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CAMELLIA PLC
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265644 Camellia R&A pp01-pp20.qxp 03/05/2023 18:46 Page 1
CAMELLIA PLC
REPORT AND ACCOUNTS 2022
CONTENTS
page
Camellia at a glance
Directors and advisers
Chairman’s statement and Operational report
Environmental and social report
Strategic report
Report of the Directors
Corporate governance
Remuneration report
Statement of Directors’ responsibilities
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
Appendices
2
4
5
16
21
32
36
41
43
44
45
46
47
48
49
50
51
68
124
135
136
1
265644 Camellia R&A pp01-pp20.qxp 03/05/2023 18:46 Page 2
CAMELLIA PLC
CAMELLIA AT A GLANCE
We are an international Group headquartered in the UK, a global family of companies focused on
agriculture, and are passionate about our produce and our communities.
We are committed to doing the right thing: ethically and commercially, globally and locally. We are
custodians, operating sustainable businesses in trust for future generations. We seek to improve the
long-term stability and wellbeing of these businesses and the communities and environments in which
they operate.
We seek to use sustainable agricultural practices to ensure that the environments and communities in
which we operate are protected and enhanced. This allows us to continually improve operational
efficiency and sustainability which is not only a driving force for enhancing profitability but also a
powerful tool to reduce our environmental impact, benefit our communities and support our ultimate
ambition to reach net zero.
Purpose and strategy
We aim to generate long-term value for our shareholders and our stakeholders which include our
employees, customers, suppliers and local communities in which we operate.
The Group’s strategy is to focus on the sustainable production of its core crops (tea, nuts and fruit) whilst
continuously assessing opportunities to diversify by both crop and origin.
Execution of this strategy will involve divesting non-agriculture assets as appropriate opportunities arise.
Our business is made up as follows:
Agriculture
2022: Revenue – £283.0 million, trading profit £15.5 million
Tea
Production and Manufacturing
Instant tea, branded tea and
tea lounges
Nuts and fruits
Macadamia
Avocado
Other fruits
Other agriculture
Forestry
Arable
Rubber
Livestock (head)
Locations
Mature
Area
Ha
Immature
Area
Ha
India, Bangladesh, Kenya, Malawi
34,298
2,282
India, UK
Kenya, Malawi, South Africa
Kenya, Tanzania, South Africa
UK, Kenya, South Africa
Kenya, Malawi, Brazil
Brazil
Bangladesh
Kenya
3,149
741
539
2,993
3,779
1,790
630
509
87
2,805
–
138
4,246
2
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CAMELLIA PLC
CAMELLIA AT A GLANCE
Other investments
Engineering
2022: Revenue – £13.2 million, trading loss £0.8 million
Location
UK
Locations
Global
UK, Malawi, Brazil
UK, India
A JT Engineering
Investments
Investment Portfolio
Investment Property
Collections (stated at cost)
Associates
2022: Share of results after taxation – £3.1 million loss
Locations
Holding %
BF&M (Life and Non-life insurance)
Bermuda
Bangladesh
United Finance (Banking)
United Insurance (Non-life insurance) Bangladesh
36.9
38.4
37.0
Market value at
31/12/2022
£’m
35.6
25.4
8.8
Market value
at 31/12/2022
£’m
59.3
9.2
6.1
3
265644 Camellia R&A pp01-pp20.qxp 03/05/2023 18:46 Page 4
CAMELLIA PLC
DIRECTORS AND ADVISERS
Directors
Malcolm Perkins
Graham Mclean
Susan Walker
Stephen Buckland
Rachel English
Simon Turner
Frédéric Vuilleumier
Chairman and Interim Chief Executive
Director of Agriculture
Chief Financial Officer
Non-executive Director
Independent non-executive Director
Non-executive Director
Independent non-executive Director
Board committee memberships are detailed on pages 32 and 33
Group General Counsel
and Company Secretary
Amarpal Takk
Registered office
Wrotham Place
Bull Lane
Wrotham
Near Sevenoaks
Kent TN15 7AE
Registered Number
00029559
Nominated adviser and
broker
Panmure Gordon (UK) Limited
40 Gracechurch Street
London
EC3V 0BT
Registrars
Independent auditors
PR
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Deloitte LLP
Statutory Auditors
1 New Street Square
London EC4A 3HQ
H Advisors Limited
3 Pancras Square
London N1C 4AG
Website
www.camellia.plc.uk
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
Overview of financial results
Revenue from continuing operations for the Group increased to £297.2 million from £255.3 million in
2021. This included an 18% increase in revenue in Agriculture to £283.0 million (2021: £238.9 million)
reflecting a full year of trading from Bardsley England, higher tea prices in almost all jurisdictions, albeit
on lower crops, higher avocado volumes at reduced selling prices, increased macadamia sales volumes at
reduced prices and improved arable prices. This was offset in part by reduced packet tea revenues in
India. Revenue from Engineering was lower in 2022 reflecting the sale of Abbey Metal and Amfin during
2021.
Revenue from the discontinued operation (ACS&T) improved in the period up to the date of sale reflecting
increased activity in the UK food service sector as COVID restrictions eased.
The results for 2022 show a loss before tax for continuing operations of £3.7 million (2021: £7.1 million
profit) reflecting significantly lower results from BF&M and a large impairment charge in respect of
Bardsley England. However, taking account of non recurring separately disclosed items the adjusted
profit before tax for continuing operations is £4.6 million (2021: £8.8 million). Adjusted profit before tax
for continuing operations is before separately disclosed items, primarily impairments, further details of
which are set out in note 4 to the Accounts.
The Agriculture division showed improved trading profits in 2022 due to a strong focus on consistent
quality to maximise prices, cost control and efficiency initiatives as well as through volume growth in
macadamia and avocado and from improved pricing for our arable crops. The improved profitability for
the division was achieved despite poor weather in India, a prolonged labour strike in Bangladesh,
significantly higher distribution costs for our products, especially from Africa, significant inflation in
energy and input costs as a result of the Ukraine war, the UK cost of living crisis and the after effects of
the COVID pandemic continuing to indirectly impact certain aspects of our trading.
Due to the very high inflation experienced in the UK fruit sector, coupled with severe customer price
sensitivity, the combination of which has impacted our view of the future for Bardsley England, an
impairment of £10.0 million has been recognised in the 2022 results (see page 73).
Our Engineering division’s results also improved in 2022 through a strong focus on cost control and
efficiency initiatives and reflecting the benefits of the sale of loss making businesses in 2021.
Our results were however also adversely impacted by the poor performance of our associate, BF&M,
which was severely affected by the volatility in financial markets and recorded a significant loss, our share
of which was £3.6 million, primarily as a result of marking investments to market values. In contrast in
2021 BF&M made a significant contribution to profits of £6.4 million.
In addition to the loss from our continuing operations, we recorded a significant profit from discontinued
operations (i.e. our Food Service segment) of £7.6 million (2021: £nil), inclusive of the gain on sale of ACS&T
of £3.8 million.
Dividend
Reflecting continued confidence in the Group’s long-term future, the Board is recommending a final
dividend in respect of the year ended 31 December 2022 of 102p per share bringing the total dividend for
the year to 146p per share (2021: 146p per share).
Strategic matters
The Group comprises businesses that produce nutritious and healthy food. Increasing global demand for
sustainable and healthy diets drives our continued strategy of evolving to meet the changing needs of our
customers, smallholder growers and others. Alongside generating returns for our shareholders we have a
role to ensure we use resources responsibly, build strong rural economies and ensure thriving healthy
communities by drawing upon everything we have learnt over many decades as a tea, macadamia, and
avocado producer.
We noted in our 2022 Interim Report that the Board was undertaking a series of measures aimed at
re-balancing the Group’s portfolio of investments to take better advantage of its strengths, and thereby
improve profitability and share price performance. This exercise continues.
The Group continues to focus on its key strengths in agriculture and the further diversification of crop
and origin, facilitated through disposing of non-core assets.
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
During 2022, the diversification strategy for the Group’s core crops has continued with the ongoing
expansion of its macadamia and avocado footprints. We have progressed new avocado developments in
three of our origins in Africa looking to build on our experience in Kenya and our market knowledge and
scale. The developments in Tanzania and South Africa also diversify origin to take advantage of the
different climatic and water benefits that these locations present, and which ultimately will lead to a
longer market window for fruit deliveries into the various key markets we supply.
Macadamia developments continued in Kenya with both commercial and trial plantings to maximise
existing site potential and test alternative sites for future viability with an objective of creating further
options for diversification of crop and origin for the future.
Blueberry expansion and development into a possible significant potential core crop for the Group,
continues to be a strong ambition given the availability and diversity of location and water supply. As
explained later, the experience being gained from the current commercial blueberry trial in Kenya will be
invaluable in converting a possibility into reality.
Sustainability and safeguarding
The work initiated by the Stewardship and Safeguarding committee (SSC) has progressed across the
Group with the assistance of international specialist consultants. Group subsidiaries have continued to
review their social and grievance procedures, and where appropriate, to establish operational-level
grievance mechanisms in accordance with the UN Guiding Principles on Business and Human Rights.
Group subsidiaries have also enhanced local reporting and training by raising awareness across their
management, employees and local communities.
The Board remains committed to further enhancing the Group’s environmental and sustainability
practices, and has expanded the remit of the SSC. Consequently, that committee has been reconstituted
as the Sustainability and Safeguarding committee and reports to the Board. More details of this
committee are set out in the corporate governance section on page 40.
The Group strives to use water sustainably, reduce waste, protect the ecosystems within which it
operates, and works to ensure estates and smallholders are resilient to climate change. Ahead of the
2023 annual report, the Group is preparing to implement the recommendations of the Task Force on
Climate-Related Financial Disclosures (TCFD) which is an important step in that process. As part of this
effort, the Group has embarked on measuring its Scope 3 emissions. In conjunction with Scope 1 and 2
emission data, this will put us in a position to consider Science Based Targets for emission reduction.
Investment activities
Capital expenditure in 2022 for continuing operations amounted to £16.9 million. Within this, substantial
investment was made in Kenya, Tanzania and South Africa, expanding our macadamia and avocado
orchards with a total of 251Ha of new avocado and 97Ha of new macadamia planted. 293Ha of tea was
replanted across the Group in the year.
The development of three residential properties on the Linton Park estate was completed and these have
been let.
We expect capital expenditure in 2023 to be in line with recent historical levels as we continue to invest in
our key strategic growth priorities.
Progress on refocusing investments
ACS&T
Consistent with our strategy, we sold ACS&T at the end of December for £16.6 million with the funds
received at the start of January 2023. This also released £3.8 million of cash by way of a pre-sale dividend
from that operation. This was the last component of our Food Services division which is now shown as a
discontinued operation in our results for 2022. ACS&T contributed £1.7 million of profit before tax in the
year and its disposal generated a gain on sale of £3.8 million.
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
Properties
A residential property in central London was sold in February 2022. We continue to consider
opportunities to realise our investment in properties and are currently marketing properties in London
and Bristol, others may be sold in due course.
As a consequence of changes in work practices and office requirements, we relocated our head office to a
Group owned property at Wrotham in Kent in March 2023. Planning consent has been achieved to
convert Linton Park to residential use and the property is being marketed for sale.
Collections
Part of the Camellia Collection was sold at auction during 2022 generating net cash proceeds of
£3.6 million and a gain on sale of £1.4 million. Further items are due to be auctioned during 2023.
Performance
Agriculture
In total, Agriculture made a trading profit of £15.5 million (2021: £13.1 million) on revenue of £283.0 million
(2021: £238.9 million), as set out in note 1 to the Accounts.
Tea
Tea estate production Instant tea, branded
and manufacturing tea and tea lounges
2021
2022
£’m
£’m
2021
£’m
2022
£’m
Revenue
Adjusted trading profit/(loss)*
Trading profit/(loss)
* See note 1 to the Accounts
Estate production and manufacturing
177.6
9.1
9.1
161.5
10.7
11.3
32.5
0.2
0.2
34.7
(0.5)
(0.5)
Group tea production in 2022 was 92.9mkg, down 6% on 2021 levels (2021: 99.1mkg) due to lower
production in most jurisdictions resulting mainly from adverse weather, and in Bangladesh, a prolonged
strike.
India
Bangladesh
Kenya
Malawi
Total own estates
Bought leaf production
Managed client production
Total made tea production
Mature
area
Ha
16,466
8,648
3,843
5,341
––––––––
34,298
––––––––
Immature
area
Ha
992
690
315
285
––––––––
2,282
––––––––
2022
Production
Volume
mkg
2021
Production
Volume
mkg
26.8
11.4
13.3
19.0
––––––––
70.5
––––––––
17.8
4.6
––––––––
92.9
––––––––
26.1
14.4
14.9
20.0
––––––––
75.4
––––––––
19.2
4.5
––––––––
99.1
––––––––
7
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
Pricing and operations
Tea pricing for all regions, except Darjeeling in India and Malawi, was above that of last year, with our
estates being rewarded for concentrating their efforts on the consistent production of high quality teas.
As with total production, our sales volumes were also lower.
Shipping logistics have continued to be a challenge throughout the year though this has improved in
more recent months. We continue to experience inflation in key input costs, particularly wages, fertiliser,
energy and logistics. Distribution costs, particularly from Africa, increased substantially in the year and
this in combination with reduced volumes has impacted margins.
India
Our estate crop for 2022 was up 3% on last year. The impact of continued poor weather meant that our
production volumes did not recover to pre-pandemic levels.
Our net selling prices firmed for both Dooars and Assam CTC teas due to demand in the internal packet
tea market and improved quality, up on prior year by 8% for Dooars and 3% for Assam CTC teas.
Darjeeling prices were down 8% over the same period, due to reduced demand. Our Assam Orthodox
(rolled leaf tea) prices were up 27% on prior year as the market continued to benefit from severely
reduced production entering world markets from Sri Lanka.
North India market pricing overall remained strong in 2022 for quality teas due to limited supply and
supported by 100% import tariffs. North India export volumes were up c.26%, with prices in this market
on a par with last year.
2023 has seen the last of the limited 2022 tea stocks sold at significantly lower prices than in the
corresponding period last year and the first auctions of the new season also opened substantially lower.
Going forward pricing will be determined by regional production volumes and demand.
As previously announced, wages in West Bengal increased 15% for 2022 and Assam wages increased 13%
effective from August 2022. A further escalation in wages of 7.7% has recently been announced in West
Bengal, on which we await clarification.
Investment in replanting continued with 122Ha of planting completed (2021: 167Ha) and a further 182Ha
uprooted in preparation for future planting.
Bangladesh
Due to a very dry start to the season, then very wet weather and flooding coupled with a national strike
over wages during the peak season, the Bangladesh operations reported a 21% lower crop than prior year.
Our average net selling price was up 3% on prior year, due to an increased concentration on quality and
improved grade mix, though this was insufficient to compensate for the reduced volume and significant
wage inflation discussed below.
National production was 3% down on prior year but was the third highest crop on record, principally as a
result of a 22% increase in bought leaf volumes, the production of which was not affected by the strike. The
bought leaf sector has grown 140% in 5 years and its continued rapid escalation, if left unchecked, presents
challenges to the market with a risk that potential oversupply results in downward pressure on pricing.
2023 has seen reasonable prices for prior season teas in the initial sale. Forthcoming pricing will be
driven by the level of production over the summer months.
Following strike action and intervention by the government, a wage increase of 41.7% was mandated and
agreed by the unions effective from August 2022. In addition, a lump sum payment of Tk11,000 per
permanent worker was agreed, payable in 2023. The significant wage increase has substantially impacted
the ongoing cost of production and requires a meaningful increase in productivity and selling prices if tea
production in Bangladesh is to be sustainable long-term.
The total area planted in 2022 was 145Ha (2021: 143Ha) of which 118Ha was replanting and 27Ha was
newly planted areas.
8
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
Kenya
Following a cool, dry first and last quarter, our Kenyan estates’ crop production was down 12% on the
previous year. Total factory volumes were down 9%. The national crop was only down c.1%, which is
indicative of increasing production levels from smallholders.
Our average selling price in 2022 was up on prior year by 17%. We have continued to outperform our
commercial grower competitors in the district by concentrating on quality with a price differential of
7% above the average and our average prices were the highest of the commercial growers.
The “all average price” at Mombasa auction was 18% up on 2021, driven principally by the sale of
improved quality teas. There were large volumes of medium quality teas which did not sell, building a
large stock of inventory. Export levels were c.27% down on 2021 with demand from Pakistan and Egypt
lower due to the lack of availability of hard currency with which to purchase tea. Demand from the UK
was also down due to lower consumption. Increased competition from other beverages and low retail
pricing in western markets continues to be a challenge for the industry as is the oversupply of low to
medium quality CTC teas for which there is a limited market.
In 2023 our prices to date have been significantly below that of the same period of 2022 reflecting a
continuing reduced demand from Kenya’s largest two buyers, Pakistan and Egypt. Pricing levels looking
forward will depend on production volumes and quality as well as the continued shortage of hard currency
in these regions. However, our crop for Q1 2023 was significantly ahead of the same period last year.
Following the conclusion of the CBA negotiations wages are expected to increase by 7% in 2023.
We replanted a total of 53Ha (2021: 50Ha) whilst uprooting 52Ha for replanting in 2023.
Malawi
Our Malawi crop in 2022 was 3% down on that of 2021 following a slow start to the season due to the late
arrival of the rains.
Sales in the first half of 2022 experienced some delays due to the logistics challenges arising from a
scarcity of containers and flooding disruption at Durban port in South Africa. However, the situation has
significantly improved in recent months.
Malawi prices remained under pressure for much of the year with the plainer teas from West of Rift
Kenya still proving an attractive value substitution to buyers. Malawi, being land locked, is at a
considerable disadvantage to most of its neighbours due to the additional costs of transport to markets.
Our average selling price was 2% below that of 2021.
As previously announced, a wage increase of 13% was agreed effective from August 2022. A further
increase of 5% applied from January 2023.
On 26 May 2022, the Reserve Bank of Malawi announced that it would stop supporting the currency and
allowed the exchange rate to reflect market fundamentals. This resulted in a devaluation of the Kwacha of
c.25%. Despite this, the availability of foreign exchange is very limited posing challenges to importers.
There was no replanting in Malawi for a third successive year, a decision taken to conserve resources
considering trading conditions.
Selling prices in 2023 in Malawi are marginally above those of the same period of 2022. The market is
expected to be volatile for a period due to uncertainty influenced by the general direction of the Kenya
market. A lack of foreign exchange in a few key markets also adds to the expected volatility. Our
production volumes in Malawi for Q1 2023 are below those of last year.
In mid-March 2023 cyclone Freddy hit southern Malawi with torrential rain and strong winds causing loss
of life and extensive damage to property and infrastructure. Sadly, we had one fatality that occurred in our
eastern Mulanje operations where the worst of the weather was experienced and where a landslide
destroyed approximately 12Ha of tea, irrigation equipment and other water supply systems. Electricity
supply has since been reinstated to all factories and roads and bridges have been repaired so access to all
estates has been restored. Production has continued throughout, although at lower than expected levels.
9
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
The impact on the surrounding communities has been more significant with loss of life, housing and the
destruction of many hectares of food crops. We are supporting the community and providing assistance
where possible. Nationally there is a great deal of damage to infrastructure in and around the urban
centre of Blantyre which will take time to rebuild.
Instant tea, branded tea and tea lounges
India
Sales volumes of our packet tea in India fell by 9%, and net prices also reduced by 5%. Despite increasing
demand for tea, packet tea sales continue to suffer from competitive pressure in the branded market as
well as reduced demand for private label teas. However, the operation has continued to innovate with
new product development and the release of new product lines in Single Estate premium teas and five
varieties of Ready to Drink bottled iced teas.
Instant tea production in 2022 was up 17% on the previous year. Sales volumes increased 36% with
average prices also up by 5% reflecting increased demand and product mix changes, leading to a
significantly improved contribution from the operation.
UK
Revenue recovered close to pre-pandemic levels and trading improved for Jing Tea as COVID restrictions
were further eased in all markets except China. Although margins have been adversely affected by
inflation, particularly on packaging and logistics costs, overall losses are lower than those experienced in
2021. Additional warehousing has been established in Dubai to serve the Middle East markets more
efficiently and new customers have been successfully secured for 2023.
Nuts and fruits
2022
£’m
Revenue
Adjusted trading
profit/(loss)*
Trading profit/(loss)
14.9
2.9
2.9
* See note 1 to the Accounts
Macadamia
Macadamia
Avocado
Other fruits
2021
£’m
10.8
2.7
2.7
2022
£’m
19.2
2.3
2.3
2021
£’m
11.1
(0.5)
(0.5)
2022
£’m
23.0
(5.3)
(5.3)
2021
£’m
9.3
(4.1)
(4.6)
Mature
area
Ha
Immature
area
Ha
2022
Production
Tonnes
2021
Production
Tonnes
1,417
822
910
––––––––
3,149
––––––––
96
315
219
––––––––
630
––––––––
540
486
660
––––––––
1,686
––––––––
438
375
492
––––––––
1,305
––––––––
Malawi
South Africa
Kenya
Total
10
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
The Group’s kernel production volumes increased by 29% in 2022 due to improved growing conditions in
Southern Africa generally, enhanced pest control in Malawi and our Kenya crop has increased over 30% on
the previous year. The Kenya crop is increasing as further areas of maturing orchard come into bearing
alongside the increasing maturity of existing orchards.
However, our average net selling price was down 10% on 2021 reflecting high inventories and continuing
subdued market demand for kernel post COVID, particularly from China, but also the USA and Japan and
exacerbated by increased worldwide production. Sales volumes were however up 18% on 2021 and profits
benefitted from the additional volumes, related efficiencies and a favourable sales grade mix despite
higher distribution costs.
Harvesting of the 2023 crop is underway and volume indications at this stage are encouraging. The
macadamia harvest in Malawi was virtually complete before cyclone Freddy arrived in country, so there
has been no significant impact on production volumes and processing continues.
Global production volumes in 2022 were above prior year with the two major producers, Australia and
South Africa up 7% and 28% respectively. China’s production volumes also increased by an estimated
44% reducing their demand for imports. Higher global inventory going into 2023 is continuing to put
downward pressure on prices, particularly on kernel grades for the ingredients market.
This situation is expected to persist for some time. Orders and pricing in 2023 so far are well below prior
year as buyers assess the current market conditions.
Avocado
Kenya – Estate Hass
Kenya – Estate Pinkerton
Tanzania – Estate Hass
South Africa – Estate Hass
Total own estate production
Smallholders
Mature
area
Ha
608
133
–
–
––––––––
741
––––––––
Immature
area
Ha
2022
Production
mkg
2021
Production
mkg
278
–
152
79
––––––––
509
––––––––
12.4
2.0
–
–
––––––––
14.4
––––––––
1.2
––––––––
7.5
1.0
–
–
––––––––
8.5
––––––––
0.6
––––––––
Our estate avocado production was up 70% on last year, due in large part to the bi-annual nature of the
production which also resulted in higher volumes packed for smallholders The avocado tree has a natural
tendency towards alternate or bi-annual bearing, widely known as ‘on’ and ‘off’ years and 2022 was an ‘on’
year. Our estate Hass pricing was up 2% on prior year, due to a firm market for the majority of our fruit
arrivals.
There was an excellent Pinkerton season with export volumes up 143% and pricing up 6% on the previous
year leading to a significant contribution from that crop to profits despite higher distribution costs.
The 2023 Pinkerton harvest is well advanced with volumes ahead of 2022 and we expect prices to be
higher. The Hass season has now started with volumes expected to be significantly behind those of 2022
reflecting the fact that it is an ‘off year’ for Hass.
We continue our avocado expansion strategy by diversifying our origin portfolio, with further plantings in
Tanzania, Kenya and South Africa. We planted 102Ha (2021: 37Ha) at our farm in Tanzania, a further 69Ha
(2021: 44Ha) in Kenya and 78Ha (2021: nil) in South Africa. In 2023 to date a further 98Ha have been
planted in Tanzania.
During the year Kakuzi in Kenya achieved GLOBALG.A.P. "SPRING" Certificate of Conformity for the
sustainable management of water resources.
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CAMELLIA PLC
CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
Other fruits
Apples – own estate
Apples – partner growers
Pears – own estate
Pears – partner growers
Stone fruit
Grapes
Blueberries
Mature
area
Ha
Immature
area
Ha
2022
Production
Tonnes
2021
Production
Tonnes
396
88
44
82
7
94
4
0
11
–
17,610
8,650
1,470
470
666
774
28
11,845
1,428
1,395
266
205
644
42
Apples and pears
Bardsley England is the Group’s only agricultural investment in the UK and to date it has failed to perform
to expectation incurring a pre-tax loss of £5.7 million in 2022. A combination of factors has contributed to
this unacceptable outcome. These include higher than anticipated labour costs, due to government policy
on pay for seasonal workers which had a consequent impact on wage rates for permanent workers, as
well as very high inflation in electricity, fertiliser, chemicals and fuel costs as a result of the Ukraine war
which also had an indirect inflationary impact on other costs. The UK apple season in 2022 saw very high
volumes of production with the market oversupplied thus applying significant downward pressure on
prices in a rising cost environment. Although consumers have experienced significant food inflation, key
retail customers have resisted any meaningful selling price increases. Studies have estimated inflation for
apple growers in the UK at 23% in contrast to average industry selling price increases of 0.8% (Source:
British Grower Association Survey). Attempts to mitigate cost increases through the restructuring
undertaken in December 2021 and other efficiency and cost reduction initiatives have had limited impact.
The record breaking heat in the summer coupled with harvesting delays due to heavy rain led to a 49%
increase in production volumes but a combination of smaller fruit and significant quality issues further
compounded the impacts of high cost inflation and low pricing.
Many producers in the UK top fruit sector are also experiencing difficulties and some producers have
ceased farming with replanting significantly scaled back. However, consumers continue to demand locally
sourced produce and UK fruit remains competitively priced. Despite the challenges in the short term, it is
our view that the UK top fruit sector is likely to present opportunities in the coming years for growth and
margin recovery for producers.
Considering the trading environment, a decision has been made to further restructure and significantly
reduce the scale of Bardsley England’s operations. As a result, the uneconomical West Kent orchards were
closed in January 2023 and discussions to exit the related leases remain ongoing.
In March 2023, Bardsley England agreed with its key customer that the existing supply contract will be
terminated at the end of the current season. Bardsley England intends is participating in the re-tendering
of this contract.
The potential closure of the West Kent packhouse operation was announced on 30 March 2023 and the
employee consultation is ongoing with packing from that site expected to continue until early August
2023 to fulfil current contracts. The business is expected to be consolidated on a single site in East Kent
which has large fruit storage facilities and is well located for access to key transport routes. This will allow
for transport and other operational efficiencies to be achieved and for future overhead cost savings.
An impairment charge of £10.0 million has been recognised in respect of Bardsley England’s assets and
goodwill in 2022 as a result of the reduced expectations for the business in the current economic and
sectoral environment. Restructuring costs in the range of approximately £1 million to £1.25 million are
expected to be incurred and recognised in the 2023 results. Due to the ongoing contractual commitments
for 2023, in conjunction with restructuring costs, we expect Bardsley England to also record a significant loss
in 2023.
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CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
Grapes
Grape production at our South African operation ended with a record harvest 17% up on that of 2021.
The grapes were high quality and were sold to local commercial-scale winemakers. The 2023 harvest in
South Africa has resulted in a further record production, well ahead of expectation. Pricing is in line with
2022.
Blueberries
2022 was the third year of full production of our 10Ha trial in Kenya.
As previously stated, the indications from the trial are that the variety planted initially does not perform
optimally in Kenyan conditions. Other varieties have been trialled in small areas during 2022 and at least
two of these are showing much greater potential than the current dominant variety planted. The reason
for establishing this commercial scale trial was to test plant establishment, agronomy practices and
varieties and this is being achieved very successfully. During 2023 the most promising varieties from the
trial will be planted in the 10Ha area.
Production in 2022 fell by 33% reflecting the transition of the trial out of one variety pending the
establishment of the others as explained above. The majority of the crop produced was sold locally.
Other agriculture
2022: Revenue – £15.8 million (2021: £11.4 million), trading profit £6.3 million (2021: £4.8 million)
Arable
Rubber
Forestry
Livestock
Mature
area
Ha
3,779
1790
Immature
area
Ha
2022
Production
Tonnes
2021
Production
Tonnes
–
138
40,621
658
m3
34,769
690
m3
2,993
2,805
45,354*
46,079*
Births
681
Births
799
* Volumes quoted are for conversion to value addition products rather than fuel wood for own use.
Arable
Our soya and maize crop production was higher than that of prior year with excellent quality being
achieved. Prices for the soya crop were 37% higher than the prior year and maize prices increased by 4%,
reflecting the impact of the Ukraine war on global food grain markets. Wheat stocks carried over from
2021 also achieved good prices. This led to substantially increased profits for our operation in Brazil.
Rubber
Production was down 5%, with pricing down 1% on last year and prices remain lower than the cost of
production. A number of initiatives are being pursued with the aim of reducing the losses from this crop.
Forestry
Kakuzi’s forestry volumes were slightly ahead of last year with the main focus on fence post sales. The
production of quality timber products is also being investigated as a potential diversified and value-added
product line.
Our Brazil operation restarted its eucalyptus timber sales during the year but no significant pine timber
sales were made. Pine resin sales continued throughout the year, providing a useful contribution to
profits.
Livestock
Births were down significantly on last year, leading to lower revenues.
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CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
There are now some 600Ha under grass production for baling and sale into the local market which will
also provide a diversified source of revenue for the livestock operation.
Other investments
Engineering – A JT Engineering
A trading loss of £0.8 million (2021: £2.3 million loss) on revenue of £13.2 million (2021: £15.3 million) was
recorded, as set out in note 1 to the Accounts. The loss in 2022 was lower than prior year due to tight cost
control and a focus on efficiency and improving terms with customers.
Market conditions in both the oil and gas and hydro sectors were flat during 2022. The surge in orders
during the autumn of 2022 subsequently abated due to government policies affecting the confidence of
the oil majors to increase production from the North Sea and the energy crisis causing the key customer
for Site Services to postpone planned projects. Order intake and enquires in 2023 to date for both
divisions are encouraging.
Associates
2022 Share of results: Loss of £3.1 million (2021: Profit of £7.2 million)
BF&M
BF&M recorded a shareholders’ net loss of Bermudian $8.8 million as compared to shareholders’ net
income of Bermudian $25.2 million for 2021. Significant increases in interest rates resulted in short-term
fluctuations in the values of BF&M’s fixed income portfolio. Both bond and equity asset prices declined,
resulting in unrealised losses of Bermudian $19 million (loss of 7.4%). A non-recurring, goodwill
impairment charge of Bermudian $5 million was also recorded.
Net income from operations, excluding fair value movements in investments and the goodwill
impairment, was Bermudian $11.5 million versus Bermudian $22.0 million in 2021. Gross premiums
written for the period increased by 3% from the prior year, driven by increased property premiums offset
by the non-renewal of a large account which was fully reinsured. Short term P&C claims and adjustment
expenses increased by 6.8% to Bermudian $15.8 million. Excluding the fair value impact, life and health
policy benefits increased by 9% to Bermudian $96.8 million. Group health claims remained elevated just
above pre-pandemic levels with a return to normalised levels expected in 2023. Volatility in financial
markets impacted overall assets under management, however the pension and annuity businesses
remain well-positioned as these markets recover.
United Finance and United Insurance
Our two associate companies in Bangladesh, United Finance and United Insurance, produced lower
results reflecting continued challenging economic conditions in Bangladesh.
While United Finance’s net operating income was 13% higher than that of the prior year due to an
increase in the number of new loans sanctioned, margins were impacted by the effect of inflation on the
overhead base and an increase in the costs of non-performing loans.
The underwriting profit for United Insurance decreased due to a decrease in gross premiums, higher
claims and increased cost of reinsurance.
Investment portfolio
The total value of the portfolio at 31 December 2022 was £35.6 million (2021: £40.2 million). During the
year a net £5.6 million was realised from the investment portfolio.
Currencies
Over the course of the year, Sterling weakened against the majority of our operating currencies. This has
resulted in a gain on foreign exchange translation of £9.3 million (2021: loss £4.0 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 2022 would have been £0.2 million lower. Our
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CHAIRMAN’S STATEMENT AND OPERATIONAL REPORT
profit before tax includes an exchange gain of £1.5 million on transactions during the year (2021: gain
£0.4 million).
Tax and other provisions
The Group’s tax charge reflects the losses in the UK and impairment charges which are not deductible for
tax. The tax charge also reflects the reversal of a significant deferred tax liability as a result of movements
in the surplus on the UK Pension Scheme.
As is normal at this time of the year, we have ongoing wage negotiations relating to prior periods in India.
We consider we have made adequate provision for their likely outcome.
Despite progress being made during 2022, we continue to have a number of significant uncertain tax
situations totalling £12.5 million, which have been disclosed previously and which are detailed in note 42
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.
On an IAS 19 basis, at the end of 2022 the UK scheme had a deficit of £1.1 million. No contributions are
currently being made to the scheme. The next triennial valuation is due in 2023.
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 loss after tax of £9.3 million
(2021: post tax net gain £16.5 million) is reflected in the Statement of Comprehensive Income. The net
loss this year arises primarily from the UK scheme where asset performance was lower than expected.
Outlook
Trading in 2023 to date has been mixed, with higher production volumes in Kenya offsetting the lower
prices being achieved in that market. There has been a positive opening for new season teas in
Bangladesh but prices in India are significantly lower than last year, albeit for both countries it is very
early in the season. Macadamia volumes are also significantly ahead of those of 2022 but pricing
continues to be under significant pressure and sales volumes are below prior year. The remaining crops
are developing in line with what we would expect at this stage in the growing cycle.
There remains residual uncertainty about how the war in Ukraine might impact the tea market and input
costs more broadly going forward. High energy prices will continue to affect our margins. Fertiliser prices
also remain relatively high with the impact continuing to be felt in the cost of production across all our
agricultural operations. Furthermore, rising inflation is leading to continuing increases in wage demands.
Overall, however, with financial markets less volatile than in the recent past, we expect adjusted profit
before tax for 2023 to be ahead of that of 2022 and 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.
We thank all of our staff for the way in which they responded to the many challenges of the year in what
has been a fast-changing business environment. The passion for our products, our skills and the
professionalism of our people are key to our success.
Malcolm Perkins Susan Walker
Chairman and Interim Chief Executive CFO
Graham Mclean
Director of Agriculture
3 May 2023
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CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
At Camellia, ESG (Environmental, Social and Governance) is integral to our business. This is based on our
fundamental belief that we are custodians of our operations and must ensure a process of continuous
improvement across all that we do. This enables our assets to be passed on to future generations whilst
caring for the environments in which they are based and for those communities who depend on them.
We believe that the success of all our operations is intrinsically connected to the communities, the
environments and wider supply chains in which they operate.
During the year we developed a Group sustainability strategy consisting of five guiding pillars which are
set out below, with the United Nations 10 Sustainable Development Goals (SDGs) to which they align:
Group guiding pillars
Environment
Emissions
Social Sustainability
Safeguarding
Health and safety
SDG*
6, 13 and 15
3, 7, 12, 13 and 15
3, 4, 5, 6 and 8
5, 8, 12 and 16
3 and 8
* SDG 3 (Good health and wellbeing); SDG 4 (Quality education); SDG 5 (Gender equality); SDG 6 (Clean water and
sanitation); SDG 7 (Affordable and clean energy); SDG 8 (Decent work and economic growth); SDG 12 (Responsible
consumption and production); SDG 13 (Climate action); SDG 15 (Life on land) and SDG 16 (Peace, justice, and strong
institutions).
Within these five guiding pillars we have identified five key focus areas for which the Group’s operations
will create timebound action plans and initiatives to actively create strategies and seek solutions which
address the various challenges facing the Group:
n Water stewardship
n
n
n
Climate action and decarbonisation
Access to clean drinking water and sanitation
Safeguarding
n Health and safety
We realise that these are highly complex areas and it will take time to devise, as well as implement, plans
to achieve our desired outcomes. In some areas solutions may not yet exist but we intend to actively seek
and trial possibilities where practically and economically feasible.
The Group undertakes a variety of ESG projects and initiatives, examples of which are set out in this
report and on our website (www.camellia.plc.uk).
The Group’s approach to ESG is described in detail in this section and is the responsibility of the Board
which is supported by the Sustainability and Safeguarding committee. The boards of the Group’s
operating companies closely consider their respective governance protocols and the environmental and
social 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 the most significant long-term risk to the Group’s agricultural operations. We seek to
mitigate the impact of this risk by diversifying our agricultural production by both origin and crop. We also
continue to plant more drought resistant crop varieties and use other initiatives, such as regenerative
farming methods and sustainable irrigation.
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ENVIRONMENTAL AND SOCIAL REPORT
In addition to our efforts to minimise our environmental impact, we work to protect and enhance forests
and water bodies to promote biodiversity. 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 oversees c.9,000Ha of indigenous forests and conservation areas and a further 7,200Ha of
commercial forestry (eucalyptus, pine and 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 further below.
We use specialist 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.
Environmental reporting
The Group continues to report under the Streamlined Energy & Carbon Reporting Regulations (SECR),
which is set out in the rest of this section. The Group’s 2023 annual report will include the Group’s
reporting in line with the Taskforce on Climate-Related Financial Disclosures (TCFD) reporting framework.
Based on prior year Scope 1 and Scope 2 carbon footprint investigation and analysis, the Group has
determined that our priority for the reduction in emissions should be the thermal and electrical energy
requirements of tea manufacture. Thermal energy demand reflects the highest levels of emissions and
accordingly initiatives have been targeted towards reducing the quantity of fuel (coal, gas, wood)
consumed.
Global GHG* emissions (excluding UK) and energy use data for the year to 31 December
Reporting year
Group sectors reported
Emissions from the combustion of fuels,
fertilisers, waste, livestock, land use
change and refrigerants (Scope 1) (tCO2e)**
Emissions from purchase of electricity,
heat, steam, and cooling purchased for
own use (Scope 2, location- based) (tCO2e)
Total gross Scope 1 and Scope 2 emissions
(location-based) (tCO2e)
Intensity ratio: Kg CO2e/Kg of made tea
2022
Global
(Excluding UK)
2021
Global
(Excluding UK)
2020
Global
(Excluding UK)
2019
Global
(Excluding UK)
154,508
156,853
164,227
181,076
40,434
41,958
42,717
47,625
194,942
198,811
206,944
228,701
1.36
1.29
1.40
1.51
* Greenhouse gas
** tCO2e – tonnes of carbon dioxide equivalent
Refer to Appendix 1 for more detailed data and Appendix 3 for the methodology.
There is no market-based data available for global (excluding UK).
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ENVIRONMENTAL AND SOCIAL REPORT
Changes in Scope 1 and Scope 2 emissions
The Group’s Scope 1 and Scope 2 location-based emissions (excluding UK) reduced by 1.9% during the
reporting period. This was primarily due to a reduction in volumes of made tea produced in Bangladesh
and a lower national grid emission factor for Kenya. This was partially offset by higher electricity usage in
South Africa due to an increase in the area under irrigation. In the tea drying process the Indian
operations rely on coal whilst Bangladesh uses natural gas. Where possible, and with infrastructure
permitting, cleaner fuel sources and efficiency improvements are being implemented, although progress
is at an early stage.
We report the made tea intensity ratio (2022:1.36 kg CO2e per kg of made tea; 2021:1.29kg CO2e per kg of
made tea) and we continue to invest to improve the carbon efficiency of our tea factories. There has been
a 5.9% increase in the Group’s location-based made tea carbon intensity, mainly due to less carbon
efficient production in Bangladesh. Green leaf volumes received into factories reduced during the period
leading up to the industrial action so factory capacity was not optimised. Following the strike, leaf was
longer, resulting in leaf volumes taking longer to process. We are also pleased to observe that our Kenyan
and Malawian tea operations have continued to improve their thermal energy efficiency in their tea
factories.
As mentioned above, the Group’s perennial crops sequester significant amounts of carbon. We previously
reported that we conducted an external study 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 continue to assess how to reflect this as part of the Group’s sustainability
strategy. We await further direction from the GHG Protocol, under its land sector removals guidance, in
relation to the accounting for carbon stocks.
UK GHG emissions and energy use data for the year to 31 December
Reporting year
Group sectors reported
2022
UK
2021
UK
2020
UK
2019
UK
Emissions from the combustion of fuels, fertilisers,
waste, livestock, land use change and refrigerants
(Scope 1) (tCO2e)
Emissions from purchase of electricity, heat,
steam and cooling purchased for own use
(Scope 2, location-based) (tCO2e)
Total gross Scope 1 and Scope 2 emissions
(location-based) (tCO2e)
5,937
5,718
5,436
7,147
4,125
4,408
5,130
5,316
10,062
10,126
10,566
12,463
Refer to Appendix 2 for more detailed data including market-based data and Appendix 3 for the methodology.
Environmental certifications
A JT Engineering is 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.
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ENVIRONMENTAL AND SOCIAL REPORT
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:
Expected Saving
per annum
(MWh)
3,534
150
146
100
100
Expected Saving
per annum
(MWh)
Operation
Energy Saving Initiatives
Kenya
Kenya
UK
Kenya
Kenya
2021 key examples were:
Improved fuelwood management and site
suitability at all tea factories
Installing new more energy efficient irrigation pumps
Installation of fast close doors at cold stores,
reducing the amount of ambient air flow
Installation of variable flow controllers
on irrigation pumps
Variable speed drives fitted to air inlet fans at
two of its tea factories
Operation
Kenya
UK
Kenya
India
Energy Saving Initiatives
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
4.1 GWh (2021: 2.3 GWh) saving in energy per annum.
In addition, the Group is continuing with its programme of replacing existing energy sources with
renewables and in 2022 installed additional capacity expected to produce 430 MWh. 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 a number of our 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 to provide significant savings. We set out
examples of the key initiatives below:
Operation
Tea
Avocado
Agriculture
Energy Saving Initiatives
Replacing inefficient withering fans
Continuous green leaf withering to improve the efficiency of the withering
process
Introduction of more energy efficient driers at its tea factories
Testing alternative steam trap systems
Variable frequency drives fitted to green leaf maceration equipment
Variable speed drives fitted to air inlet fans for tea driers
Improved fuelwood management and site suitability
Installation of heat exchangers to recycle exhaust heat
Installation of more efficient cold rooms
Variable speed drives fitted to irrigation pumps
Replacement of lighting with more energy efficient LED lighting
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CAMELLIA PLC
ENVIRONMENTAL AND SOCIAL REPORT
The Group will continue with its program of replacing existing energy sources with renewables where
possible with a focus on increasing installed solar capacity. Our ultimate intention is to set energy use and
emission reduction targets across our operations.
Social
The Group’s businesses are fundamentally connected to the welfare of the communities and
environments in which they operate. They proactively invest to ensure these environments are protected
and improved. Our focus is on the long-term stability, security and continuity of our businesses and those
communities. To this end our subsidiaries are working with supply chains, customers, national
governments, trade unions and NGOs to help improve the livelihoods of their 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 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 operations run dispensaries
established on their estates, offering medical services and care to employees, their dependents, and
people from surrounding communities. These are manned by qualified medical personnel from our
operations and services are free to employees and their dependents. Across the Group we continue to
operate 50 hospitals and 85 dispensaries that we own and/or operate. In 2022, the Group performed
1million patient treatments, of which 564,000 were for employees.
Many of our Group’s operations provide childcare and education to their employees’ families from
nursery up to secondary school. During the year we continued to run 175 nurseries and creches,
72 primary schools and six secondary schools. In total we educated more than 23,000 children. In certain
circumstances, our Group’s operations will provide land or other resources to contribute to the running of
local schools which are not owned and/or operated by them.
We also provide housing to a large number of employees and their families. The housing is owned and
managed by our Group’s operations and is provided and maintained in line with widely recognised
international certifications. The Group’s operations own c.48,000 houses accommodating c.293,000
people, of whom c.66,000 are employed.
2022 continued to be a year impacted by the effects of the COVID pandemic. Our Group’s operations
have made significant efforts to provide safe working and living environments for our employees as well
as the wider communities in which they operate.
Approved by the Board
Amarpal Takk
Company Secretary
3 May 2023
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CAMELLIA PLC
STRATEGIC REPORT
The Strategic report contains certain forward-looking statements. These statements are made by the
Directors in good faith based on the information available to them up to the time of their approval of this
report and such statements should be treated with caution due to the inherent uncertainties, including
both economic and business risk factors, underlying any such forward-looking information.
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 2022 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
operational report on pages 5 to 15. The Chairman’s statement and operational report, together with
information contained within the Report of the Directors, highlights the key factors affecting the Group’s
development, performance and the financial performance of the Group (see pages 5 to 15 of the
Chairman’s statement and operational report). Other matters are dealt with below.
Group strategy
The Board has adopted the following strategy for the Group:
n
n
n
n
n
n
To generate long-term value for our shareholders and our stakeholders which include our employees,
customers, suppliers and the communities in which we operate
To develop a worldwide group of businesses that requires management to take a long-term view
To focus on the sustainable production of its core crops whilst continuously assessing opportunities
to diversify the Agriculture division by both crop and origin
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 Chairman’s statement
and operational report, the Environmental and social report, and within the Report of the Directors.
Business model
The Group is engaged in Agriculture, Other investments and Associates.
Camellia operates a decentralised business model which empowers the management teams in its
subsidiaries to run their businesses with the scope and accountability to identify and implement
initiatives that create value for the Group. Our devolved approach enables decisions to be made by those
closest to the issues and the stakeholders that may be affected, thereby fostering resilience and flexibility
in planning and enabling timely responses to impacts and opportunities.
Regular reports are made to the Board on performance against the annual budget and each operation is
expected to perform against an agreed strategy with goals and targets for the short, medium and
long-term.
Agriculture
To focus on our tea, macadamia and avocado crops, where we have scale and geographic diversity. To
maintain and selectively expand 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.
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STRATEGIC REPORT
All our agriculture operations have regard to the potential threats arising from politics and the impact of
climate change, particularly in water stressed areas, and will adapt their portfolio of operations accordingly.
Other investments and Associates
A JT Engineering. To keep our presence in the energy sector under review, in line with our strategy of
expansion in areas of expertise, while divesting in non-core businesses.
Investment portfolio. To have 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. Parts of the portfolio may be sold to accelerate the Group’s investment in agriculture.
Collections. Parts of the art, philately and manuscripts collections 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.
Principal risks and uncertainties
The Group is exposed to a variety of possible risks and uncertainties that could impact the Group’s
operations and future performance. The Group regularly monitors these risks at operational and
Group level.
Our decentralised operating model enables Group company management teams to identify, evaluate and
manage risks that are relevant to their geographic location and markets. The Strategy group considers
risks identified to it by the Group companies, and where appropriate raises them to the Board and/or the
Audit committee. Information on the Group’s financial risks is disclosed in note 43 of the Accounts.
The Board has carried out an assessment of the material risks and uncertainties relating to the Group’s
principal operations, with key mitigations and assessment of change in risk year-on-year. These are set
out in the table below.
➡
increased risk
unchanged risk
➡
decreased risk
Agriculture
Risk
Climate change
Assessment of
change in risk
year-on-year
➞
22
Potential Impact
Current agricultural patterns
and practices become
unsustainable.
Land values and local
communities are impacted.
Flooding/drought/frost affecting
crop yields.
Mitigation
Geographical spread of
operations to lessen the impact
of extreme weather on the
Group as a whole.
Investment in irrigation, water
storage and drought resistant
crop varieties.
Investment in sustainable water
solutions, soil management,
energy saving initiatives and
renewable energy sources.
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STRATEGIC REPORT
Agriculture (continued)
Risk
Price volatility
Assessment of
change in risk
year-on-year
Potential Impact
The effect of climate change on
crop volumes and/or a
prolonged depression in the
world tea, macadamia or
avocado markets, either
individually or in combinations,
would have a material impact
on Group profitability.
Currency
fluctuation
Profit volatility arising from
sales in US Dollars and Euros
where there is no natural hedge
against the cost of production
in local currency.
Mitigation
Use of forward contracts,
product and crop diversification
and building long-term strategic
relationships with key
customers.
Production of value-added
products to access and supply
markets to address particular
customer demands whilst having
a much greater control over
pricing.
Monitoring of foreign exchange
rates and cash management.
Cost of
production
➞
Increased wage costs, cost of
inputs and other costs of
production resulting in lower
profitability.
Introduction of more efficient
and productive working practices
and the increased use of
mechanisation and automation.
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).
Reduction of energy
consumption and/or increased
use of renewable energy.
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.
Civil unrest,
political
instability and
war
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.
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STRATEGIC REPORT
Agriculture (continued)
Risk
Corruption
Assessment of
change in risk
year-on-year
Health and safety
Human rights
(current and
historic)
Potential Impact
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.
Mitigation
Strict adherence to anti-bribery
legislation and the
implementation of the Group
Principal Polices.
Training of staff.
Strict compliance with legislation
and training employees to adopt
safe working practices. Regular
external compliance reviews.
Continuing to implement human
rights strategies to protect,
respect and remedy.
Understanding the salient
human rights risks (via audits
and assessments). Implementing
measures to mitigate and
prevent such risks from
crystalising.
Providing 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).
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STRATEGIC REPORT
Engineering
Risk
Key customer
dependence
Dependence
on the oil and
gas sector
Health and
safety
Assessment of
change in risk
year-on-year
Potential Impact
Losing a major customer.
Mitigation
Seeking to diversify the
customer base and careful
customer relationship
management.
Changes in market conditions
leading to lower demand for
services.
Diversification into other sectors.
Close monitoring of the 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.
Investments and Associates
Risk
Market
Assessment of
change in risk
year-on-year
Potential Impact
Decline in the value of
investments and property.
Mitigation
Portfolio diversification, careful
stock selection, the regular
monitoring of individual
company stock performance and
a diversified property portfolio.
Adverse
weather events
in the
Caribbean
➞
Risk of substantial claims
materially reducing profits.
Maintaining strong capital base
and use of underwriting and
reinsurance to reduce risk.
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STRATEGIC REPORT
Group
Risk
Prolonged
impact of a
pandemic
Assessment of
change in risk
year-on-year
➞
UK and
overseas
pensions
Increases in
inflation
and/or
reductions in
long-term
government
bond yields
Lower than
expected asset
return
Changes in
local laws
restricting the
investment
choices for the
schemes’
assets
Potential Impact
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 required from the
Group.
Mitigation
Contingency plans.
Ongoing monitoring of banking
partners and country credit
ratings.
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.
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.
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.
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STRATEGIC REPORT
Group (continued)
Risk
Uncertainties
in 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 and
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
Assessment of
change in risk
year-on-year
Potential Impact
Future adjustments to taxable
income and/or expense
deductions previously recorded
or increases to the cash tax
costs incurred by the Group in
future.
Mitigation
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.
Monitoring the interpretation of
law and taking appropriate
advice and monitoring and
auditing compliance with new
developments.
Loss or theft of data.
Interruption to services for
customers and the business.
Developing our technology
systems.
Investing in developing the IT
skills and capabilities of our
people.
Actively monitoring and
mitigating any cyber-threats and
suspicious IT activity.
Disaster recovery plans for
business critical systems.
Group principal policies (GPPs)
There are a range of issues that are important to the Group and to all of our operations, whatever sector they
operate in. These are set out in the GPPs which are periodically cascaded across the Group. Each operation is
required to prescribe its own local policies based upon the GPPs. On an annual basis, each significant
operation confirms to Group its adherence with the GPPs. 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.
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STRATEGIC REPORT
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, Employee Welfare GPP and Human Rights 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 Rainforest Alliance 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.
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.
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STRATEGIC REPORT
Human rights
Camellia Plc and its operating companies believe that businesses flourish where human rights are
protected and respected, with remedy available. The Group is committed to protecting and respecting the
dignity, well being and human rights of the Group’s employees, the communities in which the Group
operates and those with whom we have relationships or who may be impacted by the Group’s
operations.
The Group is committed to upholding internationally recognised human rights in line with the principles
and guidance contained in the UN Guiding Principles on Business and Human Rights, 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. Where national law and international human rights
standards differ, we follow the higher standard; where they are in conflict, we adhere to national law,
while seeking ways to respect international human rights to the greatest extent possible.
Compliance GPPs
Anti-Bribery and corruption
The Company has adopted an anti-bribery policy which complies primarily with the requirements of the
UK Bribery Act 2010 although the Board also requires compliance with the laws of all countries in which
the Group operates.
All Group employees, officers and executives, and all those acting for or on the Group’s behalf are strictly
prohibited from offering, paying, soliciting or accepting bribes or kickbacks, including facilitation
payments.
Compliance with the anti-bribery policy is monitored by the individual operations and incidents are
reported to the anti-bribery officer for such operation.
In addition, the Board has adopted an anti-facilitation of tax evasion policy which complies with the
requirements of the UK Criminal Finances Act 2017. The policy has been introduced across the Group and
its compliance is monitored at Group and by individual operations.
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. Employees have access to the whistleblowing officer for the individual
operation, as well as the Group whistleblowing officer or the chair 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 2022 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.
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STRATEGIC REPORT
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 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 division, 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 Chairman’s statement and
operational report on pages 5 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
n Health and 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.
Section 172 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.
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STRATEGIC REPORT
Long-term
The Board is 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 to improve profitability. This
includes investment in social and environmental initiatives, in particular, to mitigate the impact of
climate change. This also includes 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 continues to be made across
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 projects are initiated by staff in our subsidiaries each
year, which we highlight on our website and various social media platforms. Further information can be
found in the Environmental and social report.
Views of stakeholders are provided to the Board through the information from management reporting,
committees and meetings and operational visits. The Board conducts regular reviews of how to continue
to engage effectively with stakeholders and there is ongoing dialogue between members of the Board
and stakeholders.
Employees
In order to track progress made, and in line with our culture of seeking ongoing feedback, another
annual employee engagement survey, Your Voice, was undertaken during 2022. The survey gathered
anonymous and open feedback from employees to inform local management decisions as well as to
provide Board insights. All employees in the UK were invited to respond and the results of the survey are
continuing to be used to plan key initiatives and track progress.
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. 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 business.
As set out in the Group’s Employee Welfare Policy, operating companies are expected to 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
2022.
Company Directors
All employees
Approved by the Board
Amarpal Takk
Company Secretary
3 May 2023
Men
5
50,965
Women
2
55,793
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REPORT OF THE DIRECTORS
The Directors present their report together with the audited consolidated accounts for the year ended
31 December 2022.
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 activity of Camellia
Plc is a holding company and 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 Chairman’s statement and operational report.
Results and dividends
The loss after tax for the year amounted to £8.3 million (2021: Profit after tax £4.5 million). The Board is
proposing a final dividend for the year 2022 of 102p per share payable on 26 July 2023 to holders of the
ordinary shares registered at the close of business on 16 June 2023. Therefore, the total dividend payable
for 2022 is 146p per share (2021: 146p per share). Details are shown in note 12 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
Susan Walker
31 December
2022
1 January
2022
1,673
220
1,673
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, Rachel English and
Stephen Buckland will retire and, being eligible, will seek re-election at the forthcoming Annual General
Meeting (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 and chairman of the
Nomination committee.
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 of United Finance Limited.
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REPORT OF THE DIRECTORS
Non-executive directors
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 holds an executive
position within The Camellia Foundation, a UK charity whose primary donor of the same name is the
ultimate majority shareholder of Camellia Plc. He is a member of the Audit committee.
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. She became the chair of the Audit and
Remuneration committees and joined the Nomination committee on 8 June 2022.
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 is a
member of the Remuneration 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 became a member the Audit,
Remuneration and Nomination committees on 8 June 2022.
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.
Substantial shareholdings
As at 6 April 2023 the Company has been advised of the following interests in its share capital:
Shareholder
Camellia Holding AG
Nokia Bell Pensioenfonds OFP
Quaero Capital SA
No. of Shares
1,427,000
361,500
143,148
% of total
voting rights
51.67
13.09
5.18
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 37 to the Accounts.
At the AGM in 2022, 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
So far as each Director is aware, there is no relevant audit information of which the Company’s
auditors are unaware.
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REPORT OF THE DIRECTORS
n
Each Director has taken all the steps that ought to have been taken as a Director, including making
appropriate enquiries of fellow Directors and of the Company’s auditors for that purpose, in order to
be aware of any information needed by the Company’s auditors in connection with preparing their
report and to establish that the Company’s auditors are aware of that information.
Energy and carbon disclosure
In compliance with the SECR requirements, our greenhouse gas emissions, energy consumption and
energy reduction initiatives are reported within the Environment and Social report on pages 16 to 20.
Employees and 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 section 172 Statement on pages 30 to 31.
Research and development
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 in conjunction with
specialised departmental teams are focused on numerous projects to improve operational efficiencies
(both field and factory), pest and disease identification and control, improving energy efficiency and
utilisation and the implementation of new technologies to enhance automation.
We continue to collaborate with various organisations, for example, the Cambridge Environmental
Sustainability Strategy committee, the Carbon Trust, and the Gatsby Foundation on various areas of
future business strategy. 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 decisions on the implementation of precision farming
technologies.
Future development
Details of future developments are set out in the Chairman’s statement and operational report and in 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, and the most recent
business performance of the Group as described in the Chairman’s statement and operational report on
pages 5 to 15.
They also considered the potential impact of the current operating environment and the Ukraine conflict
on the business for the next 15 months.
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 and the Ukraine
conflict, we expect our Agriculture businesses will continue to operate broadly as set out in the
Chairman’s statement and operational report. We have assumed that the leisure and food services
markets continue to recover gradually over the course of the next year.
At 31 December 2022, the Group had cash and cash equivalents net of borrowings of £45.6 million. In
addition, the Group had undrawn short-term loan and overdraft facilities of £22.4 million and a portfolio
of liquid investments with a fair market value of £35.6 million. In early January 2023, £16.6 million in cash
was received from the sale of ACS&T.
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REPORT OF THE DIRECTORS
The Directors have modelled various severe but plausible scenarios using assumptions including the
combined effect of reduced sales volumes for tea, and reduced sales volumes for macadamia during
2023. 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 2023 for our tea, macadamia and avocado crops.
Historically in the Tea operations, restrictions on, or reductions in, the supply of tea either regionally or
globally have led to higher selling prices. 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 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 43 of the Accounts.
Corporate governance
The Company’s statement on corporate governance can be found in the Corporate Governance report on
pages 36 to 40.
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,
stakeholders, communities and to the interests of the business.
Approved by the Board
Amarpal Takk
Company Secretary
3 May 2023
35
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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 seven Directors, four of whom are non-executive Directors as set out on
page 4. The remaining Directors are executive Directors, including the Chairman. The names and brief
biographical details of each Director appear on pages 32 and 33.
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 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.
Board diversity
The Group has an Employee Welfare GPP which Group companies are expected to subscribe to (see
page 28). In addition, the Company has a Dignity at Work and Equal Opportunities policy. The Board of
Directors is responsible for the effective operation of this policy and for ensuring compliance with
discrimination law.
The key principle of our Dignity at Work and Equal Opportunities policy is that there should be equal
opportunities for employees to reach their potential and we achieve this by empowering people to excel
in their careers regardless of race, gender, ethnicity, cognitive or personal strengths, sexual orientation or
socio-economic background. Our objective is that all staff are respected, valued and included.
The above objectives apply equally to the Board and to its Nomination, Audit and Remuneration
committees, as well as the Group as a whole. Such diversity and inclusion objectives for senior
appointments are achieved through the engagement of specialist external executive recruitment firms.
The most recent example was in respect of the appointment of Rachel English, as a non-executive Director.
36
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CAMELLIA PLC
CORPORATE GOVERNANCE
Attendance by Directors at Board and committee meetings held during the year was as follows:
Director
Malcolm Perkins
Tom Franks
Graham Mclean
Susan Walker
Stephen Buckland
Gautam Dalal
Rachel English
William Gibson
Simon Turner
Frédéric Vuilleumier
Board*
Audit*/**
Remuneration*/**/***
Nomination*/**
9/9
4/4
9/9
9/9
9/9
4/4
6/6
3/4
9/9
9/9
–
–
–
3/3
1/1
2/2
1/1
–
2/2
–
–
–
–
–
2/2
1/1
3/3
2/2
2/2
–
–
–
–
1/1
1/1
2/2
1/1
* Tom Franks, William Gibson and Gautam Dalal’s attendance reflects the period up to 30 June 2022 and Rachel
English’s attendance reflects the period from 6 May 2022.
** Frédéric Vuilleumier’s attendance reflects the period from 8 June 2022.
*** Where a meeting was not quorate, decisions were raised to and approved by the Board.
Board evaluation
The Board has agreed to undertake a performance evaluation by way of internal review every three
years. The last evaluation was conducted in 2021. Details of the next review will be disclosed when the
next review is completed at the end of 2024.
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 an Agriculture Executive
Committee which is chaired by the Director of Agriculture and includes the Chairman (as interim Chief
Executive), Chief Financial Officer, the Group General Counsel and heads of all the key agricultural
operations.
Investments and Associates report directly to the Chairman.
Nomination committee
The committee is chaired by Malcolm Perkins. Its other members are Rachel English, Frederic
Vuilleumier 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
37
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CAMELLIA PLC
CORPORATE GOVERNANCE
Audit committee
The committee is chaired by Rachel English (Gautam Dalal chaired the committee up to 8 June 2022).
The other members of the committee during the year were Stephen Buckland and Frederic Vuilleumier.
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 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.
Ensuring the integrity of the financial statements and associated announcements is a fundamental
responsibility of the Audit Committee. During the year it formally reviewed the Group’s interim and
annual reports. These reviews considered:
n
n
n
n
n
The description of performance in the Annual report to ensure it was fair, balanced and
understandable and that it provides the information necessary for shareholders to assess the
Company’s performance, business model and strategy
The accounting principles, policies and practices adopted in the Group’s financial statements, any
proposed changes to them, and the adequacy of their disclosure
Important accounting issues or areas of complexity, the actions, estimates and judgements of
management in relation to financial reporting and in particular the assumptions underlying the
going concern statement
Any significant adjustments to financial reporting arising from the audit
Tax contingencies and compliance with statutory tax obligations
A key responsibility of the Audit committee is to consider the significant areas of complexity,
management judgement and estimation that have been applied in the preparation of the financial
statements. The Committee has, with support from Deloitte LLP (Deloitte) as external auditor, reviewed
the suitability of the accounting policies which have been adopted and whether management has made
appropriate estimates and judgements. Set out below are the significant areas of accounting judgement
or management estimation and a description of how the Committee concluded that such judgements
and estimates were appropriate.
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.
Carrying value of intangible assets
The Group’s carrying values of the Jing Tea 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 likely future yield profile of the Assam estates and the range of future
revenue growth rates for Jing.
38
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CAMELLIA PLC
CORPORATE GOVERNANCE
The carrying value of the goodwill relating to Bardsley England which arose on the acquisition of that
group of companies was discussed in context of the current inflationary environment’s impact on
margins and the expected continuing challenging market conditions as well as the expected reduction in
scale of the business. In light of the significantly lower expectations for the profitability of the business
in the foreseeable future, the committee agreed that an impairment of £3.6 million had occurred.
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 impairment of assets related to Bardsley
England, no other impairment provisions were required in respect of intangible assets.
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 recent trading and third party valuations and agreed that no
impairment had occurred during the year. The carrying value of the underlying property, plant and
equipment assets used in Bardsley England business was also considered in light of the expectation of a
period of continuing losses for that business in the current trading environment and the committee
agreed that an impairment of £6.4 million had occurred.
Carrying value of BF&M
The Group’s carrying value of BF&M was higher than the share price for BF&M at 31 December 2022.
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, Kenya and India. The committee is satisfied that the
provisions represent best estimates of the likely liabilities. Consideration was given to the accounting
implications of the VAT assessment received in Malawi in 2021 and management’s judgement that it
should continue to be disclosed as a contingent liability.
The committee considered the implications of the VAT assessment received in the UK which indicated a
liability of £1.2 million. In light of external advice it is being appealed and the committee concluded that
the provision held was reasonable.
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.
Remuneration committee
The committee is chaired by Rachel English (William Gibson was chair up to 8 June 2022) and the other
members are Simon Turner and Frederic Vuilleumier.
The responsibilities of the committee include:
n
The review of the Group’s policy relating to remuneration of the Chairman, executive Directors and
the Company Secretary
39
265644 Camellia R&A pp21-pp43.qxp 03/05/2023 18:53 Page 40
CAMELLIA PLC
CORPORATE GOVERNANCE
n
n
To determine the terms of employment and remuneration of the Chairman, executive Directors and
Company Secretary with a view to ensuring that those individuals are fairly and responsibly rewarded
To approve compensation packages or arrangements following the severance of any executive
Director’s service contract
The Remuneration report appears on pages 41 to 42.
Sustainability and Safeguarding committee
The Board has expanded the remit of the previously established Safeguarding and Stewardship
committee to include not only the promotion of human rights across the Group, but to further enhance
the Group’s environmental and sustainability practices. Consequently, the committee has been
reconstituted to the Sustainability and Safeguarding committee and reports to the Board. The committee
is chaired by Rachel English. Other members are the Chairman (in his capacity as Interim CEO), the
Director of Agriculture, the Group General Counsel and the Head of Strategy. The committee advises the
Board on strategy in these areas and monitors and reports on progress against the agreed strategy.
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 37.
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
3 May 2023
40
265644 Camellia R&A pp21-pp43.qxp 03/05/2023 18:53 Page 41
CAMELLIA PLC
REMUNERATION REPORT
This report is drawn up in accordance with the Companies Act 2006 and the AIM Rules for Companies.
Remuneration committee
Details of the Remuneration committee are set out on pages 39 and 40.
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. The remuneration policy shall be reconsidered for shareholder approval at the AGM in 2023.
The committee considers any views expressed by shareholders on Directors’ remuneration.
At the AGM on 30 June 2022, the Remuneration Report for the year to 31 December 2021 was approved
by shareholders with 99.81% of the votes cast in favour, 0.19% of the votes cast against and 641 votes
withheld.
Service contracts
Malcolm Perkins, Graham Mclean and Susan Walker are each employed on rolling service contracts.
Director
Malcolm Perkins
Graham Mclean
Susan Walker
Date of Service Contract
25 April 2002
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.
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.
41
265644 Camellia R&A pp21-pp43.qxp 03/05/2023 18:53 Page 42
CAMELLIA PLC
REMUNERATION REPORT
Directors’ remuneration
Remuneration
2021
£
2022
£
Benefits in Kind
2021
2022
£
£
Loss of Office
Total
2022
£
2021
£
2022
£
2021
£
Executive
Malcolm Perkins
Tom Franks
Susan Walker
Graham Mclean
Non-executive
Stephen Buckland
(from 1 November 2021)
Rachel English
(from 6 May 2022)
Simon Turner
Frédéric Vuilleumier
Gautam Dalal
(up to 30 June 2022)
William Gibson
(up to 30 June 2022)
Jonathon Bond
(up to 3 June 2021)
Chris Relleen
(up to 31 August 2021)
Total
414,785
318,146
408,288
439,219
200,560
611,820
373,890
402,215
19,210
17,580
28,908
29,881
11,525
38,269
28,010
29,792
–
661,443
–
–
49,276
7,897
–
–
1,955
49,494
49,276
53,560
27,238
47,380
51,500
49,047
27,805
53,470
–
–
21,573
36,393
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
433,995
997,169
437,196
469,100
212,085
650,089
401,900
432,007
49,276
7,897
51,449
49,276
53,560
27,238
–
47,380
51,500
49,047
27,805
53,470
–
–
21,573
36,393
––––––––
––––––––
1,837,087 1,855,745
––––––––
––––––––
––––––––
97,534
––––––––
––––––––
107,596
––––––––
––––––––
661,443
––––––––
––––––––
––––––––
––––––––
––––––––
– 2,596,064 1,963,341
––––––––
––––––––
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) Rachel English received an additional fee for her role as chair of the Audit committee, the Remuneration
committee and the Sustainability and Safeguarding committee (from 6 May)
(iii) William Gibson received an additional fee for his chairmanship of the Remuneration committee and the
Sustainability and Safeguarding committee (up to 30 June 2022)
(iv) Tom Franks resigned from the board on 30 June 2022 and received a payment of £661,443 for loss of office. This
included a payment in lieu of notice equivalent to 12 months of base salary and benefits in kind
Directors’ pensions
Malcolm Perkins received no payment for pensionable service during 2022. Tom Franks, Graham Mclean
and Susan Walker received an excess non-pensionable salary supplement equivalent to 10% of base
salary.
Approved by the Board.
Amarpal Takk
Company Secretary
3 May 2023
42
265644 Camellia R&A pp21-pp43.qxp 03/05/2023 18:53 Page 43
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 International Accounting Standards Board. 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 3 May 2023.
Malcolm Perkins
Chairman
3 May 2023
43
265644 Camellia R&A pp44-pp50.qxp 03/05/2023 18:55 Page 44
CAMELLIA PLC
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2022
Continuing operations
Revenue
Cost of sales
Gross profit
Other operating income
Distribution costs
Administrative expenses
Trading profit
Share of associates' results
Profit on disposal of assets classified as held for sale
Impairments of intangible assets, investment properties
and property, plant and equipment
Loss on disposal of subsidiaries
Profit on disposal of financial assets
Operating (loss)/profit
Investment income
Finance income
Finance costs
Net exchange gain
Employee benefit expense
Net finance income/(costs)
(Loss)/profit before tax
Taxation
(Loss)/profit for the year from continuing operations
Discontinued operations
Profit for the year from discontinued operations
(Loss)/profit after tax
(Loss)/profit attributable to:
Owners of Camellia Plc
Non-controlling interests
(Loss)/earnings per share - basic and diluted
From continuing operations
From continuing and discontinued operations
44
Notes
2
3
1,3
5
6
7
8
8
8
8
8
9
2022
£'m
2021
£'m
297.2
(226.7)
–––––––––––
70.5
4.4
(23.0)
(45.8)
–––––––––––
6.1
(3.1)
1.8
(10.1)
–
0.3
–––––––––––
(5.0)
0.4
2.0
(2.2)
1.5
(0.4)
0.9
–––––––––––
(3.7)
(12.2)
–––––––––––
(15.9)
255.3
(197.8)
–––––––––––
57.5
2.5
(14.5)
(44.7)
–––––––––––
0.8
7.2
–
(0.5)
(0.1)
0.2
–––––––––––
7.6
0.5
2.2
(2.8)
0.4
(0.8)
(1.0)
–––––––––––
7.1
(2.6)
–––––––––––
4.5
10
7.6
–––––––––––
(8.3)
–––––––––––
–
–––––––––––
4.5
–––––––––––
(13.0)
4.7
–––––––––––
(8.3)
–––––––––––
2.3
2.2
–––––––––––
4.5
–––––––––––
13
13
(745.8) p
(470.7) p
83.3 p
83.3 p
265644 Camellia R&A pp44-pp50.qxp 03/05/2023 18:55 Page 45
CAMELLIA PLC
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2022
Group
(Loss)/profit for the year
Other comprehensive (expense)/income:
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
Remeasurements of post employment benefit obligations
Deferred tax movement in relation to post employment
benefit obligations
Corporation tax movement in relation to post employment
benefit obligations
Items that may be reclassified subsequently to profit or loss:
Foreign exchange translation differences
Share of other comprehensive income of associates
Other comprehensive (expense)/income for the year, net of tax
Total comprehensive (expense)/income for the year
Total comprehensive (expense)/income attributable to:
Owners of Camellia Plc
Non-controlling interests
Company
(Loss)/profit for the year
Total comprehensive (expense)/income for the year
Notes
2022
£’m
2021
£’m
(8.3)
–––––––––––
4.5
–––––––––––
0.1
(0.2)
0.2
(2.6)
(12.8)
3.6
23
36
35
1.0
(2.2)
2.2
0.8
20.4
(3.9)
(0.4)
–––––––––––
(12.1)
–––––––––––
–
–––––––––––
18.3
–––––––––––
9.6
0.1
–––––––––––
9.7
–––––––––––
(2.4)
–––––––––––
(10.7)
–––––––––––
(16.1)
5.4
–––––––––––
(10.7)
–––––––––––
(4.0)
0.2
–––––––––––
(3.8)
–––––––––––
14.5
–––––––––––
19.0
–––––––––––
18.4
0.6
–––––––––––
19.0
–––––––––––
11
(1.6)
–––––––––––
(1.6)
–––––––––––
6.5
–––––––––––
6.5
–––––––––––
45
265644 Camellia R&A pp44-pp50.qxp 03/05/2023 18:55 Page 46
CAMELLIA PLC
CONSOLIDATED BALANCE SHEET
at 31 December 2022
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Investment properties
Biological assets
Investments in associates
Equity investments at fair value through other comprehensive income
Money market investments at fair value through profit or loss
Debt investments 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
Money market investments at fair value through profit or loss
Debt investments 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
46
Notes
2022
£’m
2021
£’m
16
17
18
19
20
22
23
24
25
26
36
28
27
20
28
24
25
29
30
32
33
31
36
34
30
32
33
35
36
37
6.3
184.5
26.1
25.4
14.1
73.3
25.7
7.3
1.3
8.8
0.8
3.1
–––––––––––
376.7
–––––––––––
60.4
10.8
67.6
1.3
–
1.1
49.3
–––––––––––
190.5
4.6
–––––––––––
195.1
–––––––––––
(5.1)
(2.3)
(59.8)
(4.4)
(1.1)
(10.8)
–––––––––––
(83.5)
(2.0)
–––––––––––
(85.5)
–––––––––––
109.6
–––––––––––
486.3
–––––––––––
(4.4)
(19.1)
(37.0)
(8.1)
–––––––––––
(68.6)
–––––––––––
417.7
–––––––––––
0.3
15.3
353.3
–––––––––––
368.9
48.8
–––––––––––
417.7
–––––––––––
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
–––––––––––
265644 Camellia R&A pp44-pp50.qxp 03/05/2023 18:55 Page 47
CAMELLIA PLC
COMPANY BALANCE SHEET
at 31 December 2022
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
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
2022
£’m
2021
£’m
21
26
28
29
30
31
35
37
73.5
8.9
–––––––––––
82.4
–––––––––––
0.2
0.1
2.1
0.1
–––––––––––
2.5
0.5
–––––––––––
3.0
–––––––––––
(1.0)
(20.3)
–––––––––––
(21.3)
–––––––––––
(18.3)
–––––––––––
64.1
–––––––––––
(0.2)
–––––––––––
(0.2)
–––––––––––
63.9
–––––––––––
0.3
15.3
48.3
–––––––––––
63.9
–––––––––––
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
–––––––––––
The (loss)/profit for the Company is shown in note 11.
The notes on pages 51 to 123 form part of the financial statements.
The financial statements on pages 44 to 123 were approved on 3 May 2023 by the board of Directors and
signed on their behalf by:
M C Perkins
Chairman
Registered Number 00029559
47
265644 Camellia R&A pp44-pp50.qxp 03/05/2023 18:55 Page 48
CAMELLIA PLC
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2022
Cash generated from 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 property, plant and equipment
Proceeds from sale of non-current assets
Proceeds from sale of assets held for sale
Proceeds from sale of heritage assets
Purchase of heritage assets
Additions to investment property
Biological assets: non-current - disposals
Cash leaving the Group on disposal of subsidiary
Payment for acquisition of a businesses/subsidiary
net of cash acquired
Purchase of non-controlling interest
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 in cash and cash equivalents from continuing
operations
Net cash inflow/(outflow) from discontinued operation
Cash and cash equivalents at beginning of year
Exchange gains/(losses) on cash
Cash and cash equivalents at end of year
Notes
38
2022
£’m
2021
£’m
2.6
2.0
(2.2)
(8.3)
–––––––––––
(5.9)
–––––––––––
1.2
2.1
(2.8)
(13.0)
–––––––––––
(12.5)
–––––––––––
(14.4)
0.9
4.5
–
(0.1)
(2.5)
0.8
(1.6)
–
–
3.2
(2.9)
8.5
0.4
–––––––––––
(3.2)
–––––––––––
(4.0)
(5.3)
1.4
(1.6)
(2.6)
–––––––––––
(12.1)
–––––––––––
(21.2)
3.8
59.9
3.1
–––––––––––
45.6
–––––––––––
40
40
40
39
39
10
29
29
(9.9)
0.7
–
0.1
–
(0.9)
0.5
–
(3.7)
(5.9)
3.0
(8.9)
21.3
0.5
–––––––––––
(3.2)
–––––––––––
(5.2)
(1.9)
3.8
(13.1)
(1.7)
–––––––––––
(18.1)
–––––––––––
(33.8)
(0.6)
94.9
(0.6)
–––––––––––
59.9
–––––––––––
For the purposes of the cash flow statement, cash and cash equivalents are included net of overdrafts
repayable on demand.
48
265644 Camellia R&A pp44-pp50.qxp 03/05/2023 18:55 Page 49
Notes
CAMELLIA PLC
COMPANY CASH FLOW STATEMENT
for the year ended 31 December 2022
Cash generated from operations
(Loss)/profit before tax
Adjustments for:
Interest income
Profit on disposal of assets held for sale
Dividends from group companies
Increase in trade and other receivables
Increase in trade and other payables
Movement in provisions
Net movement in intra-group balances
Cash generated from/(used in) operations
Interest received
Net cash flow from operating activities
Cash flows from investing activities
Purchase of other investments - heritage assets
Proceeds from sale of other investments - heritage assets
Proceeds from sale of assets held for sale
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
29
29
2022
£’m
(1.6)
(0.3)
(0.4)
–
0.2
0.1
–
3.5
–––––––––––
1.5
0.3
–––––––––––
1.8
–––––––––––
(0.1)
–
1.8
–
–––––––––––
1.7
–––––––––––
(4.1)
–––––––––––
(4.1)
–––––––––––
(0.6)
0.7
–––––––––––
0.1
–––––––––––
2021
£’m
6.5
(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
–––––––––––
49
265644 Camellia R&A pp44-pp50.qxp 03/05/2023 18:55 Page 50
CAMELLIA PLC
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2022
Group Notes
At 1 January 2021
Profit for the year
Other comprehensive
income/(expense)
for the year
Transfer of realised
gains on disposal
of financial assets
Dividends 12
Companies joining
the Group 40
Adjustment arising
from change in
non-controlling
interest 40
Purchase of
non-controlling
interests 40
At 31 December 2021
Loss for the year
Other comprehensive
(expense)/income
for the year
Transfer of realised gains
on disposal of
financial assets
Dividends 12
Share of associate's
other equity movements
Share
Other
capital premium shares earnings reserves
£’m
5.0
–
Share Treasury Retained
£’m
356.4
2.3
£’m
(0.4)
–
£’m
15.3
–
£’m
0.3
–
Non-
controlling
interests
£’m
49.4
2.2
Total
£’m
376.6
2.3
Total
equity
£’m
426.0
4.5
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13.8
2.3
16.1
(1.6)
14.5
11.0
(5.2)
(11.0)
–
–
(5.2)
–
(1.9)
–
(7.1)
–
(1.4)
–
–
–
5.2
5.2
(1.4)
1.4
–
–
–––––––
0.3
–
–
–––––––
15.3
–
–
–––––––
(0.4)
–
0.2
–––––––
377.1
(13.0)
–
–––––––
(3.7)
–
0.2
–––––––
388.6
(13.0)
(6.0)
–––––––
48.7
4.7
(5.8)
–––––––
437.3
(8.3)
–
–
–
–
–
–
–
–
–
(10.0)
6.9
(3.1)
0.7
(2.4)
1.1
(4.0)
(1.1)
–
–
(4.0)
–
(5.3)
–
(9.3)
–
–––––––
0.3
–––––––
At 31 December 2022
–
–––––––
15.3
–––––––
–
–––––––
(0.4)
–––––––
0.4
–––––––
351.6
–––––––
–
–––––––
2.1
–––––––
0.4
–––––––
368.9
–––––––
–
–––––––
48.8
–––––––
0.4
–––––––
417.7
–––––––
Company
At 1 January 2021
Total comprehensive
income for the year
Dividends
–
–
–––––––
0.3
At 31 December 2021
Total comprehensive
expense for the year
Dividends 12
–
–
–––––––
0.3
–––––––
At 31 December 2022
0.3
15.3
–
40.7
12.1
68.4
–
68.4
–
–
–––––––
15.3
–
–
–––––––
15.3
–––––––
–
–
–––––––
–
–
–
–––––––
–
–––––––
6.5
(5.3)
–––––––
41.9
–
–
–––––––
12.1
6.5
(5.3)
–––––––
69.6
–
–
–––––––
–
6.5
(5.3)
–––––––
69.6
(1.6)
(4.1)
–––––––
36.2
–––––––
–
–
–––––––
12.1
–––––––
(1.6)
(4.1)
–––––––
63.9
–––––––
–
–
–––––––
–
–––––––
(1.6)
(4.1)
–––––––
63.9
–––––––
In relation to the reserves of the Company, £36.2 million (2021: £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 £44.1 million deficit
(2021: £53.5 million deficit).
Group retained earnings includes £155.4 million (2021: £162.1 million) which would require exchange control
permission for remittance as dividends.
50
265644 Camellia R&A pp51-pp67.qxp 03/05/2023 18:57 Page 51
CAMELLIA PLC
ACCOUNTING POLICIES
Camellia Plc (the Company) is a public Company limited by shares incorporated in the United Kingdom
under the Companies Act 2006 and is registered in England and Wales. The registered office can be found
on page 4 and its principal activity is included in the Directors report.
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.
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.
51
265644 Camellia R&A pp51-pp67.qxp 03/05/2023 18:57 Page 52
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.
52
265644 Camellia R&A pp51-pp67.qxp 03/05/2023 18:57 Page 53
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.
53
265644 Camellia R&A pp51-pp67.qxp 03/05/2023 18:57 Page 54
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, which is shown at cost less
impairment. Cost includes expenditure that is directly attributable to the acquisition of these assets.
On transition to IFRS, the Group followed the transitional provisions and elected that previous UK GAAP
revaluations be treated as deemed cost. On the application of the amendments to IAS 41 Agriculture and
IAS 16 Property, plant and equipment the Directors elected to state the Group's bearer plants at deemed
cost being the fair value recognised as at 1 January 2015 less the fair value at that date of the growing
produce which is disclosed in current assets under biological assets. Additions after that date are
recognised at historical cost.
Subsequent costs are included in the assets' carrying amount, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. Repairs and maintenance are charged to the income statement during the financial
period in which they are incurred.
No depreciation is provided on freehold land and on assets in the course of construction. Depreciation of
other property, plant and equipment is calculated to write off their cost less residual value over their
expected useful lives on a straight-line basis.
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.
Assets in the course of construction for production, supply or administrative purposes, or for purposes
not yet determined, are carried at cost, less any recognised impairment loss.
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.
54
265644 Camellia R&A pp51-pp67.qxp 03/05/2023 18:57 Page 55
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 future 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.
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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.
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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.
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.
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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.
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.
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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. Bank overdrafts
are shown within borrowings in current liabilities on the balance sheet.
Discontinued operations and assets classified as held for sale
A discontinued operation is a separate major line of business or geographic area of operation that has
either been disposed of, abandoned or is part of a plan to dispose of a major line of business or
geographic area. An operation is classified as a discontinued operation in the year that the above criteria
are met. In the consolidated Income Statement, profit/loss from discontinued operations is reported
separately from the results from continuing operations. Prior periods Income Statement and cash flow
are presented on a comparable basis.
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.
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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.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The
lease payments also include the exercise price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating a lease, if the lease term reflects the Group
exercising the option to terminate. The variable lease payments that do not depend on an index or a rate
are recognised as expense in the period on which the event or condition that triggers the payment
occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (i.e. those leases that have a lease term of 12 months or less from the commencement date
and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption
to leases of office equipment that are considered of low value (i.e. below £0.01 million ). Lease payments
on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis
over the lease term.
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.
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Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amount of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit, and is accounted for using the liability method. Deferred tax is not
accounted for if it arises from initial recognition of an asset or liability in a transaction, other than in a
business combination, that at the time of the transaction affects neither accounting nor taxable profit or
loss. Deferred tax is determined using tax rates and laws that have been enacted or substantively
enacted by the balance sheet date and are expected to apply when the related tax asset is realised or the
tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised. Deferred income tax assets and
liabilities are offset when there is a legally enforceable right to offset current tax assets against current
tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by
the same taxation authority on either the same taxable entity or different taxable entities where there is
an intention to settle the balances on a net basis.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates,
except where the timing of the reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable future.
Employee benefits
(i) Pension obligations
Group companies operate various pension schemes. The schemes are funded through payments to
insurance companies or trustee-administered funds. The Group has both defined benefit and defined
contribution plans.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a
separate fund. The Group has no legal or constructive obligations to pay further contributions to the
fund. Contributions are recognised as an expense in the Income Statement when they are due.
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will
receive on retirement, usually dependent on one or more factors such as age, years of service and
compensation. The pension cost for defined benefit schemes is assessed in accordance with the advice of
qualified independent actuaries using the "projected unit" funding method.
The liability recognised in the Balance Sheet in respect of defined benefit pension plans is the present
value of the defined benefit obligation at the balance sheet date less the fair value of plan assets.
Independent actuaries calculate the obligation annually using the "projected unit" funding method.
Actuarial gains and losses arising from experience adjustments and changes in actuarial adjustments are
recognised in full in the period in which they occur, they are not recognised in the Income Statement and
are presented in the Statement of Comprehensive Income.
Past service costs are recognised directly in the Income Statement.
(ii) Other post-employment benefit obligations
Some Group companies have unfunded obligations to pay terminal gratuities to employees. Provisions
are made for the estimated liability for gratuities as a result of services rendered by employees up to the
balance sheet date and any movement in the provision is recognised in the Income Statement.
The estimated monetary liability for employees' accrued annual leave entitlement and workers profit
participation at the balance sheet date is recognised as an accrual.
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources will be required to settle the obligation and the
amount has been reliably estimated.
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Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company’s equity share capital (treasury shares), the
consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted
from equity attributable to the Company’s equity holders until the shares are cancelled or reissued.
Where such shares are subsequently reissued, any consideration received, net of any directly attributable
incremental transaction costs and the related income tax effects, is included in equity attributable to the
Company’s equity holders.
Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Group’s financial
statements in the period in which the dividends are approved by the Company’s shareholders. Interim
dividends are recognised when paid.
Critical accounting judgements and key sources of estimation uncertainty
In the view of the Directors, the following accounting judgements and estimations have been made in the
process of applying the Group’s accounting policies which have a significant effect on the amounts
recognised in financial statements.
Critical judgements in applying the Group's accounting policies
The following are critical judgements not being judgements involving estimations (which are dealt with
below) that the Directors have made in the process of applying the Group's accounting policies.
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.
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(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 bearer plants are determined by management at the time
of acquisition or planting 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. Climate change will also impact useful lives. In the short-term, increases in the volatility of
weather patterns have the potential to increase plant deaths. Long-term these factors could reduce
useful lives by suppressing yields and/or increasing the cost of taking mitigating actions. 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 for all our bearer plants in aggregate by
10% or 20% would result in additional depreciation of £0.5 million or £1.0 million respectively.
(ii) Impairment of assets
The assessment of the recoverable amount for each group of CGUs is subject to a number of assumptions.
Management performs periodic reviews of goodwill and other intangible and tangible assets for
indications of impairment. The Group estimates the value in use of the cash-generating units to which the
goodwill, intangible and tangible assets with indefinite/finite useful life are allocated. Estimating the value
in use requires the Group, with the help of independent professional valuers where applicable, to make
an estimate of the expected future cash flows from the cash-generating units and also to choose suitable
discount rates in order to calculate the present value of those cash flows. Impairment tests are sensitive
to forecasted EBITDA, growth rates and discount rates and changes in these assumptions may result in
changes in recoverable values. In determining appropriate assumptions consideration is given to the
impact of weather patterns on future yields and operating costs. The carrying amount of the Group’s
goodwill and indefinite/finite life intangible assets at the balance sheet date is disclosed in note 16.
(iii) Biological assets
Biological assets are carried at fair value less estimated point-of-sale costs. Where meaningful market-
determined prices do not exist to assess the fair value of biological assets, the fair value has been
determined based on the net present value of expected future cash flows from those assets, discounted
at appropriate pre-tax rates. In determining the fair value of biological assets where the discounting of
expected future cash flows has been used, the Directors have made certain assumptions about expected
life-span of the plantings, yields, selling prices, costs and discount rates. Details of assumptions made and
sensitivity analysis are given in note 20.
(iv) Retirement benefit obligations
Pension accounting requires certain assumptions to be made in order to value obligations and to
determine the impact on the Income Statement. These figures are particularly sensitive to assumptions
for discount rates, life expectancy and inflation rates. Details of assumptions made and sensitivity
analysis are given in note 36.
(v) Taxation and other liabilities
Income tax liabilities include a number of provisions including in respect of open tax years 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. The Group records reasoned estimates of uncertain tax positions where it is assessed
on the balance of probabilities that an adjustment is likely. 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 42.
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(vi) 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 34.
Changes in accounting policy and disclosures
(i) New and amended standards adopted by the Group
In the current year, the Group has applied a number of amendments to IFRS Accounting Standards issued
by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting
period that begins on or after 1 January 2022. Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial statements.
Amendments to IFRS 3 – Reference to the Conceptual Framework
The Group has adopted the amendments to IFRS 3 Business Combinations for the first time in the current
year. 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
Provisions, Contingent Liabilities and Contingent Assets, an acquirer applies IAS 37 to determine whether
at the acquisition date a present obligation exists as a result of past events. For a levy that would be
within the scope of IFRIC 21 Levies, the acquirer applies IFRIC 21 to determine whether the obligating
event that gives rise to a liability to pay the levy has occurred by the acquisition date.
Amendments to IAS 16 Property, Plant and Equipment—Proceeds before Intended Use
The Group has adopted the amendments to IAS 16 for the first time in the current year. The amendments
prohibit deducting from the cost of an item of property, plant and equipment any proceeds from selling
items produced before that asset is available for use, i.e. proceeds while bringing the asset to the location
and condition necessary for it to be capable of operating in the manner intended by management.
Consequently, an entity recognises such sales proceeds and related costs in profit or loss. The entity
measures the cost of those items in accordance with IAS 2 Inventories.
The amendments also clarify the meaning of 'testing whether an asset is functioning properly'. IAS 16
now specifies this as assessing whether the technical and physical performance of the asset is such that it
is capable of being used in the production or supply of goods or services, for rental to others, or for
administrative purposes.
If not presented separately in the statement of comprehensive income, the financial statements shall
disclose the amounts of proceeds and cost included in profit or loss that relate to items produced that
are not an output of the entity’s ordinary activities, and which line item(s) in the statement of
comprehensive income include(s) such proceeds and cost.
Annual Improvements to IFRS Standards 2018–2020
The Group has adopted the amendments included in the Annual Improvements to IFRS Accounting
Standards 2018-2020 Cycle for the first time in the current year. The Annual Improvements include
amendments to four standards.
IFRS 1 First-time Adoption of International Financial Reporting Standards
The amendment provides additional relief to a subsidiary which becomes a first-time adopter later than
its parent in respect of accounting for cumulative translation differences. As a result of the amendment,
a subsidiary that uses the exemption in IFRS 1:D16(a) can now also elect to measure cumulative
translation differences for all foreign operations at the carrying amount that would be included in the
parent’s consolidated financial statements, based on the parent’s date of transition to IFRS Accounting
Standards, if no adjustments were made for consolidation procedures and for the effects of the business
combination in which the parent acquired the subsidiary. A similar election is available to an associate or
joint venture that uses the exemption in IFRS 1:D16(a).
64
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ACCOUNTING POLICIES
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.
IFRS 16 Leases
The amendment removes the illustration of the reimbursement of leasehold improvements.
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.
(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 (including the June 2020 and Insurance contracts
December 2021 Amendments to IFRS 17)
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture
Amendments to IAS 1 Classification of Liabilities as Current or Non-current
Amendments to IAS 1 and IFRS Practice Classification of Liabilities as Current or Non-current
Statement 2 Disclosure of Accounting Policies
Amendments to IAS 8 Definition of Accounting Estimates
Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising
from a Single Transaction
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 if indicated below.
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.
65
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ACCOUNTING POLICIES
Amendments to IAS 1 – Classification of Liabilities as Current or Non-current
The amendments to IAS 1, published in January 2020, affect only the presentation of liabilities as current or
non-current in the statement of financial position and not the amount or timing of recognition of any asset,
liability, income or expenses, or the information disclosed about those items. The amendments clarify that
the classification of liabilities as current or non-current is based on rights that are in existence at the end of
the reporting period, specify that classification is unaffected by expectations about whether an entity will
exercise its right to defer settlement of a liability, explain that rights are in existence if covenants are
complied with at the end of the reporting period, and introduce a definition of ‘settlement’ to make clear that
settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.
The amendments are applied retrospectively for annual periods beginning on or after 1 January 2023, with
early application permitted. The IASB is currently considering further amendments to the requirements in
IAS 1 on classification of liabilities as current or non-current, including deferring the application of the January
2020 amendments.
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 IASB 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.
Amendments to IAS 8 Accounting Policies Changes in Accounting Estimates and Errors—
Definition of Accounting Estimates
The amendments replace 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:
n
n
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.
66
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ACCOUNTING POLICIES
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.
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:
n
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:
–
–
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;
n
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.
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.
67
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
1 Business and geographical segments
The principal activities of the Group are as follows:
Agriculture
Engineering
For management reporting purposes these activities form the basis on which the Group reports its
primary divisions. Geographic operations in the Agriculture segment have been aggregated as they
are either producing primary crops or processing those crops to completed products.
In addition, the Group holds a number of investments.
Segment information about these businesses is presented below:
Continuing operations
Revenue
External sales
Adjusted trading profit/(loss)
Separately disclosed items (note 4)
Trading profit/(loss)
Share of associates' results
Profit on disposal of assets classified as
held for sale
Impairment of intangible assets, investment
properties and plant and equipment
Loss on disposal of subsidiaries
Profit on disposal of financial assets
Operating (loss)/profit
Comprising
– adjusted operating profit/(loss) before tax
– profit on disposal of assets classified as
held for sale
– impairment of intangible assets and
property, plant and equipment
– loss on disposal of subsidiaries
– release of provisions for wage increases
– acquisition deal costs
– restructuring costs
Investment income
Net finance income/(costs)
(Loss)/profit before tax
Taxation
(Loss)/profit for the year from continuing operations
Profit for the year from discontinued operations
(Loss)/profit after tax
Other information
Segment assets
Investments in associates
Unallocated assets
Discontinued operations
Consolidated total assets
Segment liabilities
Unallocated liabilities
Discontinued operations
Consolidated total liabilities
68
Agriculture
2022
£’m
2021
£’m
Engineering
2022
£’m
2021
£’m
Unallocated
2021
2022
£’m
£’m
Consolidated
2021
2022
£’m
£’m
1.0
13.2
15.3
283.0
238.9
15.5
–
255.3
–––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
1.9
(1.1)
–––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
0.8
7.2
(10.0)
7.2
6.1
(3.1)
(8.6)
(3.1)
(2.3)
–
(0.8)
–
(8.8)
(1.2)
(8.6)
–
(2.3)
–
(0.8)
–
15.5
–
13.0
0.1
13.1
–
6.1
–
297.2
1.1
–
–
–
–
1.8
–
1.8
–
–
–
0.2
(10.0)
–
0.3
(0.5)
(0.1)
0.2
–––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
7.6
(10.1)
–
0.3
(0.5)
(0.1)
–
(0.1)
–
–
(10.0)
(2.9)
(2.8)
(0.8)
(5.0)
13.3
–
–
–
–
–
–
5.8
15.8
13.2
(0.8)
(2.3)
(11.7)
(1.6)
3.3
9.3
–
–
–
–
1.8
–
1.8
–
–
–
–
5.8
–
–
–
–
–
–
13.3
(2.9)
(0.8)
(10.0)
(1.2)
–
(0.1)
–
–
–
–
–
–
0.6
–
(0.5)
(0.5)
(0.1)
–
–
–
(10.1)
–
–
–
–
(0.5)
(0.1)
0.6
(1.2)
(0.5)
–––––– –––––– –––––– –––––– –––––– –––––– –––––– ––––––
7.6
0.5
(1.0)
–––––– ––––––
7.1
(2.6)
–––––– ––––––
4.5
-
–––––– ––––––
4.5
–––––– ––––––
(5.0)
0.4
0.9
(3.7)
(12.2)
(15.9)
7.6
(10.0)
(2.8)
(8.3)
373.9
386.3
10.8
10.6
(82.7)
(77.8)
(7.4)
(8.0)
571.8
384.7
73.3
113.8
–
396.9
72.6
106.0
18.0
–––––– ––––––
593.5
–––––– ––––––
(85.8)
(64.8)
(5.6)
–––––– ––––––
(156.2)
–––––– ––––––
(90.1)
(64.0)
–
(154.1)
265644 Camellia R&A pp68-pp87.qxp 03/05/2023 18:59 Page 69
CAMELLIA PLC
NOTES TO THE ACCOUNTS
1 Business and geographical segments (continued)
Capital expenditure
Depreciation
Amortisation
Impairments
Continuing
Total
Continuing
Total
Continuing
Total
Continuing
Total
Agriculture
2022
£’m
2021
£’m
Engineering
2022
£’m
2021
£’m
Unallocated
2021
2022
£’m
£’m
Consolidated
2021
2022
£’m
£’m
14.1
9.4
0.3
0.3
2.5
1.0
(13.8)
(11.9)
(0.5)
(1.0)
(0.1)
(0.1)
(0.1)
(10.0)
–
–
–
–
–
–
(0.5)
(0.1)
–
–
16.9
17.3
(14.4)
(16.1)
(0.1)
(0.1)
(10.1)
10.7
11.6
(13.0)
(14.9)
–
(0.1)
(0.5)
(0.5)
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
South Africa
Tanzania
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
South Africa
North America
South America
Other
At a point in time
2021
2022
£’m
£’m
Over time
2022
£’m
2021
£’m
Total
2022
£’m
2021
£’m
54.1
29.9
24.2
97.5
38.0
6.9
2.0
8.4
13.4
21.8
––––––––––
296.2
––––––––––
30.2
20.2
24.0
97.9
32.2
13.1
1.5
7.0
8.5
19.6
––––––––––
254.2
––––––––––
0.9
–
–
–
–
0.1
–
–
–
–
––––––––––
1.0
––––––––––
1.0
–
–
–
–
0.1
–
–
–
–
––––––––––
1.1
––––––––––
55.0
29.9
24.2
97.5
38.0
7.0
2.0
8.4
13.4
21.8
––––––––––
297.2
––––––––––
31.2
20.2
24.0
97.9
32.2
13.2
1.5
7.0
8.5
19.6
––––––––––
255.3
––––––––––
69
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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
Bangladesh
India
Kenya
Malawi
South Africa
Tanzania
North America
South America
Continuing
Discontinued – United Kingdom
Carrying amount of
segment assets
2022
£’m
2021
£’m
Additions to property,
plant and equipment
2021
£’m
2022
£’m
Additions to
investment properties
2021
£’m
2022
£’m
55.9
50.9
101.1
96.4
45.3
15.9
4.1
–
15.1
––––––––––
384.7
–
––––––––––
384.7
––––––––––
71.7
63.4
97.2
89.5
46.5
14.6
2.8
0.1
11.1
––––––––––
396.9
18.0
––––––––––
414.9
––––––––––
1.6
2.4
2.8
3.8
0.6
1.4
1.1
–
0.7
––––––––––
14.4
0.4
––––––––––
14.8
––––––––––
0.6
1.9
2.2
2.7
0.1
1.1
0.9
–
0.3
––––––––––
9.8
0.9
––––––––––
10.7
––––––––––
2.5
–
–
–
–
–
–
–
–
––––––––––
2.5
–
––––––––––
2.5
––––––––––
0.9
–
–
–
–
–
–
–
–
––––––––––
0.9
–
––––––––––
0.9
––––––––––
2 Revenue
An analysis of the Group's revenue is as follows:
Sale of goods
Engineering services revenue
Property rental revenue
Total Group revenue
Other operating income
Investment income
Interest income
Total Group income
2022
£’m
2021
£’m
283.0
13.2
1.0
–––––––––––
297.2
4.4
0.4
2.0
–––––––––––
304.0
–––––––––––
238.9
15.3
1.1
–––––––––––
255.3
2.6
0.5
2.2
–––––––––––
260.6
–––––––––––
Disaggregation of revenue from contracts with customers:
At a point in time
2021
2022
£’m
£’m
Over time
2022
£’m
2021
£’m
Sale of goods
Engineering services revenue
Property rental revenue
Total Group revenue
70
283.0
13.2
–
238.9
15.3
–
–
–
1.1
––––––––––– ––––––––––– ––––––––––– –––––––––––
1.1
––––––––––– ––––––––––– ––––––––––– –––––––––––
–
–
1.0
254.2
296.2
1.0
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
3 Trading profit
The following items have been included in arriving at trading profit:
Employment costs (note 14)
Inventories:
Cost of inventories recognised as an expense (included in cost of sales)
Cost of inventories provision recognised as an expense
(included in cost of sales)
Fair value gain included in Made Tea inventory
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
Profit on disposal of property, plant and equipment
Repairs and maintenance expenditure on property, plant and equipment
Government grant income (included in other operating income)
2022
£’m
2021
£’m
118.1
108.7
181.8
163.7
2.7
–
0.2
0.2
13.4
2.7
0.1
1.5
0.1
9.9
–
––––––––––
13.3
1.6
0.1
1.5
–
7.9
0.4
––––––––––
During the year the Group benefited from £nil (2021: £0.4 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
Cost of sales
Distribution costs
Administrative expenses
Other operating income
Finance income and costs
(0.4)
0.3
(0.2)
–
(0.1)
(1.5)
–––––––––––
(1.9)
–––––––––––
–
–
–
0.2
–
(0.4)
–––––––––––
(0.2)
–––––––––––
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
0.5
0.9
–––––––––––
1.4
–
–––––––––––
1.4
–––––––––––
0.3
0.8
–––––––––––
1.1
–
–––––––––––
1.1
–––––––––––
71
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
4 Adjusted (loss)/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 (loss)/profit measure and have been
separately disclosed:
n
n
During the year, assets previously classified as held for sale including a London property and a
number of the Group's heritage assets and other items of art have been sold, realising a profit of
£1.8 million
Impairment charges of £10.0 million in relation to the goodwill and property, plant and
equipment relating to Bardsley England which arose from lower than expected profitability of the
operation due to the effects of inflation arising from the Ukraine war
n
An impairment charge of £0.1 million in relation to one of the Group's investment properties
In 2021, the following items were 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
Finishings and a related loss on sale of that business as reported in our interim results, totalling
£0.6 million
5 Share of associates' results
The Group's share of the results of associates is analysed below:
2022
£’m
2021
£’m
(2.7)
(0.4)
––––––––––
(3.1)
––––––––––
7.6
(0.4)
––––––––––
7.2
––––––––––
(Loss)/profit before tax
Taxation
(Loss)/profit after tax
72
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
6 Profit on disposal of assets classified as held for sale
During the year, assets previously classified as held for sale including a London property and a
number of the Group's heritage assets and other items of art have been sold, realising a profit of
£1.8 million. Proceeds in relation to these disposals amounted to £4.5 million.
7 Impairments of intangible assets, investment properties and property, plant and
equipment
Impairment charges relating to Bardsley England of £10.0 million were recognised. Of this £3.6 million
relates to goodwill bringing the carrying value to £nil and £6.4 million relates to property, plant and
equipment. These have arisen due to the expected continuing impact of the downturn in the
profitability of that business due to the effects of inflation arising from the Ukraine war as further
discussed on page 12.
In addition, an impairment charge of £0.1 million was incurred in relation to one of the Group's
investment properties.
In 2021, £0.5 million of impairment charges were recognised in relation to the property, plant and
equipment of Abbey Metal Finishing and its German subsidiary Atfin. These companies were
subsequently sold in the second half of 2021.
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 36)
Net finance income/(costs)
2022
£’m
2021
£’m
(1.3)
(0.8)
(0.1)
––––––––––
(2.2)
2.0
1.5
(0.4)
––––––––––
0.9
––––––––––
(1.1)
(0.6)
(1.1)
––––––––––
(2.8)
2.2
0.4
(0.8)
––––––––––
(1.0)
––––––––––
73
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
9 Taxation
Analysis of charge in the year
2022
£’m
£’m
2021
£’m
Current tax
UK corporation tax
UK corporation tax at 19.00 per cent. (2021: 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
–
–
(0.2)
–
––––––––––
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 (loss)/profit from ordinary activities
Factors affecting tax charge for the year
(Loss)/profit on ordinary activities before tax
Share of associated undertakings loss/(profit)
Group (loss)/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. (2021: 19.00 per cent.)
Effects of:
Adjustment to tax in respect of prior years
Expenses not deductible for tax purposes
Impairments not deductible for tax purposes
Adjustment in respect of foreign tax rates
Additional tax arising on dividends from overseas companies
Profits on disposals not subject to tax
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
0.2
(0.2)
(2.2)
(0.2)
––––––––––
(2.4)
6.3
0.9
––––––––––
7.2
––––––––––
4.8
(1.5)
(0.7)
––––––––––
(2.2)
––––––––––
2.6
––––––––––
9.1
–
––––––––––
3.7
(0.4)
––––––––––
(0.2)
9.1
––––––––––
8.9
3.3
––––––––––
12.2
––––––––––
(3.7)
3.1
––––––––––
(0.6)
––––––––––
7.1
(7.2)
––––––––––
(0.1)
––––––––––
(0.1)
–
(0.7)
0.3
1.9
0.8
1.7
(0.2)
(0.4)
3.7
3.7
1.5
––––––––––
12.2
––––––––––
0.7
1.1
0.1
0.9
0.5
–
(0.3)
(3.7)
3.1
0.2
––––––––––
2.6
––––––––––
The tax charge includes a deferred tax charge of £3.7 million (2021: credit of £3.7 million) relating to
the reversal (2021: recognition) of deferred tax losses able to be utilised to offset losses (2021: 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.
74
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
9 Taxation (continued)
The tax charge includes a credit of £0.4 million (2021: £0.1 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.
The current tax charge includes a credit of £0.2m (2021: £2.2m) arising from 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.
10 Discontinued operations
On 16 December 2022, the Group entered into an unconditional agreement to sell Associated Cold
Stores & Transport Limited, which was the Group’s Food Service operation. The disposal, which
completed on 10 January 2023, was effected in order to support the Group's strategy of focussing its
investment activity on its core agriculture operations and for general working capital purposes. The
effective date of the transaction is 26 November 2022. Details of the assets and liabilities disposed of,
and the calculation of the profit or loss on disposal, are disclosed in note 40.
The prior year figures in the consolidated income statement and the consolidated cashflow
statement have been restated in accordance with IFRS 5 to report the discontinued operations
separately from continuing operations.
The results of the discontinued operations, which have been included in the profit for the year, were
as follows:
2021
Revenue
Cost of sales
Gross profit
Other operating income
Administrative expenses
Profit on disposal of property, plant and equipment
Net finance costs
Profit before tax
Profit on disposal of discontinued operations
Attributable tax credit
Net profit attributable to discontinued operations
(attributable to owners of the Company)
Period ending Year ending
26 November 31 December
2022
£’m
£’m
23.7
(18.4)
––––––––––
5.3
–
(4.0)
0.5
(0.1)
––––––––––
1.7
3.8
2.1
––––––––––
21.9
(17.6)
––––––––––
4.3
0.1
(4.3)
–
(0.1)
––––––––––
–
–
–
––––––––––
7.6
––––––––––
–
––––––––––
During the year, Associated Cold Stores & Transport Limited contributed £4.0 million (2021: £0.5 million)
to the Group’s net operating cash flows, paid £0.3 million (2021: £0.9 million) in respect of investing
activities and paid £0.4 million (2021: £0.3 million) in respect of financing activities.
A profit of £3.8 million arose on the disposal of Associated Cold Stores & Transport Limited, being the
difference between the proceeds of disposal and the carrying amount of the subsidiary’s net assets at the
effective date of disposal.
75
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
11 (Loss)/profit for the year
The (loss)/profit of the Company was:
2022
£’m
2021
£’m
(1.6)
––––––––––
6.5
––––––––––
The Company has taken advantage of the exemption under Section 408 of the Companies Act 2006
not to disclose its income statement.
12 Equity dividends
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2021 of
102p (2020: 144p) per share
Interim dividend for the year ended 31 December 2022 of
44p (2021: 44p) per share
2022
£’m
2021
£’m
2.8
4.0
1.2
––––––––––
4.0
––––––––––
1.2
––––––––––
5.2
––––––––––
Dividends amounting to £0.1 million (2021: £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 2022 of
102p (2021: 102p) per share
2.8
––––––––––
2.8
––––––––––
The proposed final dividend for 2022 is subject to approval by the shareholders at the AGM and has
not been included as a liability in these financial statements.
13 (Loss)/earnings per share (EPS)
2022
Weighted
average
number of
shares
£’m Number
Earnings
EPS
Pence
2021
Weighted
average
number of
Loss
shares
£’m Number
EPS
Pence
(20.6) 2,762,000
––––––––––
––––––––––
(745.8)
––––––––––
2.3
––––––––––
2,762,000
––––––––––
83.3
––––––––––
(13.0) 2,762,000
––––––––––
––––––––––
(470.7)
––––––––––
2.3
––––––––––
2,762,000
––––––––––
83.3
––––––––––
Basic and diluted EPS
Attributable to ordinary
shareholders - continuing
operations
Attributable to ordinary
shareholders - continuing and
discontinued operations
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 37).
76
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
14 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 36) – UK
– Overseas
Continuing
operations
Continuing and
discontinued
operations
2022
Number
2021
Number
2022
Number
2021
Number
79,447
132
–
35
78,041
204
–
32
78,041
204
237
32
––––––––––– ––––––––––– ––––––––––– –––––––––––
78,514
––––––––––– ––––––––––– ––––––––––– –––––––––––
79,447
132
246
35
79,614
78,277
79,860
2022
£'m
2021
£'m
2022
£'m
2021
£'m
99.5
1.8
0.8
6.6
107.9
2.2
0.6
7.4
106.5
2.5
1.4
6.6
––––––––––– ––––––––––– ––––––––––– –––––––––––
117.0
––––––––––– ––––––––––– ––––––––––– –––––––––––
115.1
2.9
1.2
7.4
118.1
108.7
126.6
Total remuneration paid to key employees who are members of the Executive Committees, excluding
Directors of Camellia Plc, amounted to £1.9 million (2021: £2.4 million).
15 Emoluments of the directors
Aggregate emoluments excluding pension contributions
2022
£’m
2021
£’m
2.6
––––––––––
2.0
––––––––––
Emoluments of the highest paid director excluding pension contributions were £1.0 million (2021:
£0.7 million), which included a loss of office payment of £0.7 million (2021: £nil).
Further details of directors' emoluments are set out on pages 41 to 42.
77
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
16 Intangible assets
Group
Cost
At 1 January 2021
Subsidiaries joining the group
Disposals
At 1 January 2022
Subsidiary leaving the group
At 31 December 2022
Amortisation
At 1 January 2021
Charge for the year
Disposals
At 1 January 2022
Charge for the year
Subsidiary leaving the group
Impairment provision
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
Goodwill
£’m
Brands
£’m
1.3
3.6
–
––––––––––
4.9
–
––––––––––
4.9
––––––––––
0.3
–
–
––––––––––
0.3
–
3.6
––––––––––
3.9
––––––––––
1.0
––––––––––
4.6
––––––––––
8.7
–
–
––––––––––
8.7
–
––––––––––
8.7
––––––––––
3.5
–
–
––––––––––
3.5
–
–
––––––––––
3.5
––––––––––
5.2
––––––––––
5.2
––––––––––
Computer
software
£’m
2.6
–
(1.3)
––––––––––
1.3
(0.7)
––––––––––
0.6
––––––––––
2.2
0.1
(1.3)
––––––––––
1.0
0.1
(0.6)
–
––––––––––
0.5
––––––––––
0.1
––––––––––
0.3
––––––––––
Total
£’m
12.6
3.6
(1.3)
––––––––––
14.9
(0.7)
––––––––––
14.2
––––––––––
6.0
0.1
(1.3)
––––––––––
4.8
0.1
(0.6)
3.6
––––––––––
7.9
––––––––––
6.3
––––––––––
10.1
––––––––––
Included in the carrying value of brands is £2.0 million and £3.2 million relating to the Indian tea
brands acquired by Goodricke in 2017 and the Jing tea brand acquired by the Group in 2018
respectively. Both of these have been assessed as having an indefinite life. These are considered to
have an indefinite useful life due to the continuing investment in maintaining their value.
In accordance with the Group's accounting policy, goodwill and intangible assets are tested annually
for impairment. As a result of this testing, an impairment of £3.6 million was made in the year to
31 December 2022 in relation to the goodwill on acquisition of Bardsley England.
Goodwill consists of the following:
Segment
Agriculture
Bardsley England
Cash Generating Unit (CGU)
Tea estates acquired in Assam, India
Bardsley England
2022
Net Book
Value
£’m
1.0
–
––––––––––
1.0
––––––––––
2021
Net Book
Value
£’m
1.0
3.6
––––––––––
4.6
––––––––––
The valuation of the goodwill associated with Bardsley England has been re-assessed due to the
impact of inflation arising from the Ukraine war on the expected profitability of the business. The
recoverable value of the goodwill was considered to be £nil.
78
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
16 Intangible assets (continued)
Tea estates acquired in Assam, India
The recoverable value was considered to exceed the carrying value by £0.4 million. The valuation is
based on multiples of the annual average production of the relevant estates. The multiple would
need to decrease by 5% 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:
Change in assumption
Impact on fair value
Assumption of the brand
Royalty rate
Discount rate
+1%
£’m
(0.8)
0.4
-1%
£’m
0.8
(0.4)
4.2%
10.8%
If forecasted revenues were to change by +/-5 % in every year it would have the effect of a
decrease/increase in the fair value of the brand of £0.2 million.
79
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
17 Property, plant and equipment
Group
Deemed cost
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 1 January 2022
Exchange differences
Additions
Disposals
Transfer between categories
Subsidiary leaving the group
Reclassification to held for sale
At 31 December 2022
Depreciation
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 1 January 2022
Exchange differences
Charge for the year
Disposals
Subsidiary leaving the group
Reclassification to held for sale
Impairment provision
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
Assets in the course of construction
included in the above:
2021
Additions
Net book value at 31 December 2021
2022
Additions
Net book value at 31 December 2022
Bearer
plants
£’m
Land and
buildings
£’m
Plant and
machinery
£’m
130.8
(3.0)
4.5
–
0.3
3.0
–
–
–
––––––––––
135.6
(4.1)
5.7
(0.2)
–
–
–
––––––––––
137.0
––––––––––
28.6
(0.8)
4.4
–
–
–
–
–
––––––––––
32.2
(1.3)
4.5
(0.1)
–
–
2.7
––––––––––
38.0
––––––––––
99.0
––––––––––
103.4
––––––––––
107.2
(1.2)
2.0
(0.1)
0.6
10.2
(3.1)
(1.2)
(3.6)
––––––––––
110.8
0.1
2.9
(0.6)
(0.1)
(31.4)
(0.8)
––––––––––
80.9
––––––––––
52.9
(0.3)
2.3
(0.1)
1.4
–
(1.5)
–
––––––––––
54.7
(0.1)
2.4
(0.3)
(26.1)
(0.1)
0.6
––––––––––
31.1
––––––––––
49.8
––––––––––
56.1
––––––––––
105.9
(1.6)
3.5
(2.5)
0.7
5.8
–
(0.4)
(8.1)
––––––––––
103.3
0.3
5.3
(3.8)
0.1
(15.7)
–
––––––––––
89.5
––––––––––
72.9
(0.8)
5.8
(2.1)
(0.4)
(0.3)
(8.1)
0.5
––––––––––
67.5
0.2
5.7
(3.1)
(13.6)
–
3.0
––––––––––
59.7
––––––––––
29.8
––––––––––
35.8
––––––––––
Fixtures,
fittings and
equipment
£’m
19.1
(0.2)
0.7
(0.5)
(1.6)
0.5
–
–
(1.9)
––––––––––
16.1
0.1
0.9
(0.3)
–
(2.4)
–
––––––––––
14.4
––––––––––
10.3
(0.2)
0.8
(0.4)
(1.0)
–
(0.2)
–
––––––––––
9.3
0.1
0.8
(0.3)
(1.5)
–
0.1
––––––––––
8.5
––––––––––
5.9
––––––––––
6.8
––––––––––
3.3
10.2
––––––––––
0.4
0.6
––––––––––
0.9
0.6
––––––––––
0.1
–
––––––––––
3.9
9.7
––––––––––
0.9
0.7
––––––––––
1.4
0.9
––––––––––
0.2
–
––––––––––
Total
£’m
363.0
(6.0)
10.7
(3.1)
–
19.5
(3.1)
(1.6)
(13.6)
––––––––––
365.8
(3.6)
14.8
(4.9)
–
(49.5)
(0.8)
––––––––––
321.8
––––––––––
164.7
(2.1)
13.3
(2.6)
–
(0.3)
(9.8)
0.5
––––––––––
163.7
(1.1)
13.4
(3.8)
(41.2)
(0.1)
6.4
––––––––––
137.3
––––––––––
184.5
––––––––––
202.1
––––––––––
4.7
11.4
––––––––––
6.4
11.3
––––––––––
80
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
17 Property, plant and equipment (continued)
The impairment of £6.4 million relates to Bardsley England and arose due to the impact of inflation
arising from the Ukraine war on expected profitability of the operation.
In 2021, 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.
In 2021, the reclassification to right-of-use assets arose from changes in land registration in Tanzania.
18 Right-of-use assets
Group
Deemed cost
At 1 January 2021
Exchange differences
Additions
Disposals
Reclassification from property, plant and equipment
Reclassification to held for sale
Subsidiaries joining the group
At 1 January 2022
Exchange differences
Additions
Disposals
Subsidiary leaving the group
At 31 December 2022
Depreciation
At 1 January 2021
Charge for the year
Disposals
Reclassification from property, plant and equipment
Reclassification to held for sale
At 1 January 2022
Charge for the year
Disposals
Subsidiary leaving the group
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
Plant and
Land and
buildings machinery
£’m
£’m
Total
£’m
17.9
(0.1)
0.6
(0.5)
1.2
(3.6)
14.0
–––––––––––
29.5
0.1
0.3
(0.2)
(1.3)
–––––––––––
28.4
–––––––––––
1.5
1.2
(0.4)
–
(0.2)
–––––––––––
2.1
1.9
(0.1)
(0.5)
–––––––––––
3.4
–––––––––––
25.0
–––––––––––
27.4
–––––––––––
0.6
–
1.0
(0.2)
0.4
–
0.6
–––––––––––
2.4
–
1.4
(0.4)
(1.1)
–––––––––––
2.3
–––––––––––
0.4
0.4
(0.1)
0.3
–
–––––––––––
1.0
0.8
(0.2)
(0.4)
–––––––––––
1.2
–––––––––––
1.1
–––––––––––
1.4
–––––––––––
18.5
(0.1)
1.6
(0.7)
1.6
(3.6)
14.6
–––––––––––
31.9
0.1
1.7
(0.6)
(2.4)
–––––––––––
30.7
–––––––––––
1.9
1.6
(0.5)
0.3
(0.2)
–––––––––––
3.1
2.7
(0.3)
(0.9)
–––––––––––
4.6
–––––––––––
26.1
–––––––––––
28.8
–––––––––––
81
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
18 Right-of-use assets (continued)
The Group leases many assets including land, buildings and plant. The average lease term is 74 years
(2021: 69 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 £1.4 million (2021: £1.0 million).
The maturity analysis of lease liabilities is presented in note 33.
Amounts recognised in the consolidated income statement:
Interest expense on lease liabilities
Expense relating to short-term leases
19 Investment properties
Group
Cost
At 1 January 2021
Additions
Reclassification from property, plant and equipment
At 1 January 2022
Additions
At 31 December 2022
Depreciation
At 1 January 2021
Charge for the year
At 1 January 2022
Charge for the year
Impairment provision
At 31 December 2022
Net book value at 31 December 2022
Net book value at 31 December 2021
2022
£’m
2021
£’m
0.8
0.2
––––––––––
0.7
0.1
––––––––––
£’m
20.5
0.9
3.1
––––––––––
24.5
2.5
––––––––––
27.0
––––––––––
1.4
–
––––––––––
1.4
0.1
0.1
––––––––––
1.6
––––––––––
25.4
––––––––––
23.1
––––––––––
Included in revenue is £1.0 million (2021: £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 £0.3 million (2021: £0.2 million).
At the end of the year the fair value of Investment properties was £35.1 million (2021: £34.4 million)
based on vacant possession. Investment properties were valued by the Directors (fair value hierarchy
Level 2).
82
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
20 Biological assets
Non-current:
Group
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 1 January 2022
Exchange differences
Additions
Gains arising from changes
in fair value less estimated point-of-sale costs
Decreases due to harvesting
At 31 December 2022
Current:
Group
Tea
Edible nuts
Soya
Avocado
Other
Forestry
£’m
Livestock
£’m
Total
£’m
11.7
(0.3)
0.4
1.0
–
–
12.7
(0.3)
0.4
1.1
(0.5)
––––––––––
12.4
(0.1)
0.2
1.1
(0.6)
––––––––––
13.0
––––––––––
0.4
(0.4)
––––––––––
1.0
–
–
0.4
(0.3)
––––––––––
1.1
––––––––––
1.5
(0.9)
––––––––––
13.4
(0.1)
0.2
1.5
(0.9)
––––––––––
14.1
––––––––––
2022
£’m
2021
£’m
0.4
2.5
5.3
2.5
0.1
––––––––––
10.8
––––––––––
0.2
2.2
3.6
1.5
0.3
––––––––––
7.8
––––––––––
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 2022 the area planted to Forestry amounted to 5,798 Hectares (2021: 5,788) from
which 145,856 cubic metres (2021: 157,687) were harvested during the year.
Livestock numbers were 4,246 head (2021: 4,332) at 31 December 2022.
83
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
20 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 55.
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 £1.3 million (2021: £1.2 million) increase/decrease in the fair value of forestry.
Current:
– Macadamia - a 10% increase/decrease in the volumes or the prices assumed would result in a
£1.1 million (2021: £0.9 million) increase/decrease in the fair value of macadamia growing crop.
– Avocados - a 10% increase/decrease in the volumes assumed would result in a £0.2 million (2021:
£0.2 million) increase/decrease in the fair value of Hass avocados growing crop. A 10%
increase/decrease in selling price assumed would result in a £0.3 million (2021: £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 £0.6 million
(2021: £0.4 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.
21 Investments in subsidiaries
Company
Cost
At 1 January and 31 December
2022
£’m
2021
£’m
73.5
––––––––––
73.5
––––––––––
84
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
22 Investments in associates
Group
At 1 January
Exchange differences
Share of (loss)/profit (note 5)
Dividends
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
2022
£’m
2021
£’m
98.9
9.8
(3.1)
(3.2)
0.5
––––––––––
102.9
––––––––––
26.3
3.3
––––––––––
29.6
––––––––––
73.3
––––––––––
93.7
0.8
7.2
(3.0)
0.2
––––––––––
98.9
––––––––––
26.1
0.2
––––––––––
26.3
––––––––––
72.6
––––––––––
Details of the Group's associates are shown in note 44.
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
(Loss)/
profit
£’m
Interest Market
value
£’m
held
%
2022
Listed
BF&M
United Finance Limited
United Insurance
Company Limited
2021
Listed
BF&M
United Finance Limited
United Insurance
Company Limited
Bermuda
Bangladesh
665.5
83.8
(574.4)
(74.6)
41.2
3.1
(3.7)
0.5
Bangladesh
4.4
––––––––
753.7
––––––––
(1.8)
––––––––
(650.8)
––––––––
0.3
––––––––
44.6
––––––––
0.1
––––––––
(3.1)
––––––––
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
––––––––
36.9
38.4
37.0
37.4
38.4
37.0
59.3
9.2
6.1
––––––––
74.6
––––––––
57.7
13.0
9.3
––––––––
80.0
––––––––
85
265644 Camellia R&A pp68-pp87.qxp 03/05/2023 18:59 Page 86
CAMELLIA PLC
NOTES TO THE ACCOUNTS
23 Equity investments at fair value through other comprehensive income
Cost or fair value
At 1 January
Exchange differences
Fair value adjustment
Additions
Disposals
Fair value adjustment for disposal
At 31 December
Provision for diminution in value
At 1 January
Exchange differences
Disposals
At 31 December
Net book value at 31 December
Group
Company
2022
£’m
2021
£’m
2022
£’m
2021
£’m
28.4
2.7
(2.6)
0.1
(1.1)
(1.1)
––––––––––
26.4
––––––––––
0.7
0.1
(0.1)
––––––––––
0.7
––––––––––
25.7
––––––––––
43.8
–
0.8
3.5
(8.1)
(11.6)
––––––––––
28.4
––––––––––
1.2
–
(0.5)
––––––––––
0.7
––––––––––
27.7
––––––––––
0.2
–
–
–
–
–
––––––––––
0.2
––––––––––
0.2
–
–
––––––––––
0.2
––––––––––
–
––––––––––
0.2
–
–
–
–
–
––––––––––
0.2
––––––––––
0.2
–
–
––––––––––
0.2
––––––––––
–
––––––––––
Equity investments at fair value through other comprehensive income include the following:
Group
2022
£’m
2021
£’m
0.9
7.2
8.5
2.0
0.8
0.5
5.4
0.4
––––––––––
25.7
––––––––––
0.6
8.3
9.0
2.7
0.8
0.4
5.3
0.6
––––––––––
27.7
––––––––––
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
86
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
23 Equity investments at fair value through other comprehensive income (continued)
Equity investments at fair value through other comprehensive income are denominated in the following
currencies:
Sterling
US Dollar
Euro
Swiss Franc
Indian Rupee
Bermudian Dollar
Japanese Yen
Other
24 Money market investments at fair value through profit or loss
At 1 January
Exchange differences
Fair value adjustment
Additions
Disposals
At 31 December
Group
2022
£’m
2021
£’m
5.4
2.0
0.5
8.5
0.8
0.9
7.2
0.4
––––––––––
25.7
––––––––––
5.3
2.7
0.4
9.0
0.8
0.6
8.3
0.6
––––––––––
27.7
––––––––––
Group
2022
£’m
2021
£’m
9.9
0.2
0.3
2.8
(4.6)
––––––––––
8.6
––––––––––
5.3
–
0.1
5.4
(0.9)
––––––––––
9.9
––––––––––
Money market investments at fair value through profit or loss include the following:
Listed securities:
Money market - Bermuda
Money market - Brazil
Money market - India
Group
2022
£’m
2021
£’m
0.1
0.6
7.9
––––––––––
8.6
––––––––––
1.6
–
8.3
––––––––––
9.9
––––––––––
87
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
24 Money market investments at fair value through profit or loss (continued)
Money market investments at fair value through profit or loss are denominated in the following currencies:
Group
2022
£’m
0.1
0.6
7.9
––––––––––
8.6
––––––––––
1.3
7.3
––––––––––
8.6
––––––––––
2021
£’m
1.6
–
8.3
––––––––––
9.9
––––––––––
2.7
7.2
––––––––––
9.9
––––––––––
Group
2022
£’m
2021
£’m
2.6
0.1
(1.4)
––––––––––
1.3
––––––––––
2.7
(0.1)
–
––––––––––
2.6
––––––––––
2022
£’m
2021
£’m
–
1.3
1.3
––––––––––
1.3
––––––––––
–
1.3
––––––––––
1.3
––––––––––
1.3
––––––––––
2.6
––––––––––
1.3
1.3
––––––––––
2.6
––––––––––
US Dollar
Brazil Real
Indian Rupee
Current
Non-Current
25 Debt investments at amortised cost
At 1 January
Exchange differences
Disposals
At 31 December
Debt investments 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 - 12.5% interest payable twice yearly and
redeemable in November 2024 - Kenya
Current
Non-Current
88
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
26 Other investments - heritage assets
Cost
At 1 January
Additions
Disposals
Reclassification to held for sale
At 31 December
Group
Company
2022
£’m
2021
£’m
2022
£’m
2021
£’m
8.7
0.1
–
–
––––––––––
8.8
––––––––––
9.8
–
(0.1)
(1.0)
––––––––––
8.7
––––––––––
8.8
0.1
–
–
––––––––––
8.9
––––––––––
11.0
–
(0.1)
(2.1)
––––––––––
8.8
––––––––––
Heritage assets comprise the Group's and Company's investment in fine art, philately, documents
and manuscripts. The market value of these collections is expected to be in excess of book value.
27 Inventories
Group
Made Tea
Other agricultural produce
Work in progress
Trading stocks
Raw materials and consumables
2022
£’m
2021
£’m
26.3
13.3
0.1
1.3
19.4
––––––––––
60.4
––––––––––
25.7
7.8
0.1
1.1
17.0
––––––––––
51.7
––––––––––
Made tea inventories include the fair value of green leaf which includes a fair value uplift of
£nil million (2021: £0.2 million). Other agricultural produce is net of a £2.7 million (2021: £0.2 million)
provision which has been recognised as an expense.
89
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
28 Trade and other receivables
Group
Current:
Trade receivables
Amounts owed by associated undertakings
Other receivables*
Prepayments and accrued income
Group
Company
2022
£’m
2021
£’m
2022
£’m
2021
£’m
29.2
0.1
23.6
14.7
––––––––––
67.6
––––––––––
32.7
0.1
4.8
10.9
––––––––––
48.5
––––––––––
–
–
–
0.2
––––––––––
0.2
––––––––––
–
–
–
0.2
––––––––––
0.2
––––––––––
* Included within other receivables is £16.6 million of deferred consideration which was received in
January 2023 in relation to the disposal of Associated Cold Stores & Transport Limited, see note 40.
Non-current:
Other receivables
3.1
––––––––––
3.1
––––––––––
2.7
––––––––––
2.7
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
The carrying amounts of the Group's trade and other receivables are denominated in the following
currencies:
2022
£’m
2021
£’m
2022
£’m
2021
£’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
90
0.2
–
–
–
–
–
–
–
–
–
––––––––––
0.2
––––––––––
0.2
–
–
–
–
–
–
–
–
–
––––––––––
0.2
––––––––––
29.5
7.7
0.9
2.3
17.9
1.7
3.4
0.2
3.1
0.8
––––––––––
67.5
––––––––––
0.3
0.6
1.6
0.4
0.2
––––––––––
3.1
––––––––––
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
––––––––––
265644 Camellia R&A pp88-pp102.qxp 03/05/2023 19:07 Page 91
CAMELLIA PLC
NOTES TO THE ACCOUNTS
28 Trade and other receivables (continued)
As at 31 December 2021
Gross carrying amount -
trade receivables
Expected credit loss rate
Lifetime ECL
Net carrying amount
As at 31 December 2022
Gross carrying amount -
trade receivables
Expected credit loss rate
Lifetime ECL
Net carrying amount
Trades receivables - days past due
Over
Up to
30 days
£’m
31-60
days
£’m
61-90
days
£’m
4.1
4.9%
0.2
3.9
0.8
25.0%
0.2
0.6
0.3
66.7%
0.2
0.1
Trades receivables - days past due
Over
Up to
30 days
£’m
31-60
days
£’m
61-90
days
£’m
Current
£’m
27.1
–
–
27.1
Current
£’m
24.2
–
–
24.2
3.4
2.9%
0.1
3.3
0.7
0.0%
–
0.7
0.4
0.0%
–
0.4
91 days
£’m
1.2
16.7%
0.2
1.0
91 days
£’m
1.3
53.8%
0.7
0.6
Total
£’m
33.5
2.4%
0.8
32.7
Total
£’m
30.0
2.7%
0.8
29.2
The closing loss allowances for trade receivables reconciles to the opening loss allowance as follows:
Opening loss allowance
Increase in loss allowance recognised in profit and loss during the year
Receivables written off during the year as uncollectable
Closing loss allowance
29 Cash and cash equivalents (excluding bank overdrafts)
2022
£’m
2021
£’m
0.8
0.1
(0.1)
––––––––––
0.8
––––––––––
0.6
0.2
–
––––––––––
0.8
––––––––––
Cash at bank and in hand
Short-term bank deposits
Short-term liquid investments
Group
Company
2022
£’m
20.0
28.6
0.7
––––––––––
49.3
––––––––––
2021
£’m
25.9
35.3
0.6
––––––––––
61.8
––––––––––
2022
£’m
0.1
–
–
––––––––––
0.1
––––––––––
2021
£’m
0.7
–
–
––––––––––
0.7
––––––––––
91
265644 Camellia R&A pp88-pp102.qxp 03/05/2023 19:07 Page 92
CAMELLIA PLC
NOTES TO THE ACCOUNTS
29 Cash and cash equivalents (excluding bank overdrafts) (continued)
Cash, cash equivalents and bank overdrafts include the following for the purposes of the cash flow
statement:
Cash and cash equivalents
Bank overdrafts (note 32)
Effective interest rate:
Short-term deposits
Short-term liquid investments
Average maturity period:
Short-term deposits
Short-term liquid investments
2022
£’m
2021
£’m
2022
£’m
2021
£’m
49.3
(3.7)
––––––––––
45.6
––––––––––
61.8
(1.9)
––––––––––
59.9
––––––––––
0.1
–
––––––––––
0.1
––––––––––
0.7
–
––––––––––
0.7
––––––––––
2022
2021
1.30 - 11.00% 0.01 - 10.25%
5.00% 3.00 - 4.00%
50 days
32 days
67 days
32 days
30 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:
At 1 January
Reclassified from property, plant and equipment
Reclassified from right-of-use assets
Reclassified from heritage assets
Reclassified from current assets
Disposals during the year
Disposal of subsidiaries during year
At 31 December
Group
Company
2022
£’m
2021
£’m
2022
£’m
2021
£’m
6.6
0.7
–
–
–
––––––––––
7.3
(2.7)
–
––––––––––
4.6
––––––––––
–
3.8
3.4
1.0
0.7
––––––––––
8.9
(2.3)
––––––––––
6.6
––––––––––
2.1
–
–
–
–
––––––––––
2.1
(1.6)
–
––––––––––
0.5
––––––––––
–
–
–
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
––––––––––
2.0
––––––––––
–
––––––––––
–
––––––––––
During the year, a London property and a number of the Group's heritage assets and other items of
art have been sold, realising cash proceeds of £4.5 million.
92
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
31 Trade and other payables
Current:
Trade payables
Other taxation and social security
Other payables
Accruals and deferred income
Group
Company
2022
£’m
2021
£’m
2022
£’m
2021
£’m
22.2
2.4
26.4
8.8
––––––––––
59.8
––––––––––
18.1
4.8
26.8
9.5
––––––––––
59.2
––––––––––
0.1
–
0.2
0.7
––––––––––
1.0
––––––––––
0.1
–
0.2
0.6
––––––––––
0.9
––––––––––
Included in other taxation and social security is £nil (2021: £0.1 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.
32 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
2022
£’m
2021
£’m
3.7
1.4
––––––––––
5.1
––––––––––
1.9
1.4
––––––––––
3.3
––––––––––
0.6
1.4
––––––––––
2.0
––––––––––
0.3
1.4
––––––––––
1.7
––––––––––
4.4
––––––––––
4.5
––––––––––
4.4
––––––––––
4.5
––––––––––
5.1
1.1
1.1
2.2
––––––––––
9.5
––––––––––
3.3
0.7
1.2
2.6
––––––––––
7.8
––––––––––
93
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
32 Financial liabilities - borrowings (continued)
The rates of interest payable by the Group ranged between:
Bank overdrafts
Bank loans
33 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
2022
%
2021
%
5.00 - 21.90 3.25 - 16.50
6.90 - 7.55
7.60 - 10.50
2022
£’m
2021
£’m
2.3
2.3
5.4
11.4
––––––––––
21.4
––––––––––
3.2
2.3
5.0
14.2
––––––––––
24.7
––––––––––
2.3
19.1
––––––––––
21.4
––––––––––
3.2
21.5
––––––––––
24.7
––––––––––
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.
34 Provisions
Group
At 1 January 2021
Exchange differences
Utilised in the period
Provided in the period
Subsidiaries joining the group
Unused amounts reversed in period
At 1 January 2022
Utilised in the period
Provided in the period
Subsidiary leaving the group
Unused amounts reversed in period
At 31 December 2022
Current:
At 31 December 2022
At 31 December 2021
94
Wages and
salaries
£’m
Legal
claims
£’m
Others
£’m
Total
£’m
9.7
(0.1)
(7.6)
7.7
–
(0.6)
––––––––––
9.1
(6.7)
8.5
–
(1.8)
––––––––––
9.1
–––––––––––
8.2
(0.1)
(6.9)
–
–
–
––––––––––
1.2
(0.3)
–
–
–
––––––––––
0.9
–––––––––––
1.1
–
(0.4)
0.3
0.5
–
––––––––––
1.5
(0.1)
–
(0.5)
(0.1)
––––––––––
0.8
–––––––––––
19.0
(0.2)
(14.9)
8.0
0.5
(0.6)
––––––––––
11.8
(7.1)
8.5
(0.5)
(1.9)
––––––––––
10.8
–––––––––––
9.1
–––––––––––
9.1
–––––––––––
0.9
––––––––––
1.2
––––––––––
0.8
––––––––––
1.5
––––––––––
10.8
––––––––––
11.8
––––––––––
265644 Camellia R&A pp88-pp102.qxp 03/05/2023 19:07 Page 95
CAMELLIA PLC
NOTES TO THE ACCOUNTS
34 Provisions (continued)
The wages and salaries provisions are in respect of ongoing wage and bonus negotiations in India,
Kenya and Bangladesh, the majority of which are expected to be utilised during 2023.
Legal claims relate to the cost of the defence of the litigation concerning our East African operations,
including settlements and the expected costs of progressive measures.
Others relate to provisions for claims and dilapidations.
Company
At 1 January 2021
Utilised in the period
At 1 January 2022
Utilised in the period
At 31 December 2022
Current:
At 31 December 2022
At 31 December 2021
Legal claims
£’m
Total
£’m
1.9
(1.9)
––––––––––
–
–
––––––––––
–
––––––––––
1.9
(1.9)
––––––––––
–
–
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
–
––––––––––
Legal claims related to the defence of the litigation concerning our East African operations.
35 Deferred tax
The net movement on the deferred tax account is set out below:
Group
Company
2022
£’m
2021
£’m
2022
£’m
2021
£’m
At 1 January
Exchange differences
Charged/(credited) to the income statement
(Credited)/charged to other comprehensive income
At 31 December
38.0
(0.7)
3.3
(3.6)
––––––––––
37.0
––––––––––
39.5
(1.0)
(2.2)
1.7
––––––––––
38.0
––––––––––
0.2
–
–
–
––––––––––
0.2
––––––––––
0.2
–
–
–
––––––––––
0.2
––––––––––
95
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
35 Deferred tax (continued)
The movement in deferred tax assets and liabilities is set out below:
Deferred tax liabilities
At 1 January 2021
Exchange differences
(Credited)/charged to the income statement
Charged/(credited) to other comprehensive
income
At 1 January 2022
Exchange differences
Charged/(credited) to the income statement
Credited to other comprehensive income
At 31 December 2022
Deferred tax assets offset
Net deferred tax liability after offset
Deferred tax assets
At 1 January 2021
Exchange differences
Credited/(charged) to the income statement
Charged to other comprehensive income
At 1 January 2022
(Charged)/credited to the income statement
Credited to other comprehensive income
At 31 December 2022
Offset against deferred tax liabilities
Net deferred tax asset after offset
Accelerated
tax
depreciation
£’m
Pension
scheme
liabilities
£’m
44.3
(1.1)
(0.7)
–
–
–
Other
£’m
4.4
(0.1)
0.2
–
––––––––––
42.5
(0.6)
0.2
–
––––––––––
42.1
––––––––––
3.7
––––––––––
3.7
–
(0.1)
(3.5)
––––––––––
0.1
––––––––––
(2.2)
––––––––––
2.3
(0.1)
1.5
–
––––––––––
3.7
––––––––––
Total
£’m
48.7
(1.2)
(0.5)
1.5
––––––––––
48.5
(0.7)
1.6
(3.5)
––––––––––
45.9
––––––––––
(8.9)
––––––––––
37.0
––––––––––
Pension
scheme
asset
£’m
0.4
–
0.1
(0.2)
––––––––––
0.3
(0.1)
0.1
––––––––––
0.3
––––––––––
Tax losses
£’m
4.8
(0.1)
1.7
–
––––––––––
6.4
(2.1)
–
––––––––––
4.3
––––––––––
Other
£’m
Total
£’m
4.0
(0.1)
(0.1)
–
––––––––––
3.8
0.5
–
––––––––––
4.3
––––––––––
9.2
(0.2)
1.7
(0.2)
––––––––––
10.5
(1.7)
0.1
––––––––––
8.9
––––––––––
(8.9)
––––––––––
–
––––––––––
Deferred tax liabilities of £13.7 million (2021: £14.7 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.
96
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
35 Deferred tax (continued)
Deferred tax assets are recognised for tax losses carried forward only to the extent that the
realisation of the related tax benefit through future taxable profits is probable. The Group has not
recognised deferred tax assets of £26.4 million (2021: £18.4 million) in respect of losses that can be
carried forward against future taxable income.
36 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 2022 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)
2022
2021
% per annum % per annum
N/a
2.35 - 5.00
4.80
2.35/3.05
N/a
2.50 - 5.00
1.75
2.50/3.20
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_2021 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 15%. This results in males and females aged 65
having life expectancies of 21.4 years (2021: 21.5 years) and 22.2 years respectively (2021: 22.3 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 - 8.00
Inflation assumption 3.00 - 6.00
2022
2021
% per annum % per annum
6.00
0.00 - 3.00
6.50 - 6.80
3.00 - 6.00
(ii) Post-employment benefits
Certain Group subsidiaries located in Kenya, India and Bangladesh have an obligation to pay terminal
gratuities, based on years of service. These obligations are estimated annually using the projected
unit method by qualified independent actuaries. Schemes operated in India are funded but the
schemes operated in Kenya and Bangladesh are unfunded. Operations in India and Bangladesh also
have an obligation to pay medical benefits upon retirement. These schemes are unfunded.
97
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
36 Employee benefit obligations (continued)
Assumptions
The major assumptions used in the valuation to determine the present value of the post-employment
benefit obligations were as follows:
Rate of increase in salaries 6.00 - 10.95
Discount rate applied to scheme liabilities 7.25 - 14.20
Inflation assumptions 0.00 - 6.00
2022
2021
% per annum % per annum
6.00 - 8.89
6.50 - 13.70
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
Change
in assumption
0.5% higher
0.5% lower
0.25% higher
0.25% lower
+1 year
-1 year
Impact
on defined
benefit
obligation
5.1% decrease
5.5% increase
3.0% increase
3.1% decrease
5.4% increase
5.4% decrease
The above changes in assumptions may have an impact on the value of the scheme's investment
holdings. For example, the scheme holds a proportion of its assets in corporate bonds. A fall in the
discount rate as a result of lower UK corporate bond yields would lead to an increase in the value of
these assets, thus mitigating the increase in the defined benefit obligation to some extent. The
sensitivities have been calculated by changing the key assumption only and leaving all others fixed.
During the year, the UK funded scheme transferred a significant amount of its Bond investments into
a liability-driven investment to reduce overall volatility.
Duration of the scheme liabilities
The weighted average duration of the UK scheme's liabilities is 12 years.
Analysis of scheme liabilities
The liabilities of the UK scheme are split as follows:
Deferred pensioners
Current pensioners
Total membership
98
%
40
60
––––––––––
100
––––––––––
265644 Camellia R&A pp88-pp102.qxp 03/05/2023 19:07 Page 99
CAMELLIA PLC
NOTES TO THE ACCOUNTS
36 Employee benefit obligations (continued)
(v) Actuarial valuations
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 (deficit)/surplus in the schemes
Amount recognised as asset in
the balance sheet
Amount recognised as current
liability in the balance sheet
Amount recognised as non-current
liability in the balance sheet
Related deferred tax
asset/(liability) (note 35)
Net (deficit)/surplus
2022
UK Overseas
£’m
£’m
45.8
13.0
45.3
17.0
–
5.6
––––––––
126.7
3.2
25.5
–
–
3.6
10.1
––––––––
42.4
Total
£’m
49.0
38.5
45.3
17.0
3.6
15.7
––––––––
169.1
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
(127.8)
––––––––
(1.1)
––––––––
(49.7)
––––––––
(7.3)
––––––––
(177.5)
––––––––
(8.4)
––––––––
(184.6)
––––––––
14.7
––––––––
(51.6)
––––––––
(9.6)
––––––––
(236.2)
––––––––
5.1
––––––––
–
–
0.8
0.8
14.7
0.1
14.8
(1.1)
(1.1)
–
(1.1)
(1.1)
(1.1)
––––––––
(1.1)
(7.0)
––––––––
(7.3)
(8.1)
––––––––
(8.4)
–
––––––––
14.7
(8.6)
––––––––
(9.6)
(8.6)
––––––––
5.1
–
––––––––
(1.1)
––––––––
0.2
––––––––
(7.1)
––––––––
0.2
––––––––
(8.2)
––––––––
(3.7)
––––––––
11.0
––––––––
0.3
––––––––
(9.3)
––––––––
(3.4)
––––––––
1.7
––––––––
Movements in the fair value of scheme assets were as follows:
At 1 January
Expected return on plan assets
Employer contributions
Contributions paid by
plan participants
Benefit payments
Other adjustment
Actuarial (losses)/gains
Exchange differences
At 31 December
2022
UK Overseas
£’m
£’m
199.3
3.4
–
–
(8.6)
–
(67.4)
–
––––––––
126.7
––––––––
42.0
2.7
2.0
0.4
(4.2)
0.3
(0.8)
–
––––––––
42.4
––––––––
Total
£’m
241.3
6.1
2.0
0.4
(12.8)
0.3
(68.2)
–
––––––––
169.1
––––––––
2021
UK Overseas
£’m
£’m
196.0
2.4
–
–
(7.9)
–
8.8
–
––––––––
199.3
––––––––
40.1
2.3
3.8
0.4
(4.9)
0.1
0.5
(0.3)
––––––––
42.0
––––––––
Total
£’m
236.1
4.7
3.8
0.4
(12.8)
0.1
9.3
(0.3)
––––––––
241.3
––––––––
99
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
36 Employee benefit obligations (continued)
Movements in the present value of defined benefit obligations were as follows:
At 1 January
Current service cost
Interest cost
Contributions paid by
plan participants
Benefit payments
Other adjustment
Actuarial gains/(losses)
Exchange differences
At 31 December
2022
UK Overseas
£’m
£’m
(184.6)
–
(3.1)
–
8.6
–
51.3
–
––––––––
(127.8)
––––––––
(51.6)
(2.1)
(3.4)
(0.4)
4.2
(0.3)
4.1
(0.2)
––––––––
(49.7)
––––––––
Total
£’m
(236.2)
(2.1)
(6.5)
(0.4)
12.8
(0.3)
55.4
(0.2)
––––––––
(177.5)
––––––––
2021
UK Overseas
£’m
£’m
(203.0)
–
(2.5)
–
7.9
–
13.0
–
––––––––
(184.6)
––––––––
(49.7)
(1.8)
(3.0)
(0.4)
4.9
–
(1.9)
0.3
––––––––
(51.6)
––––––––
Total
£’m
(252.7)
(1.8)
(5.5)
(0.4)
12.8
–
11.1
0.3
––––––––
(236.2)
––––––––
In 2020, the total fair value of plan assets was £236.1 million, the present value of defined benefit
obligations was £252.7 million and the deficit was £16.6 million. 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 and 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.
Income Statement
The amounts recognised in the Income Statement are as follows:
2022
UK Overseas
£’m
£’m
Total
£’m
2021
UK Overseas
£’m
£’m
Total
£’m
Amounts credited/(charged) to
operating profit:
Current service cost
Past service cost
Total operating (charge)/credit
Amounts charged to other
finance costs:
Interest income/(expense)
Total credited/(charged) to
income statement
–
–
––––––––
–
(2.1)
–
––––––––
(2.1)
(2.1)
–
––––––––
(2.1)
–
–
––––––––
–
(1.8)
–
––––––––
(1.8)
(1.8)
–
––––––––
(1.8)
0.3
––––––––
(0.7)
––––––––
(0.4)
––––––––
(0.1)
––––––––
(0.7)
––––––––
(0.8)
––––––––
0.3
––––––––
(2.8)
––––––––
(2.5)
––––––––
(0.1)
––––––––
(2.5)
––––––––
(2.6)
––––––––
Employer contributions to defined contribution schemes are charged to profit when payable and the
costs charged were £5.9 million (2021: £5.6 million).
Liabilities for workers profit participation in Bangladesh are charged to profit when the obligation
arises.
100
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
36 Employee benefit obligations (continued)
Actuarial gains and losses recognised in the Statement of Comprehensive Income
The amounts included in the Statement of Comprehensive Income:
Remeasurements:
Return on plan assets, excluding
amount included in interest
Gain/(loss) from changes in
demographic assumptions
Gain/(loss) from changes in
financial assumptions
Experience (losses)/gains
Actuarial (loss)/gain
2022
UK Overseas
£’m
£’m
Total
£’m
2021
UK Overseas
£’m
£’m
(67.4)
(0.8)
(68.2)
0.6
–
0.6
8.8
0.9
0.5
–
Total
£’m
9.3
0.9
55.5
(4.8)
––––––––
(16.1)
––––––––
5.3
(1.2)
––––––––
3.3
––––––––
60.8
(6.0)
––––––––
(12.8)
––––––––
8.5
3.6
––––––––
21.8
––––––––
(1.2)
(0.7)
––––––––
(1.4)
––––––––
7.3
2.9
––––––––
20.4
––––––––
Cumulative actuarial losses recognised in the Statement of Comprehensive Income are £10.3 million
(2021: £2.5 million gain).
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 2023. No additional funding contributions will be made, as the latest actuarial
valuation shows a funding surplus.
37 Share capital
Authorised: 2,842,000 (2021: 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 (2021: 2,824,500) shares
2022
£’m
2021
£’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.
101
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
38 Reconciliation of (loss)/profit from operations to cash flow
Group
(Loss)/profit from operations
Share of associates' results
Depreciation and amortisation
Depreciation of right-of-use assets
Impairment of assets
Realised movements on biological assets - non-current
Financial assets fair value through profit or loss - gain
Profit on disposal of non-current assets
Profit on disposal of assets classified as held for sale
Loss on disposal of subsidiaries
Profit on disposal of financial assets
Movement in provisions
Increase in inventories
(Increase)/decrease in biological assets
Increase in trade and other receivables
Increase in trade and other payables
Difference between employee benefit obligations funding contributions and
cost charged
Cash generated from operations
2022
£’m
2021
£’m
(5.0)
3.1
12.2
2.2
10.1
(1.5)
(0.3)
(0.1)
(1.8)
–
(0.3)
(0.7)
(9.8)
(2.3)
(6.5)
3.3
7.6
(7.2)
11.7
1.3
0.5
(1.5)
(0.1)
–
–
0.1
(0.2)
(7.0)
(4.6)
2.1
(1.4)
1.8
–
––––––––––
2.6
––––––––––
(1.9)
––––––––––
1.2
––––––––––
102
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
39 Changes in liabilities arising from financing activities
The table below details changes in the Group’s liabilities arising from financing activities, including both
cash and non-cash changes. Liabilities arising from financing activities are those for which cash flows
were, or future cash flows will be, classified in the Group’s consolidated cash flow statement as cash
flows from financing activities.
Bank loans
Bank loans
Current Non-current
£’m
£’m
Finance
leases
Finance
leases
Current Non-current
£’m
£’m
Total
£’m
At 1 January 2021
Exchange differences
Subsidiaries joining the group
Transferred to held for sale
New loans
New finance leases
Loans repaid
Lease payments
Transfers
At 1 January 2022
Exchange differences
Subsidiary leaving the group
New loans
New finance leases
Loans repaid
Lease payments
Lease disposal
Transfers
At 31 December 2022
2.1
–
10.5
–
1.0
–
(13.0)
–
0.8
––––––––
1.4
–
–
0.6
–
(1.6)
–
–
1.0
––––––––
1.4
––––––––
2.7
(0.1)
–
–
2.8
–
(0.1)
–
(0.8)
––––––––
4.5
0.1
–
0.8
–
–
–
–
(1.0)
––––––––
4.4
––––––––
1.2
–
1.7
(0.1)
–
1.9
(1.6)
0.1
––––––––
3.2
–
(0.5)
–
0.7
–
(2.8)
–
1.7
––––––––
2.3
––––––––
(0.4)
(0.1)
10.3
–
13.2
(1.9)
–
0.4
16.3
(0.1)
25.4
(2.0)
3.8
2.3
(13.1)
(2.0)
–
–––––––– ––––––––
30.6
0.1
(1.5)
1.4
1.8
(1.6)
(3.4)
(0.2)
–
–––––––– ––––––––
27.2
–––––––– ––––––––
21.5
–
(1.0)
–
1.1
–
(0.6)
(0.2)
(1.7)
19.1
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.
103
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
40 Business combinations - disposals and acquisitions of businesses
Intangible assets
Property, plant and equipment
Right of use asset
Deferred tax 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
Provisions
Amounts due to group undertakings
Liabilities related to assets classified as held for sale
Identifiable intangible assets - Goodwill
Non-controlling interest
Profit/(loss) on disposal
Consideration transferred:
Cash consideration and costs
Deferred consideration
Total consideration
Net cash (outflow)/inflow arising on disposals/acquisitions:
Cash consideration and costs
Less: cash and cash equivalent balances disposed/acquired
Disposals Acquisitions
2021
£’m
Fair
value
2022
£’m
Net book
value
Disposals
2021
£’m
Net book
value
0.1
8.3
1.5
2.1
0.1
–
4.1
1.6
–
–
–
(1.6)
(3.4)
(0.5)
–
–
––––––––––
12.3
–
–
3.8
––––––––––
16.1
––––––––––
–
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
––––––––––
(0.5)
16.6
––––––––––
16.1
––––––––––
3.0
2.2
––––––––––
5.2
––––––––––
(0.5)
(1.6)
––––––––––
(2.1)
––––––––––
(3.0)
(0.7)
––––––––––
(3.7)
––––––––––
–
–
–
–
–
–
–
1.6
(0.3)
–
–
–
–
(0.6)
(0.4)
––––––––––
0.3
–
–
(0.1)
––––––––––
0.2
––––––––––
(0.1)
0.3
––––––––––
0.2
––––––––––
(0.1)
0.3
––––––––––
0.2
––––––––––
Disposal in 2022 - Associated Cold Stores & Transport Limited
As referred to in note 10, on 26 November 2022 the Group effectively disposed of its interest in
Associated Cold Stores & Transport Limited.
The cash consideration was paid on 10 January 2023.
The impact of Associated Cold Stores & Transport Limited on the Group’s results in the current and
prior years is disclosed in note 10. The gain on disposal is included in the profit for the year from
discontinued operations (see note 10).
104
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
40 Business combinations - disposals and acquisitions of businesses (continued)
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 Bardsley England for consideration of £5.2 million, of which £3.0 million which was
paid at completion with the balance of £2.2 million deferred with the final instalment payable by July
2023. Bardsley England is a major fruit farming business and one of the UK’s largest apple growers.
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 the consideration paid and the non-controlling interests share of
the net assets carrying amount.
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.
41 Commitments
Capital commitments
Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:
Group
Property, plant and equipment
42 Contingencies
2022
£’m
2021
£’m
0.8
––––––––––
0.9
––––––––––
In Malawi the Revenue Authority (MRA) indicated in 2021 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 tea industry, 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 £4.8 million
In India, assessments have been received for excise duties of £3.7 million, sales and entry tax of
£0.9 million and of £0.7 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.
In the UK, HM Revenue and Customs has issued a VAT assessment based on the application of the partial
exemption rules which could result in a potential liability of £1.2 million. An amount of £0.2 million has
been proved based on external advice received and this assessment is being contested.
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.
105
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 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 32 and 33, 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
2022
£’m
9.5
21.4
––––––––––
30.9
––––––––––
362.6
––––––––––
8.52%
––––––––––
2021
£’m
7.8
24.7
––––––––––
32.5
––––––––––
378.5
––––––––––
8.59%
––––––––––
Debt is defined as long and short-term borrowings and lease liabilities as detailed in notes 32 and 33.
Tangible net assets includes all capital and reserves of the Group attributable to equity holders of the
parent less intangible assets.
Financial instruments by category
At 31 December 2022
Financial
assets
Financial
asset
at fair value at fair value
through
profit
or loss
£'m
through other
comprehensive
income
£'m
Financial
assets at
amortised
cost
£'m
25.7
–
–
–
8.6
–
–
–
1.3
Total
£'m
25.7
8.6
1.3
–
–
––––––––––
25.7
––––––––––
–
–
––––––––––
8.6
––––––––––
56.0
49.3
––––––––––
106.6
––––––––––
56.0
49.3
––––––––––
140.9
––––––––––
Group
Assets as per Balance Sheet
Equity investments
Money market investments
Bond investments
Trade and other receivables
excluding prepayments
Cash and cash equivalents
106
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Financial instruments (continued)
Group
Liabilities as per Balance Sheet
Borrowings
Lease liabilities
Trade and other payables
Company
Trade and other payables
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
Leases liabilities
Trade and other payables
Company
Trade and other payables
Other financial
liabilities at
amortised cost
£’m
Total
£’m
9.5
21.4
59.8
––––––––––
90.7
––––––––––
9.5
21.4
59.8
––––––––––
90.7
––––––––––
1.0
––––––––––
1.0
––––––––––
Financial
assets
Financial
asset
at fair value at fair value
through
profit
or loss
£'m
through 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
––––––––––
107
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Financial instruments (continued)
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The
different levels have been defined as follows:
n Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
n
n
Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2)
Inputs for the asset or liability that are not based on observable market data (that is,
unobservable inputs) (Level 3)
The following table presents the Group's financial assets and liabilities that are measured at fair
value. See note 20 for disclosures of biological assets that are measured at fair value.
At 31 December 2022
Assets
Equity investments
Money market investments
Bond investments
At 31 December 2021
Assets
Equity investments
Money market investments
Bond investments
Level 1
£’m
Level 2
£’m
Level 3
£’m
Total
£’m
25.7
8.6
1.3
––––––––––
35.6
––––––––––
–
–
–
––––––––––
–
––––––––––
–
–
–
––––––––––
–
––––––––––
25.7
8.6
1.3
––––––––––
35.6
––––––––––
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
––––––––––
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.
108
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Financial instruments (continued)
Various financial instruments arise directly from the Group's operations, for example cash and cash
equivalents, trade receivables and trade payables. In addition, the Group uses financial instruments
for two main reasons, namely:
n
n
To finance its operations (to mitigate liquidity risk)
To manage currency risks arising from its operations and arising from its sources of finance
(to mitigate foreign exchange risk)
The Group did not, in accordance with Group policy, trade in financial instruments throughout the
period under review.
(A) Market risk
(i)
Foreign exchange risk
The Group has a significant exposure to the US Dollar arising from a number of 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 £1.2 million
(2021: £1.0 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 £0.6 million (2021:
£0.5 million), £0.4 million (2021: £0.4 million) and £0.4 million (2021: £0.5 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
£1.3 million (2021: £1.4 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.
At 31 December 2022 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 £0.1 million (2021: £0.2 million) higher/lower.
109
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Financial instruments (continued)
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
Swiss Franc
Assets
Liabilities
2022
£’m
2021
£’m
2022
£’m
2021
£’m
9.7
21.6
0.2
10.0
2.9
0.7
2.6
0.8
0.4
0.2
0.1
0.1
––––––––––
49.3
––––––––––
13.0
16.4
0.4
14.4
2.4
0.2
11.5
1.0
1.8
0.4
0.3
–
––––––––––
61.8
––––––––––
18.8
–
–
0.2
7.0
0.5
1.1
3.3
–
–
–
–
––––––––––
30.9
––––––––––
22.5
–
–
0.3
5.0
1.6
1.2
1.9
–
–
–
–
––––––––––
32.5
––––––––––
(B) Credit risk
The Group has policies in place to limit its exposure to credit risk. Credit risk arises from cash and
cash equivalents, deposits with banks and financial institutions, as well as credit exposures to
customers, including outstanding receivables and committed transactions. If customers are
independently rated, these ratings are used. Otherwise if there is no independent rating,
management assesses the credit quality of the customer taking into account its financial position,
past experience and other factors and if appropriate holding liens over stock and receiving payments
in advance of services or goods as required. Management monitors the utilisation of credit limits
regularly.
The Group has a large number of trade receivables, the largest five receivables at the year end
comprise 25 per cent. (2021: 21 per cent.) of total trade receivables.
(C) Liquidity risk
Ultimate responsibility for liquidity risk management rests with the board of Directors. The Group
manages liquidity risk by maintaining adequate reserves and banking facilities by continuously
monitoring forecast and actual cash flows and managing the maturity profiles of financial assets and
liabilities.
At 31 December 2022, the Group had undrawn committed facilities of £22.4 million (2021: £23.7 million),
all of which are due to be reviewed within one year.
110
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
43 Financial instruments (continued)
The table below analyses the Group's financial assets and liabilities which will be settled on a net
basis into relevant maturity groupings based on the remaining period at the balance sheet date to
the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows.
Less than 1 Between 1
Between 2 Over 5
year and 2 years and 5 years
£’m
£’m
£’m
years Undated
£’m
£’m
Total
£’m
At 31 December 2022
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 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
–
1.3
–
–
7.3
1.3
52.9
49.3
––––––––
103.5
––––––––
3.1
–
––––––––
11.7
––––––––
–
–
–
–
–
–
25.7
25.7
–
–
8.6
1.3
–
–
–
–
–––––––– ––––––––
–
–––––––– ––––––––
–
–
–
––––––––
25.7
––––––––
56.0
49.3
––––––––
140.9
––––––––
5.1
2.3
1.1
2.3
1.1
5.4
2.2
11.4
–
–
9.5
21.4
57.4
––––––––
64.8
––––––––
–
––––––––
3.4
––––––––
–
2.7
1.3
–
7.2
1.3
37.6
61.8
––––––––
103.4
––––––––
2.7
–
––––––––
11.2
––––––––
–
–
–––––––– ––––––––
13.6
–––––––– ––––––––
6.5
–
––––––––
–
––––––––
57.4
––––––––
88.3
––––––––
–
–
–
–
–
–
27.7
27.7
–
–
9.9
2.6
–
–
–
–
–––––––– ––––––––
–
–––––––– ––––––––
–
–
–
––––––––
27.7
––––––––
40.3
61.8
––––––––
142.3
––––––––
3.3
3.2
0.7
2.3
1.2
5.0
2.6
14.2
–
–
7.8
24.7
54.4
––––––––
60.9
––––––––
–
––––––––
3.0
––––––––
–
–
–––––––– ––––––––
16.8
–––––––– ––––––––
6.2
–
––––––––
–
––––––––
54.4
––––––––
86.9
––––––––
Included in borrowings due in less than 1 year is £3.7 million (2021: £1.9 million) repayable on demand.
111
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings
Subsidiary undertakings
The subsidiary undertakings of the Group at 31 December 2022, are set out below and are wholly
owned and incorporated in Great Britain unless otherwise stated. The holdings are in ordinary
shares or equivalent unless otherwise stated.
Principal
country of Registered
Office
operation
Kenya
South Africa
Bangladesh
Bangladesh
South Africa
India
Bangladesh
UK
UK
UK
UK
UK
Brazil
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 -
Bangladesh
93.8 per cent. holding)
Tanzania
EP(T) East Africa Limited (Incorporated in Tanzania)
India
Goodricke Group Limited (Incorporated in India - 74.0 per cent. holding)
India
Goodricke Tech Limited (Incorporated in India - 99.8 per cent. holding)
Kenya
Kakuzi Plc (Incorporated in Kenya – 50.7 per cent. holding)
India
Koomber Tea Company Limited (Incorporated in India)
UK
Jing Tea Limited (95.0 per cent. holding)
Newmafruit Limited
UK
Octavius Steel & Company of Bangladesh Limited (Incorporated in Bangladesh) Bangladesh
Robertson Bois Dickson Anderson Limited
UK
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
Bangladesh
Bangladesh
Bangladesh
Bangladesh
Malawi
Kenya
South Africa
South Africa
Malawi
(ii)
(i)
(i)
(i)
(i)
(i)
(i)
(vi)
(vii)
(vii)
(viii)
(ix)
(x)
(xii)
(x)
(ix)
(vii)
(xvii)
(iii)
(iii)
(xi)
(iv)
(i)
(i)
(vii)
(i)
(v)
(i)
(i)
(i)
(i)
(i)
(xii)
(ix)
112
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Engineering
A JT Engineering Limited
Principal
country of Registered
Office
operation
UK
(xiv)
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
Duncan Products Limited (Incorporated in Bangladesh)
Hobart Place Nominees Limited
Linton Park Services Limited
UK
UK
India
UK
Bangladesh
UK
India
India
USA
USA
UK
India
Bermuda
UK
Bermuda
India
UK
Kenya
Bangladesh
Malawi
UK
UK
Bangladesh
UK
UK
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
Associated Fisheries (Europe) Limited
Banbury Tea Warehouses Limited
Black Gold Oil Tools Limited (in liquidation)
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
UK
(i)
(i)
(iii)
(i)
(vii)
(i)
(iii)
(iii)
(xiii)
(xiii)
(i)
(iii)
(xvi)
(i)
(xvi)
(iii)
(i)
(x)
(i)
(xii)
(i)
(i)
(vii)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(xiv)
113
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Dormant companies (continued)
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 (ordinary and preference shares)
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)
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 (ordinary and preference shares)
Jatel Plc
Jetinga Holdings Limited
Jetinga Valley Tea Company Limited
Kaguru EPZ Limited (Incorporated in Kenya – held by Kakuzi Limited)
Kapsumbeiwa Factory Company Limited
Principal
country of Registered
Office
operation
UK
(xiv)
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
Kenya
UK
(xii)
(viii)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(x)
(i)
(x)
(xii)
(xi)
(i)
(i)
(i)
(xiv)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(i)
(xi)
(i)
114
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Principal
country of Registered
Office
operation
Dormant companies (continued)
Kip Koimet Limited (Incorporated in Kenya –
held by Eastern Produce Kenya Limited)
Kumadzi Tea Estates Limited
Lankapara Tea Company Limited
Lawrie Plantation Services Limited
Nasonia Tea Company Limited (Incorporated in Malawi)
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 (ordinary and preference shares)
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 (ordinary and preference shares)
Kenya
UK
UK
UK
Malawi
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
(x)
(i)
(i)
(i)
(xii)
(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)
115
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Summarised financial information on subsidiaries with material non-controlling interests
Summarised balance sheet
Eastern Produce
Kenya Limited
as at 31 December
2021
2022
£’m
£’m
Eastern Produce
Malawi Limited
as at 31 December
2021
2022
£’m
£’m
23.7
(19.0)
––––––––––
4.7
––––––––––
24.0
(14.6)
––––––––––
9.4
––––––––––
18.2
(14.1)
––––––––––
4.1
––––––––––
14.8
(11.9)
––––––––––
2.9
––––––––––
28.2
(5.4)
––––––––––
22.8
––––––––––
27.5
––––––––––
27.8
(5.3)
––––––––––
22.5
––––––––––
31.9
––––––––––
26.8
(8.8)
––––––––––
18.0
––––––––––
22.1
––––––––––
31.2
(9.4)
––––––––––
21.8
––––––––––
24.7
––––––––––
Eastern Produce
South Africa Limited
as at 31 December
2021
2022
£’m
£’m
Goodricke Group
Limited
as at 31 December
2021
2022
£’m
£’m
3.6
(4.4)
––––––––––
(0.8)
––––––––––
10.3
(3.3)
––––––––––
7.0
––––––––––
6.2
––––––––––
4.1
(3.7)
––––––––––
0.4
––––––––––
35.2
(23.9)
––––––––––
11.3
––––––––––
32.3
(20.2)
––––––––––
12.1
––––––––––
8.8
(2.9)
––––––––––
5.9
––––––––––
6.3
––––––––––
36.5
(11.6)
––––––––––
24.9
––––––––––
36.2
––––––––––
35.8
(12.5)
––––––––––
23.3
––––––––––
35.4
––––––––––
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Current
Assets
Liabilities
Total current net (liabilities)/assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
116
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Current
Assets
Liabilities
Total current net assets
Non-current
Assets
Liabilities
Total non-current net assets
Net assets
Summarised income statement
Kakuzi Plc
as at 31 December
2021
2022
£’m
£’m
21.6
(2.6)
––––––––––
19.0
––––––––––
18.7
(2.5)
––––––––––
16.2
––––––––––
27.6
(7.8)
––––––––––
19.8
––––––––––
38.8
––––––––––
26.3
(6.8)
––––––––––
19.5
––––––––––
35.7
––––––––––
Eastern Produce
Kenya Limited
for year
ended 31 December
2022
£’m
2021
£’m
Eastern Produce
Malawi Limited
for year
ended 31 December
2022
£’m
2021
£’m
40.6
––––––––––
36.5
––––––––––
9.9
(3.2)
1.1
––––––––––
7.8
––––––––––
7.0
(2.1)
(0.8)
––––––––––
4.1
––––––––––
30.1
––––––––––
0.7
(0.6)
(2.6)
––––––––––
(2.5)
––––––––––
25.3
––––––––––
1.2
(0.6)
(1.2)
––––––––––
(0.6)
––––––––––
2.3
3.7
1.2
0.2
(0.7)
–
(0.2)
–
Revenue
Profit before tax
Taxation
Other comprehensive income/(expense)
Total comprehensive income/(expense)
Total comprehensive income/(expense)
allocated to non-controlling interests
Dividends paid to non-controlling interests
117
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Eastern Produce
South Africa Limited
for year ended
31 December
Goodricke Group
Limited
for year ended
31 December
2022
£’m
2021
£’m
2022
£’m
2021
£’m
5.5
––––––––––
(0.8)
0.2
0.4
––––––––––
(0.2)
––––––––––
3.4
––––––––––
(0.4)
0.1
(0.5)
––––––––––
(0.8)
––––––––––
90.5
––––––––––
0.4
(0.3)
1.4
––––––––––
1.5
––––––––––
84.6
––––––––––
0.6
(0.1)
(1.4)
––––––––––
(0.9)
––––––––––
–
–
(0.2)
–
0.4
0.2
(0.2)
0.2
Revenue
(Loss)/profit before tax
Taxation
Other comprehensive income/(expense)
Total comprehensive (expense)/income
Total comprehensive (expense)/income
allocated to non-controlling interests
Dividends paid to non-controlling interests
Revenue
Profit before tax
Taxation
Other comprehensive income/(expense)
Total comprehensive income
Total comprehensive income allocated to non-controlling interests
Dividends paid to non-controlling interests
Kakuzi Plc
for year ended
31 December
2022
£’m
2021
£’m
30.5
––––––––––
7.3
(2.3)
1.1
––––––––––
6.1
––––––––––
3.0
1.5
21.8
––––––––––
3.3
(1.1)
(0.9)
––––––––––
1.3
––––––––––
0.6
1.2
118
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 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
2022
£’m
2021
£’m
2022
£’m
2021
£’m
14.0
0.9
(3.0)
––––––––––
11.9
––––––––––
(0.5)
––––––––––
(12.3)
––––––––––
4.4
0.7
(2.1)
––––––––––
3.0
––––––––––
(1.0)
––––––––––
(0.7)
––––––––––
2.6
(0.5)
0.4
––––––––––
2.5
––––––––––
(0.6)
––––––––––
–
––––––––––
1.7
(0.5)
(0.7)
––––––––––
0.5
––––––––––
(0.1)
––––––––––
–
––––––––––
(0.9)
1.3
1.9
0.4
13.6
1.2
––––––––––
12.3
–
––––––––––
(0.6)
0.2
––––––––––
(1.2)
0.2
––––––––––
13.9
––––––––––
13.6
––––––––––
1.5
––––––––––
(0.6)
––––––––––
Cash flows from operating activities
Cash generated from operations
Net interest received/(paid)
Income tax paid
Net cash generated from operating activities
Net cash used in investing activities
Net cash used in financing activities
Net (decrease)/increase in cash and cash
equivalents and bank overdrafts
Cash, cash equivalents and bank overdrafts
at beginning of year
Exchange gains on cash and cash equivalents
Cash, cash equivalents and bank overdrafts
at end of year
119
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Eastern Produce
South Africa Limited
for year ended
31 December
Goodricke
Group Limited
for year ended
31 December
2022
£’m
2021
£’m
2022
£’m
2021
£’m
0.6
(0.3)
–
––––––––––
(0.8)
(0.2)
–
––––––––––
1.1
–
(0.1)
––––––––––
4.3
–
(0.1)
––––––––––
0.3
––––––––––
(1.4)
––––––––––
(1.0)
––––––––––
(1.1)
––––––––––
1.0
––––––––––
(1.6)
––––––––––
4.2
––––––––––
(1.0)
––––––––––
1.2
––––––––––
2.0
––––––––––
(1.9)
––––––––––
(2.5)
––––––––––
0.1
––––––––––
(0.1)
––––––––––
(2.5)
––––––––––
0.7
––––––––––
1.1
1.4
1.2
0.5
0.1
––––––––––
(0.2)
––––––––––
0.1
––––––––––
-
––––––––––
1.3
––––––––––
1.1
––––––––––
(1.2)
––––––––––
1.2
––––––––––
Cash flows from operating activities
Cash generated from operations
Net interest paid
Income tax paid
Net cash generated/(used in) from
operating activities
Net cash used in investing activities
Net cash generated from/(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 gains/(losses) on cash
and cash equivalents
Cash, cash equivalents and bank
overdrafts at end of year
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 gains/(losses) on cash and cash equivalents
Cash, cash equivalents and bank overdrafts at end of year
120
Kakuzi Plc for year
ended 31 December
2022
£’m
2021
£’m
11.6
0.5
(1.4)
––––––––––
10.7
––––––––––
(10.0)
––––––––––
(3.0)
––––––––––
(2.3)
10.8
1.0
––––––––––
9.5
––––––––––
8.5
0.5
(0.9)
––––––––––
8.1
––––––––––
(6.0)
––––––––––
(2.3)
––––––––––
(0.2)
11.2
(0.2)
––––––––––
10.8
––––––––––
265644 Camellia R&A pp103-pp123.qxp 03/05/2023 19:07 Page 121
CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Subsidiary undertakings (continued)
Associated undertakings
The principal associated undertakings of the Group at 31 December 2022 were:
Insurance and banking
BF&M Limited (Incorporated in Bermuda –
common stock)
United Finance Limited
(Incorporated in Bangladesh –
ordinary shares)
United Insurance Company Limited
(Incorporated in Bangladesh –
ordinary shares)
Principal
country of
operation
Registered
Office
Group
interest
Accounting in equity
date
capital
2022 per cent.
Bermuda
(xv) 31 December
36.9
Bangladesh
(vii) 31 December
38.4
Bangladesh
(vii) 31 December
37.0
121
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
44 Subsidiary and associated undertakings (continued)
Registered Offices:
(i) Wrotham Place
(vii) Camellia House
(xiii) 1368 W Herndon Ave
Bull Lane
Wrotham
Near Sevenoaks
Kent
TN15 7AE
England
(ii) Amgoorie Tea Garden
PO: Amguri
Haloating - 785 681
Dist: Sibsagar
Assam
India
(iii) Camellia House
14 Gurusaday Road
Kolkata - 700019
West Bengal
India
(iv) Koomber Tea Garden
PO: Kumbhir
Cachar - 788 108
Assam
India
22 Kazi Nazrul Islam
Avenue
Dhaka 1000
Bangladesh
#103
Fresno
California 93711
USA
(viii) Slangrivier Road
Slangrivier Plaas
Wellington
7655
South Africa
(ix) 7 Windsor Street
Tzaneen
850
Limpopo Province
South Africa
(xiv) Craigshaw Crescent
West Tullos
Aberdeen
AB12 3TB
Scotland
(xv) 112 Pitts Bay Road
Pembroke
Bermuda
HM08
(x) New Rehema House
(xvi) Clarendon House
Rhapta Road
Westlands
P O Box 45560
GPO 00100
Nairobi
Kenya
2 Church Street
Hamilton
Bermuda
HM11
(xvii) 3rd Floor
180 Msasani Bay
Msasani
Dar Es salaam
Tanzania
(v) Sessa Tea Garden
PO: Dibrugarh - 786001
Dist: Dibrugarh
Assam
India
(xi) Main Office
Punda Milia Road
Makuyu
P O Box 24
01000 Thika
Kenya
(vi) Fazenda Maruque s/n
(xii) PO Box 53
sala 03
Bairro Maruque
Itaberá
São Paulo
Brazil
Mulanje
Malawi
122
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CAMELLIA PLC
NOTES TO THE ACCOUNTS
45 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. Simon Turner, who is a Director of Camellia Plc, is also a director of The Camellia Private
Trust Company and the president of the board of the trustee of the Foundation. While The Camellia
Private Trust Company Limited as a trustee of the Foundation maintains its rights as a shareholder, it
has not participated in, and has confirmed to the board of Camellia Plc that it has no intention of
participating in, the day to day running of the business of the Camellia Group. The Camellia Private
Trust Company Limited has also confirmed its agreement that where any director of Camellia Plc is
for the time being connected with the Foundation, he should not exercise any voting rights as a
director of Camellia Plc in relation to any matter concerning the Camellia Group’s interest in any
assets in which the Foundation also has a material interest otherwise than through Camellia Plc.
46 Related party transactions
Group
During the year the Group received rental income from the Foundation of £nil (2021: £18,620).
During the year the Group paid contributions to the overseas pension and post-employment
schemes of £1,930,199 (2021: £3,775,062).
Company
The Company receives financial and secretarial services from Linton Park Plc, a directly owned
subsidiary undertaking. The amount payable for these services for 2022 was £422,081
(2021: £433,300). At 31 December 2022 £3,621,361 (2021: £3,029,941) 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 £16,519,492 (2021:
£13,409,492) include an unsecured loan note of £4,191,777 (2021: £4,191,777). The company received
interest of £167,671 (2021: £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 2022 amounted to
£2,052,715 (2021: £1,879,504) and £193,185 (2021: £193,187) respectively and are unsecured, interest
free and have no fixed terms of repayment.
47 Subsequent events
There were no adjusting post balance sheet events.
123
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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
2022 and of the Group’s loss 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 and parent company cash flow statement;
the basis of preparation and statement of accounting policies;
the notes 1 to 47 related to the consolidated financial statements; and
the notes 1 to 47 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.
124
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CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
n
n
Revenue recognition;
Impairment of goodwill and intangible assets.
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 £1.28m
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 46 components of the Group. Of these, 35 were subjected to a
full-scope audit whilst the 11 remaining were subject to specific audit
procedures.
Our scoping provides coverage of 100% of the Group’s revenue, 98% of the
Group’s result before tax and 72% of the Group’s net assets.
Significant changes in
our approach
Changes in component scoping:
We performed full scope audit on Brazil component in current year (2021:
specified audit procedures). The component contributed over 10% of results
before tax.
Changes in key audit matters:
n
n
n
In prior year, acquisition accounting was considered a key audit matter
but we no longer report this as a key audit matter as there have been no
new acquisitions in the year.
In the prior year, Provisions for uncertain tax positions and legal matters
was considered to be a key audit matter due to impact of litigation
concerning the Group’s East African operations first identified in 2020.
There are no significant provisions or contingent liabilities remaining from
this issue. Other than the ongoing legacy matters, we have not identified
any further significant potential litigation and therefore, we no longer
report this as a key audit matter in current year.
In the prior year the Fair value of biological assets was considered to be a
key audit matter due to complexities and judgements involved. We no
longer report this as a key audit matter based upon prior year audit
experience.
125
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CAMELLIA PLC
REPORT OF THE INDEPENDENT AUDITORS
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis
of accounting in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and parent company’s ability to continue to
adopt the going concern basis of accounting included:
n
n
n
n
n
n
Assessing the latest cash flow forecasts of the Group to determine whether these are consistent with
the forecasts used during the impairment review; and assess the Directors’ going concern
assessment.
Assessing copies of any existing and new facilities and assessing the Group’s cash forecasts against
available facilities and the required repayment profiles of debt and interest.
Assessing the facilities and 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 to assess 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 £283.0m
(2021: £238.9m) 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.
126
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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 order to address the key
audit matter:
n Obtained an understanding of the processes and controls used to record
revenue transactions.
n
n
n
Assessed commercial arrangements to determine the correct point of
revenue recognition of 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.
5.2 Impairment of goodwill and intangible assets
Key audit matter
description
The Group holds £6.3m (2021: £10.1m) of intangible assets including £1.0m
(2021: £4.6m) allocated to goodwill and £3.6m (2021: £3.6m) allocated to Jing
Tea brand. Please also refer to the Critical accounting estimates and
judgments within accounting policies and Note 16 to the accounts.
The risk in relation to intangibles relates to (i) Brand value relating to Jing Tea
Limited, (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 prior year acquisition of Bardsley Group.
There is 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 are determined based upon
value in use calculations and where relevant fair value less costs to sell
calculations and are performed by management with the help pf external
valuers where applicable. The estimates and assumptions used within the
cashflow projections require estimates, including significant assumptions
regarding future royalty rates, discount rates and cashflows.
Intangible assets are disclosed in note 16 to the financial statements, the
valuation is discussed as sources of estimation uncertainty, and the valuation
policy is disclosed in the principal accounting policies.
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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
n
n
n
n
n
n
Checked the arithmetical accuracy of the value in use and Fair value less
cost to sell calculations. We evaluated the current year changes to the
key assumptions and assessed retrospectively whether prior year
assumptions were appropriate.
Involved our valuation specialists in evaluating management’s royalty
and discount rates. We benchmarked the royalty rate and discount rate
to comparable companies and considered the underlying assumptions
based on our knowledge of the group and its industry.
Assessed the accuracy of management’s revenue and 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.
Assessed the valuation reports issued by third party external valuers by
comparing them with similar market transactions. We also held
discussions with the valuers to challenge the methods and assumptions
used for determining the fair value.
Evaluated the competence, capabilities and objectivity of third party
external valuers.
Assessed the financial statements disclosures in relation to the
impairment assessments performed.
Also assessed the adequacy of the Group’s disclosures including the
need to disclose further sensitivities for CGUs where a reasonably
possible change in a key assumption would cause an impairment.
n We have considered the key potential impacts of climate change
Key observations
From the work performed, we have concluded that impairment of goodwill
and intangible assets is appropriately recognised in accordance with IAS 36.
In addition the relevant disclosures are appropriate based on the results of
our work.
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REPORT OF THE INDEPENDENT AUDITORS
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
£1.28m (2021: £0.9m)
£0.4m (2021: £0.3m)
Basis for
determining
materiality
Rationale for the
benchmark
applied
0.4% of Revenue (2021: 0.3% of
revenue).
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 (2021: 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.
Performance
materiality
Basis and rationale
for determining
performance
materiality
Group financial statements
Parent company financial
statements
70% (2021: 70%) of group materiality
70% (2021: 70%) of parent company
materiality
In determining performance materiality, we have considered the following
factors:
n There have been no changes to the business in their operation or financial
reporting process.
n The Group has a history of correcting 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.
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REPORT OF THE INDEPENDENT AUDITORS
6.3 Error reporting threshold
We agreed with the Audit Committee that we would report to the Committee all audit differences in
excess of £64,000 (2021: £43,000), 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 operations as well as apple
and pears orchards, acquired in prior year, are located in the UK. Of the Group’s 55 principal components,
35 were subject to a full audit and 11 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. We performed a full scope audit on the Brazil component in
current year (2021: specified audit procedures). The component contributed over 10% of results before
tax.
These 46 components represent the principal business units and account for 100% (2021: 99%) of the
Group’s revenue and 98% (2021: 86%) of the Group’s results before tax and 72% (2021: 87%) 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 £0.4m to (35%)
of group materiality (2021: £0.3m (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.
6%
Revenue
2%
6%
Profit
before tax
94%
92%
11%
17%
7%
Net assets
65%
Full audit scope
Full audit scope
Full audit scope
Specified audit procedures
Specified audit procedures
Specified audit procedures
Review at group level
Review at group level
Scoped out
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REPORT OF THE INDEPENDENT AUDITORS
7.2 Our consideration of the control environment
Our risk assessment procedures include obtaining an understanding of relevant controls to the audit.
Consistent with previous years, we have obtained an understanding of relevant controls on the following
areas:
n
n
Financial reporting process; and
Impairment of intangibles.
This covered some of the key accounting and reporting tools that are used by management and the
interface between various systems.
7.3 Working with other auditors
The Group audit team are responsible for the scope and direction of the audit process and provide direct
oversight, review, and coordination of our component audit teams. We interacted regularly with the
component team during each stage of the audit and reviewed key working papers. In September 2022,
we held a group-wide planning meeting, in which we set out the materiality and scoping for component
teams, as well as considering significant risks across the Group. We also held planning meetings with
each of our specialists, involving our component teams where relevant.
During our interim and year-end audit, we held regular catch-up meetings with components to monitor
progress and highlight any issues arising. The Senior Statutory Auditor participated in all of the final close
meetings of the group’s significant components. The Senior Statutory Auditor or another senior members
of the group audit team carried out a review of the component auditor files.
Our oversight of component auditors focused on the planning of their audit work and key judgements made.
In particular, our supervision and direction focused on the work performed in relation to key audit matters
by component teams including revenue recognition and impairment of intangible assets and goodwill.
As part of our monitoring of component auditors, we have also attended key audit close meetings.
7.4.Our consideration of climate-related risks
Management has considered transition and physical risks when factoring in climate change as part of their
risk assessment process when considering the principal risks and uncertainties facing the Group. This is
set out in the strategic report on pages 21 to 31 and the principal risks set out on pages 22 to 27. The areas
of the financial statements that are notably impacted by climate-related matters are associated with future
forecasts in the medium to long term. From the financial statements’ perspective, these risks have been
focused on the valuation of goodwill and other intangible assets and Biological assets. This is consistent
with our evaluation of the climate-related risks facing the Group and is linked to the key audit matter as
highlighted in section 5.2 above. In addition, we have:
n
n
n
n
assessed the key financial statement line items and estimates which are more likely to be materially
impacted by climate change risks given the more notable impacts of climate change on the business
are expected to arise in the medium to long term.
challenged how the Directors considered climate change in their assessment on the Group’s
operations based on our understanding of the business environment and by benchmarking relevant
assumptions with market data.
involved our Environmental Social and Governance (ESG) specialist in challenging the group’s climate
risk assessments.
Read the climate risk disclosures included throughout the strategic report section of the annual
report to consider whether they are materially consistent with the financial statements and our
knowledge obtained in the audit.
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REPORT OF THE INDEPENDENT AUDITORS
8. Other information
The other information comprises the information included in the annual report , other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information
contained within the annual report.
Our opinion on the financial statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group’s and the
parent company’s ability to continue as a going concern, disclosing as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to liquidate
the group or the parent company or to cease operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s
report.
11. Extent to which the audit was considered capable of detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
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REPORT OF THE INDEPENDENT AUDITORS
11.1 Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, we considered the following:
n
n
n
n
the nature of the industry and sector, control environment and business performance including the
design of the Group’s remuneration policies, key drivers for directors’ remuneration, bonus levels and
performance targets;
results of our enquiries of management and the Audit Committee about their own identification and
assessment of the risks of irregularities, including those that are specific to the Group’s sector;
any matters we identified having obtained and reviewed the group’s documentation of their policies
and procedures relating to:
l
l
l
identifying, evaluating and complying with laws and regulations and whether they were aware of
any instances of non-compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual,
suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and
regulations;
the matters discussed among the audit engagement team including significant component audit
teams and relevant internal specialists, including tax, valuations, pensions, ESG and IT specialists
regarding how and where fraud might occur in the financial statements and any potential indicators
of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in the following area – revenue
recognition. In common with all audits under ISAs (UK), we are also required to perform specific
procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the Group operates in,
focusing on provisions of those laws and regulations that had a direct effect on the determination of
material amounts and disclosures in the financial statements. The key laws and regulations we
considered in this context included the UK Companies Act, pensions legislation and tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the
financial statements but compliance with which may be fundamental to the group’s ability to operate or
to avoid a material penalty. These included the group’s health, safety and environmental regulations
(carbon reduction, etc), Bribery Act and employee laws.
11.2 Audit response to risks identified
As a result of performing the above, we identified revenue recognition as a key audit matter related to the
potential risk of fraud. The key audit matters section of our report explains the matter in more detail and
also describes the specific procedures we performed in response to that key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
n
n
n
n
reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect on the
financial statements;
enquiring of management, the Audit Committee and in-house legal counsel concerning actual and
potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance, reviewing internal audit reports; and
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REPORT OF THE INDEPENDENT AUDITORS
n
in addressing the risk of fraud through management override of controls, testing the appropriateness
of journal entries and other adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement
team members including internal specialists and significant component audit teams, and remained alert to
any indications of fraud or non-compliance with laws and regulations throughout the audit.
12. Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
n
n
the information given in the strategic report and the directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal
requirements.
In the light of the knowledge and understanding of the Group and the parent company and their
environment obtained in the course of the audit, we have not identified any material misstatements in
the strategic report or the directors’ report.
13. Matters on which we are required to report by exception
13.1 Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in our opinion:
n we have not received all the information and explanations we require for our audit; or
n
n
adequate accounting records have not been kept by the parent company, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and
returns.
We have nothing to report in respect of these matters.
13.2 Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of
directors’ remuneration have not been made.
We have nothing to report in respect of this matter.
14. Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than
the company and the company’s members as a body, for our audit work, for this report, or for the
opinions we have formed.
Makhan Chahal ACA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
3 May 2023
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CAMELLIA PLC
FIVE YEAR RECORD
2022
£’m
2021
£’m
*Restated
2020
£’m
*Restated
2019
£’m
*Restated
2018
£’m
*Restated
281.3
––––––––––
50.3
(20.0)
––––––––––
Revenue-continuing operations
297.2
––––––––––
255.3
––––––––––
270.1
––––––––––
266.0
––––––––––
(Loss)/profit before tax
Taxation
(Loss)/profit from continuing
operations
Profit from discontinued
operations
Profit/(loss) attributable to owners
of the parent
Equity dividends paid
Equity
Called up share capital
Reserves
Total shareholders’ funds
Earnings/(loss) per share
- continuing operations
Earnings/(loss) per share
- continuing and discontinued
operations
Dividend paid per share
(3.7)
(12.2)
––––––––––
7.1
(2.6)
––––––––––
7.2
(8.6)
––––––––––
20.5
(7.2)
––––––––––
(15.9)
––––––––––
4.5
––––––––––
(1.4)
––––––––––
13.3
––––––––––
30.3
––––––––––
7.6
––––––––––
–
––––––––––
0.6
––––––––––
1.8
––––––––––
2.0
––––––––––
(13.0)
––––––––––
2.3
––––––––––
(5.0)
––––––––––
8.3
––––––––––
4.0
––––––––––
5.2
––––––––––
2.8
––––––––––
4.0
––––––––––
25.2
––––––––––
3.8
––––––––––
0.3
368.6
––––––––––
368.9
––––––––––
0.3
388.3
––––––––––
388.6
––––––––––
0.3
376.3
––––––––––
376.6
––––––––––
0.3
395.4
––––––––––
395.7
––––––––––
0.3
395.2
––––––––––
395.5
––––––––––
(745.8) p
83.3 p
(202.8) p
235.3 p
839.9 p
(470.7) p
146 p
83.3 p
188 p
(181.0) p
102 p
300.5 p
144 p
912.4 p
138 p
*
The comparative figures have been restated following the disposal of Associated Cold Stores & Transport Limited
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CAMELLIA PLC
APPENDICES
Appendix 1: Global (excluding 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 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 and Scope 2
emissions (location-based) (tCO2e)
Total gross Scope 1 and 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)**
2022
Global
(Excluding UK)
2021
Global
(Excluding UK)
2020
Global
(Excluding UK)
2019
Global
(Excluding UK)
22,867
24,008
21,555
25,350
15,030
72,343
3,386
14,866
71,000
3,816
15,324
80,217
3,819
17,501
88,377
3,558
40,833
43,163
43,312
46,290
40,434
41,958
42,717
47,625
40,434
41,942
42,717
47,625
40,434
41,958
42,717
47,625
180
194,942
194,942
1.36
124.6
61.5
222.9
234.9
92.0
1.0
132
n/a
n/a
198,811
206,944
228,701
198,795
1.29
206,944
1.40
228,701
1.51
130.5
117.0
137.2
61.5
219.4
250.9
91.4
0.9
62.8
250.4
247.2
90.5
0.9
71.0
266.3
227.7
95.5
0.6
0.5
0.5
n/a
n/a
* 2020 is the first reporting period for which we reported our scope 2 market-based emissions
** 2021 was the first reporting period for which we reported our scope 3 business travel in rental cars or
employee-owned vehicles
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CAMELLIA PLC
APPENDICES
Appendix 2: UK GHG emissions and energy use data for the year to 31 December
Reporting year
Group sectors reported
2020
UK
2022
UK
2021
UK
2019
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 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 and Scope 2 emissions
(location-based) (tCO2e)
Total gross Scope 1 and 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)
799
1,202
1,591
1,939
4,344
549
245
4,125
991
4,087
362
67
4,408
1,171
3,744
88
13
5,130
32
5,069
122
17
5,316
n/a
4,125
4,408
5,130
5,316
68
15
n/a
n/a
10,062
10,126
10,566
12,463
6,928
4.3
17.0
2.1
21.3
6,889
6.5
17.3
1.4
20.8
5,468
8.6
15.6
0.3
22.0
n/a
10.5
20.8
0.5
21.5
0.3
0.0
n/a
n/a
* 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 was the first reporting period for which we reported our Scope 3 business travel in rental cars or
employee-owned vehicles.
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APPENDICES
Appendix 3: 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. We are working to capture anything that falls
outside this boundary within the Group’s reporting of its Scope 3 emissions, which is under development.
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 and Industrial Strategy and the UK Department for
Environment, Food and Rural Affairs (Defra) and the Intergovernmental Panel on Climate Change (IPCC),
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.
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