021
£’m
2020
£’m
238.8
22.0
15.3
1.1
––––––––––
277.2
2.6
0.5
2.2
––––––––––
282.5
–––––––––––
247.2
23.6
19.3
1.1
––––––––––
291.2
3.0
0.6
2.3
––––––––––
297.1
–––––––––––
At a point in time
2020
2021
£’m
£’m
Over time
2021
£’m
2020
£’m
Sale of goods
Distribution and warehousing revenue
Engineering services revenue
Property rental revenue
Total Group revenue
72
238.8
22.0
15.3
–
––––––––––
276.1
247.2
23.6
19.3
–
––––––––––
290.1
–
–
–
1.1
––––––––––
1.1
–
–
–
1.1
––––––––––
1.1
––––––––––– ––––––––––– ––––––––––– –––––––––––
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 73
CAMELLIA PLC
NOTES TO THE ACCOUNTS
3 Trading profit/(loss)
The following items have been included in arriving at trading profit/(loss):
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)
Gain from change in fair value of non-current biological assets
Loss on disposal of property, plant and equipment
Repairs and maintenance expenditure on property, plant and equipment
Government grant income (included in other operating income)
2021
£’m
2020
£’m
117.0
108.1
163.7
163.9
0.2
0.2
0.9
0.1
13.3
1.6
0.1
1.5
–
7.9
0.4
––––––––––
15.2
1.0
0.3
0.4
(0.1)
2.1
0.8
––––––––––
During the year the Group benefited from £0.4 million (2020: £0.8 million) 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
Finance income and costs
–
–
0.2
(0.4)
––––––––––
(0.2)
–––––––––––
(0.1)
(0.1)
(0.1)
(2.2)
––––––––––
(2.5)
–––––––––––
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
Tax compliance services
0.3
0.8
––––––––––
1.1
–
––––––––––
1.1
–––––––––––
0.2
0.6
––––––––––
0.8
0.1
––––––––––
0.9
–––––––––––
73
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 74
CAMELLIA PLC
NOTES TO THE ACCOUNTS
4 Adjusted profit
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 from the adjusted profit measure and have been separately
disclosed:
n
n
n
n
Restructuring costs at Bardsley England of £0.5 million
Costs of acquisition of Bardsley England of £1.2 million
A gain resulting from wage provision releases following wage agreements reached in the year of
£0.6 million
Impairment charges in relation to the property, plant and equipment relating to Abbey Metal
Finishing and a related loss on sale of that business as reported in our interim results, totalling
£0.6 million
In 2020, the following items were excluded from the adjusted 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 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
5
Share of associates’ results
The Group’s share of the results of associates is analysed below:
2021
£’m
2020
£’m
7.6
(0.4)
––––––––––
7.2
––––––––––
6.7
(0.6)
––––––––––
6.1
––––––––––
Profit before tax
Taxation
Profit after tax
74
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 75
CAMELLIA PLC
NOTES TO THE ACCOUNTS
6
Profit on disposal of property, plant and equipment
In 2020, 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.
7
Impairments of intangible assets, investment properties and property, plant and equipment
Abbey Metal Finishing was a UK subsidiary and with its German subsidiary Atfin provided specialist
coating services for the aerospace sector. These companies operations continued to be affected in
2021 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
2021, which resulted in a property, plant and equipment impairment of £0.5 million (2020: £1.6
million). These companies were subsequently sold in the second half of 2021.
In 2020, £4.9 million of impairment charges were recognised in relation to the Jing Tea brand,
investment properties and property, plant and equipment elsewhere in the UK.
8
Finance income and costs
Interest payable on loans and bank overdrafts
Interest payable on leases
Other interest payable
Finance costs
Finance income – interest income on short-term bank deposits
Net exchange gain on foreign cash balances
Employee benefit expense (note 35)
Net finance (costs)/income
Other interest payable relates to interest on unpaid withholding taxes.
2021
£’m
2020
£’m
(1.1)
(0.7)
(1.1)
––––––––––
(2.9)
2.2
0.4
(0.8)
––––––––––
(1.1)
––––––––––
(0.9)
(0.7)
–
––––––––––
(1.6)
2.3
2.2
(0.7)
––––––––––
2.2
––––––––––
75
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 76
CAMELLIA PLC
NOTES TO THE ACCOUNTS
9 Taxation
Analysis of charge in the year
Current tax
UK corporation tax
UK corporation tax at 19.00 per cent. (2020: 19.00 per cent.)
Double tax relief
Use of losses to shelter capital gain on disposal of financial
assets
Adjustment in respect of prior years
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. (2020: 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
Change in deferred tax not recognised
Increase in tax losses carried forward
Movement in other timing differences
Total tax charge for the year
2021
£’m
£’m
2020
£’m
0.2
(0.2)
(2.2)
(0.2)
––––––––––
6.3
0.9
––––––––––
(1.5)
(0.7)
––––––––––
0.3
(0.3)
–
–
––––––––––
–
13.2
–
––––––––––
13.2
––––––––––
13.2
(0.7)
(3.9)
––––––––––
(4.6)
––––––––––
8.6
––––––––––
(2.4)
7.2
––––––––––
4.8
(2.2)
––––––––––
2.6
––––––––––
7.1
(7.2)
––––––––––
(0.1)
––––––––––
7.8
(6.1)
––––––––––
1.7
––––––––––
–
0.3
0.7
1.2
0.9
0.5
(0.3)
(3.7)
3.1
0.2
––––––––––
2.6
––––––––––
–
0.3
2.5
0.5
(0.6)
–
6.0
(0.4)
––––––––––
8.6
––––––––––
In 2021, the tax charge includes a deferred tax credit of £3.7m relating to the recognition of deferred
tax losses able to be utilised to offset tax on gains in the UK pension scheme surplus recognised
through other comprehensive income where the related equal and opposite charge arises in the
Statement of Comprehensive Income.
76
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 77
CAMELLIA PLC
NOTES TO THE ACCOUNTS
9 Taxation (continued)
The tax charge includes a credit of £0.1 million (2020: £0.7 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.
In 2021 the current tax charge includes a credit of £2.2 million arising from the use of losses to offset
gains on disposal of financial assets held at fair value through other comprehensive income. The
deferred tax charge includes an equal and opposite charge to reflect the impact of utilising previously
unrecognised losses in the Statement of Comprehensive Income.
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.
10 Profit for the year
The profit of the Company was:
2021
£’m
2020
£’m
6.5
––––––––––
4.5
––––––––––
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 2020 of 144p
(2019: nil) per share
Interim dividend for the year ended 31 December 2021 of 44p
(2020: nil) per share
Special interim dividend for the year ended 31 December 2021 of
nil (2020: 102p) per share
2021
£’m
2020
£’m
4.0
1.2
–
–
–
––––––––––
5.2
––––––––––
2.8
––––––––––
2.8
––––––––––
Dividends amounting to £0.1 million (2020: £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 2021 of
102p (2020: 144p) per share
2.8
––––––––––
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.
77
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 78
CAMELLIA PLC
NOTES TO THE ACCOUNTS
12 Earnings /(loss) per share (EPS)
2021
Weighted
average
number of
shares
Number
Earnings
£’m
EPS
Pence
2020
Weighted
average
number of
Loss
shares
£’m Number
EPS
Pence
––––––––––
2.3 2,762,000
––––––––––
83.3
––––––––––
(5.0)
––––––––––
2,762,000
––––––––––
(181.0)
––––––––––
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
2021
Number
2020
Number
77,982
204
296
32
––––––––––
78,514
––––––––––
75,522
223
282
33
––––––––––
76,060
––––––––––
2021
£’m
2020
£’m
106.5
2.5
1.4
6.6
––––––––––
117.0
––––––––––
97.1
2.4
1.8
6.8
––––––––––
108.1
––––––––––
Total remuneration paid to key employees who are members of the Executive Committees, excluding
Directors of Camellia Plc, amounted to £2.4 million (2020: £2.5 million).
14 Emoluments of the directors
Aggregate emoluments excluding pension contributions
2021
£’m
2020
£’m
2.0
––––––––––
2.0
––––––––––
Emoluments of the highest paid director excluding pension contributions were £0.7 million (2020:
£0.7 million).
Further details of directors’ emoluments are set out on pages 45 to 46.
78
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 79
CAMELLIA PLC
NOTES TO THE ACCOUNTS
15 Intangible assets
Group
Cost
At 1 January 2020
Exchange differences
Additions
At 1 January 2021
Subsidiaries joining the group
Disposals
At 31 December 2021
Amortisation
At 1 January 2020
Charge for the year
Impairment provision
At 1 January 2021
Charge for the year
Disposals
At 31 December 2021
Net book value at 31 December 2021
Net book value at 31 December 2020
Goodwill
£’m
Brands
£’m
1.4
(0.1)
–
––––––––––
1.3
3.6
–
––––––––––
4.9
––––––––––
0.3
–
–
––––––––––
0.3
–
–
––––––––––
0.3
––––––––––
4.6
––––––––––
1.0
––––––––––
8.8
(0.1)
–
––––––––––
8.7
–
–
––––––––––
8.7
––––––––––
–
–
3.5
––––––––––
3.5
–
–
––––––––––
3.5
––––––––––
5.2
––––––––––
5.2
––––––––––
Computer
software
£’m
2.3
–
0.3
––––––––––
2.6
–
(1.3)
––––––––––
1.3
––––––––––
1.9
0.3
–
––––––––––
2.2
0.1
(1.3)
––––––––––
1.0
––––––––––
0.3
––––––––––
0.4
––––––––––
Total
£’m
12.5
(0.2)
0.3
––––––––––
12.6
3.6
(1.3)
––––––––––
14.9
––––––––––
2.2
0.3
3.5
––––––––––
6.0
0.1
(1.3)
––––––––––
4.8
––––––––––
10.1
––––––––––
6.6
––––––––––
In accordance with the Group’s accounting policy, goodwill and intangible assets are tested annually
for impairment. There was no indication of impairment for the year to 31 December 2021 (2020: £nil).
Goodwill consists of the following:
Segment Cash Generating Unit (CGU)
2021
2020
Net Book Net Book
Value
£’m
Value
£’m
Agriculture Tea estates acquired in Assam, India
Bardsley England
1.0
3.6
––––––––––
4.6
––––––––––
1.0
–
––––––––––
1.0
––––––––––
79
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 80
CAMELLIA PLC
NOTES TO THE ACCOUNTS
15 Intangible assets (continued)
Bardsley England
The valuation of Bardsley England has been assessed and the recoverable value was considered to
exceed the carrying value by £4.3 million. The valuation is based on discounted cash flows, is sensitive
to input assumptions particularly in relation to the rate of growth of partner grower volumes and net
margins. The key assumptions and sensitivities are set out below:
Assumption Change in assumption
Impact on impairment
-1%
£’m
+1%
£’m
Rate of growth of partner grower volumes 5.0%
Discount rate 9.2%
0.7
2.3
(0.7)
(3.0)
If forecasted margins were to change by +/-1% in every year it would have the effect of a decrease
/increase in the impairment of £3.3 million.
Tea estates acquired in Assam, India
The recoverable value was considered to exceed the carrying value by £0.3 million. The valuation is
based on multiples of the annual average production of the relevant estates. The multiple would need
to decrease by 8% for any impairment to arise.
Intangibles comprise brands owned relating to Jing Tea with a net book value of £3.6 million and
£1.6 million for the Indian packet tea operations. The brands are assessed to have indefinite lives.
Indian brands
The fair value less costs to sell of the Indian packet tea brands were significantly in excess of the
carrying value. No reasonably possible change in the key assumptions would result in a recoverable
amount that was lower than the carrying amount.
Jing Tea
The fair value of the brand owned by Jing Tea was calculated using the Royalty Forgiven methodology.
This is sensitive to input assumptions, particularly in relation to future growth, notably customer
demand growth. A range of scenarios has been considered and the recoverable amount derived from
these shows a recoverable amount in excess of the carrying value. The key assumptions and
sensitivities are set out below:
Assumption Change in assumption
Impact on impairment
-1%
£’m
+1%
£m
Royalty rate
Discount rate
4.2%
10.2%
(0.8)
0.4
0.8
(0.4)
If forecasted revenues were to change by +/-1 % in every year it would have the effect of a
decrease/increase in the impairment of £0.1 million.
80
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 81
CAMELLIA PLC
NOTES TO THE ACCOUNTS
16 Property, plant and equipment
Group
Deemed cost
At 1 January 2020
Exchange differences
Additions
Disposals
Reclassification to investment
properties
At 1 January 2021
Exchange differences
Additions
Disposals
Transfer between categories
Subsidiaries joining the group
Reclassification to investment
properties
Reclassification to right-of-use assets
Reclassification to held for sale
At 31 December 2021
Depreciation
At 1 January 2020
Exchange differences
Charge for the year
Disposals
Impairment provision
At 1 January 2021
Exchange differences
Charge for the year
Disposals
Transfer between categories
Reclassification to right-of-use assets
Reclassification to held for sale
Impairment provision
At 31 December 2021
Net book value at 31 December 2021
Net book value at 31 December 2020
Bearer
plants
£’m
141.3
(8.5)
3.7
(5.7)
–
––––––––––
130.8
(3.0)
4.5
–
0.3
3.0
–
–
–
––––––––––
135.6
––––––––––
26.7
(2.0)
5.3
(1.4)
–
––––––––––
28.6
(0.8)
4.4
–
–
–
–
–
––––––––––
32.2
––––––––––
103.4
––––––––––
102.2
––––––––––
Land and
buildings
£’m
Plant and
machinery
£’m
Fixtures,
fittings and
equipment
£’m
109.0
(4.6)
4.0
(1.1)
(0.1)
––––––––––
107.2
(1.2)
2.0
(0.1)
0.6
10.2
(3.1)
(1.2)
(3.6)
––––––––––
110.8
––––––––––
52.3
(1.7)
2.5
(0.2)
–
––––––––––
52.9
(0.3)
2.3
(0.1)
1.4
–
(1.5)
–
––––––––––
54.7
––––––––––
56.1
––––––––––
54.3
––––––––––
114.1
(5.7)
4.3
(6.8)
–
––––––––––
105.9
(1.6)
3.5
(2.5)
0.7
5.8
–
(0.4)
(8.1)
––––––––––
103.3
––––––––––
73.1
(3.5)
6.4
(4.7)
1.6
––––––––––
72.9
(0.8)
5.8
(2.1)
(0.4)
(0.3)
(8.1)
0.5
––––––––––
67.5
––––––––––
35.8
––––––––––
33.0
––––––––––
18.9
(0.7)
1.5
(0.6)
–
––––––––––
19.1
(0.2)
0.7
(0.5)
(1.6)
0.5
–
–
(1.9)
––––––––––
16.1
––––––––––
8.7
(0.4)
1.0
(0.2)
1.2
––––––––––
10.3
(0.2)
0.8
(0.4)
(1.0)
–
(0.2)
–
––––––––––
9.3
––––––––––
6.8
––––––––––
8.8
––––––––––
Total
£’m
383.3
(19.5)
13.5
(14.2)
(0.1)
––––––––––
363.0
(6.0)
10.7
(3.1)
–
19.5
(3.1)
(1.6)
(13.6)
––––––––––
365.8
––––––––––
160.8
(7.6)
15.2
(6.5)
2.8
––––––––––
164.7
(2.1)
13.3
(2.6)
–
(0.3)
(9.8)
0.5
––––––––––
163.7
––––––––––
202.1
––––––––––
198.3
––––––––––
The plant and machinery impairment provision of £0.5 million related to Abbey Metal Finishing and
its subsidiary company Atfin and arose due to the impact of COVID on the aerospace industry. Assets
were subsequently reclassified to held for sale.
The amount of expenditure for property, plant and equipment in the course of construction
(including immature bearer plants) amounted to £4.7 million (2020: £4.7 million).
Reclassification to right-of-use assets arose from changes in land registration in Tanzania.
81
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 82
CAMELLIA PLC
NOTES TO THE ACCOUNTS
17 Right-of-use assets
0.6
–
0.1
(0.1)
––––––––––
0.6
–
1.0
(0.2)
0.4
–
0.6
––––––––––
2.4
––––––––––
Plant and
Land and
buildings machinery
£’m
£’m
Group
Deemed cost
At 1 January 2020 19.0
Exchange differences (0.5)
Additions 0.4
Businesses joining the group (1.0)
––––––––––
At 1 January 2021 17.9
Exchange differences (0.1)
Additions 0.6
Disposals (0.5)
Reclassification from property, plant and equipment 1.2
Reclassification to held for sale (3.6)
Subsidiaries joining the group 14.0
––––––––––
At 31 December 2021 29.5
––––––––––
Depreciation
At 1 January 2020 0.9
Exchange differences (0.1)
Charge for the year 0.8
Disposals (0.1)
––––––––––
At 1 January 2021 1.5
Charge for the year 1.2
Disposals (0.4)
Reclassification from property, plant and equipment –
Reclassification to held for sale (0.2)
––––––––––
At 31 December 2021 2.1
––––––––––
Net book value at 31 December 2021 27.4
–––––––––––
0.2
–
0.2
–
––––––––––
0.4
0.4
(0.1)
0.3
–
––––––––––
1.0
––––––––––
1.4
–––––––––––
Total
£’m
19.6
(0.5)
0.5
(1.1)
––––––––––
18.5
(0.1)
1.6
(0.7)
1.6
(3.6)
14.6
––––––––––
31.9
––––––––––
1.1
(0.1)
1.0
(0.1)
––––––––––
1.9
1.6
(0.5)
0.3
(0.2)
––––––––––
3.1
––––––––––
28.8
–––––––––––
Net book value at 31 December 2020 16.4
–––––––––––
0.2
–––––––––––
16.6
–––––––––––
The Group leases many assets including land, buildings and plant. The average lease term is 69 years
(2020: 99 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 £1.0 million (2020: £0.1 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
2021
£’m
2020
£’m
0.7
0.1
––––––––––
0.7
0.1
––––––––––
82
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 83
CAMELLIA PLC
NOTES TO THE ACCOUNTS
18 Investment properties
Group
Cost
At 1 January 2020
Additions
Reclassification from property, plant and equipment
At 1 January 2021
Additions
Reclassification from property, plant and equipment
At 31 December 2021
Depreciation
At 1 January 2020
Charge for the year
Impairment provision
At 1 January 2021
Charge for the year
At 31 December 2021
Net book value at 31 December 2021
Net book value at 31 December 2020
£’m
19.5
0.9
0.1
––––––––––
20.5
0.9
3.1
––––––––––
24.5
––––––––––
1.2
–
0.2
––––––––––
1.4
–
––––––––––
1.4
––––––––––
23.1
––––––––––
19.1
––––––––––
Included in revenue is £1.1 million (2020: £1.1 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 £0.2 million (2020: £0.1 million).
At the end of the year the fair value of Investment properties was £34.4 million (2020: £23.9 million)
based on vacant possession. Investment properties were valued by the Directors (fair value hierarchy
Level 2).
83
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 84
CAMELLIA PLC
NOTES TO THE ACCOUNTS
19 Biological assets
Non-current:
Group
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 1 January 2021
Exchange differences
Additions
Gains arising from changes in fair value less estimated
point-of-sale costs
Decreases due to harvesting
At 31 December 2021
Forestry
£’m
Livestock
£’m
13.5
(1.4)
0.2
1.1
(0.1)
–
Total
£’m
14.6
(1.5)
0.2
0.1
(0.7)
––––––––––
11.7
(0.3)
0.4
1.1
(0.5)
––––––––––
12.4
––––––––––
0.3
(0.3)
––––––––––
1.0
–
–
0.4
(0.4)
––––––––––
1.0
––––––––––
0.4
(1.0)
––––––––––
12.7
(0.3)
0.4
1.5
(0.9)
––––––––––
13.4
––––––––––
Agricultural activity is exposed to financial risks arising from adverse climatic events, changes in
market price and crop yields. The Group’s largely overseas activities also give exposure to foreign
currency movement risk. The Group takes reasonable steps to ensure that harvests are not affected
by climatic and natural events, pest and disease or any other factors that may negatively impact on
the quality and yields obtained.
Current:
Group
Tea
Edible nuts
Soya
Avocado
Other
2021
£’m
2020
£’m
0.2
2.2
3.6
1.5
0.3
––––––––––
7.8
––––––––––
0.4
2.0
2.9
1.8
–
––––––––––
7.1
––––––––––
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 2021 the area planted to Forestry amounted to 5,788 Hectares (2020: 5,877) from
which 157,687 cubic metres (2020: 203,541) were harvested during the year.
Livestock numbers were 4,332 head (2020: 4,529) at 31 December 2021.
84
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 85
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 58.
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 (2020: £1.2 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 (2020:
£0.9 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 (2020: £0.9
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 (2020: £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 £0.4 million
(2020: £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.
20 Investments in subsidiaries
Company
Cost
At 1 January and 31 December
2021
£’m
2020
£’m
73.5
––––––––––
73.5
––––––––––
85
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 86
CAMELLIA PLC
NOTES TO THE ACCOUNTS
21 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
2021
£’m
2020
£’m
93.7
0.8
7.2
(3.0)
–
0.2
––––––––––
98.9
––––––––––
26.1
0.2
––––––––––
26.3
––––––––––
72.6
––––––––––
92.9
(3.0)
6.1
(3.2)
0.3
0.6
––––––––––
93.7
––––––––––
26.9
(0.8)
––––––––––
26.1
––––––––––
67.6
––––––––––
Details of the Group’s associates are shown in note 43.
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
Profit
£’m
Interest Market
value
£’m
held
%
2021
Listed
BF&M
United Finance Limited
United Insurance
Company Limited
2020
Listed
BF&M
United Finance Limited
United Insurance
Company Limited
Bermuda
Bangladesh
684.2
84.6
(597.9)
(74.7)
58.1
2.8
6.4
0.7
Bangladesh
4.3
––––––––
773.1
––––––––
(1.6)
––––––––
(674.2)
––––––––
0.3
––––––––
61.2
––––––––
0.1
––––––––
7.2
––––––––
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
––––––––
37.4
38.4
37.0
37.6
38.4
37.0
57.7
13.0
9.3
––––––––
80.0
––––––––
49.7
11.0
7.8
––––––––
68.5
––––––––
86
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 87
CAMELLIA PLC
NOTES TO THE ACCOUNTS
22 Financial assets at fair value through other comprehensive income
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
Group
Company
2021
£’m
2020
£’m
2021
£’m
2020
£’m
43.8
–
0.8
3.5
(8.1)
(11.6)
––––––––––
28.4
––––––––––
1.2
–
(0.5)
––––––––––
0.7
––––––––––
27.7
––––––––––
40.0
(1.5)
2.3
6.5
(2.4)
(1.1)
––––––––––
43.8
––––––––––
2.2
–
(1.0)
––––––––––
1.2
––––––––––
42.6
––––––––––
0.2
–
–
–
–
–
––––––––––
0.2
––––––––––
0.2
–
–
––––––––––
0.2
––––––––––
–
––––––––––
0.2
–
–
–
–
–
––––––––––
0.2
––––––––––
0.2
–
–
––––––––––
0.2
––––––––––
–
––––––––––
Disposals arose to support Group strategy.
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
2021
£’m
2020
£’m
0.6
8.3
9.0
2.7
0.8
0.4
5.3
0.6
––––––––––
27.7
––––––––––
0.8
19.1
12.7
4.0
0.7
0.1
4.7
0.5
––––––––––
42.6
––––––––––
87
263134 Camellia R&A pp70-pp88.qxp 30/05/2022 19:14 Page 88
CAMELLIA PLC
NOTES TO THE ACCOUNTS
22 Financial assets at fair value through other comprehensive income (continued)
Financial assets at fair value through other comprehensive income are denominated in the following
currencies:
Group
2021
£’m
2020
£’m
5.3
2.7
0.4
9.0
0.8
0.6
8.3
0.6
––––––––––
27.7
––––––––––
4.7
4.0
0.1
12.7
0.7
0.8
19.1
0.5
––––––––––
42.6
––––––––––
Sterling
US Dollar
Euro
Swiss Franc
Indian Rupee
Bermudian Dollar
Japanese Yen
Other
88
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 89
CAMELLIA PLC
NOTES TO THE ACCOUNTS
23 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 – India
Money market – Switzerland
Group
2021
£’m
2020
£’m
5.3
–
0.1
5.4
(0.9)
––––––––––
9.9
––––––––––
6.2
(0.2)
0.1
5.9
(6.7)
––––––––––
5.3
––––––––––
Group
2021
£’m
2020
£’m
1.6
8.3
–
––––––––––
9.9
––––––––––
1.6
3.6
0.1
––––––––––
5.3
––––––––––
Financial assets at fair value through profit or loss are denominated in the following currencies:
US Dollar
Indian Rupee
Current
Non-Current
24 Financial assets at amortised cost
At 1 January
Exchange differences
Disposals
At 31 December
Group
2021
£’m
2020
£’m
1.6
8.3
––––––––––
9.9
––––––––––
2.7
7.2
––––––––––
9.9
––––––––––
1.7
3.6
––––––––––
5.3
––––––––––
–
5.3
––––––––––
5.3
––––––––––
Group
2021
£’m
2020
£’m
2.7
(0.1)
–
––––––––––
2.6
––––––––––
3.0
(0.3)
–
––––––––––
2.7
––––––––––
89
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 90
CAMELLIA PLC
NOTES TO THE ACCOUNTS
24 Financial assets at amortised cost (continued))
Financial assets at amortised cost comprises:
Treasury infrastructure bonds – 12.2% to 12.5% interest payable twice yearly
and redeemable in November 2022 – Kenya
Treasury infrastructure bonds – 12.2% to 12.5% interest payable twice yearly
and redeemable in November 2024 – Kenya
2021
£’m
2020
£’m
1.3
1.4
1.3
––––––––––
2.6
––––––––––
1.3
1.3
––––––––––
2.6
––––––––––
1.3
––––––––––
2.7
––––––––––
–
2.7
––––––––––
2.7
––––––––––
Group
Company
2021
£’m
2020
£’m
2021
£’m
2020
£’m
9.8
(0.1)
(1.0)
––––––––––
8.7
––––––––––
9.8
–
–
––––––––––
9.8
––––––––––
11.0
(0.1)
(2.1)
––––––––––
8.8
––––––––––
11.0
–
–
––––––––––
11.0
––––––––––
Current
Non-Current
25 Other investments – heritage assets
Cost
At 1 January
Disposals
Reclassification to held for sale
At 31 December
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.
26 Inventories
Group
Made Tea
Other agricultural produce
Work in progress
Trading stocks
Raw materials and consumables
2021
£’m
2020
£’m
25.7
7.8
0.1
1.1
17.0
––––––––––
51.7
––––––––––
28.3
4.7
0.1
0.5
13.9
––––––––––
47.5
––––––––––
Made tea inventories include the fair value of green leaf which includes a fair value uplift of £0.2
million (2020: £0.1 million).
90
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 91
CAMELLIA PLC
NOTES TO THE ACCOUNTS
27 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
2021
£’m
2020
£’m
2021
£’m
2020
£’m
32.7
0.1
4.8
10.9
––––––––––
48.5
––––––––––
31.3
0.1
5.4
6.9
––––––––––
43.7
––––––––––
–
–
–
0.2
––––––––––
0.2
––––––––––
–
–
0.6
–
––––––––––
0.6
––––––––––
2.7
––––––––––
2.7
––––––––––
2.4
––––––––––
2.4
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
The carrying amounts of the Group’s trade and other receivables are denominated in the following
currencies:
2021
£’m
2020
£’m
2021
£’m
2020
£’m
Current:
Sterling
US Dollar
Euro
Kenyan Shilling
Indian Rupee
Malawian Kwacha
Bangladesh Taka
South African Rand
Brazilian Real
Other
Non-current:
Sterling
Kenyan Shilling
Indian Rupee
Malawian Kwacha
Bangladesh Taka
0.2
–
–
–
–
–
–
–
–
–
––––––––––
0.2
––––––––––
0.6
–
–
–
–
–
–
–
–
–
––––––––––
0.6
––––––––––
17.8
3.5
0.8
2.6
16.8
1.5
2.1
0.2
2.5
0.7
––––––––––
48.5
––––––––––
0.3
0.5
1.4
0.3
0.2
––––––––––
2.7
––––––––––
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
––––––––––
Included within trade receivables is a provision for expected credit losses of £0.8 million (2020: £0.6
million). All other trade receivables are with normal trading partners and there is no history of
defaults.
91
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 92
CAMELLIA PLC
NOTES TO THE ACCOUNTS
27 Trade and other receivables (continued)
Trade receivables include receivables of £6.4 million (2020: £5.1 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
2021
£’m
2020
£’m
4.1
0.8
0.3
1.2
––––––––––
6.4
––––––––––
2.2
0.6
0.7
1.6
––––––––––
5.1
––––––––––
28 Cash and cash equivalents (excluding bank overdrafts)
Cash at bank and in hand
Short-term bank deposits
Short-term liquid investments
Group
Company
2021
£’m
2020
£’m
2021
£’m
2020
£’m
25.9
35.3
0.6
––––––––––
61.8
––––––––––
57.8
39.6
1.1
––––––––––
98.5
––––––––––
0.7
–
–
––––––––––
0.7
––––––––––
–
–
–
––––––––––
–
––––––––––
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
2021
£’m
2020
£’m
2021
£’m
2020
£’m
61.8
(1.9)
––––––––––
59.9
––––––––––
98.5
(3.6)
––––––––––
94.9
––––––––––
0.7
–
––––––––––
0.7
––––––––––
–
–
––––––––––
–
––––––––––
2021
2020
0.01 - 10.25% 0.01 - 9.00%
3.00 - 4.00% 2.50 - 7.00%
67 days
32 days
73 days
31 days
92
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 93
CAMELLIA PLC
NOTES TO THE ACCOUNTS
29 Assets classified as held for sale/liabilities related to assets classified as held for sale
During the year the following assets were transferred to held for sale:
Reclassified from property, plant and equipment
Reclassified from right-of-use assets
Reclassified from heritage assets
Reclassified from current assets
Disposal of subsidiaries during year
At 31 December
Group
Company
2021
£’m
2020
£’m
2021
£’m
2020
£’m
3.8
3.4
1.0
0.7
––––––––––
8.9
(2.3)
––––––––––
6.6
–––––––––––
–
–
–
–
––––––––––
–
–
––––––––––
–
–––––––––––
–
–
2.1
–
––––––––––
2.1
–
––––––––––
2.1
–––––––––––
–
–
–
–
––––––––––
–
–
––––––––––
–
–––––––––––
Liabilities related to assets classified as held for sale as at 31 December:
Reclassified from lease liabilities
2.0
–––––––––––
–
–––––––––––
–
–––––––––––
–
–––––––––––
At 31 December 2021, the assets and related lease liability of two London properties owned by the
Group have been classified as held for sale. Since the year end, one of these properties has been
sold. In addition, a number of the Group’s and Company’s heritage assets and other items of art are
being marketed for sale during 2022.
30 Trade and other payables
Current:
Trade payables
Other taxation and social security
Other payables
Accruals and deferred income
Group
Company
2021
£’m
2020
£’m
2021
£’m
2020
£’m
18.1
4.8
26.8
9.5
––––––––––
59.2
–––––––––––
22.4
1.1
20.2
7.2
––––––––––
50.9
–––––––––––
0.1
–
0.2
0.6
––––––––––
0.9
–––––––––––
0.1
–
0.1
0.6
––––––––––
0.8
–––––––––––
Included in other taxation and social security is £0.1 million (2020: £0.7 million) 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 and was fully repaid by the end of February 2022.
93
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 94
CAMELLIA PLC
NOTES TO THE ACCOUNTS
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
The rates of interest payable by the Group ranged between:
Bank overdrafts
Bank loans
94
2021
£’m
2020
£’m
1.9
1.4
––––––––––
3.3
––––––––––
3.6
2.1
––––––––––
5.7
––––––––––
0.3
1.4
––––––––––
1.7
––––––––––
2.0
2.1
––––––––––
4.1
––––––––––
4.5
––––––––––
2.7
––––––––––
4.5
––––––––––
2.7
––––––––––
3.3
0.7
1.2
2.6
––––––––––
7.8
––––––––––
5.7
0.4
1.2
1.1
––––––––––
8.4
––––––––––
2021
%
2020
%
3.25 – 16.50 1.60 – 17.50
3.03 – 8.50
6.90 – 7.55
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 95
CAMELLIA PLC
NOTES TO THE ACCOUNTS
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
2021
£’m
2020
£’m
3.2
2.3
5.0
14.2
––––––––––
24.7
––––––––––
1.2
1.1
2.3
6.9
––––––––––
11.5
––––––––––
3.2
21.5
––––––––––
24.7
––––––––––
1.2
10.3
––––––––––
11.5
––––––––––
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.
33 Provisions
Group
At 1 January 2020
Exchange differences
Utilised in the period
Provided in the period
Unused amounts reversed in period
At 1 January 2021
Exchange differences
Utilised in the period
Provided in the period
Subsidiaries joining the group
Unused amounts reversed in period
At 31 December 2021
Current:
At 31 December 2021
At 31 December 2020
Wages and
salaries
£’m
Legal
claims
£’m
Others
£’m
Total
£’m
7.7
(0.5)
(7.3)
10.5
(0.7)
––––––––––
9.7
(0.1)
(7.6)
7.7
–
(0.6)
––––––––––
9.1
–––––––––––
–
–
8.2
–
––––––––––
8.2
(0.1)
(6.9)
–
–
–
––––––––––
1.2
–––––––––––
1.2
–
(0.3)
0.2
–
––––––––––
1.1
–
(0.4)
0.3
0.5
–
––––––––––
1.5
–––––––––––
8.9
(0.5)
(7.6)
18.9
(0.7)
––––––––––
19.0
(0.2)
(14.9)
8.0
0.5
(0.6)
––––––––––
11.8
–––––––––––
9.1
–––––––––––
9.7
–––––––––––
1.2
––––––––––
8.2
––––––––––
1.5
––––––––––
1.1
––––––––––
11.8
––––––––––
19.0
––––––––––
The wages and salaries provisions are in respect of ongoing wage and bonus negotiations in India
and Bangladesh, the majority of which are expected to be utilised during 2022.
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.
95
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 96
CAMELLIA PLC
NOTES TO THE ACCOUNTS
33 Provisions (continued)
Company
At 1 January 2020
Provided in the period
At 1 January 2021
Utilised in the period
At 31 December 2021
Current:
At 31 December 2021
At 31 December 2020
Legal claims
£’m
Total
£’m
–
1.9
––––––––––
1.9
(1.9)
––––––––––
–
––––––––––
–
1.9
––––––––––
1.9
(1.9)
––––––––––
–
––––––––––
–
––––––––––
1.9
––––––––––
–
––––––––––
1.9
––––––––––
Legal claims related to the defence of the litigation concerning our East African operations.
34 Deferred tax
The net movement on the deferred tax account is set out below:
At 1 January
Exchange differences
Credited to the income statement
Charged to other comprehensive income
At 31 December
Group
2021
£’m
Company
2020
£’m
2021
£’m
2020
£’m
39.5
(1.0)
(2.2)
1.7
––––––––––
38.0
––––––––––
47.1
(3.1)
(4.6)
0.1
––––––––––
39.5
––––––––––
0.2
–
–
–
––––––––––
0.2
––––––––––
0.2
–
–
–
––––––––––
0.2
––––––––––
The movement in deferred tax assets and liabilities is set out below:
96
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 97
CAMELLIA PLC
NOTES TO THE ACCOUNTS
34 Deferred tax (continued)
Deferred tax liabilities
Accelerated
tax
depreciation
£’m
At 1 January 2020
Exchange differences
Credited to the income statement
Charged to other comprehensive income
At 1 January 2021
Exchange differences
(Credited)/charged to the income statement
Charged/(credited) to other comprehensive income
At 31 December 2021
Deferred tax assets offset
Net deferred tax liability after offset
Deferred tax assets
At 1 January 2020
Exchange differences
Credited/(charged) to the income statement
Credited to other comprehensive income
At 1 January 2021
Exchange differences
Credited/(charged) to the income statement
Charged to other comprehensive income
At 31 December 2021
Offset against deferred tax liabilities
Net deferred tax asset after offset
51.3
(3.6)
(3.4)
–
––––––––––
44.3
(1.1)
(0.7)
–
––––––––––
42.5
––––––––––
Tax losses
£’m
4.5
–
0.3
–
––––––––––
4.8
(0.1)
1.7
–
––––––––––
6.4
––––––––––
Pension
scheme
liabilities
£’m
–
–
–
–
––––––––––
–
–
–
3.7
––––––––––
3.7
––––––––––
Pension
scheme
asset
£’m
0.3
(0.1)
(0.4)
0.6
––––––––––
0.4
–
0.1
(0.2)
––––––––––
0.3
––––––––––
Other
£’m
Total
£’m
4.3
0.1
(0.7)
0.7
––––––––––
4.4
(0.1)
0.2
(2.2)
––––––––––
2.3
––––––––––
55.6
(3.5)
(4.1)
0.7
––––––––––
48.7
(1.2)
(0.5)
1.5
––––––––––
48.5
(10.5)
––––––––––
38.0
––––––––––
Other
£’m
Total
£’m
3.7
(0.3)
0.6
–
––––––––––
4.0
(0.1)
(0.1)
–
––––––––––
3.8
––––––––––
8.5
(0.4)
0.5
0.6
––––––––––
9.2
(0.2)
1.7
(0.2)
––––––––––
10.5
(10.5)
––––––––––
–
––––––––––
Deferred tax liabilities of £14.7 million (2020: £25.5 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 £18.4 million (2020: £15.5 million) in respect of losses that can be
carried forward against future taxable income.
97
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 98
CAMELLIA PLC
NOTES TO THE ACCOUNTS
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 2020 and updated to 31 December 2021 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 2021 by qualified actuaries.
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)
2021
2020
% per annum % per annum
N/a
2.50 – 5.00
1.75
2.50/3.20
N/a
2.05 – 5.00
1.25
2.05/2.75
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_2020 future improvement factors and subject to a long-term annual
rate of future improvement of 1.25% per annum, smoothing parameter of 7.0, initial addition
parameter of 0.25% pa and w2020 parameter of 10%. This results in males and females aged 65
having life expectancies of 21.5 years (2020: 21.6 years) and 22.3 years respectively (2020: 22.5 years).
Overseas schemes
Rate of increase in salaries
6.00
Rate of increase to LPI (Limited Price Indexation) pensions in payment 0.00 – 3.00
Discount rate applied to scheme liabilities 6.50- 6.80
Inflation assumption 3.00- 6.00
3.00- 6.00
0.00 – 3.00
5.80- 6.25
3.00- 6.00
2021
2020
% per annum % per annum
98
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 99
CAMELLIA PLC
NOTES TO THE ACCOUNTS
35 Employee benefit obligations (continued)
(ii) Post-employment benefits
Certain Group subsidiaries located in Kenya, India and Bangladesh have an obligation to pay terminal
gratuities, based on years of service. These obligations are estimated annually using the projected
unit method by qualified independent actuaries. Schemes operated in India are funded but the
schemes operated in Kenya and Bangladesh are unfunded. Operations in India and Bangladesh also
have an obligation to pay medical benefits upon retirement. These schemes are unfunded.
Assumptions
The major assumptions used in the valuation to determine the present value of the post-employment
benefit obligations were as follows:
2021
2020
% per annum % per annum
Rate of increase in salaries 6.00 – 8.89
Discount rate applied to scheme liabilities 6.50 – 13.70
Inflation assumptions 0.00 – 6.00
3.00 – 20.00
5.80 – 13.30
0.00 – 6.00
(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.
(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
Impact
on defined
benefit
obligation
6.7% decrease
7.5% increase
1.4% increase
1.6% decrease
4.5% increase
4.5% decrease
Change
in assumption
0.5% higher
0.5% lower
0.25% higher
0.25% lower
+1 year
–1 year
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.
During the year, the UK funded scheme transferred a significant amount of its Bond investments into
a liability-driven investment to reduce overall volatility.
99
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 100
CAMELLIA PLC
NOTES TO THE ACCOUNTS
35 Employee benefit obligations (continued)
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
(v) Actuarial valuations
%
40
60
––––––––––
100
––––––––––
Equities and property
Bonds
Liability-driven investment
Diversified growth
Insurance related products
Cash
Total fair value of plan assets
Present value of defined benefit
obligations
Total surplus/(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 (liability)/
asset (note 34)
Net surplus/(deficit)
2021
UK Overseas
£’m
£’m
57.9
16.3
60.8
45.4
–
18.9
––––––––
199.3
2.8
23.5
–
–
3.2
12.5
––––––––
42.0
Total
£’m
60.7
39.8
60.8
45.4
3.2
31.4
––––––––
241.3
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
(184.6)
––––––––
(51.6)
––––––––
(236.2)
––––––––
(203.0)
––––––––
(49.7)
––––––––
(252.7)
––––––––
14.7
––––––––
(9.6)
––––––––
5.1
––––––––
(7.0)
––––––––
(9.6)
––––––––
(16.6)
––––––––
14.7
0.1
14.8
–
(1.1)
(1.1)
–
–
0.1
0.1
(1.1)
(1.1)
–
––––––––
14.7
(8.6)
––––––––
(9.6)
(8.6)
––––––––
5.1
(7.0)
––––––––
(7.0)
(8.6)
––––––––
(9.6)
(15.6)
––––––––
(16.6)
(3.7)
––––––––
11.0
––––––––
0.3
––––––––
(9.3)
––––––––
0.3
––––––––
5.4
––––––––
–
––––––––
(7.0)
––––––––
0.4
––––––––
(9.2)
––––––––
0.4
––––––––
(16.2)
––––––––
100
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 101
CAMELLIA PLC
NOTES TO THE ACCOUNTS
35 Employee benefit obligations (continued)
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
Other adjustment
Actuarial gains
Exchange differences
At 31 December
196.0
–
2.4
–
–
(7.9)
–
8.8
–
––––––––
199.3
––––––––
At 1 January
Reclassified from creditors*
Current service cost
Past service cost
Interest cost
Contributions paid by plan
participants
Benefit payments
Actuarial gains/(losses)
Exchange differences
At 31 December
(203.0)
–
–
–
(2.5)
–
7.9
13.0
–
––––––––
(184.6)
––––––––
2021
UK Overseas
£’m
£’m
2020
UK Overseas
£’m
£’m
Total
£’m
236.1
–
4.7
3.8
40.1
–
2.3
3.8
0.4
(4.9)
0.1
0.5
(0.3)
––––––––
42.0
––––––––
0.4
(12.8)
0.1
9.3
(0.3)
––––––––
241.3
––––––––
Total
£’m
(252.7)
–
(1.8)
–
(5.5)
(49.7)
–
(1.8)
–
(3.0)
(0.4)
4.9
(1.9)
0.3
––––––––
(51.6)
––––––––
(0.4)
12.8
11.1
0.3
––––––––
(236.2)
––––––––
179.7
–
3.3
–
–
(8.7)
–
21.7
–
––––––––
196.0
––––––––
(193.3)
–
–
(0.1)
(3.6)
–
8.7
(14.7)
–
––––––––
(203.0)
––––––––
Total
£’m
208.5
6.9
6.3
3.1
28.8
6.9
3.0
3.1
0.3
(2.7)
0.4
2.3
(2.0)
––––––––
40.1
––––––––
0.3
(11.4)
0.4
24.0
(2.0)
––––––––
236.1
––––––––
Total
£’m
(230.5)
(7.0)
(2.1)
(0.1)
(7.0)
(37.2)
(7.0)
(2.1)
–
(3.4)
(0.3)
2.7
(5.0)
2.6
––––––––
(49.7)
––––––––
(0.3)
11.4
(19.7)
2.6
––––––––
(252.7)
––––––––
2021
UK Overseas
£’m
£’m
2020
UK Overseas
£’m
£’m
Movements in the present value of defined benefit obligations were as follows:
* a net £0.1 million was reclassified in 2020 from other payables in relation to the provident fund
schemes operated by some of the Group’s Indian subsidiaries.
In 2019, the total fair value of plan assets was £208.5 million, the present value of defined benefit
obligations was £230.5 million and the deficit was £22.0 million. 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 and 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.
101
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 102
CAMELLIA PLC
NOTES TO THE ACCOUNTS
35 Employee benefit obligations (continued)
Income Statement
The amounts recognised in the Income Statement are as follows:
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
2021
UK Overseas
£’m
£’m
Total
£’m
2020
UK Overseas
£’m
£’m
Total
£’m
–
–
––––––––
–
(1.8)
–
––––––––
(1.8)
(1.8)
–
––––––––
(1.8)
–
(0.1)
––––––––
(0.1)
(2.1)
–
––––––––
(2.1)
(2.1)
(0.1)
––––––––
(2.2)
(0.1)
––––––––
(0.7)
––––––––
(0.8)
––––––––
(0.3)
––––––––
(0.4)
––––––––
(0.7)
––––––––
(0.1)
––––––––
(2.5)
––––––––
(2.6)
––––––––
(0.4)
––––––––
(2.5)
––––––––
(2.9)
––––––––
Employer contributions to defined contribution schemes are charged to profit when payable and the
costs charged were £6.2 million (2020: £6.4 million).
Liabilities for workers profit participation in Bangladesh are charged to profit when the obligation
arises.
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/(loss) from changes in
demographic assumptions
Gain/(loss) from changes in
financial assumptions
Experience gains/(losses)
Actuarial gain/(loss)
2021
UK Overseas
£’m
£’m
8.8
0.9
0.5
–
Total
£’m
9.3
0.9
2020
UK Overseas
£’m
£’m
21.7
(0.7)
2.3
–
Total
£’m
24.0
(0.7)
8.5
3.6
––––––––
21.8
––––––––
(1.2)
(0.7)
––––––––
(1.4)
––––––––
7.3
2.9
––––––––
20.4
––––––––
(14.0)
–
––––––––
7.0
––––––––
(6.1)
1.1
––––––––
(2.7)
––––––––
(20.1)
1.1
––––––––
4.3
––––––––
Cumulative actuarial gain recognised in the Statement of Comprehensive Income are £2.5 million
(2020: £17.9 million losses).
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 2022. No additional funding contributions will be made, as the latest actuarial
valuation shows a funding surplus.
102
263134 Camellia R&A pp89-pp103.qxp 30/05/2022 19:15 Page 103
CAMELLIA PLC
NOTES TO THE ACCOUNTS
36 Share capital
Authorised: 2,842,000 (2020: 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 (2020: 2,824,500) shares
2021
£’m
2020
£’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.
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 on disposal of non-current assets
Profit on disposal – non recurring items
Loss on disposal of subsidiaries
Profit on disposal of financial assets
Movement in provisions
(Increase)/decrease in working capital
Difference between employee benefit obligations funding contributions
and cost charged
Cash generated from operations
2021
£’m
7.7
(7.2)
13.4
1.6
0.5
(1.5)
(0.1)
–
–
0.1
(0.2)
(7.0)
(3.5)
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
(1.9)
––––––––––
1.9
––––––––––
(4.7)
––––––––––
19.3
––––––––––
103
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 104
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.
Finance Finance
Bank loans Bank loans leases leases
Current Non-current Current Non-current Total
£’m £’m £’m £’m £’m
At 1 January 2020 3.6 3.3 1.2 11.8 19.9
Exchange differences (0.3) (0.1) – (0.2) (0.6)
New loans 1.9 – – – 1.9
New finance leases – – 0.5 0.5 1.0
Loans repaid (0.9) (2.7) – – (3.6)
Lease payments – – (1.4) – (1.4)
Lease disposal – – – (0.9) (0.9)
Transfers (2.2) 2.2 0.9 (0.9) –
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
At 1 January 2021 2.1 2.7 1.2 10.3 16.3
Exchange differences – (0.1) – – (0.1)
Companies joining the Group 10.5 – 1.7 13.2 25.4
Transferred to held for sale – – (0.1) (1.9) (2.0)
New loans 1.0 2.8 – – 3.8
New finance leases – – 1.9 0.4 2.3
Loans repaid (13.0) (0.1) – – (13.1)
Lease payments – – (1.6) (0.4) (2.0)
Transfers 0.8 (0.8) 0.1 (0.1) –
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
At 31 December 2021 1.4 4.5 3.2 21.5 30.6
–––––––––– –––––––––– –––––––––– –––––––––– ––––––––––
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.
104
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 105
CAMELLIA PLC
NOTES TO THE ACCOUNTS
39 Business combinations - acquisition and disposal of businesses
Property, plant and equipment
Right of use asset
Inventories
Biological assets – current
Trade and other receivables
Cash and cash equivalents (excluding bank overdrafts)
Assets classified as held for sale
Financial liabilities – borrowings – bank overdraft
Financial liabilities – borrowings – loans
Lease liabilities
Trade and other payables
Amounts due to group undertakings
Liabilities related to assets classified as held for sale
Identifiable intangible assets – Goodwill
Non-controlling interest
Loss on disposal
Consideration transferred:
Cash consideration and costs
Deferred consideration
Total consideration
Net cash (outflow)/inflow arising on acquisitions/disposals:
Cash consideration and costs
Less: cash and cash equivalent balances acquired/disposed
Acquisitions
2021
£’m
Fair
value
Disposals
2021
£’m
Net book
value
19.5
14.6
0.7
3.1
4.0
0.1
–
(0.8)
(10.5)
(14.9)
(8.9)
–
–
––––––––––
6.9
3.6
(5.3)
–
––––––––––
5.2
––––––––––
–
–
–
–
–
1.6
(0.3)
–
–
–
(0.6)
(0.4)
––––––––––
0.3
–
–
(0.1)
––––––––––
0.2
––––––––––
3.0
2.2
––––––––––
5.2
––––––––––
(0.1)
0.3
––––––––––
0.2
––––––––––
(3.0)
(0.7)
––––––––––
(3.7)
––––––––––
(0.1)
0.3
––––––––––
0.2
––––––––––
Acquisition in 2021 – Bardsley England
On 31 July 2021, the Group acquired 60.5% of the share capital of Bardsley Horticulture Limited, the
parent company of the Bardsley England group for consideration of £5.2 million, of which £3.0 million
was paid at completion with the balance of £2.2 million deferred and payable by July 2022. Bardsley
England is a major fruit farming business and one of the UK’s largest apple growers. The farming
operation covers 850 hectares (2,100 acres) in Kent and includes 27 orchards growing apples, pears,
cherries, plums and grapes as well as a large grading, packing and storage facility. The transaction
arises from the Group’s strategy to expand the agriculture operations and to diversify our product
and geographical portfolio.
The Group has a one year measurement period, from the date of acquisition to finalise the
acquisition accounting. Provisional fair values of the identifiable assets acquired, liabilities assumed
and non-controlling interest at the date of acquisition are set out above.
105
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 106
CAMELLIA PLC
NOTES TO THE ACCOUNTS
39 Business combinations - acquisition and disposal of businesses (continued)
Fair values of the acquired property, plant and equipment, pre existing contractual relationships and
biological assets are inherently judgemental and involve a high degree of estimation. Valuations have
been performed by specialists, using appropriate methodologies and information. No new
information is expected to become available in the next financial year that would be relevant for the
acquisition date fair values, therefore these valuations are not expected to be revisited.
Also on 31 July 2021, the Group subscribed for additional shares in Bardsley Horticulture Limited for
£9.7 million which diluted the non-controlling interest by 19.5%. Bardsley Horticulture Limited, on the
same date, acquired the remaining 50% interest in Bardsley Fruit Enterprises Limited that it did not
own for £4.2 million.
On 17 November 2021, the Group acquired the remaining 20% of the share capital of Bardsley
Horticulture Limited for consideration of £1.7 million. A gain of £0.2 million has been recognised in
equity, being the difference between consideration paid and the non-controlling interest share of the
net assets carrying amount.
The goodwill acquired in relation to Bardsley England comprises certain intangible assets that cannot
be separately identified. This includes the skills and experience of the assembled workforce. None of
the goodwill recognised is expected to be deductible for income tax purposes.
From the date of acquisition, Bardsley England has contributed £8.7 million of revenue and a
£4.7 million loss before tax including restructuring costs.
It has not been practicable to disclose results for Bardsley England for the pre-acquisition period as
Bardsley England had not adopted IFRS and other Group accounting policies.
Disposal in 2021 – Abbey Metal Finishing Limited
On 5 August 2021, the Group disposed of its interests in Abbey Metal Finishing Company Limited and
its subsidiary Atfin GmbH in Germany to a newly incorporated company set up by GIL Investments
for the purpose of the acquisition and Aerotech GmbH respectively. The transaction arises from the
Group’s strategy of focusing on agriculture.
Until the date of acquisition, the disposed companies had contributed £1.7 million of revenue and
£1.3 million loss before tax.
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
2021
£’m
2020
£’m
0.9
––––––––––
0.8
––––––––––
106
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 107
CAMELLIA PLC
NOTES TO THE ACCOUNTS
41 Contingencies
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 £7.4 million
In India, assessments have been received for excise duties of £3.6 million, sales and entry tax of
£0.9 million and of £0.6 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
2021
£’m
2020
£’m
7.8
24.7
––––––––––
32.5
––––––––––
8.4
11.5
––––––––––
19.9
––––––––––
378.5
––––––––––
370.0
––––––––––
8.59%
––––––––––
5.38%
––––––––––
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 acquisition of Bardsley England.
107
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 108
CAMELLIA PLC
NOTES TO THE ACCOUNTS
42 Financial instruments (continued)
Financial instruments by category
At 31 December 2021
Group
Assets as per Balance Sheet
Equity investments
Money market investments
Bond investments
Trade and other receivables excluding
prepayments
Cash and cash equivalents
Group
Liabilities as per Balance Sheet
Borrowings
Lease liabilities
Trade and other payables
Company
Trade and other payables
At 31 December 2020
Group
Assets as per Balance Sheet
Equity investments
Money market investments
Bond investments
Trade and other receivables excluding
prepayments
Cash and cash equivalents
108
Financial
Financial
assets at fair asset at fair
value through value through
profit or
loss
£’m
other comprehensive
income
£’m
Financial
assets at
amortised
cost
£’m
27.7
–
–
–
9.9
–
–
–
2.6
Total
£’m
27.7
9.9
2.6
–
–
––––––––––
27.7
––––––––––
–
–
––––––––––
9.9
––––––––––
40.3
61.8
––––––––––
104.7
––––––––––
40.3
61.8
––––––––––
142.3
––––––––––
Other financial
liabilities at
amortised cost
£’m
Total
£’m
7.8
24.7
59.2
––––––––––
91.7
––––––––––
7.8
24.7
59.2
––––––––––
91.7
––––––––––
0.9
––––––––––
0.9
––––––––––
Financial
Financial
assets at fair asset at fair
value through value through
profit or
loss
£’m
other comprehensive
income
£’m
Financial
assets at
amortised
cost
£’m
42.6
–
–
–
5.3
–
–
–
2.7
Total
£’m
42.6
5.3
2.7
–
–
––––––––––
42.6
––––––––––
–
–
––––––––––
5.3
––––––––––
39.2
98.5
––––––––––
140.4
––––––––––
39.2
98.5
––––––––––
188.3
––––––––––
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 109
CAMELLIA PLC
NOTES TO THE ACCOUNTS
42 Financial instruments (continued)
Group
Liabilities as per Balance Sheet
Borrowings
Lease liabilities
Trade and other payables
Company
Trade and other payables
Fair value estimation
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
––––––––––
The table below analyses financial instruments carried at fair value, by valuation method. The
different levels have been defined as follows:
–
–
–
Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)
Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (Level 3)
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 2021
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 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
Level 1
£’m
Level 2
£’m
Level 3
£’m
Total
£’m
27.7
9.9
2.6
––––––––––
40.2
––––––––––
–
–
–
––––––––––
–
––––––––––
–
–
–
––––––––––
–
––––––––––
27.7
9.9
2.6
––––––––––
40.2
––––––––––
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
––––––––––
109
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 110
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:
–
–
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 £1.0 million
(2020: £2.0 million). In addition, the Group has significant Indian, Japanese and Swiss financial assets,
if the exchange rates of the Indian Rupee, Japanese Yen and Swiss Franc to Sterling were to move by
5 per cent, the Group’s carrying value would increase/decrease by £0.5 million (2020: £0.2 million),
£0.4 million (2020: £1.0 million) and £0.5 million (2020: £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 £1.4 million
(2020: £2.1 million).
The Group’s exposure to commodity price risk is not significant.
(iii) Cash flow and interest rate risk
The Group’s interest rate risk arises from interest-bearing assets and short and long-term
borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk.
110
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 111
CAMELLIA PLC
NOTES TO THE ACCOUNTS
42 Financial instruments (continued)
At 31 December 20201 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 £0.2 million (2020: £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
Japanese Yen
Tanzanian Shilling
(B) Credit risk
Assets
Liabilities
2021
£’m
2020
£’m
2021
£’m
2020
£’m
13.0
16.4
0.4
14.4
2.4
0.2
11.5
1.0
1.8
0.4
0.3
–
––––––––––
61.8
––––––––––
21.7
35.0
5.3
11.9
4.9
0.1
14.1
1.2
1.9
1.4
–
1.0
––––––––––
98.5
––––––––––
22.5
–
–
0.3
5.0
1.6
1.2
1.9
–
–
–
–
––––––––––
32.5
––––––––––
8.9
–
–
0.2
8.0
1.6
1.2
–
–
–
–
–
––––––––––
19.9
––––––––––
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 21 per cent. (2020: 22 per cent.) of total trade receivables.
The Group has investments in Kenyan infrastructure bonds which have an S&P rating of B at the
year end.
(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 2021, the Group had undrawn committed facilities of £23.7 million
(2020: £23.7 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.
111
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 112
CAMELLIA PLC
NOTES TO THE ACCOUNTS
42 Financial instruments (continued)
Less than 1
Between 1
year and 2 years
£’m
£’m
Between 2 Over 5
years
£’m
and 5 years
£’m
Undated
£’m
Total
£’m
At 31 December 2021
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 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
–
2.7
1.3
37.6
61.8
––––––––
103.4
––––––––
3.3
3.2
54.4
––––––––
60.9
––––––––
–
5.3
–
36.8
98.5
––––––––
140.6
––––––––
5.7
1.2
–
7.2
1.3
2.7
–
––––––––
11.2
––––––––
0.7
2.3
–
––––––––
3.0
––––––––
–
–
1.4
2.4
–
––––––––
3.8
––––––––
0.4
1.1
49.8
––––––––
56.7
––––––––
–
––––––––
1.5
––––––––
–
–
–
–
–
–
27.7
27.7
–
–
9.9
2.6
–
–
–
–
–––––––– ––––––––
–
–––––––– ––––––––
–
–
–
––––––––
27.7
––––––––
40.3
61.8
––––––––
142.3
––––––––
1.2
5.0
2.6
14.2
–
–
7.8
24.7
–
–
–––––––– ––––––––
16.8
–––––––– ––––––––
6.2
–
––––––––
–
––––––––
54.4
––––––––
86.9
––––––––
–
–
1.3
–
–
–
42.6
42.6
–
–
5.3
2.7
–
–
–
–
–––––––– ––––––––
–
–––––––– ––––––––
1.3
–
–
––––––––
42.6
––––––––
39.2
98.5
––––––––
188.3
––––––––
1.2
2.3
1.1
6.9
–
–
8.4
11.5
–
–
–––––––– ––––––––
8.0
–––––––– ––––––––
3.5
–
––––––––
–
––––––––
49.8
––––––––
69.7
––––––––
Included in borrowings due in less than 1 year is £1.9 million (2020: £3.6 million) repayable on demand.
112
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 113
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings
Subsidiary undertakings
The subsidiary undertakings of the Group at 31 December 2021, which are wholly owned and
incorporated in Great Britain 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
Bardsley & Sons Limited
Bardsley Fruit Enterprises Limited
Bardsley Fruit Farming Limited
Bardsley HiCo Limited
Bardsley Horticulture 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)
Jing Tea Limited (95.0 per cent. holding)
Kakuzi Plc (Incorporated in Kenya – 50.7 per cent. holding)
Koomber Tea Company Limited (Incorporated in India)
Newmafruit Limited
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)
India
Bangladesh
UK
UK
UK
UK
UK
Brazil
Bangladesh
Bangladesh
South Africa
South Africa
Kenya
Malawi
Kenya
South Africa
Bangladesh
Tanzania
India
India
USA
UK
Kenya
India
UK
Bangladesh
UK
India
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Malawi
South Africa
(ii)
(i)
(i)
(i)
(i)
(i)
(i)
(vi)
(vii)
(vii)
(viii)
(ix)
(x)
(xii)
(x)
(ix)
(vii)
(xvii)
(iii)
(iii)
(xiii)
(i)
(xi)
(iv)
(i)
(vii)
(i)
(v)
(i)
(i)
(i)
(i)
(i)
(xii)
(ix)
113
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 114
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Engineering
AJT Engineering Limited
Black Gold Oil Tools Limited
Food Service
Associated Cold Stores & Transport Limited
Duncan Products Limited (Incorporated in Bangladesh)
Investment Holding
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 Nominees Limited
Linton Park Services Limited
Dormant companies
ACS&T Gloucester Limited (in liquidation)
ACS&T Grimsby Limited (in liquidation)
ACS&T Humberside Limited (in liquidation)
ACS&T Seamer Limited (in liquidation)
ACS&T Tewkesbury Limited (in liquidation)
ACS&T Wolverhampton Limited (in liquidation)
Alex Lawrie & Company Limited
Amgoorie Investments Limited
Assam-Dooars Holdings Limited
114
Principal
country of Registered
Office
operation
UK
UK
UK
Bangladesh
UK
UK
India
UK
Bangladesh
UK
India
India
USA
USA
UK
India
Bermuda
UK
Bermuda
India
UK
Kenya
Bangladesh
Malawi
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
(xiv)
(xiv)
(i)
(vii)
(i)
(i)
(iii)
(i)
(vii)
(i)
(iii)
(iii)
(xiii)
(xiii)
(i)
(iii)
(xvi)
(i)
(xvi)
(iii)
(i)
(x)
(i)
(xii)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 115
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Principal
country of Registered
Office
operation
Dormant companies (continued)
Associated Fisheries (Europe) 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 Indian Tea Company Limited
British United Trawlers Limited
BUT Engineers (Fleetwood) Limited (in liquidation)
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 Two Limited (in liquidation)
Fescol Limited (in liquidation)
G. F. Sleight & Sons Limited (in liquidation)
Goodricke Lawrie Consultants Limited
Gotha Tea Estates Limited
Granton Transport Limited (in liquidation)
Hamstead Village Investments Limited
Hellyer Bros Limited
Horace Hickling & Co. Limited
Hudson Brothers Trawlers Limited (in liquidation)
Humber Commercials Limited (in liquidation)
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
UK
UK
UK
Malawi
South Africa
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Kenya
UK
Kenya
Malawi
Kenya
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
Kenya
UK
Kenya
UK
(i)
(i)
(xiv)
(xii)
(viii)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(x)
(i)
(x)
(xii)
(xi)
(i)
(i)
(i)
(i)
(i)
(xiv)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(xi)
(i)
(x)
(i)
115
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 116
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Dormant companies (continued)
Lankapara Tea Company Limited
Lawrie Plantation Services Limited
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
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
Malawi
UK
UK
UK
UK
UK
UK
UK
South Africa
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
(i)
(i)
(xii)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(ix)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
116
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 117
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Summarised financial information on subsidiaries with material non-controlling interests
Summarised balance sheets
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Current
Assets
Liabilities
Total current net assets/(liabilities)
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Eastern Produce
Kenya Limited
as at 31 December
2021
£’m
2020
£’m
Eastern Produce
Malawi Limited
as at 31 December
2021
£’m
2020
£’m
24.0
(14.6)
––––––––––
9.4
––––––––––
19.9
(14.6)
––––––––––
5.3
––––––––––
14.8
(11.9)
––––––––––
2.9
––––––––––
11.7
(10.2)
––––––––––
1.5
––––––––––
27.8
(5.3)
––––––––––
22.5
––––––––––
31.9
––––––––––
28.5
(5.3)
––––––––––
23.2
––––––––––
28.5
––––––––––
31.2
(9.4)
––––––––––
21.8
––––––––––
24.7
––––––––––
33.8
(10.0)
––––––––––
23.8
––––––––––
25.3
––––––––––
Eastern Produce
South Africa Limited
as at 31 December
2021
�’m
2020
�’m
Goodricke Group
Limited
as at 31 December
2021
�’m
2020
�’m
4.1
(3.7)
––––––––––
0.4
––––––––––
3.2
(3.7)
––––––––––
(0.5)
––––––––––
32.3
(20.2)
––––––––––
12.1
––––––––––
36.2
(24.2)
––––––––––
12.0
––––––––––
8.8
(2.9)
––––––––––
5.9
––––––––––
6.3
––––––––––
8.8
(1.2)
––––––––––
7.6
––––––––––
7.1
––––––––––
35.8
(12.5)
––––––––––
23.3
––––––––––
35.4
––––––––––
36.0
(11.1)
––––––––––
24.9
––––––––––
36.9
––––––––––
117
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 118
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Summarised income statements
Kakuzi Plc
as at 31 December
2020
2021
£’m
£’m
18.7
(2.5)
––––––––––
16.2
––––––––––
19.4
(2.5)
––––––––––
16.9
––––––––––
26.3
(6.8)
––––––––––
19.5
––––––––––
35.7
––––––––––
26.8
(7.0)
––––––––––
19.8
––––––––––
36.7
––––––––––
Eastern Produce
Kenya Limited
for year
ended 31 December
2020
2021
£’m
£’m
Eastern Produce
Malawi Limited
for year
ended 31 December
2021
£’m
2020
£’m
Revenue
36.5
39.4
25.3
23.1
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
––––––––––
––––––––––
––––––––––
7.0
(2.1)
(0.8)
––––––––––
4.1
––––––––––
4.7
(1.1)
(3.1)
––––––––––
0.5
––––––––––
1.2
(0.6)
(1.2)
––––––––––
(0.6)
––––––––––
––––––––––
(3.7)
1.1
(2.0)
––––––––––
(4.6)
––––––––––
1.2
0.2
0.2
1.2
(0.2)
–
(1.2)
0.3
118
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 119
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Eastern Produce
South Africa Limited
for year
ended 31 December
2020
2021
£’m
£’m
Goodricke Group
Limited
for year
ended 31 December
2021
£’m
2020
£’m
Revenue
3.4
3.8
84.6
90.6
(Loss)/profit before tax
Taxation
Other comprehensive expense
Total comprehensive (expense)/income
Total comprehensive expense
allocated to non-controlling interests
Dividends paid to non-controlling interests
––––––––––
(0.4)
0.1
(0.5)
––––––––––
(0.8)
––––––––––
––––––––––
(2.2)
0.6
(0.2)
––––––––––
(1.8)
––––––––––
––––––––––
0.6
(0.1)
(1.4)
––––––––––
(0.9)
––––––––––
––––––––––
2.7
(0.5)
(2.1)
––––––––––
0.1
––––––––––
(0.2)
–
(0.7)
–
(0.2)
0.2
–
–
Revenue
Profit 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
Kakuzi Plc
for year ended
31 December
2021
£’m
2020
£’m
21.8
25.3
––––––––––
3.3
(1.1)
(0.9)
––––––––––
1.3
––––––––––
––––––––––
5.3
(1.4)
(4.0)
––––––––––
(0.1)
––––––––––
0.6
1.2
(0.1)
1.0
119
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 120
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Summarised cash flows
Eastern Produce
Kenya Limited
for year ended
31 December
Eastern Produce
Malawi Limited
for year ended
31 December
2021
£’m
2020
£’m
2021
£’m
2020
£’m
4.4
0.7
(2.1)
––––––––––
3.0
––––––––––
(1.0)
––––––––––
(0.7)
––––––––––
6.6
0.7
(0.8)
––––––––––
6.5
––––––––––
(5.3)
––––––––––
(4.1)
––––––––––
1.7
(0.5)
(0.7)
––––––––––
0.5
––––––––––
(0.1)
––––––––––
–
––––––––––
1.1
(0.1)
(1.0)
––––––––––
–
––––––––––
(0.3)
––––––––––
(1.1)
––––––––––
1.3
12.3
(2.9)
15.7
0.4
(1.2)
(1.4)
0.1
–
––––––––––
(0.5)
––––––––––
0.2
––––––––––
0.1
––––––––––
13.6
––––––––––
12.3
––––––––––
(0.6)
––––––––––
(1.2)
––––––––––
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 increase/(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
120
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 121
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Cash flows from operating activities
Cash generated from operations
Net interest paid
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 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
2021
£’m
2020
£’m
2021
£’m
2020
£’m
(0.8)
(0.2)
–
––––––––––
(0.2)
(0.1)
–
––––––––––
4.3
–
(0.1)
––––––––––
2.4
–
(0.7)
––––––––––
(1.0)
––––––––––
(1.1)
––––––––––
(0.3)
––––––––––
(0.7)
––––––––––
4.2
––––––––––
(1.0)
––––––––––
1.7
––––––––––
(2.0)
––––––––––
2.0
––––––––––
–
––––––––––
(2.5)
––––––––––
0.7
––––––––––
(0.1)
(1.0)
0.7
0.4
1.4
(0.2)
––––––––––
2.8
(0.4)
––––––––––
0.5
–
––––––––––
0.1
–
––––––––––
1.1
––––––––––
1.4
––––––––––
1.2
––––––––––
0.5
––––––––––
Cash flows from operating activities
Cash generated from operations
Net interest received
Income tax paid
Net cash generated from operating activities
Net cash generated 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 on cash and cash equivalents
Cash, cash equivalents and bank overdrafts at end of year
Kakuzi Plc
for year ended
31 December
2021
£’m
2020
£’m
8.5
0.5
(0.9)
––––––––––
8.1
––––––––––
(6.0)
––––––––––
(2.3)
––––––––––
(0.2)
11.2
(0.2)
––––––––––
10.8
––––––––––
8.9
0.6
(1.5)
––––––––––
8.0
––––––––––
(6.7)
––––––––––
(2.0)
––––––––––
(0.7)
12.6
(0.7)
––––––––––
11.2
––––––––––
121
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 122
CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Subsidiary and associated undertakings (continued)
Associated undertakings
The principal associated undertakings of the Group at 31 December 2021 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
in equity
Accounting
date
capital
2021 per cent.
Bermuda
(xvi) 31 December
37.4
Bangladesh
(vii) 31 December
38.4
Bangladesh
(vii) 31 December
37.0
122
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 123
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
(ix) 7 Windsor Street
(xvii) 3rd Floor
180 Msasani Bay
Msasani
Dar Es salaam
Tanzania
Tzaneen
850
Limpopo Province
South Africa
(x) New Rehema House
Rhapta Road
Westlands
P O Box 45560
GPO 00100
Nairobi
Kenya
(iii) Camellia House
(xi) Main Office
14 Gurusaday Road
Kolkata - 700019
West Bengal
India
(iv) Koomber Tea Garden
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
(viii) Slangrivier Road
Slangrivier Plaas
Wellington
7655
South Africa
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) 112 Pitts Bay Road
Pembroke
Bermuda
HM08
(xvi) Clarendon House
2 Church Street
Hamilton
Bermuda
HM11
123
263134 Camellia R&A pp104-pp124.qxp 30/05/2022 19:16 Page 124
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. Other than Simon Turner (a director of The Camellia Private Trust Company and the
president of the board of the trustee of the Foundation) and Stephen Buckland (a trustee of The
Camellia Foundation, a UK charity whose primary donor of the same name is the ultimate majority
shareholder of Camellia Plc), none of the Directors of Camellia Plc are connected with The Camellia
Private Trust Company Limited or the Foundation. While The Camellia Private Trust Company Limited
as 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, that director 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 £18,620 (2020: £36,000).
During the year the Group paid contributions to the overseas pension and post-employment
schemes of £3,775,062 (2020: £3,101,125).
Company
The Company receives financial and secretarial services from Linton Park Plc, a directly owned
subsidiary undertaking. The amount payable for these services for 2021 was £433,300 (2020:
£466,659). At 31 December 2021 £3,029,941 (2020: £8,351,312) 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 £13,409,492 (2020:
£7,556,941) include an unsecured loan note of £4,191,777 (2020: £4,191,777). The company received
interest of £167,671 (2020: £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 2021 amounted to
£1,879,504 (2020: £2,223,733) and £193,187 (2020: £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.
124
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 125
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:
n
n
n
n
the financial statements of Camellia Plc (the ‘parent company’) and its subsidiaries (the ‘Group’) give a
true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 December
2021 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with United Kingdom
adopted international accounting standards and International Financial Reporting Standards (IFRSs)
as issued by the International Accounting Standards Board (IASB);
the parent company financial statements have been properly prepared in accordance with United
Kingdom adopted international accounting standards and as applied in accordance with the
provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements which comprise:
n
n
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;
the basis of preparation and statement of accounting policies;
the notes 1 to 46 related to the consolidated financial statements; and
the notes 1 to 46 related to the parent company financial statements.
The financial reporting framework that has been applied in the preparation of the group financial
statements is applicable law, United Kingdom adopted international accounting standards and IFRSs as
issued by the IASB. The financial reporting framework that has been applied in the preparation of the
parent company financial statements is applicable law and United Kingdom adopted international
accounting standards and as applied in accordance with the provisions 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.
125
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 126
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
Summary of our audit approach
3.
Key audit matters
The key audit matters that we identified in the current year were:
n
n
n
n
n
Revenue recognition
Fair value of biological assets under IAS 41 ‘Agriculture’
Impairment of intangible assets and goodwill
Acquisition accounting: Fair value adjustments arising on acquisition
Provisions for uncertain tax positions and legal matters
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
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 57 components of the Group. Of these, 34 were subjected to a full-
scope audit whilst the 21 remaining were subject to specified audit procedures.
These components provide coverage of 99% of the Group’s revenue, 86% of the
Group’s profit before tax and 87% of the Group’s net assets.
Significant changes in
our approach
Changes in component scoping:
The acquisition of Bardsley Horticulture Ltd and subsidiaries (collectively the
“Bardsley Group”) have come into scope this year and were subject to full-
scope audit.
Changes in key audit matters:
n Arising from the acquisition of Bardsley Group during the year, we
identified a new key audit matter relating to acquisition accounting and
the corresponding fair value adjustments arising on acquisition.
n Our key audit matter in relation to impairment of assets was updated to:
n include our consideration of the goodwill arising on acquisition of
Bardsley Group; and
n remove the Impairment of Bearer plants due to the reduction in
complexities and judgements involved. Impairment indicators such as
underutilisation, adverse weather conditions and land use rights, and
in particular uncertainties caused by the Coronavirus pandemic were
considered, and no impairment indicators were identified.
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:
126
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 127
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
n
n
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;
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 its 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 regarding the
solvency of the Group over the going concern review period.
Assessing the reasonability of the assumptions that management have used in their cash forecasts;
and
Assessing the adequacy 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 £238.8m
(2020: £247.2m) 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.
127
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 128
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
How the scope of our
audit responded to the
key audit matter
We have performed the following procedures in response to the key audit
matter:
– Obtained an understanding of the processes and relevant controls used
to record revenue transactions.
–
–
–
Reviewed and assessed commercial arrangements to determine the
point of revenue recognition for different type of shipments.
Assessed whether revenue was recorded in the correct period and
whether cut-off of revenue is appropriate by agreeing a sample of
revenue transactions during the period either side of the balance sheet
date to the relevant terms of business, dispatch or delivery
documentation as appropriate.
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 have concluded that revenue is appropriately
recognised in the correct accounting period in accordance with IFRS 15.
5.2.
Fair value of biological assets under IAS 41 ‘Agriculture’
Key audit matter
description
The Group holds £7.8m (2020: £7.1m) of biological assets as current assets
and £13.4m (2020: £12.7m) as non-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.
How the scope of our
audit responded to the
key audit matter
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 valua-tion 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 dis-closed in the principal accounting policies.
We have performed the following procedures in response to the key audit matter:
– Obtained an understanding of processes and relevant controls around
the valuation of biological assets.
– Made enquiries of management to understand the rationale applied in
the determination of key assumptions and any changes in the year.
–
–
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
n
Challenged the inputs by assessing the historical accuracy of
management’s forecasts and comparing to third-party and market
data (where appropriate);
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.
128
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 129
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
Impairment of intangible assets and goodwill
5.3.
Key audit matter
description
The Group holds £10.1m (2020: £6.6m) of intangible assets including £4.6m
(2020: £1m) allocated to goodwill. Please also refer to the Critical accounting
estimates and judgements within accounting policies and Note 15 to the
accounts.
The risk in relation to intangibles relates to the (i) Brand value relating to Jing
Tea Limited where the operations experienced reduced demand as a result
of the COVID-19 pandemic and (ii) Goodwill on the past acquisition of tea
estates in India by Goodricke Group Limited and Amgoorie India Limited and
(iii) Goodwill related to the current year acquisition of Bardsley Group.
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.
The Group’s impairment assessment of CGUs to which goodwill is allocated
in accordance with IAS 36 Impairment of Assets involves fair value less costs
to sell calculations which require estimates, including significant assumptions
regarding future royalty rates, discount rates and cashflows.
Intangible assets are disclosed in note 15 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 the scope of our
audit responded to the
key audit matter
We have performed the following procedures in response to the key audit matter:
n Obtained an understanding of the processes and relevant controls related
to the impairment review of intangible assets and goodwill.
n Checked the arithmetical accuracy of the value in use calculations. We
evaluated the current year changes to the key assumptions and assessed
retrospectively whether prior year assumptions were appropriate.
n Involved our valuation specialists in evaluating management’s discount
rates. We benchmarked the discount rate to comparable assets and
considered the underlying assumptions based on our knowledge of the
group and its industry.
n Assessed the accuracy of management’s cash flow projections by
comparing historical forecasts with actual cash flows. We assesed whether
forecast cash flows were consistent with Board approved forecasts. We
also performed sensitivity analysis as part of our overall evaluation of
forecast cash flows.
n Assessed the valuation reports issued by third party external valuers and
compared them with similar market transactions. We also held
discussions with the valuers to challenge the methods and assumptions
used for determining fair value.
n Assessed the financial statements disclosures in relation to the
impairment assessments performed.
n Also assessed the adequacy of the Group’s disclosures including the need
to to disclose further sensitivities for CGUs where a reasonably possible
change in a key assumption would cause an impairment.
129
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 130
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
Key observations
From the work performed, we concur with management’s assessment of
impairment during the year and that no impairments were required.
5.4. Acquisition
Fair value adjustments arising on acquistion
During the year, the Group acquired a 60.5% interest in the Bardsley Group for
a consideration of £5.2m. Accounting for acquisitions is complex, with
judgement required in both the identification of assets acquired (including any
intangible assets), and the valuation of those assets and liabilities assumed, in
accordance with IFRS 3 ‘Business Combinations’.
The calculation of fair value is subjective due to the inherent uncertainty
involved in the valuation of assets and liabilities, and this requires the
application of judgement by management and technical expertise. In particular
the method of valuation, future forecasts (including cash-flow forecasts) and
underlying assumptions may all have a material impact on the valuation of
assets and liabilities, notably on the valuation of property, plant and equipment,
biological assets and intangible assets, which represents the most significant
assets acquired.
Business combinations are disclosed in note 39 to the financial statements and
the key judgements and assumptions related to the fair value of assets and
liabilities assumed are disclosed within accounting policies.
We have performed the following procedures in response to the key audit matter:
n Obtained an understanding of the processes and relevant controls related
to the business combination accounting including fair value adjustments
preparation, review and approval.
n Read the sale and purchase agreement (“SPA”) associated with the
acquisition and identified assets acquired, including assessing whether
any potential intangible assets were not identified by management. We
agreed the consideration paid to bank statements and the sale and
purchase agreements.
n Involved our specialists in our audit of the valuation of assets acquired
and liabilities assumed. Our work included assessment of the
appropriateness of the valuation models used, assessment of the
discount rate used in the models by reference to comparable assets, and
the evaluation of future cash flow forecasts for each of the power plants
acquired.
n Assessed the completeness of disclosures for each acquisition against the
requirements of the relevant accounting standards.
From the work performed, we found that the judgements made surrounding
the identification, classification and valuation of assets and liabilities
acquired were appropriate.
accounting:
Key audit matter
description
How the scope of our
audit responded to the
key audit matter
Key observations
130
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 131
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
Provision for uncertain tax positions and legal matters
5.5.
Key audit matter
description
In the ordinary course of business, the Group is subject to actual or potential
liabilities arising from litigations and claims, including contractual disputes
brought by government bodies (including regulators and tax authorities).
Management review such litigation and claims on a case-by-case basis to
determine the likely outcome and to estimate the possible magnitude and
timing of any resultant payments from adverse outcomes.
Matters of this nature are inherently uncertain and as such management apply
significant judgement in determining the likely outcome of such matters as well
as the potential effect on future operations and the financial statements as
described in the principal risks and uncertainties on pages 27 to 30. Judgement is
also applied in estimating amounts payable to legal, regulatory or tax authorities
in certain jurisdictions and including human rights issues - assessing and
quantifying probable outcomes in relation to ongoing claims and determining
any exposure (and the need for provision) in areas where legal requirements are
open to interpretation. This gives rise to a risk over the accuracy and disclosure of
provisions recognised and contingent liabilities disclosed.
The impact of litigation concerning the Group’s East African operations on the
2020 results is disclosed on page 8 and the accounting policy for provisions is
disclosed in the principal accounting policies.
At 31 December 2021, the Group continues to carry £1.2m (2020: £8.2m) in
respect of the legal claims in the UK based upon allegations against its East African
operations, namely Kakuzi in Kenya and EPM in Malawi. Following discussion with
Group lawyers, these allegations have now been finalised and no further liabilities
are expected to arise, therefore no contingent liabilities are disclosed.
In addition, specifically in India, interpreting and complying with taxation laws
and regulations are complex, therefore uncertain tax positions were also
considered as part of this key audit matter.
Other 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.
We have performed the following procedures in response to the key audit matter:
n Obtained an understanding of processes and relevant controls around
identification of tax and legal matters across the key components of the Group.
n Assessed the completeness of provisions and contingent liabilities by
reviewing the board minutes and reviewing management’s listing, tracking
all litigations and reconciled this to the provisions recorded.
n Challenged the appropriateness of the Group’s assumptions and
estimates in relation to provisions and contingent liabilities, by reference
to industry practice and the period to which any provision amounts relate.
n Obtained legal confirmations from the Group’s legal counsel in the key
jurisdictions as at 31 December 2021. We also spoke to legal counsel on
selected key issues.
n Reviewed the Group’s correspondence with regulatory and tax authorities
and understood management’s interpretation and application of relevant
laws and regulations.
n Assessed the appropriateness of disclosures in the financial statements.
131
How the scope of our
audit responded to the
key audit matter
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 132
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
Key observations
We did not identify any further litigation or claims that had not already been
disclosed to us. From the evidence obtained, we were satisfied with the
adequacy of the Group’s provisions made as at 31 December 2021 for the
risks identified in the context of the Group financial statements taken as a
whole. We were also satisfied with the appropriateness of the contingent
liability disclosures given the status, materiality and likely outcome of and
exposures in areas where legal and taxation requirements are open to
interpretation.
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
£0.9m (2020: £0.9m)
£0.3m (2020: £0.3m)
Basis for determining
materiality
0.3% of Revenue (2020: 0.4% of
revenue.)
Rationale for the
benchmark applied
We note that the overall size of the
business, demonstrated by revenue,
has remained broadly consistent
with the prior year therefore we
conclude that the basis for
materiality was deemed
appropriate. Revenue is deemed an
important benchmark for users to
determine growth and performance
of the Group.
2% of net assets, capped at 35% of
group materiality (2020: 2% of net
assets, capped at 35% of group
materiality)
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.
Group financial statements
Parent company financial statements
Performance
materiality
70% (2020: 70%) of group materiality
70% (2020: 70%) of parent company
materiality
132
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 133
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
Group financial statements
Parent company financial statements
Basis and rationale for
determining
performance
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 identified misstatements and the
remaining uncorrected misstatements are historically below performance
materiality.
n The quality of the control environment, 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 £43,000 (2020: £45,000), 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.
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, South America, and Asia, with its principal
crops grown in Bangladesh, India, Kenya and Malawi. The Group’s engineering and food service
operations as well as recently acquired apple and pear orchards are located in the UK. Of the Group’s 57
principal components, 34 were subject to a full audit scope (including newly acquired Bardsley Group in
the UK) and 21 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.
These 55 components represent the principal business units and account for 99% (2020: 99%) of the
Group’s revenue and 86% (2020: 95%) of the Group’s profit before tax and 87% (2020: 95%) of the Group’s
net assets. The remaining components were subject to analytical review procedures by the group audit
team or were scoped out on the basis of being dormant or immaterial. Our audit work on these
components in addition to the parent entity was executed to lower levels of materiality of £0.3m to (35%)
of Group materiality (2020: £0.32m (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.
133
263134 Camellia R&A pp125-end.qxp 30/05/2022 19:19 Page 134
CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
"#"#
$#$#
&()&
%&'%&'&()&
!"#!"#
";#";#
>7>73636/0
?&?&637&,0-@-@
<=#<=#
"<#"<#
:;#:;#