TIDMCAM
RNS Number : 2484D
Camellia PLC
25 April 2013
Camellia Plc
Annual financial report for year ended 31
December 2012
Highlights from
the results
Year ended Year ended
31 December 31 December
2012 2011
GBP'000 GBP'000
Revenue 261,529 246,849
Trading profit 39,969 39,233
Profit before tax 70,734 58,650
Headline profit
before tax 49,146 50,535
Profit for the year 45,072 41,790
Earnings per share 1,159.7 p 1,190.4 p
Final dividend 88 p 84 p
Chairman's statement
The headline profit before tax for the year to 31 December 2012
amounted to GBP49.15 million compared with
GBP50.54 million in the previous year. Headline profit is a
measure of underlying performance which is not impacted by
exceptional and other items considered non-operational in
nature.
I have, for a number of years, advised shareholders that the
profit after inclusion of unrealised gains on biological assets
under IAS 41 should be viewed with caution. That advice is even
more relevant this year as the overall gain of GBP30.04 million in
the income statement includes a gain of GBP21.35 million as a
result of a substantial devaluation of the Malawian Kwacha during
2012. A corresponding charge has been made to reserves. The
intricacies of these adjustments are explained in more detail in
note 18 to the accounts. The recognition of the gain arising from
the devaluation is, in my opinion, somewhat misleading
notwithstanding the fact that our accounts are prepared in
accordance with IFRSs as adopted by the European Union. The better
news is that the International Accounting Standards Board will
shortly be re-considering the application of IAS 41 in respect of
permanent plantings that yield on-going annual crops. It is to be
hoped that a new policy can be implemented which will largely
eliminate the unrealised amounts appearing in the income statement
from year to year.
After taking account of exceptional items the profit before tax
for the year to 31 December 2012 amounted to GBP70.73 million
compared with GBP58.65 million in the previous year.
Dividend
The board is recommending a final dividend of 88p per share
which, together with the interim dividend already
paid of 32p per share, brings the total distribution for the
year to 120p per share compared with 114p per share in 2011.
Agriculture and horticulture
Tea
In 2012 tea prices remained at a relatively high level resulting
in the overall profit from our tea gardens being at a similar level
to the previous year.
India
Production in the Dooars area of India was similar to that of
the previous year and whilst prices increased, the cost of
production was significantly higher resulting in lower profits. In
Assam however, the increase in costs were more than offset by the
increase in sale prices.
Progress continues to be made by both our packet tea and instant
tea operations.
Bangladesh
Favourable weather enabled our tea gardens in Bangladesh to
increase their production over the previous year. Tea prices were
higher and, as a result, profitability improved.
Factory renovations continue and are proving beneficial to the
efficiency of the operations.
Kenya
Our Kenyan tea gardens produced a crop and profits similar to
the previous year. Prices remained firm throughout the year. The
recent elections held under the new constitution were relatively
peaceful and a new government has now been installed.
Kakuzi disposed of its remaining 50.5 per cent. shareholding in
The Siret Tea Company during the year.
Malawi
Due to severe drought in the latter part of the year, production
declined by over 10 per cent. This drought has resulted in the
death of a large number of infills, some young tea areas and even
some mature tea, all of which will have to be replanted. Recovery
from the drought will be a slow process. In May 2012, the Malawi
Kwacha devalued by 50 per cent. and further devaluation has
continued. This has led to an exceptional gain being made in the
income statement, reference to which has been made above.
Negotiations continue with our insurance company following the fire
at one of our processing factories in 2011. Payments on account
have been received but it is proving somewhat difficult to finalise
this matter. The lack of foreign exchange in the country continues
to be a problem.
Edible Nuts
2012 was an 'on-year' for our pistachio orchards at Horizon
Farms in California and production was up to expectations as were
sale prices.
Our macadamia production in Malawi and South Africa was slightly
below the very good figures achieved in 2011, but costs were well
contained. Sale prices remained firm in South Africa but declined
slightly in Malawi. The new areas of macadamia planted in both
Kenya and South Africa continue to mature and a small crop will be
harvested in Kenya during 2013.
New areas of almonds have been planted on vacant land at Horizon
Farms in California.
Other horticulture
Avocado production on Kakuzi's orchards in Kenya increased but a
large amount of small fruit was harvested. Sale prices reduced
substantially. Nonetheless, profitability was satisfactory. Delays
at Mombasa port continue to cause problems in getting this fresh
product to market in a timely fashion.
Rubber production on our operations in Bangladesh was similar to
the previous year but sale prices declined from the very high
figures in 2011.
Changes to the planting schedule on our farm in Brazil resulted
in a substantial increase in maize production but a decline in the
soya tonnage harvested. Prices were slightly lower than the
previous year for both crops but the profitability of CC Lawrie was
satisfactory. A Government committee has been appointed to review
the foreign ownership of agricultural land in Brazil and it will
hopefully report soon.
Citrus production at Horizon Farms in California was similar to
the previous year but sale prices were higher resulting in improved
profitability.
The wine grape harvest on our estate in South Africa was ahead
of the previous year but the sale of bottled wine remains difficult
due to an oversupplied market.
Food storage and distribution
The progress made by Associated Cold Stores and Transport
(ACS&T) in 2011 was maintained in 2012. Nonetheless the market
for cold storage in the United Kingdom continues to be over
supplied and rates achieved remain competitive. ACS&T's balance
sheet remains strong and we continue to examine the possible future
expansion of the business.
2012 was a poor year for our food distribution businesses in the
Netherlands. Demand was reduced by the continuing recession in that
country and elsewhere in Europe.
Engineering
The overall results of our engineering companies remain
disappointing. Considerable effort is being deployed to improve our
fortunes in this sector and there are some signs of success despite
the poor economic conditions.
AJT Engineering improved its results over the previous year
benefiting from increased activity in the repair
businesses in the North Sea oil and gas markets. The
re-commissioning of its site at Altens in Aberdeen has proved to be
a material enhancement of the facilities available to our
customers.
Abbey Metal Finishing has now received a number of the
accreditations necessary for increased business through
its new factory in Hinckley. It will however take more time to
recover the business lost through the fire at its plant in
2010.
AKD Engineering in Lowestoft experienced a very difficult year
with a major contract being continuously delayed from month to
month resulting in considerable expenditure. We are seeking
compensation for the loss incurred.
Our other engineering facilities at GU Cutting and Grinding,
British Metal Treatments and Loddon all experienced disappointing
results in 2012.
Banking and financial services
2012 was a difficult year for banks in the United Kingdom and
Duncan Lawrie was not immune from the effects of this situation. We
continue to operate in a very conservative manner and the capital
base of the bank is well above the regulatory minimum. We also
continue to raise awareness of the Duncan Lawrie name in the market
place and have expanded our customer base in 2012. A high level of
service to our customers is being maintained.
Associates
The results to 31 December 2012 include our share of the
estimated profits of BF&M Ltd in Bermuda. We are no longer able
to exercise significant influence over BF&M Ltd and, on this
basis, as from 1 January 2013 we intend to account for our
shareholding in this company as an investment rather than as an
associate. Accordingly, we will recognise dividends received in our
income statement as opposed to our share of profits.
Difficult economic conditions prevailed in Bangladesh throughout
2012 and our associate companies United Leasing and United
Insurance earned profits slightly below the levels of the previous
year.
Development
The policy of developing our existing businesses continues. In
particular, progress has been made in improving the irrigation
capacity of our operations in India and Bangladesh. A new tea
factory has been built in Malawi and considerable efforts in
upgrading our engineering facilities will hopefully show positive
results in the years to come. The share capital of Duncan Lawrie is
being increased to take advantage of additional lending
opportunities.
Directors
David Reeves, who joined the board in 2001, is retiring at the
conclusion of the annual general meeting in June. I would like to
thank David for his invaluable contribution to our deliberations
and wish him well for the future.
Frédéric Vuilleumier joined the board as a non-executive
independent director on 7 March 2013.
Staff
Once again I would like to thank all of our staff for their
considerable efforts in contributing to the success of the group
over the last year.
M C Perkins
Chairman
25 April 2013
Report of the directors
The directors present their report together with the audited
accounts for the year ended 31 December 2012.
Principal activities
The company is a holding company and its country of
incorporation is England. The principal activities of its
subsidiary and associated undertakings comprise:
Agriculture and horticulture - the production of tea, edible
nuts, citrus, rubber, fruits, other horticultural produce
and general farming
Engineering - metal finishing, fabrication, precision
engineering and heat treatment
Food storage and distribution
Private banking and financial services
The holding of investments
Further details of the group's activities are included in the
chairman's statement on pages 3 to 5.
Results and dividends
The profit for the year amounted to GBP45,072,000 (2011:
GBP41,790,000). The board has proposed a final dividend for the
year of 88p per share payable on 5 July 2013 to holders of ordinary
shares registered at the close of business on 14 June 2013. The
total dividend for 2012 is therefore 120p per share (2011: 114p per
share). Details are shown in note 12 on page 43.
Directors
The directors of the company are listed on page 2. The following
directors had beneficial interests in the share capital of the
company:
31 December 1 January
2012 2012
Camellia Plc ordinary shares of 10p each:
M C Perkins 1,573 1,573
C P T Vaughan-Johnson 1,000 1,000
C J Ames purchased 100 shares on 2 January 2013.
Under the company's articles of association all the directors
are required to retire annually. Accordingly, Mr M C Perkins, Mr C
J Relleen, Mr C J Ames, Mr M Dünki, Mr P J Field, Mr A K Mathur,
and Mr C P T Vaughan-Johnson retire and, being eligible, seek
re-election. Mr D A Reeves will not seek re-election as a director
at the forthcoming AGM and will retire from the board at the
conclusion of the meeting on 6 June 2013. Mr F Vuilleumier was
appointed as a non-executive director on 7 March 2013 and will seek
election at the AGM on 6 June 2013.
None of the directors or their families had a material interest
in any contract of significance with the company or any subsidiary
during and at the end of the financial year.
Executive directors
Mr M C Perkins was appointed a director in 1999 and chairman in
2001 having joined Eastern Produce
(Holdings) Limited (now Linton Park Plc) in 1972. He is a
chartered accountant. Mr Perkins is also chairman of Duncan Lawrie
Holdings Limited and chairman of the nomination committee.
Mr C J Ames, a chartered accountant, is a joint managing
director of Camellia Plc, a non-executive director of Kakuzi
Limited and a non-executive director of Duncan Lawrie Holdings
Limited. He was previously managing director of Douglas Deakin
Young Limited which was acquired by the Camellia group in 2005.
Prior to that he was a partner of PricewaterhouseCoopers.
Mr P J Field is a joint managing director of Camellia Plc, is
chairman of Goodricke Group Limited and from 30 April 2010 a
non-executive director of Duncan Lawrie Holdings Limited. Before
joining the group in 1987, Mr Field was with Grindlays Bank engaged
primarily with their business in the Indian subcontinent.
Mr A K Mathur, is a chartered accountant and joined the group in
1981. He was appointed finance director in 1999 and is also a
director of Goodricke Group Limited.
Non-executive directors
Mr C J Relleen was formerly a partner in PricewaterhouseCoopers.
He was appointed an independent non-executive director and deputy
chairman in January 2006 having previously been a non-executive
director of Linton Park Plc. Mr Relleen is also a non-executive
director of Duncan Lawrie Holdings Limited. He is the senior
independent director, chairman of the audit committee and a member
of the nomination and remuneration committees.
Mr M Dünki was appointed a non-executive director on 1 April
2010. Mr Dünki was a director of Rahn & Bodmer Co., a Zurich
based private bank until 31 January 2012. He is also a director of
The Camellia Private Trust Company Limited and a trustee of The
Camellia Foundation and a director of Camellia Holding AG.
Mr D A Reeves was appointed a director in 2001. Following a long
career with the Bank of England, Mr Reeves joined the group in 1998
and was managing director of Duncan Lawrie Limited. He became a
non-executive director of the company in 2002 and is a member of
the audit committee. Mr Reeves is a director of The Camellia
Private Trust Company Limited and a trustee of The Camellia
Foundation and a director of Camellia Holding AG.
Mr C P T Vaughan-Johnson, who was formerly president and chief
executive officer of the Bank of Bermuda, was appointed a director
in 1999. He is chairman of the remuneration committee and a member
of the audit and nomination committees. Mr Vaughan-Johnson was also
a non-executive director of Duncan Lawrie Holdings Limited until 1
June 2011.
Mr F Vuilleumier was appointed as a non-executive independent
director on 7 March 2013. Mr Vuilleumier is a partner of Oberson
Avocats, a law office based in Geneva, Switzerland. He is also a
Swiss Certified tax expert and a lecturer in tax law at the
University of Lausanne.
Secretary
Mrs J A Morton was appointed as company secretary on 8 September
2011.
Change in group structure
During the year, Kakuzi Limited sold the remainder of its 50.5
per cent. shareholding in The Siret Tea Company Limited to EPK
Outgrowers Empowerment Project Company Limited.
BF&M Limited has been reclassified as an available-for-sale
financial asset of the group rather than an associated company.
Further details are set out in note 21 on page 50.
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 2012
and a description of principal risks and uncertainties facing the
group. A fair review of the business of the group is incorporated
within the chairman's statement on pages 3 to 5. The chairman's
statement together with information contained within the report of
the directors highlight the key factors affecting the group's
development and performance. Other matters are dealt with
below:
Principal risks and uncertainties
There are a number of possible risks and uncertainties that
could impact the group's businesses. As the group's businesses are
widely spread both in terms of activity and location, it is
unlikely that any one single factor could have a material impact on
the group's long-term performance. The following risks relating to
the group's principal operations have been identified:
Agriculture and horticulture
The group's agricultural based businesses are located in Kenya,
Malawi, South Africa, Bangladesh, India, Brazil and the USA. The
success of these activities is greatly dependent on climatic
conditions, the control of plant disease, the cost of labour and
the market price for the produce. We export a considerable amount
of produce through the port of Mombasa in Kenya. Such exports can
be seriously delayed by inefficiencies in the operation of the
port. In addition, exports from these businesses are subject to
foreign exchange fluctuations as products, particularly those from
Africa, are normally priced in US dollars.
In Kenya and South Africa there are long-term issues concerning
land ownership over which the group has little control but monitors
closely.
The board continues to work with local management to monitor
land ownership issues that may impact the group's operations. In
Kenya, the length of the leases owned by non-Kenyan citizens and
corporations has been reduced from 999 years to 99 years in
accordance with the new constitution. In South Africa, on land
where ownership claims have been made, any substantiated claim is
required to be resolved on a willing buyer willing seller basis and
crops are generally only planted following notification to the Land
Claims Commission.
In India, violence from separatist groups which has been a
problem for some years has recently been greatly reduced in Assam,
Darjeeling and the Dooars. The situation continues to be monitored
and the group's operations in these regions have generally been
able to trade normally.
UK engineering
A number of the UK engineering companies are dependent for a
significant part of their revenue on the aerospace and the oil and
gas industries. A downturn in either of these sectors would have an
impact on the level of activity in these businesses.
Some of the processes used by the companies involved in metal
treatment require high standards of health and safety and
environmental management. Failure to maintain these standards could
give rise to accidents or environmental damage.
Cold storage and transport
Cold storage and transport in the UK is a highly competitive
industry and is largely dependent on the food industry for the
utilisation of cold stores.
Cold stores are heavy users of electricity and any significant
movement in energy costs can affect the operation's profitability.
Similarly, the transport division is affected by sharp movements in
the cost of fuel.
The business is dependent upon a sophisticated computer system.
The failure of this system could have significant consequences for
the business although a disaster recovery plan is in place.
Banking and financial services
Duncan Lawrie Limited is now regulated by the Financial Conduct
Authority (FCA) and the Prudential Regulation Authority (PRA) and
has a well developed compliance process. The following risks have
been identified:
- compliance risk - the FCA and the PRA have the power to stop
trading activity should there be a serious breach of their
regulations. Following the recent global banking crisis,
there have been moves by the authorities to tighten regulatory
standards and this may lead to a requirement for further
capital to be invested in Duncan Lawrie Limited.
- credit risk - the lending of money gives rise to a credit
risk. It lends money to customers and places money with other
banks and holds interest bearing securities. This credit
risk is managed by strict internal procedures. It limits
itself to lending to customers no more than its share capital
and reserves.
- liquidity, interest and foreign exchange rate risk - these
risks are monitored closely and reported upon daily against
conservative exposure limits.
Duncan Lawrie Limited has no exposure to the sub-prime mortgage
market but in periods of low interest rates or low stock market
values its income stream will inevitably be affected. Bank failures
in the jurisdiction within which Duncan Lawrie operates can also
impact its results as a consequence of industry wide compensation
schemes to which it is required to contribute.
Further information on the group's financial risks are disclosed
in note 38 of the accounts.
Investments
The group owns a number of investments including listed
investments. The value of these investments is therefore likely to
fluctuate in line with global stock market movements.
Pension schemes
There is one final salary scheme in the UK, following the merger
of three schemes in 2011. It is closed to new entrants and permits
an element of future accrual for existing members in the defined
benefit section. A material proportion of the assets of the scheme
are invested in equities and the value of these assets will
fluctuate in line with global equity markets. Continuing
improvements in mortality rates may also increase the liabilities
of the scheme.
Credit Risk
Credit control procedures are in place throughout the group but
the risk remains that some customers may have difficulty making
payments.
Social and environmental responsibility
Background
The group has a wide range of businesses operating around the
world in diverse commercial, cultural and regulatory environments.
These businesses encompass a correspondingly wide spectrum of
employment and environmental issues and our main challenge is to
ensure that these are appropriately managed across the group.
The group's businesses have a duty to meet local regulatory
requirements and will always strive to do so. In this respect,
there is a distinction between our UK businesses and our
agricultural and horticultural businesses based mostly in
developing countries. Whilst the UK businesses are subject to well
developed regulatory regimes in the areas of employment and
environmental protection, this is not necessarily the case
elsewhere. Our agricultural and horticultural businesses have
however more than responded to the increasing amount of relevant
local legislation and to the demands of the marketplace, as many of
our major customers for agricultural products now expect us to meet
their own social and environmental standards, or to achieve
certification against recognised international standards such as
'Fairtrade' labelling.
Particular challenges and opportunities for the group lie in the
following areas:
Child labour: We have a clear policy not to use child labour and
all of our businesses meet local legal requirements. The minimum
legal working age varies around the world and in some countries it
is both the cultural norm and permissible for parents to involve
their children in the productive process. We do not subscribe to
this approach and therefore translating our policy into unambiguous
local rules and enforcing these rules requires vigilance.
Health and safety: Our UK, European and North-American
businesses operate in a strong regulatory climate, and have a good
health and safety culture and record. Achieving equivalent
standards of health and safety management in our operations in some
developing countries is a continuing challenge.
Medical care and education: In some countries, our workers and
their children do not have access to good state provision of
medical or educational services. However, the majority of tea
estates in India and Bangladesh have a hospital and a qualified
doctor and our operations in both these countries have central
group hospitals to which more serious illnesses are referred. A
number of our African businesses report a high incidence of
HIV/AIDS related illnesses. We provide, as a very minimum, basic
medical services including where appropriate antiretroviral drugs,
and give support to schools that are either run by our companies,
or in the local neighbourhood.
Casual labour: Some of our agricultural businesses rely on
seasonal labour, notably at harvest time. Our agricultural
companies give casual and contract workers employment rights in
accordance with local legislation.
Environmental management: Our UK-based engineering businesses
have the greatest potential to create pollution and hazardous waste
and need to meet tight legislative standards. Where appropriate,
our UK businesses have formal environmental management systems in
place and most are independently certified to the international
standard ISO 14001. The enforcement of environmental legislation in
many countries where we operate is poor and our businesses in these
locations have to act on their own initiative to meet international
standards of environmental protection.
Our approach
We believe that good management of employment and environmental
issues is essential in ensuring the long-term success of our
businesses. We are therefore committed to devoting the resources
necessary to continually improve our performance with the same
vigour that we apply to other aspects of managing our business.
The board has a corporate social responsibility policy which is
available on the company's website and which has been adopted
across the group.
In December 2011, the board adopted a new anti-bribery policy
which complies with the requirements of the Bribery Act 2010 which
came into force in 2011. The policy has being introduced across the
group and its implementation is being monitored. The board does not
permit bribery as part of its business practices.
Performance
There are no current employment or environmental issues that
prejudice the continuing development of the group. No group
businesses were prosecuted for any significant breach of employment
or environmental legislation during the year. The executive
committee has established a process for ensuring that the corporate
social responsibility policy is enforced across the group.
Key financial performance indicators
Return on segmental assets
The nature of the group's principal activities is such that the
board takes a long-term view on its operations, particularly in
agriculture. It is also concerned to improve the quality of the
group's assets over the long-term and monitors that by reference to
return on segmental assets achieved in the main segments of the
business which are then compared against budget. The returns
achieved in the current and prior year were as follows:
Agriculture and Engineering Food storage Banking and
horticulture and distribution financial
services
2012 2011 2012 2011 2012 2011 2012 2011
Segment net assets (GBP'000) 236,166 224,549 21,645 19,379 15,003 17,366 34,254 36,549
Segment trading profit/(loss)
(GBP'000) 45,495 43,807 (6) 253 127 51 253 485
Return on segmental
net assets (%) 19.26 19.51 (0.03) 1.31 0.85 0.29 0.74 1.33
Segment net assets (segment assets less segment liabilities) and
segment profit are as reported in the consolidated accounts.
Group borrowings ratio
The board's objective is to ensure that gross borrowings as a
percentage of tangible net assets do not exceed 50 per cent.. The
ratio achieved at 31 December 2012 was 1.86% (2011: 2.39%).
Gross borrowings and tangible net assets (share capital and
reserves less goodwill and intangible assets) are derived from the
consolidated accounts.
Key non-financial performance indicators
The following information has been compiled based on data
provided by a majority of the group's subsidiary undertakings. The
board considers that this information demonstrates the level of
compliance with important elements of its business principles. The
board will regularly review which key non-financial performance
indicators are most appropriate.
Food
Agriculture storage Banking
and and and financial
horticulture Engineering distribution services
1 Compliance 2012 2011 2010 2012 2011 2010 2012 2011 2010 2012 2011 2010
a) Prosecutions The number
of
prosecutions
brought in
the financial
year by the
official
regulatory
bodies
responsible
for enforcing
regulations
in the areas
of:
Employment - 1 - - - - - - - - - -
Worker health
and safety 1 1 - - - - - - - - - -
Environmental
protection - - - - - - - - - - - -
The number
b) Formal of written
warnings
during
warnings the financial
year by the
official
regulatory
bodies
responsible
for
enforcing
regulations
in the
areas of:
Employment - 2 - - - - - - - - - -
Worker health
and safety 3 2 - - - - - - - - - -
Environmental
protection - - - - - - - - - - - -
Child
2 Labour
a) Minimum The number
age of employees
who were less
than 15 years
old during
the financial
year - - - - - - - - - - - -
b) Access The number
to education of employees
who were
younger
than the age
for completing
compulsory
education in
their country
during the
financial year - - - - - - - - - - - -
3 Accidents
The number
a) Injury of injuries
received at
work resulting
in
either absence
from work for more
than three
days, or the
injured
person being
unable to do
the full range
of their normal
duties for
more than three
days 579 565 685 5 1 6 2 11 4 - - -
4 Health
The number
of employee
a) Sickness days
absence as
a result of
sickness during
the financial
absence year 228,411(i) 229,63(i) 180,438(i) 2,354 1,563 3,580 1,628 1,550 1,779 417 486 571
The number
of claims for
compensation
arising from
occupational
health issues
received
during
the financial
year in
respect
Sickness of continuing
b) claims operations 314 389 482 - 2 3 2 2 2 - - -
(i) This excludes tea garden workers in India who have a
contractual entitlement to fourteen days sickness absence. It
should be noted that in Malawi there is high level of sickness due
to HIV/AIDS related conditions and malaria.
Substantial shareholdings
As at 25 April 2013 the company had been advised of the
following interests in the share capital of the company:
Camellia Private Trust Company Limited held through its
subsidiary, Camellia Holding AG 1,427,000 ordinary shares (51.34
per cent. of total voting rights).
Alcatel Bell Pensioenfonds VZW held through HSBC Global Custody
Nominees (UK) Limited 223,015 ordinary shares (8.02 per cent. of
total voting rights).
St James's Place Unit Trust Group Limited held through State
Street Nominees Limited 111,038 ordinary shares (3.99 per cent. of
total voting rights).
Taube Hodson Stonex & Partners held through State Street
Nominees Limited 87,946 ordinary shares (3.16 per cent. of total
voting rights).
Charitable contributions
During the year the group made charitable donations totalling
GBP12,308 (2011: GBP14,638). Of this amount GBP11,558 was paid to
arts, sports and education related charities and GBP750 was paid to
local hospitals and health related charities.
Employees
It is group policy to keep employees informed, through internal
publications and other communications, on the performance of the
group and on matters affecting them as employees and arrangements
to that end are made by the management of individual subsidiary
undertakings.
It is also group policy that proper consideration is given to
applications for employment received from disabled persons and to
give employees who become disabled every opportunity to continue
their employment.
Payment of creditors
It is group policy to agree payment terms with suppliers when
negotiating business transactions and to pay suppliers in
accordance with contractual or other legal obligations. The company
has no trade creditors. Group trade creditors at 31 December 2012
represented 37 days (2011: 40 days) of annual purchases.
Share capital and purchase of own shares
The company's share capital comprises one class of ordinary
shares of 10 pence each which carry no restrictions on the transfer
of shares or on voting rights (other than as set out in the
company's articles of association). There are no agreements known
to the company between shareholders in the company which may result
in restrictions on the transfer of shares or on voting rights in
relation to the company. Details of the issued share capital are
contained in note 32 to the accounts.
At the annual general meeting in 2012, shareholders gave
authority for the company to purchase up to 277,950 of its own
shares. This authority expires at the conclusion of this year's
annual general meeting on 6 June 2013.
Independent auditors
PricewaterhouseCoopers LLP has expressed its willingness to
continue as auditors of the company and a resolution proposing
PricewaterhouseCoopers LLP re-appointment will be put to the annual
general meeting.
Each of the persons who were directors at the time when this
directors' report was approved has confirmed that:
a) so far as each director is aware, there is no relevant audit
information of which the company's auditors are unaware;
and
b) each director has taken all the steps that ought to have
been taken as a director, including making appropriate enquiries
of fellow directors and of the company's auditors for that
purpose, in order to be aware of any information needed by
the company's auditors in connection with preparing their
report and to establish that the company's auditors are aware
of that information.
Going concern
After reviewing the group's budget for 2013 and other forecasts,
the directors have a reasonable expectation that the group has
adequate resources to continue in operational existence for the
foreseeable future. Therefore they continue to adopt the going
concern basis in preparing the accounts.
By order of the board
J A Morton
Secretary
25 April 2013
Corporate governance
Statement of compliance
This statement describes how the company applies the main
principles of UK Corporate Governance Code 2010 ("the Code"). In
implementing the Code, the directors have taken account of the
company's size and structure and the fact that there is a
controlling shareholder.
The company has complied with the relevant provisions set out in
the Code throughout the year with the exception of the following
areas of the Code that have not been implemented:
(i) the audit committee includes one non-executive director who
is not considered to be independent;
(ii) the roles of chairman and chief executive have continued
to be fulfilled during the year by Mr Perkins and not separated
as required by the Code. Mr Ames and Mr Field are joint managing
directors and have responsibility for aspects of the day
to day management of the group.
The board
The board currently comprises nine directors. Five are
non-executive directors, of which three are considered independent.
The remaining directors are executive directors, including the
executive chairman. Mr Relleen, the deputy chairman, has been
designated as the senior independent director. The names and brief
biographical details of each director appear on pages 6 and 7.
Mr Vaughan-Johnson and Mr Reeves were first appointed to the
board in 1999 and 2001 respectively. The board, having taken into
consideration provision B.1.1 of the Code, considers it is in the
best interest of the company for Mr Vaughan-Johnson to continue to
act as non-executive directors. The board considers that Mr
Vaughan-Johnson remains independent and that given the relative
complexity and geographical spread of the group, his experience
continues to be of considerable benefit. Mr Reeves will be retiring
from the board following the forthcoming AGM.
There is on-going dialogue between the chairman and the majority
shareholder whose views are reported to the board. The company is
also in contact with other significant shareholders.
The board has established a nomination committee chaired by Mr
Perkins, the other members being Mr Relleen and Mr
Vaughan-Johnson.
The board has established a remuneration committee, audit
committee and executive committee. Terms of reference of each of
these committees can be viewed on the company's website.
The board undertook a performance evaluation during the year by
way of an internal review.
The board is responsible for managing the group's business and
has adopted a schedule of matters reserved for its approval. The
schedule is reviewed annually and covers, inter alia, the following
areas:
- Strategy
- Acquisitions and disposals
- Financial reporting and control
- Internal controls
- Approval of expenditure above specified limits
- Approval of transactions and contracts above specified limits
- Responsibilities for corporate governance
- Board membership and committees
- Approval of changes to capital structure
A full copy of the schedule is available on the company's
website.
A report summarising the group's financial and operational
performance including detailed information on each of its
businesses is sent to directors each month. Each director is
provided with sufficient information in advance of board meetings
to enable the directors to make informed judgments on matters
referred to the board. The board met eight times in 2012.
Attendance by directors at board and committee meetings held
during the year was as follows:
Board Audit Remuneration
M C Perkins 8/8 - -
C J Relleen 8/8 3/3 1/1
C J Ames 8/8 - -
M Dünki 8/8 - -
P J Field 8/8 - -
A K Mathur 8/8 3/3(i) -
D A Reeves 7/8 3/3 -
C P T Vaughan-Johnson 8/8 3/3 1/1
(i) Mr Mathur attends meetings of the audit committee by invitation
in his capacity as finance director.
Executive committee
The board has delegated the day to day management of the group's
operations to the executive committee which is also responsible for
implementing board policy. The members of the committee are:
M C Perkins Chairman
A K Mathur Finance
C J Ames Joint managing director
P J Field Joint managing director
I Ahmed Bangladesh
G A Mclean Kenya, Malawi and South Africa
A Singh India
J A Morton Company secretary
Audit committee
The audit committee is chaired by Mr Relleen. The other members
of the committee are Mr Reeves and Mr Vaughan-Johnson. During 2012,
the committee met on three occasions.
The principal responsibilities of the audit committee are:
- to review and monitor the financial statements of the company
and the audit of those statements - to monitor compliance
with relevant financial reporting requirements and legislation
- to monitor the effectiveness and independence of the external
auditor
- to review effectiveness of the group's internal control system.
The committee regularly reviews the effectiveness of internal
audit activities carried out by the company's group accounting
function and senior management
- to review non-audit services provided by the external auditors
During the year the committee's work included discharging these
responsibilities and considering enquiries from the Financial
Reporting Council.
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 comprises the board's two independent
non-executive directors, being Mr Vaughan-Johnson who is chairman
of the committee and Mr Relleen.
The committee's full terms of reference are available on the
company's website. The responsibilities of the committee
include:
- the review of the group's policy relating to remuneration
of the chairman, executive directors and members of the executive
committee
- to determine the terms of employment and remuneration of the
chairman, executive directors - and those members of the executive
committee that are employed in the United Kingdom with a view
to ensuring that those individuals are fairly but responsibly
rewarded
- to approve compensation packages or arrangements following
the severance of any executive director's service contract
- at its discretion, the committee may make such enquiries as
it sees fit concerning the remuneration packages of those
members of the executive committee that are employed outside
the United Kingdom
The committee met once during 2012. The remuneration report
appears on pages 18 to 20.
Insurance
The company purchases insurance to cover its directors in
respect of legal actions against them in their capacity as
directors of the company. The level of cover is currently GBP20
million. All directors have access to independent professional
advice at the company's expense.
Share capital structure
The share capital of the group is set out in note 32 on page
63.
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.
Decentralisation is a key management philosophy with
responsibility for efficient day to day operations delegated to
local management. Accountability and delegation of authority are
clearly defined with regular communication between group head
office and local management. The performance of each company is
continually monitored centrally including a critical review of
annual budgets, revised forecasts and monthly sales, profits and
cash reports. Financial results and key business statistics and
variances from approved plans are carefully monitored. Senior
management regularly visit and review the group's operating units.
However, any system of internal control can provide only
reasonable, and not absolute, assurance against material
mis-statement or loss.
By order of the board
J A Morton
Secretary
25 April 2013
Statement of directors' responsibilities
The directors are responsible for preparing the annual report,
the directors' remuneration report and the financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent
company financial statements for each financial
year. Under that law the directors have prepared the group and
parent company financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of both the group and the parent
company and of the profit or loss of the group and company for that
period.
In preparing these financial statements, the directors are
required to:
- select suitable accounting policies and apply them consistently
- make judgements and accounting estimates that are reasonable
and prudent
- state whether applicable IFRSs as adopted by the European
Union have been followed, subject to any material departures
disclosed and explained in the financial statements
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the company will
continue in business
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company's
transactions and disclose with reasonable accuracy at any time the
financial position of the company and the group and enable them to
ensure that the financial statements and the Directors'
Remuneration Report comply with the Companies Act 2006 and, as
regards the group financial statements, Article 4 of the IAS
Regulation. They are also responsible for safeguarding the assets
of the company and the group and hence for taking reasonable steps
for the prevention and detection of fraud and other
irregularities.
Each of the directors, whose names and functions are listed on
page 2 confirm that, to the best of their knowledge:
- the group financial statements, which have been prepared in
accordance with IFRSs as adopted by the EU, give a true and
fair view of the assets, liabilities, financial position and
profit of the group
- the report of the directors contained on pages 6 to 13 includes
a fair review of the development and
performance of the business and the position of the group,
together with a description of the principal risks and uncertainties
that it faces
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company's website.
On behalf of the board
M C Perkins
Chairman
25 April 2013
Remuneration report
This report is drawn up in accordance with the Companies Act
2006 and the rules of the UK Listing Authority.
Policy on directors' remuneration
In determining remuneration policy and the remuneration of
directors, full consideration has been given to the relevant
provisions of the UK Corporate Governance Code 2010. The board
seeks to provide remuneration packages that will attract, retain
and motivate the best possible person for each position. The board
also wishes to align the interests of executives with shareholders.
The group's activities are based largely on agriculture and
horticulture, which are highly dependent on factors outside
management control (e.g. weather and market prices for our
produce), and this is a significant consideration as to why the
company does not operate profit related bonus, share option or
share incentive schemes for directors.
Service contracts
Messrs Perkins, Ames, Field and Mathur are each employed on
rolling service contracts. Mr Perkins's service contract is dated
25 April 2002, Mr Mathur's service contract is dated 1 December
2003, Mr Ames's service contract is dated 24 April 2009 and Mr
Field's service contract is dated 19 December 2011. The service
contracts are terminable at any time by a one year period of notice
from the company or the director. Following their initial
appointment non-executive directors may seek re-election by
shareholders at each subsequent annual general meeting.
Non-executive directors do not have service agreements. There are
no specific contractual provisions for compensation upon early
termination of a non-executive director's employment. The
remuneration committee reviews salaries annually and will seek
independent professional advice when appropriate.
The following sections on directors' remuneration and pensions
have been audited.
Directors' remuneration
Basic Benefits
remuneration in kind Total Total
2012 2012 2012 2011
GBP GBP GBP GBP
Executive
M C Perkins 412,775 120,531 533,306 448,526
C J Ames 229,903 40,137 270,040 245,022
P J Field 246,730 25,231 271,961 244,522
A K Mathur 231,544 25,786 257,330 259,670
Non-executive
M Dünki 30,000 - 30,000 30,000
D A Reeves 30,000 - 30,000 30,000
C J Relleen 47,500 47,500 47,500
C P T Vaughan-Johnson 32,500 32,500 36,705
------------- -------- --------- ---------
1,260,952 211,685 1,472,637 1,341,945
------------- -------- --------- ---------
Benefits in kind include the value attributed to benefits such
as medical insurance, permanent health insurance, spouse/partner
travel and cash alternatives to company cars.
Mr Mathur and Mr Field withdrew from the Linton Park Pension
Scheme (2011) on 5 April 2012. Their base salaries were adjusted
accordingly.
Directors' pensions
Most UK employees, including executive directors, are eligible
to join pension schemes operated within the group. Mr Perkins was a
member of The Linton Park Group Pension Scheme up until 28 February
2010. Mr Field and Mr Mathur were members of the Linton Park
Pension Scheme 2011 until 5 April 2012. This Pension Scheme was
formerly the Unochrome Group Pension Scheme and was merged with the
Linton Park Pension Scheme and the Lawrie Group Pension Scheme on 1
July 2011. Under The Linton Park Group Pension Scheme the normal
retirement age was 63 up until 31 December 2003 in respect of
service up until that date. With effect from 1 January 2004 the
normal retirement age was increased to 65.
From 1 May 2007 the normal retirement age of members of The
Lawrie Group Pension Scheme was increased to 65. Pension benefits
accrued prior to that date can be paid at age 63 without actuarial
reduction. In a few cases pensions can be paid from age 60 without
actuarial reduction. The Linton Park Pension Scheme (2011) provides
for a lump sum death in service benefit of four times basic salary
and a spouse's pension of half of the member's pension, based on
prospective service.
All benefits are subject to HM Revenue and Customs limits. Up
until 6 April 2005, under The Linton Park Group Pension Scheme,
post retirement pension increases were based on the annual increase
in the retail price index, subject to a maximum of 5 per cent. From
6 April 2005, the maximum increase reduced to 2.5 per cent. per
annum in respect of pension accrued on or after that date. Also,
under The Linton Park Group Pension Scheme there is a minimum
increase of 3 per cent. per annum in respect of service before 1
January 2002. Under The Lawrie Group Pension Scheme for entrants
prior to 1 January 1996, pension earned prior to April 2003 is
subject to a 5 per cent. increase per annum. From 1 May 2007, the
maximum increase reduced to 2.5 per cent. in respect of pension
accrual on or after that date.
A sum of GBP40,972 was paid to Mr Ames's personal pension
arrangement during the year.
Further information on pension arrangements:
Defined benefit pension schemes
Transfer Transfer Transfer
value value value
Pension of of of
accrued Pension pension accrued accrued Increase
in in
Pension year net accrued accrued pension pension transfer
to in
accrued of inflation 5 Apr year net at 31 at 31 value
in 2012 Dec Dec
year GBP p.a. GBP p.a. of inflation 2011 2012 in year
Age GBP p.a. (see note (see note GBP GBP GBP GBP
2) 2)
P J Field 62 4,199 4,199 84,156 118,295 2,065,539 2,307,127 241,588
A K Mathur 65 4,813 4,813 94,143 137,764 2,448,148 2,690,082 241,934
Notes:
1. Accrual ceased on 5 April 2012 as both members withdrew from
Pensionable Service on that date.
2. No allowance has been made for the effect of inflation on the
accrued pensions at the start of the year as accrual ceased during
the year.
3. Transfer values have been calculated using the Cash
Equivalent Transfer Value Basis adopted by the Trustee with effect
from September 2011, in accordance with The Occupational Pension
Schemes (Transfer Values) Regulations 1996.
4. The transfer value disclosed above does not represent a sum
paid or payable to the individual Director, instead it represents a
potential liability of the Pension Scheme.
In addition to the above, an unfunded pension of US$200,000 per
annum is paid to Mr G Fox, a former director of the company.
J A Morton
Secretary
25 April 2013
Consolidated income statement
for the year ended 31 December 2012
2012 2011
Notes GBP'000 GBP'000
Revenue 2 261,529 246,849
Cost of sales (166,859) (155,806)
--------- ---------
Gross profit 94,670 91,043
Other operating income 1,699 1,755
Distribution costs (12,201) (12,972)
Administrative expenses (44,199) (40,593)
--------- ---------
Trading profit 3 39,969 39,233
Share of associates' results 5 4,269 6,862
Profit on disposal of non-current assets 6 1,538 534
Profit on disposal of a subsidiary 7 396 -
Profit on disposal of available-for-sale
investments 271 178
Loss on transfer of an associate 8 (10,045) (721)
Gain arising from changes in fair value
of biological assets:
--------- ---------
Excluding Malawi Kwacha exceptional gain 8,690 7,320
Malawi Kwacha exceptional gain 21,353 -
--------- ---------
18 30,043 7,320
--------- ---------
Profit from operations 66,441 53,406
Investment income 1,186 1,074
--------- ---------
Finance income 9 3,517 2,350
Finance costs 9 (825) (632)
Net exchange gain 9 1,030 1,648
Pension schemes' net financing (expense)/income 9 (615) 804
--------- ---------
Net finance income 9 3,107 4,170
--------- ---------
Profit before tax 70,734 58,650
------------------------------------------------------------ ----- --------- ---------
Comprising
- headline profit before tax 4 49,146 50,535
* exceptional items, gain arising from changes in fair
value of biological assets and other financing gains
and losses 4 21,588 8,115
--------- ---------
70,734 58,650
------------------------------------------------------------ ----- --------- ---------
Taxation 10 (25,662) (16,860)
--------- ---------
Profit for the year 45,072 41,790
--------- ---------
Profit attributable to:
Owners of the parent 32,234 33,086
Non-controlling interests 12,838 8,704
--------- ---------
Profit for the year 45,072 41,790
--------- ---------
Earnings per share - basic and diluted 13 1,159.7p 1,190.4p
Statement of comprehensive income
for the year ended 31 December 2012
2012 2011
GBP'000 GBP'000
Group
Profit for the year 45,072 41,790
-------- --------
Other comprehensive (expense)/income:
Foreign exchange translation differences (36,155) (20,383)
Release of exchange translation difference on
transfer of associate (3,998) (429)
Release of other reserves movements on transfer
of associate 2,817 219
Release of exchange translation difference on
disposal of subsidiary 5 -
Actuarial movement on defined benefit pension
schemes (note 31) (7,109) (15,609)
Available-for-sale investments:
Valuation gains/(losses) taken to equity 674 (2,201)
Transferred to income statement on sale (4) 2
Share of other comprehensive expense of associates (769) (2,446)
Tax relating to components of other comprehensive
income (48) 21
-------- --------
Other comprehensive expense for the year, net
of tax (44,587) (40,826)
-------- --------
Total comprehensive income for the year 485 964
-------- --------
Total comprehensive (expense)/income attributable
to:
Owners of the parent (4,356) (4,861)
Non-controlling interests 4,841 5,825
-------- --------
485 964
-------- --------
Company
Profit for the year 3,755 3,514
-------- --------
Total comprehensive income for the year 3,755 3,514
-------- --------
Consolidated balance sheet
at 31 December 2012
2012 2011
Notes GBP'000 GBP'000
Non-current assets
Intangible assets 16 7,413 7,643
Property, plant and equipment 17 93,483 94,575
Biological assets 18 119,693 118,180
Prepaid operating leases 19 910 992
Investments in associates 21 6,549 38,077
Deferred tax assets 30 314 158
Financial assets 22 50,501 28,545
Other investments 23 8,598 8,368
Retirement benefit surplus 31 678 437
Trade and other receivables 25 15,174 13,903
--------- ---------
Total non-current assets 303,313 310,878
--------- ---------
Current assets
Inventories 24 37,575 39,177
Trade and other receivables 25 72,257 62,872
Financial assets 22 3,993 5,829
Current income tax assets 822 690
Cash and cash equivalents 26 262,174 260,916
--------- ---------
Total current assets 376,821 369,484
--------- ---------
Current liabilities
Borrowings 28 (5,590) (7,310)
Trade and other payables 27 (235,636) (236,621)
Current income tax liabilities (5,542) (3,242)
Employee benefit obligations 31 (409) (374)
Provisions 29 (456) (214)
--------- ---------
Total current liabilities (247,633) (247,761)
--------- ---------
Net current assets 129,188 121,723
--------- ---------
Total assets less current liabilities 432,501 432,601
--------- ---------
Non-current liabilities
Borrowings 28 (116) (181)
Trade and other payables 27 (9,015) (7,652)
Deferred tax liabilities 30 (36,225) (35,395)
Employee benefit obligations 31 (32,866) (26,955)
Other non-current liabilities (107) (111)
Provisions 29 (671) (600)
--------- ---------
Total non-current liabilities (79,000) (70,894)
--------- ---------
Net assets 353,501 361,707
--------- ---------
Equity
Called up share capital 32 284 284
Share premium 15,298 15,298
Reserves 298,228 306,010
--------- ---------
Total shareholders' funds 313,810 321,592
Non-controlling interests 39,691 40,115
--------- ---------
Total equity 353,501 361,707
--------- ---------
Company balance sheet
at 31 December 2012
2012 2011
Notes GBP'000 GBP'000
Non-current assets
Investments in subsidiaries 20 73,508 73,508
Financial assets 22 170 170
Other investments 23 8,603 8,373
-------- --------
Total non-current assets 82,281 82,051
-------- --------
Current assets
Trade and other receivables 25 16 -
Amounts due from group undertakings 3,005 5,258
Current income tax asset 74 74
Cash and cash equivalents 26 9,458 6,323
-------- --------
Total current assets 12,553 11,655
-------- --------
Current liabilities
Trade and other payables 27 (160) (149)
Amounts due to group undertakings (28,194) (27,514)
-------- --------
Total current liabilities (28,354) (27,663)
-------- --------
Net current liabilities (15,801) (16,008)
-------- --------
Total assets less current liabilities 66,480 66,043
-------- --------
Non-current liabilities
Deferred tax liabilities 30 (280) (301)
-------- --------
Total non-current liabilities (280) (301)
-------- --------
Net assets 66,200 65,742
-------- --------
Equity
Called up share capital 32 284 284
Share premium 15,298 15,298
Reserves 50,618 50,160
-------- --------
Total shareholders' funds 66,200 65,742
-------- --------
The notes on pages 28 to 73 form part of the financial
statements
The financial statements were approved on 25 April
2013 by the board of directors and signed on their
behalf by:
M C Perkins
Chairman
Registered Number 29559
Consolidated cash flow statement
for the year ended 31 December 2012
2012 2011
Notes GBP'000 GBP'000
Cash generated from operations
Cash flows from operating activities 33 41,162 44,275
Interest paid (822) (625)
Income taxes paid (12,407) (16,133)
Interest received 3,411 2,257
Dividends received from associates 1,275 1,221
-------- --------
Net cash flow from operating activities 32,619 30,995
Cash flows from investing activities
Purchase of intangible assets (180) (89)
Purchase of property, plant and equipment (16,557) (20,790)
Insurance proceeds for non-current assets 1,538 534
Proceeds from sale of non-current assets 429 530
Biological assets - new planting (2,499) (2,525)
Part disposal of subsidiaries 262 210
Disposal of a subsidiary 1,264 -
Purchase of non-controlling interests (223) -
Non-controlling interest subscription - 67
Proceeds from sale of investments 7,863 5,662
Purchase of investments (8,339) (11,168)
Income from investments 1,186 1,074
-------- --------
Net cash flow from investing activities (15,256) (26,495)
Cash flows from financing activities
Equity dividends paid (3,224) (3,057)
Dividends paid to non-controlling interests (4,106) (3,421)
New loans 154 168
Loans repaid (230) (138)
Finance lease payments (190) (490)
-------- --------
Net cash flow from financing activities (7,596) (6,938)
-------- --------
Net increase/(decrease) in cash and cash
equivalents 9,767 (2,438)
Cash and cash equivalents at beginning
of year 26 72,626 75,273
Exchange losses on cash (1,020) (209)
-------- --------
Cash and cash equivalents at end of year 26 81,373 72,626
-------- --------
For the purposes of the cash flow statement, cash and cash
equivalents are included net of overdrafts repayable on demand.
These overdrafts are excluded from the definition of cash and cash
equivalents disclosed on the balance sheet.
Company cash flow statement
for the year ended 31 December 2012
2012 2011
Note GBP'000 GBP'000
Cash generated from operations
Profit before tax 3,734 3,502
Adjustments for:
Gain on disposal of investments - (2)
Interest income (398) (343)
Exchange loss/(gain) on cash 220 (26)
Dividends from group companies (6,000) (5,000)
Increase in trade and other payables 11 132
Net movement in intra-group balances 2,933 6,821
-------- --------
Net cash movement from operations 500 5,084
Interest received 382 343
-------- --------
Net cash flow from operating activities 882 5,427
Cash flows from investing activities
Proceeds from sale of investments - 5
Purchase of investments (230) (1,009)
Dividends received 6,000 5,000
-------- --------
Net cash flow from investing activities 5,770 3,996
Cash flows from financing activities
Equity dividends paid (3,297) (3,126)
-------- --------
Net cash flow from financing activities (3,297) (3,126)
-------- --------
Net movement in cash and cash equivalents 3,355 6,297
Cash and cash equivalents at beginning
of year 26 6,323 -
Exchange (loss)/gain on cash (220) 26
-------- --------
Cash and cash equivalents at end of year 26 9,458 6,323
-------- --------
Statement in changes in equity
for the year ended 31 December 2012
Share Share Treasury Retained Other Total Non-controlling Total
capital premium shares earnings reserves interests equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 1 January 2011 284 15,298 (400) 252,529 61,782 329,493 37,479 366,972
Total comprehensive
income/(expense)
for the year - - - 15,170 (20,031) (4,861) 5,825 964
Dividends - - - (3,057) - (3,057) (3,421) (6,478)
Non-controlling interest
subscription - - - 46 - 46 232 278
Share of associate's other
equity movements - - - 22 - 22 - 22
Loss on dilution of interest
in associate - - - (51) - (51) - (51)
-------- -------- -------- --------- --------- ------- --------------- -------
At 31 December 2011 284 15,298 (400) 264,659 41,751 321,592 40,115 361,707
Total comprehensive
income/(expense)
for the year - - - 27,129 (31,485) (4,356) 4,841 485
Dividends - - - (3,224) - (3,224) (4,106) (7,330)
Disposal of subsidiary - - - - - - (1,333) (1,333)
Non-controlling interest
subscription - - - 71 - 71 226 297
Acquisition of non-controlling
interest - - - (171) - (171) (52) (223)
Share of associate's other
equity movements - - - 221 - 221 - 221
Loss on dilution of interest
in associate - - - (323) - (323) - (323)
-------- -------- -------- --------- --------- ------- --------------- -------
At 31 December 2012 284 15,298 (400) 288,362 10,266 313,810 39,691 353,501
-------- -------- -------- --------- --------- ------- --------------- -------
Company
At 1 January 2011 284 15,298 - 37,640 12,132 65,354 - 65,354
Total comprehensive income
for the year - - - 3,514 - 3,514 - 3,514
Dividends - - - (3,126) - (3,126) - (3,126)
-------- -------- -------- --------- --------- ------- --------------- -------
At 31 December 2011 284 15,298 - 38,028 12,132 65,742 - 65,742
Total comprehensive income
for the year - - - 3,755 - 3,755 - 3,755
Dividends - - - (3,297) - (3,297) - (3,297)
-------- -------- -------- --------- --------- ------- --------------- -------
At 31 December 2012 284 15,298 - 38,486 12,132 66,200 - 66,200
-------- -------- -------- --------- --------- ------- --------------- -------
Other reserves of the group and company includes a GBP31,000
(2011: GBP31,000) capital redemption reserve and, in respect of the
group, net exchange differences of GBP27,166,000 deficit
(2011:GBP984,000 surplus).
Group retained earnings includes GBP130,524,000 (2011:
GBP116,745,000) which would require exchange control permission for
remittance as dividends.
Accounting policies
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all years presented, unless otherwise
stated.
Basis of preparation
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
as adopted by the EU, IFRIC interpretations and the Companies Act
2006 applicable to companies reporting under IFRS.
The consolidated financial statements have been prepared on the
historical cost basis as modified by the revaluation of biological
assets, available-for-sale investments, financial assets and
financial liabilities.
Where necessary, comparative figures have been adjusted to
conform with changes in presentation in the current year.
Going concern
The directors have, at the time of approving the financial
statements, a reasonable expectation that the company and the group
have adequate resources to continue to operate for the foreseeable
future. They therefore continue to adopt the going concern basis of
accounting in preparing the financial statements.
Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial
statements of the company and entities controlled by the company
(its subsidiaries) made up to 31 December each year.
On acquisition, the assets and liabilities of a subsidiary are
measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. Any
deficiency of the cost of acquisition below the fair values of the
identifiable net assets acquired (i.e. discount on acquisition) is
credited to the income statement in the period of acquisition. The
interest of minority shareholders is stated at the minority's
proportion of the fair values of the assets and liabilities
recognised.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated income statement from the
effective date of acquisition or disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the group.
All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Associates
An associate is an entity over which the group is in a position
to exercise significant influence, but not control or joint
control, through participation in the financial and operating
policy decisions of that entity.
Investments in associates are accounted for by the equity method
of accounting. Under this method the group's share of the
post-acquisition profits or losses of associates is recognised in
the income statement and its share of post-acquisition movements in
reserves is recognised in reserves.
Foreign currency translation
Transactions in currencies other than pounds sterling are
recorded at the rates of exchange prevailing on the dates of the
transactions. At each balance sheet date, monetary assets and
liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the balance sheet date.
Translation differences on non-monetary items carried at fair value
are reported as part of the fair value gain or loss. Gains and
losses arising on retranslation are included in the income
statement, except for exchange differences arising on non-monetary
items where the changes in fair value are recognised directly in
equity.
The consolidated financial statements are presented in sterling
which is the company's functional and presentation currency. On
consolidation, income statements and cash flows of foreign entities
are translated into pounds sterling at average exchange rates for
the year and their balance sheets are translated at the exchange
rates ruling at the balance sheet date. Exchange differences
arising from the translation of the net investment in foreign
entities and of borrowings designated as hedges of such
investments, are taken to equity. When a foreign entity is sold
such exchange differences arising since 1 January 2004 are
recognised in the income statement as part of the gain or loss on
disposal.
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.
Interest income and expense arising through the group's banking
operations are recognised in the income statement for all
instruments measured at amortised cost using the effective interest
method and is stated net of interest paid.
The effective interest method is a method of calculating the
amortised cost of a financial asset or a financial liability and of
allocating the interest income or interest expense over the
relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount of the
financial asset or financial liability. When calculating the
effective interest rate, the group estimates cash flows considering
all contractual terms of the financial instrument (for example,
prepayment options) but does not consider future credit losses. The
calculation includes all fees and points paid or received between
parties to the contract that are an integral part of the effective
interest rate, transaction costs and all other premiums or
discounts. Once a financial asset or a group of similar financial
assets has been written down as a result of an impairment loss,
interest income is recognised using the rate of interest used to
discount the future cash flows for the purpose of measuring the
impairment loss.
Fees and commissions are for portfolio and other management
advisory services and are recognised based on the applicable
service contracts, usually on a time-apportioned basis.
In respect of engineering services, revenue is recognised based
upon the stage of completion and includes costs incurred to date,
plus accrued profits.
Invoices are raised when goods are despatched or when the risks
and rewards of ownership otherwise irrevocably pass to the
customer.
Segmental reporting
The adoption of IFRS 8 requires operating segments to be
identified on the basis of internal reports used to assess
performance and allocate resources by the chief operating decision
maker. The chief operating decision maker has been identified as
the Executive Committee led by the Chairman. Inter segment sales
are not significant.
Exceptional items
Exceptional items are those significant items which are
separately disclosed by virtue of their size or incidence to enable
a full understanding of the group's financial performance. Full
disclosure of exceptional items are set out in notes 6, 7 and
8.
Intangible assets
(i) Goodwill
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the group's interest in the fair value of
the identifiable assets and liabilities of a subsidiary or
associate at the date of acquisition.
Goodwill is recognised as an asset and reviewed for impairment
at least annually. 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
Identifiable intangible assets include customer relationships
and other intangible assets acquired on the acquisition of
subsidiaries. Acquired intangible assets with finite lives are
initially recognised at cost and amortised on a straight-line basis
over their estimated useful lives, not exceeding 20 years.
Intangible assets' estimated lives are re-evaluated annually and an
impairment test is carried out if certain indicators of impairment
exist.
(iii) Computer software
Acquired computer software licences are capitalised on the basis
of the costs incurred to acquire and bring to use the specific
software. Computer software licences are held at cost and are
amortised on a straight-line basis over 3 to 7 years.
Costs associated with developing or maintaining computer
software programmes are recognised as an expense as incurred. Costs
that are directly associated with identifiable and unique software
products controlled by the group and which are expected to generate
economic benefits exceeding costs beyond one year, are recognised
as an intangible asset and amortised over their estimated useful
lives.
Property, plant and equipment
Land and buildings comprises mainly factories and offices. All
property, plant and equipment is shown at cost less subsequent
depreciation and impairment, except for land, which is shown at
cost less impairment. Cost includes expenditure that is directly
attributable to the acquisition of these assets.
On transition to IFRS, the group followed the transitional
provisions and elected that previous UK GAAP revaluations be
treated as deemed cost.
Subsequent costs are included in the assets' carrying amount,
only when it is probable that future economic benefits associated
with the item will flow to the group and the cost of the item can
be measured reliably. Repairs and maintenance are charged to the
income statement during the financial period in which they are
incurred.
No depreciation is provided on freehold land. Depreciation of
other property, plant and equipment is calculated to write off
their cost less residual value over their expected useful
lives.
The rates of depreciation used are as follows:
Freehold and long leasehold nil to 10 per cent. per annum
buildings
Other short leasehold land and unexpired term of the lease
buildings
Plant, machinery, fixtures, 4 to 33 per cent. per annum
fittings and equipment
Assets held under finance leases are depreciated over their
expected useful lives on the same basis as owned assets, or, where
shorter, over the term of the relevant lease.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date.
The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is included in the income
statement.
Biological assets
Biological assets are measured at each balance sheet date at
fair value. Any changes in fair value are recognised in the income
statement in the year in which they arise. The basis under which
fair value is determined for the group's biological assets are
described below:
Tea and rubber are generally valued at each year end by
independent professional valuers. The valuations take into account
assumptions about expected life span of plantings, yields, selling
prices and sales of similar assets.
Costs of new areas planted are included as "new planting
additions" in the biological assets note. Growing costs for tea and
rubber are accounted for as a cost of inventory in the year in
which they are incurred. The group does not recognise the fair
value of harvested green leaf within cost of sales in the income
statement. The increase in value is in effect offset against the
fair value movement in biological assets.
Annually harvested horticultural assets such as edible nuts,
citrus and avocados are generally valued on the basis of net
present values of expected future cash flows from those assets,
discounted at appropriate pre-tax rates and including certain
assumptions about expected life span of the plantings, yields,
selling prices, costs and discount rates. Growing costs incurred
during the year are treated as "capitalised cultivation costs" in
biological assets. As the crop is harvested and sold these
accumulated costs are shown as "decrease due to harvesting" in
biological assets and charged to cost of sales in the income
statement.
Timber is valued on the basis of expected future cash flows from
scheduled harvesting dates, discounted at appropriate pre-tax rates
and including certain assumptions about expected life span, yields,
selling prices, costs and discount rates. Growing costs incurred
during the year are treated as "new planting additions" in
biological assets. As the trees are harvested the value accumulated
to date of harvest is treated as "decrease due to harvesting" and
charged to cost of sales in the income statement.
Agricultural crops such as soya and maize are valued at
estimated selling price less future anticipated costs. Growing
costs incurred during the year are treated as "capitalised
cultivation costs" in biological assets. As the crops are harvested
the value accumulated to date of harvest is treated as "decrease
due to harvesting" and charged to cost of sales in the income
statement.
Impairment of assets
Assets that have an indefinite useful life are not subject to
amortisation and are tested annually for impairment and whenever
events or changes in circumstance indicate that the carrying amount
may not be recoverable. Assets that are subject to amortisation are
tested for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the assets'
carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an assets' fair value less costs to sell
and value in use. For the purposes of assessing impairment, assets
are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units).
Investments
Investments are recognised and de-recognised on a trade date
when a purchase or sale of an investment is under a contract whose
terms require delivery of the investment within the timeframe
established by the market concerned, and are initially measured at
cost, including transaction costs.
Held-to-maturity investments are non-derivative financial assets
with fixed or determinable payments and fixed maturities that the
group's management has the positive intention and ability to hold
to maturity. Were the group to sell other than an insignificant
amount of held-to-maturity assets, the entire category would be
tainted and reclassified as available-for-sale.
Available-for-sale financial assets include shares of listed and
unlisted companies. Listed shares are measured at subsequent
reporting dates at fair value. The fair values of listed shares are
based on current bid values. Other investments such as shares of
unlisted companies, documents, manuscripts and philately are
measured at cost as fair value cannot be reliably measured.
Gains and losses arising from changes in fair value are
recognised directly in equity, until the investment is disposed of
or is determined to be impaired, at which time the cumulative gain
or loss previously recognised in equity is included in the net
profit or loss for the period.
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.
Leases
Leases of property, plant and equipment where the group has
substantially all the risks and rewards of ownership are classified
as finance leases. Finance leases are capitalised at the inception
of the lease at the lower of fair value and the estimated present
value of the underlying lease payments. Each lease payment is
allocated between the liability and finance charges so as to
achieve a constant rate of interest on the finance balance
outstanding. The corresponding rental obligations, net of finance
charges, are included in liabilities. The interest element of the
finance cost is charged to the income statement over the lease
period. Property, plant and equipment acquired under finance leases
is depreciated over the shorter of the asset's useful life and the
lease term.
Leases where a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
income statement on a straight-line basis over the period of the
lease.
Inventories
Agricultural produce included within inventory largely comprises
stock of "black" tea. This is valued at the lower of cost and net
realisable value. Cost includes the growing costs of 'green leaf'
up to the date of harvest and factory costs incurred to bring the
tea to its manufactured state.
In accordance with IAS 41, on initial recognition, agricultural
produce is required to be measured at fair value less estimated
point of sale costs. Given that there is no open market for green
leaf, this is recognised in inventory at the lower of cost or net
realisable value.
Other inventories are stated at the lower of cost and net
realisable value. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been
incurred in bringing the inventories to their present location and
condition. Cost is calculated using the weighted average method.
Net realisable value represents the estimated selling price less
all estimated costs of completion and selling expenses.
Trade and other receivables
Trade receivables are carried at original invoice amount less
provision made for impairment of these receivables. A provision for
impairment of trade receivables is established when there is
objective evidence that the group will not be able to collect all
amounts due according to the original terms. The amount of the
provision is recognised in the income statement.
Amounts due from customers of banking subsidiaries consist of
loans and receivables which are non-derivative financial assets
with fixed or determinable payments that are not quoted in an
active market. They arise when the bank provides money, goods or
services directly to a customer with no intention of trading the
receivable and are carried at amortised cost using the effective
interest method.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts.
Bank overdrafts are shown within borrowings in current liabilities
on the balance sheet. In respect of the group's banking operation,
cash and cash equivalents include cash and non-restricted balances
with central banks, treasury bills and other eligible bills, loans
and advances to banks, amounts due from other banks and short-term
government securities.
Non-current assets held for sale
Non-current assets classified as held for sale are measured at
the lower of the carrying amount and fair value less costs to
sell.
Non-current assets are classified as held for sale if their
carrying amount will be recovered through a sale transaction rather
than through continuing use. This condition is regarded as met only
when the sale is highly probable and the asset is available for
immediate sale in its present condition. Management must be
committed to the sale which should be expected to qualify for
recognition as a completed sale within one year from the date of
classification.
Trade payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities
if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method.
Borrowings
Interest-bearing bank loans and overdrafts are initially
recorded at the proceeds received, net of direct issue costs.
Finance charges, including premiums payable on settlement or
redemption and direct issue costs, are accounted for on an accrual
basis to the income statement using the effective interest method
and are added to the carrying amount of the instrument to the
extent that they are not settled in the period in which they
arise.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The group
liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
liability method. Deferred tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction,
other than in a business combination, that at the time of the
transaction affects neither accounting nor taxable profit or loss.
Deferred tax is determined using tax rates and laws that have been
enacted or substantively enacted by the balance sheet date and are
expected to apply when the related tax asset is realised or the tax
liability is settled.
Deferred tax assets are recognised to the extent that it is
probable that future taxable profit will be available against which
the temporary differences can be utilised.
Deferred 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 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.
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.
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 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.
(ii) Other post-employment benefit obligations
Some group companies have unfunded obligations to pay terminal
gratuities to employees. Provisions are made for the estimated
liability for gratuities as a result of services rendered by
employees up to the balance sheet date and any movement in the
provision is recognised in the income statement.
The estimated monetary liability for employees' accrued annual
leave entitlement at the balance sheet date is recognised as an
accrual.
Provisions
Provisions are recognised when the group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources will be required to settle
the obligation and the amount has been reliably estimated.
The provision for onerous lease commitments is based on the
expected vacancy period.
Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Where any group company purchases the company's equity share
capital (treasury shares), the consideration paid, including any
directly attributable incremental costs (net of income taxes) is
deducted from equity attributable to the company's equity holders
until the shares are cancelled or reissued. Where such shares are
subsequently reissued, any consideration received, net of any
directly attributable incremental transaction costs and the related
income tax effects, is included in equity attributable to the
company's equity holders.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The group makes estimates and assumptions concerning the future.
The resulting accounting will, by definition, seldom equal the
actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year
are set out below.
(i) Impairment of assets
The group has significant investments in intangible assets,
property, plant and equipment, biological assets, associated
companies and other investments. These assets are tested for
impairment when circumstances indicate there may be a potential
impairment. Factors considered which could trigger an impairment
review include the significant fall in market values, significant
underperformance relative to historical or projected future
operating results, a major change in market conditions or negative
cash flows.
(ii) Depreciation and amortisation
Depreciation and amortisation is based on management estimates
of the future useful life of property, plant and equipment and
intangible assets. Estimates may change due to technological
developments, competition, changes in market conditions and other
factors and may result in changes in the estimated useful life and
in the depreciation and amortisation charges.
(iii) Biological assets
Biological assets are carried at fair value less estimated
point-of-sale costs. Where meaningful market-determined prices do
not exist to assess the fair value of biological assets, the fair
value has been determined based on the net present value of
expected future cash flows from those assets, discounted at
appropriate pre-tax rates. In determining the fair value of
biological assets where the discounting of expected future cash
flows has been used, the directors have made certain assumptions
about expected life-span of the plantings, yields, selling prices,
costs and discount rates.
(iv) Retirement benefit obligations
Pension accounting requires certain assumptions to be made in
order to value obligations and to determine the impact on the
income statement. These figures are particularly sensitive to
assumptions for discount rates, mortality, inflation rates and
expected long-term rates of return on assets. Details of
assumptions made are given in note 31.
(v) Taxation
The group is subject to taxes in numerous jurisdictions.
Significant judgement is required in determining worldwide
provisions for taxes. There are many transactions and calculations
during the ordinary course of business for which the ultimate tax
determination is uncertain.
(vi) Identifiable intangible assets - customer relationships
Customer relationships acquired are valued using discounted cash
flow techniques and amortised over their estimated useful lives. In
determining their value and their subsequent useful life,
management are required to make assumptions in relation to expected
cash flows, applicable discount factors, and client attrition
rates.
Changes in accounting policy and disclosures
(i) New and amended standards adopted by the group
No new or amended standards or interpretations have been adopted
by the group during 2012.
(ii) Standards, amendments and interpretations to existing standards
that are not yet effective and have not been adopted early
by the group
The following standards and amendments to existing standards
have been published and are mandatory for the group's accounting
periods beginning on or after 1 January 2013 or later periods, but
the group has not adopted them early:
IAS 1 (amendment) Financial statement presentation - effective
from 1 July 2012
The main change resulting from these amendments
is a requirement for entities to group items
presented in other comprehensive income on the
basis of whether they are potentially reclassifiable
to profit or loss subsequently. The amendments
do not address which items are presented in other
comprehensive income.
IFRS 10 Consolidated financial statements - effective
from 1 January 2013
This standard builds on existing principles by
identifying the concept of control as the determining
factor in which an entity should be included
within the consolidated financial statements.
The standard provides additional guidance to
assist in determining control where this is difficult
to assess. This standard has been endorsed by
the EU with an effective date of 1 January 2014.
IFRS 12 Disclosures of interests in other entities -
effective from 1 January 2013
This standard includes the disclosure requirements
for all forms of interests in other entities,
including joint arrangements, associates, structured
entities and other off balance sheet vehicles.
This standard has been endorsed by the EU with
an effective date of 1 January 2014.
IFRS 13 Fair value measurement - effective from 1 January
2013
This standard aims to improve consistency and
reduce complexity by providing a precise definition
of fair value and a single source of fair value
measurement and disclosure requirements for use
across IFRSs. The requirements, which are largely
aligned between IFRSs and US GAAP, do not extend
the use of fair value accounting but provide
guidance on how it should be applied where its
use is already required or permitted by other
standards within IFRSs or US GAAP.
IAS 19 (amendment) Employee benefits - effective from 1 January
2013
These amendments eliminate the corridor approach
and calculate finance costs on a net funding
basis.
IAS 27 (revised Separate financial statements - effective from
2011) 1 January 2013
This revision includes the requirements relating
to separate financial statements. This revised
standard has been endorsed by the EU with an
effective date of 1 January 2014
IFRS 9 Financial instruments - effective from 1 January
2015
This standard is the first step in the process
to replace IAS 39, 'Financial instruments: recognition
and measurement'. IFRS 9 introduces new requirements
for classifying and measuring financial assets
and is likely to affect the group's accounting
for its financial assets. The standard is not
applicable until 1 January 2015 but is available
for early adoption. This standard has not yet
been endorsed by the EU
Notes to the accounts
1 Business and geographical segments
The principal activities of the group are as follows:
Agriculture and horticulture
Engineering
Food storage and distribution
Banking and financial services
For management reporting purposes these activities form the
basis on which the group reports its primary divisions.
Segment information about these businesses is presented
below:
Agriculture Food storage Banking
and horticulture and distribution and
financial
Engineering services Other operations Consolidated
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
External sales 187,538 177,268 27,675 22,854 32,195 32,890 12,551 12,403 1,570 1,434 261,529 246,849
-------- -------- ------- -------- ------- -------- --------- --------- ------- -------- --------- ---------
Trading profit
Segment
profit/(loss) 45,495 43,807 (6) 253 127 51 253 485 62 5 45,931 44,601
-------- -------- ------- -------- ------- -------- --------- --------- ------- --------
Unallocated
corporate
expenses* (5,962) (5,368)
--------- ---------
Trading profit 39,969 39,233
Share of
associates'
results 4,269 6,811 51 4,269 6,862
Profit on
disposal
of
non-current
assets 1,538 534
Profit on
disposal
of a
subsidiary 396 -
Profit on
disposal
of
available--
for-sale
investments 271 178
Loss on
transfer
of an
associate (10,045) (721)
Gain arising
from changes
in fair value
of biological
assets 30,043 7,320 30,043 7,320
Investment
income 1,186 1,074
Net finance
income 3,107 4,170
--------- ---------
Profit before
tax 70,734 58,650
Taxation (25,662) (16,860)
--------- ---------
Profit after
tax 45,072 41,790
--------- ---------
Other
information
Segment assets 268,283 260,793 30,054 27,209 20,270 22,737 238,291 237,623 4,393 4,299 561,291 552,661
Investments
in associates 6,549 38,077 6,549 38,077
Unallocated
assets 112,294 89,624
--------- ---------
Consolidated
total assets 680,134 680,362
--------- ---------
Segment
liabilities (32,117) (36,244) (8,409) (7,830) (5,267) (5,371) (204,037) (201,074) (832) (896) (250,662) (251,415)
Unallocated
liabilities (75,971) (67,240)
--------- ---------
Consolidated
total
liabilities (326,633) (318,655)
--------- ---------
Capital
expenditure 9,495 12,349 2,988 6,275 1,788 1,135 993 660 1,293 371 16,557 20,790
Depreciation (4,903) (4,912) (1,623) (1,068) (2,155) (2,074) (368) (433) (189) (173) (9,238) (8,660)
Amortisation (42) (46) (5) (8) (361) (456) (408) (510)
Impairments (440) (177) (440) (177)
Segment assets consist primarily of intangible assets, property,
plant and equipment, biological assets, prepaid operating leases,
inventories, trade and other receivables and cash and cash
equivalents. Receivables for tax have been excluded. Investments in
associates, valued using the equity method, have been shown
separately in the segment information. Segment liabilities are
primarily those relating to the operating activities and generally
exclude liabilities for taxes, short-term loans, finance leases and
non-current liabilities.
*Unallocated corporate expenses include group marketing expenses
of GBP1,162,000 (2011: GBP200,000) incurred of behalf of banking
and financial services and agriculture and horticulture
segments.
Geographical segments
The group operations are based in nine main geographical areas.
The United Kingdom is the home country of the parent. The principal
geographical areas in which the group operates are as follows:
United Kingdom
Continental Europe
Bangladesh
India
Kenya
Malawi
North America and Bermuda
South Africa
South America
The following table provides an analysis of the group's sales by
geographical market, irrespective of the origin of the
goods/services:
2012 2011
GBP'000 GBP'000
United Kingdom 70,379 71,686
Continental Europe 23,885 27,750
Bangladesh 20,281 15,496
India 70,401 67,876
Kenya 25,563 21,547
Malawi 8,000 8,245
North America and Bermuda 9,620 6,708
South Africa 724 2,453
South America 5,947 4,582
Other 26,729 20,506
-------- --------
261,529 246,849
-------- --------
The following is an analysis of the carrying amount of segment
assets and additions to property, plant and equipment, analysed by
the geographical area in which the assets are located:
Carrying amount of Additions to property,
segment assets plant and equipment
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 285,819 283,083 6,744 8,062
Continental Europe 4,693 5,900 196 377
Bangladesh 44,975 39,503 983 1,230
India 77,243 75,732 3,339 5,969
Kenya 70,991 71,626 1,709 2,071
Malawi 43,831 43,659 2,367 2,207
North America and Bermuda 8,430 7,718 190 108
South Africa 12,038 12,588 223 165
South America 13,271 12,852 806 601
--------- --------- ----------- -----------
561,291 552,661 16,557 20,790
--------- --------- ----------- -----------
Results of banking subsidiaries
2012 2011
GBP'000 GBP'000
Interest receivable third parties 3,298 3,119
Interest payable third parties (600) (693)
group companies (26) (49)
-------- --------
Net interest income 2,672 2,377
Fee and commission income 10,325 10,404
Fee and commission expense (472) (427)
Inter-segment net interest 26 49
-------- --------
Revenue 12,551 12,403
Other operating income 29 102
-------- --------
12,580 12,505
Operating expenses (12,327) (12,020)
-------- --------
Segment profit 253 485
-------- --------
2 Revenue
An analysis of the group's revenue is as follows:
2012 2011
GBP'000 GBP'000
Sale of goods 188,595 178,211
Distribution and warehousing revenue 32,195 32,890
Engineering services revenue 27,675 22,854
Banking service revenue 12,551 12,403
Agency commission revenue 244 218
Property rental revenue 269 273
------- -------
Total group revenue 261,529 246,849
Other operating income 1,699 1,755
Investment income 1,186 1,074
Interest income 3,517 2,350
------- -------
Total group income 267,931 252,028
------- -------
3 Trading profit
2012 2011
GBP'000 GBP'000
The following items have been included in arriving
at trading profit:
Employment costs (note 14) 73,893 69,730
Inventories:
Cost of inventories recognised as an expense
(included in cost of sales) 108,364 108,265
Cost of inventories provision recognised as an
expense (included in cost of sales) 326 262
Cost of inventories provision reversed (included
in cost of sales) (45) (12)
Business interruption income received from insurance
claim 1,750 1,833
Depreciation of property, plant and equipment:
Owned assets 8,995 8,299
Under finance leases 243 361
Amortisation of intangibles (included in administrative
expenses) 408 510
Impairment of investments (included in administrative
expenses) 440 177
Provision for claim reversed - (770)
Profit on disposal of property, plant and equipment (248) (164)
Operating leases - lease payments:
Plant and machinery 321 334
Property 885 749
Repairs and maintenance expenditure on property,
plant and equipment 4,962 4,533
-------- --------
Currency exchange (gains)/losses (credited)/charged
to income include:
Revenue (1,914) 140
Cost of sales (51) 50
Distribution costs (280) (30)
Administrative expenses 2 81
Other operating income - (26)
Finance income (1,030) (1,648)
-------- --------
(3,273) (1,433)
-------- --------
Included in the above is an exchange gain of GBP3,952,000
relating to the Malawian Kwacha.
Amounts paid to the group's auditors comprised:
Audit services:
Statutory audit:
Parent company and consolidated financial statements 166 154
Subsidiary companies 663 632
-------- --------
829 786
Audit - related regulatory reporting 59 33
Tax services:
Compliance services 16 15
Advisory services - 46
Other services not covered above 69 42
-------- --------
973 922
-------- --------
Included in the above group audit fees and expenses is
GBP822,000 (2011: GBP779,000) paid to PricewaterhouseCoopers LLP
and its associates for statutory audit services, GBP59,000 (2011:
GBP33,000) for audit related regulatory reporting, GBP16,000 (2011:
GBP61,000) for taxation services and GBP66,000 (2011: GBP38,000)
for other services.
4 Headline profit
The group seeks to present an indication of the underlying
performance which is not impacted by exceptional items or items
considered non-operational in nature. This measure of profit is
described as 'headline' and is used by management to measure and
monitor performance.
The following items have been excluded from the headline
measure:
- Exceptional items, including profit and losses from disposal
of non-current assets and available-for-sale investments.
- Gains and losses arising from changes in fair value of
biological assets, which are a non-cash item, and the
directors believe should be excluded to give a better
understanding of the group's underlying performance
- Financing income and expense relating to retirement benefits
Headline profit before tax comprises:
2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Trading profit 39,969 39,233
Share of associates' results 4,269 6,862
Investment income 1,186 1,074
Net finance income 3,107 4,170
Exclude
* Pension schemes' net financing expense/ (income) 615 (804)
--------- --------
Headline finance costs 3,722 3,366
-------- --------
Headline profit before tax 49,146 50,535
-------- --------
Non-headline items profit before
tax comprises:
Exceptional items
Profit on disposal of non-current
assets 1,538 534
Profit on disposal of a subsidiary 396 -
Profit on disposal of available-for-sale
investments 271 178
Loss on transfer of an associate (10,045) (721)
--------- --------
(7,840) (9)
Gain arising from changes in fair
value biological assets 30,043 7,320
Pension schemes' net financing
(expense) /income (615) 804
-------- --------
Non-headline items in profit before
tax 21,588 8,115
-------- --------
The group's share of the results of associates
is analysed below:
2012 2011
GBP'000 GBP'000
Operating profit 4,857 7,696
Net finance costs (114) (28)
-------- --------
Profit before tax 4,743 7,668
Taxation (474) (806)
-------- --------
Profit after tax 4,269 6,862
-------- --------
5 Share of associates' results
The results in 2011 included the group's share of the profits of
West Hamilton Holdings Limited until 1 August 2011, as the group's
shareholding fell from 28.2 per cent. to 14.1 per cent. following a
rights issue which was not taken up by the group. With effect from
1 August 2011, the group's holding in West Hamilton was
reclassified from an associated company to an available-for-sale
investment.
6 Profit on non-current assets
A profit of GBP1,538,000 has been realised following part
recovery of insurance claims received in relation to the property,
plant and equipment destroyed by the fire in 2011 at one of the tea
processing factories owned by Eastern Produce Malawi Limited.
In 2011, an additional profit of GBP534,000 was realised in
relation to the property, plant and equipment destroyed by the fire
in 2010 at the Nuneaton premises of Abbey Metal Finishing Company
Limited.
7 Profit on disposal of a subsidiary
A profit of GBP396,000, after the transfer of GBP5,000 of
exchange difference previously included in reserves, was realised
on the disposal by the group (through Kakuzi Limited) of its
remaining 50.5 per cent. interest in Siret Tea Company Limited to
EPK Outgrowers Empowerment Project Company Limited, a company
mainly owned by smallholders in Kenya. Further details are included
in note 35.
8 Loss on transfer of an associate
A loss of GBP10,045,000, after the transfer of GBP1,181,000 of
exchange difference and other movements previously included in
other comprehensive income, was realised in relation to the
reclassification of the group's investment in BF&M Limited from
an associated company. Further details are included in note 21.
In 2011, a loss of GBP721,000, after the transfer of GBP210,000
of exchange difference and other movements previously included in
other comprehensive income, was realised in relation to the
reclassification of the group's investment in West Hamilton
Holdings Limited from an associated company.
9 Finance income and costs
2012 2011
GBP'000 GBP'000
Interest payable on loans and bank overdrafts (808) (584)
Interest payable on obligations under finance
leases (17) (48)
Finance costs (825) (632)
Finance income - interest income on short-term
bank deposits 3,517 2,350
Net exchange gain on foreign cash balances 1,030 1,648
Pension schemes' net financing (expense)/income
(note 31) (615) 804
Net finance income 3,107 4,170
The above figures do not include any amounts
relating to the banking subsidiaries.
10 Taxation
Analysis of charge in the year 2012 2011
GBP'000 GBP'000 GBP'000
Current tax
UK corporation tax
UK corporation tax at 24.5 per cent.
(2011: 26.5 per cent.) 2,172 1,484
Double tax relief (2,172) (1,484)
-------
- -
Foreign tax
Corporation tax 15,582 12,651
Adjustment in respect of prior years (77) 35
-------
15,505 12,686
------- -------
Total current tax 15,505 12,686
Deferred tax
Origination and reversal of timing differences
United Kingdom - -
Overseas 10,157 4,174
-------
Total deferred tax 10,157 4,174
------- -------
Tax on profit on ordinary activities 25,662 16,860
------- -------
Factors affecting tax charge for the
year
Profit on ordinary activities before
tax 70,734 58,650
Share of associated undertakings profit (4,269) (6,862)
------- -------
Group profit on ordinary activities before
tax 66,465 51,788
------- -------
Tax on ordinary activities at the standard
rate
of corporation tax in the UK of 24.5
per cent. (2011: 26.5 per cent.) 16,284 13,724
Effects of:
Adjustment to tax in respect of prior
years (77) 35
Expenses not deductible for tax purposes 1,088 623
Adjustment in respect of foreign tax
rates 5,598 3,064
Additional tax arising on dividends from
overseas companies 358 381
Loss on transfer of an associate not
allowable for tax 2,461 191
Other income not charged to tax (366) (510)
Increase in tax losses carried forward 248 220
Movement in other timing differences 68 (868)
------- -------
Total tax charge for the year 25,662 16,860
------- -------
11 Profit for the year
2012 2011
GBP'000 GBP'000
The profit of the company was 3,755 3,514
---------
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
2012 2011
GBP'000 GBP'000
Amounts recognised as distributions to equity
holders in the period:
Final dividend for the year ended 31
84p (2010: 80p) per share 2,335 2,223
Interim dividend for the year ended 31 December
2012 of
32p (2011: 30p) per share 889 839
3,224 3,057
Dividends amounting to GBP73,000 (2011: GBP69,000) have not been
included as group companies hold 62,500 issued shares in the
company. These are classified as treasury shares.
Proposed final dividend for the year ended 31
December 2012 of
88p (2011: 84p) per share 2,501 2,387
The proposed final dividend is subject to approval by the
shareholders at the annual general meeting and has not been
included as a liability in these financial statements.
13 Earnings per share (EPS)
2012 2011
Weighted Weighted
Average Average
Number Number
Earnings of EPS Earnings of EPS
GBP'000 Shares Pence GBP'000 Shares Pence
Number Number
Basic and diluted EPS
Attributable to ordinary
shareholders 32,234 2,779,500 1,159.7 33,086 2,779,500 1,190.4
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 32).
14 Employees
2012 2011 Number
Average number of employees by activity: Number
Agriculture and horticulture 70,204 72,556
Engineering 435 403
Food storage and distribution 260 262
Banking and financial services 123 119
Central management 21 20
71,043 73,360
-------
2012 2011
GBP'000 GBP'000
Employment costs:
Wages and salaries 65,943 62,387
Social security costs 3,087 2,681
Employee benefit obligations
(see note 31) - UK 1,389 1,277
- Overseas 3,474 3,385
-------
73,893 69,730
Total remuneration paid to key employees who are members of the
executive committee, excluding directors of Camellia Plc, amounted
to GBP602,000 (2011: GBP528,000).
15 Emoluments of the directors
2012 2011
GBP'000 GBP'000
Aggregate emoluments excluding pension contributions 1,473 1,342
Emoluments of the highest paid director excluding pension
contributions were GBP533,000 (2011: GBP449,000).
Further details of directors' emoluments are set out on pages 18
and 19.
16 Intangible assets
Customer Computer
Goodwill relationships software Total
GBP'000 GBP'000 GBP'000 GBP'000
Group
Cost
At 1 January 2011 3,978 4,814 1,882 10,674
Exchange differences - - (37) (37)
Additions - - 89 89
At 1 January 2012 3,978 4,814 1,934 10,726
Exchange differences - - (16) (16)
Additions - - 180 180
At 31 December 2012 3,978 4,814 2,098 10,890
Amortisation
At 1 January 2011 - 1,111 1,487 2,598
Exchange differences - - (25) (25)
Charge for the year - 241 269 510
At 1 January 2012 - 1,352 1,731 3,083
Exchange differences - - (14) (14)
Charge for the year - 241 167 408
At 31 December 2012 - 1,593 1,884 3,477
Net book value at 31 December
2012 3,978 3,221 214 7,413
Net book value at 31 December
2011 3,978 3,462 203 7,643
Impairment testing
Timing of impairment testing
The group's impairment test in respect of intangible assets
allocated to each component of the cash-generating unit ('CGU') is
performed as at 31 December each year. In line with the accounting
policy, impairment testing is also performed whenever there is an
indication that the assets may be impaired. There was no indication
of impairment in the year to 31 December 2012. For the purpose of
this impairment testing, the group's CGU components represent the
asset management and financial planning elements of the holistic
private banking service provided by Duncan Lawrie.
Basis of the recoverable amount - value in use or fair value
less costs to sell
The recoverable amount of the CGU to which customer
relationships and goodwill have been allocated was assessed at each
respective testing date in 2012 and 2011.
The asset management component of the CGU is assessed on the
basis of the fair value less costs to sell by applying industry
average multiples to the value of assets under management.
The financial planning component of the CGU is assessed on the
basis of value in use (VIU) by discounting management's projections
of future cash flows. Given the inherent uncertainty in assessing
the most appropriate discount rate to use when assessing the
goodwill and customer relationships VIU, the group again has used a
range of rates from 5 per cent. to 15 per cent. to assess the VIU
under a number of scenarios. These discount rates have been applied
to the expected cash flows that will be generated by the VIU over a
20 year period, being the length of time over which the group
believes that value will accrue given the inherently long term
nature of private banking relationships. Management's judgement in
estimating the cash flows of a CGU are based on both contracts that
are in place and plans prepared by management.
Based on the conditions at the balance sheet date, a change in
any of the key assumptions described above would not cause an
impairment to be recognised in respect of goodwill and customer
relationships.
17 Property, plant and equipment
Fixtures,
Land and Plant and fittings
buildings machinery and equipment Total
Group GBP'000 GBP'000 GBP'000 GBP'000
Deemed cost
At 1 January 2011 81,706 90,793 20,329 192,828
Exchange differences (5,316) (6,283) (621) (12,220)
Additions 5,623 14,098 1,069 20,790
Disposals (105) (2,616) (148) (2,869)
At 1 January 2012 81,908 95,992 20,629 198,529
Exchange differences (4,629) (7,688) (467) (12,784)
Additions 6,727 8,846 984 16,557
Disposals (382) (1,658) (717) (2,757)
Disposal of subsidiary (632) (981) (41) (1,654)
At 31 December 2012 82,992 94,511 20,388 197,891
Depreciation
At 1 January 2011 33,909 58,477 11,766 104,152
Exchange differences (2,048) (3,839) (468) (6,355)
Charge for the year 2,024 5,614 1,022 8,660
Disposals (64) (2,208) (231) (2,503)
At 1 January 2012 33,821 58,044 12,089 103,954
Exchange differences (1,452) (3,405) (348) (5,205)
Charge for the year 3,007 5,323 908 9,238
Disposals (323) (1,570) (682) (2,575)
Disposal of subsidiary (302) (661) (41) (1,004)
At 31 December 2012 34,751 57,731 11,926 104,408
Net book value at 31 December
2012 48,241 36,780 8,462 93,483
Net book value at 31 December
2011 48,087 37,948 8,540 94,575
Land and buildings at net book
value comprise:
2012 2011
GBP'000 GBP'000
Freehold 27,547 25,877
Long leasehold 19,632 20,596
Short leasehold 1,062 1,614
48,241 48,087
Plant and machinery includes assets held under finance leases.
The depreciation charge for the year in respect of these assets was
GBP51,000 (2011: GBP175,000) and their net book value was GBP49,000
(2011: GBP1,469,000).
The amount of expenditure for property, plant and equipment in
the course of construction amounted to GBP905,000 (2011:
GBP5,511,000).
18 Biological assets
Edible
Tea nuts Timber Other Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
At 1 January 2011 74,442 18,823 9,794 17,941 121,000
Exchange differences (8,080) (1,885) (549) (1,459) (11,973)
New planting additions 1,795 420 273 37 2,525
Capitalised cultivation
costs - 2,751 - 4,575 7,326
Gains arising from changes
in fair value
less estimated point-of-sale
costs 1,416 1,842 1,813 2,249 7,320
Decreases due to harvesting - (3,032) (206) (4,780) (8,018)
At 1 January 2012 69,573 18,919 11,125 18,563 118,180
Exchange differences (13,777) (9,873) (1,726) (935) (26,311)
New planting additions 1,720 622 157 - 2,499
Capitalised cultivation
costs - 2,634 - 4,283 6,917
Gains arising from changes
in fair value
less estimated point-of-sale
costs 13,257 13,151 2,433 1,202 30,043
Decreases due to harvesting - (3,166) (824) (5,168) (9,158)
Company leaving the group (1,573) - (904) - (2,477)
At 31 December 2012 69,200 22,287 10,261 17,945 119,693
Other includes avocados, citrus, grapes, livestock, maize,
pineapples, rubber and soya.
Biological assets are carried at fair value. Where meaningful
market-determined prices do not exist to assess the fair value of
biological assets, the fair value has been determined based on the
net present value of expected future cash flows from those assets,
discounted at appropriate pre-tax rates. At 31 December 2012
professional valuations were obtained on a significant proportion
of assets. In determining the fair value of biological assets where
the discounting of expected future cash flows has been used, the
directors have made certain assumptions about the expected
life-span of the plantings, yields, selling prices and costs. The
fair value of livestock is based on market prices of livestock of
similar age and sex.
New planting additions represents new areas planted to the
particular crop at cost.
For crops other than tea and rubber capitalised cultivation
costs represent annual growing costs incurred. Growing costs for
tea and rubber are charged directly to inventory which are included
in cost of sales and do not include any uplift on initial
recognition as no appropriate market value can be determined for
green leaf and rubber produced at harvest prior to
manufacturing.
Decreases due to harvesting represent values transferred to cost
of sales at the point of harvest for agricultural produce other
than tea and rubber.
The discount rates used reflect the cost of capital, an
assessment of country risk and the risks associated with individual
crops. The range of discount rates used is:
Tea Edible nuts Timber Other
% % % %
2012 13.5 12.0 - 13.5 17.5 5.0 - 17.5
2011 13.5 12.0 - 13.5 17.5 5.0 - 17.5
During the year the Malawian kwacha depreciated in value from
254.49 to the pound sterling at 1 January 2012 to 544.05 to the
pound sterling at 31 December 2012. The functional currency of our
Malawian subsidiaries is the kwacha. Our principal assets in Malawi
are our agricultural assets. As they generate revenues in
currencies other than the kwacha their value in hard currency has
not fallen in the year. Accordingly, the revaluation of the
agricultural assets in kwacha under IAS 41 at 31 December 2012 has
generated a credit of GBP26,366,000 including a gain of
GBP21,353,000 due to the currency devaluation which is included in
the overall gain of GBP30,043,000 credited to the income statement.
This has been largely offset by a foreign exchange translation loss
charged to the statement of comprehensive income.
Financial risk management strategies
The group is exposed to financial risks arising from changes in
the prices of the agricultural products it produces. The group does
not anticipate that these prices will decline significantly in the
foreseeable future. There are no futures markets available for the
majority of crops grown by the group. Further the group's exposure
to this risk is mitigated by the geographical spread of its
operations, selective forward selling in certain instances when
considered appropriate, and regular review of available market data
on sales and production. The group monitors closely the returns it
achieves from its crops and considers replacing its biological
assets when yields decline with age or markets change.
Further financial risk arises from changes in market prices of
key cost components, such costs are closely monitored.
The estimated fair value of agricultural output from our tea
operations after deducting estimated points of sales costs is
GBP82,923,000 (2011: GBP76,171,000) which includes a gain on
initial recognition at the point of harvest of GBP23,169,000(2011:
GBP21,012,000).
The areas planted to the various crop types at the end of the
year were:
2012 2011
Hectares Hectares
Tea 34,591 35,280
Macadamia 2,774 2,713
Pistachios 130 130
Timber 6,253 6,321
Arable crops 2,363 3,297
Avocados 414 411
Citrus 178 178
Pineapples 45 45
Rubber 1,918 1,960
Wine grapes 70 84
2012 2111
Head Head
Livestock numbers on hand at the end of the
year 4,237 4,436
Output of agricultural produce during the year was:
2012 2011
Metric Metric
tonnes tonnes
Tea 67,363 68,667
Macadamia 1,033 1,094
Pistachios 647 21
Arable crops 23,530 13,923
Avocados 8,157 5,822
Citrus 6,480 6,217
Pineapples 1,033 1,777
Rubber 701 700
Wine grapes 616 553
-------
2012 2011
Cubic Cubic
metres metres
Timber 128,519 48,297
19 Prepaid operating
leases
GBP'000
Group
Cost
At 1 January 2011 1,059
Exchange differences (48)
At 1 January 2012 1,011
Exchange differences (56)
Company leaving the group (26)
At 31 December 2012 929
-------
Amortisation
At 1 January 2011 19
Exchange differences (1)
Charge for the year 1
At 1 January 2012 19
Exchange differences (1)
Charge for the year 1
At 31 December 2012 19
-------
Net book value at 31 December 2012 910
-------
Net book value at 31 December 2011 992
-------
20 Investments in subsidiaries
2012 2011
GBP'000 GBP'000
Company
Cost
At 1 January and 31 December 73,508 73,508
21 Investments in associates
2012 2011
GBP'000 GBP'000
Group
At 1 January 38,077 31,778
Exchange differences (1,533) (611)
Transfer from held for sale - 6,161
Impairment on transfer to financial assets (11,226) (931)
Disposals (323) (51)
Share of profit (note 5) 4,269 6,862
Dividends (1,275) (1,221)
Other equity movements (769) (2,424)
Transfer to financial assets (20,671) (1,486)
At 31 December 6,549 38,077
-------
At 31 December 2012, the group has re-evaluated its relationship
with BF&M Limited. Although the group's holding is in excess of
20 per cent., the directors have concluded that the group is no
longer able to exercise significant influence due to the cumulative
result of, inter alia, the composition of the board of BF&M and
the inability of the group to be a party to important strategic
decisions concerning the operations and development of BF&M.
Accordingly the directors intend to account for the group's holding
as an available-for-sale financial asset with effect from 1 January
2013 and the investment has been reclassified at 31 December 2012.
In conjunction with this reclassification the investment has been
written down to current market value at 31 December 2012 giving
rise to an exceptional charge in the Income Statement of
GBP10,045,000 (note 8).
In 2011, the transfer to other investments related to the
group's investment in West Hamilton Holdings Limited, as the
group's shareholding fell from 28.2 per cent. to 14.1 per cent.
following a rights issue which was not taken up by the group. As a
result, West Hamilton was reclassified from an associated company
to an available-for-sale investment.
In 2011, the group's holding in its Bangladeshi associated
undertakings United Insurance Company Limited and United
Leasing Company Limited of GBP6,161,000 were reclassified from
assets held for sale to investments in associates, as the proposed
sale did not materialise.
Details of the group's associates are shown in note 39.
The group's share of the results of its principal associates and
its share of the assets (including goodwill) and liabilities are as
follows:
Assets Liabilities Revenues Profit Market
value
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
31 December 2012 36,195 (29,646) 43,471 4,269 12,533
31 December 2011 176,055 (137,978) 41,076 6,862 38,253
22 Financial assets
Group Company
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Cost or fair value
At 1 January 35,697 31,632 170 170
Exchange differences (1,357) 99 - -
Fair value adjustment 674 (2,201) - -
Additions 8,109 10,159 - -
Disposals (7,592) (5,480) - -
Fair value adjustment for disposal (4) 2 - -
Transfer from investment in associates 20,671 1,486 - -
At 31 December 56,198 35,697 170 170
Provision for diminution in value
At 1 January 1,323 1,135
Exchange differences (59) 11
Provided during year 440 177
At 31 December 1,704 1,323
Net book value at 31 December 54,494 34,374 170 170
Net book value comprises:
Held-to-maturity investments:
UK Treasury bills - 3,228
Bank and building society certificates
of deposit 3,993 2,601
3,993 5,829
Available-for-sale financial assets:
Listed investments 50,321 28,366
Unlisted investments 180 179 170 170
50,501 28,545
54,494 34,374 170 170
Current element 3,993 5,829 - -
Non-current element 50,501 28,545 170 170
54,494 34,374 170 170
UK Treasury bills and bank and building society certificates of
deposit are held by the group's banking operation.
23 Other investments
Group Company
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 8,368 7,362 8,373 7,367
Additions 230 1,009 230 1,009
Disposals - (3) - (3)
------- ------- -------
At 31 December 8,598 8,368 8,603 8,373
-------
Other investments comprise the group's and company's investment
in fine art, philately, documents and manuscripts. The market value
of collections is expected to be in excess of book value.
24 Inventories
2012 2011
GBP'000 GBP'000
Group
Made tea 21,818 22,371
Other agricultural produce 520 1,342
Work in progress 3,224 1,460
Trading stocks 3,377 2,893
Raw materials and consumables 8,636 11,111
--------
37,575 39,177
Made tea is included in inventory at cost as no reliable fair
value is available to reflect the uplift in value upon initial
recognition of harvested green leaf.
Included within the inventory value of made tea of GBP21,818,000
(2011: GBP22,371,000) are costs associated with the growing and
cultivation of green leaf from our own estates of GBP10,103,000
(2011: GBP11,007,000). This would increase by GBP4,042,000 (2011:
GBP3,962,000) if estimated green leaf fair values at harvest were
applied. The impact on the income statement would be an increase in
profit for the year to 31 December 2012 of GBP80,000 and an
increase in taxation of GBP25,000.
The year end inventories balance is stated after a provision of
GBP214,000 (2011: GBP152,000).
25 Trade and other receivables
Group Company
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Current:
Amounts due from customers of banking
subsidiaries 30,410 23,576 - -
Trade receivables 28,010 25,886 - -
Amounts owed by associated undertakings 258 282 - -
Other receivables 7,527 6,988 - -
Prepayments and accrued income 6,052 6,140 16 -
-------
72,257 62,872 16 -
Non-current:
Amounts due from customers of banking
subsidiaries 14,096 12,936
Other receivables 1,078 967
-------
15,174 13,903
Included within trade receivables is a provision for doubtful
debts of GBP391,000 (2011: GBP365,000).
Trade receivables include receivables of GBP4,373,000 (2011:
GBP5,025,000) which are past due at the reporting date against
which the group has not provided, as there has not been a
significant change in credit quality and the amounts are still
considered recoverable. Ageing of past due but not provided for
receivables is as follows:
2012 2011
GBP'000 GBP'000
Up to 30 days 1,791 3,613
30-60 days 1,654 800
60-90 days 346 148
Over 90 days 582 464
-------
4,373 5,025
-------
26 Cash and cash equivalents
Group Company
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Cash at bank and in hand 181,134 196,852 - -
Short-term bank deposits 56,728 45,226 9,458 6,323
Short-term liquid investments 24,312 18,838 - -
-------
262,174 260,916 9,458 6,323
Included in the amounts above are cash and short-term funds,
time deposits with banks and building societies, UK treasury bills
and certificates of deposit amounting to GBP175,302,000 (2011:
GBP181,278,000) which are held by the group's banking subsidiaries
and which are an integral part of the banking operations.
Cash, cash equivalents and bank overdrafts include the following
for the purposes of the cash flow statement:
Group Company
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Cash and cash equivalents (excluding banking operations 86,872 79,638 9,458 6,323
Bank overdrafts (note 28) (5,499) (7,012) - -
81,373 72,626 9,458 6,323
2012 2011 2012 2011
Effective interest rate:
Short-term deposits 0.00-13.75% 0.00-25.00% 1.05% 1.05%
Short-term liquid investments 0.01-0.10% 0.01-0.10% - -
Average maturity period:
Short-term deposits 92 days 78 days 163 days 163 days
Short-term liquid investments 41 days 35 days - -
27 Trade and other payables
Group Company
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Current:
Amounts due to customers of banking
subsidiaries 193,715 192,145 - -
Trade payables 22,477 23,419 - -
Other taxation and social security 2,066 1,871 - -
Other payables 12,534 15,025 160 144
Accruals 4,844 4,161 - 5
-------
235,636 236,621 160 149
Non-current:
Amounts due to customers of banking
subsidiaries 9,015 7,652 - -
-------
28 Financial liabilities - borrowings
2012 2011
GBP'000 GBP'000
Group
Current
Bank overdrafts 5,499 7,012
Bank loans 63 110
Finance leases 28 188
5,590 7,310
Current borrowings include the following amounts
secured on biological assets and property, plant
and equipment:
Bank overdrafts 5,499 5,383
Bank loans 63 110
Finance leases 28 188
-------
5,590 5,681
Non-current
Bank loans 90 123
Finance leases 26 58
-------
116 181
-------
Non-current borrowings include the following
amounts secured on biological assets and property,
plant and equipment:
Bank loans 90 123
Finance leases 26 58
-------
116 181
-------
The repayment of bank loans and overdrafts fall
due as follows:
Within one year or on demand (included in current
liabilities) 5,562 7,122
Between 1 - 2 years 27 36
Between 2 - 5 years 39 57
After 5 years 24 30
-------
5,652 7,245
-------
Minimum finance lease payments fall due as follows:
Within one year or on demand (included in current
liabilities) 30 200
Between 1 - 2 years 16 38
Between 2 - 5 years 12 23
-------
58 261
Future finance charges on finance leases (4) (15)
-------
Present value of finance lease liabilities 54 246
The present value of finance lease liabilities fall due as
follows:
2012 2011
GBP'000 GBP'000
Within one year or on demand (included
in current liabilities) 28 188
Between 1 - 2 years 15 36
Between 2 - 5 years 11 22
------------
54 246
The rates of interest payable by the
group ranged between:
2012 2011
%%
2.25 -
Overdrafts 2.25 - 33.00 13.00
Bank loans 9.00 - 13.00 9.00 - 13.00
4.29 -
Finance leases 7.54 - 18.00 18.00
29 Provisions
Onerous Others Total
leases
GBP'000 GBP'000 GBP'000
Group
At 1 January 2011 900 963 1,863
Exchange differences - (93) (93)
Utilised in the period (150) (36) (186)
Unused amounts reversed in period - (770) (770)
At 1 January 2012 750 64 814
Utilised in the period (150) (8) (158)
Provided in the period 71 400 471
At 31 December 2012 671 456 1,127
Current
At 31 December 2012 150 306 456
At 31 December 2011 150 64 214
Non-current
At 31 December 2012 521 150 671
At 31 December 2011 600 - 600
The provision for onerous leases relates to two leases with
commitments of two and four years, which is the expected period of
vacancy, both relate to warehouse premises. The leases expire in
2014 and 2016 respectively.
Others relate to provisions for claims and dilapidations.
30 Deferred tax
The net movement on the deferred tax account is set out
below:
Group Company
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 35,237 34,393 301 313
Exchange differences (8,671) (3,309) - -
Charged/(credited) to the income
statement 10,157 4,174 (21) (12)
Charged/(credited) to equity 48 (21) - -
Company leaving the group (860) - - -
At 31 December 35,911 35,237 280 301
The movement in deferred tax assets and liabilities is set out
below:
Deferred tax liabilities
Accelerated Pension
tax scheme
depreciation liability Other Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2011 38,018 278 (1) 38,295
Exchange differences (3,722) (37) 12 (3,747)
Charged/(credited) to the income
statement 2,651 (3) 831 3,479
(Credited)/charged to equity - (20) 5 (15)
Transfers between categories 340 (63) (52) 225
At 1 January 2012 37,287 155 795 38,237
Exchange differences (8,519) (1) (325) (8,845)
Charged/(credited) to the income
statement 9,698 218 (33) 9,883
Charged/(credited) to equity - 98 (46) 52
Transfers between categories - (198) - (198)
Company leaving the group (801) - (59) (860)
At 31 December 2012 37,665 272 332 38,269
Deferred tax assets offset (2,044)
Net deferred tax liability after
offset 36,225
Deferred tax assets
Pension
scheme
Tax losses asset Other Total
GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2011 1,796 912 1,194 3,902
Exchange differences (234) (132) (72) (438)
(Charged)/credited to the income
statement (633) 111 (173) (695)
Credited/(charged) to equity - 62 (56) 6
Transfers between categories - (62) 287 225
------- -------
At 1 January 2012 929 891 1,180 3,000
Exchange differences (54) (44) (76) (174)
(Charged)/credited to the income
statement (612) 249 89 (274)
Credited to equity - 4 - 4
Transfers between categories - (198) - (198)
------- -------
At 31 December 2012 263 902 1,193 2,358
------- -------
Offset against deferred tax liabilities (2,044)
Net deferred tax asset after offset 314
Included within deferred tax liabilities are GBP33,396,000
(2011: GBP32,087,000) of accelerated tax depreciation relating to
biological assets.
Deferred tax liabilities of GBP10,142,000 (2011: GBP8,684,000)
have not been recognised for the withholding tax and other taxes
that would be payable on the unremitted earnings of certain
subsidiaries. Such amounts are permanently reinvested.
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 GBP4,997,000 (2011:
GBP5,076,000) in respect of losses that can be carried forward
against future taxable income.
31 Employee benefit obligations
(i) Pensions
Certain group subsidiaries operate defined contribution and
funded defined benefit pension schemes. The most significant is the
UK funded, final salary defined benefit scheme. The assets of this
scheme is administered by trustees and are kept separate from those
of the group. On 1 July 2011, the three UK defined benefit pension
schemes were merged to form the Linton Park Pension Scheme (2011).
A full actuarial valuation was undertaken as at 1 July 2011 and
updated to 31 December by a qualified independent actuary. The UK
final salary defined benefit pension scheme is closed to new
entrants and new employees are eligible to join a group personal
pension plan. Members who formerly belonged to the Unochrome Group
Pension Scheme are closed to future accruals and active members
participate in a defined contribution scheme. From 1 July 2011,
active members of the Linton Park Pension Scheme (2011) earn
accruals at a rate of 1/80th per year of service from a rate of
1/60th per year of service previously earned as members of the
Linton Park Pension Scheme or the Lawrie Group Pension Scheme.
The overseas schemes are operated in group subsidiaries located
in Bangladesh, India and The Netherlands. Actuarial valuations have
been updated to 31 December 2012 by qualified actuaries for these
schemes.
Assumptions
The major assumptions used in the valuation to determine the
present value of the schemes' defined benefit obligations were as
follows:
2012 2011
UK scheme % per annum % per annum
Rate of increase in salaries 2.00 2.00
Rate of increase to LPI (Limited Price 2.00 - 5.00 2.00 - 5.00
Indexation) pensions in payment
Discount rate applied to scheme liabilities 4.20 4.70
Inflation assumption (CPI/RPI) 2.00/2.80 2.00/3.00
Assumptions regarding future mortality experience are based on
advice received from independent actuaries. The current mortality
tables used are S1PA, on a year of birth basis, with CMI_2010
future improvement factors and subject to a long term annual rate
of future improvement of 1% per annum. This results in males and
females aged 65 having life expectancies of 22 years and 24 years
respectively.
Overseas schemes
Rate of increase in salaries 2.00 - 7.00 2.00 - 7.00
Rate of increase to LPI (Limited Price
Indexation) pensions in payment 0.00 - 3.00 0.00 - 3.00
Discount rate applied to scheme liabilities 3.20 - 10.50 4.60 - 9.00
Inflation assumption 0.00 - 7.00 0.00 - 7.00
The major assumptions used to determine the expected future
return on the schemes' assets were as follows:
UK scheme
Equities and property 6.50 7.80
Bonds 3.60 4.70
Cash 0.50 0.50
Overseas schemes
Bonds 7.51 - 9.00 7.51 - 9.00
Cash 7.51 - 9.00 7.51 - 9.00
Other 4.60 4.60
(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 Bangladesh and India are funded but the schemes
operated in Kenya are unfunded. Operations in India and Bangladesh
also have an obligation to pay medical benefits upon retirement,
these schemes are unfunded.
Assumptions
The major assumptions used in the valuation to determine the
present value of the post-employment benefit obligations were as
follows:
Rate of increase in salaries 5.00 - 10.00 5.00 - 10.00
Discount rate applied to scheme
liabilities 8.00 - 12.00 8.50 - 13.50
Inflation assumptions 0.00 - 10.00 0.00 - 10.00
(iii) Actuarial valuations
UK 2012 Total UK 2011 Total
GBP'000 Overseas GBP'000 GBP'000 Overseas GBP'000
GBP'000 GBP'000
Equities and property 91,471 419 91,890 84,107 352 84,459
Bonds 39,334 12,339 51,673 36,679 12,555 49,234
Cash 1,761 2,816 4,577 1,624 2,479 4,103
Other - 3,420 3,420 - 2,547 2,547
Total fair value of
plan assets 132,566 18,994 151,560 122,410 17,933 140,343
Present value of defined
benefit obligations (160,427) (23,730) (184,157) (144,403) (22,832) (167,235)
Total deficit in the
schemes (27,861) (4,736) (32,597) (21,993) (4,899) (26,892)
Amount recognised as
asset in the balance
sheet - 678 678 - 437 437
Amount recognised as
current liability in
the balance sheet - (409) (409) - (374) (374)
Amount recognised as
non-current liability
in the balance sheet (27,861) (5,005) (32,866) (21,993) (4,962) (26,955)
(27,861) (4,736) (32,597) (21,993) (4,899) (26,892)
Related deferred tax
asset (note 30) - 902 902 - 891 891
Related deferred tax
liability (note 30) - (272) (272) - (155) (155)
Net deficit (27,861) (4,106) (31,967) (21,993) (4,163) (26,156)
Movements in the fair value of
scheme assets were as follows:
2012 2011
UK Overseas Total UK Overseas Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 122,410 17,933 140,343 126,039 19,852 145,891
Expected return on
plan assets 6,492 1,290 7,782 8,274 1,343 9,617
Employer contributions 2,196 1,206 3,402 818 716 1,534
Contributions paid
by plan participants - 4 4 179 5 184
Benefit payments (6,560) (1,193) (7,753) (6,083) (1,534) (7,617)
Actuarial gains/(losses) 8,028 866 8,894 (6,817) 285 (6,532)
Exchange differences - (1,112) (1,112) - (2,734) (2,734)
At 31 December 132,566 18,994 151,560 122,410 17,933 140,343
Movements in the present value of defined benefit obligations
were as follows:
UK 2012 Total UK 2011 Total
GBP'000 Overseas GBP'000 GBP'000 Overseas GBP'000
GBP'000 GBP'000
At 1 January (144,403) (22,832) (167,235) (133,805) (24,455) (158,260)
Current service cost (671) (1,262) (1,933) (726) (1,132) (1,858)
Past service cost - (5) (5) 164 - 164
Contributions paid
by plan participants - (4) (4) (179) (5) (184)
Interest cost (6,633) (1,764) (8,397) (7,081) (1,732) (8,813)
Benefit payments 6,560 1,193 7,753 6,083 1,534 7,617
Actuarial losses (15,280) (723) (16,003) (8,859) (218) (9,077)
Disposal of subsidiary - 250 250 - - -
Exchange differences - 1,417 1,417 - 3,176 3,176
At 31 December (160,427) (23,730) (184,157) (144,403) (22,832) (167,235)
In 2010, the total fair value of plan assets was GBP145,891,000,
present value of defined benefit obligations was GBP158,260,000 and
the deficit was GBP12,369,000. In 2009, the total fair value of
plan assets was GBP122,063,000, present value of defined benefit
obligations was GBP146,054,000 and the deficit was GBP23,991,000
and in 2008, the total fair value of plan assets was
GBP106,142,000, present value of defined benefit obligations was
GBP130,104,000 and the deficit was GBP23,962,000.
Income statement
The amounts recognised in the income statement are as
follows:
2012 2011
UK Overseas Total UK Overseas Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Amounts (charged)/credited
to operating profit:
Current service cost (671) (1,262) (1,933) (726) (1,132) (1,858)
Past service cost - (5) (5) 164 - 164
Total operating charge (671) (1,267) (1,938) (562) (1,132) (1,694)
Amounts credited/(charged)
to other finance costs:
Expected return on pension
scheme assets 6,492 1,290 7,782 8,274 1,343 9,617
Interest on pension scheme
liabilities (6,633) (1,764) (8,397) (7,081) (1,732) (8,813)
Net financing income/(charge)
(note 9) (141) (474) (615) 1,193 (389) 804
Total credited/(charged)
to income statement (812) (1,741) (2,553 631 (1,521) (890)
Employer contributions to defined contribution schemes are
charged to profit when payable and the costs charged were
GBP2,925,000 (2011: GBP2,968,000).
Actuarial gains and losses recognised in the statement of
comprehensive income
The amounts included in the statement of comprehensive
income:
2012 2011
UK Overseas Total UK Overseas Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Actual return less expected
return on
pension scheme assets 8,028 866 8,894 (6,817) 285 (6,532)
Experience losses arising
on scheme
liabilities (2,008) (723) (2,731) (1,946) (218) (2,164)
Changes in assumptions
underlying
present value of scheme
liabilities (13,272) - (13,272) (6,913) - (6,913)
----------- --------- ----------- ---------- ----------
Actuarial (loss)/gain (7,252) 143 (7,109) (15,676) 67 (15,609)
----------
Cumulative actuarial losses recognised in the statement of
comprehensive income are GBP35,385,000 (2011: GBP28,276,000).
If the revised IAS19 standard had been implemented during 2012
there would have been no material impact on the annual
accounts.
History of experience gains and losses
2012 2011 2010
UK Overseas Total UK Overseas Total UK Overseas Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP;000 GBP'000 GBP'000 GBP'000
Difference between expected
and actual return on
scheme assets:
Amount (GBP'000) 8,028 866 8,894 (6,817) 285 (6,532) 11,080 334 11,414
Percentage of scheme
assets 6.1% 4.6% 5.9% (5.6%) 1.6% (4.7%) 8.8% 1.7% 7.8%
Experience gains and
losses on scheme
liabilities:
Amount (GBP'000) (2,008) (732) (2,731) (1,946) (218) (2,164) 186 (3,306) (3,120)
Percentage of present
value of scheme liabilities (1.3%) (3.0%) (1.5%) (1.3%) (1.0%) (1.3%) 0.1% (13.5%) (2.0%)
Effects to changes in
assumptions underlying
the present value
of the scheme liabilities:
Amount (GBP'000) (13,272) - (13,272) (6,913) - (6,913) (2,837) - (2,837)
Percentage of present
value of scheme liabilities (8.3%) - (7.2%) (4.8%) - (4.1%) (2.1%) - (1.8%)
Total amount recognised:
Amount (GBP'000) (7,252) 143 (7,109) (15,676) 67 (15,609) 8,429 (2,972) 5,457
Percentage of present
value of scheme liabilities (4.5%) 0.6% (3.9%) (10.9%) 0.3% (9.3%) 6.3% (12.2%) 3.4%
2009 2008
UK Overseas Total UK Overseas Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Difference between expected
and actual return on
scheme assets:
Amount (GBP'000) 11,377 82 11,459 (28,968) (94) (29,062)
Percentage of scheme
assets 10.9% 0.5% 9.4% (32.9%) (0.5%) (27.4%)
Experience gains and
losses on scheme
liabilities:
Amount (GBP'000) 2,654 572 3,226 194 (2,040) (1,846)
Percentage of present
value of scheme liabilities 2.1% 3.3% 2.2% 0.2% (11.2%) (1.4%)
Effects to changes in
assumptions underlying
the present value
of the scheme liabilities:
Amount (GBP'000) (17,342) - (17,342) 8,981 - 8,981
Percentage of present
value of scheme liabilities (13.5%) - (11.9%) 8.0% - 6.9%
Total amount recognised:
Amount (GBP'000) (3,311) 654 (2,657) (19,793) (2,134) (21,927)
Percentage of present
value of scheme liabilities (2.6%) 3.8% (1.8%) (17.7%) (11.7%) (16.9%)
The employer contributions to be paid to the UK defined benefit
pension scheme for the year commencing 1 January 2013 is 19.8% of
pensionable salary for active members plus GBP912,000 additional
contribution to reduce the scheme's funding deficit.
32 Share capital
2012 2011
GBP'000 GBP'000
Authorised: 2,842,000 (2011: 2,842,000) ordinary
shares of 10p each 284 284
Allotted, called up and fully paid: ordinary
shares of 10p each:
At 1 January and 31 December - 2,842,000 (2011:
2,842,000) shares 284 284
Group companies hold 62,500 issued shares in the company. These
are classified as treasury shares.
33 Reconciliation of profit from operations to cash flow
2012 2011
GBP'000 GBP'000
Group
Profit from operations 66,441 53,406
Share of associates' results (4,269) (6,862)
Depreciation and amortisation 9,646 9,170
Impairment of non-current assets 440 180
Gain arising from changes in fair value of
biological assets (30,043) (7,320)
Profit on disposal of non-current assets (1,786) (698)
Loss on transfer of an associate 10,045 721
Profit on disposal of a subsidiary (396) -
Profit on disposal of investments (271) (178)
Increase in working capital (10,336) (7,542)
Pensions and similar provisions less payments (1,465) 160
Biological assets capitalised cultivation
costs (6,917) (7,326)
Biological assets decreases due to harvesting 9,158 8,018
Net decrease in funds of banking subsidiaries 915 2,546
-------- -------
41,162 44,275
34 Reconciliation of net cash flow to movement in net cash
2012 2011
GBP'000 GBP'000
Group
Increase/(decrease) in cash and cash equivalents
in the year 9,767 (2,438)
Net cash outflow from decrease in debt 266 460
Increase/(decrease) in net cash resulting from
cash flows 10,033 (1,978)
Exchange rate movements (1,014) (163)
Increase/(decrease) in net cash in the year 9,019 (2,141)
Net cash at beginning of year 72,147 74,288
Net cash at end of year 81,166 72,147
35 Disposal of business
Group
On 31 August 2012 the group disposed of its 50.5 per cent.
holding in Siret Tea Company Limited, a tea company operating in
Kenya.
Details of net assets disposed are as follows:
2012
GBP'000
Book value of assets and liabilities:
Property plant and equipment 650
Biological assets 2,477
Prepaid operating leases 26
Inventories 1,108
Trade and other receivables 631
Cash and cash equivalents 487
Trade and other payables (1,452)
Current income tax liabilities (129)
Employee benefit obligations (250)
Deferred tax liabilities (860)
--------
2,688
Less direct non-controlling interest (1,333)
Profit on disposal 396
--------
1,751
--------
Satisfied by:
Cash consideration 1,751
--------
Net inflow of cash in respect of disposal of business:
Cash consideration 1,751
Net cash and cash equivalents of business (487)
--------
1,264
--------
There were no disposals in 2011.
36 Commitments
Capital commitments
Capital expenditure contracted for at the balance
sheet date but not yet incurred is as follows:
2012 2011
GBP'000 GBP'000
Group
Property, plant and equipment 1,304 1,800
Operating leasing commitments - minimum lease payments
The group leases land and buildings, plant and machinery under
non-cancellable operating lease arrangements, which have various
terms and renewal rights.
The future aggregate minimum lease payments under
non-cancellable operating leases are as follows:
2012 2011
GBP'000 GBP'000
Group
Land and buildings:
Within 1 year 859 809
Between 1 - 5 years 2,263 2,602
After 5 years 13,557 13,315
-------- --------
16,679 16,726
-------- --------
Plant and machinery:
Within 1 year 104 124
Between 1 - 5 years 101 98
-------- --------
205 222
-------- --------
The group's most significant operating lease commitments are
long term property leases with renewal terms in excess of 60
years.
37 Contingent liabilities
The group operates in certain countries where its operations are
potentially subject to a number of legal claims including taxation.
When required, appropriate provisions are made for the expected
cost of such claims. At 31 December 2012, the directors do not
anticipate the outcome of any such claim to result in a material
loss.
38 Financial instruments
Capital risk management
The group manages its capital to ensure that the group will be
able to continue as a going concern, while maximising the return to
stakeholders through the optimisation of its debt and equity
balance. The capital structure of the group consists of debt, which
includes the borrowings disclosed in note 28, cash and cash
equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained
earnings.
The board reviews the capital structure, with an objective to
ensure that gross borrowings as a percentage of tangible net assets
does not exceed 50 per cent.
The ratio at the year end is as follows:
2012 2011
GBP'000 GBP'000
Borrowings 5,706 7,491
Tangible net assets 306,397 313,949
Ratio 1.86% 2.39%
Borrowings are defined as current and non-current borrowings, as
detailed in note 28.
Tangible net assets includes all capital and reserves of the
group attributable to equity holders of the parent less intangible
assets.
Categories of financial instruments Carrying value
2012 2011
GBP'000 GBP'000
Financial assets
Cash and cash equivalents (excluding banking subsidiaries) 86,872 79,638
Loans and advances to banks by banking subsidiaries 175,302 181,278
Loans and advances to customers of banking subsidiaries 44,506 36,512
Trade and other receivables 36,873 34,123
Other investments 54,494 34,374
398,047 365,925
Financial liabilities
Amounts due to customers of banking subsidiaries 202,730 199,797
Trade and other payables 39,855 42,605
Borrowings 5,706 7,491
Provisions 1,127 814
Other non-current liabilities 107 111
249,525 250,818
Fair values
Financial assets and liabilities are subject to market
variations in respect of price, exchange and interest rates. The
group assesses fair values based on available market data and does
not make use of valuation techniques.
The fair value of the group's financial assets and liabilities
are not materially different to their carrying value.
Financial risk management objectives
The group finances its operations by a mixture of retained
profits, bank borrowings, long-term loans and leases. The objective
is to maintain a balance between continuity of funding and
flexibility through the use of borrowings with a range of
maturities. To achieve this, the maturity profile of borrowings and
facilities are regularly reviewed. The group also seeks to maintain
sufficient undrawn committed borrowing facilities to provide
flexibility in the management of the group's liquidity.
Given the nature and diversity of the group's operations, the
board does not believe a highly complex use of financial
instruments would be of significant benefit to the group. However,
where appropriate, the board does authorise the use of certain
financial instruments to mitigate financial risks that face the
group, where it is effective to do so.
Various financial instruments arise directly from the group's
operations, for example cash and cash equivalents, trade
receivables and trade payables. In addition, the group uses
financial instruments for two main reasons, namely:
- To finance its operations (to mitigate liquidity risk);
- To manage currency risks arising from its operations and
arising from its sources of finance (to mitigate foreign
exchange risk).
The group, including Duncan Lawrie, the group's banking
subsidiary, did not, in accordance with group policy, trade in
financial instruments throughout the period under review.
(A) Market risk
(i) Foreign exchange risk
The group has no material exposure to foreign currency exchange
risk on currencies other than the functional currencies of the
operating entities, with the exception of significant Swiss Franc
and Canadian Dollar cash deposits. A movement by 5 per cent. in the
exchange rate of the Swiss Franc with Sterling would
increase/decrease profit and net assets by GBP808,000 (2011:
GBP1,044,000) and a movement by 5 per cent. in the exchange rate of
the Canadian Dollar with Sterling would increase/decrease profit
and net assets by GBP473,000 (2011: GBP316,000).
Currency risks are primarily managed through the use of natural
hedging and regularly reviewing when cash should be exchanged into
either sterling or another functional currency.
(ii) Price risk
The group is exposed to equity securities price risk because of
investments held by the group and classified on the consolidated
balance sheet as available-for-sale. To manage its price risk
arising from investments in equity securities, the group
diversifies its portfolio.
The majority of the group's equity investments are publicly
traded and are quoted on stock exchanges located in Bermuda, Japan,
Switzerland, UK and US. Should these equity indexes increase or
decrease by 5 per cent. with all other variables held constant and
all the group's equity instruments move accordingly, the group's
equity balance would increase/decrease by GBP2,516,000 (2011:
GBP1,418,000).
The group's exposure to commodity price risk is not
significant.
(iii) Cash flow and interest rate risk
The group's interest rate risk arises from interest-bearing
assets and short and long-term borrowings. Borrowings issued at
variable rates expose the group to cash flow interest rate risk.
The group has no fixed rate exposure.
At 31 December 2012, 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 GBP340,000 (2011:
GBP303,000) higher/lower.
At 31 December 2012, if interest rates on sterling denominated
interest-bearing assets and borrowings had been 50 basis points
higher/lower with all other variables held constant, post-tax
profit for the year would have been GBP171,000 (2011: GBP177,000)
higher/lower.
The interest rate exposure of the group's interest bearing
assets and liabilities by currency at 31 December was:
Assets Liabilities
2012 2011 2012 2011
GBP'000 GBP'000 GBP'000 GBP'000
Sterling 164,912 162,044 130,646 126,665
US Dollar 50,486 53,202 40,988 48,076
Euro 18,729 19,220 18,839 19,952
Swiss Franc 23,104 24,002 6,939 3,131
Kenyan Shilling 19,236 20,478 - -
Indian Rupee 6,622 3,716 4,716 2,545
Malawian Kwacha 12 203 - -
Bangladesh Taka 5,565 3,233 190 1,911
Australian Dollar 978 678 974 682
South African Rand 1,821 2,196 146 83
Brazilian Real 4,044 2,956 - -
Bermudian Dollar 790 755 - -
Canadian Dollar 10,064 7,093 602 769
Japanese Yen 1,609 1,767 1,607 1,761
Other 2,791 1,714 2,789 1,713
-------
310,763 303,257 208,436 207,288
------- --------
(B) Credit risk
The group has policies in place to limit its exposure to credit
risk. Credit risk arises from cash and cash equivalents, deposits
with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables and committed
transactions. If customers are independently rated, these ratings
are used. Otherwise if there is no independent rating, management
assesses the credit quality of the customer taking into account its
financial position, past experience and other factors and if
appropriate holding liens over stock and receiving payments in
advance of services or goods as required. Management monitors the
utilisation of credit limits regularly.
The group's approach to customer lending through the group's
banking subsidiaries is risk averse with only 1.5 per cent. of the
customer loan book being unsecured. Collateralised loans are
normally secured against cash or property, with property loans
being restricted to 70 per cent. of recent valuation although
corporate or personal guarantees are also acceptable in some
instances.
The group has a large number of trade receivables, the largest
five receivables at the year end comprise 20 per cent. (2011: 24
per cent.) of total trade receivables.
(C) Liquidity risk
Ultimate responsibility for liquidity risk management rests with
the board of directors. The group manages liquidity risk by
maintaining adequate reserves and banking facilities by
continuously monitoring forecast and actual cash flows and managing
the maturity profiles of financial assets and liabilities.
The two subsidiary companies which are engaged in banking
activities, Duncan Lawrie Limited and Duncan Lawrie (IOM) Limited
both have restrictions contained in their memorandum and articles
of association which place a ceiling on their levels of customer
lending. Such restrictions effectively limit the customer loan book
to the value of the share capital and reserves of each banking
subsidiary. This fact, in conjunction with the general matching of
maturing customer deposits with market placements and the general
use of liquid assets such as certificates of deposit, results in
significantly reduced liquidity risk for Duncan Lawrie and the
group.
At 31 December 2012, the group had undrawn committed facilities
of GBP24,078,000 (2011: GBP24,943,000), all of which are due to be
reviewed within one year.
The table below analyses the group's financial assets and
liabilities which will be settled on a net basis into relevant
maturity groupings based on the remaining period at the balance
sheet date to the contractual maturity date. The amounts disclosed
are the contractual undiscounted cash flows.
Less than Between Between Over
1 year 1 2 5 years
and 2 and 5
years years Undated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 31 December 2012
Assets
Cash and cash equivalents
(excluding banking subsidiaries) 86,872 - - - - 86,872
Loans and advances to
banks by banking subsidiaries 175,084 - - - 218 175,302
Loans and advances to
customers of banking
subsidiaries 23,201 3,418 10,575 103 7,209 44,506
Trade and other receivables 35,795 1,078 - - - 36,873
Other investments 3,993 - - - 50,501 54,494
--------- ------- -------- -------
324,945 4,496 10,575 103 57,928 398,047
Liabilities
Deposits by banks at
banking subsidiaries 2,832 - - - - 2,832
Customer accounts held
at banking subsidiaries 190,804 2,123 6,789 103 79 199,898
Trade and other payables 39,855 - - - - 39,855
Borrowings 5,590 42 50 24 - 5,706
Provisions 456 221 450 - - 1,127
Other non-current liabilities - - - 107 - 107
--------- ------- -------- -------
239,537 2,386 7,289 234 79 249,525
At 31 December 2011
Assets
Cash and cash equivalents
(excluding banking subsidiaries) 79,638 - - - - 79,638
Loans and advances to
banks by banking subsidiaries 181,056 - - - 222 181,278
Loans and advances to
customers of banking
subsidiaries 16,246 5,116 6,997 823 7,330 36,512
Trade and other receivables 33,156 967 - - - 34,123
Other investments 5,829 - - - 28,545 34,374
--------- ------- -------- -------
315,925 6,083 6,997 823 36,097 365,925
Liabilities
Deposits by banks at
banking subsidiaries 1,024 1,800 900 - - 3,724
Customer accounts held
at banking subsidiaries 191,050 1,706 2,423 823 71 196,073
Trade and other payables 42,605 - - - - 42,605
Borrowings 7,310 72 79 30 - 7,491
Provisions 214 150 450 - - 814
Other non-current liabilities - - - 111 - 111
--------- ------- -------- -------
242,203 3,728 3,852 964 71 250,818
Included in loans and advances to banks by banking subsidiaries
repayable in less than 1 year is GBP139,210,000 (2011:
GBP133,642,000) repayable on demand and GBP35,874,000 (2011:
GBP47,414,000) repayable within 3 months.
Included in loans and advances to customers of banking
subsidiaries repayable in less than 1 year is GBP7,615,000 (2011:
GBP7,952,000) repayable on demand, GBP10,438,000 (2011:
GBP5,137,000) repayable within 3 months and GBP5,148,000 (2011:
GBP3,157,000) repayable between 3 and 12 months.
Included in other investments repayable in less than 1 year is
GBP3,993,000 (2011: GBP5,829,000) repayable between 3 and 12
months.
Included in deposits by banks at banking subsidiaries repayable
in less than 1 year is GBP2,631,000 (2011: GBP459,000) repayable on
demand, GBPnil (2011: GBP355,000) repayable within 3 months and
GBP201,000 (2011: GBP210,000) repayable between 3 and 12
months.
Included in customer accounts held at banking subsidiaries
repayable in less than 1 year is GBP155,390,000
(2011: GBP130,695,000) repayable on demand, GBP26,529,000 (2011:
GBP55,041,000) repayable within 3 months and GBP8,885,000 (2011:
GBP5,314,000) repayable between 3 and 12 months.
Included in borrowings in less than 1 year is GBP5,499,000
(2011: GBP7,012,000) repayable on demand.
39 Principal subsidiary and associated undertakings
Subsidiary undertakings
The principal operating subsidiary undertakings of the group at
31 December 2012, which are wholly owned and incorporated in Great
Britain unless otherwise stated, were:
Principal
country
of operation
Agriculture and horticulture
Amgoorie India Limited (Incorporated in India - 99.8
per cent. holding) India
C.C. Lawrie Comércio e Participacões Ltda.
(Incorporated in Brazil) Brazil
Eastern Produce Cape (Pty) Limited (Incorporated in
South Africa) South Africa
Eastern Produce Kenya Limited (Incorporated in Kenya
- 70.0 per cent. holding) Kenya
Eastern Produce Malawi Limited (Incorporated in Malawi
- 73.2 per cent. holding) Malawi
Eastern Produce South Africa (Pty) Limited (Incorporated
in South Africa - 73.2 per cent. holding) South Africa
Goodricke Group Limited (Incorporated in India - 78.5
per cent. holding) India
Horizon Farms (An United States of America general
partnership - 80.0 per cent. holding) USA
Kakuzi Limited (Incorporated in Kenya - 50.7 per cent.
holding) Kenya
Koomber Tea Company Limited (Incorporated in India) India
Longbourne Holdings Limited Bangladesh
Stewart Holl (India) Limited (Incorporated in India
- 92.0 per cent. holding) India
Engineering
Abbey Metal Finishing Company Limited UK
AJT Engineering Limited UK
AKD Engineering Limited UK
British Metal Treatments Limited UK
GU Cutting and Grinding Services Limited UK
Loddon Engineering Limited UK
Food storage and distribution
Affish BV (Incorporated in The Netherlands) The Netherlands
Associated Cold Stores & Transport Limited UK
Wylax International BV (Incorporated in
The Netherlands) The Netherlands
Trading and agency
Linton Park Services Limited UK
Robertson Bois Dickson Anderson Limited UK
Banking and financial services
Duncan Lawrie Limited UK
Duncan Lawrie Asset Management Limited UK
Duncan Lawrie Holdings Limited UK
Duncan Lawrie (IOM) Limited (Incorporated Isle of
in Isle of Man) Man
Investment holding
Affish Limited UK
Assam Dooars Investments Limited UK
Associated Fisheries Limited UK
Bordure Limited UK
John Ingham & Sons Limited UK
Lawrie (Bermuda) Limited (Incorporated
in Bermuda) Bermuda
Lawrie Group Plc (Owned directly by the
company) UK
Lawrie International Limited (Incorporated
in Bermuda) Bermuda
Linton Park Plc (Owned directly by the
company) UK
Unochrome Industries Limited UK
Western Dooars Investments Limited UK
Associated undertakings
The principal associated undertakings
of the group at 31 December 2012 were:
Group
interest
Principal in equity
country
of Accounting capital
operation date 2012 per cent.
Insurance and leasing
United Insurance Company Limited
(Incorporated in Bangladesh - ordinary
shares) Bangladesh 31 December 37.0
United Leasing Company Limited
(Incorporated in Bangladesh - ordinary
shares) Bangladesh 31 December 38.4
40 Control of Camellia Plc
Camellia Holding AG holds 1,427,000 ordinary shares of Camellia
Plc (representing 51.34 per cent. of the total voting rights).
Camellia Holding AG is owned by The Camellia Private Trust Company
Limited, a private trust company incorporated under the laws of
Bermuda as trustee of The Camellia Foundation ("the Foundation").
The Foundation is a Bermudian trust, the income of which is
utilised for charitable, educational and humanitarian causes at the
discretion of the trustees.
The activities of Camellia Plc and its group (the "Camellia
Group") are conducted independently of the Foundation and, other
than Mr M Dünki and Mr D A Reeves who are directors of The Camellia
Private Trust Company Limited and act as trustees of the
Foundation, none of the directors of Camellia Plc are connected
with The Camellia Private Trust Company Limited or the Foundation.
While The Camellia Private Trust Company Limited as a Trustee of
the Foundation maintains its rights as a shareholder, it has not
participated in, and has confirmed to the board of Camellia Plc
that it has no intention of participating in, the day to day
running of the business of the Camellia Group. The Camellia Private
Trust Company Limited has also confirmed its agreement that where
any director of Camellia Plc is for the time being connected with
the Foundation, he should not exercise any voting rights as a
director of Camellia Plc in relation to any matter concerning the
Camellia Group's interest in any assets in which the Foundation
also has a material interest otherwise than through Camellia
Plc.
Report of the independent auditors
Independent auditors' report to the members of Camellia Plc
We have audited the financial statements of Camellia Plc for the
year ended 31 December 2012 which comprise the consolidated income
statement, the group and parent company statements of comprehensive
income, the consolidated and parent company balance sheets, the
consolidated and parent company cash flow statements, the group and
parent company statement of changes in equity, the accounting
policies and the related notes. The financial reporting framework
that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by
the European Union and, as regards the parent company financial
statements, as applied in accordance with the provisions of the
Companies Act 2006.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors'
responsibilities set out on page 17, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's Ethical Standards for
Auditors.
This report, including the opinions, has been prepared for and
only for the company's members as a body in accordance with Chapter
3 of Part 16 of the Companies Act 2006 and for no other purpose. We
do not, in giving these opinions, accept or assume responsibility
for any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of whether: the accounting policies are
appropriate to the group's and the parent company's circumstances
and have been consistently applied and adequately disclosed; the
reasonableness of significant accounting estimates made by the
directors; and the overall presentation of the financial
statements. In addition, we read all the financial and
non-financial information in the Camellia Plc report and accounts
2012 to identify material inconsistencies with the audited
financial statements. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for
our report.
Opinion on financial statements
In our opinion:
- the financial statements give a true and fair view of the
state of the group's and of the parent company's affairs
as at 31 -December 2012 and of the group's profit and group's
and parent company's cash flows for the year then ended;
- the group financial statements have been properly prepared
in accordance with IFRSs as adopted by the European Union;
- the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the European
Union and as applied in accordance with the provisions of
the Companies Act 2006; and
- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006 and, as
regards the group financial statements, Article 4 of the
lAS Regulation.
Opinion on other matters prescribed by the Companies Act
2006
In our opinion:
- the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies
Act 2006;
- the information given in the report of the directors for
the financial year for which the financial statements are
prepared is consistent with the financial statements; and
- the information given in the corporate governance statement
set out on pages 14 to 16 with respect to internal control
and risk management systems and about share capital structures
is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
- 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 and the part of
the directors' remuneration report to be audited are not
in agreement with the accounting records and returns; or
- certain disclosures of directors' remuneration specified
by law are not made; or
- we have not received all the information and explanations
we require for our audit; or
- a corporate governance statement has not been prepared by
the parent company
Under the Listing Rules we are required to review:
- the directors' statement, set out on page 13, in relation
to going concern;
- the parts of the corporate governance statement relating
to the company's compliance with the nine provisions of
the UK Corporate Governance Code specified for our review;
and
- certain elements of the report to shareholders by the board
on directors' remuneration.
John Waters (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
25 April 2013
Notes:
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
For further enquiries please contact Camellia Plc
Malcolm Perkins, Chairman
01622 746655
25 April 2013
This information is provided by RNS
The company news service from the London Stock Exchange
END
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