TIDMCAM
RNS Number : 3100N
Camellia PLC
31 May 2022
CAMELLIA PLC
Final results for the year ended 31 December 2021
2021 Highlights
-- Adjusted profits before tax were significantly lower in 2021
than in 2020:
* Overall, the Group's average tea selling price was
higher in 2021 but avocado volumes and prices were
significantly down
* Profits from macadamia and our arable farm in Brazil
were higher
* Profits were significantly affected by strategic
changes to the Agriculture portfolio:
Bardsley England, a significant apple producer, was purchased
at the end of July 2021. Significant steps are being taken
to restructure and cut costs so that the business can reach
its full profit potential and also allow Camellia to reduce
its high corporation tax rate. In the comparative period,
Horizon Farms in California, which generated GBP4.5 million
profit in 2020 but was subject to severe climate risk, was
sold.
* Profits from Instant tea, branded tea and tea rooms
improved despite the continuing impact of Covid
lockdowns on demand for our Jing branded teas
-- Net cash of GBP46.5 million and an investment portfolio with
a market value of GBP35.8 million at 30 April 2022
Strategic developments
-- Continued investment to expand agriculture via diversification
of crop and location, including the purchase of Bardsley
England
-- Sale of non-core loss making businesses: Abbey Metal Finishing,
Atfin and BMT
-- Sale underway of other non-core assets: sale of residential
property and items from the collections generated net proceeds
of GBP3.8 million so far in 2022 and a gain on sale of GBP1.4
million. These will be reflected in the 2022 results.
Outlook
-- The Board recommends a final dividend of 102p per share increasing
the total dividend for the year to 146p, reflecting its confidence
in the outlook for the Group
-- Outlook for 2022 is positive overall with both revenues and
profits expected to be ahead of 2021 as previously reported
Malcolm Perkins, Chairman, stated:
"Camellia withstood a range of challenges in 2021, several of
which were unprecedented. The combination of these and the
long-term decision in 2020 to exit Horizon Farms in climate
challenged California, and the purchase of Bardsley England in the
UK in 2021 meant that Group profit was significantly impacted. That
said, the resilience and commitment of our people has enabled us to
continue to focus on our strategy of expansion in areas of
expertise while divesting non-core businesses.
2022 has started well with good prices being achieved in the
Kenya tea market and a strong opening for India and Bangladesh,
albeit early in the season. The remaining crops are developing in
line with our expectations for the stage of the growing cycle with
volumes ahead of those of 2021. The impact of substantial rises in
energy prices and in fertiliser costs is being felt across all our
agriculture operations and we expect rising inflation to also lead
to further increases in wages. Overall however, we expect higher
profits in the year ahead."
Financial highlights
Year ended Year ended
31 December 2021 31 December 2020
GBP'm GBP'm
Revenue 277.2 291.2
Adjusted profit before tax* 8.8 16.0
Separately disclosed significant items (1.7) (8.2)
Profit before tax 7.1 7.8
Profit/(loss) after tax for the year 4.5 (0.8)
Earnings/(loss) per share 83.3 p (181.0) p
Total dividend for the year 146 p 144 p
* Profit before tax excluding separately disclosed significant
items, details of which can be found in note 1 and note 4 to the
Accounts later in this announcement
This announcement contains inside information for the purpose of
Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
ENQUIRIES
Camellia Plc 01622 746655
Malcolm Perkins, Chairman
Tom Franks, Chief Executive
Susan Walker, Chief Financial Officer
Panmure Gordon (UK) Limited 020 7886 2500
Nominated Adviser and Broker
Erik Anderson
Emma Earl
Maitland/AMO
PR
William Clutterbuck 07785 292617
CAMELLIA AT A GLANCE
We are an international Group - a global family of companies
focussed on agriculture across the world. Headquartered in the UK
we are passionate about our produce, our communities and
sustainable agriculture worldwide.
We grow healthy life-enhancing products for a world hungry for
ethically produced natural food.
Our purpose
We are committed to doing the right thing: ethically and
commercially, globally and locally.
We invest for the long-term:
-- Delivering performance for investors - but not at the
expense of sustainability long-term
-- Treating our customers and suppliers fairly
-- Acting as a custodian of our agricultural resources
-- Being a responsible and forward-thinking employer
-- Behaving as a good citizen in the countries in which
we operate
Sustainability
Our businesses can and should grow with respect and care for the
environment and the communities in which we operate rather than at
a cost to them. We invest in innovative technology and cutting-edge
agricultural practices to ensure that these environments and
communities are protected and enhanced.
Innovation
Research into, and development of, agricultural techniques and
technology allows us to continually improve efficiency and
sustainability within our operations. Innovation is not only a
driving force for improved profitability but also a powerful tool
to reduce our environmental impact and benefit our communities.
Long-termism
We see ourselves as custodians, holding our business in trust
for future generations. We have a responsibility to ensure the
growth and continuity of all our businesses.
Economic contribution
Each of our operations plays a significant role in its local
economy, infrastructure and community. Our contribution includes
employee wages and benefits, smallholder crop procurement, training
in agronomic practices, contracting local service providers,
capital investment, taxes, community projects and exports.
Our business is made up as follows:
Agriculture
2021: Revenue - GBP238.8 million, adjusted trading profit*
GBP13.1 million, trading profit GBP13.2 million
Mature Immature
Area Area
Tea Locations Ha Ha
India, Bangladesh, Kenya,
Production & Manufacturing Malawi 34,097 2,485
Instant Tea, Branded
Tea &
Tea Rooms India, UK
Nuts & fruits
Macadamia Kenya, Malawi, South Africa 2,906 786
Avocado Kenya, Tanzania 623 377
Apple, Pear, Blueberry,
Plum,
Cherry, Apricot, Grapes UK, Kenya, South Africa 798 103
Other agriculture
Forestry Kenya, Malawi, Brazil 1,981 2,685
Arable Brazil 3,888 -
Rubber Bangladesh 1,822 153
Livestock Kenya 4,332 head
Other investments
Food Service and Engineering
2021: Revenue - GBP37.3 million, adjusted trading loss* GBP2.3
million, trading loss GBP2.3 million
Locations
AJT Engineering UK
ACS&T UK
Market
value
at 31/12/2021
Investments Locations GBP'm
Investment Portfolio Global 40.2
Investment Property UK, Malawi, Brazil 34.4
Collections UK, India 8.7 **
Associates
2021: Share of results after taxation -
GBP7.2 million
Market
value
at 31/12/2021
Holding
Locations % GBP'm
BF&M (Life & Non-life
insurance) Bermuda 37.4 57.7
United Finance (Banking) Bangladesh 38.4 13.0
United Insurance
(Non-life insurance) Bangladesh 37.0 9.3
* Figures quoted above are extracted from note 1 to the
Accounts
** Collections are stated at cost
DIRECTORS AND ADVISERS
Directors Malcolm Perkins Chairman (iii) (iv)
Tom Franks Chief Executive
Graham Mclean Director of Agriculture
Susan Walker Chief Financial O cer
Non-executive Director
Stephen Buckland* (i)
Independent non-executive
Gautam Dalal Director (i)
William Gibson
Senior independent non-executive
Director** (i) (ii) (iii)
(iv)
Non-executive Director
Simon Turner (ii) (iii)
Frédéric Independent non-executive
Vuilleumier Director
Senior independent non-executive
Chris Relleen*** Director
Independent non-executive
Jonathan Bond**** Director (iv)
Independent non-executive
Rachel English***** Director
(i) Audit committee
(ii) Remuneration
committee
(iii) Nomination committee
(iv) Safeguarding and Stewardship committee
*From 1 November 2021
**From 11 August 2021
***Until 5 August
2021
****Until 3 June 2021
*****From 6 May 2022
Group General Counsel Amarpal Takk (iv)
& Company Secretary
Registered office Linton Park
Linton
Maidstone
Kent ME17 4AB
Registered Number 00029559
Nominated adviser Panmure Gordon (UK)
and Limited
broker One New Change
London EC4M 9AF
Registrars Link Group
10th Floor
Central Square
29 Wellington Street
Leeds LS1 4DL
Independent auditors Deloitte LLP
Statutory Auditors
1 New Street Square
London EC4A 3HQ
PR Maitland/AMO
The HKX Building
3 Pancras Square
London N1C 4AG
Website www.camellia.plc.uk
CHAIRMAN'S STATEMENT
2021 has been another challenging year for all our staff and the
communities in which we operate as they have continued to work
through the pandemic and the on-going impact it has had on
operations globally. We have seen inspiring collaboration with
local governments and communities as they have pulled together to
deal with the consequences of the pandemic.
The results for 2021 reflect a profit before tax of GBP7.1
million after a number of one off items with an aggregate net costs
of GBP1.7 million (2020: profit before tax of GBP7.8 million after
one off net costs of GBP8.2 million). Profits were also impacted by
the important long-term strategic changes made in the last two
financial years to the Agriculture portfolio.
Strategy
Despite the unprecedented challenges, the resilience and
commitment of our people has enabled us to continue to focus on our
strategy of expansion in areas of expertise, while divesting
non-core businesses. We noted in our 2021 Interim Report that the
Board was undertaking a series of measures aimed at re-balancing
the Group's portfolio of investments in order to take better
advantage of its strengths, and thereby improve profitability and
share price performance. Significant steps have been taken to
diversify our interests in agriculture where we have scale and
expertise, and sell those businesses where we have fewer long-term
strategic advantages.
Further details are provided in the Operational report.
Dividend
Reflecting confidence in the Group's long-term future, the Board
is recommending a final dividend in respect of the year ended 31
December 2021 of 102p per share increasing the total dividend for
the year to 146p per share.
Outlook
With significant uptake of vaccines, there are signs of the
world returning to normality, but we do not believe that normal
trading conditions will emerge until 2023 at the earliest, and may
be further delayed by the disastrous war in Ukraine.
The substantial rise in energy prices will continue to affect
our global supply chain, with an increase in the cost of shipping
affecting us and our customers alike. Linked to the increasing
price of natural gas, fertiliser prices have increased
substantially with the impact being felt in the cost of production
across all our agricultural operations. Furthermore, rising
inflation will to lead to further increases in wages.
On a more positive note, the year has started well for our
agricultural operations with good prices being achieved in the
Kenya tea market and a strong opening for India and Bangladesh,
albeit it is very early in the season. The remaining crops are
developing in line with what we would expect at this stage in the
growing cycle.
Directors
We were deeply saddened by the passing of Chris Relleen, Senior
independent non-executive Director, in August 2021. We shall all
remember Chris' contribution to the Board and miss his wise
counsel, humility and humour.
I am delighted to welcome our new non-executive Directors,
Rachel English and Stephen Buckland. Rachel English, a chartered
accountant, has extensive international and general management
experience, having founded and served on the board of several
significant businesses. She has a particular focus on ESG matters.
Stephen Buckland is a trustee of The Sir Percival Griffiths' Tea
Planters Trust and also The Camellia Foundation, a UK charity whose
primary donor of the same name is the ultimate majority shareholder
of Camellia Plc. Stephen previously held positions within the
Camellia Group's agricultural and banking businesses.
As announced previously, Tom Franks, having substantially
achieved the objective of focusing the Group's investments into the
core activities of agriculture and food and beverage distribution,
has indicated his
wish not to stand for re-election at the forthcoming Annual
General Meeting in June. I would like to thank Tom for his
contribution to the business through a challenging few years and we
wish him well for the future. The Board is initiating a search
process to identify a new CEO.
In addition, and as previously announced, two of our independent
non-executive Directors, William Gibson and Gautam Dalal, have also
indicated that they will not be standing for re-election at the
forthcoming Annual General Meeting. I would like to thank both of
them for their contributions to the business. Further appointments
of new non-executive Directors to the Board will be announced in
due course.
Staff
I am grateful to our staff around the world for their continued
hard work and dedication in challenging circumstances, and for the
progress we have made together.
Malcolm Perkins
Chairman
30 May 2022
OPERATIONAL REPORT
Overview
2021 was a challenging year, with the COVID pandemic continuing
to impact trading. Poor weather conditions in India and lower
production in Kenya resulted in lower bought leaf volumes which
contributed to Group tea production being slightly lower than in
2020. Avocado revenues significantly reduced due to lower volumes
and prices. These falls were in part offset by revenues generated
by Bardsley England, which was acquired during the year but which
saw volumes impacted by the late frost earlier in the season.
Revenue for 2020 included the results for Horizon Farm, which was
sold during that year. Profits were impacted by these important
strategic changes to the Agriculture portfolio.
Strategic matters
As previously announced, the Group continues to focus on its
strategy to expand the Agriculture division continuing the further
diversification of crop and location, and on disposing of non-core
assets.
Acquisitions and divestments
At the end of July 2021 the Group acquired an 80% controlling
stake in Bardsley England with the remaining 20% stake purchased in
November. The Group's expertise in managing large scale bearer
crops and its existing relationships with Bardsley England's
customer base and other major UK retailers will provide synergies.
The acquisition provides a larger Group footprint in the UK, which
will in time reduce our effective corporation tax rate. The market
for UK apples has good potential to grow significantly due to
increasing demand for local produce and a resulting reduction in
apple imports.
In line with the Group's strategy to focus on agriculture, the
Group sold its interests in Abbey Metal Finishing Company Limited
in August 2021 and its subsidiary Atfin GmbH in Germany in July
2021. In late December 2021, the BMT division of AJT Engineering
was sold to its management. Part of the Camellia Collection was
sold at auction in the early part of 2022 with further items due to
be sold later in the year.
Ukraine
We have all been deeply disturbed by the reports coming out of
Ukraine, and I am pleased to say that our Bardsley England
operation in Kent has successfully accommodated a number of
refugees and provided employment.
The war is impacting the Group in a number of ways of which the
following are the most significant at this stage:
-- The price of energy has risen significantly since before
the start of the war and continues to rise. This is impacting
directly on fuel and heating costs, and indirectly on
the costs of other inputs, such as fertiliser, which
rely on natural gas as a raw material.
-- Shipping routes and supply chains which were already
chaotic following the pandemic have been thrown into
further disarray with both shipping times and costs rising
dramatically.
-- For the last few years Russia has been the world's third
largest importer of tea. Whilst there does not appear
to have been any impact on tea prices at this stage it
remains early in the season for India and the impact
that sanctions will have on the market remains uncertain.
COVID
Whilst our businesses were able to keep trading throughout the
pandemic, they were all affected to some extent, whether through
lockdowns and absences interrupting operations, or market
disruption. The Group's operations continued to protect employees
and communities, whilst taking account of a wide variation in
national and cultural responses to the pandemic. All our operations
have continued to work closely with local governments, communities
and the Group's clients in their response to the COVID
pandemic.
Human Rights
As a consequence of the allegations faced by the Group in
2020/21 which have now been finalised, we have further enhanced our
Human Rights commitment including greater governance, reporting and
training and we have established significant measures around
employee and community welfare. Current information on these
measures can be found on the Camellia Plc website.
Brexit
Extensive preparations were undertaken ahead of Brexit to
mitigate the impact on our UK businesses in 2021 and although the
supply to the EU of our Jing branded tea was affected, we did not
experience any material e ect on our trading operations as a
whole.
Performance
Agriculture
In total, Agriculture made a trading profit of GBP13.2 million
(2020: GBPnil) on revenue of GBP238.8 million (2020: GBP249.6
million), as set out in note 1 to the Accounts. The release of
provisions for wage agreements offset by the restructuring costs
for Bardsley England amounted to a net gain of GBP0.1 million
(2020: GBPnil). Our 2020 results were also impacted by a number of
one off items, the largest of which were costs of GBP16.1 million
in respect of legal and other costs associated with the allegations
arising from the actions of certain of our African operations.
Agriculture's adjusted trading profit* was GBP13.1 million
(2020: GBP16.1 million).
Tea
Instant tea,
Tea estate production branded
& manufacturing tea & tea rooms
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Revenue 161.5 163.9 34.7 37.0
Adjusted trading profit/(loss)* 10.7 7.1 (0.5) (1.4)
Trading profit/(loss) 11.3 (5.5) (0.5) (1.4)
* See note 1 to the Accounts
Estate production & manufacturing
Group tea production in 2021 was 99.1mkg, marginally down on
2020 levels (2020: 99.5mkg) due to lower bought leaf volumes in
India. However, we achieved record production in Bangladesh where
the impact of our investment in irrigation and replanting provided
positive returns. Kenya and Malawi experienced high crops, both
nationally and at the Group's operations.
Mature Immature 2021 2020
area area Volume Volume
Ha Ha mkg mkg
India 16,400 1,125 26.1 26.1
Bangladesh 8,591 683 14.4 12.5
Kenya 3,891 267 14.9 15.8
Malawi 5,215 410 20.0 16.8
------ -------- ------ ------
Total own estates 34,097 2,485 75.4 71.2
------ -------- ------ ------
Bought leaf production 19.2 23. 5
Managed client production 4.5 4.8
------ ------
Total made tea production 99.1 99.5
------ ------
Pricing and operations
Tea pricing for most operations was above that of last year,
with our estates being rewarded for concentrating their efforts on
the production of high quality teas. Total sales volumes were
lower.
Shipping logistics have been a challenge throughout the year
with many delivery delays experienced by customers. With volatile
trading conditions persisting into 2022, shipping logistics will
take some considerable time to settle, particularly with the recent
flooding impact at Durban Port in South Africa in April 2022.
India
Our estate crop for 2021 was on par with last year. The impact
of continued poor and varied weather meant that our crop did not
recover to 2019 levels.
Our net selling prices firmed significantly for both Dooars and
Assam CTC teas from demand in the internal packet tea market, up
over 10% against the prior year. Darjeeling prices were up on prior
year by 11%, due to good quality and improved first flush volumes.
2022 has seen the last of the limited tea stocks left over from
2021 sold and the first auction of the new season opened in March
2022 with strong pricing. The market has remained firm for the
early part of the new season and going forward pricing will be
determined by regional production volumes and demand.
The Assam Orthodox (rolled leaf tea) market, however, was down
3% on prior year as it continued to be impacted by ongoing
political and economic volatility in Iran which subdued demand and
kept prices relatively flat.
North India market pricing overall has remained strong due to
limited supply and is supported by 100% import tariffs. North India
export volumes were down c.9%, with prices in the export market
remaining under pressure with reduced sales of Orthodox tea.
State elections were held in Assam and West Bengal in March
2021, with no change to the incumbent Governments in each State.
Wage negotiations were concluded in both States resulting in 22%
and 15% increases in Assam and West Bengal respectively.
Investment in replanting continued with 167Ha of planting
completed (2020: 164Ha) and a further 120Ha uprooted in preparation
for future planting.
Bangladesh
Despite a slow, dry start to the season, Bangladesh reported a
record crop up 15% on the prior year. The impact of several years
of investment in replanting and irrigation contributed to our
improved yields.
Our average net selling price remained strong through the
season, up 20% on prior year, with limited COVID restrictions
allowing local demand to flourish whilst being supported by very
low volumes of imports.
National production achieved record levels at 12% up on prior
year, principally as a result of a 40% increase in bought leaf
volumes. The continued rapid escalation of the bought leaf sector
volumes, if left unchecked, presents challenges to the market with
a risk that potential oversupply results in downward pressure on
pricing.
2022 has seen prices remain under pressure for prior season teas
due to the high volumes of inventory carried forward. The market
for new season teas has started firm and is expected to remain
relatively stable as stocks are now depleted and the new season
production has yet to gain momentum. Pricing thereafter will be
driven by the level of production over the summer months.
Wage negotiations for 2021/2022 are ongoing between the
Bangladesh Tea Association and the Trade Unions and are due to be
settled imminently. Provisions have been made for expected
increases relating to 2021.
Having reduced replanting in 2020 to concentrate on infilling
young tea areas, the total area planted in 2021 was increased to
143Ha (2020: 105Ha), of which 131Ha was replanting and 12Ha was
newly planted areas.
Kenya
Our Kenyan estates produced their second highest ever crop in
2021, albeit down 8% on the previous year. The national crop was
also the second highest on record.
As a part of many ongoing initiatives to address structural
issues within the tea industry in Kenya, the Government in July
implemented a reserve pricing mechanism for The Kenya Tea
Development Agency ("KTDA") teas which make up over c.66% of the
national production. This intervention has had a positive impact on
prices for higher quality teas within the Kenyan market, including
those produced by the Group. The "all average price" at Mombasa
auction was 3% up on 2020, driven principally by improved quality
teas. Export levels were c.9% up on 2020 with strong demand from
Pakistan, Egypt, Russia, UAE and Sudan. Low retail pricing and
increased competition from other beverages in western markets
continues to be a challenge for the industry.
Our average selling price in 2021 was up on prior year by 6%. We
have continued to outperform our commercial grower competitors in
the district with a price differential of 16%, by concentrating on
quality. In 2022 our prices continued to firm initially but then
weakened towards the end of the first quarter with predictions of a
normal long rains season. In aggregate, our average selling prices
in the five months to the end of May 2022 were significantly higher
than the same period of 2021 though the benefit of this has been
partially offset by lower production volumes. Pricing levels
looking forward will depend on production volumes and the impact of
the reserve pricing policy for KTDA teas.
Wage rates increased by 7% for 2020 and 2021 and negotiations
are ongoing for 2022 and 2023.
We replanted a total of 50Ha (2020: 47Ha) whilst uprooting 52Ha
for replanting in 2022.
Malawi
Our Malawi crop in 2021 was the second highest on record, up 15%
on 2020, with strong cropping throughout the year and good out of
season rains at the mid-year point.
Fertiliser prices in 2021 increased by 45%. The impact of this
on the cost of production was mitigated by careful management of
usage.
Malawi prices remained under pressure for much of the year with
teas from the plainer West of Rift Kenyan's still proving a value
substitute to buyers. Our average selling price was 3% down on 2020
due to the lag effect of prices responding to an improving Kenyan
market. The auction was temporarily suspended in the early part of
2021 due to the previously reported lack of clarity around
interpretation of VAT rules on local sales for export.
Global logistics issues, including a lack of containers and
delayed shipping times, has resulted in deliveries taking much
longer to reach customers.
While selling prices in 2022 in Malawi have firmed, they are
below those of the same period of 2021. The market is expected to
be volatile for a period due to uncertainty relating to logistics
and will also be influenced by the general direction of the Kenya
market. Our production volumes in Malawi for the year so far are in
line with that of last year.
A minimum wage was implemented for the tea industry in Malawi in
January 2021. Negotiations are ongoing with the union, with further
increases expected from August 2022.
On 26 May 2022, the Reserve Bank of Malawi announced that it
will stop supporting the currency and allow the exchange rate to
reflect market fundamentals. This is expected to result in a
devaluation of the Kwacha of c.25%.
There was no replanting in Malawi for a second successive year,
a decision taken to conserve resources in light of difficult
trading conditions.
Instant tea, branded tea & tea rooms
India
Sales volumes of our packet tea in India fell by 14%, whilst net
prices increased by 11%. Despite increasing demand for tea, packet
sales have come under pressure due to fierce competition in the
branded market. However, the packet tea operation has continued to
innovate with new product development and the release of new
product lines in Ready to Drink, fortified (health) teas and
premium tea bags.
Instant tea production in 2021 was up marginally on the previous
year. Sales volumes and average prices however were both down 10%
due to lower demand from a key customer, leading to a lower
contribution from the operation.
Due to COVID lockdowns, our tea lounges and kiosks were closed
periodically during 2021. These outlets continue to be developed as
part of the India marketing and value addition strategy.
UK
Trading improved for Jing Tea as COVID restrictions were eased
in many of its markets, but revenue remained below pre-pandemic
levels. Supplies into the EU have also been impacted by Brexit with
the business contracting for EU warehousing space during the year
to alleviate import complexities. Jing launched its Ready to Drink
Jasmine Pearls Sparkling Tea in 2021, which has gained initial
positive traction in the market.
Nuts & fruits
Macadamia Avocado Other fruits
2021 2020 2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 10.8 13.0 11.1 16.8 9.3 8.7
Adjusted trading
profit/(loss)* 2.7 1.0 (0.5) 3.9 (4.1) 2.9
Trading profit/(loss) 2.7 (0.1) (0.5) 1.9 (4.6) 2.9
* See note 1 to the Accounts
Macadamia
Mature Immature
Area Area 2021 2020
Ha Ha Tonnes Tonnes
Malawi 1,388 125 438 403
South Africa 751 396 375 196
Kenya 767 265 492 455
------ -------- ------ ------
Total 2,906 786 1,305 1,054
------ -------- ------ ------
The Group's production volumes increased 24% on 2020 due to
improved weather in South Africa, and an increased crop in Kenya
with further areas of maturing orchard coming into bearing and
increasing maturity of existing orchards.
Overall, our average net selling price was down 16% on 2020,
which was in part due to the large volume of nuts of industrial
grade from the Group's Malawian operation. Sales volumes were up
60% on 2020. Profits benefitted from the efficiencies generated by
higher production and favourable sales mix.
Harvesting of the 2022 crop is underway and the indications are
that volumes will be ahead of 2021 levels.
Global production volumes were up on prior year with the two
major producers, Australia and South Africa up 10% and 11%
respectively. Higher carryover stocks from Australia and Kenya are
anticipated in 2022 with downward pressure on prices, particularly
on grades for the ingredients market.
The Nut in Shell market in China was over supplied and prices
declined mid-year leading to surplus kernel supply, particularly
for the ingredients grades which further suppressed the market.
The global macadamia kernel market remains under pressure due to
the ongoing impact of COVID on certain market segments. In the USA,
import levels were similar to 2020 but remain approximately 30%
below 2018/19 levels.
Avocado
Mature Immature
Area Area 2021 2020
Ha Ha mkg mkg
Kenya - Estate Hass 560 257 7.5 10.1
Kenya - Estate Pinkerton 63 70 1.0 0.8
Tanzania - Estate Hass - 50 - -
------ -------- ---- ----
Total own estate production 623 377 8.5 10.9
------ -------- ---- ----
Smallholder and outgrowers 0.6 1.1
---- ----
Our own Avocado production was down 22% on last year, due in
large part to the biannual nature of the production and this also
impacted the volumes packed for smallholders and outgrowers. Our
pricing was down 9% on last year, due to high volumes in the market
from Peru and Colombia during a critical sales window.
Unfortunately, due to the lower volumes the season could not be
extended to take advantage of improved pricing at the end of
Q3.
The Pinkerton harvest is well advanced with volumes ahead of
2021, however we expect prices to be lower. The Hass season has now
started with volumes expected to be significantly ahead of 2021
reflecting the fact that it is an 'on year' for Hass.
We continue to strengthen our avocado growth strategy by
diversifying our origin portfolio, with further plantings in
Tanzania and Kenya. We planted 37Ha (2020: 13Ha) at our new farm in
Tanzania and a further 44Ha (2020: 85Ha) in Kenya. In 2022 to date
96Ha have been planted in Tanzania. At Beja farm in South Africa
80Ha has been prepared to be planted in 2022, of which 38Ha has
already been planted.
Other fruits
Mature Immature
Area Area 2021 2020
Ha Ha Tonnes Tonnes
Apples - own estate 404 61 11,845 n/a
Apples - partner growers 1,428 n/a
Pears - own estate 96 2 1,395 n/a
Pears - partner growers 266 n/a
Cherries 20 - 106 n/a
Grapes 71 18 644 594
Blueberries 10 - 42 13
Other 197 22
Apples & Pears
Bardsley England was acquired at the end of July and we have
taken significant steps to improve costs and profitability
including closing one of its two packhouses and streamlining its
administrative operations. The benefit of these will be seen in
2022. The orchards were severely affected in April 2021 by frost
resulting in a lower than expected level of apple production.
Partner grower crops were also similarly adversely affected.
The last of the 2021 season stock is being sold at prices in
line with our expectations. It is too early to predict the crop
profile for 2022.
Grapes
Grape production at our South African operation was up 8% on
2020. The grapes were high quality and were sold to local
commercial-scale winemakers. The 2022 harvest in South Africa has
resulted in a record production, well ahead of expectation.
Blueberries
2021 was the second year of full production of our 10Ha trial in
Kenya, with production rising steadily, although it is still below
where we would like it to be. The majority of the crop was sold
locally at good prices.
Indications from the trial are that the variety planted does not
perform optimally in Kenyan conditions and that other varieties
will have to be considered. There are already other varieties being
trialled in small areas and at least one of these is showing much
greater potential than the current dominant variety planted. The
reason for establishing a trial was to test plant establishment,
agronomy practices and varieties and this is being achieved very
successfully, particularly on the initial two objectives. The
results indicate further work is required on optimal variety
selection, which will continue to be the focus going forward.
Other agriculture
2021: Revenue - GBP11.4 million (2020: GBP10.2 million), trading
profit GBP4.8 million (2020: GBP2.2 million)
Mature Immature
Area Area 2021 2020
Ha Ha Tonnes Tonnes
Arable 3,888 - 34,769 34,979
Rubber 1,822 153 690 659
m(3) m(3)
Forestry 1,981 2,685 46,079 116,672
Livestock 799 Births 956 Births
Arable
Despite some challenging weather, we were overall very pleased
with our soya, maize and sorghum crop production results. Prices
for our soya crop were 60% higher than the prior year and our
sorghum prices more than doubled, reflecting global markets. This
led to substantially increased profits for our operation in
Brazil.
Rubber
Production was up 5%, with pricing up 39% on last year, due to
increased demand from manufacturing sectors and also an increased
price for petroleum-based synthetic rubber products. However,
prices remain lower than the cost of production.
Forestry
Kakuzi's forestry volumes were on par with last year with the
main focus on fence post sales. The production of quality timber
products are also being investigated as a potential diversified and
value-added product line.
Our Brazil operations had no eucalyptus timber sales during the
year but expects to restart these in 2022. Pine timber sales were
more than double the previous year and resin sales continued
throughout the year, both providing a useful contribution to
profits.
Livestock
Births were down significantly on last year, however, revenues
were up on last year as COVID restrictions were eased.
Goat production was introduced at Kakuzi during the year. It is
anticipated that the herd will provide a diversified source of
revenue to complement beef sales.
Other investments
Engineering - AJT Engineering, Abbey Metal Finishing and
Atfin
A trading loss of GBP2.3 million (2020: GBP1.5 million loss) on
revenue of GBP15.3 million (2020: GBP19.3 million) was recorded
across this group of companies, as set out in note 1 to the
Accounts.
AJT Engineering has continued to experience lower activity from
the oil and gas sector, but its site services division has seen an
increase in trading as COVID related restrictions were lifted and
access to client sites was restored.
In line with our strategy, the Group sold its interests in Abbey
Metal Finishing Company Limited and its subsidiary Atfin GmbH in
Germany during the year.
AJT Engineering's BMT division was sold to its management in
December 2021.
Food Service - ACS&T
ACS&T broke even in the year (2020: GBP0.5 million trading
profit) on revenue of GBP22.0 million (2020: GBP21.2 million).
ACS&T's trading was challenging as a result of the impact of
the COVID pandemic on the UK food service sector. The national LGV
driver shortage in the UK has also affected margins in its
transport division, though volumes have increased. 2022 has started
much stronger following the lifting of COVID restrictions.
Associates
2021 Share of results: 7.2 million
BF&M
BF&M made a substantial contribution to our performance in
2021 recording net income up 19% at Bermudian $25.7 million (2020:
Bermudian $21.6 million) due to a 15% uplift in gross premiums
written in the period compared to the prior year. This was driven
by increased property and group health premiums and new business.
Short term claims and adjustment expenses increased by 53% to
Bermudian $14.8 million while life and health policy benefits
decreased by 24% to Bermudian $77.5 million.
United Finance and United Insurance
Our two associate companies in Bangladesh, United Insurance and
United Finance, produced lower results reflecting more challenging
economic conditions in Bangladesh due to the COVID pandemic.
The underwriting profit for United Insurance decreased due to a
decrease in gross premiums, higher claims and increased cost of
reinsurance.
While United Finance's net operating income was 6% higher than
that of the prior year due to an increase in the number of new
loans sanctioned and lower borrowing costs, margins were impacted
due to the effect of inflation on the overhead base.
Investment portfolio
The total value of the portfolio at 31 December 2021 was GBP40.2
million (2020: GBP50.6 million). During the year a net GBP12.4
million was realised from the investment portfolio in part to fund
the acquisition and refinancing of Bardsley England.
Investment property
Work continues on the development of the Linton Park estate. The
development of two properties into three residential units started
in May 2021 and these are due for completion by mid-2022. Following
refurbishment in 2020, a further investment property in central
London was let during the year.
Renovation work commenced at Wrotham Place during the year to
convert it to residential use.
In terms of the Group's London property portfolio, the decision
was made during the year to close the Group's offices at 1 Hobart
Place. A residential property in central London was sold in
February 2022. Both these properties were categorised as "held for
sale" at 31 December 2021.
Collections
Part of the art and manuscript collection with a net book value
of GBP2.7 million was classified as held for sale on the Group's
balance sheet at the end of 2021, and is scheduled for sale during
2022. To date, a portion of this has been sold realising proceeds
of GBP3.0 million and generating a gain on sale of GBP1.0 million
which will be reflected in our 2022 results.
Tom Franks
Chief Executive
30 May 2022
FINANCIAL REPORT
Overview of results
Revenue for the Group fell to GBP277.2 million from GBP291.2
million in 2020. This reflected the 4% reduction in revenue in
Agriculture to GBP238.8 million (2020: GBP249.6 million) as a
result of lower tea crops, reduced packet tea sales volumes at
improved prices in India, and reduced production volumes and prices
of avocado, offset in part by the revenues of Bardsley England
acquired part way through the year. 2020 revenue also reflected the
results of Horizon Farms which was sold during that year. Revenue
at ACS&T improved in the year despite the challenges presented
by COVID lockdowns. Revenue from Engineering was down reflecting
the sales of Abbey Metal Finishing and Atfin.
Adjusted profit before tax was GBP8.8 million (2020: GBP16.0
million). Adjusted profit before tax is before net costs of GBP1.7
million relating to a number of large separately disclosed items,
further details of which are set out in note 4 to the Accounts and
below. (2020: separately disclosed net loss of GBP8.2 million also
relating to a number of large separately disclosed items).
Profit before tax in 2021 was GBP7.1 million (2020: GBP7.8
million). This decrease in profit before tax reflects, inter alia,
the effect of the lower profits from avocado and the impact of the
Bardsley England acquisition offset in part by improved profits
from tea and at BF&M. The 2020 results included profits for
Horizon Farms of GBP4.5 million which was sold during 2020 due to
concerns about the severe climate risks in California. In addition
2021 profit before tax reflects a number of separately disclosed
items:
-- Restructuring costs at Bardsley England of GBP0.5 million
-- Costs of acquisition of Bardsley England of GBP1.2 million
-- A gain resulting from wage provision releases following
wage agreements reached in the year of GBP0.6 million
-- Impairment charges in relation to the property, plant
and equipment relating to Abbey Metal Finishings and
a related loss on sale of that business as reported in
our interim results, totalling GBP0.6 million
The profit after tax for the year ended 31 December 2021 was
GBP4.5 million (2020: Loss after tax GBP0.8 million).
In addition, our financial assets recorded at fair value through
other comprehensive income (part of the investment portfolio)
recorded a post tax gain of GBP1.8 million which has been reflected
in Other Comprehensive Income.
Equity attributable to the owners of Camellia was up at GBP389.8
million (2020: GBP376.6 million) with net cash and cash equivalents
net of borrowings of GBP54.0 million (2020: GBP90.1 million) and
financial assets at fair value through profit or loss (money market
funds) of GBP7.2 million (2020: GBP5.3 million).
Acquisition
The acquisition and subscription for new shares to obtain an 80%
interest in Bardsley England on 31 July 2021 resulted in goodwill
arising on acquisition of GBP3.6 million. GBP2.2 million of the
purchase price is deferred with part payable in 2022 and the
balance due in 2023.
In November 2021, the remaining 20% was acquired for GBP1.7
million in cash. At the same time, a loan due to Bardsley England
by BX Technologies (previously part of the Bardsley family's group)
of GBP1.1 million was repaid.
Impairments
The impairment to the goodwill relating to Abbey Metal Finishing
arises from the losses incurred in the period prior to sale.
COVID and Ukraine impacts
As set out in the Operational report on page 7, our businesses
are currently operating broadly as normal despite the ongoing
pandemic and the uncertainty arising from the war in Ukraine. Our
experience over the last two years has given us valuable insight
into how the pandemic impacts our markets and our operations.
Although the war in Ukraine has had limited impact on the Group to
date, there remains uncertainty about how it might impact the tea
market and input costs going forwards. Accordingly, we continue to
take actions to conserve cash by focusing on e ciencies, minimising
our operating costs and focusing capital expenditure across the
Group.
However, with our substantial cash resources, our investment
portfolio and limited gearing, we continue to be well placed to
withstand a further period of disruption to our operations and
sales.
Currencies
Over the course of the year, Sterling strengthened against the
majority of our operating currencies. This has resulted in a loss
on foreign exchange translation of GBP4.0 million (2020: loss
GBP22.6 million) which is reflected in the Statement of
Comprehensive Income. Had we translated our profit before tax for
the year using the same average rates as last year, our results for
2021 would have been GBP1.7 million higher. Our profit before tax
includes an exchange gain of GBP0.4 million on transactions during
the year (2020: gain GBP2.2 million).
On 26 May 2022, the Reserve Bank of Malawi announced that it
will stop supporting the currency and allow the exchange rate to
reflect market fundamentals. This is expected to result in a
devaluation of the Kwacha of c.25%.
Cash
The Group's net cash position reduced to GBP59.9 million at 31
December 2021 (2020: GBP94.9 million) reflecting, inter alia, net
cash outflows from continuing operating activities of GBP11.9
million (2020: inflow GBP12.9 million).
We spent GBP11.6 million on investment in our existing
operations and investment property and incurred a net cash outflow
in the year of GBP9.6 million acquiring 100% of Bardsley England.
Investment portfolio disposals net of reinvestments contributed
GBP12.4 million to financing cashflows in the year.
Group borrowings in the form of loans amounted to GBP5.9 million
at the end of the year (2020: GBP4.8 million).
We expect capital expenditure in 2022 to be higher than our
depreciation charge and in excess of recent historical levels as we
continue to invest in our key strategic growth priorities.
As previously highlighted, a number of the Group's key trading
subsidiaries have minority shareholders such that when cash is
repatriated to the UK by way of dividends, those minorities are
entitled to their share of the relevant dividend. In a number of
cases, withholding taxes are also payable from our share of those
dividends.
Funds are reserved within our subsidiary companies to ensure
wherever possible a level of headroom exists against the risk of
crop losses and adverse price movements, such as are possible as a
result of COVID and the Ukraine conflict and to fund long-term
development projects.
Taxation
The Group's e ective tax rate of 36.6% (2020: 110.3%) reflects
the use of current year UK trading losses to offset taxable gains
arising on investment disposals. The tax charge also reflects the
recognition of a significant deferred tax liability relating to the
surplus on the UK Pension Scheme.
The acquisition of Bardsley England will bring a UK profit
stream for the Group which is expected to assist in reducing the
Group's effective tax rate in future.
Following discussions with the Bangladesh Revenue Authority
regarding the withholding tax rate applicable to branch
remittances, this liability has increased to GBP3.4 million. These
discussions have facilitated the remittance of significant funds to
the UK.
Tax and other provisions
As is normal at this time of the year, we have ongoing wage
negotiations relating to prior periods in Bangladesh and India. We
consider we have made adequate provision for their likely
outcome.
Despite progress being made during 2021, we continue to have a
number of significant uncertain tax situations totalling GBP13.7
million, which have been disclosed previously and which are
detailed in note 41 to the Accounts.
Pensions and other employment benefits
The Group operates a number of defined benefit pension schemes,
the largest of which is in the UK.
The 2020 triennial valuation for the UK scheme, concluded early
in 2021, shows a funding surplus and no contributions are required
to be made to the scheme for the next three years. On an IAS 19
basis, at the end of 2021 the UK scheme had a surplus of GBP14.7
million.
The overseas defined benefit schemes are located in Bangladesh
and India. Our businesses in Kenya, India and Bangladesh also have
obligations to pay terminal gratuities based on years of service
and, in some cases, based on salaries.
In aggregate, our employee benefit schemes currently show a net
surplus on an IAS 19 basis of GBP5.1 million (2020: GBP16.6 million
deficit).
Accounting for defined benefit schemes is prescribed by IAS 19
and the quantum of the deficit continues to be highly sensitive to
small changes in assumptions as regards wage inflation and gilt
yields in the relevant jurisdictions and to asset performance. This
year a net actuarial gain of GBP20.4 million (2020: gain GBP4.3
million) is reflected in the Statement of Comprehensive Income. The
net gain this year arises primarily from the UK scheme where strong
asset performance and the e ect of higher interest rates benefited
the Scheme.
Our Income Statement also reflects current and past service
costs of GBP1.8 million (2020: net cost GBP2.2 million) and GBP0.8
million (2020: GBP0.7 million) in respect of employee benefit
interest cost.
Susan Walker
Chief Financial O cer
30 May 2022
ENVIRONMENTAL AND SOCIAL REPORT
At Camellia, ESG (Environmental, Social and Governance) is
integral to our business. We believe that the success of all our
operations is fundamentally connected to the communities and
environments, including the wider supply chains, in which we
operate. Our Group ESG report ("Custodianship") published in 2020
illustrates not only the ESG initiatives undertaken across the
Group but also explains the Group's approach to each of these
principles. We intend to publish our next edition of Custodianship
later this year. We have aligned ourselves to seven of the United
Nations Sustainable Development Goals ("SDGs"):
-- SDG 3: Good health and well being
-- SDG 4: Quality education
-- SDG 5: Gender equality
-- SDG 6: Clean water and sanitation
-- SDG 8: Decent work and economic growth
-- SDG 13: Climate action
-- SDG 15: Life on land
The Group's ESG initiatives are based on our fundamental belief
that we are custodians of our operations, ensuring they undergo a
process of continuous improvement. This enables them to be passed
on to the next generation whilst caring for the environments in
which they are based and for those communities who depend on
them.
The Group's approach to ESG is the responsibility of the
Strategy group (as described on page 40) which is supported in
certain key areas by the Safeguarding and Stewardship committee
which is described in more detail below. The boards of the Group's
operating companies closely consider their respective governance
protocols and the environmental impact of their ongoing operations
and investment decisions, with regard to both Group requirements
and local regulations and legislation. The Group's approach to
Governance is set out in the Corporate Governance report.
Environmental
Climate change is a significant risk to the Group's agricultural
operations. We seek to mitigate the impact of this risk by
diversifying our agricultural production in both origin and crop.
We also continue to plant more drought resistant crop varieties and
use other initiatives, such as restorative farming methods and
sustainable irrigation.
In addition to minimising our environmental impact, we protect
and enhance forests and water bodies for local flora and fauna. The
material environmental impacts that arise from the Group's
operations fall broadly into three categories: (i) greenhouse gas
emissions from on-site combustion of fuels to power the tea factory
driers; (ii) use of fertilisers; and (iii) extraction of water for
irrigation of crops. Water is extracted from a variety of sources,
but we seek to maximise rainwater capture by creating large
reservoirs wherever possible from which to irrigate
sustainably.
The Group also oversees c.11,100Ha of indigenous forests and
conservation areas and a further 7,500Ha of commercial forestry
(eucalyptus, pine, cypress). These areas, in combination with
fields of perennial crops sequester significant amounts of carbon
and act as an important carbon sink, which once quantified will
offset some of the Group's emissions. We have estimated
sequestration of our core crops and our managed eucalyptus estates,
which we comment on in more detail below.
We use appropriate partners to support the Group in achieving
environmental protection and emission footprint reduction
initiatives and are continuously exploring technologies that can
reduce our environmental footprint. In addition to minimising our
environmental impact, we protect and enhance forests and water
bodies for local flora and fauna.
Environmental reporting
The Group continues to report under SECR (Streamlined Energy
& Carbon Reporting) Regulations, which is set out in the rest
of this section. The Group has not been subject to any
environmental fines during the reporting period.
Global GHG emissions (excluding UK) and energy use data for the
year to 31 December
Reporting year 2021 2020*** 2019***
Group sectors reported Global Global Global
(Excluding (Excluding (Excluding
UK) UK) UK)
Emissions from combustion of LPG and Natural
gas (Scope 1) (tCO(2) e) 24,008 21,555 25,350
Emissions from combustion of diesel and
petrol for transport and onsite combustion
(Scope 1) (tCO(2) e) 14,866 15,324 17,501
Emissions from the combustion of coal (Scope
1) (tCO(2) e) 71,000 80,217 88,377
Emissions from combustion of firewood and
other fuels (Scope 1) (tCO(2) e) 3,816 3,819 3,558
Emissions from fertilisers, waste, livestock,
land use change and refrigerants (Scope
1) (tCO(2) e) 43,163 43,312 46,290
Emissions from purchase of electricity
for own use (Scope 2, location-based) (tCO(2)
e) 41,958 42,717 47,625
Emissions from purchase of electricity
for own use (Scope 2, market-based*) (tCO(2)
e) 41,942 42,717 47,625
Emissions from purchase of electricity,
heat, steam, and cooling purchased for
own use (Scope 2, location- based) (tCO(2)
e) 41,958 42,717 47,625
Emissions from business travel in rental
cars or employee-owned vehicles where company
is responsible for purchasing the fuel
(Scope 3) (tCO(2) e)** 132 n/a n/a
Total gross Scope 1 & Scope 2 emissions
(location-based) (tCO(2) e) 198,811 206,944 228,701
Total gross Scope 1 & Scope 2 emissions
(market-based) (tCO(2) e) 198,795 206,944 228,701
Intensity ratio: Kg CO(2) e/Kg of made
tea 1.29 1.40 1.51
Energy equivalent from combustion of LPG
and Natural gas (Scope 1) (GWh) 130.5 117.0 137.2
Energy equivalent from combustion of diesel
and petrol for transport and onsite combustion
(Scope 1) (GWh) 61.5 62.8 71.0
Energy equivalent from the combustion of
coal (Scope 1) (GWh) 219.4 250.4 266.3
Energy equivalent from combustion of firewood
and other fuels (Scope 1) (GWh) 250.9 247.2 227.7
Electricity purchased for own use (Scope
2) (GWh) 91.4 90.5 95.5
Renewable electricity generated for own
use (Scope 2) (Gwh) 0.9 0.9 0.6
Energy equivalent from business travel
in rental cars or employee-owned vehicles
where company is responsible for purchasing
the fuel (Scope 3) (GWh)** 0.5 n/a n/a
* 2020 is the first reporting period for which we reported our
scope 2 market-based emissions
** 2021 is the first reporting period for which we reported our
scope 3 business travel in rental cars or employee-owned
vehicles
*** Due to increased granularity of our Scope 1 and 2 reporting
we have restated 2019 and 2020
Changes in Scope 1 & Scope 2 emissions
The Group's Scope 1 & 2 location-based emissions (excluding
UK) reduced by 4% during the reporting period. This was primarily
due to a reduction in volumes of made tea produced in India,
partially offset by an increase in volumes in Bangladesh. In the
tea drying process the Indian operations rely on coal and the
Bangladesh operations rely on natural gas. Where possible, and with
infrastructure permitting, cleaner fuel sources and efficiency
improvements are being implemented. For example, installation of
natural gas turbines, and investments in hydro-electric
generators.
We report the made tea intensity ratio (2021:1.29kg CO(2) e per
kg of made tea; 2020: 1.40kg) and we continue to invest to improve
the carbon e ciency of our tea factories. We are happy to report
that in 2021 there has been an 8% decrease in the Group's
location-based made tea carbon intensity, mainly due to lower
production in India. We are also pleased to observe that our Kenyan
and Malawian tea operations have continued to improve both thermal
and electrical energy efficiency in their tea factories.
As mentioned above, the Group's perennial crops sequester
significant amounts of carbon. In last year's annual report, we
reported that we conducted a study with Ricardo Plc to estimate the
volume of carbon sequestered by the Group's key crops and managed
forestry. Sequestration forms an integral part of the Group's
ambitions to become net zero and we are assessing how to implement
this.
UK GHG emissions and energy use data for the year to 31
December
Reporting year 2021 2020 2019
Group sectors reported UK UK UK
Emissions from combustion of LPG and Natural
gas (Scope 1) (tCO(2) e) 1,202 1,591 1,939
Emissions from combustion of diesel and
petrol for transport and onsite combustion
(Scope 1) (tCO(2) e) 4,087 3,744 5,069
Emissions from combustion of other fuels
(Scope 1) (tCO(2) e) 362 88 122
Emissions from fertilisers, waste, livestock,
land use change, and refrigerants (Scope
1) (tCO(2) e) 67 13 17
Emissions from purchase of electricity
for own use (Scope 2, location-based) (tCO(2)
e) 4,408 5,130 5,316
Emissions from purchase of electricity
for own use (Scope 2, market-based*) (tCO(2)
e) 1,171 32 n/a
Emissions from purchase of electricity,
heat, steam and cooling purchased for own
use (Scope 2, location- based) (tCO(2)
e) 4,408 5,130 5,316
Emissions from business travel in rental
cars or employee-owned vehicles where company
is responsible for purchasing the fuel**(Scope
3) (tCO(2) e) 15 n/a n/a
Total gross Scope 1 & Scope 2 emissions
(location-based) (tCO(2) e) 10,126 10,566 12,463
Total gross Scope 1 & Scope 2 emissions
(market-based) (tCO(2) e) 6,889 5,468 n/a
Energy equivalent from combustion of LPG
and Natural gas (Scope 1) (GWh) 6.5 8.6 10.5
Energy equivalent from combustion of diesel
and petrol for transport and onsite combustion
(Scope 1) (GWh) 17.3 15.6 20.8
Energy equivalent from combustion of other
fuels (Scope 1) (GWh) 1.4 0.3 0.5
Electricity purchased for own use (Scope
2) (GWh) 20.8 22.0 21.5
Energy equivalent from business travel
in rental cars or employee-owned vehicles
where company is responsible for purchasing
the fuel (Scope 3) (GWh) 0.01 n/a n/a
* 2020 is the first reporting period for which we reported our
Scope 2 market-based emissions. The increase in market-based
emissions in 2021 was primarily due to the inclusion of Bardsley
England.
** 2021 is the first reporting period for which we reported our
Scope 3 business travel in rental cars or employee-owned
vehicles.
Environmental certifications
AJT Engineering and ACS&T are ISO 14001 certified. The
framework of which helps the entities improve building energy
efficiency, reduce waste streams, and increases awareness of
potential environmental risk factors. Many of our global operations
are Rainforest Alliance certified and some are Global G.A.P.
certified.
Energy efficiency action taken
In the period covered by the report, the Group's operations have
implemented a range of energy e ciency initiatives. We set out some
of the key examples below:
Expected
Saving
per
annum
Operation Energy Saving Initiatives (MWh)
Installation of a heat exchanger to recycle hot
Kenya air from the boiler
chimney, preheating the air entering driers at
one of its tea factories 680
Installation of fast close doors at cold stores,
UK reducing the amount of
ambient air flow 600
Variable speed drives fitted to air inlet fans
Kenya on tea driers at four of its tea factories 249
Upgrading steam traps at one tea estate, reducing
India steam losses,
and increasing efficiency 230
In aggregate, we expect the above energy saving initiatives and
several smaller initiatives to result in 2.3 GWh saving in energy
per annum.
In addition, the Group is continuing with its programme of
replacing existing energy sources with renewable energy sources,
amounting to an additional 227 MWh in 2021. The main initiatives to
date include the installation of solar generation at several
operations in India, Bangladesh, Kenya and Brazil, as well as the
installation of hydro turbines in India. In the UK most sites are
on green tari electricity contracts. The Group's operations have
also assessed potential energy e ciency initiatives that can be
implemented over the next five years. We set out examples of the
key initiatives below:
Operation Energy Saving Initiatives
Malawi Replacing steel withering fans with lightweight alternatives
Malawi Introduction of more energy efficient driers at its
tea factories
Kenya Improved fuelwood management and site suitability at
all tea factories
Kenya Variable speed drives fitted to air inlet fans for tea
driers
Kenya Installation of heat exchangers to recycle exhaust heat
Kenya Conversion of inefficient irrigation water pumps to
energy efficient units
India Replacement of lighting with more energy efficient LED
lighting
UK Replacement of the transport fleet with more fuel-efficient
vehicles
UK Installation of fast close doors at cold stores, reducing
the amount of ambient air flow
We expect the above initiatives to provide significant savings
in energy over the next five years. The Group will continue with
its program of replacing existing energy sources with renewable
energy sources where possible. Our ultimate intention is to set
energy use reduction targets across our operations.
Social
The Group's businesses are fundamentally connected to the
welfare of the communities and environments in which we operate. We
proactively invest to ensure these environments are protected and
improved. Our focus is on the long-term stability, security and
continuity of our businesses and those communities. To this end we
are working with our supply chain, customers, national governments,
trade unions and NGOs to improve of the livelihoods of our
employees and their communities.
Healthcare, education and housing
Healthcare, education and housing continue to be integral parts
of the Group's operations. For example, the majority of our tea
estates in India and Bangladesh have a hospital and a qualified
doctor, in addition to central referral hospitals owned and managed
by the operations. Our African businesses run dispensaries
established on their estates, o ering medical services and care to
employees, their dependents, and people from surrounding
communities. These are manned by qualified medical personnel from
our operations and services are free to employees and their
dependents. Across the Group we continue to operate 50 hospitals
and 85 dispensaries that we either own and/or operate. In 2021, the
Group performed 880,000 patient treatments, of which 515,000
treatments were for Group employees, at its hospitals.
In many of our operations we provide childcare and education to
our employee's families from nursery up to secondary school. During
the year we continued to run 178 nurseries and creches, 76 primary
schools and six secondary schools. In total we educated more than
32,000 children. In certain circumstances, our operations will
provide land or other resources to contribute to the running of
local schools which are not owned and/or operated by us.
We also provide housing to a large number of employees and their
families. The housing is owned and managed by our Group operations
and is provided and maintained in line with widely recognised
international certifications. The Group owns c.48,000 houses
accommodating c.291,000 people, of whom c.67,000 are employed.
2021 continued to be a year impacted by the effects of the COVID
pandemic. Our operations have made significant efforts to provide
safe working and living environments for our employees as well as
the wider communities in which we operate. More information on
these initiatives is contained in our ESG report.
Human Rights
We are determined to promote the safeguarding of Human Rights
across our Group and its supply chains.
The Board has decided to enhance its governance and safeguarding
oversight functions to comply with the UN Guiding Principles on
Business and Human Rights and has established a Safeguarding and
Stewardship committee which is further described on page 42. The
purpose of the committee is to promote the highest standards in
protecting and promoting Human Rights across the Group and an
internationally respected firm of specialists has been appointed to
enable our larger Group companies to review their Human Rights
positions and to assist them in making improvements where
necessary. Our Group wide Human Rights Policy and Social Code of
Conduct is also designed to support Group companies in their
efforts to continually improve the development and operation of
their individual policies and procedures in this regard.
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
Appendix to Environmental & Social report
SECR reporting methodology
The scope of the reporting for SECR purposes was determined by
including the businesses in which the Group owns majority holdings
and/or fully operates. It includes GHG (Greenhouse Gas) emissions
and energy use by businesses that were divested during the
reporting period up to the date of transfer of risk and reward
pertaining to those businesses. Similarly, it includes business
that were acquired during the reporting period from the date of
transfer of risk and reward pertaining to those businesses. The
reporting period aligns with the Group's financial reporting
period. The reported figures are an aggregation of emissions and
energy consumption by the Group's reporting units. A reporting unit
is defined as a geographically located operating entity or group of
entities. For example, the India group of companies is defined as
one reporting unit. Within a reporting unit distinction is made
between di erent sites, field operations and factory
operations.
The conversion and emission factors used in calculating the
Group's emissions are as per those published by the UK Department
for Business, Energy & Industrial Strategy and the UK
Department for Environment, Food and Rural A airs (Defra), which
are in line with the GHG Protocol guidance. The non-UK electricity
emission factors are sourced from the International Energy Agency
for Scope 2 location-based reporting. For Scope 2 market-based
reporting they are sourced directly from the electricity suppliers,
where available. For global (excluding UK) market-based emissions
in regions where renewable energy certificate ("REC") systems are
not developed, market-based emission factors are calculated using
location-based grid average emission factors. For UK market-based
emissions, where supplier specific emission rates could not be
determined due to unavailability of data, UK residual mix emission
factors were used.
A standardised reporting tool is used to capture the Group's
environmental and energy data. Year on year trends in the data are
analysed and understood. Where estimates are used these are
disclosed and assessed in terms of magnitude as part of the overall
data quality.
Every e ort is made to ensure the environmental data that we
report is accurate. However, should more accurate or complete data
be available for prior years, we will restate if it results in a
movement of at least 5% in the reported data. We may restate carbon
emissions even when there is no change in consumption data, due to
corrections to the emissions factors provided by Defra.
The Scope 3 element pertaining to energy use and CO2e emissions
from rental cars or employee-owned vehicles where the company is
responsible for purchasing the fuel or where the company reimburses
the employee for the fuel has been estimated based on an estimate
of the kilometres travelled by employees under this category. We
did not estimate this category for prior years since its share of
the Group's total carbon footprint is relatively immaterial.
STRATEGIC REPORT
Business review
The Company is required to set out in this report a fair review
of the business of the Group during the year ended 31 December 2021
and a description of the principal risks and uncertainties facing
the Group. A fair review of the business of the Group is
incorporated within the Chairman's statement and the Operational
report on pages 5 to 18. The Chairman's statement and the
Operational report, together with information contained within the
report of the Directors, highlight the key factors affecting the
Group's development and performance. Further details of the
financial performance and position of the Group are set out in the
Financial report on pages 16 to 18. Other matters are dealt with
below.
Group strategy
The Board has adopted the following strategy for the Group:
-- To develop a worldwide group of businesses requiring
management to take a long-term view
-- The achievement of long-term shareholder returns through
sustained and targeted investment
-- Investing in the environment and sustainability of the
communities in which we do business
-- Setting the principles which the operating companies
need to achieve through their policies and procedures
to ensure that the quality and safety of their products
and services meet the highest international standards
-- The continuous refinement and improvement of the Group's
existing businesses using our internal expertise and
financial strength
The progress against this strategy during the year is set out in
further detail in the Operational report, the Environmental and
Social report, and within the Report of the Directors.
Business model
The Group consists of operations engaged in Agriculture, Other
Investments and Associates. These operations are managed on a
divisional basis with regular reports made to the Board on
performance against the annual budget. Each operation is expected
to perform against an agreed strategy with goals and targets for
the short, medium and long-term. These are summarised below.
Agriculture
To focus on our tea, macadamia, avocado and newly acquired apple
crops, where we have scale and geographic diversity, and further
maintain our portfolio of crops and products in order to retain the
diversity of location and crop which has historically proven so
valuable in spreading the Group's political and commodity price
risk. Where appropriate opportunities arise, to add to our
production capability in bearer plant agriculture, as well as to
make aligned acquisitions and investments to enable us to capture
more of the value chain.
With all our Agricul t ure operations we will have regard to the
potential threats arising from politics and the impact of climate
change , particularly in water stressed areas and will adapt our
portfolio of operations accordingly.
Other investments & Associates
AJT Engineering. To keep our presence in the oil services sector
under review, in line with our strategy of expansion in areas of
expertise, while divesting in non-core businesses.
ACS&T . To keep our presence in the cold storage and
transport sector under review in line with our Group strategy to
focus on core areas of expertise.
Investment portfolio. The Group has a portfolio, principally of
listed investments, the strategy for which remains to invest in
high quality companies where we believe that there is long-term
value. This portfolio also enables us to balance our geographic
risk exposure.
Investment property . Maintain the existing portfolio and
maximise returns from it. Part of the portfolio may be sold to
accelerate the Group's investment in agriculture.
Collections. The Group has collections of art, philately and
manuscripts, part of which may be realised to facilitate the
increased focus on our core agricultural business.
Associates . The Group has three associate companies in the
financial services sector of which BF&M, the listed Bermudian
insurance business is the most significant. With all our
Associates, we continually monitor our investment and may increase
or decrease our holding in the future.
S172 statement
This section 172 statement should be read in conjunction with
the Environmental and Social report, this Strategic report, the
Corporate Governance report and the Statement of Directors'
Responsibilities.
In performing their duty under section 172(1) (a) to (f) of the
Companies Act 2006, Directors have acted in a way that they have
considered, in good faith, to promote the success of the Group as a
whole, whilst carefully considering the interests of shareholders
and other stakeholders which have an impact on the long-term
success and sustainability of the Group, including suppliers,
customers, employees, the communities in which the Group operates
and the impact on the environment.
Long-term
The Board has undertaken a series of measures aimed at
re-balancing the Group's portfolio of investments in order to take
better advantage of its strengths, and thereby to improve
profitability. This included investment in social and environmental
initiatives, in particular, to mitigate the impact of climate
change. These measures include accelerating agricultural
diversification and divesting of certain assets which we consider
to be non-core, details of which are covered elsewhere in this
report. Key risks, potential impact and mitigations are included in
the "Principal Risks and Uncertainties" section below.
Stakeholders
The Board recognises the value of stakeholder relationships and
the key role that these play in the Group's sustainability and
success over the longer term. Good progress has been reported from
the Safeguarding and Stewardship committee as it continues to
support members of the Group in initiatives to protect and promote
Human Rights and a peaceful, long-term and mutually beneficial
relationship between the activities of businesses within the Group
and the communities affected by them. Many environmental and social
initiatives are initiated by staff in our operations each year,
which we highlight on our website, various social media platforms
and in the Group's ESG report. Further information can be found in
the Environmental and Social report.
In order to track progress made, and in line with our culture of
ongoing feedback, a second annual employee engagement survey, Your
Voice, was undertaken during 2021. The survey gathered anonymous
and open feedback from employees to support local management
decisions as well as to provide Board insights. All employees in
the UK were invited to respond, including from Bardsley England.
Key questions from the survey were also put to a proportion of
employees in our largest companies outside of the UK, which
provided further insight. The results of the survey are continuing
to be used to plan key initiatives and track progress on key areas
such as recognition, development, leadership, mental health and
wellbeing and feedback on how employees feel their company has
continued to respond to the COVID pandemic. The positive trends
identified included confidence in the communications and working
practices related to the COVID pandemic, understanding of company
goals and values and how individual performance contributes to the
success of the Group. Opportunities to improve were agreed in
partnership with employees at a company level and examples include
continued clear and open communication, ongoing performance
management and feedback, and a continued focus on learning and
development. Your Voice will be repeated in 2022 to continue the
momentum of ongoing employee feedback.
We have worked closely with our suppliers and customers to
manage the challenges and disruption caused by the COVID pandemic
and have continued to develop our relationship with these
stakeholders across our operations through consistent engagement
and regular meetings.
Further examples of how the views of stakeholders are provided
to the Board include the annual cycle of information from
management reporting, committees and meetings and operational
visits in the UK and abroad. The Board conducts regular reviews of
how to continue to engage effectively with stakeholders and there
is on--going dialogue between members of the Board and
stakeholders.
Principal risks and uncertainties
There are a number of possible risks and uncertainties that
could impact the Group's operations. The Group regularly monitors
these risks at operational and Group level, i.e. operational risks
are raised by the operations directly to members of the Strategy
group; Group risks are reviewed by the Group General Counsel and
raised to the Audit committee; and risks considered and raised to
the Strategy group are further raised to the Board. Information on
the Group's financial risks is disclosed in note 42 of the
Accounts.
Material risks relating to the Group's principal operations,
with additions and updates for 2021, are noted in the table below.
Whilst there has been a decrease in the overall risk and potential
impact to the Group in relation to UK and Overseas Pensions, Legal
& Regulation and prolonged impact of a pandemic, the Group
considers that there has been an increase in overall risk and
potential impact in relation to the cost of production (increased
cost of fuel and fertiliser) and from the war in Ukraine. The
overall materiality of individual risks or magnitude of impact on
the Group as a whole in other areas has not changed significantly
from the previous year.
Agriculture
Risk Potential Impact Mitigation
------------------------------------ ------------------------------------ --------------------------------------
Climate change Current agricultural patterns and Geographical spread of operations to
practices become unsustainable. lessen the impact of extreme weather
Land values and local communities on the Group as
are impacted. a whole.
Flooding/drought/frost affecting Investment in irrigation, water
crop yields. storage and drought resistant crop
varieties.
Investment in sustainable water
solutions, soil management, energy
saving initiatives and
renewable energy sources.
------------------------------------ ------------------------------------ --------------------------------------
Price volatility Fluctuations in commodity prices Use of forward contracts, product and
impact profitability each season. In crop diversification and building
the event of a prolonged long-term strategic
depression in the world tea market relationships with key customers.
the impact on the Group would be
material.
------------------------------------ ------------------------------------ --------------------------------------
Currency fluctuation Profit volatility arising from sales Monitoring of foreign exchange rates
in US Dollars and Euros where there and cash management.
is no natural hedge
against the cost of production in
local currency.
------------------------------------ ------------------------------------ --------------------------------------
Cost of production Increased wage costs, cost of inputs Introduction of more efficient working
and other costs of production practices and the increased use of
resulting in lower profitability. mechanisation and
Wage costs and inputs have been automation.
included in 2021. Securing fertiliser and chemical
supply contracts in advance of
delivery requirement has been
included in 2021.
------------------------------------ ------------------------------------ --------------------------------------
Long-term political issues over land Potentially losing access to farms Monitoring changes to local land
ownership and estates or paying more for legislation with the assistance of
existing property (for example lawyers and local trade
if freeholds become leaseholds). associations. Maintaining
collaborative relationships with
governments at local and national
levels.
------------------------------------ ------------------------------------ --------------------------------------
Civil unrest, political instability Periodic interruptions to the Increasing security for our workers
and war operation of the businesses at a and operations during times of civil
War has been included as a potential local level. unrest.
risk in 2021 Supply chain disruption, lack of Maintain market supply options and
availability of key inputs. carrying buffer stocks.
Reduced demand for products. Maintaining diverse customer base.
------------------------------------ ------------------------------------ --------------------------------------
Corruption Inability to carry on business in a Strict adherence to anti-bribery
manner which is legal and ethical. legislation and the implementation of
the Group Principal
Polices.
------------------------------------ ------------------------------------ --------------------------------------
Health and safety Vulnerability of the employees to Strict compliance with legislation and
injury at work due to the use of training employees to adopt safe
machinery and chemicals. working practices.
Payment of fines and claims, Regular external compliance reviews.
criminal prosecutions and
reputational damage.
------------------------------------ ------------------------------------ --------------------------------------
Human Rights Adverse impact on financial results The following has been updated in
(current and historic) from legal and reputational costs. 2021:
Media and political Understanding the salient Human Rights
pressure impacting operations or risks (via audits and assessments).
customers preparedness to buy Implementing measures
products. to mitigate and prevent such risks
from crystalising.
Provide on-going training and raising
awareness across the Group and
communities.
Strengthening governance protocols, by
way of policies and increased
reporting.
Providing appropriate mechanisms to
bring forward any allegations and
redress (such as whistleblowing
and operational-level grievance
mechanisms).
------------------------------------ ------------------------------------ --------------------------------------
AJT Engineering
Risk Potential Impact Mitigation
------------------------------------ ------------------------------------ --------------------------------------
Key customer dependence Losing a major customer. Diversification of the customer base
and careful customer relationship
management.
------------------------------------ ------------------------------------ --------------------------------------
Dependence on the oil and gas sector Changes in market conditions leading Diversification into other sectors.
to lower demand for services. Close monitoring of the oil and gas
sector.
------------------------------------ ------------------------------------ --------------------------------------
Health and safety Vulnerability of the employees to Strict compliance with legislation and
injury at work due to the use of training employees to adopt safe
machinery and chemicals. working practices.
Payment of fines and claims and Regular external compliance reviews.
reputational damage.
------------------------------------ ------------------------------------ --------------------------------------
ACS&T
Risk Potential Impact Mitigation
------------------------------------ ------------------------------------ --------------------------------------
Key customer dependence Losing a major customer. Diversification of the customer base
and careful customer relationship
management.
------------------------------------ ------------------------------------ --------------------------------------
Health and safety Vulnerability of the employees to Strict compliance with legislation and
injury at work due to the use of training employees to adopt safe
machinery and chemicals. working practices.
Payment of fines and claims, Regular external compliance reviews.
criminal prosecutions and
reputational damage.
Investments & Associates
Risk Potential Impact Mitigation
------------------------------------ ------------------------------------ ------------------------------------
Market Decline in the value of investments Portfolio diversification, careful
and property. stock selection, the regular
monitoring of individual company
stock performance and a diversified
property portfolio.
------------------------------------ ------------------------------------ ------------------------------------
Adverse weather events in the Risk of substantial claims Maintaining strong capital base and
Caribbean materially reducing profits. use of underwriting and reinsurance
to reduce risk.
------------------------------------ ------------------------------------ ------------------------------------
Group
Risk Potential Impact Mitigation
------------------------------------ ------------------------------------ ------------------------------------
Prolonged impact of a pandemic Interruption to production and/or Implementation of contingency plans.
disruption of supply to customers. Cost reduction and cash management
Volatile equity markets impacting measures.
the pension schemes' deficits with a Ongoing monitoring of banking
resultant increase partners and country credit ratings.
in the funding requirement.
Increased risk of bank failure, and
foreign exchange volatility
resulting in increased costs.
Risk of imposition of currency
controls leading to the inability to
remit funds from overseas
operations.
------------------------------------ ------------------------------------ ------------------------------------
UK and Overseas Pensions Increase in the pension schemes' The following has been updated in
Increases in inflation and/or deficits with a resultant increase 2021:
reductions in long-term government in the funding requirement. Regular monitoring of the funding
bond yields position of the pension schemes and
Lower than expected asset return their investment performance.
Changes in local laws restricting Improvement to the investment
the investment choices for the strategy and hedging key exposures
schemes' assets when appropriate.
------------------------------------ ------------------------------------ ------------------------------------
Environmental Contamination of local and wider Strict compliance with legislation,
environment due to the use of training employees to adopt safe
machinery and chemicals. Payment working practices and
of fines and claims, criminal lessen the impact on the
prosecutions and reputational environment.
damage. Proactively seek to reduce our
impact on the environment.
------------------------------------ ------------------------------------ ------------------------------------
Taxation Uncertainties in relation Future adjustments to taxable income Tax exposures are considered
to the interpretation of complex tax and expenses already recorded or individually, and judgements made
legislation, or arising increases to the cash with support from experienced
from changes in tax legislation tax costs incurred by the Group in tax professionals and external
Risk that the Group's judgements are future. advisors.
challenged by tax authorities
------------------------------------ ------------------------------------ ------------------------------------
Legal & Regulation Uncertainties in Group legal risk in relation to the The following has been updated in
relation to the application of activities of overseas operations 2021:
English or other law or (including potential Monitoring the interpretation of law
changes in case law litigation in the UK) and incurring and taking appropriate advice and
costs in relation to the same. monitoring and auditing
compliance with new developments.
------------------------------------ ------------------------------------ ------------------------------------
Potential cyber- threats such as Loss or theft of data. Developing our technology systems.
computer viruses Interruption to services for Investing in developing the IT
IT malfunctions or external customers and the business. skills and capabilities of our
cyber-attacks people.
Actively monitoring and mitigating
any cyber-threats and suspicious IT
activity.
Implementation of disaster recovery
plans for business critical systems.
------------------------------------ ------------------------------------ ------------------------------------
Group principal policies - GPPs
There are a range of issues that are important to the Group and
to all of our operations, whatever sector they operate in. These
are set out in the Group Principal Policies which are periodically
cascaded across the Group. Each operation is required to prescribe
its own local policies based upon the Group Principal Policies. On
an annual basis, each significant operation confirms to Group its
adherence with the Group Principal Policies. Ultimately, our
individual operations have experts who are best placed to identify
how each policy can be implemented and applied which in turn
enables them to operate responsibly and ethically over the
long-term.
Notwithstanding the fact that overall responsibility for the
implementation and enforcement of the GPPs rests with the
management of each operating company, certain GPPs (such as the
Anti-Bribery and Corruption GPP, the Modern Slavery GPP and the Tax
GPP) include provisions which are directly effective. This is the
case where observance of these provisions is required in order for
Camellia Plc to comply with its own legal and regulatory
obligations.
The GPPs can therefore be grouped into the following four
categories:
-- High-level GPPs
-- Compliance GPPs
-- Modern Slavery GPP
-- Tax Principles
The High-level GPPs comprise the Certification and Traceability
GPP, the Health and Safety GPP, the Environment GPP, the Employee
Welfare GPP and Social Code of Conduct GPP. The Compliance GPPs
comprise the Anti-Bribery and Corruption GPP, and the
Whistleblowing GPP. A summary of each principal policy is set out
below and they are set out in full on our website.
High-level GPPs
Certification and traceability
As part of our end to end supply chain, our operations are
required to meet the requirements of our customers and suppliers in
terms of certifications and traceability. The vast majority of our
tea gardens are RFA certified and all our macadamia, avocado and
winery processing facilities are FSSC 22000 certified. Across the
Group, many operations have also obtained ISO14001, ISO9001 and
ISO45001 and many other appropriate accreditations, such as Red
Tractor for our Bardsley England operation.
Health and safety
We take responsibility for our people by promoting good health
and providing a safe and healthy workplace to protect all
employees, contractors, visitors and the public from foreseeable
work hazards. All operations are required to comply with local
health and safety legislation, regulations and to obtain
certifications from external authorities.
Environmental
We are mindful of the environment in which we operate,
recognising that our operations require natural resources and that
our operations generate emissions and waste. We understand and
comply with current applicable legislation in the jurisdictions in
which we operate. Our operations are each required to commit to
policies which reduce their environmental footprint and which
include (where appropriate), carbon, recycling, waste and
water.
Employee welfare
Our employees are at the heart of what we do, and their safety
and welfare is paramount, as described in Environmental and Social
report. Operations are required to have policies and procedures in
place which cover equality, health, personal development, training,
diversity, and (where appropriate) education, housing and
sanitation.
We consciously and continuously work towards encouraging
equality in management positions across our operations. The Group
complies with local regulations to encourage employees with
disabilities to work in our operations and where necessary, makes
appropriate adjustments to working practices.
Social code of conduct
As an international Group, we have interests in companies in
various countries with very di erent levels of income and
education. We believe that it is critical that we respect the
cultures of the people of those countries but we also recognise the
important role our Group companies and their suppliers play in
helping us to source sustainably and responsibly. Our social code
of conduct ('Code') provides the foundation for our engagement with
our Group and its supply chains. It sets out our broad expectations
for their independently developed policies and procedures regarding
basic compliance with applicable law, respect for the workforce and
their Human Rights, environmental management and
anti-corruption.
Human Rights
We respect and support Group companies' efforts to respect the
dignity, wellbeing and Human Rights of the Group's employees, the
communities in which the Group operates and those who may be
impacted by the Group's operations. Our commitment to respecting
internationally recognised Human Rights in line with the principles
and guidance contained in the UN Guiding Principles on Business and
Human Rights is set out in our Human Rights Policy, which underpins
principles of internationally recognised Human Rights as relevant
to our Group's operations, including those set out in the
International Bill of Human Rights and the International Labour
Organisation's Declaration on Fundamental Principles and Rights at
Work and OECD Guidelines for Multinational Enterprises. We
recognise that while states have a duty to protect Human Rights,
companies have a responsibility to respect Human Rights and this
means acting with due diligence to avoid infringing the Human
Rights of others and addressing the adverse impacts companies may
have caused, be connected to, or be linked to.
Respecting Human Rights is not only important to us and Group
employees but is of importance to all of our shareholders,
investors, customers, consumers, the communities where the Group
operates and civil society groups. There is both a business and a
moral case for supporting the promotion of Human Rights across the
Group and its supply chain and our Group-wide Human Rights Policy
is therefore designed to support Group companies in their
development and operation of policies and procedures addressing
these standards. We understand that Human Rights often compete, and
that the resolution of these conflicts may be impossible for Group
companies to achieve to everyone's satisfaction. We also understand
that no amount of work on the part of the Group in promoting Human
Rights can wholly eradicate the risk of Human Rights being breached
by someone intent on causing harm, or careless as to whether harm
is caused. We therefore recognise this is a journey and that our
performance will evolve as we mature our practices. Despite the
possibility of imperfect outcomes we will continuously seek to
improve our Human Rights efforts.
Compliance GPPs
Anti-Bribery and corruption
The Company has adopted an anti-bribery policy which complies
primarily with the requirements of the UK Bribery Act 2010 although
the Board also requires compliance with the laws of all countries
in which the Group operates.
All Group employees, o cers and executives, and all those acting
for or on the Group's behalf are strictly prohibited from o ering,
paying, soliciting or accepting bribes or kickbacks, including
facilitation payments.
Compliance with the anti-bribery policy is monitored by the
individual operations and incidents are reported to the
anti-bribery o cer for such operation.
In addition, the Board has adopted an anti-facilitation of tax
evasion policy which complies with the requirements of the UK
Criminal Finances Act 2017. The policy has been introduced across
the Group and its compliance is monitored at Group and by
individual operations.
Whistleblowing
Our whistleblowing policy provides guidelines for people who
feel they need to raise certain issues in confidence. It is
designed to protect those raising a genuine concern, in line with
the Public Interest Disclosure Act 1998 or other jurisdictional
legislation. Each operation is required to have a designated Local
Whistleblowing O cer. Group employees have access to the
whistleblowing o cer for the individual operation, as well as the
Group Whistleblowing O cer or the chairman of the Audit
committee.
Modern slavery GPP
The Group continues to comply with the requirements of the
Modern Slavery Act 2015, to ensure that modern slavery and human
tra cking are not taking place either within the Group or in the
supply chains of our operations. A copy of the statement for the
year ended 31 December 2021 is available on the Company's website.
In some countries, it is both the cultural norm and permissible for
parents to involve their children in the production process. We do
not subscribe to this approach and the use of child labour is
prohibited across the Group. All Group operations are required to
confirm this statement and adopt local policies and procedures to
ensure continued compliance. This includes setting out codes of
conduct when working alongside customers and suppliers.
Tax principles
The Group's tax principles include: compliance with applicable
tax laws; payment of the correct tax amounts; interpretation of tax
law; undertaking tax planning based on commercial rationale; and
transparency with tax authorities.
Key financial performance indicators
The nature of the Group's principal activities is such that the
Board takes a long-term view of its operations, particularly in
Agriculture.
The Board reviews monthly reports with a range of financial and
other indicators to monitor the performance of each division
depending on the nature of its operations.
For the Agriculture division, the Board receives monthly profit
and operating performance information, data on sales prices and
volumes, costs of production and crop volumes against budget and on
a per unit basis. Rainfall and other climate data are also
considered.
For the Engineering and Food Service divisions, the Board
receives monthly profit and operating performance information.
For Investments, the value and performance of the share
portfolio is reviewed quarterly.
For Associates, the Board receives revenue and profitability
information when those companies release information to their
respective shareholders.
Certain of the key financial performance indicators are included
in the Operational report on pages 7 to 15.
Non-financial performance indicators
Operations have developed non-financial KPIs that are relevant
to it, these are regularly monitored and include:
-- Market trends - including tea auction volumes, demand
for each product by country where available, supply data
and market prices
-- Health & Safety - including days lost to injury, number
of accidents and fatalities, whistleblowing incidents
and updates to legislation
-- Grievances - including employee , welfare and social
issues
-- Industrial disputes - including days lost to strike action
and other significant employee issues
-- Land and politics - including elections, material new
regulation or case law
-- Changes in key personnel - including promotions, resignations
and retirements of senior management
-- Weather and climate - including rainfall, temperatures
and long-term meteorological trends
The Board, or the Strategy group (as appropriate), considers
such KPIs by exception where local operations notify that
significant material issues have emerged.
Employees
Employees are kept informed on matters a ecting them and the
performance of the Group by their local management as well as
through internal publications, the Camellia Plc website, social
media and operational visits. A new communication tool was
implemented at the Camellia Head O ce and two UK companies in 2021,
which provides a portal of news, updates, policies and social media
feeds, as well as the opportunity to book annual leave and access
key work related information on an automated system. Kenyan and
Indian operations have social media platforms which support
employee engagement and Kakuzi uses YouTube videos to communicate
news and information about sta and their roles within the
operation.
As set out in the Group's Employee Welfare Policy, operating
companies give due consideration to employment applications
received from disabled persons and give employees who become
disabled every opportunity to continue their employment.
The table below provides a breakdown of the gender of the
Directors and employees on 31 December 2021.
Men Women
Company Directors 9 1
All employees 65,229 72,931
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
REPORT OF THE DIRECTORS
The Directors present their report together with the audited
consolidated accounts for the year ended 31 December 2021.
Principal activities
The Company is a public company limited by shares, which is
quoted on the AIM Market of the London Stock Exchange and
incorporated and domiciled in England and Wales. The principal
activities of its subsidiary undertakings comprise:
-- Agriculture
-- Other Investments and Associates
Fostering business relationships is of paramount importance to
the Directors, as set out in the s172 Statement in the Strategic
report. Further details of the Group's activities are included in
the Strategic report and the Operational report.
Results and dividends
The profit after tax for the year amounted to GBP4.5 million
(2020: loss after tax GBP0.8 million). The Board is proposing a
final dividend for the year 2021 of 102p per share payable on 29
July 2022 to holders of the ordinary shares registered at the close
of business on 8 July 2022. Therefore, the total dividend payable
for 2021 is 146p per share (2020: 144p per share). Details are
shown in note 11 to the Accounts.
Directors
The Directors are listed on page 4. The following Directors had
beneficial interests in the shares of the Company.
Camellia Plc ordinary shares of 10p each: 31 December 1 January
2021 2021
Malcolm Perkins 1,673 1,673
Tom Franks 200 200
Susan Walker 220 220
Under the Company's articles of association all the Directors
are required to retire annually. Accordingly, Malcolm Perkins,
Susan Walker, Graham Mclean, Frédéric Vuilleumier, Simon Turner and
Stephen Buckland will retire and, being eligible, will seek
re-election at the forthcoming Annual General Meeting ("AGM"). Tom
Franks, William Gibson and Gautam Dalal have indicated that they do
not wish to stand for re-election at the AGM. Rachel English was
appointed as an independent non-executive Director e ective from 6
May 2022 and will seek election to the Board at the AGM.
None of the Directors or their families had a material interest
in any contract of significance with the Company or any subsidiary
during, or at the end of, the financial year.
Executive Directors
Malcolm Perkins was appointed a Director in 1999 and Chairman in
2001, having joined Eastern Produce (Holdings) Limited, now Linton
Park Plc, in 1972. He is a chartered accountant, a member of the
Safeguarding and Stewardship committee and Chairman of the
Nomination committee.
Tom Franks, a chartered accountant, was appointed as Chief
Executive with e ect from 1 September 2015. He joined Camellia as
Deputy Chief Executive in October 2014.
Graham Mclean, a qualified agriculturalist, was appointed as
Director of Agriculture in October 2014. He was previously regional
director of the Group's operations in Africa and has worked for the
Group for more than 25 years. He is a non-executive director of
Kakuzi Plc.
Susan Walker was appointed Chief Financial O cer for the Group
on 4 June 2015. She joined Camellia as Finance Director Designate
on 1 July 2014. She is a chartered certified accountant and a
non-executive director of Goodricke Group Limited and United
Finance Limited.
Non-executive Directors
William Gibson was appointed as an independent non-executive
Director in September 2014 and was appointed as the senior
independent non-executive director in September 2021. He was
previously chairman and managing director of Westminster Press and
an executive director of the Financial Times Group. He is chairman
of the Remuneration committee, chairman of the Safeguarding and
Stewardship committee, and a member of the Audit and Nomination
committees.
Frédéric Vuilleumier was appointed as an independent
non-executive Director in March 2013. He is a partner of Oberson
Abels SA, a law o ce based in Geneva, Switzerland. He was a member
of the Audit committee until April 2019.
Gautam Dalal was appointed as an independent non-executive
Director in March 2018. He was previously a partner at KPMG and a
founder-director of the UK India Business Council, a member of the
Asian Business Association and a director of AMREF Health Africa's
International Board. He was appointed chairman of the Audit
committee in September 2021.
Simon Turner was appointed as a non-executive Director in March
2020. After an earlier career in the legal profession, he is now
president of the board of the trustee of The Camellia Foundation.
He became a member of the Remuneration and Nomination committees in
September 2021.
Stephen Buckland was appointed as a non-executive Director in
November 2021. He previously held positions within the Camellia
Group's agricultural and banking businesses. He is a trustee of two
charities: The Sir Percival Gri ths' Tea Planters Trust and The
Camellia Foundation, a UK charity whose primary donor of the same
name is the ultimate majority shareholder of Camellia Plc. He
became a member of the Audit committee in December 2021.
Rachel English was appointed as an independent non-executive
Director in May 2022. She is a chartered accountant and has
extensive international and general management experience, having
founded and served on the board of several significant businesses,
including as chair of Acacia, a FTSE 250 company, and previously
served on the audit committee of the UK Department for
International Development. She has substantial experience and
interest in ESG matters.
Company Secretary
Amarpal Takk was appointed as Group General Counsel and Company
Secretary in April 2018. He is a qualified solicitor of England and
Wales. He was appointed a member of the Safeguarding and
Stewardship committee in December 2020.
Substantial shareholdings
As at 6 May 2022 the Company has been advised of the following
interests in its share capital:
% of total
No. of voting
Shareholder Shares rights
Camellia Holding AG 1,427,000 51.67
Fide Holding NV 360,500 13.05
Quaero Capital SA 151,098 5.47
Share capital and purchase of own shares
The Company's share capital comprises one class of ordinary
shares of 10p per share which carry no restrictions on the transfer
of shares or on voting rights (other than as set out in the
Company's articles of association). There are no agreements known
to the Company between shareholders in the Company which may result
in restrictions on the transfer of shares or on voting rights in
relation to the Company. Details of the issued share capital are
contained in note 36 to the Accounts.
At the AGM in 2021, shareholders gave authority for the Company
to purchase up to 276,200 of its own shares. This authority expires
at the conclusion of this year's AGM at which a resolution
proposing renewal of the authority will be submitted to
shareholders.
Auditors
A resolution proposing the reappointment of Deloitte LLP will be
put to the AGM.
Each of the persons who were Directors at the time when this
Directors' report was approved has confirmed that:
-- So far as each Director is aware, there is no relevant
audit information of which the Company's auditors are
unaware.
-- Each Director has taken all the steps that ought to have
been taken as a Director, including making appropriate
enquiries of fellow Directors and of the Company's auditors
for that purpose, in order to be aware of any information
needed by the Company's auditors in connection with preparing
their report and to establish that the Company's auditors
are aware of that information.
Energy and carbon disclosure
In compliance with the SECR requirements, our greenhouse gas
emissions, energy consumption and energy reduction initiatives are
reported within the Environment and Social report on pages 19 to
24.
Employees & stakeholders
The Directors have had regard to the need to foster the
Company's business relationships with employees, suppliers,
customers and others, and the e ect of that regard, including on
the principal decisions taken by the Company during the financial
year. Details in relation to employees and stakeholders are set out
in the s172 Statement on page 26 and the Employee section on page
34.
R&D
The Group invests in research and development projects within
its operations in order to improve e ciency and grow revenues. In
Kenya, Malawi and India technical departments are focussed on
various projects to improve harvesting e ciency, pest and disease
identification and control, energy e ciency and implement colour
sorting technology. New agricultural technologies are also being
trialled where possible, including the use of drones, robotics and
automated manufacturing systems.
We continue to collaborate with various organisations, for
example, the Cambridge Environmental Sustainability Strategy
committee and working with the Gatsby Foundation on potential
value-added ventures. In Kenya we use precision specification
eucalyptus trees for furniture and other construction applications.
In Kenya we are running a commercial blueberry trial to evaluate
the viability of di erent varieties. In Brazil, research and
development is ongoing into water saving irrigation systems, and
satellite imaging for soil, nutrient and crop profiling help to
identify climate impact and plant nutrient requirements. These
initiatives will help to inform our decisions on the implementation
of precision farming technologies.
Future development
Details of future developments are set out in the Operational
report and the Strategic report.
Going concern
The Directors, at the time of approving the financial
statements, considered the Group's business activities together
with the main trends and factors likely to a ect the Group, the
most recent business performance of the Group, including the
impacts of the pandemic, as described in the Operational report on
pages 7 to 15.
The Directors considered the impact of the current COVID
environment and the Ukraine conflict on the business for the next
15 months.
The Directors have considered several variables which may impact
on revenue, profits and cash flows. In light of the nature of our
business and our experience of trading through the pandemic over
the last two years, we expect our Agriculture businesses will
continue to operate broadly as currently. In the UK we have assumed
that the food service market recovers gradually over the course of
the next year.
At 31 December 2021, the Group had cash and cash equivalents net
of borrowings of GBP54.0 million. In addition, the Group had
undrawn short-term loan and overdraft facilities of GBP23.7 million
and a portfolio of liquid investments with a fair market value of
GBP40.2 million.
The Directors have modelled various severe but plausible
scenarios using assumptions including the combined e ect of reduced
sales volumes for tea, reduced avocado exports, reduced sales
volumes for macadamia and reduced partner grower apple volumes
during 2022. The revenue and operational impact of such volume
reductions across our operations would have a substantially
negative impact on Group profitability. We have also considered the
risk of price reductions during 2022 for our tea, macadamia and
avocado crops combined with higher than expected energy and
fertiliser costs across all operations.
Historically in the Tea division restrictions on, or reductions
in, the supply of tea either regionally or globally have led to
higher selling prices and this was borne out in India during 2020
and 2021 and in Bangladesh in 2021. However, for prudence for the
purposes of our downside scenario planning we have not reflected
increased selling prices for tea nor any significant mitigating
reductions to our operating cost base in our tea operations. We
have however assumed that in certain scenarios aspects of our
investment programme would be curtailed.
Under both the base case and the downside scenario, the Group is
expected to continue to have su cient headroom relative to the
funding available to it.
The Directors believe that the Company and the Group are well
placed to manage their financing and other business risks
satisfactorily and, have a reasonable expectation that the Company
and the Group will have adequate resources to continue in
operational existence for the foreseeable future. The Directors
therefore continue to adopt the going concern basis in preparing
the financial statements.
Financial risk management
Information on the Group's financial risk management objectives
and policies and on the exposure of the Group to relevant risks in
respect of financial instruments is set out in note 42 of the
Accounts.
Corporate governance
The Company's statement on corporate governance can be found in
the Corporate Governance report on pages 39 to 43.
Political donations
The Company has no political a liations and does not make
political donations. Its operations work with governments and other
parties around the world on issues that are important to our
customers, and stakeholders, communities and to the interests of
the business.
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
CORPORATE GOVERNANCE
Statement of compliance
The Company is committed to complying with the Quoted Companies
Alliance's ("QCA") Corporate Governance Code for Small and Mid-size
Quoted Companies ("QCA Code"). The Chairman considers the
application of standards of corporate governance that are
appropriate for the Group's nature, status, profile, size and
circumstances to be important in ensuring the Group is managed for
the long-term benefit of all stakeholders. The table on our website
sets out how we comply with the ten principles of the QCA Code.
The Group consists of a portfolio of businesses which are
grouped into independently managed divisions. These divisions
report into the Board by function against a variety of metrics
including budgets and business plans.
The Board
The Board currently comprises ten Directors, six of whom are
non-executive Directors as set out on page 4.
The remaining Directors are executive Directors, including the
Chairman. William Gibson has been designated as the senior
independent non-executive Director. The names and brief
biographical details of each Director appear on pages 35 and 36.
Following the decision of three Directors not to stand for
re-election at the AGM, a recruitment process is underway.
The Board has established Remuneration, Audit and Nomination
committees. Terms of reference of each of the committees can be
viewed on the Company's website. The Board has also established the
Safeguarding and Stewardship committee.
The Board is responsible for managing the Group's business and
has adopted a schedule of matters reserved for its approval. The
schedule is reviewed periodically and covers, inter alia, the
following areas:
-- Strategy
-- Acquisitions and disposals
-- Financial reporting and control
-- Internal controls
-- Approval of expenditure above specified limits
-- Approval of transactions and contracts above specified
limits
-- Responsibilities for corporate governance
-- Board membership and Board committees
-- Approval of changes to capital structure
A full copy of the schedule is available on the Company's
website.
A report summarising the Group's financial and operational
performance is provided to Directors each month. Each Director has
su cient information in advance of Board meetings to enable
informed judgements to be made on matters referred to the Board.
The Board met 13 times in 2021.
Attendance by Directors at Board and committee meetings held
during the year was as follows:
Director Board Audit Remuneration* Nomination
Malcolm Perkins 13/13 - - 1/1
Chris Relleen 8/13 1/3 0/3 -
Tom Franks 13/13 - - -
Graham Mclean 13/13 - - -
Susan Walker 13/13 - - -
William Gibson 12/13 3/3 2/3 1/1
Frédéric Vuilleumier 13/13 - - -
Gautam Dalal 13/13 3/3 - -
Simon Turner 13/13 - 2/3 1/1
Jonathan Bond 5/13 - - -
Stephen Buckland 2/13 1/3
* Where a meeting was not quorate, decisions were raised to and
approved by the Board.
Board evaluation
An internal review, led by the Company Secretary and the
Chairman, was undertaken this year. This was based upon a series of
questions and each Director had the opportunity to contribute and
challenge, which enabled a constructive and quality debate during
Board meetings. In order to enhance and further strengthen the
Board, the decision was taken to appoint a new independent
non-executive Director.
Executive committees
The Board has established the Strategy group, consisting of the
Chairman, the executive Directors of the Board and the Group
General Counsel. The Board has also established two Executive
Committees. The Agriculture Executive Committee is chaired by the
Director of Agriculture and includes the Chief Executive, Chief
Financial O cer, the Group General Counsel and heads of all the key
agricultural operations. The Engineering and Food Service Executive
Committee is chaired by the Chief Executive and includes the Chief
Financial O cer, the Managing Directors of the UK businesses, the
Group General Counsel, the UK Investment Manager and the UK Head of
Human Resources.
Investments and Associates report directly to the Chief
Executive.
Nomination committee
The committee is chaired by Malcolm Perkins. Its other members
are William Gibson and Simon Turner.
The principal responsibilities of the committee are set out
below:
-- Review the balance and composition (including gender
and diversity) of the Board, ensuring that they remain
appropriate
-- Be responsible for overseeing the Board's succession
planning requirements including the identification and
assessment of potential Board candidates and making recommendations
to the Board for its approval
-- Keep under review the leadership needs of, and succession
planning for, the Group in relation to both its executive
and non-executive Directors and other senior executives
The committee met once during the year to consider the
appointment of Stephen Buckland. Other matters were raised to and
approved by the Board.
Audit committee
The committee is chaired by Gautam Dalal (Chris Relleen chaired
the committee up to 5 August 2021). The other members of the
committee during the year were Stephen Buckland and William Gibson.
During 2021, the committee met on three occasions.
The principal responsibilities of the committee are set out
below and were undertaken during the year:
-- Monitor the e ectiveness of the Group's risk management
practices
-- Review the e ectiveness of the Group's internal control
system. The committee regularly reviews the e ectiveness
of internal audit activities carried out by the Group's
accounting function and senior management
-- Review and monitor the financial statements of the Company
and the audit of those statements and monitor compliance
with relevant financial reporting requirements and legislation
-- Monitor the e ectiveness and independence of the external
auditors
-- Review non-audit services provided by the external auditors
The Audit committee assesses whether suitable accounting
policies have been adopted and whether management has made
appropriate estimates and judgements. In the year under review, the
Audit committee considered the following matters in relation to the
financial statements:
Going concern
The committee considered the appropriateness of the going
concern principle of accounting used in preparing the financial
statements in the context, in particular, of the potential impact
of the pandemic and the conflict in Ukraine on the Group's cash
requirements.
Biological assets
One of the key areas of judgement that the committee considered
in reviewing the financial statements was the valuation of
biological assets in accordance with IAS 41. Valuations are based
on discounted cash flows or are carried out by external
professional valuers. These were considered for consistency of
approach and assumptions agreed as reasonable. For more details see
note 19 to the Accounts.
Pensions
The valuation of the pension schemes obligations is conducted by
independent actuaries and due to the size of the obligation a
relatively minor change to the assumptions made could result in a
material change in the quantum of the obligation. The committee
considered the competence of the actuaries and the key assumptions
adopted and concluded that the work performed is su cient to
support the valuation.
Accounting for the acquisition of Bardsley England
A detailed exercise was undertaken to identify and allocate a
fair value to the separately identifiable assets and liabilities
relating to the Bardsley England business at the date of
acquisition. The committee considered the assumptions made and
concluded that the basis of allocation of the purchase price to the
assets and liabilities acquired was appropriate.
Carrying value of intangible assets
The Group's carrying values of the Jing and Tea City brands and
of the goodwill relating to the two Assam estates purchased in 2019
were discussed in light of the trading of those businesses. In
particular consideration was given to the uncertainties regarding
timing of recovery from the impact of COVID and the range of future
revenue growth rates for Jing.
The carrying value of the goodwill relating to Bardsley England
which arose on the acquisition of that group of companies during
2021 was also considered in context of the future expectations of
growth rates for partner grower volumes and the potential impact of
inflation on margins.
The committee considered the fair value of the Group's holdings
and whether any impairment in the carrying value had occurred and
agreed that apart from the GBP0.5 million impairment in respect of
Abbey Metal Finishing, no impairment provisions were required.
Carrying value of tangible assets
The committee considered the fair value of the Group's
investment property portfolio, the carrying value of plant and
equipment at the engineering subsidiaries, and the carrying value
of certain of the Indian and Bangladeshi estates in the context of
COVID impacts on trading and third party valuations and agreed that
no impairment had occurred during the year.
Carrying value of BF&M
The Group's carrying value of BF&M was lower than the share
price for BF&M at 31 December 2021. The committee considered
the fair value of the Group's holding and whether any impairment in
the carrying value had occurred and in view of the expected control
premium associated with our holding concluded that no impairment is
required.
Provisions
The bases of provisions for material uncertain tax situations
were considered by the committee as were the provisions for wage
increases in Bangladesh and India. Consideration was given to the
accounting implications of the recent VAT assessment in Malawi and
management's judgement that it should continue to be disclosed as a
contingent liability. The committee is satisfied that the
provisions represent best estimates of the likely liabilities.
External auditor
To assess the e ectiveness of the external audit process, the
external auditor is required to report to the Audit committee and
confirm their independence in accordance with ethical standards and
that they had maintained appropriate internal safeguards to ensure
their independence and objectivity. In addition to the steps taken
by the Board to safeguard the auditor's objectivity, Deloitte
operates a five-year rotation policy for audit partners for a
listed entity.
The committee reviewed those non-audit services provided by the
external auditor and satisfied itself that the scale and nature of
those services were such that the external auditors objectivity and
independence were safeguarded.
The committee confirms that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company's
performance, business model and strategy.
Remuneration committee
The committee is chaired by William Gibson and the other member
is Simon Turner (Chris Relleen was a member up to 5 August
2021).
The responsibilities of the committee include:
-- The review of the Group's policy relating to remuneration
of the Chairman, executive Directors and the Company
Secretary
-- To determine the terms of employment and remuneration
of the Chairman, executive Directors and Company Secretary
with a view to ensuring that those individuals are fairly
and responsibly rewarded
-- To approve compensation packages or arrangements following
the severance of any executive Director's service contract
The Remuneration report appears on pages 45 to 46.
Safeguarding & Stewardship committee
The Safeguarding and Stewardship committee has continued to
promote its mission of meeting the highest standards in protecting
and promoting Human Rights across the Group. The committee meets
regularly throughout the year and is chaired by William Gibson.
Other members of the committee are Malcolm Perkins and Amarpal
Takk. Louise Nicholls and Vinita Singh are independent members of
the committee. Louise is the managing director of a Human Rights
and sustainability management consultancy in the UK, prior to which
she was the head of sustainability for a large UK supermarket and
Vinita has previously worked on empowering individuals and workers
within supply chains based in India and across a variety of
sectors, including helping businesses to understand how they can
contribute to improving working conditions.
The principal objectives of the committee are set out below:
-- Identify and mitigate significant social and governance
risks
-- Monitor the management of personal and process safety
risk, security and environment risks
-- Work with industry experts to put in place processes
to identify and mitigate such social and governance risks
which are appropriate in their design and e ective in
their implementation
Insurance
The Company purchases insurance to cover its Directors and o
cers, and those of its subsidiaries in respect of legal actions
against them in their capacity as Directors of the Company. All
Directors have access to independent professional advice at the
Company's expense.
Share capital structure
The share capital of the Company is set out in note 36.
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 e
ectiveness of the framework of the Group's system of internal
control, the principal features of which are described below.
The key management philosophy of the Company is that the
responsibility for e cient day to day operations remains with the
local management at the operational level. Accountability and
delegation of authority are clearly defined with regular
communication between Group head o ce and the management of the
individual operations. Our key operations have internal audit
functions reporting to local audit committees. The performance of
each operation is continually monitored centrally including a
critical review of annual budgets, forecasts and monthly sales,
profits and cash reports. Financial results and key operational
statistics and variances from approved plans are carefully
monitored. Group senior management regularly visit operations.
However, any system of internal control can provide only
reasonable, and not absolute, assurance against material
mis-statement or loss.
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors are required
to prepare the Group financial statements in accordance with United
Kingdom adopted international accounting standards in conformity
with the requirements of the Companies Act 2006. The financial
statements also comply with International Financial Reporting
Standards (IFRSs) as issued by the IASB. The Directors have also
chosen to prepare the parent company financial statements under
United Kingdom adopted international accounting standards. Under
Company law the Directors must not approve the accounts unless they
are satisfied that they give a true and fair view of the state of a
airs of the Company and of the profit or loss of the Company for
that period. In preparing these financial statements, International
Accounting Standard 1 requires that Directors:
-- Properly select and apply accounting policies
-- Present information, including accounting policies, in
a manner that provides relevant, reliable, comparable
and understandable information
-- Provide additional disclosures when compliance with the
specific requirements in IFRSs are insu cient to enable
users to understand the impact of particular transactions,
other events and conditions on the entity's financial
position and financial performance
-- Make an assessment of the Company's ability to continue
as a going concern
The Directors are responsible for keeping adequate accounting
records that are su cient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the Company and
hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities. The Directors are responsible
for the maintenance and integrity of the corporate and financial
information included on the Company's website. Legislation in the
UK governing the preparation and dissemination of financial
statements may di er from legislation in other jurisdictions.
Responsibility statement
We confirm that to the best of our knowledge:
-- The financial statements, prepared in accordance with
IFRSs, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company
and the undertakings included in the consolidation taken
as a whole
-- The Strategic report includes a fair review of the development
and performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the
principal risks and uncertainties that they face
-- The Annual Report and Accounts, taken as a whole, are
fair, balanced and understandable and provide the information
necessary for shareholders to assess the Company's position
and performance, business model and strategy
This responsibility statement was approved by the Board of
Directors on 30 May 2022.
Malcolm Perkins
Chairman
30 May 2022
REMUNERATION REPORT
This report is drawn up in accordance with the Companies Act
2006 and the AIM Rules for Companies.
Remuneration committee
Details of the Remuneration committee are set out on page
42.
Policy on Directors' remuneration
The policy agreed by the committee is as follows:
-- To seek to provide remuneration packages that will attract,
retain and motivate the right people for the roles
-- So far as is practicable to align the interests of the
executives with those of shareholders
-- To reflect the overriding remuneration philosophy and
the principles of the wider Group
In implementing the second point, the Company does not operate
profit related bonus, share option or share incentive schemes for
Directors as the Group's activities are based largely on
agriculture, which is highly dependent on factors outside
management control such as the weather and market prices.
The policy is designed to ensure that the Directors manage the
Group's businesses for the long-term in line with the strategy of
the Group.
In determining this remuneration policy and the remuneration of
Directors, consideration has been given to the relevant provisions
of the QCA Guidelines.
The remuneration policy was approved by shareholders at the 2020
AGM and applies for a period of three years until 2023. The
committee considers any views expressed by shareholders on
Directors' remuneration.
At the AGM on 3 June 2021, the Remuneration Report for the year
to 31 December 2020 was approved by shareholders with 99.90% of the
votes cast in favour, 0.03% of the votes cast against and 508 votes
withheld.
Service contracts
Malcolm Perkins, Tom Franks, Graham Mclean and Susan Walker are
each employed on rolling service contracts.
Director Date of Service Contract
Malcolm Perkins 25 April 2002
Tom Franks 8 April 2015
Graham Mclean 10 April 2015
Susan Walker 14 April 2015
The service contracts are terminable at any time by a one year
period of notice from the Company or the Director. Following their
initial appointment non-executive Directors may seek re-election by
shareholders at each subsequent Annual General Meeting.
Non-executive Directors do not have service agreements. The Company
has in place appropriate director's and o cers' liability insurance
cover in respect of legal action against its executive and
non-executive Directors, amongst others.
There are no specific contractual provisions for compensation
upon early termination of a non-executive Director's
employment.
The following sections on Directors' remuneration and pensions
have been audited.
Directors' remuneration
Benefits in
Remuneration Kind Total
2021 2020 2021 2020 2021 2020
GBP GBP GBP GBP GBP GBP
Executive
Malcolm Perkins 200,560 261,006 11,525 15,140 212,085 276,146
Tom Franks 611,820 611,820 38,269 38,453 650,089 650,273
Susan Walker 373,890 373,890 28,010 28,057 401,900 401,947
Graham Mclean 402,215 402,215 29,792 29,866 432,007 432,081
Non-executive
William Gibson 53,470 50,470 - - 53,470 50,470
Chris Relleen (up to
31 August 2021) 36,393 54,590 - - 36,393 54,590
Frédéric Vuilleumier 51,500 51,500 - - 51,500 51,500
Gautam Dalal 49,047 47,380 - - 49,047 47,380
Simon Turner 47,380 38,815 - - 47,380 38,815
Jonathon Bond (up to
3 June 2021) 21,573 38,815 - - 21,573 38,815
Stephen Buckland
(from 1 November 2021) 7,897 - - - 7,897 -
--------- --------- ------- ------- --------- ---------
Total 1,855,745 1,930,501 107,596 111,516 1,963,341 2,042,017
--------- --------- ------- ------- --------- ---------
Notes
(i) The executive Directors' benefits in kind include the value
attributed to medical insurance, permanent health insurance,
spouse/partner travel and cash alternatives to company cars.
(ii) Gautam Dalal received an additional annual fee for his Chairmanship of the Audit committee
(iii) William Gibson received an additional annual fee for his
Chairmanship of the Remuneration committee and the Safeguarding and
Stewardship committee
Directors' pensions
Malcolm Perkins received no payment for pensionable service
during 2021. Tom Franks, Graham Mclean and Susan Walker receive an
excess non-pensionable salary supplement equivalent to 10% of base
salary.
Approved by the Board
Amarpal Takk
Company Secretary
30 May 2022
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2021
2021 2020
Separately Separately
Adjusted disclosed Adjusted disclosed
profit items profit items
(note (note (note (note
4) 4) 4) 4) GBP
Notes GBP'm GBP'm GBP'm GBP 'm GBP 'm 'm
Continuing operations
Revenue 2 277.2 - 277.2 291.2 - 291.2
Cost of sales (215.7) 0.3 (215.4) (227.7) - (227.7 )
-------- ---------- ------ -------- ---------- ------
Gross profit 61.5 0.3 61.8 63.5 - 63.5
Other operating
income 2.6 - 2.6 3.0 - 3.0
Distribution costs (14.5) - (14.5) (16.2) - (16.2 )
Administrative
expenses 3 (47.6) (1.4) (49.0) (43.4) (16.1) (59.5 )
-------- ---------- ------ -------- ---------- ------
Trading profit/(loss) 1,3 2.0 (1.1) 0.9 6.9 (16.1) (9.2 )
Share of associates'
results 5 7.2 - 7.2 6.1 - 6.1
Profit on disposal
of property, plant
and equipment 6 - - - - 14.4 14.4
Impairments of
intangible assets,
investment properties
and property, plant
and equipment 7 - (0.5) (0.5) - (6.5) (6.5 )
Loss on disposal
of subsidiaries - (0.1) (0.1) - - -
Profit on disposal
of financial assets 0.2 - 0.2 0.2 - 0.2
-------- ---------- ------ -------- ---------- ------
Operating profit 9.4 (1.7) 7.7 13.2 (8.2) 5.0
Investment income 0.5 - 0.5 0.6 - 0.6
-------- ---------- ------ -------- ---------- ------ ---
Finance income 8 2.2 - 2.2 2.3 - 2.3
Finance costs 8 (2.9) - (2.9) (1.6) - (1.6 )
Net exchange gain 8 0.4 - 0.4 2.2 - 2.2
Employee benefit
expense 8 (0.8) - (0.8) (0.7) - (0.7 )
-------- ---------- ------ -------- ---------- ------ ---
Net finance (costs)/income 8 (1.1) - (1.1) 2.2 - 2.2
-------- ---------- ------ -------- ---------- ------
Profit before
tax 8.8 (1.7) 7.1 16.0 (8.2) 7.8
Taxation 9 (2.6) (8.6 )
------ ------
Profit/(loss)
after tax 4.5 (0.8 )
------ ------
Profit/(loss)
attributable to:
Owners of Camellia
Plc 2.3 (5.0 )
Non-controlling
interests 2.2 4.2
------ ------
4.5 (0.8 )
------ ------
Earnings/(loss)
per share - basic
and diluted 12 83.3p (181.0 )p
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2021
2021 2020
Notes GBP'm GBP'm
Group
Profit/(loss) for the year 4.5 (0.8 )
----- -----
Other comprehensive income/(expense):
Items that will not be reclassified subsequently
to profit or loss:
Financial assets at fair value through
other comprehensive income:
Fair value adjustment for the financial
assets disposed 1.0 (0.3 )
Corporation tax arising on financial asset
disposals before utilisation of losses (2.2) -
Unwind of deferred tax on financial assets 2.2 -
Changes in the fair value of financial
assets 22 0.8 2.3
Deferred tax movement in relation to fair
value adjustments - (0.7 )
Remeasurements of post employment benefit
obligations 35 20.4 4.3
Deferred tax movement in relation to post
employment benefit obligations 34 (3.9) 0.6
----- -----
18.3 6.2
----- -----
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation di erences (4.0) (22.6 )
Share of other comprehensive income of
associates 0.2 0.3
----- -----
(3.8) (22.3 )
----- -----
Other comprehensive income/(expense) for
the year, net of tax 14.5 (16.1 )
----- -----
Total comprehensive income/(expense) for
the year 19.0 (16.9 )
----- -----
Total comprehensive income/(expense) attributable
to:
Owners of Camellia Plc 18.4 (16.6 )
Non-controlling interests 0.6 (0.3 )
----- -----
19.0 (16.9 )
----- -----
Company
Profit for the year 6.5 4.5
----- -----
Total comprehensive income for the year 6.5 4.5
----- -----
CONSOLIDATED BALANCE SHEET
at 31 December 2021
2021 2020
Notes GBP'm GBP'm
ASSETS
Non-current assets
Intangible assets 15 10.1 6.6
Property, plant and equipment 16 202.1 198.3
Right-of-use assets 17 28.8 16.6
Investment properties 18 23.1 19.1
Biological assets 19 13.4 12.7
Investments in associates 21 72.6 67.6
Financial assets at fair value through
other comprehensive income 22 27.7 42.6
Financial asset at fair value through profit
or loss 23 7.2 5.3
Financial assets at amortised cost 24 1.3 2.7
Other investments - heritage assets 25 8.7 9.8
Retirement benefit surplus 35 14.8 0.1
Trade and other receivables 27 2.7 2.4
----- -----
Total non-current assets 412.5 383.8
----- -----
Current assets
Inventories 26 51.7 47.5
Biological assets 19 7.8 7.1
Trade and other receivables 27 48.5 43.7
Financial asset at fair value through profit
or loss 23 2.7 -
Financial assets at amortised cost 24 1.3 -
Current income tax assets 0.6 1.7
Cash and cash equivalents (excluding bank
overdrafts) 28 61.8 98.5
----- -----
174.4 198.5
Assets classified as held for sale 29 6.6 -
----- -----
Total current assets 181.0 198.5
----- -----
LIABILITIES
Current liabilities
Financial liabilities - borrowings 31 (3.3) (5.7 )
Lease liabilities 32 (3.2) (1.2 )
Trade and other payables 30 (59.2) (50.9 )
Current income tax liabilities (3.0) (10.3 )
Employee benefit obligations 35 (1.1) (1.1 )
Provisions 33 (11.8) (19.0 )
----- -----
(81.6) (88.2 )
Liabilities related to assets classified
as held for sale 29 (2.0) -
----- -----
Total current liabilities (83.6) (88.2 )
----- -----
Net current assets 97.4 110.3
----- -----
Total assets less current liabilities 509.9 494.1
----- -----
Non-current liabilities
Financial liabilities - borrowings 31 (4.5) (2.7)
Lease liabilities 32 (21.5) (10.3)
Deferred tax liabilities 34 (38.0) (39.5)
Employee benefit obligations 35 (8.6) (15.6)
----- -----
Total non-current liabilities (72.6) (68.1)
----- -----
Net assets 437.3 426.0
----- -----
EQUITY
Called up share capital 36 0.3 0.3
Share premium 15.3 15.3
Reserves 373.0 361.0
----- -----
Equity attributable to owners of Camellia
Plc 388.6 376.6
Non-controlling interests 48.7 49.4
----- -----
Total equity 437.3 426.0
----- -----
COMPANY BALANCE SHEET
at 31 December 2021
2021 2020
Notes GBP'm GBP'm
ASSETS
Non-current assets
Investments in subsidiaries 20 73.5 73.5
Other investments - heritage assets 25 8.8 11.0
----- -----
Total non-current assets 82.3 84.5
----- -----
Current assets
Trade and other receivables 27 0.2 0.6
Current income tax asset 0.1 0.1
Amounts due from group undertakings 1.9 2.2
Cash and cash equivalents 28 0.7 -
----- -----
2.9 2.9
Assets classified as held for sale 29 2.1 -
----- -----
Total current assets 5.0 2.9
----- -----
LIABILITIES
Current liabilities
Trade and other payables 30 (0.9) (0.8 )
Amounts due to group undertakings (16.6) (16.1 )
Provisions 33 - (1.9 )
----- -----
Total current liabilities (17.5) (18.8 )
----- -----
Net current liabilities (12.5) (15.9 )
----- -----
Total assets less current liabilities 69.8 68.6
----- -----
Non-current liabilities
Deferred tax liabilities 34 (0.2) (0.2 )
----- -----
Total non-current liabilities (0.2) (0.2 )
----- -----
Net assets 69.6 68.4
----- -----
EQUITY
Called up share capital 36 0.3 0.3
Share premium 15.3 15.3
Reserves 54.0 52.8
----- -----
Total equity 69.6 68.4
----- -----
The profit for the company is shown in note 10.
The notes on pages 54 to 124 form part of the financial
statements.
The financial statements on pages 47 to 124 were approved on 30
May 2022 by the board of Directors and signed on their behalf
by:
M C Perkins
Chairman
Registered Number 00029559
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2021
2021 2020
Notes GBP'm GBP'm
Cash generated from/(used in) operations
Cash flows from operating activities 37 1.9 19.3
Interest received 2.1 2.4
Interest paid (2.9) (1.6 )
Income taxes paid (13.1) (7.2 )
----- -----
Net cash flow from operating activities (12.0) 12.9
----- -----
Cash flows from investing activities
Purchase of intangible assets - (0.3 )
Purchase of property, plant and equipment (10.7) (13.5 )
Proceeds from sale of non-current assets 0.7 0.5
Proceeds from sale of non-current assets
- non recurring - 21.6
Proceeds from sale of heritage assets 0.1 -
Additions to investment property (0.9) (0.9 )
Biological assets: non-current - disposals 0.5 0.7
Payment for acquisition of a businesses/subsidiary
net of cash acquired 39 (3.7) -
Purchase of non-controlling interest 39 (5.9) -
Investment in associates - (0.3 )
Dividends received from associates 3.0 3.2
Purchase of investments (8.9) (12.4 )
Proceeds from sale of investments 21.3 9.1
Income from investments 0.5 0.6
----- -----
Net cash flow from investing activities (4.0) 8.3
----- -----
Cash flows from financing activities
Equity dividends paid (5.2) (2.8 )
Dividends paid to non-controlling interests (1.9) (7.0 )
New loans 38 3.8 1.9
Loans repaid 38 (13.1) (3.6 )
Payments of lease liabilities 38 (2.0) (0.9 )
----- -----
Net cash flow from financing activities (18.4) (12.4 )
----- -----
Net (decrease)/increase in cash and cash
equivalents (34.4) 8.8
Cash and cash equivalents at beginning
of year 28 94.9 89.4
Exchange losses on cash (0.6) (3.3 )
----- -----
Cash and cash equivalents at end of year 28 59.9 94.9
----- -----
For the purposes of the cash flow statement, cash and cash
equivalents are included net of overdrafts repayable on demand.
COMPANY CASH FLOW STATEMENT
for the year ended 31 December 2021
2021 2020
Notes GBP'm GBP'm
Cash generated from operations
Profit before tax 10 6.5 4.5
Adjustments for:
Interest income (0.3) (0.2 )
Dividends from group companies (8.0) (10.0 )
Decrease/(increase) in trade and other
receivables 0.4 (0.6 )
Increase in trade and other payables 0.1 0.2
Movement in provisions (1.9) 1.9
Net movement in intra-group balances 0.8 (3.1 )
----- -----
Cash used in operations (2.4) (7.3 )
Interest received 0.3 0.2
----- -----
Net cash flow from operating activities (2.1) (7.1 )
----- -----
Cash flows from investing activities
Proceeds from sale of other investments
- heritage assets 0.1 -
Dividends received 8.0 10.0
----- -----
Net cash flow from investing activities 8.1 10.0
----- -----
Cash flows from financing activities
Equity dividends paid (5.3) (2.9 )
----- -----
Net cash flow from financing activities (5.3) (2.9 )
----- -----
Net movement in cash and cash equivalents 0.7 -
Cash and cash equivalents at beginning
of year 28 - -
----- -----
Cash and cash equivalents at end of year 28 0.7 -
----- -----
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Non-
Share Share Treasury Retained Other controlling Total
capital premium shares earnings reserves Total interests equity
Notes GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Group
At 1 January
2020 0.3 15.3 (0.4) 358.6 21.9 395.7 56.7 452.4
Loss for the
year - - - (5.0) - (5.0) 4.2 (0.8)
Other
comprehensive
income/(expense)
for the year - - - 5.3 (16.9) (11.6) (4.5) (16.1)
Dividends 11 - - - (2.8) - (2.8) (7.0) (9.8)
Share of
associate's
other equity
movements - - - 0.3 - 0.3 - 0.3
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2020 0.3 15.3 (0.4) 356.4 5.0 376.6 49.4 426.0
Profit for the
year - - - 2.3 - 2.3 2.2 4.5
Other
comprehensive
income/(expense)
for the year - - - 13.8 2.3 16.1 (1.6) 14.5
Transfer of
realised
gains on disposal
of financial
assets - - - 11.0 (11.0) - - -
Dividends 11 - - - (5.2) - (5.2) (1.9) (7.1)
Companies joining
the Group 39 - - - - - - 5.3 5.3
Adjustment arising
from change in
non-controlling
interest - - - (1.4) - (1.4) 1.4 -
Purchase of
non-controlling
interests 39 - - - 0.2 - 0.2 (6.1) (5.9)
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2021 0.3 15.3 (0.4) 377.1 (3.7) 388.6 48.7 437.3
------- ------- -------- -------- -------- ----- ----------- ------
Company
At 1 January
2020 0.3 15.3 - 39.1 12.1 66.8 - 66.8
Profit for the
year - - - 4.5 - 4.5 - 4.5
Other
comprehensive
income for the
year - - - - - - - -
Dividends - - - (2.9) - (2.9) - (2.9)
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2020 0.3 15.3 - 40.7 12.1 68.4 - 68.4
Profit for the
year - - - 6.5 - 6.5 - 6.5
Other
comprehensive
income for the
year - - - - - - - -
Dividends 11 - - - (5.3) - (5.3) - (5.3)
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2021 0.3 15.3 - 41.9 12.1 69.6 - 69.6
------- ------- -------- -------- -------- ----- ----------- ------
In relation to the reserves of the Company, GBP41.9 million is
distributable. Other reserves of the Company include capital
redemption and revaluation reserves.
Other reserves of the Group include fair value reserves and net
exchange di erences of GBP53.5 million deficit (2020: GBP50.8
million deficit).
Group retained earnings includes GBP162.1 million (2020:
GBP157.3 million) 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 United Kingdom adopted International Financial
Reporting Standards (IFRS), IFRS Interpretations Committee (IFRS
IC) and the Companies Act 2006 applicable to companies reporting
under IFRS. The consolidated financial statements comply with IFRS
as issued by the International Standards Board (IASB).
The consolidated financial statements have been prepared on the
historical cost basis as modified by the revaluation of biological
assets, financial assets and financial liabilities and assets held
for sale.
Where necessary, comparative figures have been adjusted to
conform with changes in presentation in the current year. In the
current year, Jing Tea has been included in agriculture instead of
food service and comparative figures in note 1 have been adjusted.
This reclassification had no impact upon the net profit for the
period.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue to operate for the foreseeable
future. They therefore continue to adopt the going concern basis of
accounting in preparing the financial statements.
Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Subsidiaries
are those entities over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to,
variable returns through its power over the entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date
that control ceases.
On acquisition, the assets and liabilities of a subsidiary are
measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. Any
deficiency of the cost of acquisition below the fair values of the
identifiable net assets acquired (i.e. discount on acquisition) is
credited to the income statement in the period of acquisition. The
Group recognises any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, at the non-controlling interest's
proportionate share of the recognised amounts of the acquiree's
identifiable net assets. Any di erence that arises from the
acquisition of additional shares of an already consolidated
subsidiary is taken directly to equity.
The results of subsidiaries acquired or disposed of during the
year are included in the consolidated Income Statement from the e
ective 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 di erences 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 di erences 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 di erences arising
from the translation of the net investment in foreign entities are
taken to equity. When a foreign entity is sold such exchange di
erences arising since 1 January 2004 are recognised in the Income
Statement as part of the gain or loss on disposal.
Goodwill and fair value adjustments arising on the acquisition
of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the exchange rate ruling on the
date of acquisition. The Group has elected to treat goodwill and
fair value adjustments arising on acquisitions prior to 1 January
2004, the date of the Group's transition from UK GAAP to IFRS, as
sterling denominated assets and liabilities.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable for goods
and services provided in the normal course of business, net of
discounts, value added tax and other sales related taxes and after
eliminating intra-group sales.
Revenue from the sale of goods is recognised when the following
five core principles of the model framework have been
delivered:
-- The identification of contract(s) with customers
-- The identification of the performance obligations in
the contract
-- The determination of the transaction price
-- The allocation of the transaction price to the performance
obligations in the contract
-- The recognition of revenue when (or as) a performance
obligation has been satisfied
In respect of agricultural produce, revenue is recognised when
the performance obligations have been satisfied, which is once
control of the produce has transferred from the Group to the buyer.
Revenue is measured based on the consideration specified in the
contract with a customer and excludes amounts collected on behalf
of third parties. Revenue related to the sale of produce is
recognised when the product is delivered to the destination
specified by the customer, which is typically the vessel on which
it is shipped, the destination port or the customer's premises and
the buyer has gained control through their ability to direct the
use of and obtain substantially all the benefits from the
asset.
In respect of warehousing and distribution services, revenue for
handling is recognised at the point that the goods are actually
handled.
In respect of engineering services, revenue is recognised at
either the point in time that the customer has accepted return of
the asset or control of the asset has been re-established and there
is a present obligation to pay for services rendered or revenue is
recognised based upon the stage of completion and includes costs
incurred to date, plus accrued profits.
In respect of rental income, revenue is recognised on a
straight-line basis over the lease term. Contingent rent, being
lease payments that are based on the future amount of a factor that
changes other than with the passage of time, is recognised when it
is received or receivable.
Investment income
Investment income is recognised when the right to receive
payment of a dividend is established.
Segmental reporting
IFRS 8 requires operating segments to be identified on the basis
of internal reports used to assess performance and allocate
resources by the chief operating decision maker. The chief
operating decision maker has been identified as the Strategy Group
led by the CEO. Inter segment sales are not significant.
Exceptional items
Exceptional items are those significant items which are
separately disclosed by virtue of their size or incidence to enable
a full understanding of the Group's financial performance.
Government grants
Government grants are recognised when there is reasonable
assurance that the conditions associated with the grants have been
complied with and the grants will be received.
Government grants are recognised in the Income Statement within
other operating income so as to match with the related costs that
they are intended to compensate for. Grants for the purchase or
production of property, plant and equipment are deducted from the
cost of the related assets and reduce future depreciation expense
accordingly.
Intangible assets
(i) Goodwill
Goodwill arising on consolidation represents the excess of the
cost of acquisition over the Group's interest in the fair value of
the identifiable assets, liabilities and contingent liabilities of
a subsidiary or associate at the date of acquisition.
Goodwill is recognised as an asset and reviewed for impairment
at least annually or more frequently if events or changes in
circumstances indicate a potential impairment. Any impairment is
recognised immediately in the income statement and is not
subsequently reversed.
On disposal of a subsidiary or associate, the attributable
amount of goodwill is included in the determination of the profit
or loss on disposal.
(ii) Identifiable intangible assets
Indefinite life identifiable intangible assets include certain
brands acquired. They are not amortised but tested for impairment
annually or more frequently if an impairment indicator is
triggered, any impairment is charged to the income statement as it
arises. The assessment of the classification of intangible assets
as indefinite is reviewed annually.
Finite life identifiable intangible assets include certain
brands, customer relationships and other intangible assets acquired
on the acquisition of subsidiaries. Acquired intangible assets with
finite lives are initially recognised at cost and amortised on a
straight-line basis over their estimated useful lives, not
exceeding 20 years. Intangible assets' estimated lives are
re-evaluated annually and an impairment test is carried out if
certain indicators of impairment exist.
Expenditure on research activities is recognised as an expense
in the period in which it is incurred.
(iii) Computer software
Acquired computer software licences are capitalised on the basis
of the costs incurred to acquire and bring to use the specific
software. Computer software licences are held at cost and are
amortised on a straight-line basis over 3 to 7 years.
Costs associated with developing or maintaining computer
software programmes are recognised as an expense as incurred. Costs
that are directly associated with identifiable and unique software
products controlled by the Group and which are expected to generate
economic benefits exceeding costs beyond one year, are recognised
as an intangible asset and amortised over their estimated useful
lives.
Property, plant and equipment
Property, plant and equipment includes biological assets (bearer
plants) which are accounted for under IAS 16.
Land and buildings comprises mainly factories and o ces. All
property, plant and equipment is shown at cost less subsequent
depreciation and impairment, except for land and assets under
construction, which are shown at cost less impairment. Cost
includes expenditure that is directly attributable to the
acquisition of these assets.
On transition to IFRS, the Group followed the transitional
provisions and elected that previous UK GAAP revaluations be
treated as deemed cost. On the application of the amendments to IAS
41 Agriculture and IAS 16 Property, plant and equipment the
Directors elected to state the Group's bearer plants at deemed cost
being the fair value recognised as at 1 January 2015 less the fair
value at that date of the growing produce which is disclosed in
current assets under biological assets. Additions after that date
are recognised at historical cost.
Subsequent costs are included in the assets' carrying amount,
only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can
be measured reliably. Repairs and maintenance are charged to the
income statement during the financial period in which they are
incurred.
No depreciation is provided on freehold land. Depreciation of
other property, plant and equipment is calculated to write o their
cost less residual value over their expected useful lives.
The rates of depreciation used for the other assets are as
follows:-
Biological assets (Bearer plants) 20 to 50 years
Freehold and long leasehold buildings nil to 50 years
Other short leasehold land and unexpired term of the lease
buildings
Plant, machinery, fixtures, fittings 3 to 25 years
and equipment
No depreciation is provided on bearer plants until maturity when
commercial levels of production have
been reached.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance
sheet date.
The gain or loss arising on the disposal or retirement of an
asset is determined as the di erence between the sales proceeds and
the carrying amount of the asset and is included in the Income
Statement.
Right-of-use assets
The Group recognises right-of-use assets for land and buildings
and plant and machinery at the commencement date of the lease.
Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
re-measurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made
at or before the commencement date, less any lease incentives
received. Unless the Group is reasonably certain to obtain
ownership of the leased asset at the end of the lease term, the
recognised
right-of-use asset is depreciated over the shorter of its
estimated useful life and lease term.
Investment properties
Properties held to earn rental income rather than for the
purpose of the Group's principal activities are classified as
Investment properties. Investment properties are recorded at cost
less accumulated depreciation and any recognised impairment loss.
The depreciation policy is consistent with those described for
other Group properties.
Income from Investment properties is disclosed in 'Revenue'. The
related operating costs are immaterial and are included within
administrative expenses.
Biological assets: non-current
Biological assets are measured at each balance sheet date at
fair value and are generally valued at each year end by independent
professional valuers. Any changes in fair value are recognised in
the Income Statement in the year in which they arise. Costs of new
areas planted are included as "new planting additions" in the
biological assets note. As timber is harvested the value
accumulated to the date of harvest is treated as "decrease due to
harvesting" and charged to cost of sales in the Income
Statement.
Biological assets: current
Produce is valued on the basis of net present values of expected
future cash flows and includes certain assumptions about yields,
selling prices, costs and discount rates. As the crop is harvested
it is transferred to inventory at fair value.
Financial assets
Classification of financial assets
(i) Equity instruments designated as at fair value through other
comprehensive income (FVTOCI)
On initial recognition, the Group made an irrevocable election
(on an instrument-by-instrument basis) to designate investments in
equity instruments as at FVTOCI.
Investments in equity instruments designated as FVTOCI are
initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with gains and losses
arising from changes in fair value recognised in other
comprehensive income and accumulated in the investment revaluation
reserve. The cumulative gain or loss is not reclassified to profit
or loss on disposal of the equity investments, instead, it is
transferred to retained earnings.
Dividends on these investments in equity instruments are
recognised in profit or loss in accordance with IFRS 9, unless the
dividends clearly represent a recovery of part of the cost of the
investment. Dividends are included as investment income in the
consolidated income statement.
(ii) Financial assets at fair value through profit or loss
(FVTPL)
Financial assets that do not meet the criteria for being
measured FVTOCI or at amortised cost (see (i) above and (iii)
below) are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end
of each reporting period, with any fair value gains or losses
recognised in profit or loss to the extent they are not part of a
designated hedging relationship.
(iii) Amortised cost and effective interest method
The amortised cost of a financial asset is the amount at which
the financial asset is measured at initial recognition minus the
principal repayments, plus the cumulative amortisation using the e
ective interest method of any di erence between that initial amount
and the maturity amount, adjusted for any loss allowance. The gross
carrying amount of a financial asset is the amortised cost of a
financial asset before adjusting for any loss allowance.
The e ective interest method is a method of calculating the
amortised cost and of allocating interest income over the relevant
period. Interest income is recognised in profit or loss and is
included in the "finance income - interest income" line item (note
8).
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses
(ECL) on investments in debt instruments that are measured at
amortised cost, lease receivables, trade receivables and contract
assets. The amount of expected credit losses is updated at each
reporting date to reflect changes in credit risk since initial
recognition of the respective financial instrument.
Lifetime ECL represents the expected credit losses that will
result from all possible default events over the expected life of a
financial instrument. In contrast, 12 - month ECL represents the
portion of lifetime ECL that is expected to result from default
events on a financial instrument that are possible within 12 months
after the reporting date.
The Group always recognises lifetime ECL for trade receivables,
contract assets and lease receivables. The expected credit losses
on these financial assets are estimated using a provision matrix
based on the Group's historical credit loss experience, adjusted
for factors that are specific to the debtors, general economic
conditions and an assessment of both the current as well as the
forecast direction of conditions at the reporting date, including
time value of money where appropriate.
For all other financial instruments, the Group recognises
lifetime ECL when there has been a significant increase in credit
risk since initial recognition. However, if the credit risk on the
financial instrument has not increased significantly since initial
recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month ECL.
(i) Significant increase in credit risk
In assessing whether the credit risk on a financial instrument
has increased significantly since initial recognition, the Group
compares the risk of a default occurring on the financial
instrument at the reporting date with the risk of a default
occurring on the financial instrument at the date of initial
recognition. In making this assessment, the Group considers both
quantitative and qualitative information that is reasonable and
supportable, including historical experience and forward-looking
information that is available without undue cost or e ort.
Forward-looking information considered includes the future
prospects of the industries in which the Group's debtors operate,
obtained from economic expert reports, financial analysts,
governmental bodies, relevant think-tanks and other similar
organisations, as well as consideration of various external sources
of actual and forecast economic information that relate to the
Group's core operations.
In particular, the following information is taken into account
when assessing whether credit risk has increased:
-- An actual or expected significant deterioration in the
financial instrument's external (if available) or internal
credit rating
-- Significant deterioration in external market indicators
of credit risk for a particular financial instrument
-- Existing or forecast adverse changes in business, financial
or economic conditions that are expected to cause a significant
decrease in the debtor's ability to meet its debt obligations
-- An actual or expected significant deterioration in the
operating results of the debtor
-- Significant increases in credit risk on other financial
instruments of the same debtor
-- An actual or expected significant adverse change in the
regulatory, economic, or technological environment of
the debtor that results in a significant decrease in
the debtor's ability to meet its debt obligations
Irrespective of the outcome of the above assessment, the Group
presumes that the credit risk on a financial asset has increased
significantly since initial recognition when contractual payments
are more than 30 days past due, unless the Group has reasonable and
supportable information that demonstrates otherwise.
Despite the foregoing, the Group assumes that the credit risk on
a financial instrument has not increased significantly since
initial recognition if the financial instrument is determined to
have low credit risk at the reporting date. A financial instrument
is determined to have low credit risk if:
(i) The financial instrument has a low risk of default,
(ii) The debtor has a strong capacity to meet its contractual
cash flow obligations in the near term, and
(iii) Adverse changes in economic and business conditions in
the longer term, may but will not necessarily, reduce
the ability of the borrower to fulfil its contractual
cash flow obligations.
The Group considers a financial asset to have low credit risk
when the asset has external credit rating of 'investment grade' in
accordance with the globally understood definition or if an
external rating is not available, the asset has an internal rating
of 'performing'. Performing means that the counterparty has a
strong financial position and there is no past due amounts.
The Group regularly monitors the e ectiveness of the criteria
used to identify whether there has been a significant increase in
credit risk and revises them as appropriate to ensure that the
criteria are capable of identifying any significant increase in
credit risk before the amount becomes past due.
(ii) Definition of default
The Group considers the following as constituting an event of
default for internal credit risk management purposes as historical
experience indicates that financial assets that meet either of the
following criteria are generally not recoverable:
-- When there is a breach of financial covenants by the
debtor; or
-- Information developed internally or obtained from external
sources indicates that the debtor is unlikely to pay
its creditors, including the Group, in full (without
taking into account any collateral held by the Group).
Irrespective of the above analysis, the Group considers that
default has occurred when a financial asset is more than 90 days
past due unless the Group has reasonable and supportable
information to demonstrate that di erent default criterion is more
appropriate.
(iii) Credit -impaired financial assets
A financial asset is credit-impaired when one or more events
that have a detrimental impact on the estimated future cash flows
of that financial asset have occurred. Evidence that a financial
asset is credit-impaired includes observable data about the
following events:
(a) Significant financial di culty of the issuer or the borrower;
(b) A breach of contract, such as a default or past due event
(see (ii) above);
(c) The lender(s) of the borrower, for economic or contractual
reasons relating to the borrower's financial di culty,
having granted to the borrower a concession(s) that the
lender(s) would not otherwise consider;
(d) It is becoming probable that the borrower will enter bankruptcy
or other financial reorganisation; or
(e) A disappearance of an active market for that financial
asset because of financial di culties.
(iv) Write-off policy
The Group writes o a financial asset when there is information
indicating that the debtor is in severe financial di culty and
there is no realistic prospect of recovery, e.g. when the debtor
has been placed under liquidation or has entered into bankruptcy
proceedings, or in the case of trade receivables, when the amounts
are over two years past due, whichever occurs sooner. Financial
assets written o may still be subject to enforcement activities
under the Group's recovery procedures, taking into account legal
advice where appropriate. Any recoveries made are recognised in
profit or loss.
(v) Measurement and recognition of expected credit losses
The measurement of expected credit losses is a function of the
probability of default, loss given default (i.e. the magnitude of
the loss if there is a default) and the exposure at default. The
assessment of the probability of default and loss given default is
based on historical data adjusted by forward-looking information as
described above.
As for the exposure at default, for financial assets, this is
represented by the assets' gross carrying amount at the reporting
date; for financial guarantee contracts, the exposure includes the
amount drawn down as at the reporting date, together with any
additional amounts expected to be drawn down in the future by
default date determined based on historical trend, the Group's
understanding of the specific future financing needs of the
debtors, and other relevant forward-looking information.
For financial assets, the expected credit loss is estimated as
the di erence between all contractual cash flows that are due to
the Group in accordance with the contract and all the cash flows
that the Group expects to receive, discounted at the original e
ective interest rate. For a lease receivable, the cash flows used
for determining the expected credit losses is consistent with the
cash flows used in measuring the lease receivable in accordance
with IFRS 16 Leases.
The Group recognises an impairment gain or loss in profit or
loss for all financial instruments with a corresponding adjustment
to their carrying amount through a loss allowance account, except
for investments in debt instruments that are measured at FVTOCI,
for which the loss allowance is recognised in other comprehensive
income and accumulated in reserves, and does not reduce the
carrying amount of the financial asset in the balance sheet.
Derecognition of financial assets
The Group derecognises a financial asset only when the
contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity. If the
Group neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the transferred
asset, the Group recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the
Group retains substantially all the risks and rewards of ownership
of a transferred financial asset, the Group continues to recognise
the financial asset and also recognises a collateralised borrowing
for the proceeds received.
On derecognition of a financial asset measured at amortised
cost, the di erence between the asset's carrying amount and the sum
of the consideration received and receivable is recognised in
profit or loss. In addition, on derecognition of an investment in a
debt instrument classified as at FVTOCI, the cumulative gain or
loss previously accumulated in the investments revaluation reserve
is reclassified to profit or loss. In contrast, on derecognition of
an investment in equity instrument which the Group has elected on
initial recognition to measure at FVTOCI, the cumulative gain or
loss previously accumulated in the investments revaluation reserve
is not reclassified to profit or loss, but is transferred to
retained earnings.
Other investments - heritage assets
Other investments comprise fine art, documents, manuscripts and
philately which are measured at cost as fair value cannot be
reliably measured.
Investments in subsidiary companies
Investments in subsidiary companies are included at cost plus
incidental expenses less any provision for impairment. Impairment
reviews are performed by the Directors when there has been an
indication of potential impairment.
Impairment of non-financial assets
The Group has significant investments in intangible assets,
property, plant and equipment, investment properties, biological
assets, associated companies, financial assets and other
investments. These assets are tested for impairment when
circumstances indicate there may be a potential impairment.
Goodwill and intangible assets with an indefinite useful life are
tested for impairment at least annually. Factors considered which
could trigger an impairment review include a significant fall in
market values, significant underperformance relative to historical
or projected future operating results, a major change in market
conditions or negative cash flows.
Recoverable amount is the higher of fair value less costs of
disposal and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
Where the asset does not generate cash flows that are
independent from other assets, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. When
a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating
units, or otherwise they are allocated to the smallest group of
cash-generating units for which a reasonable and consistent
allocation basis can be identified.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit or loss, unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is treated as a
revaluation decrease and to the extent that the impairment loss is
greater than the related revaluation surplus, the excess impairment
loss is recognised in profit or loss.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss
to the extent that it eliminates the impairment loss which has been
recognised for the asset in prior years. Any increase in excess of
this amount is treated as a revaluation increase.
Inventories
Agricultural produce included within inventory largely comprises
stock of 'black' tea. In accordance with IAS 41, on initial
recognition, agricultural produce is required to be measured at
fair value less estimated point of sale costs.
Other inventories are stated at the lower of cost and net
realisable value. Cost comprises direct materials and, where
applicable, direct labour costs and those overheads that have been
incurred in bringing the inventories to their present location and
condition. Cost is calculated using the weighted average method.
Net realisable value represents the estimated selling price less
all estimated costs of completion and selling expenses.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of three months or less, and bank overdrafts,
which are integral to the Group's cash management activities. Bank
overdrafts are shown within borrowings in current liabilities on
the balance sheet.
Assets classified as held for sale
Assets classified as held for sale are measured at the lower of
the carrying amount and fair value less costs to sell.
Assets are classified as held for sale if their carrying amount
will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the
sale is highly probable and the asset is available for immediate
sale in its present condition. Management must be committed to the
sale which should be expected to qualify for recognition as a
completed sale within one year from the date of classification.
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 e ective 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 e ective 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 di ers 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
di erences 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 a ects 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 di erences can be utilised. Deferred income tax
assets and liabilities are o set when there is a legally
enforceable right to o set current tax assets against current tax
liabilities and when the deferred income taxes assets and
liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or di erent taxable
entities where there is an intention to settle the balances on a
net basis.
Deferred tax is provided on temporary di erences arising on
investments in subsidiaries and associates, except where the timing
of the reversal of the temporary di erence is controlled by the
Group and it is probable that the temporary di erence will not
reverse in the foreseeable future.
Employee benefits
(i) Pension obligations
Group companies operate various pension schemes. The schemes are
funded through payments to insurance companies or
trustee-administered funds. The Group has both defined benefit and
defined contribution plans.
A defined contribution plan is a pension plan under which the
Group pays fixed contributions into a separate fund. The Group has
no legal or constructive obligations to pay further contributions
to the fund. Contributions are recognised as an expense in the
Income Statement when they are due.
A defined benefit plan is a pension plan that defines an amount
of pension benefit that an employee will receive on retirement,
usually dependent on one or more factors such as age, years of
service and compensation. The pension cost for defined benefit
schemes is assessed in accordance with the advice of qualified
independent actuaries using the "projected unit" funding
method.
The liability recognised in the Balance Sheet in respect of
defined benefit pension plans is the present value of the defined
benefit obligation at the balance sheet date less the fair value of
plan assets. Independent actuaries calculate the obligation
annually using the "projected unit" funding method. Actuarial gains
and losses arising from experience adjustments and changes in
actuarial adjustments are recognised in full in the period in which
they occur, they are not recognised in the Income Statement and are
presented in the Statement of Comprehensive Income.
Past service costs are recognised directly in the Income
Statement.
(ii) Other post-employment benefit obligations
Some Group companies have unfunded obligations to pay terminal
gratuities to employees. Provisions are made for the estimated
liability for gratuities as a result of services rendered by
employees up to the balance sheet date and any movement in the
provision is recognised in the Income Statement.
The estimated monetary liability for employees' accrued annual
leave entitlement and workers profit participation at the balance
sheet date is recognised as an accrual.
Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources will be required to settle
the obligation and the amount has been reliably estimated.
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 e ects, is included in equity attributable to the
Company's equity holders.
Dividend distribution
Dividend distribution to the Company's shareholders is
recognised as a liability in the Group's financial statements in
the period in which the dividends are approved by the Company's
shareholders. Interim dividends are recognised when paid.
Critical accounting judgements and key sources of estimation
uncertainty
In the view of the Directors, the following accounting
judgements and estimations have been made in the process of
applying the Group's accounting policies which have a significant e
ect on the amounts recognised in financial statements.
Critical judgements in applying the Group's accounting
policies
The following are critical judgements not being judgements
involving estimations (which are dealt with below) that the
Directors have made in the process of applying the Group's
accounting policies.
Significant judgement in determining the lease term of contracts
with renewal options
The Group determines the lease term as the non-cancellable term
of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or
any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised.
The Group has the option, under some of its leases to lease the
assets for additional terms. The Group applies judgement in
evaluating whether it is reasonably certain to exercise the option
to renew. That is, it considers all relevant factors that create an
economic incentive for it to exercise the renewal. After the
commencement date, the Group reassesses the lease term if there is
a significant event or change in circumstances that is within its
control and a ects its ability to exercise (or not to exercise) the
option to renew (e.g., a change in business strategy).
Key sources of estimation uncertainty
Estimates are continually evaluated and are based on historical
experience and other factors, including expectations of future
events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the future.
The resulting accounting will, by definition, seldom equal the
actual results. The estimates and assumptions that have a risk of
causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are set out below.
(i) Estimation of useful lives of bearer plants
Estimates and assumptions made to determine bearer plants
carrying values and related depreciation are significant to the
Group's financial position and performance. The annual depreciation
charge is determined after estimating an asset's expected useful
life and its residual value at the end of its life. The useful
lives and residual values of the Group's assets are determined by
management at the time the asset is acquired or bearer plant is
planted and reviewed annually for appropriateness. The Group
derives useful economic lives based on experience of similar
assets, including use of third party experts at the time of
acquisition of assets. Emerging governmental policies relating to
climate change are also considered when reviewing the
appropriateness of useful economic lives. A decrease in the average
useful life by 10% would result in additional depreciation of
GBP0.5 million.
(ii) Fair value of assets acquired and liabilities assumed in a
business combination
Business combinations are recorded in accordance with IFRS 3
using the acquisition method. The Group estimates the excess
purchase price in accordance with IFRS3 as the di erence of the
consideration paid for the acquisition and the net asset of the
target company at the acquisition date. Under this method, the
identifiable assets acquired and the liabilities assumed are
recognised at their fair value at the acquisition date. Therefore,
through a number of di erent approaches and with the assistance of
external independent valuation experts for acquisitions as
considered appropriate by management, the Group identifies what it
believes is the fair value of the assets acquired and liabilities
assumed at the acquisition date. These valuations involve the use
of judgement and include a number of estimates. Specifically in
relation to the value of bearer plants this includes assumptions on
useful lives, yield profiles, costs and future selling prices of
the produce.
(iii) Impairment of assets
The assessment of the recoverable amount for each group of CGUs
is subject to a number of assumptions.
The Group has conducted an analysis of the sensitivity of the
impairment test to changes in the key assumptions used to determine
the recoverable amount for each of the group of CGUs to which
intangible and tangible assets are allocated.
(iv) Biological assets
Biological assets are carried at fair value less estimated
point-of-sale costs. Where meaningful market-determined prices do
not exist to assess the fair value of biological assets, the fair
value has been determined based on the net present value of
expected future cash flows from those assets, discounted at
appropriate pre-tax rates. In determining the fair value of
biological assets where the discounting of expected future cash
flows has been used, the Directors have made certain assumptions
about expected life-span of the plantings, yields, selling prices,
costs and discount rates. Details of assumptions made and
sensitivity analysis are given in note 19.
(v) Retirement benefit obligations
Pension accounting requires certain assumptions to be made in
order to value obligations and to determine the impact on the
Income Statement. These figures are particularly sensitive to
assumptions for discount rates, life expectancy and inflation
rates. Details of assumptions made and sensitivity analysis are
given in note 35.
(vi) Taxation and other liabilities
Income tax liabilities include a number of provisions based on
management's interpretation of country specific tax law and the
likelihood of settlement. This can involve a significant amount of
judgement as tax legislation can be complex and open to di erent
interpretation. Management uses professional firms and previous
experience when assessing tax risks. Where actual tax liabilities
di er from the provisions, adjustments are made which can have a
material impact on the Group's profits for the year. It is not
practicable to quantify the range of outcomes with the application
of sensitivity analyses. Tax provision movements are disclosed in
note 9. Significant unprovided contingent tax liabilities are
disclosed in note 41.
(vii) Provisions and other liabilities
Provisions include a number of provisions in respect of ongoing
wage and bonus negotiations which are based on management's
judgement of the expected outcome of these negotiations. Where
actual wage and bonus awards di er from the provisions, adjustments
are made which can have a material impact on the Group's profits
for the year. Provision movements are disclosed in note 33.
Changes in accounting policy and disclosures
(i) New and amended standards adopted by the Group
There were no new or amended IFRSs e ective for the current year
which had a material impact on the financial statements of the
Group.
The IFRS interpretations committee (IFRIC) published an agenda
decision which clarified how a customer should account for the
costs of configuring or customising the suppliers application
software in a software as a service arrangement. As a result the
Group has revised its accounting policy. This had no material
impact on the results.
(ii) Standards, amendments and interpretations to existing
standards that are not yet effective and have not been adopted
early by the Group
At the date of authorisation of these financial statements, the
Group has not applied the following new and revised IFRS Standards
that have been issued but are not yet e ective:
IFRS 17 Insurance contracts
Amendments to IAS 1 Classification of Liabilities
as Current or
Non-current
Amendments to IFRS 3 Reference to the Conceptual
Framework
Amendments to IFRS 10 and IAS 28 Sale or Contribution of
Assets between an
Investor and its Associate
or Joint Venture
Amendments to IAS 16 Property, Plant Proceeds before Intended
and Equipment Use
Amendments to IAS 37 Cost of fulfilling a contract
Amendments to IFRS 9, IAS 39, IFRS Interest Rate Benchmark
7, IFRS 4 and IFRS 16 Reform - Phase 2
Annual Improvements to IFRS 2018-2020
The Directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial
statements of the Group in future periods, except as noted
below:
Amendments to IAS 1 - Classification of Liabilities as Current
or Non-current
The amendments to IAS 1 a ect only the presentation of
liabilities as current or non-current in the balance sheet and not
the amount or timing of recognition of any asset, liability, income
or expenses, or the information disclosed about those items. The
amendments clarify that the classification of liabilities as
current or non-current is based on rights that are in existence at
the end of the reporting period, specify that classification is una
ected by expectations about whether an entity will exercise its
right to defer settlement of a liability, explain that rights are
in existence if covenants are complied with at the end of the
reporting period, and introduce a definition of 'settlement' to
make clear that settlement refers to the transfer to the
counterparty of cash, equity instruments, other assets or
services.
The amendments are applied retrospectively for annual periods
beginning on or after 1 January 2023, with early application
permitted.
Amendments to IFRS 10 and IAS 28 - Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture
The amendments to IFRS 10 and IAS 28 deal with situations where
there is a sale or contribution of assets between an investor and
its associate or joint venture. Specifically, the amendments state
that gains or losses resulting from the loss of control of a
subsidiary that does not contain a business in a transaction with
an associate or a joint venture that is accounted for using the
equity method, are recognised in the parent's profit or loss only
to the extent of the unrelated investors' interests in that
associate or joint venture. Similarly, gains and losses resulting
from the remeasurement of investments retained in any former
subsidiary (that has become an associate or a joint venture that is
accounted for using the equity method) to fair value are recognised
in the former parent's profit or loss only to the extent of the
unrelated investors' interests in the new associate or joint
venture.
The e ective date of the amendments has yet to be set by the
Board; however, earlier application of the amendments is permitted.
The Directors of the Company anticipate that the application of
these amendments may have an impact on the Group's consolidated
financial statements in future periods should such transactions
arise.
Amendments to IFRS 3 - Reference to the Conceptual Framework
The amendments update IFRS 3 so that it refers to the 2018
Conceptual Framework instead of the 1989 Framework. They also add
to IFRS 3 a requirement that, for obligations within the scope of
IAS 37, an acquirer applies IAS 37 to determine whether at the
acquisition date a present obligation exists as a result of past
events. For a levy that would be within the scope of IFRIC 21
Levies, the acquirer applies IFRIC 21 to determine whether the
obligating event that gives rise to a liability to pay the levy has
occurred by the acquisition date. Finally, the amendments add an
explicit statement that an acquirer does not recognise contingent
assets acquired in a business combination. The amendments are e
ective for business combinations for which the date of acquisition
is on or after the beginning of the first annual period beginning
on or after 1 January 2022. Early application is permitted if an
entity also applies all other updated references (published
together with the updated Conceptual Framework) at the same time or
earlier.
Annual Improvements to IFRS Standards 2018-2020
The Annual Improvements include amendments to four
Standards.
IFRS 9 Financial Instruments
The amendment clarifies that in applying the '10 per cent' test
to assess whether to derecognise a financial liability, an entity
includes only fees paid or received between the entity (the
borrower) and the lender, including fees paid or received by either
the entity or the lender on the other's behalf. The amendment is
applied prospectively to modifications and exchanges that occur on
or after the date the entity first applies the amendment.
The amendment is e ective for annual periods beginning on or
after 1 January 2022, with early application permitted.
IFRS 16 Leases
The amendment removes the illustration of the reimbursement of
leasehold improvements. As the amendment to IFRS 16 only regards an
illustrative example, no e ective date is stated.
IAS 41 Agriculture
The amendment removes the requirement in IAS 41 for entities to
exclude cash flows for taxation when measuring fair value. This
aligns the fair value measurement in IAS 41 with the requirements
of IFRS 13 Fair Value Measurement to use internally consistent cash
flows and discount rates and enables preparers to determine whether
to use pre-tax or post-tax cash flows and discount rates for the
most appropriate fair value measurement. The amendment is applied
prospectively, i.e. for fair value measurements on or after the
date an entity initially applies the amendment.
The amendment is e ective for annual periods beginning on or
after 1 January 2022, with early application permitted.
Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2 Making Materiality Judgements-Disclosure
of Accounting Policies
The amendments change the requirements in IAS 1 with regard to
disclosure of accounting policies. The amendment replaces all
instances of the term 'significant accounting policies' with
'material accounting policy information'. Accounting policy
information is material if, when considered together with other
information included in an entity's financial statements, it can
reasonably be expected to influence decisions that the primary
users of general purpose financial statements make on the basis of
those financial statements.
The supporting paragraphs in IAS 1 are also amended to clarify
that accounting policy information that relates to immaterial
transactions, other events or conditions is immaterial and need not
be disclosed. Accounting policy information may be material because
of the nature of the related transactions, other events or
conditions, even if the amounts are immaterial. However, not all
accounting policy information relating to material transactions,
other events or conditions is itself material.
The Board has also developed guidance and examples to explain
and demonstrate the application of the 'four-step materiality
process' described in IFRS Practice Statement 2.
The amendments to IAS 1 are e ective for annual periods
beginning on or after 1 January 2023, with earlier application
permitted and are applied prospectively. The amendments to IFRS
Practice Statement 2 do not contain an e ective date or transition
requirements.
Amendments to IAS 8 Accounting Policies Changes in Accounting
Estimates and Errors-Definition of Accounting Estimates
The amendments replaces the definition of a change in accounting
estimates with a definition of accounting estimates. Under the new
definition, accounting estimates are "monetary amounts in financial
statements that are subject to measurement uncertainty".
The definition of a change in accounting estimates was deleted.
However, the IASB retained the concept of changes in accounting
estimates in the Standard with the following clarifications:
- A change in accounting estimate that results from new information
or new developments is not the correction of an error; and
- The e ects of a change in an input or a measurement technique
used to develop an accounting estimate are changes in accounting
estimates if they do not result from the correction of prior
period errors.
The IASB added two examples (Examples 4-5) to the Guidance on
implementing IAS 8, which accompanies the Standard. The IASB has
deleted one example (Example 3) as it could cause confusion in
light of the amendments.
The amendments are e ective for annual periods beginning on or
after 1 January 2023 to changes in accounting policies and changes
in accounting estimates that occur on or after the beginning of
that period, with earlier application permitted.
Amendments to IAS 12 Income Taxes-Deferred Tax related to Assets
and Liabilities arising from a Single Transaction
The amendments introduce a further exception from the initial
recognition exemption. Under the amendments, an entity does not
apply the initial recognition exemption for transactions that give
rise to equal taxable and deductible temporary di erences.
Depending on the applicable tax law, equal taxable and
deductible temporary di erences may arise on initial recognition of
an asset and liability in a transaction that is not a business
combination and a ects neither accounting nor taxable profit. For
example, this may arise upon recognition of a lease liability and
the corresponding right-of-use asset applying IFRS 16 at the
commencement date of a lease.
Following the amendments to IAS 12, an entity is required to
recognise the related deferred tax asset and liability, with the
recognition of any deferred tax asset being subject to the
recoverability criteria in IAS 12.
The IASB also added an illustrative example to IAS 12 that
explains how the amendments are applied.
Following the amendments to IAS 12, an entity is required to
recognise the related deferred tax asset and liability, with the
recognition of any deferred tax asset being subject to the
recoverability criteria in IAS 12.
The amendments apply to transactions that occur on or after the
beginning of the earliest comparative period presented. In
addition, at the beginning of the earliest comparative period an
entity recognises:
- A deferred tax asset (to the extent that it is probable
that taxable profit will be available against which the
deductible temporary di erence can be utilised) and a deferred
tax liability for all deductible and taxable temporary di
erences associated with:
-- Right-of-use assets and lease liabilities
-- Decommissioning, restoration and similar liabilities
and the corresponding amounts recognised as part of
the cost of the related asset
- The cumulative e ect of initially applying the amendments
as an adjustment to the opening balance of retained earnings
(or other component of equity, as appropriate) at that date
The amendments are e ective for annual reporting periods
beginning on or after 1 January 2023, with earlier application
permitted.
NOTES TO THE ACCOUNTS
1 Business and geographical segments
The principal activities of the Group are as follows:
Agriculture
Engineering
Food Service
For management reporting purposes these activities form the
basis on which the Group reports its primary divisions.
In addition, the Group holds a number of investments.
Segment information about these businesses is presented below.
Following a change in management reporting the figures for 2020
have been restated to move results for Jing Tea to Agriculture from
Food Service.
Agriculture Engineering Food Service Unallocated Consolidated
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Restated Restated
Revenue
External sales 238.8 249.6 15.3 19.3 22.0 21.2 1.1 1.1 277.2 291.2
----- -------- ----- ----- ----- -------- ----- ----- ------ ------
Adjusted trading profit/(loss) 13.1 16.1 (2.3) (1.5) - 0.5 (8.8) (8.2) 2.0 6.9
Separately disclosed items 0.1 (16.1) - - - - (1.2) - (1.1) (16.1)
----- -------- ----- ----- ----- -------- ----- ----- ------ ------
Trading profit/(loss) 13.2 - (2.3) (1.5) - 0.5 (10.0) (8.2) 0.9 (9.2)
Share of associates' results - - - - - - 7.2 6.1 7.2 6.1
Profit on disposal of property, plant and equipment - 14.4 - - - - - - - 14.4
Impairment of intangible assets, investment
properties and plant and equipment - (0.2) (0.5) (1.6) - (3.7) - (1.0) (0.5) (6.5)
Loss on disposal of subsidiaries - - (0.1) - - - - - (0.1) -
Profit on disposal of financial assets 0.2 0.2 - - - - - - 0.2 0.2
----- -------- ----- ----- ----- -------- ----- ----- ------ ------
Operating profit/(loss) 13.4 14.4 (2.9) (3.1) - (3.2) (2.8) (3.1) 7.7 5.0
----------------------------------------------------- ----- -------- ----- ----- ----- -------- ----- ----- ------ ------
Comprising
* adjusted operating profit/(loss) before tax 13.3 16.3 (2.3) (1.5) - 0.5 (1.6) (2.1) 9.4 13.2
* profit on disposal of property, plant and equ
ipment - 14.4 - - - - - - - 14.4
- costs related to group claims - (16.1) - - - - - - - (16.1)
* impairment of intangible assets and property,
plant
and equipment - (0.2) (0.5) (1.6) - (3.7) - (1.0) (0.5) (6.5)
* Loss on disposal of subsidiaries - - (0.1) - - - - - (0.1) -
* release of provisions for wage increases 0.6 - - - - - - - 0.6 -
- acquisition costs - - - - - - (1.2) - (1.2) -
- restructuring costs (0.5) - - - - - - - (0.5) -
----- -------- ----- ----- ----- -------- ----- ----- ------ ------
13.4 14.4 (2.9) (3.1) - (3.2) (2.8) (3.1) 7.7 5.0
----------------------------------------------------- ----- -------- ----- ----- ----- -------- ----- ----- ------ ------
Investment income 0.5 0.6
Net finance (costs)/income (1.1) 2.2
------ ------
Profit before tax 7.1 7.8
Taxation (2.6) (8.6)
------ ------
Profit/(loss) after tax 4.5 (0.8)
------ ------
Other information
Segment assets 385.4 355.9 10.6 16.6 18.9 26.2 24.5 20.5 439.4 419.2
Investments in associates 72.6 67.6
Unallocated assets 81.5 95.5
------ ------
Consolidated total assets 593.5 582.3
------ ------
Segment liabilities (77.7) (61.0) (8.0) (11.8) (5.7) (5.7) (0.8) (2.9) (92.2) (81.4)
Unallocated liabilities (64.0) (74.9)
------ ------
Consolidated total liabilities (156.2) (156.3)
------ ------
Capital expenditure 9.4 11.4 0.3 0.6 0.9 1.2 1.0 1.2 11.6 14.4
Depreciation (11.9) (12.7) (1.0) (1.4) (1.9) (1.9) (0.1) (0.2) (14.9) (16.2)
Amortisation - - - - (0.1) - - (0.3) (0.1) (0.3)
Impairments - (0.2) (0.5) (1.6) - (3.7) - (1.0) (0.5) (6.5)
Segment assets consist primarily of intangible assets, property,
plant and equipment, investment properties, biological assets,
prepaid operating leases, inventories, trade and other receivables
and cash and cash equivalents. Receivables for tax have been
excluded. Investments in associates, valued using the equity
method, have been shown separately in the segment information.
Segment liabilities are primarily those relating to the operating
activities and generally exclude liabilities for taxes, short-term
loans, finance leases and non-current liabilities.
Geographical segments
The Group operations are based in eight main geographical areas.
The United Kingdom is the home country of the parent. The principal
geographical areas in which the Group operates are as follows:
United Kingdom
Bangladesh
India
Kenya
Malawi
North America
South Africa
South America
The Group derives revenue from the transfer of goods and
services over time and at a point in time in the following major
geographical regions:
At a point in
time Over time Total
2021 2020 2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
United Kingdom 52.1 49.8 1.0 1.0 53.1 50.8
Continental Europe 20.2 26.6 - - 20.2 26.6
Bangladesh 24.0 23.3 - - 24.0 23.3
India 97.9 99.9 - - 97.9 99.9
Kenya 32.2 32.0 - - 32.2 32.0
Malawi 13.1 13.7 0.1 0.1 13.2 13.8
North America 7.0 14.7 - - 7.0 14.7
South Africa 1.5 2.2 - - 1.5 2.2
South America 8.5 6.4 - - 8.5 6.4
Other 19.6 21.5 - - 19.6 21.5
------- ------ ----- ----- ----- -----
276.1 290.1 1.1 1.1 277.2 291.2
------- ------ ----- ----- ----- -----
The following is an analysis of the carrying amount of segment
assets and additions to property, plant and equipment and
investment properties, analysed by the geographical area in which
the assets are located:
Carrying amount of segment Additions to property, plant Additions to investment
assets and equipment properties
2021 2020 2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
United Kingdom 113.0 62.1 1.5 2.2 0.9 0.9
Continental
Europe - 0.8 - - - -
Bangladesh 64.3 64.4 1.9 1.7 - -
India 97.2 102.9 2.2 2.7 - -
Kenya 89.5 89.4 2.7 3.7 - -
Malawi 46.8 48.0 0.1 0.4 - -
Tanzania 2.8 3.7 0.9 1.5 - -
North America 0.1 24.7 - - - -
South Africa 14.6 14.2 1.1 1.0 - -
South America 11.1 9.0 0.3 0.3 - -
-------------- -------------- ------------- ------------- -------------- --------------
439.4 419.2 10.7 13.5 0.9 0.9
-------------- -------------- ------------- ------------- -------------- --------------
2 Revenue
An analysis of the Group's revenue is as follows:
2021 2020
GBP'm GBP'm
Sale of goods 238.8 247.2
Distribution and warehousing revenue 22.0 23.6
Engineering services revenue 15.3 19.3
Property rental revenue 1.1 1.1
----- -----
Total Group revenue 277.2 291.2
Other operating income 2.6 3.0
Investment income 0.5 0.6
Interest income 2.2 2.3
----- -----
Total Group income 282.5 297.1
----- -----
Disaggregation of revenue from contracts with customers:
At a point in time Over time
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Sale of goods 238.8 247.2 - -
Distribution and warehousing revenue 22.0 23.6 - -
Engineering services revenue 15.3 19.3 - -
Property rental revenue - - 1.1 1.1
--------- --------- ----- -----
Total Group revenue 276.1 290.1 1.1 1.1
--------- --------- ----- -----
3 Trading profit/(loss)
2021 2020
GBP'm GBP'm
The following items have been included in arriving at trading profit/(loss):
Employment costs (note 13) 117.0 108.1
Inventories:
Cost of inventories recognised as an expense (included in cost of sales) 163.7 163.9
Cost of inventories provision recognised as an expense
(included in cost of sales) 0.2 0.9
Fair value gain included in Made Tea 0.2 0.1
Depreciation of property, plant and equipment:
Owned assets 13.3 15.2
Right-of-use assets 1.6 1.0
Amortisation of intangibles (included in administrative expenses) 0.1 0.3
Gain from change in fair value of non-current biological assets 1.5 0.4
Loss on disposal of property, plant and equipment - (0.1)
Repairs and maintenance expenditure on property, plant and equipment 7.9 2.1
Government grant income (included in other operating income) 0.4 0.8
---------- ----------
During the year the Group benefited from GBP0.4 million (2020:
GBP0.8 million) of government grants in the form of the UK
Coronavirus Job Retention Scheme. In accordance with our accounting
policy this credit is included in other operating income within the
Income Statement over the same period as the sta costs for which it
compensates.
Currency exchange (gains)/losses (credited)/charged to income include:
Revenue - (0.1)
Distribution costs - (0.1)
Administrative expenses 0.2 (0.1)
Finance income and costs (0.4) (2.2)
(0.2) (2.5)
---- ----
During the year the Group (including its overseas subsidiaries)
obtained the following services from the Company's auditor and its
associates:
Audit services:
Statutory audit:
Parent company and consolidated financial statements 0.3 0.2
Subsidiary companies 0.8 0.6
--- ---
1.1 0.8
Tax compliance services - 0.1
--- ---
1.1 0.9
--- ---
4 Adjusted profit
The Group's income statement and segmental analysis separately
identify a number of Alternative Performance Measures (APMs) in
addition to those reported under IFRS. The Directors believe that
the presentation of the results in this way, which is not meant to
be a substitute for or superior to IFRS measures, is relevant to an
understanding of the Group's underlying trends, financial
performance and position. These APMs are also used to enhance the
comparability of information between reporting periods and the
Group's divisions, by adjusting for non-recurring or uncontrollable
factors which a ect IFRS measures, to aid the user in understanding
the underlying performance. Our KPIs are aligned to our strategy.
Consequently, APMs are consistent with how the business performance
is planned and reported internally to the Board and Operating
Committees to aid their decision making.
The following items have been excluded from the adjusted profit
measure and have been separately disclosed:
-- Restructuring costs at Bardsley England of GBP0.5 million
-- Costs of acquisition of Bardsley England of GBP1.2
million
-- A gain resulting from wage provision releases following
wage agreements reached in the year of GBP0.6 million
-- Impairment charges in relation to the property, plant
and equipment relating to Abbey Metal Finishing and
a related loss on sale of that business as reported
in our interim results, totalling GBP0.6 million
In 2020, the following items were excluded from the adjusted
profit measure and have been separately disclosed:
-- A GBP14.4 million profit from the disposal of the property,
plant and equipment owned by Horizon Farms
-- GBP16.1 million of legal and other costs relating to
the defence of the litigation concerning our East African
operations, including the settlements of up to GBP4.6
million in relation to the Kenyan claims and GBP2.3
million in relation to the Malawian claims
-- Impairment charges in relation to the Jing Tea brand,
investment properties, plant and equipment at Abbey
Metal Finishing and at Atfin and elsewhere in the UK
totalling GBP6.5 million
5 Share of associates' results
The Group's share of the results of associates is analysed
below:
2021 2020
GBP'm GBP'm
Profit before tax 7.6 6.7
Taxation (0.4) (0.6)
----- -----
Profit after tax 7.2 6.1
----- -----
6 Profit on disposal of property, plant and equipment
In 2020, a GBP14.4 million profit was realised from the disposal
of the property, plant and equipment owned by Horizon Farms in
California. Total cash consideration was GBP21.6 million.
7 Impairments of intangible assets, investment properties and property, plant and equipment
Abbey Metal Finishing was a UK subsidiary and with its German
subsidiary Atfin provided specialist coating services for the
aerospace sector. These companies operations continued to be a
ected in 2021 by the pandemic and the measures taken to contain it.
These measures, which included a significant lockdown period and
curtailments to travel, constituted a triggering event leading to
an impairment test in the interim condensed financial statements
for the six months ended 30 June 2021, which resulted in a
property, plant and equipment impairment of GBP0.5 million (2020:
GBP1.6 million). These companies were subsequently sold in the
second half of 2021.
In 2020, GBP4.9 million of impairment charges were recognised in
relation to the Jing Tea brand, investment properties and property,
plant and equipment elsewhere in the UK.
8 Finance income and costs
2021 2020
GBP'm GBP'm
Interest payable on loans and bank overdrafts (1.1) (0.9)
Interest payable on leases (0.7) (0.7)
Other interest payable (1.1) -
----- -----
Finance costs (2.9) (1.6)
Finance income - interest income on short-term
bank deposits 2.2 2.3
Net exchange gain on foreign cash balances 0.4 2.2
Employee benefit expense (note 35) (0.8) (0.7)
----- -----
Net finance (costs)/income (1.1) 2.2
----- -----
Other interest payable relates to interest on unpaid withholding
taxes.
9 Taxation
Analysis of charge in the year 2021 2020
Current tax GBP'm GBP'm GBP'm
UK corporation tax
UK corporation tax at 19.00 per cent. (2020: 19.00 per cent.) 0.2 0.3
Double tax relief (0.2) (0.3)
Use of losses to shelter capital gain on disposal of financial assets (2.2) -
Adjustment in respect of prior years (0.2) -
----- -----
-
Foreign tax (2.4)
Corporation tax 6.3 13.2
Adjustment in respect of prior years 0.9 -
----- -----
7.2 13.2
----- -----
Total current tax 4.8 13.2
Deferred tax
Origination and reversal of timing di erences
United Kingdom (1.5) (0.7)
Overseas (0.7) (3.9)
----- -----
(2.2) (4.6)
----- -----
Tax on profit on ordinary activities 2.6 8.6
----- -----
Factors affecting tax charge for the year
Profit on ordinary activities before tax 7.1 7.8
Share of associated undertakings profit (7.2) (6.1)
----- -----
Group profit on ordinary activities before tax (0.1) 1.7
----- -----
Tax on ordinary activities at the standard rate of corporation tax
in the UK of 19.00 per cent. (2020: 19.00 per cent.) - 0.3
E ects of:
Adjustment to tax in respect of prior years 0.7 -
Expenses not deductible for tax purposes 1.2 0.3
Adjustment in respect of foreign tax rates 0.9 2.5
Additional tax arising on dividends from overseas companies 0.5 0.5
Other income not charged to tax (0.3) (0.6)
Change in deferred tax not recognised (3.7) -
Increase in tax losses carried forward 3.1 6.0
Movement in other timing di erences 0.2 (0.4)
----- -----
Total tax charge for the year 2.6 8.6
----- -----
In 2021, the tax charge includes a deferred tax credit of
GBP3.7m relating to the recognition of deferred tax losses able to
be utilised to o set tax on gains in the UK pension scheme surplus
recognised through other comprehensive income where the related
equal and opposite charge arises in the Statement of Comprehensive
Income.
The tax charge includes a credit of GBP0.1 million (2020: GBP0.7
million) relating to the recognition of deferred tax losses able to
be utilised to o set gains in value of financial assets at fair
value through other comprehensive income where the related equal
and opposite charge arises in the Statement of Comprehensive
Income.
In 2021 the current tax charge includes a credit of GBP2.2
million arising from the use of losses to o set gains on disposal
of financial assets held at fair value through other comprehensive
income. The deferred tax charge includes an equal and opposite
charge to reflect the impact of utilising previously unrecognised
losses in the Statement of Comprehensive Income.
In 2020, losses arising in the UK, including legal and other
costs relating to the defense of the litigation concerning our East
African operations, gave rise to a significant increase in losses
carried forward which cannot be recognised as a deferred tax
asset.
In 2020, a GBP14.4 million profit on disposal of the property,
plant and equipment owned by Horizon Farms gave rise to a
corporation tax charge of GBP5.6 million offset by a release of
deferred tax of GBP1.7 million.
10 Profit for the year
2021 2020
GBP'm GBP'm
The profit of the Company was: 6.5 4.5
----- -----
The Company has taken advantage of the exemption under Section
408 of the Companies Act 2006 not to disclose its income
statement.
11 Equity dividends
2021 2020
GBP'm GBP'm
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 December 2020 of 144p
(2019: nil) per share 4.0 -
Interim dividend for the year ended 31 December 2021 of 44p
(2020: nil) per share 1.2 -
Special interim dividend for the year ended 31 December 2021 of
nil (2020: 102p) per share - 2.8
----- -----
5.2 2.8
----- -----
Dividends amounting to GBP0.1 million (2020: GBP0.1 million)
have not been included as group companies hold 62,500 issued shares
in the Company. These are classified as treasury shares.
Proposed final dividend for the year ended 31 December 2021 of
102p (2020: 144p) per share 2.8 4.1
--- ---
The proposed final dividend is subject to approval by the
shareholders at the AGM and has not been included as a liability in
these financial statements.
12 Earnings /(loss) per share (EPS)
2021 2020
Weighted Weighted
average average
number number
of of
Earnings shares EPS Loss shares EPS
Basic and diluted
EPS GBP'm Number Pence GBP'm Number Pence
Attributable
to ordinary
shareholders 2.3 2,762,000 83.3 (5.0) 2,762,000 (181.0)
-------- --------- ----- ----- --------- ------
Basic and diluted earnings per share are calculated by dividing
the earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the period,
excluding those held by the Group as treasury shares (note 36).
13 Employees
2021 2020
Number Number
Average number of employees by activity:
Agriculture 77,982 75,522
Engineering 204 223
Food Service 296 282
Central Management 32 33
------ ------
78,514 76,060
------ ------
2021 2020
GBP'm GBP'm
Employment costs:
Wages and salaries 106.5 97.1
Social security costs 2.5 2.4
Employee benefit obligations (note 35) - UK 1.4 1.8
- Overseas 6.6 6.8
117.0 108.1
----- -----
Total remuneration paid to key employees who are members of the
Executive Committees, excluding Directors of Camellia Plc, amounted
to GBP2.4 million (2020: GBP2.5 million).
14 Emoluments of the directors
2021 2020
GBP'm GBP'm
Aggregate emoluments excluding pension contributions 2.0 2.0
----- -----
Emoluments of the highest paid director excluding pension
contributions were GBP0.7 million (2020: GBP0.7 million).
Further details of directors' emoluments are set out on pages 45
to 46.
15 Intangible assets
Computer
Goodwill Brands software Total
Group GBP'm GBP'm GBP'm GBP'm
Cost
At 1 January 2020 1.4 8.8 2.3 12.5
Exchange di erences (0.1) (0.1) - (0.2)
Additions - - 0.3 0.3
-------- ------ -------- -----
At 1 January 2021 1.3 8.7 2.6 12.6
Subsidiaries joining the
group 3.6 - - 3.6
Disposals - - (1.3) (1.3)
-------- ------ -------- -----
At 31 December 2021 4.9 8.7 1.3 14.9
-------- ------ -------- -----
Amortisation
At 1 January 2020 0.3 - 1.9 2.2
Charge for the year - - 0.3 0.3
Impairment provision - 3.5 - 3.5
-------- ------ -------- -----
At 1 January 2021 0.3 3.5 2.2 6.0
Charge for the year - - 0.1 0.1
Disposals - - (1.3) (1.3)
-------- ------ -------- -----
At 31 December 2021 0.3 3.5 1.0 4.8
-------- ------ -------- -----
Net book value at 31 December
2021 4.6 5.2 0.3 10.1
-------- ------ -------- -----
Net book value at 31 December
2020 1.0 5.2 0.4 6.6
-------- ------ -------- -----
In accordance with the Group's accounting policy, goodwill and
intangible assets are tested annually for impairment. There was no
indication of impairment for the year to 31 December 2021 (2020:
GBPnil).
Goodwill consists of the following:
2021 2020
Cash Generating Unit
Segment (CGU) Net Book Net Book
Value Value
GBP'm GBP'm
Tea estates acquired
Agriculture in Assam, India 1.0 1.0
Bardsley England 3.6 -
-------- --------
4.6 1.0
-------- --------
Bardsley England
The valuation of Bardsley England has been assessed and the
recoverable value was considered to exceed the carrying value by
GBP4.3m. The valuation is based on discounted cash flows, is
sensitive to input assumptions particularly in relation to the rate
of growth of partner grower volumes and net margins. The key
assumptions and sensitivities are set out below:
Change in assumption
Assumption Impact on impairment
+1% -1%
GBP'm GBP'm
Rate of growth of partner
grower volumes 5.0% 0.7 (0.7 )
Discount rate 9.8% 2.3 (3.0)
If forecasted margins were to change by +/-1 % in every year it
would have the e ect of a decrease/increase in the impairment of
GBP3.3 million.
Tea estates acquired in Assam, India
The recoverable value was considered to exceed the carrying
value by GBP0.3 million. The valuation is based on multiples of the
annual average production of the relevant estates. The multiple
would need to decrease by 8% for any impairment to arise.
Intangibles comprise brands owned relating to Jing Tea with a
net book value of GBP3.6 million and GBP1.6 million for the Indian
packet tea operations. The brands are assessed to have indefinite
lives.
Indian brands
The fair value less costs to sell of the Indian packet tea
brands were significantly in excess of the carrying value. No
reasonably possible change in the key assumptions would result in a
recoverable amount that was lower than the carrying amount.
Jing Tea
The fair value of the brand owned by Jing Tea was calculated
using the Royalty Forgiven methodology. This is sensitive to input
assumptions, particularly in relation to future growth, notably
customer demand growth. A range of scenarios has been considered
and the recoverable amount derived from these shows a recoverable
amount in excess of the carrying value. The key assumptions and
sensitivities are set out below:
Change in assumption
Assumption Impact on impairment
+1% -1%
GBP'm GBP'm
Royalty rate 4.2% (0.8) 0.8
Discount rate 10.2% 0.4 (0.4)
If forecasted revenues were to change by +/-1 % in every year it
would have the e ect of a decrease/increase in the impairment of
GBP0.1 million.
16 Property, plant and equipment
Fixtures,
Land Plant fittings
Bearer and and and
plants buildings machinery equipment Total
Group GBP'm GBP'm GBP'm GBP'm GBP'm
Deemed cost
At 1 January 2020 141.3 109.0 114.1 18.9 383.3
Exchange di erences (8.5) (4.6) (5.7) (0.7) (19.5)
Additions 3.7 4.0 4.3 1.5 13.5
Disposals (5.7) (1.1) (6.8) (0.6) (14.2)
Reclassification to investment
properties - (0.1) - - (0.1)
------ --------- --------- --------- -----
At 1 January 2021 130.8 107.2 105.9 19.1 363.0
Exchange di erences (3.0) (1.2) (1.6) (0.2) (6.0)
Additions 4.5 2.0 3.5 0.7 10.7
Disposals - (0.1) (2.5) (0.5) (3.1)
Transfer between categories 0.3 0.6 0.7 (1.6) -
Subsidiaries joining
the group 3.0 10.2 5.8 0.5 19.5
Reclassification to investment
properties - (3.1) - - (3.1)
Reclassification to right-of-use
assets - (1.2) (0.4) - (1.6)
Reclassification to held
for sale - (3.6) (8.1) (1.9) (13.6)
------ --------- --------- --------- -----
At 31 December 2021 135.6 110.8 103.3 16.1 365.8
------ --------- --------- --------- -----
Depreciation
At 1 January 2020 26.7 52.3 73.1 8.7 160.8
Exchange di erences (2.0) (1.7) (3.5) (0.4) (7.6)
Charge for the year 5.3 2.5 6.4 1.0 15.2
Disposals (1.4) (0.2) (4.7) (0.2) (6.5)
Impairment provision - - 1.6 1.2 2.8
------ --------- --------- --------- -----
At 1 January 2021 28.6 52.9 72.9 10.3 164.7
Exchange di erences (0.8) (0.3) (0.8) (0.2) (2.1)
Charge for the year 4.4 2.3 5.8 0.8 13.3
Disposals - (0.1) (2.1) (0.4) (2.6)
Transfer between categories - 1.4 (0.4) (1.0) -
Reclassification to right-of-use
assets - - (0.3) - (0.3)
Reclassification to held
for sale - (1.5) (8.1) (0.2) (9.8)
Impairment provision - - 0.5 - 0.5
------ --------- --------- --------- -----
At 31 December 2021 32.2 54.7 67.5 9.3 163.7
------ --------- --------- --------- -----
Net book value at 31
December 2021 103.4 56.1 35.8 6.8 202.1
------ --------- --------- --------- -----
Net book value at 31
December 2020 102.2 54.3 33.0 8.8 198.3
------ --------- --------- --------- -----
The plant and machinery impairment provision of GBP0.5 million
related to Abbey Metal Finishing and its subsidiary company Atfin
and arose due to the impact of COVID on the aerospace industry.
Assets were subsequently reclassified to held for sale.
The amount of expenditure for property, plant and equipment in
the course of construction (including immature bearer plants)
amounted to GBP4.7 million (2020: GBP4.7 million).
Reclassification to right-of-use assets arose from changes in
land registration in Tanzania.
17 Right-of-use assets
Land and Plant and
buildings machinery Total
GBP'm GBP'm GBP'm
Group
Deemed cost
At 1 January 2020 19.0 0.6 19.6
Exchange di erences (0.5) - (0.5)
Additions 0.4 0.1 0.5
Businesses joining the group (1.0) (0.1) (1.1)
--------- --------- -----
At 1 January 2021 17.9 0.6 18.5
Exchange di erences (0.1) - (0.1)
Additions 0.6 1.0 1.6
Disposals (0.5) (0.2) (0.7)
Reclassification from property,
plant and equipment 1.2 0.4 1.6
Reclassification to held for sale (3.6) - (3.6)
Subsidiaries joining the group 14.0 0.6 14.6
--------- --------- -----
At 31 December 2021 29.5 2.4 31.9
--------- --------- -----
Depreciation
At 1 January 2020 0.9 0.2 1.1
Exchange di erences (0.1) - (0.1)
Charge for the year 0.8 0.2 1.0
Disposals (0.1) - (0.1)
--------- --------- -----
At 1 January 2021 1.5 0.4 1.9
Charge for the year 1.2 0.4 1.6
Disposals (0.4) (0.1) (0.5)
Reclassification from property,
plant and equipment - 0.3 0.3
Reclassification to held for sale (0.2) - (0.2)
--------- --------- -----
At 31 December 2021 2.1 1.0 3.1
--------- --------- -----
Net book value at 31 December
2021 27.4 1.4 28.8
--------- --------- -----
Net book value at 31 December
2020 16.4 0.2 16.6
--------- --------- -----
The Group leases many assets including land, buildings and
plant. The average lease term is 69 years (2020: 99 years).
Leases that expired in the year and were replaced by new leases
for identical or the same underlying assets resulted in additions
to right-of-use assets of GBP1.0 million (2020: GBP0.1
million).
The maturity analysis of lease liabilities is presented in note 32.
2021 2020
GBP'm GBP'm
Amounts recognised in the consolidated income statement:
Interest expense on lease liabilities 0.7 0.7
Expense relating to short-term leases 0.1 0.1
----- -----
18 Investment properties
GBP'm
Group
Cost
At 1 January 2020 19.5
Additions 0.9
Reclassification from property, plant and equipment 0.1
-----
At 1 January 2021 20.5
Additions 0.9
Reclassification from property, plant and equipment 3.1
-----
At 31 December 2021 24.5
-----
Depreciation
At 1 January 2020 1.2
Charge for the year -
Impairment provision 0.2
-----
At 1 January 2021 1.4
Charge for the year -
-----
At 31 December 2021 1.4
-----
Net book value at 31 December 2021 23.1
-----
Net book value at 31 December 2020 19.1
-----
Included in revenue is GBP1.1 million (2020: GBP1.1 million) of
rental income generated from investment properties. Direct
operating expenses relating to the investment property, the
majority of which generated rental income in the period, amounted
to GBP0.2 million (2020: GBP0.1 million).
At the end of the year the fair value of Investment properties
was GBP34.4 million (2020: GBP23.9 million) based on vacant
possession. Investment properties were valued by the Directors
(fair value hierarchy Level 2).
19 Biological assets
Non-current: Forestry Livestock Total
GBP'm GBP'm GBP'm
Group
At 1 January 2020 13.5 1.1 14.6
Exchange di erences (1.4) (0.1) (1.5)
Additions 0.2 - 0.2
Gains arising from changes in fair
value less estimated
point-of-sale costs 0.1 0.3 0.4
Decreases due to harvesting (0.7) (0.3) (1.0)
-------- --------- -----
At 1 January 2021 11.7 1.0 12.7
Exchange di erences (0.3) - (0.3)
Additions 0.4 - 0.4
Gains arising from changes in fair
value less estimated
point-of-sale costs 1.1 0.4 1.5
Decreases due to harvesting (0.5) (0.4) (0.9)
At 31 December 2021 12.4 1.0 13.4
-------- --------- -----
Agricultural activity is exposed to financial risks arising from
adverse climatic events, changes in market price and crop yields.
The Group's largely overseas activities also give exposure to
foreign currency movement risk. The Group takes reasonable steps to
ensure that harvests are not a ected by climatic and natural
events, pest and disease or any other factors that may negatively
impact on the quality and yields obtained.
Current:
2021 2020
GBP'm GBP'm
Group
Tea 0.2 0.4
Edible nuts 2.2 2.0
Soya 3.6 2.9
Avocado 1.5 1.8
Other 0.3 -
----- -----
7.8 7.1
----- -----
Biological assets are carried at fair value. Where meaningful
market-determined prices do not exist to assess the fair value of
biological assets, the fair value has been determined based on the
net present value of expected future cash flows from those assets,
discounted at appropriate pre-tax rates. In determining the fair
value of biological assets where the discounting of expected future
cash flows has been used, the Directors have made certain
assumptions about the expected life-span of the plantings, yields,
selling prices and costs. There are no individually significant
unobservable inputs. The fair value of livestock is based on market
prices of livestock of similar age and sex.
New planting additions represent new areas planted to the
particular crop at cost.
As at 31 December 2021 the area planted to Forestry amounted to
5,788 Hectares (2020: 5,877) from which 157,687 cubic metres (2020:
203,541) were harvested during the year.
Livestock numbers were 4,332 head (2020: 4,529) at 31 December
2021.
Fair value measurement
All of the biological assets fall under level 3 of the hierarchy
defined in IFRS 13.
The basis upon which the valuations are determined is set out in
accounting policies on page 58.
Valuations by external professional valuers and those derived
from discounted cash flows both make assumptions based on
observable inputs of: yields, an increase in which will raise the
value; costs, an increase in which will decrease the value; market
prices, an increase in which will raise the value; life span of the
plantings, an increase in which will raise the value; discount
rates, an increase in which will decrease the value. These
assumptions vary significantly across di erent countries, crops and
varieties. In preparing these valuations a long-term view is taken
on the yields and prices achievable.
The fair value of biological assets is sensitive to these
assumptions, the more significant of which are as follows:
Non-current:
- Forestry - a 10% movement in the market price for trees
or volume of trees assumed would result in a GBP1.2 million
(2020: GBP1.2 million) increase/decrease in the fair
value of forestry.
Current:
- Macadamia - a 10% increase/decrease in the volumes assumed
would result in a GBP0.9 million (2020: GBP0.9 million)
increase/decrease in the fair value of macadamia growing
crop. A 10% increase/decrease in selling price assumed
for macadamia would result in a GBP0.9 million (2020:
GBP0.9 million) increase/decrease in the fair value.
- Avocados - a 10% increase/decrease in the volume or the
price assumed would result in a GBP0.2 million (2020:
GBP0.2 million) increase/decrease in the fair value of
Hass avocados growing crop.
- Soya - a 10% increase/decrease in the volume or the price
assumed would result in a GBP0.4 million (2020: GBP0.3
million) increase/decrease in the fair value of soya
growing crop.
Financial risk management strategies
The Group is exposed to financial risks arising from changes in
the prices of the agricultural products it produces. There are no
futures markets available for the majority of crops grown by the
Group. The Group's exposure to this risk is mitigated by the
geographical spread of its operations, selective forward selling in
certain instances when considered appropriate, and regular reviews
of available market data on sales and production. The Group
monitors closely the returns it achieves from its crops and
considers replacing its biological assets when yields decline with
age or markets change.
Further financial risk arises from changes in market prices of
key cost components. Such costs are closely monitored.
20 Investments in subsidiaries
2021 2020
GBP'm GBP'm
Company
Cost
At 1 January and 31 December 73.5 73.5
----- -----
21 Investments in associates
2021 2020
GBP'm GBP'm
Group
At 1 January 93.7 92.9
Exchange di erences 0.8 (3.0)
Share of profit (note 5) 7.2 6.1
Dividends (3.0) (3.2)
Additions - 0.3
Other equity movements 0.2 0.6
----- -----
At 31 December 98.9 93.7
----- -----
Provision for diminution in value
At 1 January 26.1 26.9
Exchange differences 0.2 (0.8)
----- -----
At 31 December 26.3 26.1
----- -----
Net book value at 31 December 72.6 67.6
----- -----
Details of the Group's associates are shown in note 43.
The Group's share of the results of its principal associates and
its share of the assets (including goodwill) and liabilities are as
follows:
Country of Interest Market
incorporation Assets Liabilities Revenues Profit held value
GBP'm GBP'm GBP'm GBP'm % GBP'm
2021
Listed
BF&M Bermuda 684.2 (597.9) 58.1 6.4 37.4 57.7
United Finance Limited Bangladesh 84.6 (74.7) 2.8 0.7 38.4 13.0
United Insurance
Company Limited Bangladesh 4.3 (1.6) 0.3 0.1 37.0 9.3
------ ----------- -------- ------ ------
773.1 (674.2) 61.2 7.2 80.0
------ ----------- -------- ------ ------
2020
Listed
BF&M Bermuda 630.2 (549.0) 68.1 5.2 37.6 49.7
United Finance Limited Bangladesh 70.7 (60.8) 2.8 0.7 38.4 11.0
United Insurance
Company Limited Bangladesh 4.0 (1.4) 0.4 0.2 37.0 7.8
------ ----------- -------- ------ ------
704.9 (611.2) 71.3 6.1 68.5
------ ----------- -------- ------ ------
22 Financial assets at fair value through other comprehensive income
Group Company
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
At 1 January 43.8 40.0 0.2 0.2
Exchange di erences - (1.5 ) - -
Fair value adjustment 0.8 2.3 - -
Additions 3.5 6.5 - -
Disposals (8.1) (2.4 ) - -
Fair value adjustment for disposal (11.6) (1.1 ) - -
----- ----- ----- -----
At 31 December 28.4 43.8 0.2 0.2
----- ----- ----- -----
Provision for diminution in value
At 1 January 1.2 2.2 0.2 0.2
Exchange di erences - - - -
Disposals (0.5) (1.0 ) - -
----- ----- ----- -----
At 31 December 0.7 1.2 0.2 0.2
----- ----- ----- -----
Net book value at 31 December 27.7 42.6 - -
----- ----- ----- -----
Disposals arose to support Group strategy.
Financial assets at fair value through other comprehensive
income include the following:
Group
2021 2020
GBP'm GBP'm
Listed securities:
Equity securities - Bermuda 0.6 0.8
Equity securities - Japan 8.3 19.1
Equity securities - Switzerland 9.0 12.7
Equity securities - US 2.7 4.0
Equity securities - India 0.8 0.7
Equity securities - Europe 0.4 0.1
Equity securities - United Kingdom 5.3 4.7
Equity securities - Other 0.6 0.5
----- -----
27.7 42.6
----- -----
Financial assets at fair value through other comprehensive
income are denominated in the following currencies:
Group
2021 2020
GBP'm GBP'm
Sterling 5.3 4.7
US Dollar 2.7 4.0
Euro 0.4 0.1
Swiss Franc 9.0 12.7
Indian Rupee 0.8 0.7
Bermudian Dollar 0.6 0.8
Japanese Yen 8.3 19.1
Other 0.6 0.5
----- -----
27.7 42.6
----- -----
23 Financial assets at fair value through profit or loss
Group
2021 2020
GBP'm GBP'm
At 1 January 5.3 6.2
Exchange di erences - (0.2)
Fair value adjustment 0.1 0.1
Additions 5.4 5.9
Disposals (0.9) (6.7)
----- -----
At 31 December 9.9 5.3
----- -----
Financial assets at fair value through profit or loss include the following:
Group
2021 2020
GBP'm GBP'm
Listed securities:
Money market - Bermuda 1.6 1.6
Money market - India 8.3 3.6
Money market - Switzerland - 0.1
----- -----
9.9 5.3
----- -----
Financial assets at fair value through profit or loss are
denominated in the following currencies:
Group
2021 2020
GBP'm GBP'm
US Dollar 1.6 1.7
Indian Rupee 8.3 3.6
----- -----
9.9 5.3
----- -----
Current 2.7 -
Non-Current 7.2 5.3
----- -----
9.9 5.3
----- -----
24 Financial assets at amortised cost
Group
2021 2020
GBP'm GBP'm
At 1 January 2.7 3.0
Exchange di erences (0.1) (0.3)
Disposals - -
----- -----
At 31 December 2.6 2.7
----- -----
Financial assets at amortised cost comprises:
2021 2020
GBP'm GBP'm
Treasury infrastructure bonds - 12.2% to
12.5% interest payable twice yearly and
redeemable in November 2022 - Kenya 1.3 1.4
Treasury infrastructure bonds - 12.2% to
12.5% interest payable twice yearly and
redeemable in November 2024 - Kenya 1.3 1.3
----- -----
2.6 2.7
----- -----
Current 1.3 -
Non-Current 1.3 2.7
2.6 2.7
----- -----
25 Other investments - heritage assets
Group Company
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Cost
At 1 January 9.8 9.8 11.0 11.0
Disposals (0.1) - (0.1) -
Reclassification to held
for sale (1.0) - (2.1) -
----- ----- ----- -----
At 31 December 8.7 9.8 8.8 11.0
----- ----- ----- -----
Heritage assets comprise the Group's and Company's investment in
fine art, philately, documents and manuscripts. The market value of
these collections is expected to be in excess of book value.
26 Inventories
2021 2020
GBP'm GBP'm
Group
Made Tea 25.7 28.3
Other agricultural produce 7.8 4.7
Work in progress 0.1 0.1
Trading stocks 1.1 0.5
Raw materials and consumables 17.0 13.9
----- -----
51.7 47.5
----- -----
Made tea inventories include the fair value of green leaf which
includes a fair value uplift of GBP0.2 million (2020: GBP0.1
million).
27 Trade and other receivables
Group Company
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Group
Current:
Trade receivables 32.7 31.3 - -
Amounts owed by associated
undertakings 0.1 0.1 - -
Other receivables 4.8 5.4 - 0.6
Prepayments and accrued income 10.9 6.9 0.2 -
----- ----- ----- -----
48.5 43.7 0.2 0.6
----- ----- ----- -----
Non-current:
Other receivables 2.7 2.4 - -
2.7 2.4 - -
----- ----- ----- -----
The carrying amounts of the Group's trade and other receivables
are denominated in the following currencies:
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Current:
Sterling 17.8 11.6 0.2 0.6
US Dollar 3.5 4.8 - -
Euro 0.8 0.3 - -
Kenyan Shilling 2.6 2.3 - -
Indian Rupee 16.8 19.7 - -
Malawian Kwacha 1.5 1.5 - -
Bangladesh Taka 2.1 2.0 - -
South African Rand 0.2 0.2 - -
Brazilian Real 2.5 0.7 - -
Other 0.7 0.6 - -
----- ----- ----- -----
48.5 43.7 0.2 0.6
----- ----- ----- -----
Non-current:
Sterling 0.3 -
Kenyan Shilling 0.5 0.5
Indian Rupee 1.4 1.2
Malawian Kwacha 0.3 0.4
Bangladesh Taka 0.2 0.3
2.7 2.4
----- -----
Included within trade receivables is a provision for expected
credit losses of GBP0.8 million (2020: GBP0.6 million). All other
trade receivables are with normal trading partners and there is no
history of defaults.
Trade receivables include receivables of GBP6.4 million (2020:
GBP5.1 million) which are past due at the reporting date against
which the Group has not provided, as there has not been a
significant change in credit quality and the amounts are still
considered recoverable. Ageing of past due but not provided for
receivables is as follows:
2021 2020
GBP'm GBP'm
Up to 30 days 4.1 2.2
30-60 days 0.8 0.6
60-90 days 0.3 0.7
Over 90 days 1.2 1.6
----- -----
6.4 5.1
----- -----
28 Cash and cash equivalents (excluding bank overdrafts)
Group Company
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Cash at bank and in hand 25.9 57.8 0.7 -
Short-term bank deposits 35.3 39.6 - -
Short-term liquid investments 0.6 1.1 - -
----- ----- ----- -----
61.8 98.5 0.7 -
----- ----- ----- -----
Cash, cash equivalents and bank overdrafts include the following
for the purposes of the cash flow statement:
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Cash and cash equivalents 61.8 98.5 0.7 -
Bank overdrafts (note 31) (1.9) (3.6 ) - -
----- ----- ----- -----
59.9 94.9 0.7 -
----- ----- ----- -----
2021 2020
E ective interest rate:
0.01 -
Short-term deposits 0.01 - 10.25% 9.00%
2.50 -
Short-term liquid investments 3.00 - 4.00% 7.00%
Average maturity period:
Short-term deposits 67 days 73 days
Short-term liquid investments 32 days 31 days
29 Assets classified as held for sale/liabilities related to assets classified as held for sale
During the year the following assets were transferred to held
for sale:
Group Company
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Reclassified from property,
plant and equipment 3.8 - - -
Reclassified from right-of-use
assets 3.4 - - -
Reclassified from heritage
assets 1.0 - 2.1 -
Reclassified from current
assets 0.7 - - -
----- ----- ----- -----
8.9 - 2.1 -
Disposal of subsidiaries during
year (2.3) - - -
----- ----- ----- -----
At 31 December 6.6 - 2.1 -
----- ----- ----- -----
Liabilities related to assets classified
as held for sale as at 31 December:
Reclassified from lease liabilities 2.0 - - -
----- ----- ----- -----
At 31 December 2021, the assets and related lease liability of
two London properties owned by the Group have been classified as
held for sale. Since the year end, one of these properties has been
sold. In addition, a number of the Group's and Company's heritage
assets and other items of art are being marketed for sale during
2022.
30 Trade and other payables
Group Company
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Current:
Trade payables 18.1 22.4 0.1 0.1
Other taxation and social
security 4.8 1.1 - -
Other payables 26.8 20.2 0.2 0.1
Accruals and deferred income 9.5 7.2 0.6 0.6
----- ----- ----- -----
59.2 50.9 0.9 0.8
----- ----- ----- -----
Included in other taxation and social security is GBP0.1 million
(2020: GBP0.7 million) of VAT payable by the UK operations which
was deferred from Q1 2020 as part of the UK Government deferral
scheme in relation to COVID and was fully repaid by the end of
February 2022.
31 Financial liabilities - borrowings
2021 2020
GBP'm GBP'm
Group
Current:
Bank overdrafts 1.9 3.6
Bank loans 1.4 2.1
------ ------
3.3 5.7
------ ------
Current borrowings include the following
amounts secured on
property, plant and equipment and investment
properties:
Bank overdrafts 0.3 2.0
Bank loans 1.4 2.1
------ ------
1.7 4.1
------ ------
Non-current:
Bank loans 4.5 2.7
------ ------
Non-current borrowings include the following
amounts secured on
plant and equipment and investment properties:
Bank loans 4.5 2.7
------ ------
The repayment of bank loans and overdrafts
fall due as follows:
Within one year or on demand (included
in current liabilities) 3.3 5.7
Between 1 - 2 years 0.7 0.4
Between 2 - 5 years 1.2 1.2
After 5 years 2.6 1.1
------ ------
7.8 8.4
------ ------
The rates of interest payable by the Group
ranged between:
2021 2020
% %
3.25 - 1.60 -
Bank overdrafts 16.50 17.50
6.90 - 3.03 -
Bank loans 7.55 8.50
32 Lease liabilities
2021 2020
GBP'm GBP'm
Group
Maturity analysis of lease liabilities
is as follows:
Within one year 3.2 1.2
Between 1 - 2 years 2.3 1.1
Between 2 - 5 years 5.0 2.3
Onwards 14.2 6.9
----- -----
24.7 11.5
----- -----
Analysed as:
Current 3.2 1.2
Non-current 21.5 10.3
24.7 11.5
----- -----
The Group does not face a significant liquidity risk with regard
to its lease liabilities. Lease liabilities are monitored within
the individual subsidiaries' finance functions.
33 Provisions
Wages and Legal
salaries claims Others Total
GBP'm GBP'm GBP'm GBP'm
Group
At 1 January 2020 7.7 - 1.2 8.9
Exchange di erences (0.5) - - (0.5)
Utilised in the period (7.3) (0.3) (7.6)
Provided in the period 10.5 8.2 0.2 18.9
Unused amounts reversed
in period (0.7) - - (0.7)
--------- ------ ------ -----
At 1 January 2021 9.7 8.2 1.1 19.0
Exchange di erences (0.1) (0.1) - (0.2)
Utilised in the period (7.6) (6.9) (0.4) (14.9)
Provided in the period 7.7 - 0.3 8.0
Subsidiaries joining the
group - - 0.5 0.5
Unused amounts reversed
in period (0.6) - - (0.6)
--------- ------ ------ -----
At 31 December 2021 9.1 1.2 1.5 11.8
--------- ------ ------ -----
Current:
At 31 December 2021 9.1 1.2 1.5 11.8
--------- ------ ------ -----
At 31 December 2020 9.7 8.2 1.1 19.0
--------- ------ ------ -----
The wages and salaries provisions are in respect of ongoing wage
and bonus negotiations in India and Bangladesh, the majority of
which are expected to be utilised during 2022.
Legal claims relate to the expected cost of the defence of the
litigation concerning our East African operations, including
settlements and progressive measures.
Others relate to provisions for claims and dilapidations.
Legal claims Total
GBP'm GBP 'm
Company
At 1 January 2020 - -
Provided in the period 1.9 1.9
At 1 January 2021 1.9 1.9
Utilised in the period (1.9) (1.9)
------------ ------
At 31 December 2021 - -
------------ ------
Current:
At 31 December 2021 - -
------------ ------
At 31 December 2020 1.9 1.9
------------ ------
Legal claims related to the defence of the litigation concerning
our East African operations.
34 Deferred tax
The net movement on the deferred tax account is set out
below:
Group Company
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
At 1 January 39.5 47.1 0.2 0.2
Exchange di erences (1.0) (3.1 ) - -
Credited to the income statement (2.2) (4.6 ) - -
Charged to other comprehensive
income 1.7 0.1 - -
-----
At 31 December 38.0 39.5 0.2 0.2
The movement in deferred tax assets and liabilities is set out
below:
Deferred tax liabilities
Accelerated Pension
tax scheme
depreciation liabilities Other Total
GBP'm GBP'm GBP'm GBP'm
At 1 January 2020 51.3 - 4.3 55.6
Exchange di erences (3.6) - 0.1 (3.5)
Credited to the income statement (3.4) - (0.7) (4.1)
Charged to other comprehensive
income - - 0.7 0.7
At 1 January 2021 44.3 - 4.4 48.7
Exchange di erences (1.1) - (0.1) (1.2)
(Credited)/charged to the income
statement (0.7) - 0.2 (0.5)
Charged/(credited) to other
comprehensive income - 3.7 (2.2) 1.5
At 31 December 2021 42.5 3.7 2.3 48.5
Deferred tax assets offset (10.5)
Net deferred tax liability
after offset 38.0
Deferred tax assets
Pension
Tax scheme
losses asset Other Total
GBP'm GBP'm GBP'm GBP'm
At 1 January 2020 4.5 0.3 3.7 8.5
Exchange di erences - (0.1) (0.3) (0.4)
Credited/(charged) to the income
statement 0.3 (0.4) 0.6 0.5
Credited to other comprehensive
income - 0.6 - 0.6
At 1 January 2021 4.8 0.4 4.0 9.2
Exchange di erences (0.1) - (0.1) (0.2)
Credited/(charged) to the income
statement 1.7 0.1 (0.1) 1.7
Charged to other comprehensive
income - (0.2) - (0.2)
At 31 December 2021 6.4 0.3 3.8 10.5
Offset against deferred tax
liabilities (10.5)
Net deferred tax asset after
offset -
Deferred tax liabilities of GBP14.7 million (2020: GBP25.5
million) have not been recognised for the withholding tax and other
taxes that would be payable on the unremitted earnings of certain
subsidiaries. Such amounts are permanently reinvested.
Deferred tax assets are recognised for tax losses carried
forward only to the extent that the realisation of the related tax
benefit through future taxable profits is probable. The Group has
not recognised deferred tax assets of GBP18.4 million (2020:
GBP15.5 million) in respect of losses that can be carried forward
against future taxable income.
35 Employee benefit obligations
(i) Pensions
Certain Group subsidiaries operate defined contribution and
funded defined benefit pension schemes. The most significant is the
UK funded, defined benefit scheme. The assets of this scheme are
administered by trustees and are kept separate from those of the
Group. The performance of the assets is monitored on a regular
basis by the trustees and their investment advisors. A full
actuarial valuation was undertaken as at 1 July 2020 and updated to
31 December 2021 by a qualified independent actuary. The UK defined
benefit pension scheme is closed to new entrants and with e ect
from 1 November 2016, the scheme was closed to future accruals.
Since that date members have participated in a defined contribution
scheme.
The overseas schemes are operated in Group subsidiaries located
in Bangladesh and India. Actuarial valuations for these schemes
have been updated to 31 December 2021 by qualified actuaries.
Assumptions
The major assumptions used in the valuation to determine the
present value of the schemes' defined benefit obligations were as
follows:
2021 2020
% per annum % per annum
UK schemes
Rate of increase in salaries N/a N/a
Rate of increase to LPI (Limited Price Indexation)
pensions in payment 2.50 - 5.00 2.05 - 5.00
Discount rate applied to scheme liabilities 1.75 1.25
Inflation assumption (CPI/RPI) 2.50/3.20 2.05/2.75
Assumptions regarding future mortality experience are based on
advice received from independent actuaries. The current mortality
tables used are SAPS 3, males 113%/106% and females 112%/108%, on a
year of birth basis, with CMI_2020 future improvement factors and
subject to a long-term annual rate of future improvement of 1.25%
per annum, smoothing parameter of 7.0, initial addition parameter
of 0.25% pa and w2020 parameter of 10%. This results in males and
females aged 65 having life expectancies of 21.5 years (2020: 21.6
years) and 22.3 years respectively (2020: 22.5 years).
2021 2020
% per annum % per annum
Overseas schemes
Rate of increase in salaries 6.00 3.00- 6.00
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 6.50- 6.80 5.80- 6.25
Inflation assumption 3.00- 6.00 3.00- 6.00
(ii) Post-employment benefits
Certain Group subsidiaries located in Kenya, India and
Bangladesh have an obligation to pay terminal gratuities, based on
years of service. These obligations are estimated annually using
the projected unit method by qualified independent actuaries.
Schemes operated in India are funded but the schemes operated in
Kenya and Bangladesh are unfunded. Operations in India and
Bangladesh also have an obligation to pay medical benefits upon
retirement. These schemes are unfunded.
Assumptions
The major assumptions used in the valuation to determine the
present value of the post-employment benefit obligations were as
follows:
2021 2020
% per annum % per annum
Rate of increase in salaries 6.00 - 8.89 3.00 - 20.00
Discount rate applied to scheme liabilities 6.50 - 13.70 5.80 - 13.30
Inflation assumptions 0.00 - 6.00 0.00 - 6.00
(iii) Leave obligations
Certain Group subsidiaries located in India have an obligation
to pay leave benefit, based on years of service. These obligations
are estimated annually using the projected unit method by qualified
independent actuaries. These schemes are unfunded.
(iv) Profit sharing obligations
Certain Group subsidiaries located in Bangladesh may have an
obligation to pay sums for workers profit participation for prior
years based on a rate of 5 per cent. of post tax profit. Provisions
have been made for these sums pending clarification of the
applicability of the legislation.
Sensitivity analysis
The sensitivity of the UK defined benefit obligation to changes
in the weighted principal assumptions is:
Impact
on defined
Change benefit
in assumption obligation
Discount rate 0.5% higher 6.7% decrease
Discount rate 0.5% lower 7.5% increase
Rate of RPI inflation 0.25% higher 1.4% increase
Rate of RPI inflation 0.25% lower 1.6% decrease
Life expectancy +1 year 4.5% increase
Life expectancy -1 year 4.5% decrease
The above changes in assumptions may have an impact on the value
of the scheme's investment holdings. For example, the scheme holds
a proportion of its assets in corporate bonds. A fall in the
discount rate as a result of lower UK corporate bond yields would
lead to an increase in the value of these assets, thus mitigating
the increase in the defined benefit obligation to some extent. The
sensitivities have been calculated by changing the key assumption
only and leaving all others fixed.
During the year, the UK funded scheme transferred a significant
amount of its Bond investments into a liability-driven investment
to reduce overall volatility.
Duration of the scheme liabilities
The weighted average duration of the UK scheme's liabilities is
15 years.
Analysis of scheme liabilities
The liabilities of the UK scheme are split as follows:
%
Deferred pensioners 40
Current pensioners 60
Total membership 100
(v) Actuarial valuations
2021 2020
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Equities and
property 57.9 2.8 60.7 57.0 1.9 58.9
Bonds 16.3 23.5 39.8 74.4 23.0 97.4
Liability-driven
investment 60.8 - 60.8 - - -
Diversified
growth 45.4 - 45.4 42.9 - 42.9
Insurance related
products - 3.2 3.2 - - -
Cash 18.9 12.5 31.4 21.7 15.2 36.9
Total fair value
of plan assets 199.3 42.0 241.3 196.0 40.1 236.1
Present value
of defined benefit
obligations (184.6) (51.6) (236.2) (203.0 ) (49.7 ) (252.7 )
Total surplus/(deficit)
in the schemes 14.7 (9.6) 5.1 (7.0 ) (9.6 ) (16.6 )
Amount recognised
as asset in
the balance
sheet 14.7 0.1 14.8 - 0.1 0.1
Amount recognised
as current liability
in the balance
sheet - (1.1) (1.1) - (1.1 ) (1.1 )
Amount recognised
as non-current
liability in
the balance
sheet - (8.6) (8.6) (7.0 ) (8.6 ) (15.6) )
14.7 (9.6) 5.1 (7.0 ) (9.6 ) (16.6
Related deferred
tax (liability)/asset
(note 34) (3.7) 0.3 0.3 - 0.4 0.4
Net surplus/(deficit) 11.0 (9.3) 5.4 (7.0 ) (9.2 ) (16.2 )
Movements in the fair value of scheme assets were as
follows:
2021 2020
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
At 1 January 196.0 40.1 236.1 179.7 28.8 208.5
Reclassified
from creditors* - - - - 6.9 6.9
Expected return
on plan assets 2.4 2.3 4.7 3.3 3.0 6.3
Employer contributions - 3.8 3.8 - 3.1 3.1
Contributions
paid by plan
participants - 0.4 0.4 - 0.3 0.3
Benefit payments (7.9) (4.9) (12.8) (8.7 ) (2.7 ) (11.4 )
Other adjustment - 0.1 0.1 - 0.4 0.4
Actuarial gains 8.8 0.5 9.3 21.7 2.3 24.0
Exchange di
erences - (0.3) (0.3) - (2.0 ) (2.0 )
At 31 December 199.3 42.0 241.3 196.0 40.1 236.1
Movements in the present value of defined benefit obligations
were as follows:
2021 2020
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
At 1 January (203.0) (49.7) (252.7) (193.3 ) (37.2 ) (230.5)
Reclassified
from creditors* - - - - (7.0 ) (7.0 )
Current service
cost - (1.8) (1.8) - (2.1 ) (2.1 )
Past service
cost - - - (0.1 ) - (0.1 )
Interest cost (2.5) (3.0) (5.5) (3.6 ) (3.4 ) (7.0 )
Contributions
paid by plan
participants - (0.4) (0.4) - (0.3 ) (0.3 )
Benefit payments 7.9 4.9 12.8 8.7 2.7 11.4
Actuarial
gains/(losses) 13.0 (1.9) 11.1 (14.7 ) (5.0 ) (19.7 )
Exchange di
erences - 0.3 0.3 - 2.6 2.6
------
At 31 December (184.6) (51.6) (236.2) (203.0 ) (49.7 ) (252.7 )
* a net GBP0.1 million was reclassified in 2020 from other
payables in relation to the provident fund schemes operated by some
of the Group's Indian subsidiaries.
In 2019, the total fair value of plan assets was GBP208.5
million, the present value of defined benefit obligations was
GBP230.5 million and the deficit was GBP22.0 million. In 2018, the
total fair value of plan assets was GBP190.6 million, the present
value of defined benefit obligations was GBP215.3 million and the
deficit was GBP24.7 million and in 2017, the total fair value of
plan assets was GBP206.6 million, the present value of defined
benefit obligations was GBP237.5 million and the deficit was
GBP30.9 million.
Income Statement
The amounts recognised in the Income Statement are as
follows:
2021 2020
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Amounts (charged)/credited
to operating
profit:
Current service
cost - (1.8) (1.8) - (2.1 ) (2.1 )
Past service
cost - - - (0.1) - (0.1 )
-----
Total operating
(charge)/credit - (1.8) (1.8) (0.1) (2.1 ) (2.2 )
Amounts charged
to other finance
costs:
Interest expense (0.1) (0.7) (0.8) (0.3) (0.4 ) (0.7 )
-----
Total (charged)/credited
to income statement (0.1) (2.5) (2.6) (0.4) (2.5 ) (2.9 )
Employer contributions to defined contribution schemes are
charged to profit when payable and the costs charged were GBP6.2
million (2020: GBP6.4 million).
Liabilities for workers profit participation in Bangladesh are
charged to profit when the obligation arises.
Actuarial gains and losses recognised in the Statement of
Comprehensive Income
The amounts included in the Statement of Comprehensive
Income:
2021 2020
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Remeasurements:
Return on plan
assets, excluding
amount included
in interest 8.8 0.5 9.3 21.7 2.3 24.0
Gain/(loss)
from changes
in demographic
assumptions 0.9 - 0.9 (0.7 ) - (0.7 )
Gain/(loss)
from changes
in financial
assumptions 8.5 (1.2) 7.3 (14.0 ) (6.1 ) (20.1 )
Experience gains/(losses) 3.6 (0.7) 2.9 - 1.1 1.1
Actuarial gain/(loss) 21.8 (1.4) 20.4 7.0 (2.7 ) 4.3
Cumulative actuarial gain recognised in the Statement of
Comprehensive Income are GBP2.5 million (2020: GBP17.9 million
losses).
As the UK defined benefit pension scheme is closed to future
accrual and active members were transferred to a defined
contribution scheme, no employer contributions will be paid for the
year commencing 1 January 2022. No additional funding contributions
will be made, as the latest actuarial valuation shows a funding
surplus.
36 Share capital
2021 2020
GBP'm GBP'm
Authorised: 2,842,000 (2020: 2,842,000)
ordinary shares of 10p each 0.3 0.3
Allotted, called up and fully paid: ordinary
shares of 10p each:
At 1 January and 31 December- 2,824,500
(2020: 2,824,500) shares 0.3 0.3
Group companies hold 62,500 issued shares in the Company. These
are classified as treasury shares.
37 Reconciliation of profit from operations to cash flow
2021 2020
GBP'm GBP'm
Group
Profit from operations 7.7 5.0
Share of associates' results (7.2) (6.1)
Depreciation and amortisation 13.4 15.5
Depreciation of right-of-use assets 1.6 1.0
Impairment of assets and provisions 0.5 6.5
Realised movements on biological assets
- non-current (1.5) (0.4)
Financial assets fair value through profit
or loss - gain (0.1) (0.1)
Loss on disposal of non-current assets - 0.1
Profit on disposal - non recurring items - (14.4)
Loss on disposal of subsidiaries 0.1 -
Profit on disposal of financial assets (0.2) (0.2)
Movement in provisions (7.0) 10.8
(Increase)/decrease in working capital (3.5) 6.3
Di erence between employee benefit obligations
funding contributions and cost charged (1.9) (4.7)
Cash generated from operations 1.9 19.3
38 Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities
arising from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are those
for which cash flows were, or future cash flows will be, classified
in the Group's consolidated cash flow statement as cash flows from
financing activities.
Finance Finance
Bank loans Bank loans leases leases
Current Non-current Current Non-current Total
GBP'm GBP'm GBP'm GBP'm GBP'm
At 1 January 2020 3.6 3.3 1.2 11.8 19.9
Exchange di erences (0.3) (0.1) - (0.2) (0.6)
New loans 1.9 - - - 1.9
New finance leases - - 0.5 0.5 1.0
Loans repaid (0.9) (2.7) - - (3.6)
Lease payments - - (1.4) - (1.4)
Lease disposal - - - (0.9) (0.9)
Transfers (2.2) 2.2 0.9 (0.9) -
At 1 January 2021 2.1 2.7 1.2 10.3 16.3
Exchange di erences - (0.1) - - (0.1)
Companies joining
the Group 10.5 - 1.7 13.2 25.4
Transferred to held
for sale - - (0.1) (1.9) (2.0)
New loans 1.0 2.8 - - 3.8
New finance leases - - 1.9 0.4 2.3
Loans repaid (13.0) (0.1) - - (13.1)
Lease payments - - (1.6) (0.4) (2.0)
Transfers 0.8 (0.8) 0.1 (0.1) -
At 31 December 2021 1.4 4.5 3.2 21.5 30.6
The cash flows from bank loans, loans from related parties and
other borrowings make up the net amount of proceeds from borrowings
and repayments of borrowings in the cash flow statement.
Other changes include interest accruals and prepayments.
39 Business combinations - acquisition and disposal of businesses
Acquisitions Disposals
2021 2021
GBP'm GBP'm
Fair Net book
value value
Property, plant and equipment 19.5 -
Right of use asset 14.6 -
Inventories 0.7 -
Biological assets - current 3.1 -
Trade and other receivables 4.0 -
Cash and cash equivalents (excluding bank
overdrafts) 0.1 -
Assets classified as held for sale - 1.6
Financial liabilities - borrowings - bank
overdraft (0.8) (0.3)
Financial liabilities - borrowings - loans (10.5) -
Lease liabilities (14.9) -
Trade and other payables (8.9) -
Amounts due to group undertakings - (0.6)
Liabilities related to assets classified
as held for sale - (0.4)
6.9 0.3
Identifiable intangible assets - Goodwill 3.6 -
Non-controlling interest (5.3) -
Loss on disposal - (0.1)
5.2 0.2
Consideration transferred:
Cash consideration and costs 3.0 (0.1)
Deferred consideration 2.2 0.3
Total consideration 5.2 0.2
Net cash (outflow)/inflow arising on acquisitions/disposals:
Cash consideration and costs (3.0) (0.1)
Less: cash and cash equivalent balances acquired/disposed (0.7) 0.3
(3.7) 0.2
Acquisition in 2021 - Bardsley England
On 31 July 2021, the Group acquired 60.5% of the share capital
of Bardsley Horticulture Limited, the parent company of the
Bardsley England group for consideration of GBP5.2 million, of
which GBP3.0 million was paid at completion with the balance of
GBP2.2 million deferred and payable by July 2022. Bardsley England
is a major fruit farming business and one of the UK's largest apple
growers. The farming operation covers 850 hectares (2,100 acres) in
Kent and includes 27 orchards growing apples, pears, cherries,
plums and grapes as well as a large grading, packing and storage
facility. The transaction arises from the Group's strategy to
expand the agriculture operations and to diversify our product and
geographical portfolio.
The Group has a one year measurement period, from the date of
acquisition to finalise the acquisition accounting. Provisional
fair values of the identifiable assets acquired, liabilities
assumed and non-controlling interest at the date of acquisition are
set out above.
Fair values of the acquired property, plant and equipment, pre
existing contractual relationships and biological assets are
inherently judgemental and involve a high degree of estimation.
Valuations have been performed by specialists, using appropriate
methodologies and information. No new information is expected to
become available in the next financial year that would be relevant
for the acquisition date fair values, therefore these valuations
are not expected to be revisited.
Also on 31 July 2021, the Group subscribed for additional shares
in Bardsley Horticulture Limited for GBP9.7 million which diluted
the non-controlling interest by 19.5%. Bardsley Horticulture
Limited, on the same date, acquired the remaining 50% interest in
Bardsley Fruit Enterprises Limited that it did not own for GBP4.2
million.
On 17 November 2021, the Group acquired the remaining 20% of the
share capital of Bardsley Horticulture Limited for consideration of
GBP1.7 million. A gain of GBP0.2 million has been recognised in
equity, being the di erence between consideration paid and the
non-controlling interest share of the net assets carrying
amount.
The goodwill acquired in relation to Bardsley England comprises
certain intangible assets that cannot be separately identified.
This includes the skills and experience of the assembled workforce.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
From the date of acquisition, Bardsley England has contributed
GBP8.7 million of revenue and a GBP4.7 million loss before tax
including restructuring costs.
It has not been practicable to disclose results for Bardsley
England for the pre-acquisition period as Bardsley England had not
adopted IFRS and other Group accounting policies.
Disposal in 2021 - Abbey Metal Finishing Limited
On 5 August 2021, the Group disposed of its interests in Abbey
Metal Finishing Company Limited and its subsidiary Atfin GmbH in
Germany to a newly incorporated company set up by GIL Investments
for the purpose of the acquisition and Aerotech GmbH respectively.
The transaction arises from the Group's strategy of focusing on
agriculture.
Until the date of acquisition, the disposed companies had
contributed GBP1.7 million of revenue and GBP1.3 million loss
before tax.
40 Commitments
Capital commitments
Capital expenditure contracted for at the balance sheet date but
not yet incurred is as follows:
2021 2020
GBP'm GBP'm
Group
Property, plant and equipment 0.9 0.8
41 Contingencies
In Malawi the Revenue Authority (MRA) recently indicated that it
intended to collect VAT on sales made at auction and under private
treaty for export, in the period since 2017. Tea sales intended for
the export market were subject to an industry wide agreement with
the MRA and the Reserve Bank of Malawi reached at the time the
auction was established, resulting in these deemed exports being
zero rated for VAT. The MRA has raised an assessment for VAT
against Eastern Produce Malawi in connection with this which has
been appealed in light of the historic agreement and
long-established custom and practice of the industry. Following
discussions between the Malawi government, the MRA and the entire
tea industry, the MRA has undertaken to investigate the sales
process for export teas and to consider the implications of this on
the VAT treatment of these deemed export sales. Pending conclusion
of the review, the MRA has given permission for the auction to
continue with teas deemed as export zero rated for VAT and the
assessment raised against Eastern Produce Malawi has been
suspended. Eastern Produce Malawi's estimated contingent liability
for VAT on these deemed export sales, excluding any penalties and
interest, is approximately GBP7.4 million
In India, assessments have been received for excise duties of
GBP3.6 million, sales and entry tax of GBP0.9 million and of GBP0.6
million for income tax matters. These are being contested on the
basis that they are without technical merit.
In India, a long running dispute between our local subsidiaries
and the Government of West Bengal over the payment of a land tax,
locally called, "Salami", remains unresolved. Lawyers acting for
the Group have advised that payment of Salami does not apply,
accordingly no provisions have been made. The sum in dispute,
excluding fines and penalties, amounts to GBP1.2 million.
The Group operates in certain countries where its operations are
potentially subject to a number of legal claims. When required,
appropriate provisions are made for the expected cost of such
claims.
42 Financial instruments
Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern, while maximising the return to
stakeholders through the optimisation of its debt and equity
balance. The capital structure of the Group consists of debt, which
includes the borrowings and lease liabilities disclosed in notes 31
and 32, cash and cash equivalents and equity attributable to equity
holders of the parent, comprising issued capital, reserves and
retained earnings.
The Board reviews the capital structure, with an objective to
ensure that debt as a percentage of tangible net assets does not
exceed 50 per cent.
The ratio at the year end is as follows:
2021 2020
GBP'm GBP'm
Borrowings 7.8 8.4
Lease liabilities 24.7 11.5
Debt 32.5 19.9
Tangible net assets 378.5 370.0
Ratio 8.59% 5.38%
Debt is defined as long and short-term borrowings and lease
liabilities as detailed in notes 31 and 32.
Tangible net assets includes all capital and reserves of the
Group attributable to equity holders of the parent less intangible
assets.
Debt as a percentage of tangible net assets has increased with
the acquisition of Bardsley England.
Financial instruments by category
At 31 December 2021
Financial Financial
assets at fair asset at fair Financial
value through value through assets at
other comprehensive profit or amortised
income loss cost Total
GBP'm GBP'm GBP'm GBP'm
Group
Assets as per Balance
Sheet
Equity investments 27.7 - - 27.7
Money market investments - 9.9 - 9.9
Bond investments - - 2.6 2.6
Trade and other receivables
excluding prepayments - - 40.3 40.3
Cash and cash equivalents - - 61.8 61.8
27.7 9.9 104.7 142.3
Other financial
liabilities at
amortised cost Total
GBP'm GBP'm
Group
Liabilities as per
Balance Sheet
Borrowings 7.8 7.8
Lease/liabilities 24.7 24.7
Trade and other payables 59.2 59.2
91.7 91.7
Company
Trade and other payables 0.9 0.9
At 31 December 2020
Financial Financial
assets at fair asset at fair Financial
value through value through assets at
other comprehensive profit or amortised
income loss cost Total
GBP'm GBP'm GBP'm GBP'm
Group
Assets as per Balance
Sheet
Equity investments 42.6 - - 42.6
Money market investments - 5.3 - 5.3
Bond investments - - 2.7 2.7
Trade and other receivables
excluding
prepayments - - 39.2 39.2
Cash and cash equivalents - - 98.5 98.5
42.6 5.3 140.4 188.3
Other financial
liabilities
at
amortised
cost Total
GBP'm GBP'm
Group
Liabilities as per Balance Sheet
Borrowings 8.4 8.4
Leases liabilities 11.5 11.5
Trade and other payables 50.9 50.9
70.8 70.8
Company
Trade and other payables 0.8 0.8
Fair value estimation
The table below analyses financial instruments carried at fair
value, by valuation method. The di erent levels have been defined
as follows:
- Quoted prices (unadjusted) in active markets for identical
assets or liabilities (Level 1).
- Inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is,
derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs)
(Level 3).
The following table presents the Group's financial assets and
liabilities that are measured at fair value. See note 19 for
disclosures of biological assets that are measured at fair
value.
At 31 December 2021
Level 1 Level 2 Level 3 Total
GBP'm GBP'm GBP'm GBP'm
Assets
Financial assets at fair value
through
other comprehensive income 27.7 - - 27.7
Financial asset at fair value
through profit or loss 9.9 - - 9.9
Financial assets at amortised
cost 2.6 - - 2.6
40.2 - - 40.2
At 31 December 2020
Level 1 Level 2 Level 3 Total
GBP'm GBP'm GBP'm GBP'm
Assets
Financial assets at fair value
through
other comprehensive income 42.6 - - 42.6
Financial asset at fair value
through profit or loss 5.3 - - 5.3
Financial assets at amortised
cost 2.7 - - 2.7
50.6 - - 50.6
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
su cient 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 e ective to do so.
Various financial instruments arise directly from the Group's
operations, for example cash and cash equivalents, trade
receivables and trade payables. In addition, the Group uses
financial instruments for two main reasons, namely:
- To finance its operations (to mitigate liquidity risk)
- To manage currency risks arising from its operations and
arising from its sources of finance (to mitigate foreign
exchange risk)
The Group did not, in accordance with Group policy, trade in
financial instruments throughout the period under review.
(A) Market risk
(i) Foreign exchange risk
The Group has a significant exposure to the US Dollar arising
from a number of our operations having a significant trading
exposure to the Dollar and as a consequence the Group holds
significant US Dollar funds and Dollar denominated investments. If
the exchange rate of the Dollar to Sterling were to move by 5 per
cent, the Group's carrying value would increase/decrease by GBP1.0
million (2020: GBP2.0 million). In addition, the Group has
significant Indian, Japanese and Swiss financial assets, if the
exchange rates of the Indian Rupee, Japanese Yen and Swiss Franc to
Sterling were to move by 5 per cent, the Group's carrying value
would increase/decrease by GBP0.5 million (2020: GBP0.2 million),
GBP0.4 million (2020: GBP1.0 million) and GBP0.5 million (2020:
GBP0.6 million) respectively.
Currency risks are primarily managed through the use of natural
hedging and regularly reviewing when cash should be exchanged into
either sterling or another functional currency.
(ii) Price risk
The Group is exposed to equity securities price risk because of
investments held by the Group and classified on the consolidated
balance sheet as financial assets. To manage its price risk arising
from investments in equity securities, the Group diversifies its
portfolio.
The majority of the Group's equity investments are publicly
traded and are quoted on stock exchanges located in Bermuda, India,
Japan, Switzerland, UK and US. Should these equity indexes increase
or decrease by 5 per cent. with all other variables held constant
and all the Group's equity instruments move accordingly, the
Group's carrying value would increase/decrease by GBP1.4 million
(2020: GBP2.1 million).
The Group's exposure to commodity price risk is not
significant.
(iii) Cash flow and interest rate risk
The Group's interest rate risk arises from interest-bearing
assets and short and long-term borrowings. Borrowings issued at
variable rates expose the Group to cash flow interest rate
risk.
At 31 December 20201 if interest rates on non-sterling
denominated interest-bearing assets and borrowings had been 50
basis points higher/lower with all other variables held constant,
post-tax profit for the year would have been GBP0.2 million (2020:
GBP0.3 million) higher/lower.
The interest rate exposure of the Group's interest bearing
assets and liabilities by currency, at
31 December was:
Assets Liabilities
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Sterling 13.0 21.7 22.5 8.9
US Dollar 16.4 35.0 - -
Euro 0.4 5.3 - -
Kenyan Shilling 14.4 11.9 0.3 0.2
Indian Rupee 2.4 4.9 5.0 8.0
Malawian Kwacha 0.2 0.1 1.6 1.6
Bangladesh Taka 11.5 14.1 1.2 1.2
South African Rand 1.0 1.2 1.9 -
Brazilian Real 1.8 1.9 - -
Bermudian Dollar 0.4 1.4 - -
Japanese Yen 0.3 - - -
Tanzanian Shilling - 1.0 - -
61.8 98.5 32.5 19.9
(B) Credit risk
The Group has policies in place to limit its exposure to credit
risk. Credit risk arises from cash and cash equivalents, deposits
with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables and committed
transactions. If customers are independently rated, these ratings
are used. Otherwise if there is no independent rating, management
assesses the credit quality of the customer taking into account its
financial position, past experience and other factors and if
appropriate holding liens over stock and receiving payments in
advance of services or goods as required. Management monitors the
utilisation of credit limits regularly.
The Group has a large number of trade receivables, the largest
five receivables at the year end comprise 21 per cent. (2020: 22
per cent.) of total trade receivables.
The Group has investments in Kenyan infrastructure bonds which
have an S&P rating of B at the year end.
(C) Liquidity risk
Ultimate responsibility for liquidity risk management rests with
the board of Directors. The Group manages liquidity risk by
maintaining adequate reserves and banking facilities by
continuously monitoring forecast and actual cash flows and managing
the maturity profiles of financial assets and liabilities.
At 31 December 2021, the Group had undrawn committed facilities
of GBP23.7 million (2020: GBP23.7 million), all of which are due to
be reviewed within one year.
The table below analyses the Group's financial assets and
liabilities which will be settled on a net basis into relevant
maturity groupings based on the remaining period at the balance
sheet date to the contractual maturity date. The amounts disclosed
are the contractual undiscounted cash flows.
Less than Between Between Over
1 1 2 5
and 2 and 5
year years years years Undated Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
At 31 December
2021
Assets
Financial assets
at fair
value through other
comprehensive income - - - - 27.7 27.7
Financial asset
at fair value
through profit
or loss 2.7 7.2 - - - 9.9
Financial assets
at amortised
cost 1.3 1.3 - - - 2.6
Trade and other
receivables
excluding prepayments 37.6 2.7 - - - 40.3
Cash and cash equivalents 61.8 - - - - 61.8
103.4 11.2 - - 27.7 142.3
Liabilities
Borrowings 3.3 0.7 1.2 2.6 - 7.8
Lease liabilities 3.2 2.3 5.0 14.2 - 24.7
Trade and other
payables
excluding taxation 54.4 - - - - 54.4
60.9 3.0 6.2 16.8 - 86.9
At 31 December
2020
Assets
Financial assets
at fair
value through other
comprehensive income - - - - 42.6 42.6
Financial asset
at fair value
through profit
or loss 5.3 - - - - 5.3
Financial assets
at amortised
cost - 1.4 1.3 - - 2.7
Trade and other
receivables
excluding prepayments 36.8 2.4 - - - 39.2
Cash and cash equivalents 98.5 - - - - 98.5
140.6 3.8 1.3 - 42.6 188.3
Liabilities
Borrowings 5.7 0.4 1.2 1.1 - 8.4
Lease liabilities 1.2 1.1 2.3 6.9 - 11.5
Trade and other
payables
excluding taxation 49.8 - - - - 49.8
56.7 1.5 3.5 8.0 - 69.7
Included in borrowings due in less than 1 year is GBP1.9 million
(2020: GBP3.6 million) repayable on demand.
43 Subsidiary and associated undertakings
Subsidiary undertakings
The subsidiary undertakings of the Group at 31 December 2021,
which are wholly owned and incorporated in Great Britain unless
otherwise stated, were:
Principal
country
of Registered
operation O ce
Agriculture
Amgoorie India Limited (Incorporated in India
- 99.8 per cent. holding) India (ii)
Amo Tea Company Limited Bangladesh (i)
Bardsley & Sons Limited UK (i)
Bardsley Fruit Enterprises Limited UK (i)
Bardsley Fruit Farming Limited UK (i)
Bardsley HiCo Limited UK (i)
Bardsley Horticulture Limited UK (i)
C.C. Lawrie Comércio e Participacões
Ltda. (Incorporated in Brazil) Brazil (vi)
Chittagong Warehouse Limited (Incorporated
in
Bangladesh - 93.3 per cent. holding) Bangladesh (vii)
Duncan Brothers Limited (Incorporated in Bangladesh) Bangladesh (vii)
Eastern Produce Cape (Pty) Limited (Incorporated
in South Africa) South Africa (viii)
Eastern Produce Estates South Africa (Pty)
Limited
(Incorporated in South Africa - held by Eastern
Produce
South Africa (Pty) Limited) South Africa (ix)
Eastern Produce Kenya Limited
(Incorporated in Kenya - 70.0 per cent. holding) Kenya (x)
Eastern Produce Malawi Limited
(Incorporated in Malawi- 73.2 per cent. holding) Malawi (xii)
Eastern Produce Regional Services Limited
(Incorporated in Kenya) Kenya (x)
Eastern Produce South Africa (Pty) Limited
(Incorporated in South Africa - 73.2 per
cent. holding) South Africa (ix)
Eastland Camellia Limited
(Incorporated in Bangladesh - 93.8 per cent.
holding) Bangladesh (vii)
EP(T) East Africa Limited (Incorporated in
Tanzania) Tanzania (xvii)
Goodricke Group Limited (Incorporated in India
- 74.0 per cent. holding) India (iii)
Goodricke Tech Limited (Incorporated in India
- 99.8 per cent. holding) India (iii)
Horizon Farms (An United States of
America general partnership - 80 per cent.
holding) USA (xiii)
Jing Tea Limited (95.0 per cent. holding) UK (i)
Kakuzi Plc (Incorporated in Kenya - 50.7 per
cent. holding) Kenya (xi)
Koomber Tea Company Limited (Incorporated
in India) India (iv)
Newmafruit Limited UK (i)
Octavius Steel & Company of Bangladesh Limited
(Incorporated in Bangladesh) Bangladesh (vii)
Robertson Bois Dickson Anderson Limited UK (i)
Stewart Holl (India) Limited (Incorporated
in India - 92.0 per cent. holding) India (v)
Surmah Valley Tea Company Limited Bangladesh (i)
The Allynugger Tea Company Limited Bangladesh (i)
The Chandpore Tea Company Limited Bangladesh (i)
The Lungla (Sylhet) Tea Company Limited Bangladesh (i)
The Mazdehee Tea Company Limited Bangladesh (i)
Victoria Investments Limited
(Incorporated in Malawi - 73.2 per cent.
holding) Malawi (xii)
Zetmac (Pty) Limited (Incorporated in South
Africa - 55.8 per cent.
held by Eastern Produce Estates South Africa
(Pty) Limited) South Africa (ix)
Engineering
AJT Engineering Limited UK (xiv)
Black Gold Oil Tools Limited UK (xiv)
Food Service
Associated Cold Stores & Transport Limited UK (i)
Duncan Products Limited (Incorporated in Bangladesh) Bangladesh (vii)
Investment Holding
Assam Dooars Investments Limited UK (i)
Associated Fisheries Limited UK (i)
Borbam Limited (Incorporated in India - 99.8
per cent. holding) India (iii)
Bordure Limited UK (i)
Duncan Properties Limited (Incorporated in
Bangladesh) Bangladesh (vii)
Eastern Produce Investments Limited UK (i)
Elgin Investments Limited (Incorporated in
India - 99.8 per cent. holding) India (iii)
Endogram Limited India (iii)
EP USA Inc. (Incorporated in the United States
of America) USA (xiii)
EP California Inc. (Incorporated in the United
States of America) USA (xiii)
John Ingham & Sons Limited UK (i)
Koomber Properties Limited (Incorporated in
India - 94.0 per cent. holding) India (iii)
Lawrie (Bermuda) Limited (Incorporated in
Bermuda) Bermuda (xvi)
Lawrie Group Plc (Owned directly by the Company) UK (i)
Lawrie International Limited (Incorporated
in Bermuda) Bermuda (xvi)
Lebong Investments Limited (Incorporated in
India - 94.0 per cent. holding) India (iii)
Linton Park Plc (Owned directly by the Company) UK (i)
Lintak Investments Limited (Incorporated in
Kenya) Kenya (x)
Longbourne Holdings Limited Bangladesh (i)
Plantation House Investments Limited
(Incorporated in Malawi - 50.2 per cent.
held by subsidiaries) Malawi (xii)
Unochrome Industries Limited UK (i)
Western Dooars Investments Limited UK (i)
Other
Hobart Place Nominees Limited UK (i)
Linton Park Services Limited UK (i)
Dormant companies
ACS&T Gloucester Limited (in liquidation) UK (i)
ACS&T Grimsby Limited (in liquidation) UK (i)
ACS&T Humberside Limited (in liquidation) UK (i)
ACS&T Seamer Limited (in liquidation) UK (i)
ACS&T Tewkesbury Limited (in liquidation) UK (i)
ACS&T Wolverhampton Limited (in liquidation) UK (i)
Alex Lawrie & Company Limited UK (i)
Amgoorie Investments Limited UK (i)
Assam-Dooars Holdings Limited UK (i)
Associated Fisheries (Europe) Limited UK (i)
Banbury Tea Warehouses Limited UK (i)
Blantyre & East Africa Limited UK (xiv)
Blantyre Insurance & General Agencies Limited
(Incorporated in Malawi - Eastern Produce
Malawi Limited) Malawi (xii)
Bonathaba Farms (Pty) Limited (Incorporated
in South Africa) South Africa (viii)
British African Tea Estates (Holdings) Limited UK (i)
British African Tea Estates Limited UK (i)
British Indian Tea Company Limited UK (i)
British United Trawlers Limited UK (i)
BUT Engineers (Fleetwood) Limited (in liquidation) UK (i)
BUT Engineers (Grimsby) Limited UK (i)
Camellia Investments Limited UK (i)
Chisambo Holdings Limited UK (i)
Chisambo Tea Estate Limited UK (i)
Cholo Holdings Limited UK (i)
Craighead Investments Limited UK (i)
David Field Limited UK (i)
East African Tea Plantations Limited
(Incorporated in Kenya - held by Eastern
Produce Kenya Limited) Kenya (x)
Eastern Produce Africa Limited UK (i)
Eastern Produce Kakuzi Services Limited
(Incorporated in Kenya - held by Kakuzi Limited) Kenya (x)
EP (RBDA) Limited (Incorporated in Malawi
-
Eastern Produce Malawi Limited) Malawi (xii)
Estate Services Limited (Incorporated in Kenya
- held by Kakuzi Limited) Kenya (xi)
Feltham Two Limited (in liquidation) UK (i)
Fescol Limited (in liquidation) UK (i)
G. F. Sleight & Sons Limited (in liquidation) UK (i)
Goodricke Lawrie Consultants Limited UK (i)
Gotha Tea Estates Limited UK (i)
Granton Transport Limited (in liquidation) UK (xiv)
Hamstead Village Investments Limited UK (i)
Hellyer Bros Limited UK (i)
Horace Hickling & Co. Limited UK (i)
Hudson Brothers Trawlers Limited (in liquidation) UK (i)
Humber Commercials Limited (in liquidation) UK (i)
Humber - St. Andrew's Engineering Company
Limited UK (i)
Isa Bheel Tea Company Limited UK (i)
Jatel Plc UK (i)
Jetinga Holdings Limited UK (i)
Jetinga Valley Tea Company Limited UK (i)
Kaguru EPZ Limited (Incorporated in Kenya
- held by Kakuzi Limited) Kenya (xi)
Kapsumbeiwa Factory Company Limited UK (i)
Kip Koimet Limited
(Incorporated in Kenya - held by Eastern
Produce Kenya Limited) Kenya (x)
Kumadzi Tea Estates Limited UK (i)
Lankapara Tea Company Limited UK (i)
Lawrie Plantation Services Limited UK (i)
Nasonia Tea Company Limited (Incorporated
in Malawi) Malawi (xii)
North West Profiles Limited (in liquidation) UK (i)
Octavius Steel & Company (London) Limited UK (i)
Robert Hudson Holdings Limited (in liquidation) UK (i)
Rosehaugh (Africa) Limited UK (i)
Ruo Estates Limited UK (i)
Ruo Estates Holdings Limited UK (i)
Sandbach Export Limited UK (i)
Sapekoe Pusela (Pty) Limited (Incorporated
in South Africa - held by
Eastern Produce South Africa (Pty) Limited) South Africa (ix)
Silverthorne-Gillott Limited UK (i)
S.I.S. Securities Limited UK (i)
Sterling Industrial Securities Limited UK (i)
Stewart Holl Investments Limited UK (i)
The Amgoorie Tea Estates Limited UK (i)
The Bagracote Tea Company, Limited UK (i)
The Ceylon Upcountry Tea Estates Limited UK (i)
Dejoo Tea Company Limited UK (i)
The Dhoolie Tea Company Limited UK (i)
The Doolahat Tea Company Limited UK (i)
The Eastern Produce and Estates Company Limited UK (i)
The Endogram Tea Company Limited UK (i)
Jhanzie Tea Association Ltd UK (i)
The Harmutty Tea Company Limited UK (i)
The Kapsumbeiwa Tea Company Limited UK (i)
Longai Valley Tea Company Limited UK (i)
The Tyspane Tea Company Limited UK (i)
Thyolo Highlands Tea Estates Limited UK (i)
Vaghamon (Travancore) Tea Company Limited UK (i)
Walter Duncan & Goodricke Limited UK (i)
WDG Properties Limited UK (i)
Western Dooars Tea Holdings Limited UK (i)
Summarised financial information on subsidiaries with material
non-controlling interests
Summarised balance sheets
Eastern Produce Eastern Produce
Kenya Limited Malawi Limited
as at 31 December as at 31 December
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Current
Assets 24.0 19.9 14.8 11.7
Liabilities (14.6) (14.6) (11.9) (10.2)
Total current net assets 9.4 5.3 2.9 1.5
Non-current
Assets 27.8 28.5 31.2 33.8
Liabilities (5.3) (5.3) (9.4) (10.0)
Total non-current net assets 22.5 23.2 21.8 23.8
Net assets 31.9 28.5 24.7 25.3
Eastern Produce Goodricke Group
South Africa Limited Limited
as at 31 December as at 31 December
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Current
Assets 4.1 3.2 32.3 36.2
Liabilities (3.7) (3.7) (20.2) (24.2)
Total current net assets/(liabilities) 0.4 (0.5) 12.1 12.0
Non-current
Assets 8.8 8.8 35.8 36.0
Liabilities (2.9) (1.2) (12.5) (11.1)
Total non-current net assets 5.9 7.6 23.3 24.9
Net assets 6.3 7.1 35.4 36.9
Kakuzi Plc
as at 31 December
2021 2020
GBP'm GBP'm
Current
Assets 18.7 19.4
Liabilities (2.5) (2.5)
Total current net assets 16.2 16.9
Non-current
Assets 26.3 26.8
Liabilities (6.8) (7.0)
Total non-current net assets 19.5 19.8
Net assets 35.7 36.7
Summarised income statements
Eastern Produce Eastern Produce
Kenya Limited Malawi Limited
for year ended for year ended
31 December 31 December
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Revenue 36.5 39.4 25.3 23.1
Profit/(loss) before tax 7.0 4.7 1.2 (3.7)
Taxation (2.1) (1.1) (0.6) 1.1
Other comprehensive expense (0.8) (3.1) (1.2) (2.0)
Total comprehensive income/(expense) 4.1 0.5 (0.6) (4.6)
Total comprehensive income/(expense)
allocated to non-controlling
interests 1.2 0.2 (0.2) (1.2)
Dividends paid to non-controlling
interests 0.2 1.2 - 0.3
Eastern Produce Goodricke Group
South Africa Limited Limited
for year for year
ended 31 December ended 31 December
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Revenue 3.4 3.8 84.6 90.6
(Loss)/profit before tax (0.4) (2.2) 0.6 2.7
Taxation 0.1 0.6 (0.1) (0.5)
Other comprehensive expense (0.5) (0.2) (1.4) (2.1)
Total comprehensive (expense)/income (0.8) (1.8) (0.9) 0.1
Total comprehensive expense
allocated to non-controlling
interests (0.2) (0.7) (0.2) -
Dividends paid to non-controlling
interests - - 0.2 -
Kakuzi Plc
for year ended
31 December
2021 2020
GBP'm GBP'm
Revenue 21.8 25.3
Profit before tax 3.3 5.3
Taxation (1.1) (1.4)
Other comprehensive expense (0.9) (4.0)
Total comprehensive income/(expense) 1.3 (0.1)
Total comprehensive income/(expense)
allocated to non-controlling
interests 0.6 (0.1)
Dividends paid to non-controlling
interests 1.2 1.0
Summarised cash flows
Eastern Produce Eastern Produce
Kenya Limited Malawi Limited
for year ended for year ended
31 December 31 December
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Cash flows from operating
activities
Cash generated from operations 4.4 6.6 1.7 1.1
Net interest received/(paid) 0.7 0.7 (0.5) (0.1)
Income tax paid (2.1) (0.8) (0.7) (1.0)
Net cash generated from operating
activities 3.0 6.5 0.5 -
Net cash used in investing
activities (1.0) (5.3) (0.1) (0.3)
Net cash used in financing
activities (0.7) (4.1) - (1.1)
Net increase/(decrease) in
cash
and cash equivalents and
bank overdrafts 1.3 (2.9) 0.4 (1.4)
Cash, cash equivalents and
bank overdrafts
at beginning of year 12.3 15.7 (1.2) 0.1
Exchange (losses)/gains on
cash and cash
equivalents - (0.5) 0.2 0.1
Cash, cash equivalents and
bank overdrafts
at end of year 13.6 12.3 (0.6) (1.2)
Eastern Produce Goodricke Group
South Africa Limited Limited
for year ended for year ended
31 December 31 December
2021 2020 2021 2020
GBP'm GBP'm GBP'm GBP'm
Cash flows from operating
activities
Cash generated from operations (0.8) (0.2) 4.3 2.4
Net interest paid (0.2) (0.1) - -
Income tax paid - - (0.1) (0.7)
Net cash (used in)/generated
from
operating activities (1.0) (0.3) 4.2 1.7
Net cash used in investing
activities (1.1) (0.7) (1.0) (2.0)
Net cash generated from/(used
in)
financing activities 2.0 - (2.5) 0.7
Net (decrease)/increase in
cash and cash
equivalents and bank overdrafts (0.1) (1.0) 0.7 0.4
Cash, cash equivalents and bank
overdrafts
at beginning of year 1.4 2.8 0.5 0.1
Exchange losses on cash and
cash equivalents (0.2) (0.4) - -
Cash, cash equivalents and
bank overdrafts
at end of year 1.1 1.4 1.2 0.5
Kakuzi Plc
for year ended
31 December
2021 2020
GBP'm GBP'm
Cash flows from operating activities
Cash generated from operations 8.5 8.9
Net interest received 0.5 0.6
Income tax paid (0.9) (1.5)
Net cash generated from operating activities 8.1 8.0
Net cash generated used in investing activities (6.0) (6.7)
Net cash used in financing activities (2.3) (2.0)
Net decrease in cash and cash equivalents
and bank overdrafts (0.2) (0.7)
Cash, cash equivalents and bank overdrafts
at beginning of year 11.2 12.6
Exchange losses on cash and cash equivalents (0.2) (0.7)
Cash, cash equivalents and bank overdrafts
at end of year 10.8 11.2
Associated undertakings
The principal associated undertakings of the Group at 31 December
2021 were:
Group
interest
Principal Accounting in equity
country
of Registered date capital
operation O ce 2021 per cent.
Insurance and banking
BF&M Limited (Incorporated
in Bermuda -
common stock) Bermuda (xvi) 31 December 37.4
United Finance Limited
(Incorporated in Bangladesh
-
ordinary shares) Bangladesh (vii) 31 December 38.4
United Insurance Company
Limited
(Incorporated in Bangladesh
-
ordinary shares) Bangladesh (vii) 31 December 37.0
Registered Offices:
(i) Linton Park (ix) 7 Windsor Street (xvii) 3rd Floor
Linton Tzaneen 180 Msasani
Maidstone 850 Bay
Kent Limpopo Province Msasani
ME17 4AB South Africa Dar Es salaam
England Tanzania
(ii) Amgoorie Tea Garden (x) New Rehema House
PO: Amguri Rhapta Road
Haloating - 785 681 Westlands
Dist: Sibsagar P O Box 45560
Assam GPO 00100
India Nairobi
Kenya
(iii) Camellia House (xi) Main O ce
14 Gurusaday Road Punda Milia Road
Kolkata - 700019 Makuyu
West Bengal P O Box 24
India 01000 Thika
Kenya
(iv) Koomber Tea Garden (xii) PO Box 53
PO: Kumbhir Mulanje
Cachar - 788 108 Malawi.
Assam
India
(v) Sessa Tea Garden (xiii) 1368 W Herndon
PO: Dibrugarh - 786001 Ave #103
Dist: Dibrugarh Fresno
Assam California 93711
India USA
(vi) Fazenda Maruque (xiv) Craigshaw Crescent
s/n sala 03 West Tullos
Bairro Maruque Aberdeen
Itaberá AB12 3TB
São Paulo Scotland
Brazil
(vii) Camellia House (xv) 112 Pitts Bay Road
22 Kazi Nazrul Islam Pembroke
Avenue Bermuda
Dhaka 1000 HM08
Bangladesh
(viii) Slangrivier Road (xvi) Clarendon House
Slangrivier Plaas 2 Church Street
Wellington Hamilton
7655 Bermuda
South Africa HM11
44 Control of Camellia Plc
Camellia Holding AG continues to hold 1,427,000 ordinary shares
of Camellia Plc (representing 51.67 per cent. of the total voting
rights). Camellia Holding AG is owned by The Camellia Private Trust
Company Limited, a private trust company incorporated under the
laws of Bermuda as trustee of The Camellia Foundation ("the
Foundation"). The Foundation is a Bermudian trust, the income of
which is utilised for charitable, educational and humanitarian
causes at the discretion of the trustees.
The activities of Camellia Plc and its Group (the "Camellia
Group") are conducted independently of the Foundation. Other than
Simon Turner (a director of The Camellia Private Trust Company and
the president of the board of the trustee of the Foundation) and
Stephen Buckland (a trustee of The Camellia Foundation, a UK
charity whose primary donor of the same name is the ultimate
majority shareholder of Camellia Plc), none of the Directors of
Camellia Plc are connected with The Camellia Private Trust Company
Limited or the Foundation. While The Camellia Private Trust Company
Limited as trustee of the Foundation maintains its rights as a
shareholder, it has not participated in, and has confirmed to the
board of Camellia Plc that it has no intention of participating in,
the day to day running of the business of the Camellia Group. The
Camellia Private Trust Company Limited has also confirmed its
agreement that where any director of Camellia Plc is for the time
being connected with the Foundation, that director should not
exercise any voting rights as a director of Camellia Plc in
relation to any matter concerning the Camellia Group's interest in
any assets in which the Foundation also has a material interest
otherwise than through Camellia Plc.
45 Related party transactions
Group
During the year the Group received rental income from the
Foundation of GBP18,620 (2020: GBP36,000).
During the year the Group paid contributions to the overseas
pension and post-employment schemes of GBP3,775,062 (2020:
GBP3,101,125).
Company
The Company receives financial and secretarial services from
Linton Park Plc, a directly owned subsidiary undertaking. The
amount payable for these services for 2021 was GBP433,300 (2020:
GBP466,659). At 31 December 2021 GBP3,029,941 (2020: GBP8,351,312)
is owed to Linton Park Plc and is unsecured, interest free and has
no fixed terms of repayment.
Amounts due to Lawrie Group Plc, a directly owned subsidiary
undertaking of GBP13,409,492 (2020: GBP7,556,941) include an
unsecured loan note of GBP4,191,777 (2020: GBP4,191,777). The
company received interest of GBP167,671 (2020: GBP167,671) on this
unsecured loan note. The remaining balance is unsecured, interest
free and has no fixed terms of repayment.
Balances receivable and payable from/to other Group companies at
31 December 2021 amounted to GBP1,879,504 (2020: GBP2,223,733) and
GBP193,187 (2020: GBP193,187) respectively and are unsecured,
interest free and have no fixed terms of repayment.
46 Subsequent events
There were no adjusting post balance sheet events.
REPORT OF THE INDEPENT DIRECTORS
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF CAMELLIA PLC
Report on the audit of the financial statements
1. Opinion
In our opinion:
-- the financial statements of Camellia Plc (the 'parent
company') and its subsidiaries (the 'Group') give a true
and fair view of the state of the Group's and of the parent
company's affairs as at 31 December 2021 and of the Group's
profit for the year then ended;
-- the Group financial statements have been properly prepared
in accordance with United Kingdom adopted international
accounting standards and International Financial Reporting
Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB);
-- the parent company financial statements have been properly
prepared in accordance with United Kingdom adopted international
accounting standards and as applied in accordance with
the provisions of the Companies Act 2006; and
-- the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
-- the consolidated income statement;
-- the consolidated statement of comprehensive income;
-- the consolidated and parent company balance sheets;
-- the consolidated and parent company statements of changes
in equity;
-- the consolidated cash flow statement;
-- the basis of preparation and statement of accounting
policies;
-- the notes 1 to 46 related to the consolidated financial
statements; and
-- the notes 1 to 46 related to the parent company financial
statements.
The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law,
United Kingdom adopted international accounting standards and IFRSs
as issued by the IASB. The financial reporting framework that has
been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom adopted
international accounting standards and as applied in accordance
with the provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
auditor's responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group and the parent company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the
Financial Reporting Council's (the 'FRC's') Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters The key audit matters that we identified in the current
year were:
* Revenue recognition
* Fair value of biological assets under IAS 41
'Agriculture'
* Impairment of intangible assets and goodwill
* Acquisition accounting: Fair value adjustments
arising on acquisition
* Provisions for uncertain tax positions and legal
matters
Within this report, key audit matters are identified
as follows: Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality The materiality that we used for the Group financial
statements was GBP0.9m which was determined on the
basis of revenue.
Scoping We consider the principal business units to reflect
the components of the Group as this is how management
monitor and control the business. Our scope covered
57 components of the Group. Of these, 34 were subjected
to a full-scope audit whilst the 21 remaining were
subject to specified audit procedures. These components
provide coverage of 99% of the Group's revenue, 86%
of the Group's profit before tax and 87% of the Group's
net assets.
Significant changes Changes in component scoping :
in our approach The acquisition of Bardsley Horticulture Ltd and
subsidiaries (collectively the "Bardsley Group")
have come into scope this year and were subject to
full-scope audit.
Changes in key audit matters:
* Arising from the acquisition of Bardsley Group during
the year, we identified a new key audit matter
relating to acquisition accounting and the
corresponding fair value adjustments arising on
acquisition.
* Our key audit matter in relation to impairment of
assets was updated to:
* include our consideration of the goodwill arising on
acquisition of Bardsley Group; and
* remove the Impairment of Bearer plants due to the
reduction in complexities and judgements involved.
Impairment indicators such as underutilisation,
adverse weather conditions and land use rights, and
in particular uncertainties caused by the Coronavirus
pandemic were considered, and no impairment
indicators were identified.
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the Directors' assessment of the Group's and
parent company's ability to continue to adopt the going concern
basis of accounting included:
-- Assessing the latest cash flow forecasts of the Group
to determine whether these are consistent with the forecasts
used during the impairment review;
-- Assessing copies of any existing and new facilities
and assessing the Group's cash forecasts against available
facilities and the required repayment profiles of debt
and interest.
-- Assessing the facilities and its availability and compliance
with covenants.
-- Evaluating each of the sensitivities adopted by management
and assessing downside scenarios of cash headroom over
the forecast period by performing our own sensitivity
analyses regarding the solvency of the Group over the
going concern review period.
-- Assessing the reasonability of the assumptions that
management have used in their cash forecasts; and
-- Assessing the adequacy of the financial statement disclosures
in relation to going concern.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group's and parent company's ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had
the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the
engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these
matters.
5.1. Revenue recognition
Key audit matter The Group's agricultural operations involve a wide
description range of customer delivery models, including auction
and retail sales. Given the complexity of the Group's
operations and the terms of business with buyers,
there is a risk of inappropriate cut-off of revenue
recognition around the balance sheet date.
The Group's agricultural revenue is included within
Sale of Goods of GBP238.8m (2020: GBP247.2m) disclosed
in note 2 to the financial statements. Further information
regarding the agricultural revenue recognition policy
is in the principal accounting policies disclosed
in the financial statements.
How the scope We have performed the following procedures in response
of our audit responded to the key audit matter:
to the key audit * Obtained an understanding of the processes and
matter relevant controls used to record revenue
transactions.
* Reviewed and assessed commercial arrangements to
determine the point of revenue recognition for
different type of shipments.
* Assessed whether revenue was recorded in the correct
period and whether cut-off of revenue is appropriate
by agreeing a sample of revenue transactions during
the period either side of the balance sheet date to
the relevant terms of business, dispatch or delivery
documentation as appropriate.
* Examined material journal entries that were posted to
revenue accounts and obtained supporting evidence to
test the appropriateness of revenue recognition.
Key observations From the work performed, we have concluded that revenue
is appropriately recognised in the correct accounting
period in accordance with IFRS 15.
5.2. Fair value of biological assets under IAS 41
'Agriculture'
Key audit matter The Group holds GBP7.8m (2020: GBP7.1m) of biological
description assets as current assets and GBP13.4m (2020: GBP12.7m)
as non-current assets.
As required by IAS 41 'Agriculture', management estimates
the fair value of these assets through the use of
valuation models and recent transaction prices.
Significant judgement is required for key assumptions
for each model, including the life-span of the plantings,
yields, selling prices, costs and discount rates.
The valuation is sensitive to some of the underlying
assumptions.
Biological assets are disclosed in note 19 to the
financial statements, the valuation is discussed as
a key source of estimation uncertainty and the valuation
policy is disclosed in the principal accounting policies.
How the scope We have performed the following procedures in response
of our audit responded to the key audit matter:
to the key audit * Obtained an understanding of processes and relevant
matter controls around the valuation of biological assets.
* Made enquiries of management to understand the
rationale applied in the determination of key
assumptions and any changes in the year.
* Assessed the appropriateness of the logic and
mechanical accuracy of the valuation models prepared
and the valuation methodology applied.
* For the fair value models:
* Challenged the inputs by assessing the historical
accuracy of management's forecasts and comparing to
third-party and market data (where appropriate);
* Assessed the completeness and accuracy of disclosures
made within the financial statements in accordance
with IAS 41.
Key observations From the work performed, we are satisfied that the
key assumptions applied in respect of the valuation
of biological assets and the associated disclosures
are appropriate.
5.3. Impairment of intangible assets and goodwill
Key audit matter The Group holds GBP10.1m (2020: GBP6.6m) of intangible
description assets including GBP4.6m (2020: GBP1m) allocated to
goodwill. Please also refer to the Critical accounting
estimates and judgements within accounting policies
and Note 15 to the accounts.
The risk in relation to intangibles relates to the
(i) Brand value relating to Jing Tea Limited where
the operations experienced reduced demand as a result
of the COVID-19 pandemic and (ii) Goodwill on the
past acquisition of tea estates in India by Goodricke
Group Limited and Amgoorie India Limited and (iii)
Goodwill related to the current year acquisition of
Bardsley Group.
There is a risk that these cash generating units (CGUs)
or groups of CGUs may not achieve the anticipated
business performance to support their carrying value,
or that the estimated fair value of the CGUs may not
support their carrying value. This could lead to an
impairment charge that has not been recognised by
management.
The Group's impairment assessment of CGUs to which
goodwill is allocated in accordance with IAS 36 Impairment
of Assets involves fair value less costs to sell calculations
which require estimates, including significant assumptions
regarding future royalty rates, discount rates and
cashflows.
Intangible assets are disclosed in note 15 to the
financial statements, the valuation is discussed as
sources of estimation uncertainty, and the valuation
policy is disclosed in the principal accounting policies.
How the scope We have performed the following procedures in response
of our audit responded to the key audit matter:
to the key audit * Obtained an understanding of the processes and
matter relevant controls related to the impairment review of
intangible assets and goodwill.
* Checked the arithmetical accuracy of the value in use
calculations. We evaluated the current year changes
to the key assumptions and assessed retrospectively
whether prior year assumptions were appropriate.
* Involved our valuation specialists in evaluating
management's discount rates. We benchmarked the
discount rate to comparable assets and considered the
underlying assumptions based on our knowledge of the
group and its industry.
* Assessed the accuracy of management's cash flow
projections by comparing historical forecasts with
actual cash flows. We assesed whether forecast cash
flows were consistent with Board approved forecasts.
We also performed sensitivity analysis as part of our
overall evaluation of forecast cash flows.
* Assessed the valuation reports issued by third party
external valuers and compared them with similar
market transactions. We also held discussions with
the valuers to challenge the methods and assumptions
used for determining fair value.
* Assessed the financial statements disclosures in
relation to the impairment assessments performed.
* Also assessed the adequacy of the Group's disclosures
including the need to to disclose further
sensitivities for CGUs where a reasonably possible
change in a key assumption would cause an impairment.
Key observations From the work performed, we concur with management's
assessment of impairment during the year and that
no impairments were required.
5.4. Acquisition accounting: Fair value adjustments arising on acquistion
Key audit matter During the year, the Group acquired a 60.5% interest
description in the Bardsley Group for a consideration of GBP5.2m.
Accounting for acquisitions is complex, with judgement
required in both the identification of assets acquired
(including any intangible assets), and the valuation
of those assets and liabilities assumed, in accordance
with IFRS 3 'Business Combinations'.
The calculation of fair value is subjective due to
the inherent uncertainty involved in the valuation
of assets and liabilities, and this requires the
application of judgement by management and technical
expertise. In particular the method of valuation,
future forecasts (including cash-flow forecasts)
and underlying assumptions may all have a material
impact on the valuation of assets and liabilities,
notably on the valuation of property, plant and equipment,
biological assets and intangible assets, which represents
the most significant assets acquired.
Business combinations are disclosed in note 39 to
the financial statements and the key judgements and
assumptions related to the fair value of assets and
liabilities assumed are disclosed within accounting
policies.
How the scope We have performed the following procedures in response
of our audit responded to the key audit matter:
to the key audit * Obtained an understanding of the processes and
matter relevant controls related to the business combination
accounting including fair value adjustments
preparation, review and approval.
* Read the sale and purchase agreement ("SPA")
associated with the acquisition and identified assets
acquired, including assessing whether any potential
intangible assets were not identified by management.
We agreed the consideration paid to bank statements
and the sale and purchase agreements.
* Involved our specialists in our audit of the
valuation of assets acquired and liabilities assumed.
Our work included assessment of the appropriateness
of the valuation models used, assessment of the
discount rate used in the models by reference to
comparable assets, and the evaluation of future cash
flow forecasts for each of the power plants acquired.
* Assessed the completeness of disclosures for each
acquisition against the requirements of the relevant
accounting standards.
Key observations From the work performed, we found that the judgements
made surrounding the identification, classification
and valuation of assets and liabilities acquired
were appropriate.
5.5. Provision for uncertain tax positions and legal matters
Key audit matter In the ordinary course of business, the Group is subject
description to actual or potential liabilities arising from litigations
and claims, including contractual disputes brought
by government bodies (including regulators and tax
authorities). Management review such litigation and
claims on a case-by-case basis to determine the likely
outcome and to estimate the possible magnitude and
timing of any resultant payments from adverse outcomes.
Matters of this nature are inherently uncertain and
as such management apply significant judgement in
determining the likely outcome of such matters as
well as the potential effect on future operations
and the financial statements as described in the principal
risks and uncertainties on pages 27 to 30. Judgement
is also applied in estimating amounts payable to legal,
regulatory or tax authorities in certain jurisdictions
and including human rights issues - assessing and
quantifying probable outcomes in relation to ongoing
claims and determining any exposure (and the need
for provision) in areas where legal requirements are
open to interpretation. This gives rise to a risk
over the accuracy and disclosure of provisions recognised
and contingent liabilities disclosed.
The impact of litigation concerning the Group's East
African operations on the 2020 results is disclosed
on page 8 and the accounting policy for provisions
is disclosed in the principal accounting policies.
At 31 December 2021, the Group continues to carry
GBP1.2m (2020: GBP8.2m) in respect of the legal claims
in the UK based upon allegations against its East
African operations, namely Kakuzi in Kenya and EPM
in Malawi. Following discussion with Group lawyers,
these allegations have now been finalised and no further
liabilities are expected to arise, therefore no contingent
liabilities are disclosed.
In addition, specifically in India, interpreting and
complying with taxation laws and regulations are complex,
therefore uncertain tax positions were also considered
as part of this key audit matter.
Other contingent liabilities are disclosed in note
41 to the financial statements, their quantification
is discussed as sources of estimation uncertainty,
and the accounting policy for provisions is disclosed
in the principal accounting policies.
How the scope We have performed the following procedures in response
of our audit responded to the key audit matter:
to the key audit * Obtained an understanding of processes and relevant
matter controls around identification of tax and legal
matters across the key components of the Group.
* Assessed the completeness of provisions and
contingent liabilities by reviewing the board minutes
and reviewing management's listing, tracking all
litigations and reconciled this to the provisions
recorded.
* Challenged the appropriateness of the Group's
assumptions and estimates in relation to provisions
and contingent liabilities, by reference to industry
practice and the period to which any provision
amounts relate.
* Obtained legal confirmations from the Group's legal
counsel in the key jurisdictions as at 31 December
2021. We also spoke to legal counsel on selected key
issues.
* Reviewed the Group's correspondence with regulatory
and tax authorities and understood management's
interpretation and application of relevant laws and
regulations.
* Assessed the appropriateness of disclosures in the
financial statements.
Key observations We did not identify any further litigation or claims
that had not already been disclosed to us. From the
evidence obtained, we were satisfied with the adequacy
of the Group's provisions made as at 31 December 2021
for the risks identified in the context of the Group
financial statements taken as a whole. We were also
satisfied with the appropriateness of the contingent
liability disclosures given the status, materiality
and likely outcome of and exposures in areas where
legal and taxation requirements are open to interpretation.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the
financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality
for the financial statements as a whole as follows:
Group financial statements Parent company financial statements
Materiality GBP0.9m (2020: GBP0.9m) GBP0.3m (2020: GBP0.3m)
Basis for determining materiality 0.3% of Revenue (2020: 0.4% of 2% of net assets, capped at 35% of group
revenue.) materiality (2020: 2% of net assets,
capped at 35%
of group materiality)
Rationale for the benchmark applied We note that the overall size of the We have used net assets measure given
business, demonstrated by revenue, has that the parent company is a holding
remained broadly company, generating
consistent with the prior year no revenue.
therefore we conclude that the basis
for materiality was deemed
appropriate. Revenue is deemed an
important benchmark for users to
determine growth and performance
of the Group.
6.2. Performance materiality
We set performance materiality at a level lower than materiality
to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial
statements as a whole.
Group financial statements Parent company financial statements
Performance materiality 70% (2020: 70%) of group materiality 70% (2020: 70%) of parent company
materiality
Basis and rationale for determining In determining performance materiality, we have considered the following
performance materiality factors:
* There have been no changes to the business in their
operation or financial reporting process.
* The Group has a history of correcting identified
misstatements and the remaining uncorrected
misstatements are historically below performance
materiality.
* The quality of the control environment, hence the
decreased likelihood of significant misstatements
occurring.
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to the
Committee all audit differences in excess of GBP43,000 (2020:
GBP45,000), as well as differences below that threshold that, in
our view, warranted reporting on qualitative grounds. We also
report to the Audit Committee on disclosure matters that we
identified when assessing the overall presentation of the financial
statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including group-wide controls, and
assessing the risks of material misstatement at the Group level.
The Group undertakes agricultural operations in countries across
Africa, South America, and Asia, with its principal crops grown in
Bangladesh, India, Kenya and Malawi. The Group's engineering and
food service operations as well as recently acquired apple and pear
orchards are located in the UK. Of the Group's 57 principal
components, 34 were subject to a full audit scope (including newly
acquired Bardsley Group in the UK) and 21 were subject to specified
audit procedures where the extent of our testing was based on our
assessment of the risks of material misstatement and of the
materiality of the Group's operations at those locations.
These 55 components represent the principal business units and
account for 99% (2020: 99%) of the Group's revenue and 86% (2020:
95%) of the Group's profit before tax and 87% (2020: 95%) of the
Group's net assets. The remaining components were subject to
analytical review procedures by the group audit team or were scoped
out on the basis of being dormant or immaterial. Our audit work on
these components in addition to the parent entity was executed to
lower levels of materiality of GBP0.3m to (35%) of Group
materiality (2020: GBP0.32m (35%)).
The parent company is located in the UK and audited directly by
the group audit team. At the parent entity level, we tested the
consolidation process and carried out analytical procedures to
confirm our conclusion that there were no significant risks of
material misstatement of the aggregated financial information of
the remaining components not subject to audit or audit of specified
account balances.
7.2. Our consideration of the control environment
Our risk assessment procedures include obtaining an
understanding of relevant controls to the audit.
Consistent with previous years, we have obtained an
understanding of relevant controls on the following areas:
-- Financial reporting process;
-- Legal and regulatory reviews; and
-- Impairment of intangibles.
This covered some of the key accounting and reporting tools that
are used by management and the interface between various systems
including new consolidation software.
7.3. Working with other auditors
The group audit team are responsible for the scope and direction
of the audit process and provide direct oversight, review, and
coordination of our component audit teams. We interacted regularly
with the component teams during each stage of the audit and
reviewed key working papers. In September 2021 we held a group-wide
planning meeting, in which we set out the materiality and scoping
for component teams, as well as considering significant risks
across the Group. We also held planning meetings with each of our
specialists, involving our component teams where relevant.
During our interim and year-end audit, we held regular catch-up
meetings with components to monitor progress and highlight any
issues arising. The Senior Statutory Auditor participated in all of
the final close meetings of the Group's significant components. The
Senior Statutory Auditor or another senior member of the group
audit team carried out a review of the component auditor files.
Our oversight of component auditors focused on the planning of
their audit work and key judgements made. In particular, our
supervision and direction focused on the work performed in relation
to key audit matters by component teams including revenue
recognition, fair value of biological assets, impairment of
intangible assets and goodwill acquisition accounting, provisions
for uncertain tax positions and legal matters and going concern
assessments.
As part of our monitoring of component auditors, we have also
attended key audit close meetings.
7.4. Climate change
Management has considered transition and physical risks when
factoring in climate change as part of their risk assessment
process when considering the principal risks and uncertainties
facing the Group. This is set out in the strategic report on pages
25 to 34 and the principal risks set out on pages 27 to 30. From
the financial statements' perspective, these risks have been
focused on the valuation of goodwill and other intangible assets
and biological assets. This is consistent with our evaluation of
the climate-related risks facing the Group and is linked to the key
audit matter as highlighted in sections 5.2 and 5.3 above, where we
have described both the risks related to these assumptions and our
audit procedures in relation to the challenge of these assumptions.
In addition, we have:
-- Challenged how the Directors considered climate change
in their impact assessment on the Group's operations
based on our understanding of the business environment
and by benchmarking relevant assumptions with market
data.
-- Read the climate risk disclosures included throughout
the strategic report section of the annual report to
consider whether they are materially consistent with
the financial statements and our knowledge obtained
in the audit.
8. Other information
The other information comprises the information included in the
annual report, other than the financial statements and our
auditor's report thereon. The Directors are responsible for the
other information contained within the annual report.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements, or our knowledge
obtained in the course of the audit, or otherwise appears to be
materially misstated.
If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether this
gives rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we
are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of Directors
As explained more fully in the Directors' responsibilities
statement, the Directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true
and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group's and the parent company's
ability to continue as a going concern, disclosing as applicable,
matters related to going concern and using the going concern basis
of accounting unless the Directors either intend to liquidate the
Group or the parent company or to cease operations, or have no
realistic alternative but to do so.
10. Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms
part of our auditor's report.
11. Extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance with
laws and regulations, we considered the following:
-- the nature of the industry and sector, control environment
and business performance including the design of the
Group's remuneration policies, key drivers for Directors'
remuneration, bonus levels and performance targets;
-- results of our enquiries of management and the Audit
Committee about their own identification and assessment
of the risks of irregularities;
-- any matters we identified having obtained and reviewed
the Group's documentation of their policies and procedures
relating to:
* identifying, evaluating and complying with laws and
regulations and whether they were aware of any
instances of non-compliance;
* detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud;
* the internal controls established to mitigate risks
of fraud or non-compliance with laws and regulations;
-- the matters discussed among the audit engagement team
including significant component audit teams and relevant
internal specialists, including tax, valuations, pensions,
and IT specialists regarding how and where fraud might
occur in the financial statements and any potential indicators
of fraud.
As a result of these procedures, we considered the opportunities
and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the following area -
recognition of revenue, impairment of intangible assets and
goodwill and fair value adjustments arising on acquisition of
Bardsley Group. In common with all audits under ISAs (UK), we are
also required to perform specific procedures to respond to the risk
of management override.
We also obtained an understanding of the legal and regulatory
framework that the group operates in, focusing on provisions of
those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this
context included the UK Companies Act, pensions legislation and tax
legislation.
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental to the
group's ability to operate or to avoid a material penalty. These
included the group's health, safety and environmental regulations
(carbon reduction, etc) , Bribery Act and employee laws.
11.2. Audit response to risks identified
As a result of performing the above, we identified revenue
recognition, impairment of goodwill and intangible assets and
acquisition accounting: fair value adjustments arising on
acquisition as key audit matters related to the potential risk of
fraud. The key audit matters section of our report explains the
matters in more detail and also describes the specific procedures
we performed in response to those key audit matters.
In addition to the above, our procedures to respond to risks
identified included the following:
-- reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described
as having a direct effect on the financial statements;
-- enquiring of management, the Audit Committee and in-house
legal counsel concerning actual and potential litigation
and claims;
-- performing analytical procedures to identify any unusual
or unexpected relationships that may indicate risks of
material misstatement due to fraud;
-- reading minutes of meetings of those charged with governance,
reviewing internal audit reports; and
-- in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries
and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of
a potential bias; and evaluating the business rationale
of any significant transactions that are unusual or outside
the normal course of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members including
internal specialists and component audit teams, and remained alert
to any indications of fraud or non-compliance with laws and
regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
Directors' report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
-- the strategic report and the Directors' report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
the parent company and their environment obtained in the course of
the audit, we have not identified any material misstatements in the
strategic report or the Directors' report .
13. Matters on which we are required to report by exception
13.1. Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
-- we have not received all the information and explanations
we require for our audit; or
-- adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
-- the parent company financial statements are not in agreement
with the accounting records and returns.
We have nothing to report in respect of these matters.
13.2. Directors' remuneration
Under the Companies Act 2006 we are also required to report if
in our opinion certain disclosures of Directors' remuneration have
not been made.
We have nothing to report in respect of these matters.
14. Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Makhan Chahal FCA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
30 May 2022
FIVE YEAR RECORD
2021 2020 2019 2018 2017
GBP'm GBP'm GBP'm GBP'm GBP'm
Restated
Revenue - continuing
operations 277.2 291.2 291.5 309.8 298.3
Profit before tax 7.1 7.8 22.3 52.5 27.6
Taxation (2.6) (8.6) (7.2) (20.0) (12.2)
Profit/(loss) from
continuing operations 4.5 (0.8) 15.1 32.5 15.4
(Loss)/profit from
discontinued operation - - - (0.2) 14.8
Profit/(loss) attributable
to
owners of the parent 2.3 (5.0) 8.3 25.2 23.8
Equity dividends paid 5.2 2.8 4.0 3.8 3.6
Equity
Called up share capital 0.3 0.3 0.3 0.3 0.3
Reserves 388.3 376.3 395.4 395.2 368.1
Total shareholders'
funds 388.6 376.6 395.7 395.5 330.8
Earnings/(loss) per
share 83.3p (181.0 )p 300.5p 912.4p 861.7p
Earnings/(loss) per
share
- continuing operations 83.3p (181.0 )p 300.5P 919.6p 325.9p
Dividend paid per share 188p 102p 144p 138p 132p
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END
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