TIDMCAM
RNS Number : 3433Y
Camellia PLC
04 May 2023
CAMELLIA PLC
Final results for the year ended 31 December 2022
2022 Highlights
-- Adjusted operating profit before tax for Agriculture increased
20% to GBP15.8 million in the year
* Average tea selling prices in all regions, except
Darjeeling in India and Malawi, were higher in 2022
but aggregate tea volumes were down 6%
* Profits from macadamia, avocado, instant tea, branded
tea and our arable farm in Brazil were higher
* Profits were affected by adverse trading at Bardsley
England and by increased distribution costs,
particularly on exports out of Africa
-- Adjusted operating profit before tax for continuing operations
was significantly lower in 2022 at GBP3.3 million than in
2021 (GBP9.3 million) due to trading losses from our associate,
BF&M, reflecting volatility in financial markets
-- Significant profit of GBP7.6 million recorded in relation
to ACS&T's trading and its disposal
-- Impairment charges of GBP10.1m incurred, primarily in relation
to Bardsley England due to exceptional cost inflation, from
the impact of the Ukraine war, coupled with severe customer
price sensitivity
-- Net cash of GBP44.7 million and an investment portfolio with
a market value of GBP34.5 million at 31 March 2023
Strategic developments
-- Continued investment to expand agriculture activities via
diversification of crop and location
-- Sale of non-core business completed: ACS&T
-- Sale underway of other non-core assets: items from the collections
and sale of a residential property generated net proceeds
of GBP3.6 million in 2022 with a gain on sale of GBP1.8 million.
-- Marketing of Linton Park and a number of other properties
is underway
-- Part of Bardsley England (the West Kent orchards) ceased
farming in January 2023 and consultation is underway on a
proposed restructuring of packing operations to mitigate
future losses.
-- Establishing the baseline data for our Scope 3 emissions
to complete the full Group carbon footprint measurement.
Outlook
-- The Board recommends a final dividend of 102p per share bringing
the total dividend for the year to 146p, reflecting its confidence
in the outlook for the Group
-- Outlook for 2023 is mixed with revenues expected to be ahead
of 2022 but with trading profits lower in large part due
to the effect of inflation on costs, including wages
-- With financial markets currently more stable than in 2022,
BF&M should return to profit, resulting in the Group's expectation
that adjusted profit before tax will be ahead of 2022
Malcolm Perkins, Chairman, stated:
"Camellia withstood a range of challenges in 2022, including the
impact of inflation on input and distribution costs as a result of
the Ukraine war, volatility in financial markets, the cost of
living crisis in the UK as well as adverse weather in India and
prolonged strikes in Bangladesh. The combination of these meant
that the Group's profitability 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.
Trading in 2023 to date has been mixed, with higher production
volumes in Kenya offsetting the lower prices being achieved in that
market. There has been a positive opening for new season teas in
Bangladesh but prices in India are significantly lower than last
year, albeit for both countries it is very early in the season. The
remaining crops are developing in line with our expectations for
the stage of the growing cycle with volumes of macadamia expected
to be ahead of those of 2023. However, higher global inventories
are continuing to put downward pressure on macadamia kernel prices
with the result that orders and pricing for 2023 are well below
prior year. The impact of substantial rises in wages and energy
prices continue to be felt across all our agriculture operations
and are expected to impact margins. Overall, however, with
financial markets less volatile than in the recent past, we expect
adjusted profit before tax to be ahead of that of 2022."
Financial highlights
Year ended Year ended
31 December 2022 31 December 2021
GBP'm GBP'm
Continuing operations
Revenue 297.2 255.3
Adjusted operating profit before tax * 3.3 9.3
Separately disclosed significant items (8.3) (1.7)
(Loss)/Profit before tax (3.7) 7.1
Profit for the year from discontinued operations 7.6 -
Taxation (12.2) (2.6)
(Loss)/profit after tax for the year (8.3) 4.5
(Loss)/earnings per share from continuing
operations (745.8) p 83.3 p
(Loss)/earnings per share from continuing and
discontinued operations (470.7) 83.3
Total dividend for the year 146 p 146 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 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018.
ENQUIRIES
Camellia Plc 01622 746655
Malcolm Perkins, Chairman
Susan Walker, Chief Financial Officer
Panmure Gordon (UK) Limited 020 7886 2500
Nominated Adviser and Broker
Emma Earl
Rupert Dearden
H/Advisers Maitland
PR
William Clutterbuck 07785 292617
Camellia at a glance
We are an international Group headquartered in the UK, a global
family of companies focused on agriculture, and are passionate
about our produce and our communities.
We are committed to doing the right thing: ethically and
commercially, globally and locally. We are custodians, operating
sustainable businesses in trust for future generations. We seek to
improve the long-term stability and wellbeing of these businesses
and the communities and environments in which they operate.
We seek to use sustainable agricultural practices to ensure that
the environments and communities in which we operate are protected
and enhanced. This allows us to continually improve operational e
ciency and sustainability which is not only a driving force for
enhancing profitability but also a powerful tool to reduce our
environmental impact, benefit our communities and support our
ultimate ambition to reach net zero.
Purpose and strategy
We aim to generate long-term value for our shareholders and our
stakeholders which include our employees, customers, suppliers and
local communities in which we operate.
The Group's strategy is to focus on the sustainable production
of its core crops (tea, nuts and fruit) whilst continuously
assessing opportunities to diversify by both crop and origin.
Execution of this strategy will involve divesting
non-agriculture assets as appropriate opportunities arise.
Our business is made up as follows:
Agriculture
2022: Revenue - GBP283.0 million, trading profit GBP15.5
million
Mature Immature
Area Area
Locations Ha Ha
Tea
India, Bangladesh, Kenya,
Production and Manufacturing Malawi 34,298 2,282
Instant tea, branded tea
and tea lounges India, UK
Nuts and fruits
Kenya, Malawi, South
Macadamia Africa 3,149 630
Kenya, Tanzania, South
Avocado Africa 741 509
Other fruits UK, Kenya, South Africa 539 87
Other agriculture
Forestry Kenya, Malawi, Brazil 2,993 2,805
Arable Brazil 3,779 -
Rubber Bangladesh 1,790 138
Livestock (head) Kenya 4,246
Other investments
Engineering
2022: Revenue - GBP13.2 million, trading loss GBP0.8 million
Location
AJT Engineering UK
Investments
Market value
at
31/12/2022
Locations GBP'm
Investment Portfolio Global 35.6
Investment Property UK, Malawi, Brazil 25.4
Collections (stated at
cost) UK, India 8.8
Associates
2022: Share of results after taxation - GBP3.1 million loss
Market value
at 31/12/2022
Holding
Locations % GBP'm
BF&M (Life and Non-life
insurance) Bermuda 36.9 59.3
United Finance (Banking) Bangladesh 38.4 9.2
United Insurance (Non-life
insurance) Bangladesh 37.0 6.1
Directors and advisers
Chairman and Interim
Directors Malcolm Perkins Chief Executive
Graham Mclean Director of Agriculture
Susan Walker Chief Financial O cer
Stephen Buckland Non-executive Director
Independent non-executive
Rachel English Director
Simon Turner Non-executive Director
Frédéric Independent non-executive
Vuilleumier Director
Board committee memberships are detailed
on pages 32 and 33
Group General Counsel
and
Company Secretary Amarpal Takk
Registered o ce Wrotham Place
Bull Lane
Wrotham
Near Sevenoaks
Kent TN15 7AE
Registered Number 00029559
Nominated adviser and Panmure Gordon (UK)
broker Limited
40 Gracechurch Street
London
EC3V 0BT
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 H Advisors Limited
3 Pancras Square
London N1C 4AG
Website www.camellia.plc.uk
Chairman's statement and operational report
Overview of financial results
Revenue from continuing operations for the Group increased to
GBP297.2 million from GBP255.3 million in 2021. This included an
18% increase in revenue in Agriculture to GBP283.0 million (2021:
GBP238.9 million) reflecting a full year of trading from Bardsley
England, higher tea prices in almost all jurisdictions, albeit on
lower crops, higher avocado volumes at reduced selling prices,
increased macadamia sales volumes at reduced prices and improved
arable prices. This was o set in part by reduced packet tea
revenues in India. Revenue from Engineering was lower in 2022
reflecting the sale of Abbey Metal and Amfin during 2021.
Revenue from the discontinued operation (ACS&T) improved in
the period up to the date of sale reflecting increased activity in
the UK food service sector as COVID restrictions eased.
The results for 2022 show a loss before tax for continuing
operations of GBP3.7 million (2021: GBP7.1 million profit)
reflecting significantly lower results from BF&M and a large
impairment charge in respect of Bardsley England. However, taking
account of non recurring separately disclosed items the adjusted
profit before tax for continuing operations is GBP4.6 million
(2021: GBP8.8 million). Adjusted profit before tax for continuing
operations is before separately disclosed items, primarily
impairments, further details of which are set out in note 4 to the
Accounts.
The Agriculture division showed improved trading profits in 2022
due to a strong focus on consistent quality to maximise prices,
cost control and e ciency initiatives as well as through volume
growth in macadamia and avocado and from improved pricing for our
arable crops. The improved profitability for the division was
achieved despite poor weather in India, a prolonged labour strike
in Bangladesh, significantly higher distribution costs for our
products, especially from Africa, significant inflation in energy
and input costs as a result of the Ukraine war, the UK cost of
living crisis and the after e ects of the COVID pandemic continuing
to indirectly impact certain aspects of our trading.
Due to the very high inflation experienced in the UK fruit
sector, coupled with severe customer price sensitivity, the
combination of which has impacted our view of the future for
Bardsley England, an impairment of GBP10.0 million has been
recognised in the 2022 results (see page 73).
Our Engineering division's results also improved in 2022 through
a strong focus on cost control and e ciency initiatives and
reflecting the benefits of the sale of loss making businesses in
2021.
Our results were however also adversely impacted by the poor
performance of our associate, BF&M, which was severely a ected
by the volatility in financial markets and recorded a significant
loss, our share of which was GBP3.6 million, primarily as a result
of marking investments to market values. In contrast in 2021
BF&M made a significant contribution to profits of GBP6.4
million.
In addition to the loss from our continuing operations, we
recorded a significant profit from discontinued operations (i.e.
our Food Service segment) of GBP7.6 million (2021: GBPnil),
inclusive of the gain on sale of ACS&T of GBP3.8 million.
Dividend
Reflecting continued confidence in the Group's long-term future,
the Board is recommending a final dividend in respect of the year
ended 31 December 2022 of 102p per share bringing the total
dividend for the year to 146p per share (2021: 146p per share).
Strategic matters
The Group comprises businesses that produce nutritious and
healthy food. Increasing global demand for sustainable and healthy
diets drives our continued strategy of evolving to meet the
changing needs of our customers, smallholder growers and others.
Alongside generating returns for our shareholders we have a role to
ensure we use resources responsibly, build strong rural economies
and ensure thriving healthy communities by drawing upon everything
we have learnt over many decades as a tea, macadamia, and avocado
producer.
We noted in our 2022 Interim Report that the Board was
undertaking a series of measures aimed at re--balancing the Group's
portfolio of investments to take better advantage of its strengths,
and thereby improve profitability and share price performance. This
exercise continues.
The Group continues to focus on its key strengths in agriculture
and the further diversification of crop and origin, facilitated
through disposing of non-core assets.
During 2022, the diversification strategy for the Group's core
crops has continued with the ongoing expansion of its macadamia and
avocado footprints. We have progressed new avocado developments in
three of our origins in Africa looking to build on our experience
in Kenya and our market knowledge and scale. The developments in
Tanzania and South Africa also diversify origin to take advantage
of the di erent climatic and water benefits that these locations
present, and which ultimately will lead to a longer market window
for fruit deliveries into the various key markets we supply.
Macadamia developments continued in Kenya with both commercial
and trial plantings to maximise existing site potential and test
alternative sites for future viability with an objective of
creating further options for diversification of crop and origin for
the future.
Blueberry expansion and development into a possible significant
potential core crop for the Group, continues to be a strong
ambition given the availability and diversity of location and water
supply. As explained later, the experience being gained from the
current commercial blueberry trial in Kenya will be invaluable in
converting a possibility into reality.
Sustainability and safeguarding
The work initiated by the Stewardship and Safeguarding committee
(SSC) has progressed across the Group with the assistance of
international specialist consultants. Group subsidiaries have
continued to review their social and grievance procedures, and
where appropriate, to establish operational-level grievance
mechanisms in accordance with the UN Guiding Principles on Business
and Human Rights. Group subsidiaries have also enhanced local
reporting and training by raising awareness across their
management, employees and local communities.
The Board remains committed to further enhancing the Group's
environmental and sustainability practices, and has expanded the
remit of the SSC. Consequently, that committee has been
reconstituted as the Sustainability and Safeguarding committee and
reports to the Board. More details of this committee are set out in
the corporate governance section on page 40.
The Group strives to use water sustainably, reduce waste,
protect the ecosystems within which it operates, and works to
ensure estates and smallholders are resilient to climate change.
Ahead of the 2023 annual report, the Group is preparing to
implement the recommendations of the Task Force on Climate-Related
Financial Disclosures (TCFD) which is an important step in that
process. As part of this e ort, the Group has embarked on measuring
its Scope 3 emissions. In conjunction with Scope 1 and 2 emission
data, this will put us in a position to consider Science Based
Targets for emission reduction.
Investment activities
Capital expenditure in 2022 for continuing operations amounted
to GBP16.9 million. Within this, substantial investment was made in
Kenya, Tanzania and South Africa, expanding our macadamia and
avocado orchards with a total of 251Ha of new avocado and 97Ha of
new macadamia planted. 293Ha of tea was replanted across the Group
in the year.
The development of three residential properties on the Linton
Park estate was completed and these have been let.
We expect capital expenditure in 2023 to be in line with recent
historical levels as we continue to invest in our key strategic
growth priorities.
Progress on refocusing investments
ACS&T
Consistent with our strategy, we sold ACS&T at the end of
December for GBP16.6 million with the funds received at the start
of January 2023. This also released GBP3.8 million of cash by way
of a pre-sale dividend from that operation. This was the last
component of our Food Services division which is now shown as a
discontinued operation in our results for 2022. ACS&T
contributed GBP1.7 million of profit before tax in the year and its
disposal generated a gain on sale of GBP3.8 million.
Properties
A residential property in central London was sold in February
2022. We continue to consider opportunities to realise our
investment in properties and are currently marketing properties in
London and Bristol, others may be sold in due course.
As a consequence of changes in work practices and o ce
requirements, we relocated our head o ce to a Group owned property
at Wrotham in Kent in March 2023. Planning consent has been
achieved to convert Linton Park to residential use and the property
is being marketed for sale.
Collections
Part of the Camellia Collection was sold at auction during 2022
generating net cash proceeds of GBP3.6 million and a gain on sale
of GBP1.4 million. Further items are due to be auctioned during
2023.
Performance
Agriculture
In total, Agriculture made a trading profit of GBP15.5 million
(2021: GBP13.1 million) on revenue of GBP283.0 million (2021:
GBP238.9 million), as set out in note 1 to the Accounts.
Tea
Tea estate production Instant tea, branded
and manufacturing tea and tea lounges
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Revenue 177.6 161.5 32.5 34.7
Adjusted trading profit/(loss)* 9.1 10.7 0.2 (0.5 )
Trading profit/(loss) 9.1 11.3 0.2 (0.5 )
* See note 1 to the Accounts
Estate production and manufacturing
Group tea production in 2022 was 92.9mkg, down 6% on 2021 levels
(2021: 99.1mkg) due to lower production in most jurisdictions
resulting mainly from adverse weather, and in Bangladesh, a
prolonged strike.
2022 2021
Mature Immature Production Production
area area Volume Volume
Ha Ha mkg mkg
India 16,466 992 26.8 26.1
Bangladesh 8,648 690 11.4 14.4
Kenya 3,843 315 13.3 14.9
Malawi 5,341 285 19.0 20.0
------ -------- ---------- ----------
Total own estates 34,298 2,282 70.5 75.4
------ -------- ---------- ----------
Bought leaf production 17.8 19.2
Managed client production 4.6 4.5
---------- ----------
Total made tea production 92.9 99.1
---------- ----------
Pricing and operations
Tea pricing for all regions, except Darjeeling in India and
Malawi, was above that of last year, with our estates being
rewarded for concentrating their e orts on the consistent
production of high quality teas. As with total production, our
sales volumes were also lower.
Shipping logistics have continued to be a challenge throughout
the year though this has improved in more recent months. We
continue to experience inflation in key input costs, particularly
wages, fertiliser, energy and logistics. Distribution costs,
particularly from Africa, increased substantially in the year and
this in combination with reduced volumes has impacted margins.
India
Our estate crop for 2022 was up 3% on last year. The impact of
continued poor weather meant that our production volumes did not
recover to pre-pandemic levels.
Our net selling prices firmed for both Dooars and Assam CTC teas
due to demand in the internal packet tea market and improved
quality, up on prior year by 8% for Dooars and 3% for Assam CTC
teas. Darjeeling prices were down 8% over the same period, due to
reduced demand. Our Assam Orthodox (rolled leaf tea) prices were up
27% on prior year as the market continued to benefit from severely
reduced production entering world markets from Sri Lanka.
North India market pricing overall remained strong in 2022 for
quality teas due to limited supply and supported by 100% import
tari s. North India export volumes were up c.26%, with prices in
this market on a par with last year.
2023 has seen the last of the limited 2022 tea stocks sold at
significantly lower prices than in the corresponding period last
year and the first auctions of the new season also opened
substantially lower. Going forward pricing will be determined by
regional production volumes and demand.
As previously announced, wages in West Bengal increased 15% for
2022 and Assam wages increased 13% e ective from August 2022. A
further esclation in wages of 7.7% has recently been announced in
West Bengal, on which we await clarification.
Investment in replanting continued with 122Ha of planting
completed (2021: 167Ha) and a further 182Ha uprooted in preparation
for future planting.
Bangladesh
Due to a very dry start to the season, then very wet weather and
flooding coupled with a national strike over wages during the peak
season, the Bangladesh operations reported a 21% lower crop than
prior year.
Our average net selling price was up 3% on prior year, due to an
increased concentration on quality and improved grade mix, though
this was insu cient to compensate for the reduced volume and
significant wage inflation discussed below.
National production was 3% down on prior year but was the third
highest crop on record, principally as a result of a 22% increase
in bought leaf volumes, the production of which was not a ected by
the strike. The bought leaf sector has grown 140% in 5 years and
its continued rapid escalation, if left unchecked, presents
challenges to the market with a risk that potential oversupply
results in downward pressure on pricing.
2023 has seen reasonable prices for prior season teas in the
initial sale. Forthcoming pricing will be driven by the level of
production over the summer months.
Following strike action and intervention by the government, a
wage increase of 41.7% was mandated and agreed by the unions e
ective from August 2022. In addition, a lump sum payment of
Tk11,000 per permanent worker was agreed, payable in 2023. The
significant wage increase has substantially impacted the ongoing
cost of production and requires a meaningful increase in
productivity and selling prices if tea production in Bangladesh is
to be sustainable long-term.
The total area planted in 2022 was 145Ha (2021: 143Ha) of which
118Ha was replanting and 27Ha was newly planted areas.
Kenya
Following a cool, dry first and last quarter, our Kenyan
estates' crop production was down 12% on the previous year. Total
factory volumes were down 9%. The national crop was only down c.1%,
which is indicative of increasing production levels from
smallholders.
Our average selling price in 2022 was up on prior year by 17%.
We have continued to outperform our commercial grower competitors
in the district by concentrating on quality with a price di
erential of 7% above the average and our average prices were the
highest of the commercial growers.
The "all average price" at Mombasa auction was 18% up on 2021,
driven principally by the sale of improved quality teas. There were
large volumes of medium quality teas which did not sell, building a
large stock of inventory. Export levels were c.27% down on 2021
with demand from Pakistan and Egypt lower due to the lack of
availability of hard currency with which to purchase tea. Demand
from the UK was also down due to lower consumption. Increased
competition from other beverages and low retail pricing in western
markets continues to be a challenge for the industry as is the
oversupply of low to medium quality CTC teas for which there is a
limited market.
In 2023 our prices to date have been significantly below that of
the same period of 2022 reflecting a continuing reduced demand from
Kenya's largest two buyers, Pakistan and Egypt. Pricing levels
looking forward will depend on production volumes and quality as
well as the continued shortage of hard currency in these regions.
However, our crop for Q1 2023 was significantly ahead of the same
period last year.
Following the conclusion of the CBA negotiations wages are
expected to increase by 7% in 2023.
We replanted a total of 53Ha (2021: 50Ha) whilst uprooting 52Ha
for replanting in 2023.
Malawi
Our Malawi crop in 2022 was 3% down on that of 2021 following a
slow start to the season due to the late arrival of the rains.
Sales in the first half of 2022 experienced some delays due to
the logistics challenges arising from a scarcity of containers and
flooding disruption at Durban port in South Africa. However, the
situation has significantly improved in recent months.
Malawi prices remained under pressure for much of the year with
the plainer teas from West of Rift Kenya still proving an
attractive value substitution to buyers. Malawi, being land locked,
is at a considerable disadvantage to most of its neighbours due to
the additional costs of transport to markets. Our average selling
price was 2% below that of 2021.
As previously announced, a wage increase of 13% was agreed e
ective from August 2022. A further increase of 5% applied from
January 2023.
On 26 May 2022, the Reserve Bank of Malawi announced that it
would stop supporting the currency and allowed the exchange rate to
reflect market fundamentals. This resulted in a devaluation of the
Kwacha of c.25%. Despite this, the availability of foreign exchange
is very limited posing challenges to importers.
There was no replanting in Malawi for a third successive year, a
decision taken to conserve resources considering trading
conditions.
Selling prices in 2023 in Malawi are marginally above those of
the same period of 2022. The market is expected to be volatile for
a period due to uncertainty influenced by the general direction of
the Kenya market. A lack of foreign exchange in a few key markets
also adds to the expected volatility. Our production volumes in
Malawi for Q1 2023 are below those of last year.
In mid-March 2023 cyclone Freddy hit southern Malawi with
torrential rain and strong winds causing loss of life and extensive
damage to property and infrastructure. Sadly, we had one fatality
that occurred in our eastern Mulanje operations where the worst of
the weather was experienced and where a landslide destroyed
approximately 12Ha of tea, irrigation equipment and other water
supply systems. Electricity supply has since been reinstated to all
factories and roads and bridges have been repaired so access to all
estates has been restored. Production has continued throughout,
although at lower than expected levels.
The impact on the surrounding communities has been more
significant with loss of life, housing and the destruction of many
hectares of food crops. We are supporting the community and
providing assistance where possible. Nationally there is a great
deal of damage to infrastructure in and around the urban centre of
Blantyre which will take time to rebuild.
Instant tea, branded tea and tea lounges
India
Sales volumes of our packet tea in India fell by 9%, and net
prices also reduced by 5%. Despite increasing demand for tea,
packet tea sales continue to su er from competitive pressure in the
branded market as well as reduced demand for private label teas.
However, the operation has continued to innovate with new product
development and the release of new product lines in Single Estate
premium teas and five varieties of Ready to Drink bottled iced
teas.
Instant tea production in 2022 was up 17% on the previous year.
Sales volumes increased 36% with average prices also up by 5%
reflecting increased demand and product mix changes, leading to a
significantly improved contribution from the operation.
UK
Revenue recovered close to pre-pandemic levels and trading
improved for Jing Tea as COVID restrictions were further eased in
all markets except China. Although margins have been adversely a
ected by inflation, particularly on packaging and logistics costs,
overall losses are lower than those experienced in 2021. Additional
warehousing has been established in Dubai to serve the Middle East
markets more e ciently and new customers have been successfully
secured for 2023.
Nuts and fruits
Macadamia Avocado Other fruits
2022 2021 2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue 14.9 10.8 19.2 11.1 23.0 9.3
Adjusted trading
profit/(loss)* 2.9 2.7 2.3 (0.5) (5.3) (4.1)
Trading profit/(loss) 2.9 2.7 2.3 (0.5) (5.3) (4.6)
* See note 1 to the Accounts
Macadamia
Mature Immature 2022 2021
area area Production Production
Ha Ha Tonnes Tonnes
Malawi 1,417 96 540 438
South Africa 822 315 486 375
Kenya 910 219 660 492
------ -------- ---------- ----------
Total 3,149 630 1,686 1,305
------ -------- ---------- ----------
The Group's kernel production volumes increased by 29% in 2022
due to improved growing conditions in Southern Africa generally,
enhanced pest control in Malawi and our Kenya crop has increased
over 30% on the previous year. The Kenya crop is increasing as
further areas of maturing orchard come into bearing alongside the
increasing maturity of existing orchards.
However, our average net selling price was down 10% on 2021
reflecting high inventories and continuing subdued market demand
for kernel post COVID, particularly from China, but also the USA
and Japan and exacerbated by increased worldwide production. Sales
volumes were however up 18% on 2021 and profits benefitted from the
additional volumes, related e ciencies and a favourable sales grade
mix despite higher distribution costs.
Harvesting of the 2023 crop is underway and volume indications
at this stage are encouraging. The macadamia harvest in Malawi was
virtually complete before cyclone Freddy arrived in country, so
there has been no significant impact on production volumes and
processing continues.
Global production volumes in 2022 were above prior year with the
two major producers, Australia and South Africa up 7% and 28%
respectively. China's production volumes also increased by an
estimated 44% reducing their demand for imports. Higher global
inventory going into 2023 is continuing to put downward pressure on
prices, particularly on kernel grades for the ingredients
market.
This situation is expected to persist for some time. Orders and
pricing in 2023 so far are well below prior year as buyers assess
the current market conditions.
Avocado
Mature Immature 2022 2021
area area Production Production
Ha Ha mkg mkg
Kenya - Estate Hass 608 278 12.4 7.5
Kenya - Estate Pinkerton 133 - 2.0 1.0
Tanzania - Estate Hass - 152 - -
South Africa - Estate Hass - 79 - -
------ -------- ---------- ----------
Total own estate production 741 509 14.4 8.5
------ -------- ---------- ----------
Smallholders 1.2 0.6
---------- ----------
Our estate avocado production was up 70% on last year, due in
large part to the bi-annual nature of the production which also
resulted in higher volumes packed for smallholders The avocado tree
has a natural tendency towards alternate or bi-annual bearing,
widely known as 'on' and 'o ' years and 2022 was an 'on' year. Our
estate Hass pricing was up 2% on prior year, due to a firm market
for the majority of our fruit arrivals.
There was an excellent Pinkerton season with export volumes up
143% and pricing up 6% on the previous year leading to a
significant contribution from that crop to profits despite higher
distribution costs.
The 2023 Pinkerton harvest is well advanced with volumes ahead
of 2022 and we expect prices to be higher. The Hass season has now
started with volumes expected to be significantly behind those of
2022 reflecting the fact that it is an 'o year' for Hass.
We continue our avocado expansion strategy by diversifying our
origin portfolio, with further plantings in Tanzania, Kenya and
South Africa. We planted 102Ha (2021: 37Ha) at our farm in
Tanzania, a further 69Ha (2021: 44Ha) in Kenya and 78Ha (2021: nil)
in South Africa. In 2023 to date a further 98Ha have been planted
in Tanzania.
During the year Kakuzi in Kenya achieved GLOBALG.A.P. "SPRING"
Certificate of Conformity for the sustainable management of water
resources.
Other fruits
Mature Immature 2022 2021
area area Production Production
Ha Ha Tonnes Tonnes
Apples - own estate 396 94 17,610 11,845
Apples - partner growers 8,650 1,428
Pears - own estate 88 4 1,470 1,395
Pears - partner growers 470 266
Stone fruit 44 0 666 205
Grapes 82 11 774 644
Blueberries 7 - 28 42
Apples and pears
Bardsley England is the Group's only agricultural investment in
the UK and to date it has failed to perform to expectation
incurring a pre-tax loss of GBP5.7 million in 2022. A combination
of factors has contributed to this unacceptable outcome. These
include higher than anticipated labour costs, due to government
policy on pay for seasonal workers which had a consequent impact on
wage rates for permanent workers, as well as very high inflation in
electricity, fertiliser, chemicals and fuel costs as a result of
the Ukraine war which also had an indirect inflationary impact on
other costs. The UK apple season in 2022 saw very high volumes of
production with the market oversupplied thus applying significant
downward pressure on prices in a rising cost environment. Although
consumers have experienced significant food inflation, key retail
customers have resisted any meaningful selling price increases.
Studies have estimated inflation for apple growers in the UK at 23%
in contrast to average industry selling price increases of 0.8%
(Source: British Grower Association Survey). Attempts to mitigate
cost increases through the restructuring undertaken in December
2021 and other e ciency and cost reduction initiatives have had
limited impact.
The record breaking heat in the summer coupled with harvesting
delays due to heavy rain led to a 49% increase in production
volumes but a combination of smaller fruit and significant quality
issues further compounded the impacts of high cost inflation and
low pricing.
Many producers in the UK top fruit sector are also experiencing
di culties and some producers have ceased farming with replanting
significantly scaled back. However, consumers continue to demand
locally sourced produce and UK fruit remains competitively priced.
Despite the challenges in the short term, it is our view that the
UK top fruit sector is likely to present opportunities in the
coming years for growth and margin recovery for producers.
Considering the trading environment, a decision has been made to
further restructure and significantly reduce the scale of Bardsley
England's operations. As a result, the uneconomical West Kent
orchards were closed in January 2023 and discussions to exit the
related leases remain ongoing.
In March 2023, Bardsley England agreed with its key customer
that the existing supply contract will be terminated at the end of
the current season. Bardsley England intends is participating in
the re-tendering of this contract.
The potential closure of the West Kent packhouse operation was
announced on 30 March 2023 and the employee consultation is ongoing
with packing from that site expected to continue until early August
2023 to fulfil current contracts. The business is expected to be
consolidated on a single site in East Kent which has large fruit
storage facilities and is well located for access to key transport
routes. This will allow for transport and other operational e
ciencies to be achieved and for future overhead cost savings.
An impairment charge of GBP10.0 million has been recognised in
respect of Bardsley England's assets and goodwill in 2022 as a
result of the reduced expectations for the business in the current
economic and sectoral environment. Restructuring costs in the range
of approximately GBP1 million to GBP1.25 million are expected to be
incurred and recognised in the 2023 results. Due to the ongoing
contractual commitments for 2023, in conjunction with restructuring
costs, we expect Bardsley England to also record a significant loss
in 2023.
Grapes
Grape production at our South African operation ended with a
record harvest 17% up on that of 2021. The grapes were high quality
and were sold to local commercial-scale winemakers. The 2023
harvest in South Africa has resulted in a further record
production, well ahead of expectation. Pricing is in line with
2022.
Blueberries
2022 was the third year of full production of our 10Ha trial in
Kenya.
As previously stated, the indications from the trial are that
the variety planted initially does not perform optimally in Kenyan
conditions. Other varieties have been trialed in small areas during
2022 and at least two of these are showing much greater potential
than the current dominant variety planted. The reason for
establishing this commercial scale trial was to test plant
establishment, agronomy practices and varieties and this is being
achieved very successfully. During 2023 the most promising
varieties from the trial will be planted in the 10Ha area.
Production in 2022 fell by 33% reflecting the transition of the
trial out of one variety pending the establishment of the others as
explained above. The majority of the crop produced was sold
locally.
Other agriculture
2022: Revenue - GBP15.8 million (2021: GBP11.4 million), trading
profit GBP6.3 million (2021: GBP4.8 million)
Mature Immature 2022 2021
area area Production Production
Ha Ha Tonnes Tonnes
Arable 3,779 - 40,621 34,769
Rubber 1790 138 658 690
m(3) m(3)
Forestry 2,993 2,805 45,354* 46,079*
Births Births
Livestock 681 799
* Volumes quoted are for conversion to value addition products
rather than fuel wood for own use.
Arable
Our soya and maize crop production was higher than that of prior
year with excellent quality being achieved. Prices for the soya
crop were 37% higher than the prior year and maize prices increased
by 4%, reflecting the impact of the Ukraine war on global food
grain markets. Wheat stocks carried over from 2021 also achieved
good prices. This led to substantially increased profits for our
operation in Brazil.
Rubber
Production was down 5%, with pricing down 1% on last year and
prices remain lower than the cost of production. A number of
initiatives are being pursued with the aim of reducing the losses
from this crop.
Forestry
Kakuzi's forestry volumes were slightly ahead of last year with
the main focus on fence post sales. The production of quality
timber products is also being investigated as a potential
diversified and value-added product line.
Our Brazil operation restarted its eucalyptus timber sales
during the year but no significant pine timber sales were made.
Pine resin sales continued throughout the year, providing a useful
contribution to profits.
Livestock
Births were down significantly on last year, leading to lower
revenues.
There are now some 600Ha under grass production for baling and
sale into the local market which will also provide a diversified
source of revenue for the livestock operation.
Other investments
Engineering - A JT Engineering
A trading loss of GBP0.8 million (2021: GBP2.3 million loss) on
revenue of GBP13.2 million (2021: GBP15.3 million) was recorded, as
set out in note 1 to the Accounts. The loss in 2022 was lower than
prior year due to tight cost control and a focus on e ciency and
improving terms with customers.
Market conditions in both the oil and gas and hydro sectors were
flat during 2022. The surge in orders during the autumn of 2022
subsequently abated due to government policies a ecting the
confidence of the oil majors to increase production from the North
Sea and the energy crisis causing the key customer for Site
Services to postpone planned projects. Order intake and enquires in
2023 to date for both divisions are encouraging.
Associates
2022 Share of results: Loss of GBP3.1 million (2021: Profit of
GBP7.2 million)
BF&M
BF&M recorded a shareholders' net loss of Bermudian $8.8
million as compared to shareholders' net income of Bermudian $25.2
million for 2021. Significant increases in interest rates resulted
in short-term fluctuations in the values of BF&M's fixed income
portfolio. Both bond and equity asset prices declined, resulting in
unrealised losses of Bermudian $19 million (loss of 7.4%). A
non-recurring, goodwill impairment charge of Bermudian $5 million
was also recorded.
Net income from operations, excluding fair value movements in
investments and the goodwill impairment, was Bermudian $11.5
million versus Bermudian $22.0 million in 2021. Gross premiums
written for the period increased by 3% from the prior year, driven
by increased property premiums o set by the non-renewal of a large
account which was fully reinsured. Short term P&C claims and
adjustment expenses increased by 6.8% to Bermudian $15.8 million.
Excluding the fair value impact, life and health policy benefits
increased by 9% to Bermudian $96.8 million. Group health claims
remained elevated just above pre-pandemic levels with a return to
normalised levels expected in 2023. Volatility in financial markets
impacted overall assets under management, however the pension and
annuity businesses remain well-positioned as these markets
recover.
United Finance and United Insurance
Our two associate companies in Bangladesh, United Finance and
United Insurance, produced lower results reflecting continued
challenging economic conditions in Bangladesh.
While United Finance's net operating income was 13% higher than
that of the prior year due to an increase in the number of new
loans sanctioned, margins were impacted by the e ect of inflation
on the overhead base and an increase in the costs of non-performing
loans.
The underwriting profit for United Insurance decreased due to a
decrease in gross premiums, higher claims and increased cost of
reinsurance.
Investment portfolio
The total value of the portfolio at 31 December 2022 was GBP35.6
million (2021: GBP40.2 million). During the year a net GBP5.6
million was realised from the investment portfolio.
Currencies
Over the course of the year, Sterling weakened against the
majority of our operating currencies. This has resulted in a gain
on foreign exchange translation of GBP9.3 million (2021: loss
GBP4.0 million) which is reflected in the Statement of
Comprehensive Income. Had we translated our profit before tax for
the year using the same average rates as last year, our results for
2022 would have been GBP0.2 million lower. Our profit before tax
includes an exchange gain of GBP1.5 million on transactions during
the year (2021: gain GBP0.4 million).
Tax and other provisions
The Group's tax charge reflects the losses in the UK and
impairment charges which are not deductible for tax. The tax charge
also reflects the reversal of a significant deferred tax liability
as a result of movements in the surplus on the UK Pension
Scheme.
As is normal at this time of the year, we have ongoing wage
negotiations relating to prior periods in India. We consider we
have made adequate provision for their likely outcome.
Despite progress being made during 2022, we continue to have a
number of significant uncertain tax situations totaling GBP12.5
million, which have been disclosed previously and which are
detailed in note 42 to the Accounts.
Pensions and other employment benefits
The Group operates a number of defined benefit pension schemes,
the largest of which is in the UK. On an IAS 19 basis, at the end
of 2022 the UK scheme had a deficit of GBP1.1 million. No
contributions are currently being made to the scheme. The next
triennial valuation is due in 2023.
Accounting for defined benefit schemes is prescribed by IAS 19
and the quantum of the deficit continues to be highly sensitive to
small changes in assumptions as regards wage inflation and gilt
yields in the relevant jurisdictions and to asset performance. This
year a net actuarial loss after tax of GBP9.3 million (2021: post
tax net gain GBP16.5 million) is reflected in the Statement of
Comprehensive Income. The net loss this year arises primarily from
the UK scheme where asset performance was lower than expected.
Outlook
Trading in 2023 year to date has been mixed with higher
production volumes in Kenya offsetting the lower prices being
achieved in that market. There has been a positive opening for new
season teas in Bangladesh but prices in India are significantly
lower than last year, albeit for both countries it is very early in
the season. Macadamia volumes are also significantly ahead of those
of 2022 but pricing continues to be under significant pressure and
sales volumes are below prior year. The remaining crops are
developing in line with what we would expect at this stage in the
growing cycle.
There remains residual uncertainty about how the war in Ukraine
might impact the tea market and input costs more broadly going
forward. High energy prices will continue to a ect our margins.
Fertiliser prices also remain relatively high with the impact
continuing to be felt in the cost of production across all our
agricultural operations. Furthermore, rising inflation is leading
to continuing increases in wage demands.
Overall, however, with financial markets less volatile than in
the recent past, we expect adjusted profit before tax for 2023 to
be ahead of that of 2022 and with our substantial cash resources,
our investment portfolio and limited gearing, we continue to be
well placed to withstand a further period of disruption to our
operations and sales.
We thank all of our sta for the way in which they responded to
the many challenges of the year in what has been a fast-changing
business environment. The passion for our products, our skills and
the professionalism of our people are key to our success.
Malcolm Perkins Susan Walker Graham Mclean
Chairman and Interim Chief
Executive CFO Director of Agriculture
3 May 2023
Environmental and social report
At Camellia, ESG (Environmental, Social and Governance) is
integral to our business. This is based on our fundamental belief
that we are custodians of our operations and must ensure a process
of continuous improvement across all that we do. This enables our
assets to be passed on to future generations whilst caring for the
environments in which they are based and for those communities who
depend on them. We believe that the success of all our operations
is intrinsically connected to the communities, the environments and
wider supply chains in which they operate.
During the year we developed a Group sustainability strategy
consisting of five guiding pillars which are set out below, with
the United Nations 10 Sustainable Development Goals (SDGs) to which
they align:
Group guiding pillars SDG*
Environment 6, 13 and 15
3, 7, 12, 13
Emissions and 15
3, 4, 5, 6 and
Social Sustainability 8
5, 8, 12 and
Safeguarding 16
Health and safety 3 and 8
* SDG 3 (Good health and wellbeing); SDG 4 (Quality education);
SDG 5 (Gender equality); SDG 6 (Clean water and sanitation); SDG 7
(A ordable and clean energy); SDG 8 (Decent work and economic
growth); SDG 12 (Responsible consumption and production); SDG 13
(Climate action); SDG 15 (Life on land) and SDG 16 (Peace, justice,
and strong institutions).
Within these five guiding pillars we have identified five key
focus areas for which the Group's operations will create timebound
action plans and initiatives to actively create strategies and seek
solutions which address the various challenges facing the
Group:
-- Water stewardship
-- Climate action and decarbonisation
-- Access to clean drinking water and sanitation
-- Safeguarding
-- Health and safety
We realise that these are highly complex areas and it will take
time to devise, as well as implement, plans to achieve our desired
outcomes. In some areas solutions may not yet exist but we intend
to actively seek and trial possibilities where practically and
economically feasible.
The Group undertakes a variety of ESG projects and initiatives,
examples of which are set out in this report and on our website
(www.camellia.plc.uk).
The Group's approach to ESG is described in detail in this
section and is the responsibility of the Board which is supported
by the Sustainability and Safeguarding committee. The boards of the
Group's operating companies closely consider their respective
governance protocols and the environmental and social impact of
their ongoing operations and investment decisions, with regard to
both Group requirements and local regulations and legislation. The
Group's approach to Governance is set out in the Corporate
Governance report.
Environmental
Climate change is the most significant long-term risk to the
Group's agricultural operations. We seek to mitigate the impact of
this risk by diversifying our agricultural production by both
origin and crop. We also continue to plant more drought resistant
crop varieties and use other initiatives, such as regenerative
farming methods and sustainable irrigation.
In addition to our e orts to minimise our environmental impact,
we work to protect and enhance forests and water bodies to promote
biodiversity. The material environmental impacts that arise from
the Group's operations fall broadly into three categories: (i)
greenhouse gas emissions from on-site combustion of fuels to power
the tea factory driers; (ii) use of fertilisers; and (iii)
extraction of water for irrigation of crops. Water is extracted
from a variety of sources, but we seek to maximise rainwater
capture by creating large reservoirs wherever possible from which
to irrigate sustainably.
The Group oversees c.9,000Ha of indigenous forests and
conservation areas and a further 7,200Ha of commercial forestry
(eucalyptus, pine and cypress). These areas, in combination with
fields of perennial crops sequester significant amounts of carbon
and act as an important carbon sink, which once quantified will o
set some of the Group's emissions. We have estimated sequestration
of our core crops and our managed eucalyptus estates, which we
comment on further below.
We use specialist partners to support the Group in achieving
environmental protection and emission footprint reduction
initiatives and are continuously exploring technologies that can
reduce our environmental footprint.
Environmental reporting
The Group continues to report under the Streamlined Energy &
Carbon Reporting Regulations (SECR), which is set out in the rest
of this section. The Group's 2023 annual report will include the
Group's reporting in line with the Taskforce on Climate-Related
Financial Disclosures (TCFD) reporting framework.
Based on prior year Scope 1 and Scope 2 carbon footprint
investigation and analysis, the Group has determined that our
priority for the reduction in emissions should be the thermal and
electrical energy requirements of tea manufacture. Thermal energy
demand reflects the highest levels of emissions and accordingly
initiatives have been targeted towards reducing the quantity of
fuel (coal, gas, wood) consumed.
Global GHG* emissions (excluding UK) and energy use data for the
year to 31 December
2022 2021 2020 2019
Global Global Global Global
Reporting year (Excluding (Excluding (Excluding (Excluding
Group sectors reported UK) UK) UK) UK)
Emissions from the combustion
of fuels,
fertilisers, waste, livestock,
land use
change and refrigerants
(Scope 1) (tCO(2) e)** 154,508 156,853 164,227 181,076
Emissions from purchase
of electricity,
heat, steam, and cooling
purchased for
own use (Scope 2, location-
based) (tCO(2) e) 40,434 41,958 42,717 47,625
Total gross Scope 1 and
Scope 2 emissions
(location-based) (tCO(2)
e) 194,942 198,811 206,944 228,701
Intensity ratio: Kg CO(2)
e/Kg of made tea 1.36 1.29 1.40 1.51
* Greenhouse gas
** tCO(2) e - tonnes of carbon dioxide equivalent
Refer to Appendix 1 for more detailed data and Appendix 3 for
the methodology.
There is no market-based data available for global (excluding
UK).
Changes in Scope 1 and Scope 2 emissions
The Group's Scope 1 and Scope 2 location-based emissions
(excluding UK) reduced by 1.9% during the reporting period. This
was primarily due to a reduction in volumes of made tea produced in
Bangladesh and a lower national grid emission factor for Kenya.
This was partially o set by higher electricity usage in South
Africa due to an increase in the area under irrigation. In the tea
drying process the Indian operations rely on coal whilst Bangladesh
uses natural gas. Where possible, and with infrastructure
permitting, cleaner fuel sources and e ciency improvements are
being implemented, although progress is at an early stage.
We report the made tea intensity ratio (2022:1.36 kg CO(2) e per
kg of made tea; 2021:1.29kg CO(2) e per kg of made tea) and we
continue to invest to improve the carbon e ciency of our tea
factories. There has been a 5.9% increase in the Group's
location-based made tea carbon intensity, mainly due to less carbon
e cient production in Bangladesh. Green leaf volumes received into
factories reduced during the period leading up to the industrial
action so factory capacity was not optimised. Following the strike,
leaf was longer, resulting in leaf volumes taking longer to
process. We are also pleased to observe that our Kenyan and
Malawian tea operations have continued to improve their thermal
energy e ciency in their tea factories.
As mentioned above, the Group's perennial crops sequester
significant amounts of carbon. We previously reported that we
conducted an external study to estimate the volume of carbon
sequestered by the Group's key crops and managed forestry.
Sequestration forms an integral part of the Group's ambitions to
become net zero and we continue to assess how to reflect this as
part of the Group's sustainability strategy. We await further
direction from the GHG Protocol, under its land sector removals
guidance, in relation to the accounting for carbon stocks.
UK GHG emissions and energy use data for the year to 31
December
Reporting year 2022 2021 2020 2019
Group sectors reported UK UK UK UK
Emissions from the combustion of
fuels, fertilisers,
waste, livestock, land use change
and refrigerants
(Scope 1) (tCO(2) e) 5,937 5,718 5,436 7,147
Emissions from purchase of electricity,
heat,
steam and cooling purchased for
own use
(Scope 2, location-based) (tCO(2)
e) 4,125 4,408 5,130 5,316
Total gross Scope 1 and Scope 2
emissions
(location-based) (tCO(2) e) 10,062 10,126 10,566 12,463
Refer to Appendix 2 for more detailed data including
market-based data and Appendix 3 for the methodology.
Environmental certifications
AJT Engineering is ISO 14001 certified, the framework of which
helps the entities improve building energy e ciency, reduce waste
streams, and increases awareness of potential environmental risk
factors. Many of our global operations are Rainforest Alliance
certified and some are GlobalG.A.P. certified.
Energy e ciency 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)
Improved fuelwood management and site suitability
Kenya at all tea factories 3,534
Installing new more energy e cient irrigation
Kenya pumps 150
Installation of fast close doors at cold stores,
UK reducing the amount of ambient air flow 146
Installation of variable flow controllers on
Kenya irrigation pumps 100
Variable speed drives fitted to air inlet fans
Kenya at two of its tea factories 100
2021 Key examples were:
Expected Saving
per annum
Operation Energy Saving Initiatives (MWh)
Installation of a heat exchanger to recycle
Kenya hot 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 4.1 GWh (2021: 2.3 GWh)
saving in energy per annum.
In addition, the Group is continuing with its programme of
replacing existing energy sources with renewables and in 2022
installed additional capacity expected to produce 430 MWh. The main
initiatives to date include the installation of solar generation at
several operations in India, Bangladesh, Kenya and Brazil, as well
as the installation of hydro turbines in India. In the UK a number
of our sites are on green tari electricity contracts. The Group's
operations have also assessed potential energy e ciency initiatives
that can be implemented over the next five years to provide
significant savings. We set out examples of the key initiatives
below:
Operation Energy Saving Initiatives
Tea Replacing ine cient withering fans
Continuous green leaf withering to improve the
e ciency of the withering process
Introduction of more energy e cient driers at
its tea factories
Testing alternative steam trap systems
Variable frequency drives fitted to green leaf
maceration equipment
Variable speed drives fitted to air inlet fans
for tea driers
Improved fuelwood management and site suitability
Installation of heat exchangers to recycle exhaust
heat
Avocado Installation of more e cient cold rooms
Agriculture Variable speed drives fitted to irrigation pumps
Replacement of lighting with more energy e cient
LED lighting
The Group will continue with its program of replacing existing
energy sources with renewables where possible with a focus on
increasing installed solar capacity. Our ultimate intention is to
set energy use and emission reduction targets across our
operations.
Social
The Group's businesses are fundamentally connected to the
welfare of the communities and environments in which they operate.
They proactively invest to ensure these environments are protected
and improved. Our focus is on the long-term stability, security and
continuity of our businesses and those communities. To this end our
subsidiaries are working with supply chains, customers, national
governments, trade unions and NGOs to help improve the livelihoods
of their employees and their communities.
Healthcare, education and housing
Healthcare, education and housing continue to be integral parts
of the Group's operations. For example, the majority of tea estates
in India and Bangladesh have a hospital and a qualified doctor, in
addition to central referral hospitals owned and managed by the
operations. Our African operations run dispensaries established on
their estates, 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 own and/or operate. In 2022, the Group performed 1million
patient treatments, of which 564,000 were for employees.
Many of our Group's operations provide childcare and education
to their employees' families from nursery up to secondary school.
During the year we continued to run 175 nurseries and creches, 72
primary schools and six secondary schools. In total we educated
more than 23,000 children. In certain circumstances, our Group's
operations will provide land or other resources to contribute to
the running of local schools which are not owned and/or operated by
them.
We also provide housing to a large number of employees and their
families. The housing is owned and managed by our Group's
operations and is provided and maintained in line with widely
recognised international certifications. The Group's operations own
c.48,000 houses accommodating c.293,000 people, of whom c.66,000
are employed.
2022 continued to be a year impacted by the e ects of the COVID
pandemic. Our Group's operations have made significant e orts to
provide safe working and living environments for our employees as
well as the wider communities in which they operate.
Approved by the Board
Amarpal Takk
Company Secretary
3 May 2023
Strategic report
The Strategic report contains certain forward-looking
statements. These statements are made by the Directors in good
faith based on the information available to them up to the time of
their approval of this report and such statements should be treated
with caution due to the inherent uncertainties, including both
economic and business risk factors, underlying any such
forward-looking information.
Business review
The Company is required to set out in this report a fair review
of the business of the Group during the year ended 31 December 2022
and a description of the principal risks and uncertainties facing
the Group. A fair review of the business of the Group is
incorporated within the Chairman's statement and operational report
on pages 5 to 15. The Chairman's statement and operational report,
together with information contained within the Report of the
Directors, highlights the key factors a ecting the Group's
development, performance and the financial performance of the Group
(see pages 5 to 15 of the Chairman's statement and operational
report). Other matters are dealt with below.
Group strategy
The Board has adopted the following strategy for the Group:
-- To generate long-term value for our shareholders and our
stakeholders which include our employees, customers, suppliers
and the communities in which we operate
-- To develop a worldwide group of businesses that requires
management to take a long-term view
-- To focus on the sustainable production of its core crops
whilst continuously assessing opportunities to diversify
the Agriculture division by both crop and origin
-- Investing in the environment and sustainability of the communities
in which we do business
-- Setting the principles which the operating companies need
to achieve through their policies and procedures to ensure
that the quality and safety of their products and services
meet the highest international standards
-- The continuous refinement and improvement of the Group's
existing businesses using our internal expertise and financial
strength
The progress against this strategy during the year is set out in
further detail in the Chairman's statement and operational report,
the Environmental and social report, and within the Report of the
Directors.
Business model
The Group is engaged in Agriculture, Other investments and
Associates.
Camellia operates a decentralised business model which empowers
the management teams in its subsidiaries to run their businesses
with the scope and accountability to identify and implement
initiatives that create value for the Group. Our devolved approach
enables decisions to be made by those closest to the issues and the
stakeholders that may be a ected, thereby fostering resilience and
flexibility in planning and enabling timely responses to impacts
and opportunities.
Regular reports are made to the Board on performance against the
annual budget and each operation is expected to perform against an
agreed strategy with goals and targets for the short, medium and
long-term.
Agriculture
To focus on our tea, macadamia and avocado crops, where we have
scale and geographic diversity. To maintain and selectively expand
our portfolio of crops and products in order to retain the
diversity of location and crop which has historically proven so
valuable in spreading the Group's political and commodity price
risk. Where appropriate opportunities arise, to add to our
production capability in bearer plant agriculture, as well as to
make aligned acquisitions and investments to enable us to capture
more of the value chain.
All our agriculture operations have regard to the potential
threats arising from politics and the impact of climate change,
particularly in water stressed areas, and will adapt their
portfolio of operations accordingly.
Other investments and Associates
AJT Engineering. To keep our presence in the energy sector under
review, in line with our strategy of expansion in areas of
expertise, while divesting in non-core businesses.
Investment portfolio . To have a portfolio, principally of
listed investments, the strategy for which remains to invest in
high quality companies where we believe that there is long-term
value. This portfolio also enables us to balance our geographic
risk exposure.
Investment property. Parts of the portfolio may be sold to
accelerate the Group's investment in agriculture.
Collections. Parts of the art, philately and manuscripts
collections may be realised to facilitate the increased focus on
our core agricultural business.
Associates. The Group has three associate companies in the
financial services sector of which BF&M, the listed Bermudian
insurance business is the most significant. With all our
Associates, we continually monitor our investment and may increase
or decrease our holding in the future.
Principal risks and uncertainties
The Group is exposed to a variety of possible risks and
uncertainties that could impact the Group's operations and future
performance. The Group regularly monitors these risks at
operational and Group level.
Our decentralised operating model enables Group company
management teams to identify, evaluate and manage risks that are
relevant to their geographic location and markets. The Strategy
group considers risks identified to it by the Group companies, and
where appropriate raises them to the Board and/or the Audit
committee. Information on the Group's financial risks is disclosed
in note 43 of the Accounts.
The Board has carried out an assessment of the material risks
and uncertainties relating to the Group's principal operations,
with key mitigations and assessment of change in risk year-on-year.
These are set out in the table below.
# increased risk
1 unchanged risk
$ decreased risk
Agriculture
Assessment
of change
Risk in risk year-on-year Potential Impact Mitigation
-------------- --------------------- -------------------------- -------------------------
Climate change # Current agricultural Geographical spread
patterns and practices of operations to lessen
become unsustainable. the impact of extreme
weather on the Group
as a whole.
Land values and local Investment in irrigation,
communities are impacted. water storage and
drought resistant
crop varieties.
Flooding/drought/frost Investment in sustainable
a ecting crop yields. water solutions, soil
management, energy
saving initiatives
and renewable energy
sources.
Price volatility n The e ect of climate Use of forward contracts,
change on crop volumes product and crop diversi
and/or a prolonged cation and building
depression in the long-term strategic
world tea, macadamia relationships with
or avocado markets, key customers.
either individually
or in combinations, Production of value-added
would have a material products to access
impact on Group pro and supply markets
tability. to address particular
customer demands whilst
having a much greater
control over pricing.
------------------ -------------------------- ------------------------------
Currency n Pro t volatility Monitoring of foreign
fluctuation arising from sales exchange rates and
in US Dollars and cash management.
Euros where there
is no natural hedge
against the cost
of production in
local currency.
------------------ -------------------------- ------------------------------
Cost of production h Increased wage costs, Introduction of more
cost of inputs and e cient and productive
other costs of production working practices
resulting in lower and the increased
pro tability. use of mechanisation
and automation.
Reduction of energy
consumption and/or
increased use of renewable
energy.
------------------ -------------------------- ------------------------------
Long-term h Potentially losing Monitoring changes
political access to farms and to local land legislation
issues over estates or paying with the assistance
land ownership more for existing of lawyers and local
property (for example trade associations.
if freeholds become Maintaining collaborative
leaseholds). relationships with
governments at local
and national levels.
------------------ -------------------------- ------------------------------
Civil unrest, n Periodic interruptions Increasing security
political to the operation for our workers and
instability of the businesses operations during
and war at a local level. times of civil unrest.
Supply chain disruption, Maintain market supply
lack of availability options and carrying
of key inputs. bu er stocks.
Reduced demand for Maintaining diverse
products. customer base.
------------------ -------------------------- ------------------------------
Corruption n Inability to carry Strict adherence to
on business in a anti-bribery legislation
manner which is legal and the implementation
and ethical. of the Group Principal
Polices.
Training of sta .
------------------ -------------------------- ------------------------------
Health and n Vulnerability of Strict compliance
safety the employees to with legislation and
injury at work due training employees
to the use of machinery to adopt safe working
and chemicals. Payment practices. Regular
of nes and claims, external compliance
criminal prosecutions reviews.
and reputational
damage.
------------------ -------------------------- ------------------------------
Human rights n Adverse impact on Continuing to implement
(current nancial results from human rights strategies
and historic) legal and reputational to protect, respect
costs. Media and and remedy. Understanding
political pressure the salient human
impacting operations rights risks (via
or customers preparedness audits and assessments).
to buy products. Implementing measures
to mitigate and prevent
such risks from crystalising.
Providing on-going
training and raising
awareness across the
Group and communities.
Strengthening governance
protocols, by way
of policies and increased
reporting.
Providing appropriate
mechanisms to bring
forward any allegations
and redress (such
as whistleblowing
and operational--level
grievance mechanisms).
------------------ -------------------------- ------------------------------
Engineering
Assessment
of change
Risk in risk year-on-year Potential Impact Mitigation
--------------- --------------------- ------------------------ -------------------------
Key customer n Losing a major customer. Seeking to diversify
dependence the customer base
and careful customer
relationship management.
--------------- --------------------- ------------------------ -------------------------
Dependence n Changes in market Diversi cation into
on the oil conditions leading other sectors. Close
and gas sector to lower demand for monitoring of the
services. oil and gas sector.
--------------- --------------------- ------------------------ -------------------------
Health and h Vulnerability of Strict compliance
safety the employees to with legislation and
injury at work due training employees
to the use of machinery to adopt safe working
and chemicals. Payment practices. Regular
of nes and claims external compliance
and reputational reviews.
damage.
--------------- --------------------- ------------------------ -------------------------
Investments and Associates
Assessment
of change
Risk in risk year-on-year Potential Impact Mitigation
--------------- --------------------- -------------------- --------------------------
Market n Decline in the value Portfolio diversi
of investments and cation, careful stock
property. selection, the regular
monitoring of individual
company stock performance
and a diversi ed property
portfolio.
--------------- --------------------- -------------------- --------------------------
Adverse weather h Risk of substantial Maintaining strong
events in claims materially capital base and use
the Caribbean reducing pro ts. of underwriting and
reinsurance to reduce
risk.
--------------- --------------------- -------------------- --------------------------
Group
Assessment
of change
Risk in risk year-on-year Potential Impact Mitigation
---------------------- --------------------- ---------------------------- ------------------------------
Prolonged i Interruption to production Contingency plans.
impact of and/or disruption
a pandemic of supply to customers. Ongoing monitoring
of banking partners
Volatile equity markets and country credit
impacting the pension ratings.
schemes' de cits
with a resultant
increase in the funding
requirement.
Increased risk of
bank failure, and
foreign exchange
volatility resulting
in increased costs.
Risk of imposition
of currency controls
leading to the inability
to remit funds from
overseas operations.
---------------------- --------------------- ---------------------------- ------------------------------
UK and overseas n Increase in the pension Regular monitoring
pensions schemes' de cits of the funding position
with a resultant of the pension schemes
Increases increase in the funding and their investment
in in ation required from the performance.
and/or reductions Group.
in long-term Improvement to the
government investment strategy
bond yields and hedging key exposures
when appropriate.
Lower than
expected
asset return
Changes in
local laws
restricting
the investment
choices for
the schemes'
assets
---------------------- --------------------- ---------------------------- ------------------------------
Environmental n Contamination of Strict compliance
local and wider environment with legislation,
due to the use of training employees
machinery and chemicals. to adopt safe working
practices and lessen
Payment of nes and the impact on the
claims, criminal environment.
prosecutions and
reputational damage. Proactively seek to
reduce our impact
on the environment.
---------------------- --------------------- ---------------------------- ------------------------------
Uncertainties n Future adjustments Tax exposures are
in the interpretation to taxable income considered individually,
of complex and/or expense deductions and judgements made
tax legislation, previously recorded with support from
or arising or increases to the experienced tax professionals
from changes cash tax costs incurred and external advisors.
in tax legislation by the Group in future.
Risk that
the Group's
judgements
are challenged
by tax authorities
---------------------- --------------------- ---------------------------- ------------------------------
Legal and h Group legal risk Monitoring the interpretation
regulation in relation to the of law and taking
uncertainties activities of overseas appropriate advice
in relation operations (including and monitoring and
to the application potential litigation auditing compliance
of English in the UK) and incurring with new developments.
or other costs in relation
law or changes to the same.
in case law
---------------------- --------------------- ---------------------------- ------------------------------
Potential n Loss or theft of Developing our technology
cyber- threats data. systems.
such as computer Interruption to services
viruses for customers and Investing in developing
the business. the IT skills and
IT malfunctions capabilities of our
or external people.
cyber-attacks
Actively monitoring
and mitigating any
cyber-threats and
suspicious IT activity.
Disaster recovery
plans for business
critical systems.
---------------------- --------------------- ---------------------------- ------------------------------
Group principal policies (GPPs)
There are a range of issues that are important to the Group and
to all of our operations, whatever sector they operate in. These
are set out in the GPPs which are periodically cascaded across the
Group. Each operation is required to prescribe its own local
policies based upon the GPPs. On an annual basis, each significant
operation confirms to Group its adherence with the GPPs.
Ultimately, our individual operations have experts who are best
placed to identify how each policy can be implemented and applied
which in turn enables them to operate responsibly and ethically
over the long-term.
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 e ective. 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, Employee
Welfare GPP and Human Rights GPP. The Compliance GPPs comprise the
Anti-Bribery and Corruption GPP and the Whistleblowing GPP. A
summary of each principal policy is set out below and they are set
out in full on our website.
High-level GPPs
Certification and traceability
As part of our end to end supply chain, our operations are
required to meet the requirements of our customers and suppliers in
terms of certifications and traceability. The vast majority of our
tea gardens are Rainforest Alliance certified and all our
macadamia, avocado and winery processing facilities are FSSC 22000
certified. Across the Group, many operations have also obtained
ISO14001, ISO9001 and ISO45001 and many other appropriate
accreditations, such as Red Tractor for our Bardsley England
operation.
Health and safety
We take responsibility for our people by promoting good health
and providing a safe and healthy workplace to protect all
employees, contractors, visitors and the public from foreseeable
work hazards. All operations are required to comply with local
health and safety legislation, regulations and to obtain
certifications from external authorities.
Environmental
We are mindful of the environment in which we operate,
recognising that our operations require natural resources and that
our operations generate emissions and waste. We understand and
comply with current applicable legislation in the jurisdictions in
which we operate. Our operations are each required to commit to
policies which reduce their environmental footprint and which
include (where appropriate), carbon, recycling, waste and
water.
Employee welfare
Our employees are at the heart of what we do, and their safety
and welfare is paramount, as described in Environmental and social
report. Operations are required to have policies and procedures in
place which cover equality, health, personal development, training,
diversity, and (where appropriate) education, housing and
sanitation.
We consciously and continuously work towards encouraging
equality in management positions across our operations. The Group
complies with local regulations to encourage employees with
disabilities to work in our operations and where necessary, makes
appropriate adjustments to working practices.
Human rights
Camellia Plc and its operating companies believe that businesses
flourish where human rights are protected and respected, with
remedy available. The Group is committed to protecting and
respecting the dignity, well being and human rights of the Group's
employees, the communities in which the Group operates and those
with whom we have relationships or who may be impacted by the
Group's operations.
The Group is committed to upholding internationally recognised
human rights in line with the principles and guidance contained in
the UN Guiding Principles on Business and Human Rights, including
those set out in the International Bill of Human Rights and the
International Labour Organisation's Declaration on Fundamental
Principles and Rights at Work. Where national law and international
human rights standards di er, we follow the higher standard; where
they are in conflict, we adhere to national law, while seeking ways
to respect international human rights to the greatest extent
possible.
Compliance GPPs
Anti-Bribery and corruption
The Company has adopted an anti-bribery policy which complies
primarily with the requirements of the UK Bribery Act 2010 although
the Board also requires compliance with the laws of all countries
in which the Group operates.
All Group employees, 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. Employees have access to the whistleblowing o
cer for the individual operation, as well as the Group
whistleblowing o cer or the chair of the Audit committee.
Modern slavery GPP
The Group continues to comply with the requirements of the
Modern Slavery Act 2015, to ensure that modern slavery and human
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 2022 is available on the Company's website.
In some countries, it is both the cultural norm and permissible for
parents to involve their children in the production process. We do
not subscribe to this approach and the use of child labour is
prohibited across the Group. All Group operations are required to
confirm this statement and adopt local policies and procedures to
ensure continued compliance. This includes setting out codes of
conduct when working alongside customers and suppliers.
Tax principles
The Group's tax principles include: compliance with applicable
tax laws; payment of the correct tax amounts; interpretation of tax
law; undertaking tax planning based on commercial rationale; and
transparency with tax authorities.
Key financial performance indicators
The nature of the Group's principal activities is such that the
Board takes a long-term view of its operations, particularly
Agriculture.
The Board reviews monthly reports with a range of financial and
other indicators to monitor the performance of each division
depending on the nature of its operations.
For the Agriculture division, the Board receives monthly profit
and operating performance information, data on sales prices and
volumes, costs of production and crop volumes against budget and on
a per unit basis. Rainfall and other climate data are also
considered.
For the Engineering division, the Board receives monthly profit
and operating performance information.
For Investments, the value and performance of the share
portfolio is reviewed quarterly.
For Associates, the Board receives revenue and profitability
information when those companies release information to their
respective shareholders.
Certain of the key financial performance indicators are included
in the Chairman's statement and operational report on pages 5 to
15.
Non-financial performance indicators
Operations have developed non-financial KPIs that are relevant
to it, these are regularly monitored and include:
n Market trends - including tea auction volumes, demand for
each product by country where available, supply data and
market prices
n Health and Safety - including days lost to injury, number
of accidents and fatalities, whistleblowing incidents and
updates to legislation
n Grievances - including employee, welfare and social issues
n Industrial disputes - including days lost to strike action
and other significant employee issues
n Land and politics - including elections, material new regulation
or case law
n Changes in key personnel - including promotions, resignations
and retirements of senior management
n Weather and climate - including rainfall, temperatures
and long-term meteorological trends
The Board, or the Strategy group (as appropriate), considers
such KPIs by exception where local operations notify that
significant material issues have emerged.
Section 172 statement
This section 172 statement should be read in conjunction with
the Environmental and social report, this Strategic report, the
Corporate Governance report and the Statement of Directors'
Responsibilities.
In performing their duty under section 172(1) (a) to (f) of the
Companies Act 2006, Directors have acted in a way that they have
considered, in good faith, to promote the success of the Group as a
whole, whilst carefully considering the interests of shareholders
and other stakeholders which have an impact on the long-term
success and sustainability of the Group, including suppliers,
customers, employees, the communities in which the Group operates,
and the impact on the environment.
Long-term
The Board is undertaking a series of measures aimed at
re-balancing the Group's portfolio of investments in order to take
better advantage of its strengths, and thereby to improve
profitability. This includes investment in social and environmental
initiatives, in particular, to mitigate the impact of climate
change. This also includes accelerating agricultural
diversification and divesting of certain assets which we consider
to be non-core, details of which are covered elsewhere in this
report. Key risks, potential impact and mitigations are included in
the "Principal Risks and Uncertainties" section below.
Stakeholders
The Board recognises the value of stakeholder relationships and
the key role that these play in the Group's sustainability and
success over the longer term. Good progress continues to be made
across the Group in initiatives to protect and promote human rights
and a peaceful, long-term and mutually beneficial relationship
between the activities of businesses within the Group and the
communities a ected by them. Many environmental and social projects
are initiated by sta in our subsidiaries each year, which we
highlight on our website and various social media platforms.
Further information can be found in the Environmental and social
report.
Views of stakeholders are provided to the Board through the
information from management reporting, committees and meetings and
operational visits. The Board conducts regular reviews of how to
continue to engage e ectively with stakeholders and there is
ongoing dialogue between members of the Board and stakeholders.
Employees
In order to track progress made, and in line with our culture of
seeking ongoing feedback, another annual employee engagement
survey, Your Voice, was undertaken during 2022. The survey gathered
anonymous and open feedback from employees to inform local
management decisions as well as to provide Board insights. All
employees in the UK were invited to respond and the results of the
survey are continuing to be used to plan key initiatives and track
progress.
Employees are kept informed on matters 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. 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 business.
As set out in the Group's Employee Welfare Policy, operating
companies are expected to give due consideration to employment
applications received from disabled persons and give employees who
become disabled every opportunity to continue their employment.
The table below provides a breakdown of the gender of the
Directors and employees on 31 December 2022.
Men Women
Company Directors 5 2
All employees 50,965 55,793
Approved by the Board
Amarpal Takk
Company Secretary
3 May 2023
Report of the directors
The Directors present their report together with the audited
consolidated accounts for the year ended 31 December 2022.
Principal activities
The Company is a public company limited by shares, which is
quoted on the AIM Market of the London Stock Exchange and
incorporated and domiciled in England and Wales. The principal
activity of Camellia Plc is a holding company and the principal
activities of its subsidiary undertakings comprise:
n Agriculture
n Other Investments and Associates
Fostering business relationships is of paramount importance to
the Directors, as set out in the s172 Statement in the Strategic
report. Further details of the Group's activities are included in
the Strategic report and the Chairman's statement and operational
report.
Results and dividends
The loss after tax for the year amounted to GBP8.3 million
(2021: Profit after tax GBP4.5 million). The Board is proposing a
final dividend for the year 2022 of 102p per share payable on 26
July 2023 to holders of the ordinary shares registered at the close
of business on 16 June 2023. Therefore, the total dividend payable
for 2022 is 146p per share (2021: 146p per share). Details are
shown in note 12 to the Accounts.
Directors
The Directors are listed on page 4. The following Directors had
beneficial interests in the shares of the Company.
Camellia Plc ordinary shares of 10p each: 31 December 1 January
2022 2022
Malcolm Perkins 1,673 1,673
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,
Rachel English and Stephen Buckland will retire and, being
eligible, will seek re-election at the forthcoming Annual General
Meeting (AGM).
None of the Directors or their families had a material interest
in any contract of significance with the Company or any subsidiary
during, or at the end of, the financial year.
Executive directors
Malcolm Perkins was appointed a Director in 1999 and Chairman in
2001, having joined Eastern Produce (Holdings) Limited, now Linton
Park Plc, in 1972. He is a chartered accountant and chairman of the
Nomination committee.
Graham Mclean, a qualified agriculturalist, was appointed as
Director of Agriculture in October 2014. He was previously regional
director of the Group's operations in Africa and has worked for the
Group for more than 25 years. He is a non-executive director of
Kakuzi Plc.
Susan Walker was appointed Chief Financial 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 of United
Finance Limited.
Non-executive directors
Stephen Buckland was appointed as a non-executive Director in
November 2021. He previously held positions within the Camellia
Group's agricultural and banking businesses. He holds an executive
position within The Camellia Foundation, a UK charity whose primary
donor of the same name is the ultimate majority shareholder of
Camellia Plc. He is a member of the Audit committee.
Rachel English was appointed as an independent non-executive
Director in May 2022. She is a chartered accountant and has
extensive international and general management experience, having
founded and served on the board of several significant businesses,
including as chair of Acacia, a FTSE 250 company, and previously
served on the audit committee of the UK Department for
International Development. She has substantial experience and
interest in ESG matters. She became the chair of the Audit and
Remuneration committees and joined the Nomination committee on 8
June 2022.
Simon Turner was appointed as a non-executive Director in March
2020. After an earlier career in the legal profession, he is now
president of the board of the trustee of The Camellia Foundation.
He is a member of the Remuneration and Nomination committees.
Frédéric Vuilleumier was appointed as an independent
non-executive Director in March 2013. He is a partner of Oberson
Abels SA, a law o ce based in Geneva, Switzerland. He became a
member the Audit, Remuneration and Nomination committees on 8 June
2022.
Company Secretary
Amarpal Takk was appointed as Group General Counsel and Company
Secretary in April 2018. He is a qualified solicitor of England and
Wales.
Substantial shareholdings
As at 6 April 2023 the Company has been advised of the following
interests in its share capital:
% of total
Shareholder No. of Shares voting rights
Camellia Holding AG 1,427,000 51.67
Nokia Bell Pensioenfonds OFP 361,500 13.09
Quaero Capital SA 143,148 5.18
Share capital and purchase of own shares
The Company's share capital comprises one class of ordinary
shares of 10p per share which carry no restrictions on the transfer
of shares or on voting rights (other than as set out in the
Company's articles of association). There are no agreements known
to the Company between shareholders in the Company which may result
in restrictions on the transfer of shares or on voting rights in
relation to the Company. Details of the issued share capital are
contained in note 37 to the Accounts.
At the AGM in 2022, shareholders gave authority for the Company
to purchase up to 276,200 of its own shares. This authority expires
at the conclusion of this year's AGM at which a resolution
proposing renewal of the authority will be submitted to
shareholders.
Auditors
A resolution proposing the reappointment of Deloitte LLP will be
put to the AGM.
Each of the persons who were Directors at the time when this
Directors' report was approved has confirmed that:
n So far as each Director is aware, there is no relevant
audit information of which the Company's auditors are unaware.
n Each Director has taken all the steps that ought to have
been taken as a Director, including making appropriate
enquiries of fellow Directors and of the Company's auditors
for that purpose, in order to be aware of any information
needed by the Company's auditors in connection with preparing
their report and to establish that the Company's auditors
are aware of that information.
Energy and carbon disclosure
In compliance with the SECR requirements, our greenhouse gas
emissions, energy consumption and energy reduction initiatives are
reported within the Environment and Social report on pages 16 to
20.
Employees and stakeholders
The Directors have had regard to the need to foster the
Company's business relationships with employees, suppliers,
customers and others, and the 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 section 172 Statement on pages 30 to 31.
Research and development
The Group invests in research and development projects within
its operations in order to improve e ciency and grow revenues. In
Kenya, Malawi and India technical departments in conjunction with
specialised departmental teams are focused on numerous projects to
improve operational e ciencies (both field and factory), pest and
disease identification and control, improving energy e ciency and
utilisation and the implementation of new technologies to enhance
automation.
We continue to collaborate with various organisations, for
example, the Cambridge Environmental Sustainability Strategy
committee, the Carbon Trust, and the Gatsby Foundation on various
areas of future business strategy. In Kenya we are running a
commercial blueberry trial to evaluate the viability of 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
decisions on the implementation of precision farming
technologies.
Future development
Details of future developments are set out in the Chairman's
statement and operational report and in the Strategic report.
Going concern
The Directors, at the time of approving the financial
statements, considered the Group's business activities together
with the main trends and factors likely to a ect the Group, and the
most recent business performance of the Group as described in the
Chairman's statement and operational report on pages 5 to 15.
They also considered the potential impact of the current
operating environment and the Ukraine conflict on the business for
the next 15 months.
The Directors have considered several variables which may impact
on revenue, profits and cash flows. In light of the nature of our
business and our experience of trading through the pandemic and the
Ukraine conflict, we expect our Agriculture businesses will
continue to operate broadly as set out in the Chairman's statement
and operational report. We have assumed that the leisure and food
services markets continue to recover gradually over the course of
the next year.
At 31 December 2022, the Group had cash and cash equivalents net
of borrowings of GBP45.6 million. In addition, the Group had
undrawn short-term loan and overdraft facilities of GBP22.4 million
and a portfolio of liquid investments with a fair market value of
GBP35.6 million. In early January 2023, GBP16.6 million in cash was
received from the sale of ACS&T.
The Directors have modelled various severe but plausible
scenarios using assumptions including the combined e ect of reduced
sales volumes for tea, and reduced sales volumes for macadamia
during 2023. The revenue and operational impact of such volume
reductions across our operations would have a substantially
negative impact on Group profitability. We have also considered the
risk of price reductions during 2023 for our tea, macadamia and
avocado crops.
Historically in the Tea operations, restrictions on, or
reductions in, the supply of tea either regionally or globally have
led to higher selling prices. However, for prudence for the
purposes of our downside scenario planning we have not reflected
increased selling prices for tea nor any significant mitigating
reductions to our operating cost base in our tea operations. We
have assumed that in certain scenarios aspects of our investment
programme would be curtailed.
Under both the base case and the downside scenario, the Group is
expected to continue to have 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 43 of the
Accounts.
Corporate governance
The Company's statement on corporate governance can be found in
the Corporate Governance report on pages 36 to 40.
Political donations
The Company has no political 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, stakeholders, communities and to the interests of the
business.
Approved by the Board
Amarpal Takk
Company Secretary
3 May 2023
Corporate governance
Statement of compliance
The Company is committed to complying with the Quoted Companies
Alliance's (QCA) Corporate Governance Code for Small and Mid-size
Quoted Companies (QCA Code). The Chairman considers the application
of standards of corporate governance that are appropriate for the
Group's nature, status, profile, size and circumstances to be
important in ensuring the Group is managed for the long-term
benefit of all stakeholders. The table on our website sets out how
we comply with the ten principles of the QCA Code.
The Group consists of a portfolio of businesses which are
grouped into independently managed divisions. These divisions
report into the Board by function against a variety of metrics
including budgets and business plans.
The Board
The Board currently comprises seven Directors, four of whom are
non-executive Directors as set out on page 4. The remaining
Directors are executive Directors, including the Chairman. The
names and brief biographical details of each Director appear on
pages 32 and 33.
The Board has established Remuneration, Audit and Nomination
committees. Terms of reference of each of the committees can be
viewed on the Company's website.
The Board is responsible for managing the Group's business and
has adopted a schedule of matters reserved for its approval. The
schedule is reviewed periodically and covers, inter alia, the
following areas:
n Strategy
n Acquisitions and disposals
n Financial reporting and control
n Internal controls
n Approval of expenditure above specified limits
n Approval of transactions and contracts above specified
limits
n Responsibilities for corporate governance
n Board membership and Board committees
n 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.
Board diversity
The Group has an Employee Welfare GPP which Group companies are
expected to subscribe to (see page 28). In addition, the Company
has a Dignity at Work and Equal Opportunities policy. The Board of
Directors has overall responsibility for the effective operation of
this policy and for ensuring compliance with discrimination law.
Day-to-day operational responsibility for this policy, including
regular review of this policy, has been delegated to the UK HR
Manager.
The key principle of the Dignity at Work and Equal Opportunities
policy is that there should be equal opportunities for employees to
reach their potential and this is achieved by empowering people to
excel in their careers regardless of race, gender, ethnicity,
cognitive or personal strengths, sexual orientation or
socio-economic background. Our objective is that all staff should
feel respected, valued and included.
The above objectives apply to the Group as a whole but equally
to the Board and to its Nomination, Audit and Remuneration
committees. Such diversity and inclusion objectives for senior
appointments are achieved through the engagement of specialist
external executive recruitment firms. The most recent example was
the appointment of Rachel English, as a non-executive Director.
Attendance by Directors at Board and committee meetings held
during the year was as follows:
Director Board(*) Audit(*/**) Remuneration(*/**/***) Nomination(*/**)
Malcolm Perkins 9/9 - - 2/2
Tom Franks 4/4
Graham Mclean 9/9 - - -
Susan Walker 9/9 - - -
Stephen Buckland 9/9 3/3 - -
Gautam Dalal 4/4 1/1 - -
Rachel English 6/6 2/2 2/2 1/1
William Gibson 3/4 1/1 1/1 1/1
Simon Turner 9/9 - 3/3 2/2
Frédéric
Vuilleumier 9/9 2/2 2/2 1/1
* Tom Franks, William Gibson and Gautam Dalal's attendance
reflects the period up to 30 June 2022 and Rachel English's
attendance reflects the period from 6 May 2022.
** Frédéric Vuilleumier's attendance reflects the period from 8
June 2022.
*** Where a meeting was not quorate, decisions were raised to
and approved by the Board.
Board evaluation
The Board has agreed to undertake a performance evaluation by
way of internal review every three years. The last evaluation was
conducted in 2021. Details of the next review will be disclosed
when the next review is completed at the end of 2024.
Executive committees
The Board has established the Strategy group, consisting of the
Chairman, the executive Directors of the Board and the Group
General Counsel. The Board has also established an Agriculture
Executive Committee which is chaired by the Director of Agriculture
and includes the Chairman (as interim Chief Executive), Chief
Financial O cer, the Group General Counsel and heads of all the key
agricultural operations.
Investments and Associates report directly to the Chairman.
Nomination committee
The committee is chaired by Malcolm Perkins. Its other members
are Rachel English, Frederic Vuilleumier and Simon Turner.
The principal responsibilities of the committee are set out
below:
n Review the balance and composition (including gender and
diversity) of the Board, ensuring that they remain appropriate
n 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
n 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
Audit committee
The committee is chaired by Rachel English (Gautam Dalal chaired
the committee up to 8 June 2022). The other members of the
committee during the year were Stephen Buckland and Frederic
Vuilleumier.
The principal responsibilities of the committee are set out
below and were undertaken during the year:
n Monitor the e ectiveness of the Group's risk management
practices
n Review the e ectiveness of the Group's internal control
system. The committee reviews the e ectiveness of internal
audit activities carried out by the Group's accounting
function and senior management
n Review and monitor the financial statements of the Company
and the audit of those statements and monitor compliance
with relevant financial reporting requirements and legislation
n Monitor the e ectiveness and independence of the external
auditors
n Review non-audit services provided by the external auditors
The Audit committee assesses whether suitable accounting
policies have been adopted and whether management has made
appropriate estimates and judgements.
Ensuring the integrity of the financial statements and
associated announcements is a fundamental responsibility of the
Audit Committee. During the year it formally reviewed the Group's
interim and annual reports. These reviews considered:
n The description of performance in the Annual report to
ensure it was fair, balanced and understandable and that
it provides the information necessary for shareholders
to assess the Company's performance, business model and
strategy
n The accounting principles, policies and practices adopted
in the Group's financial statements, any proposed changes
to them, and the adequacy of their disclosure
n Important accounting issues or areas of complexity, the
actions, estimates and judgements of management in relation
to financial reporting and in particular the assumptions
underlying the going concern statement
n Any significant adjustments to financial reporting arising
from the audit
n Tax contingencies and compliance with statutory tax obligations
A key responsibility of the Audit committee is to consider the
significant areas of complexity, management judgement and
estimation that have been applied in the preparation of the
financial statements. The Committee has, with support from Deloitte
LLP (Deloitte) as external auditor, reviewed the suitability of the
accounting policies which have been adopted and whether management
has made appropriate estimates and judgements. Set out below are
the significant areas of accounting judgement or management
estimation and a description of how the Committee concluded that
such judgements and estimates were appropriate.
Pensions
The valuation of the pension schemes obligations is conducted by
independent actuaries and due to the size of the obligation a
relatively minor change to the assumptions made could result in a
material change in the quantum of the obligation. The committee
considered the competence of the actuaries and the key assumptions
adopted and concluded that the work performed is su cient to
support the valuation.
Carrying value of intangible assets
The Group's carrying values of the Jing Tea and Tea City brands
and of the goodwill relating to the two Assam estates purchased in
2019 were discussed in light of the trading of those businesses. In
particular consideration was given to likely future yield profile
of the Assam estates and the range of future revenue growth rates
for Jing.
The carrying value of the goodwill relating to Bardsley England
which arose on the acquisition of that group of companies was
discussed in context of the current inflationary environment's
impact on margins and the expected continuing challenging market
conditions as well as the expected reduction in scale of the
business. In light of the significantly lower expectations for the
profitability of the business in the foreseeable future, the
committee agreed that an impairment of GBP3.6 million had
occurred.
The committee considered the fair value of the Group's holdings
and whether any impairment in the carrying value had occurred and
agreed that apart from the impairment of assets related to Bardsley
England, no other impairment provisions were required in respect of
intangible assets.
Carrying value of tangible assets
The committee considered the fair value of the Group's
investment property portfolio, the carrying value of plant and
equipment at the engineering subsidiaries, and the carrying value
of certain of the Indian and Bangladeshi estates in the context of
recent trading and third party valuations and agreed that no
impairment had occurred during the year. The carrying value of the
underlying property, plant and equipment assets used in Bardsley
England business was also considered in light of the expectation of
a period of continuing losses for that business in the current
trading environment and the committee agreed that an impairment of
GBP6.4 million had occurred.
Carrying value of BF&M
The Group's carrying value of BF&M was higher than the share
price for BF&M at 31 December 2022. The committee considered
the fair value of the Group's holding and whether any impairment in
the carrying value had occurred and in view of the expected control
premium associated with our holding concluded that no impairment is
required.
Provisions
The bases of provisions for material uncertain tax situations
were considered by the committee as were the provisions for wage
increases in Bangladesh, Kenya and India. The committee is
satisfied that the provisions represent best estimates of the
likely liabilities. Consideration was given to the accounting
implications of the VAT assessment received in Malawi in 2021 and
management's judgement that it should continue to be disclosed as a
contingent liability.
The committee considered the implications of the VAT assessment
received in the UK which indicated a liability of GBP1.2 million.
In light of external advice it is being appealed and the committee
concluded that the provision held was reasonable.
External auditor
To assess the 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.
Remuneration committee
The committee is chaired by Rachel English (William Gibson was
chair up to 8 June 2022) and the other members are Simon Turner and
Frederic Vuilleumier.
The responsibilities of the committee include:
n The review of the Group's policy relating to remuneration
of the Chairman, executive Directors and the Company Secretary
n To determine the terms of employment and remuneration of
the Chairman, executive Directors and Company Secretary
with a view to ensuring that those individuals are fairly
and responsibly rewarded
n To approve compensation packages or arrangements following
the severance of any executive Director's service contract
The Remuneration report appears on pages 41 to 42.
Sustainability and Safeguarding committee
The Board has expanded the remit of the previously established
Safeguarding and Stewardship committee to include not only the
promotion of human rights across the Group, but to further enhance
the Group's environmental and sustainability practices.
Consequently, the committee has been reconstituted to the
Sustainability and Safeguarding committee and reports to the Board.
The committee is chaired by Rachel English. Other members are the
Chairman (in his capacity as Interim CEO), the Director of
Agriculture, the Group General Counsel and the Head of Strategy.
The committee advises the Board on strategy in these areas and
monitors and reports on progress against the agreed strategy.
Insurance
The Company purchases insurance to cover its Directors and 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 37.
Internal control and risk management systems
The Directors acknowledge that they are responsible for
maintaining a sound system of internal control. During the year,
the Audit committee, on behalf of the Board, reviewed the 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
3 May 2023
Remuneration report
This report is drawn up in accordance with the Companies Act
2006 and the AIM Rules for Companies.
Remuneration committee
Details of the Remuneration committee are set out on pages 39
and 40.
Policy on Directors' remuneration
The policy agreed by the committee is as follows:
n To seek to provide remuneration packages that will attract,
retain and motivate the right people for the roles
n So far as is practicable to align the interests of the
executives with those of shareholders
n To reflect the overriding remuneration philosophy and the
principles of the wider Group
In implementing the second point, the Company does not operate
profit related bonus, share option or share incentive schemes for
Directors as the Group's activities are based largely on
agriculture, which is highly dependent on factors outside
management control such as the weather and market prices.
The policy is designed to ensure that the Directors manage the
Group's businesses for the long-term in line with the strategy of
the Group.
In determining this remuneration policy and the remuneration of
Directors, consideration has been given to the relevant provisions
of the QCA Guidelines.
The remuneration policy was approved by shareholders at the 2020
AGM and applies for a period of three years. The remuneration
policy shall be reconsidered for shareholder approval at the AGM in
2023. The committee considers any views expressed by shareholders
on Directors' remuneration.
At the AGM on 30 June 2022, the Remuneration Report for the year
to 31 December 2021 was approved by shareholders with 99.81% of the
votes cast in favour, 0.19% of the votes cast against and 641 votes
withheld.
Service contracts
Malcolm Perkins, Graham Mclean and Susan Walker are each
employed on rolling service contracts.
Date of Service
Director Contract
Malcolm Perkins 25 April 2002
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
Loss
Bene ts in of O
Remuneration Kind ce Total
2022 2021 2022 2021 2022 2021 2022 2021
Executive GBP GBP GBP GBP GBP GBP GBP GBP
Malcolm Perkins 414,785 200,560 19,210 11,525 - - 433,995 212,085
Tom Franks 318,146 611,820 17,580 38,269 661,443 - 997,169 650,089
Susan Walker 408,288 373,890 28,908 28,010 - - 437,196 401,900
Graham Mclean 439,219 402,215 29,881 29,792 - - 469,100 432,007
Non-executive
Stephen Buckland 49,276 7,897 - - - - 49,276 7,897
(from 1 November
2021)
Rachel English 49,494 - 1,955 - - - 51,449 -
(from 6 May
2022)
Simon Turner 49,276 47,380 - - - - 49,276 47,380
Frédéric
Vuilleumier 53,560 51,500 - - - - 53,560 51,500
Gautam Dalal 27,238 49,047 - - - - 27,238 49,047
(up to 30 June
2022)
William Gibson 27,805 53,470 - - - - 27,805 53,470
(up to 30 June
2022)
Jonathon Bond - 21,573 - - - - - 21,573
(up to 3 June
2021)
Chris Relleen - 36,393 - - - - - 36,393
(up to 31 August
2021)
---------- ------------ -------- --------- -------- ------ --------- ---------
Total 1,837,087 1,855,745 97,534 107,596 661,443 - 2,596,064 1,963,341
---------- ------------ -------- --------- -------- ------ --------- ---------
Notes
(i) The executive Directors' benefits in kind include the value
attributed to medical insurance, permanent health insurance,
spouse/partner travel and cash alternatives to company cars
(ii) Rachel English received an additional fee for her role as
chair of the Audit committee, the Remuneration committee and the
Sustainability and Safeguarding committee (from 6 May)
(iii) William Gibson received an additional fee for his
chairmanship of the Remuneration committee and the Sustainability
and Safeguarding committee (up to 30 June 2022)
(iv) Tom Franks resigned from the board on 30 June 2022 and
received a payment of GBP661,443 for loss of o ce. This included a
payment in lieu of notice equivalent to 12 months of base salary
and benefits in kind
Directors' pensions
Malcolm Perkins received no payment for pensionable service
during 2022. Tom Franks, Graham Mclean and Susan Walker received an
excess non-pensionable salary supplement equivalent to 10% of base
salary.
Approved by the Board.
Amarpal Takk
Company Secretary
3 May 2023
Statement of directors' responsibilities
The Directors are responsible for preparing the Annual Report
and Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements
for each financial year. Under that law the Directors are required
to prepare the Group financial statements in accordance with United
Kingdom adopted international accounting standards in conformity
with the requirements of the Companies Act 2006. The financial
statements also comply with International Financial Reporting
Standards (IFRSs) as issued by the International Accounting
Standards Board. The Directors have also chosen to prepare the
parent company financial statements under United Kingdom adopted
international accounting standards. Under Company law the Directors
must not approve the accounts unless they are satisfied that they
give a true and fair view of the state of 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:
n Properly select and apply accounting policies
n Present information, including accounting policies, in
a manner that provides relevant, reliable, comparable and
understandable information
n 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
n Make an assessment of the Company's ability to continue
as a going concern
The Directors are responsible for keeping adequate accounting
records that are 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:
n The financial statements, prepared in accordance with IFRSs,
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings
included in the consolidation taken as a whole
n 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
n The Annual Report and Accounts, taken as a whole, are fair,
balanced and understandable and provide the information
necessary for shareholders to assess the Company's position
and performance, business model and strategy
This responsibility statement was approved by the Board of
Directors on 3 May 2023.
Malcolm Perkins
Chairman
3 May 2023
Consolidated income statement
for the year ended 31 December 2022
2022 2021
Notes GBP'm GBP'm
Continuing operations
Revenue 2 297.2 255.3
Cost of sales (226.7) (197.8 )
------ ------
Gross profit 70.5 57.5
Other operating income 4.4 2.5
Distribution costs (23.0) (14.5 )
Administrative expenses 3 (45.8) (44.7 )
------ ------
Trading profit 1,3 6.1 0.8
Share of associates' results 5 (3.1) 7.2
Profit on disposal of assets classified
as held for sale 6 1.8 -
Impairments of intangible assets,
investment properties
and property, plant and equipment 7 (10.1) (0.5 )
Loss on disposal of subsidiaries - (0.1
)
Profit on disposal of financial
assets 0.3 0.2
------ ------
Operating (loss)/profit (5.0) 7.6
Investment income 0.4 0.5
------ ------
Finance income 8 2.0 2.2
Finance costs 8 (2.2) (2.8 )
Net exchange gain 8 1.5 0.4
Employee benefit expense 8 (0.4) (0.8 )
------ ------
Net finance income/(costs) 8 0.9 (1.0 )
------ ------
(Loss)/profit before tax (3.7) 7.1
Taxation 9 (12.2) (2.6 )
------ ------
(Loss)/profit for the year from
continuing operations (15.9) 4.5
Discontinued operations
Profit for the year from discontinued
operations 10 7.6 -
------ ------
(Loss)/profit after tax (8.3) 4.5
------ ------
(Loss)/profit attributable to:
Owners of Camellia Plc (13.0) 2.3
Non-controlling interests 4.7 2.2
------ ------
(8.3) 4.5
------ ------
(Loss)/earnings per share - basic
and diluted
)
From continuing operations 13 (745.8 p 83.3 p
From continuing and discontinued )
operations 13 (470.7 p 83.3 p
Statement of comprehensive income
for the year ended 31 December 2022
2022 2021
Notes GBP'm GBP'm
Group
(Loss)/profit for the year (8.3) 4.5
----- -----
Other comprehensive (expense)/income:
Items that will not be reclassified subsequently
to profit or loss:
Financial assets at fair value through
other comprehensive income:
Fair value adjustment for the financial
assets disposed 0.1 1.0
Corporation tax arising on financial
asset disposals
before utilisation of losses 0.2 (2.2 )
Unwind of deferred tax on financial assets 0.2 2.2
Changes in the fair value of financial
assets 23 (2.6) 0.8
Remeasurements of post employment benefit
obligations 36 (12.8) 20.4
Deferred tax movement in relation to post
employment
benefit obligations 35 3.6 (3.9 )
Corporation tax movement in relation to
post employment
benefit obligations (0.4) -
----- -----
(12.1) 18.3
----- -----
Items that may be reclassified subsequently
to profit or loss:
Foreign exchange translation di erences 9.6 (4.0 )
Share of other comprehensive income of
associates 0.1 0.2
----- -----
9.7 (3.8 )
----- -----
Other comprehensive (expense)/income
for the year, net of tax (2.4) 14.5
----- -----
Total comprehensive (expense)/income
for the year (10.7) 19.0
----- -----
Total comprehensive (expense)/income attributable
to:
Owners of Camellia Plc (16.1) 18.4
Non-controlling interests 5.4 0.6
----- -----
(10.7) 19.0
----- -----
Company
(Loss)/profit for the year 11 (1.6) 6.5
----- -----
Total comprehensive (expense)/income
for the year (1.6) 6.5
----- -----
Consolidated balance sheet
at 31 December 2022
2022 2021
Notes GBP'm GBP'm
ASSETS
Non-current assets
Intangible assets 16 6.3 10.1
Property, plant and equipment 17 184.5 202.1
Right-of-use assets 18 26.1 28.8
Investment properties 19 25.4 23.1
Biological assets 20 14.1 13.4
Investments in associates 22 73.3 72.6
Equity investments at fair value through
other comprehensive income 23 25.7 27.7
Money market investments at fair value
through profit or loss 24 7.3 7.2
Debt investments at amortised cost 25 1.3 1.3
Other investments - heritage assets 26 8.8 8.7
Retirement benefit surplus 36 0.8 14.8
Trade and other receivables 28 3.1 2.7
----- -----
Total non-current assets 376.7 412.5
----- -----
Current assets
Inventories 27 60.4 51.7
Biological assets 20 10.8 7.8
Trade and other receivables 28 67.6 48.5
Money market investments at fair value
through profit or loss 24 1.3 2.7
Debt investments at amortised cost 25 - 1.3
Current income tax assets 1.1 0.6
Cash and cash equivalents (excluding bank
overdrafts) 29 49.3 61.8
----- -----
190.5 174.4
Assets classified as held for sale 30 4.6 6.6
----- -----
Total current assets 195.1 181.0
----- -----
LIABILITIES
Current liabilities
Financial liabilities - borrowings 32 (5.1) (3.3 )
Lease liabilities 33 (2.3) (3.2 )
Trade and other payables 31 (59.8) (59.2 )
Current income tax liabilities (4.4) (3.0 )
Employee benefit obligations 36 (1.1) (1.1 )
Provisions 34 (10.8) (11.8 )
----- -----
(83.5) (81.6 )
Liabilities related to assets classified
as held for sale 30 (2.0) (2.0 )
----- -----
Total current liabilities (85.5) (83.6 )
----- -----
Net current assets 109.6 97.4
----- -----
Total assets less current liabilities 486.3 509.9
----- -----
Non-current liabilities
Financial liabilities - borrowings 32 (4.4) (4.5 )
Lease liabilities 33 (19.1) (21.5 )
Deferred tax liabilities 35 (37.0) (38.0 )
Employee benefit obligations 36 (8.1) (8.6 )
----- -----
Total non-current liabilities (68.6) (72.6 )
----- -----
Net assets 417.7 437.3
----- -----
EQUITY
Called up share capital 37 0.3 0.3
Share premium 15.3 15.3
Reserves 353.3 373.0
----- -----
Equity attributable to owners of Camellia
Plc 368.9 388.6
Non-controlling interests 48.8 48.7
----- -----
Total equity 417.7 437.3
----- -----
Company balance sheet
at 31 December 2022
2022 2021
Notes GBP'm GBP'm
ASSETS
Non-current assets
Investments in subsidiaries 21 73.5 73.5
Other investments - heritage assets 26 8.9 8.8
----- -----
Total non-current assets 82.4 82.3
----- -----
Current assets
Trade and other receivables 28 0.2 0.2
Current income tax asset 0.1 0.1
Amounts due from group undertakings 2.1 1.9
Cash and cash equivalents 29 0.1 0.7
----- -----
2.5 2.9
Assets classified as held for sale 30 0.5 2.1
----- -----
Total current assets 3.0 5.0
----- -----
LIABILITIES
Current liabilities
Trade and other payables 31 (1.0) (0.9 )
Amounts due to group undertakings (20.3) (16.6 )
----- -----
Total current liabilities (21.3) (17.5 )
----- -----
Net current liabilities (18.3) (12.5 )
----- -----
Total assets less current liabilities 64.1 69.8
----- -----
Non-current liabilities
Deferred tax liabilities 35 (0.2) (0.2 )
----- -----
Total non-current liabilities (0.2) (0.2 )
----- -----
Net assets 63.9 69.6
----- -----
EQUITY
Called up share capital 37 0.3 0.3
Share premium 15.3 15.3
Reserves 48.3 54.0
----- -----
Total equity 63.9 69.6
----- -----
The (loss)/profit for the Company is shown in note 11.
The notes on pages 51 to 123 form part of the financial
statements.
The financial statements on pages 44 to 123 were approved on 3
May 2023 by the board of Directors and signed on their behalf
by:
M C Perkins
Chairman
Registered Number 00029559
Consolidated cash flow statement
for the year ended 31 December 2022
2022 2021
Notes GBP'm GBP'm
Cash generated from operations
Cash flows from operating activities 38 2.6 1.2
Interest received 2.0 2.1
Interest paid (2.2) (2.8 )
Income taxes paid (8.3) (13.0 )
----- -----
Net cash flow from operating activities (5.9) (12.5 )
----- -----
Cash flows from investing activities
Purchase of property, plant and equipment (14.4) (9.9 )
Proceeds from sale of non-current assets 0.9 0.7
Proceeds from sale of assets held for
sale 4.5 -
Proceeds from sale of heritage assets - 0.1
Purchase of heritage assets (0.1) -
Additions to investment property (2.5) (0.9 )
Biological assets: non-current - disposals 0.8 0.5
Cash leaving the Group on disposal of
subsidiary 40 (1.6) -
Payment for acquisition of a businesses/subsidiary
net of cash acquired 40 - (3.7 )
Purchase of non-controlling interest 40 - (5.9 )
Dividends received from associates 3.2 3.0
Purchase of investments (2.9) (8.9 )
Proceeds from sale of investments 8.5 21.3
Income from investments 0.4 0.5
----- -----
Net cash flow from investing activities (3.2) (3.2 )
----- -----
Cash flows from financing activities
Equity dividends paid (4.0) (5.2 )
Dividends paid to non-controlling interests (5.3) (1.9 )
New loans 39 1.4 3.8
Loans repaid 39 (1.6) (13.1 )
Payments of lease liabilities (2.6) (1.7 )
----- -----
Net cash flow from financing activities (12.1) (18.1 )
----- -----
Net decrease in cash and cash equivalents
from continuing
operations (21.2) (33.8 )
Net cash inflow/(outflow) from discontinued
operation 10 3.8 (0.6 )
Cash and cash equivalents at beginning
of year 29 59.9 94.9
Exchange gains/(losses) on cash 3.1 (0.6 )
----- -----
Cash and cash equivalents at end of
year 29 45.6 59.9
----- -----
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 2022
2022 2021
Notes GBP'm GBP'm
Cash generated from operations
(Loss)/profit before tax (1.6) 6.5
Adjustments for:
Interest income (0.3) (0.3 )
Profit on disposal of assets held for
sale (0.4) -
Dividends from group companies - (8.0 )
Increase in trade and other receivables 0.2 0.4
Increase in trade and other payables 0.1 0.1
Movement in provisions - (1.9 )
Net movement in intra-group balances 3.5 0.8
----- -----
Cash generated from/(used in) operations 1.5 (2.4 )
Interest received 0.3 0.3
----- -----
Net cash flow from operating activities 1.8 (2.1 )
----- -----
Cash flows from investing activities
Purchase of other investments - heritage
assets (0.1) -
Proceeds from sale of other investments
- heritage assets - 0.1
Proceeds from sale of assets held for
sale 1.8 -
Dividends received - 8.0
----- -----
Net cash flow from investing activities 1.7 8.1
----- -----
Cash flows from financing activities
Equity dividends paid (4.1) (5.3 )
----- -----
Net cash flow from financing activities (4.1) (5.3 )
----- -----
Net movement in cash and cash equivalents (0.6) 0.7
Cash and cash equivalents at beginning
of year 29 0.7 -
----- -----
Cash and cash equivalents at end of
year 29 0.1 0.7
----- -----
Statement of changes in equity
for the year ended 31 December 2022
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
2021 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 12 - - - (5.2) - (5.2) (1.9) (7.1)
Companies joining
the Group 40 - - - - - - 5.2 5.2
Adjustment
arising
from change
in
non-controlling
interest 40 - - - (1.4) - (1.4) 1.4 -
Purchase of
non-controlling
interests 40 - - - 0.2 - 0.2 (6.0) (5.8)
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2021 0.3 15.3 (0.4) 377.1 (3.7) 388.6 48.7 437.3
Loss for the
year - - - (13.0) - (13.0) 4.7 (8.3)
Other
comprehensive
(expense)/income
for the year - - - (10.0) 6.9 (3.1) 0.7 (2.4)
Transfer of
realised gains
on disposal
of financial
assets - - - 1.1 (1.1) - - -
Dividends 12 - - - (4.0) - (4.0) (5.3) (9.3)
Share of
associate's
other equity
movements - - - 0.4 - 0.4 - 0.4
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2022 0.3 15.3 (0.4) 351.6 2.1 368.9 48.8 417.7
------- ------- -------- -------- -------- ----- ----------- ------
Company
At 1 January
2021 0.3 15.3 - 40.7 12.1 68.4 - 68.4
Total
comprehensive
income for the
year - - - 6.5 - 6.5 - 6.5
Dividends - - - (5.3) - (5.3) - (5.3)
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2021 0.3 15.3 - 41.9 12.1 69.6 - 69.6
Total
comprehensive
expense for
the year - - - (1.6) - (1.6) - (1.6)
Dividends 12 - - - (4.1) - (4.1) - (4.1)
------- ------- -------- -------- -------- ----- ----------- ------
At 31 December
2022 0.3 15.3 - 36.2 12.1 63.9 - 63.9
------- ------- -------- -------- -------- ----- ----------- ------
In relation to the reserves of the Company, GBP36.2 million
(2021: 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 GBP44.1 million deficit (2021: GBP53.5
million deficit).
Group retained earnings includes GBP155.4 million (2021:
GBP162.1 million) which would require exchange control permission
for remittance as dividends.
Accounting policies
Camellia Plc (the Company) is a public Company limited by shares
incorporated in the United Kingdom under the Companies Act 2006 and
is registered in England and Wales. The registered office can be
found on page 4 and its principal activity is included in the
Directors report.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all years presented, unless otherwise
stated.
Basis of preparation
The consolidated financial statements have been prepared in
accordance with United Kingdom adopted International Financial
Reporting Standards (IFRS), IFRS Interpretations Committee (IFRS
IC) and the Companies Act 2006 applicable to companies reporting
under IFRS. The consolidated financial statements comply with IFRS
as issued by the International Standards Board (IASB).
The consolidated financial statements have been prepared on the
historical cost basis as modified by the revaluation of biological
assets, financial assets and financial liabilities and assets held
for sale.
Where necessary, comparative figures have been adjusted to
conform with changes in presentation in the current year.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have adequate resources to continue to operate for the foreseeable
future. They therefore continue to adopt the going concern basis of
accounting in preparing the financial statements.
Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Subsidiaries
are those entities over which the Group has control. The Group
controls an entity when the Group is exposed to, or has rights to,
variable returns through its power over the entity. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date
that control ceases.
On acquisition, the assets and liabilities of a subsidiary are
measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the
identifiable net assets acquired is recognised as goodwill. Any
deficiency of the cost of acquisition below the fair values of the
identifiable net assets acquired (i.e. discount on acquisition) is
credited to the income statement in the period of acquisition. The
Group recognises any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, at the non-controlling interest's
proportionate share of the recognised amounts of the acquiree's
identifiable net assets. Any 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:
n The identification of contract(s) with customers
n The identification of the performance obligations in the
contract
n The determination of the transaction price
n The allocation of the transaction price to the performance
obligations in the contract
n 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, which is shown at
cost less impairment. Cost includes expenditure that is directly
attributable to the acquisition of these assets.
On transition to IFRS, the Group followed the transitional
provisions and elected that previous UK GAAP revaluations be
treated as deemed cost. On the application of the amendments to IAS
41 Agriculture and IAS 16 Property, plant and equipment the
Directors elected to state the Group's bearer plants at deemed cost
being the fair value recognised as at 1 January 2015 less the fair
value at that date of the growing produce which is disclosed in
current assets under biological assets. Additions after that date
are recognised at historical cost.
Subsequent costs are included in the assets' carrying amount,
only when it is probable that future economic benefits associated
with the item will flow to the Group and the cost of the item can
be measured reliably. Repairs and maintenance are charged to the
income statement during the financial period in which they are
incurred.
No depreciation is provided on freehold land and on assets in
the course of construction. Depreciation of other property, plant
and equipment is calculated to write o their cost less residual
value over their expected useful lives on a straight-line
basis.
The rates of depreciation used for the other assets are as
follows:-
Biological assets (Bearer 20 to 50 years
plants)
Freehold and long leasehold nil to 50 years
buildings
Other short leasehold land unexpired term
and buildings of the lease
Plant, machinery, fixtures, 3 to 25 years
fittings and equipment
No depreciation is provided on bearer plants until maturity when
commercial levels of production have been reached.
Assets in the course of construction for production, supply or
administrative purposes, or for the purposes not yet determined,
are carried at cost, less any recognised impairment loss.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date.
The gain or loss arising on the disposal or retirement of an
asset is determined as the 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 future
yields, selling prices, costs and discount rates. As the crop is
harvested it is transferred to inventory at fair value.
Financial assets
Classification of financial assets
(i) Equity instruments designated as at fair value through other
comprehensive income (FVTOCI)
On initial recognition, the Group made an irrevocable election
(on an instrument by instrument basis) to designate investments in
equity instruments as at FVTOCI.
Investments in equity instruments designated as FVTOCI are
initially measured at fair value plus transaction costs.
Subsequently, they are measured at fair value with gains and losses
arising from changes in fair value recognised in other
comprehensive income and accumulated in the investment revaluation
reserve. The cumulative gain or loss is not reclassified to profit
or loss on disposal of the equity investments, instead, it is
transferred to retained earnings.
Dividends on these investments in equity instruments are
recognised in profit or loss in accordance with IFRS 9, unless the
dividends clearly represent a recovery of part of the cost of the
investment. Dividends are included as investment income in the
consolidated income statement.
(ii) Financial assets at fair value through profit or loss
(FVTPL)
Financial assets that do not meet the criteria for being
measured FVTOCI or at amortised cost (see (i) above and (iii)
below) are measured at FVTPL.
Financial assets at FVTPL are measured at fair value at the end
of each reporting period, with any fair value gains or losses
recognised in profit or loss to the extent they are not part of a
designated hedging relationship.
(iii) Amortised cost and e ective 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:
n An actual or expected significant deterioration in the
financial instrument's external (if available) or internal
credit rating
n Significant deterioration in external market indicators
of credit risk for a particular financial instrument
n 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
n An actual or expected significant deterioration in the
operating results of the debtor
n Significant increases in credit risk on other financial
instruments of the same debtor
n 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:
n When there is a breach of financial covenants by the debtor;
or
n Information developed internally or obtained from external
sources indicates that the debtor is unlikely to pay its
creditors, including the Group, in full (without taking
into account any collateral held by the Group).
Irrespective of the above analysis, the Group considers that
default has occurred when a financial asset is more than 90 days
past due unless the Group has reasonable and supportable
information to demonstrate that 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 o 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.
Bank overdrafts are shown within borrowings in current liabilities
on the balance sheet.
Discontinued operations and assets classified as held for
sale
A discontinued operation is a separate major line of business or
geographic area of operation that has either been disposed of,
abandoned or is part of a plan to dispose of a major line of
business or geographic area. An operation is classified as a
discontinued operation in the year that the above criteria are met.
In the consolidated Income Statement, profit/loss from discontinued
operations is reported separately from the results from continuing
operations. Prior periods Income Statement and cash flow are
presented on a comparable basis.
Assets classified as held for sale are measured at the lower of
the carrying amount and fair value less costs to sell.
Assets are classified as held for sale if their carrying amount
will be recovered through a sale transaction rather than through
continuing use. This condition is regarded as met only when the
sale is highly probable and the asset is available for immediate
sale in its present condition. Management must be committed to the
sale which should be expected to qualify for recognition as a
completed sale within one year from the date of classification.
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.
Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed
payments (including in--substance fixed payments) less any lease
incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual
value guarantees. The lease payments also include the exercise
price of a purchase option reasonably certain to be exercised by
the Group and payments of penalties for terminating a lease, if the
lease term reflects the Group exercising the option to terminate.
The variable lease payments that do not depend on an index or a
rate are recognised as expense in the period on which the event or
condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group
uses the incremental borrowing rate at the lease commencement date
if the interest rate implicit in the lease is not readily
determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the
in-substance fixed lease payments or a change in the assessment to
purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to
its short-term leases of machinery and equipment (i.e. those leases
that have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the
lease of low-value assets recognition exemption to leases of o ce
equipment that are considered of low value (i.e. below GBP0.01
million ). Lease payments on short-term leases and leases of
low-value assets are recognised as expense on a straight-line basis
over the lease term.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
year. Taxable profit 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 bearer plants are
determined by management at the time of acquisition or planting and
reviewed annually for appropriateness. The Group derives useful
economic lives based on experience of similar assets, including use
of third party experts at the time of acquisition of assets.
Climate change will also impact useful lives. In the short-term,
increases in the volatility of weather patterns have the potential
to increase plant deaths. Long-term these factors could reduce
useful lives by suppressing yields and/or increasing the cost of
taking mitigating actions. Emerging governmental policies relating
to climate change are also considered when reviewing the
appropriateness of useful economic lives. A decrease in the average
useful life for all our bearer plants in aggregate by 10% or 20%
would result in additional depreciation of GBP0.5 million or GBP1.0
million respectively.
(ii) Impairment of assets
The assessment of the recoverable amount for each group of CGUs
is subject to a number of assumptions.
Management performs periodic reviews of goodwill and other
intangible and tangible assets for indications of impairment. The
Group estimates the value in use of the cash-generating units to
which the goodwill, intangible and tangible assets with
indefinite/finite useful life are allocated. Estimating the value
in use requires the Group, with the help of independent
professional valuers where applicable, to make an estimate of the
expected future cash flows from the cash-generating units and also
to choose suitable discount rates in order to calculate the present
value of those cash flows. Impairment tests are sensitive to
forecasted EBITDA, growth rates and discount rates and changes in
these assumptions may result in changes in recoverable values. In
determining appropriate assumptions consideration is given to the
impact of weather patterns on future yields and operating costs.
The carrying amount of the Group's goodwill and indefinite/finite
life intangible assets at the balance sheet date is disclosed in
note 16.
(iii) Biological assets
Biological assets are carried at fair value less estimated
point-of-sale costs. Where meaningful market--determined prices do
not exist to assess the fair value of biological assets, the fair
value has been determined based on the net present value of
expected future cash flows from those assets, discounted at
appropriate pre-tax rates. In determining the fair value of
biological assets where the discounting of expected future cash
flows has been used, the Directors have made certain assumptions
about expected life-span of the plantings, yields, selling prices,
costs and discount rates. Details of assumptions made and
sensitivity analysis are given in note 20.
(iv) Retirement benefit obligations
Pension accounting requires certain assumptions to be made in
order to value obligations and to determine the impact on the
Income Statement. These figures are particularly sensitive to
assumptions for discount rates, life expectancy and inflation
rates. Details of assumptions made and sensitivity analysis are
given in note 36.
(v) Taxation and other liabilities
Income tax liabilities include a number of provisions including
in respect of open tax years based on management's interpretation
of country specific tax law and the likelihood of settlement. This
can involve a significant amount of judgement as tax legislation
can be complex and open to 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. The Group records reasoned estimates
of uncertain tax positions where it is assessed on the balance of
probabilities that an adjustment is likely. It is not practicable
to quantify the range of outcomes with the application of
sensitivity analyses. Tax provision movements are disclosed in note
9. Significant unprovided contingent tax liabilities are disclosed
in note 42.
(vi) Provisions and other liabilities
Provisions include a number of provisions in respect of ongoing
wage and bonus negotiations which are based on management's
judgement of the expected outcome of these negotiations. Where
actual wage and bonus awards 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 34.
Changes in accounting policy and disclosures
(i) New and amended standards adopted by the Group
In the current year, the Group has applied a number of
amendments to IFRS Accounting Standards issued by the International
Accounting Standards Board (IASB) that are mandatorily e ective for
an accounting period that begins on or after 1 January 2022. Their
adoption has not had any material impact on the disclosures or on
the amounts reported in these financial statements.
Amendments to IFRS 3 - Reference to the Conceptual Framework
The Group has adopted the amendments to IFRS 3 Business
Combinations for the first time in the current year. The amendments
update IFRS 3 so that it refers to the 2018 Conceptual Framework
instead of the 1989 Framework. They also add to IFRS 3 a
requirement that, for obligations within the scope of IAS 37
Provisions, Contingent Liabilities and Contingent Assets, an
acquirer applies IAS 37 to determine whether at the acquisition
date a present obligation exists as a result of past events. For a
levy that would be within the scope of IFRIC 21 Levies, the
acquirer applies IFRIC 21 to determine whether the obligating event
that gives rise to a liability to pay the levy has occurred by the
acquisition date.
Amendments to IAS 16 Property, Plant and Equipment-Proceeds
before Intended Use
The Group has adopted the amendments to IAS 16 for the first
time in the current year. The amendments prohibit deducting from
the cost of an item of property, plant and equipment any proceeds
from selling items produced before that asset is available for use,
i.e. proceeds while bringing the asset to the location and
condition necessary for it to be capable of operating in the manner
intended by management. Consequently, an entity recognises such
sales proceeds and related costs in profit or loss. The entity
measures the cost of those items in accordance with IAS 2
Inventories.
The amendments also clarify the meaning of 'testing whether an
asset is functioning properly'. IAS 16 now specifies this as
assessing whether the technical and physical performance of the
asset is such that it is capable of being used in the production or
supply of goods or services, for rental to others, or for
administrative purposes.
If not presented separately in the statement of comprehensive
income, the financial statements shall disclose the amounts of
proceeds and cost included in profit or loss that relate to items
produced that are not an output of the entity's ordinary
activities, and which line item(s) in the statement of
comprehensive income include(s) such proceeds and cost.
Annual Improvements to IFRS Standards 2018-2020
The Group has adopted the amendments included in the Annual
Improvements to IFRS Accounting Standards 2018-2020 Cycle for the
first time in the current year. The Annual Improvements include
amendments to four standards.
IFRS 1 First-time Adoption of International Financial Reporting
Standards
The amendment provides additional relief to a subsidiary which
becomes a first-time adopter later than its parent in respect of
accounting for cumulative translation di erences. As a result of
the amendment, a subsidiary that uses the exemption in IFRS
1:D16(a) can now also elect to measure cumulative translation di
erences for all foreign operations at the carrying amount that
would be included in the parent's consolidated financial
statements, based on the parent's date of transition to IFRS
Accounting Standards, if no adjustments were made for consolidation
procedures and for the e ects of the business combination in which
the parent acquired the subsidiary. A similar election is available
to an associate or joint venture that uses the exemption in IFRS
1:D16(a).
IFRS 9 Financial Instruments
The amendment clarifies that in applying the '10 per cent' test
to assess whether to derecognise a financial liability, an entity
includes only fees paid or received between the entity (the
borrower) and the lender, including fees paid or received by either
the entity or the lender on the other's behalf.
IFRS 16 Leases
The amendment removes the illustration of the reimbursement of
leasehold improvements.
IAS 41 Agriculture
The amendment removes the requirement in IAS 41 for entities to
exclude cash flows for taxation when measuring fair value. This
aligns the fair value measurement in IAS 41 with the requirements
of IFRS 13 Fair Value Measurement to use internally consistent cash
flows and discount rates and enables preparers to determine whether
to use pre-tax or post-tax cash flows and discount rates for the
most appropriate fair value measurement.
(ii) Standards, amendments and interpretations to existing
standards that are not yet e ective 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 (including the June Insurance contracts
2020 and
December 2021 Amendments
to IFRS 17)
Amendments to IFRS 10 and Sale or Contribution of Assets between
IAS 28 an Investor and its Associate or
Joint Venture
Amendments to IAS 1 Classification of Liabilities as
Current or Non--current
Amendments to IAS 1 and IFRS Classification of Liabilities as
Practice Statement 2 Current or Non--current Disclosure
of Accounting Policies
Amendments to IAS 8 Definition of Accounting Estimates
Amendments to IAS 12 Deferred Tax related to Assets and
Liabilities arising from a Single
Transaction
The Directors do not expect that the adoption of the Standards
listed above will have a material impact on the financial
statements of the Group in future periods, except if indicated
below.
Amendments to IFRS 10 and IAS 28 - Sale or Contribution of
Assets between an Investor and its Associate or Joint Venture
The amendments to IFRS 10 and IAS 28 deal with situations where
there is a sale or contribution of assets between an investor and
its associate or joint venture. Specifically, the amendments state
that gains or losses resulting from the loss of control of a
subsidiary that does not contain a business in a transaction with
an associate or a joint venture that is accounted for using the
equity method, are recognised in the parent's profit or loss only
to the extent of the unrelated investors' interests in that
associate or joint venture. Similarly, gains and losses resulting
from the remeasurement of investments retained in any former
subsidiary (that has become an associate or a joint venture that is
accounted for using the equity method) to fair value are recognised
in the former parent's profit or loss only to the extent of the
unrelated investors' interests in the new associate or joint
venture.
The 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 IAS 1 - Classification of Liabilities as Current
or Non-current
The amendments to IAS 1, published in January 2020, a ect only
the presentation of liabilities as current or non-current in the
statement of financial position and not the amount or timing of
recognition of any asset, liability, income or expenses, or the
information disclosed about those items. The amendments clarify
that the classification of liabilities as current or non-current is
based on rights that are in existence at the end of the reporting
period, specify that classification is 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. The IASB is currently considering further amendments to
the requirements in IAS 1 on classification of liabilities as
current or non-current, including deferring the application of the
January 2020 amendments.
Amendments to IAS 1 Presentation of Financial Statements and
IFRS Practice Statement 2 Making Materiality Judgements-Disclosure
of Accounting Policies
The amendments change the requirements in IAS 1 with regard to
disclosure of accounting policies. The amendment replaces all
instances of the term 'significant accounting policies' with
'material accounting policy information'. Accounting policy
information is material if, when considered together with other
information included in an entity's financial statements, it can
reasonably be expected to influence decisions that the primary
users of general purpose financial statements make on the basis of
those financial statements.
The supporting paragraphs in IAS 1 are also amended to clarify
that accounting policy information that relates to immaterial
transactions, other events or conditions is immaterial and need not
be disclosed. Accounting policy information may be material because
of the nature of the related transactions, other events or
conditions, even if the amounts are immaterial. However, not all
accounting policy information relating to material transactions,
other events or conditions is itself material.
The IASB has also developed guidance and examples to explain and
demonstrate the application of the 'four--step materiality process'
described in IFRS Practice Statement 2.
The amendments to IAS 1 are 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 replace the definition of a change in accounting
estimates with a definition of accounting estimates. Under the new
definition, accounting estimates are "monetary amounts in financial
statements that are subject to measurement uncertainty".
The definition of a change in accounting estimates was deleted.
However, the IASB retained the concept of changes in accounting
estimates in the Standard with the following clarifications:
n a change in accounting estimate that results from new information
or new developments is not the correction of an error;
and
n 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.
The amendments apply to transactions that occur on or after the
beginning of the earliest comparative period presented. In
addition, at the beginning of the earliest comparative period an
entity recognises:
n a deferred tax asset (to the extent that it is probable
that taxable profit will be available against which the
deductible temporary 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;
n 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.
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.
Notes to the accounts
1 Business and geographical segments
The principal activities of the Group are as follows:
Agriculture Engineering
For management reporting purposes these activities form the
basis on which the Group reports its primary divisions. Geographic
operations in the Agriculture segment have been aggregated as they
are either producing primary crops or processing those crops to
completed products.
In addition, the Group holds a number of investments.
Segment information about these businesses is presented
below:
Agriculture Engineering Unallocated Consolidated
2022 2021 2022 2021 2022 2021 2022 2021
Continuing operations GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Revenue
External sales 283.0 238.9 13.2 15.3 1.0 1.1 297.2 255.3
------ ------- ------ ------- ------ ------- ------- -------
Adjusted trading profit/(loss) 15.5 13.0 (0.8) (2.3) (8.6) (8.8) 6.1 1.9
Separately disclosed items
(note 4) - 0.1 - - - (1.2) - (1.1)
------ ------- ------ ------- ------ ------- ------- -------
Trading profit/(loss) 15.5 13.1 (0.8) (2.3) (8.6) (10.0) 6.1 0.8
Share of associates' results - - - - (3.1) 7.2 (3.1) 7.2
Profit on disposal of assets
classified as held for
sale - - - - 1.8 - 1.8 -
Impairment of intangible
assets, investment properties
and plant and equipment (10.0) - - (0.5) (0.1) - (10.1) (0.5)
Loss on disposal of subsidiaries - - - (0.1) - - - (0.1)
Profit on disposal of financial
assets 0.3 0.2 - - - - 0.3 0.2
------ ------- ------ ------- ------ ------- ------- -------
Operating (loss)/profit 5.8 13.3 (0.8) (2.9) (10.0) (2.8) (5.0) 7.6
----------------------------------------------------- ------ ------- ------ ------- ------ ------- ------- -------
Comprising
- adjusted operating profit/(loss)
before tax 15.8 13.2 (0.8) (2.3) (11.7) (1.6) 3.3 9.3
- profit on disposal of
assets classified as held
for sale - - - - 1.8 - 1.8 -
* impairment of intangible assets and property,
plant
and equipment (10.0) - - (0.5) (0.1) - (10.1) (0.5)
- loss on disposal of subsidiaries - (0.1) - - - (0.1)
- release of provisions
for wage increases - 0.6 - - - - 0.6
- acquisition deal costs - - - - - (1.2) - (1.2)
- restructuring costs - (0.5) - - - - - (0.5)
------ ------- ------ ------- ------ ------- ------- -------
5.8 13.3 (0.8) (2.9) (10.0) (2.8) (5.0) 7.6
----------------------------------------------------- ------ ------- ------ ------- ------ ------- ------- -------
Investment income 0.4 0.5
Net finance income/(costs) 0.9 (1.0)
------- -------
(Loss)/profit before tax (3.7) 7.1
Taxation (12.2) (2.6)
------- -------
(Loss)/profit for the
year from continuing operations (15.9) 4.5
Profit for the year from
discontinued operations 7.6 -
------- -------
(Loss)/profit after tax (8.3) 4.5
------- -------
Other information
Segment assets 373.9 386.3 10.8 10.6 384.7 396.9
Investments in associates 73.3 72.6
Unallocated assets 113.8 106.0
Discontinued operations - 18.0
------- -------
Consolidated total assets 571.8 593.5
------- -------
Segment liabilities (82.7) (77.8) (7.4) (8.0) (90.1) (85.8)
Unallocated liabilities (64.0) (64.8)
Discontinued operations - (5.6)
------- -------
Consolidated total liabilities (154.1) (156.2)
------- -------
Agriculture Engineering Unallocated Consolidated
2022 2021 2022 2021 2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Capital expenditure Continuing 14.1 9.4 0.3 0.3 2.5 1.0 16.9 10.7
Total 17.3 11.6
Depreciation Continuing (13.8) (11.9) (0.5) (1.0) (0.1) (0.1) (14.4) (13.0)
Total (16.1) (14.9)
Amortisation Continuing (0.1) - - - - - (0.1) -
Total (0.1) (0.1)
Impairments Continuing (10.0) - - (0.5) (0.1) - (10.1) (0.5)
Total (0.5 )
Segment assets consist primarily of intangible assets, property,
plant and equipment, investment properties, biological assets,
prepaid operating leases, inventories, trade and other receivables
and cash and cash equivalents. Receivables for tax have been
excluded. Investments in associates, valued using the equity
method, have been shown separately in the segment information.
Segment liabilities are primarily those relating to the operating
activities and generally exclude liabilities for taxes, short-term
loans, finance leases and non-current liabilities.
Geographical segments
The Group operations are based in eight main geographical areas.
The United Kingdom is the home country of the parent. The principal
geographical areas in which the Group operates are as follows:
United Kingdom
Bangladesh
India
Kenya
Malawi
South Africa
Tanzania
South America
The Group derives revenue from the transfer of goods and
services over time and at a point in time in the following major
geographical regions:
At a point in
time Over time Total
2022 2021 2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
United Kingdom 54.1 30.2 0.9 1.0 55.0 31.2
Continental
Europe 29.9 20.2 - - 29.9 20.2
Bangladesh 24.2 24.0 - - 24.2 24.0
India 97.5 97.9 - - 97.5 97.9
Kenya 38.0 32.2 - - 38.0 32.2
Malawi 6.9 13.1 0.1 0.1 7.0 13.2
South Africa 2.0 1.5 - - 2.0 1.5
North America 8.4 7.0 - - 8.4 7.0
South America 13.4 8.5 - - 13.4 8.5
Other 21.8 19.6 - - 21.8 19.6
---------- --------- ------- ------- ----- -----
296.2 254.2 1.0 1.1 297.2 255.3
---------- --------- ------- ------- ----- -----
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 Additions to
of property, Additions to
segment assets plant and equipment investment properties
2022 2021 2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
United Kingdom 55.9 71.7 1.6 0.6 2.5 0.9
Bangladesh 50.9 63.4 2.4 1.9 - -
India 101.1 97.2 2.8 2.2 - -
Kenya 96.4 89.5 3.8 2.7 - -
Malawi 45.3 46.5 0.6 0.1 - -
South Africa 15.9 14.6 1.4 1.1 - -
Tanzania 4.1 2.8 1.1 0.9 - -
North America - 0.1 - - - -
South America 15.1 11.1 0.7 0.3 - -
---------- --------- ------------ ------------ ------------- -------------
Continuing 384.7 396.9 14.4 9.8 2.5 0.9
Discontinued
- United Kingdom - 18.0 0.4 0.9 - -
---------- --------- ------------ ------------ ------------- -------------
384.7 414.9 14.8 10.7 2.5 0.9
---------- --------- ------------ ------------ ------------- -------------
2 Revenue
An analysis of the Group's revenue is as follows:
2022 2021
GBP'm GBP'm
Sale of goods 283.0 238.9
Engineering services revenue 13.2 15.3
Property rental revenue 1.0 1.1
----- -----
Total Group revenue 297.2 255.3
Other operating income 4.4 2.6
Investment income 0.4 0.5
Interest income 2.0 2.2
----- -----
Total Group income 304.0 260.6
----- -----
Disaggregation of revenue from contracts with customers:
At a point in
time Over time
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Sale of goods 283.0 238.9 - -
Engineering services revenue 13.2 15.3 - -
Property rental revenue - - 1.0 1.1
--------- -------- ------ ------
Total Group revenue 296.2 254.2 1.0 1.1
--------- -------- ------ ------
3 Trading profit
2022 2021
GBP'm GBP'm
The following items have been included in
arriving at trading profit:
Employment costs (note 14) 118.1 108.7
Inventories:
Cost of inventories recognised as an expense
(included in cost of sales) 181.8 163.7
Cost of inventories provision recognised
as an expense (included in
cost of sales) 2.7 0.2
Fair value gain included in Made Tea inventory - 0.2
Depreciation of property, plant and equipment:
Owned assets 13.4 13.3
Right-of-use assets 2.7 1.6
Amortisation of intangibles (included in
administrative expenses) 0.1 0.1
Gain from change in fair value of non-current
biological assets 1.5 1.5
Profit on disposal of property, plant and
equipment 0.1 -
Repairs and maintenance expenditure on property,
plant and equipment 9.9 7.9
Government grant income (included in other
operating income) - 0.4
----- -----
During the year the Group benefited from GBPnil (2021: GBP0.4
million) of government grants in the form of the UK Coronavirus Job
Retention Scheme. In accordance with our accounting policy this
credit is included in other operating income within the Income
Statement over the same period as the sta costs for which it
compensates.
Currency exchange (gains)/losses (credited)/charged to income
include:
Revenue (0.4) -
Cost of sales 0.3 -
Distribution costs (0.2) -
Administrative expenses - 0.2
Other operating income (0.1) -
Finance income and costs (1.5) (0.4 )
---- ----
(1.9) (0.2 )
---- ----
During the year the Group (including its overseas subsidiaries)
obtained the following services from the Company's auditor and its
associates:
Audit services:
Statutory audit:
Parent company and consolidated financial
statements 0.5 0.3
Subsidiary companies 0.9 0.8
--- ---
1.4 1.1
Tax compliance services - -
--- ---
1.4 1.1
--- ---
4 Adjusted (loss)/profit
The Group's income statement and segmental analysis separately
identify a number of Alternative Performance Measures (APMs) in
addition to those reported under IFRS. The Directors believe that
the presentation of the results in this way, which is not meant to
be a substitute for or superior to IFRS measures, is relevant to an
understanding of the Group's underlying trends, financial
performance and position. These APMs are also used to enhance the
comparability of information between reporting periods and the
Group's divisions, by adjusting for non-recurring or uncontrollable
factors which 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
(loss)/profit measure and have been separately disclosed:
n During the year, assets previously classified as held
for sale including a London property and a number of
the Group's heritage assets and other items of art have
been sold, realising a profit of GBP1.8 million
n Impairment charges of GBP10.0 million in relation to
the goodwill and property, plant and equipment relating
to Bardsley England which arose from lower than expected
profitability of the operation due to the e ects of inflation
arising from the Ukraine war
n An impairment charge of GBP0.1 million in relation to
one of the Group's investment properties
In 2021, the following items were excluded from the adjusted
profit measure and have been separately disclosed:
n Restructuring costs at Bardsley England of GBP0.5 million
n Costs of acquisition of Bardsley England of GBP1.2 million
n A gain resulting from wage provision releases following
wage agreements reached in the year of GBP0.6 million
n 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
5 Share of associates' results
The Group's share of the results of associates is analysed
below:
2022 2021
GBP'm GBP'm
(Loss)/profit before tax (2.7) 7.6
Taxation (0.4) (0.4 )
----- -----
(Loss)/Profit after tax (3.1) 7.2
----- -----
6 Profit on disposal of assets classified as held for sale
During the year, assets previously classified as held for sale
including a London property and a number of the Group's heritage
assets and other items of art have been sold, realising a profit of
GBP1.8 million. Proceeds in relation to these disposals amounted to
GBP4.5 million.
7 Impairments of intangible assets, investment properties and property, plant and equipment
Impairment charges relating to Bardsley England of GBP10.0
million were recognised. Of this GBP3.6 million relates to goodwill
bringing the carrying value to GBPnil and GBP6.4 million relates to
property, plant and equipment. These have arisen due to the
expected continuing impact of the downturn in the profitability of
that business due to the e ects of inflation arising from the
Ukraine war as further discussed on page 12.
In addition, an impairment charge of GBP0.1 million was incurred
in relation to one of the Group's investment properties.
In 2021, GBP0.5 million of impairment charges were recognised in
relation to the property, plant and equipment of Abbey Metal
Finishing and its German subsidiary Atfin. These companies were
subsequently sold in the second half of 2021.
8 Finance income and costs
2022 2021
GBP'm GBP'm
Interest payable on loans and bank overdrafts (1.3) (1.1)
Interest payable on leases (0.8) (0.6)
Other interest payable (0.1) (1.1)
----- -----
Finance costs (2.2) (2.8)
Finance income - interest income on short-term
bank deposits 2.0 2.2
Net exchange gain on foreign cash balances 1.5 0.4
Employee benefit expense (note 36) (0.4) (0.8)
----- -----
Net finance income/(costs) 0.9 (1.0)
----- -----
9 Taxation
Analysis of charge in the year 2022 2021
GBP'm GBP'm GBP'm
Current tax
UK corporation tax
UK corporation tax at 19.00 per cent.
(2021: 19.00 per cent.) - 0.2
Double tax relief - (0.2 )
Use of losses to shelter capital
gain on disposal of financial assets (0.2) (2.2 )
Adjustment in respect of prior years - (0.2 )
------ -----
(0.2) (2.4 )
Foreign tax
Corporation tax 9.1 6.3
Adjustment in respect of prior years - 0.9
------ -----
9.1 7.2
----- -----
Total current tax 8.9 4.8
Deferred tax
Origination and reversal of timing
di erences
United Kingdom 3.7 (1.5 )
Overseas (0.4) (0.7 )
------ -----
3.3 (2.2 )
----- -----
Tax on (loss)/profit from ordinary
activities 12.2 2.6
----- -----
Factors a ecting tax charge for
the year
(Loss)/profit on ordinary activities
before tax (3.7) 7.1
Share of associated undertakings
loss/(profit) 3.1 (7.2 )
----- -----
Group (loss)/profit on ordinary activities
before tax (0.6) (0.1 )
----- -----
Tax on ordinary activities at the
standard rate of corporation
tax in the UK of 19.00 per cent.
(2021: 19.00 per cent.) (0.1) -
E ects of:
Adjustment to tax in respect of prior
years (0.7) 0.7
Expenses not deductible for tax purposes 0.3 1.1
Impairments not deductible for tax
purposes 1.9 0.1
Adjustment in respect of foreign
tax rates 0.8 0.9
Additional tax arising on dividends
from overseas companies 1.7 0.5
Profits on disposals not subject
to tax (0.2) -
Other income not charged to tax (0.4) (0.3 )
Change in deferred tax not recognised 3.7 (3.7 )
Increase in tax losses carried forward 3.7 3.1
Movement in other timing di erences 1.5 0.2
----- -----
Total tax charge for the year 12.2 2.6
----- -----
The tax charge includes a deferred tax charge of GBP3.7 million
(2021: credit of GBP3.7 million) relating to the reversal (2021:
recognition) of deferred tax losses able to be utilised to o set
losses (2021: gains) in the UK pension scheme surplus recognised
through other comprehensive income where the related equal and
opposite charge arises in the Statement of Comprehensive
Income.
The tax charge includes a credit of GBP0.4 million (2021: GBP0.1
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.
The current tax charge includes a credit of GBP0.2m (2021:
GBP2.2m) arising from 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.
10 Discontinued operations
On 16 December 2022, the Group entered into an unconditional
agreement to sell Associated Cold Stores & Transport Limited,
which was the Group's Food Service operation. The disposal, which
completed on 10 January 2023, was e ected in order to support the
Group's strategy of focussing its investment activity on its core
agriculture operations and for general working capital purposes.
The e ective date of the transaction is 26 November 2022. Details
of the assets and liabilities disposed of, and the calculation of
the profit or loss on disposal, are disclosed in note 40.
The prior year figures in the consolidated income statement and
the consolidated cashflow statement have been restated in
accordance with IFRS 5 to report the discontinued operations
separately from continuing operations.
The results of the discontinued operations, which have been
included in the profit for the year, were as follows:
Period
ending Year ending
26 November 31 December
2022 2021
GBP'm GBP'm
Revenue 23.7 21.9
Cost of sales (18.4) (17.6 )
----------- -----------
Gross profit 5.3 4.3
Other operating income - 0.1
Administrative expenses (4.0) (4.3 )
Profit on disposal of property, plant and
equipment 0.5 -
Net finance costs (0.1) (0.1 )
----------- -----------
Profit before tax 1.7 -
Profit on disposal of discontinued operations 3.8 -
Attributable tax credit 2.1 -
----------- -----------
Net profit attributable to discontinued
operations
(attributable to owners of the Company) 7.6 -
----------- -----------
During the year, Associated Cold Stores & Transport Limited
contributed GBP4.0 million (2021: GBP0.5 million) to the Group's
net operating cash flows, paid GBP0.3 million (2021: GBP0.9
million) in respect of investing activities and paid GBP0.4 million
(2021: GBP0.3 million) in respect of financing activities.
A profit of GBP3.8 million arose on the disposal of Associated
Cold Stores & Transport Limited, being the di erence between
the proceeds of disposal and the carrying amount of the
subsidiary's net assets at the e ective date of disposal.
11 (Loss)/profit for the year
2022 2021
GBP'm GBP'm
The (loss)/profit of the Company was: (1.6) 6.5
----- -----
The Company has taken advantage of the exemption under Section
408 of the Companies Act 2006 not to disclose its income
statement.
12 Equity dividends
2022 2021
GBP'm GBP'm
Amounts recognised as distributions to
equity holders in the period:
Final dividend for the year ended 31 December
2021 of
102p (2020: 144p) per share 2.8 4.0
Interim dividend for the year ended 31
December 2022 of
44p (2021: 44p) per share 1.2 1.2
----- -----
4.0 5.2
----- -----
Dividends amounting to GBP0.1 million (2021: 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 2022 of
102p (2021: 102p) per share 2.8 2.8
--- ---
The proposed final dividend for 2022 is subject to approval by
the shareholders at the AGM and has not been included as a
liability in these financial statements.
13 (Loss)/earnings per share (EPS)
2022 2021
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
- continuing
operations (20.6) 2,762,000 (745.8) 2.3 2,762,000 83.3
-------- --------- ------ ----- --------- -----
Attributable
to ordinary shareholders
- continuing
and discontinued
operations (13.0) 2,762,000 (470.7) 2.3 2,762,000 83.3
-------- --------- ------ ----- --------- -----
Basic and diluted earnings per share are calculated by dividing
the earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the period,
excluding those held by the Group as treasury shares (note 37).
14 Employees
Continuing and
Continuing discontinued
operations operations
2022 2021 2022 2021
Number Number Number Number
Average number of employees
by activity:
Agriculture 79,447 78,041 79,447 78,041
Engineering 132 204 132 204
Food Service - - 246 237
Central Management 35 32 35 32
-------- ------- --------- ---------
79,614 78,277 79,860 78,514
-------- ------- --------- ---------
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Employment costs:
Wages and salaries 107.9 99.5 115.1 106.5
Social security costs 2.2 1.8 2.9 2.5
Employee benefit obligations
(note 36) - UK 0.6 0.8 1.2 1.4
- Overseas 7.4 6.6 7.4 6.6
----- ----- ----- -----
118.1 108.7 126.6 117.0
----- ----- ----- -----
Total remuneration paid to key employees who are members of the
Executive Committees, excluding Directors of Camellia Plc, amounted
to GBP1.9 million (2021: GBP2.4 million).
15 Emoluments of the directors
2022 2021
GBP'm GBP'm
Aggregate emoluments excluding pension contributions 2.6 2.0
----- -----
Emoluments of the highest paid director excluding pension
contributions were GBP1.0 million (2021: GBP0.7 million), which
included a loss of o ce payment of GBP0.7 million (2021:
GBPnil).
Further details of directors' emoluments are set out on pages 41
to 42.
16 Intangible assets
Computer
Goodwill Brands software Total
Group GBP'm GBP'm GBP'm GBP'm
Cost
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 1 January 2022 4.9 8.7 1.3 14.9
Subsidiary leaving the group - - (0.7) (0.7)
-------- ------ -------- -----
At 31 December 2022 4.9 8.7 0.6 14.2
-------- ------ -------- -----
Amortisation
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 1 January 2022 0.3 3.5 1.0 4.8
Charge for the year 0.1 0.1
Subsidiary leaving the group - - (0.6) (0.6)
Impairment provision 3.6 - - 3.6
-------- ------ -------- -----
At 31 December 2022 3.9 3.5 0.5 7.9
-------- ------ -------- -----
Net book value at 31 December
2022 1.0 5.2 0.1 6.3
-------- ------ -------- -----
Net book value at 31 December
2021 4.6 5.2 0.3 10.1
-------- ------ -------- -----
Included in the carrying value of brands is GBP2.0 million and
GBP3.2 million relating to the Indian tea brands acquired by
Goodricke in 2017 and the Jing tea brand acquired by the Group in
2018 respectively. Both of these have been assessed as having an
indefinite life. These are considered to have an indefinite useful
life due to the continuing investment in maintaining their
value.
In accordance with the Group's accounting policy, goodwill and
intangible assets are tested annually for impairment. As a result
of this testing, an impairment of GBP3.6 million was made in the
year to 31 December 2022 in relation to the goodwill on acquisition
of Bardsley England.
Goodwill consists of the following:
2022 2021
Net Book Net Book
Value Value
Segment Cash Generating Unit (CGU) GBP'm GBP'm
Tea estates acquired in Assam,
Agriculture India 1.0 1.0
Bardsley England - 3.6
-------- --------
1.0 4.6
-------- --------
Bardsley England
The valuation of the goodwill associated with Bardsley England
has been re-assessed due to the impact of inflation arising from
the Ukraine war on the expected profitability of the business. The
recoverable value of the goodwill was considered to be GBPnil.
Tea estates acquired in Assam, India
The recoverable value was considered to exceed the carrying
value by GBP0.4 million. The valuation is based on multiples of the
annual average production of the relevant estates. The multiple
would need to decrease by 5% for any impairment to arise.
Intangibles comprise brands owned relating to Jing Tea with a
net book value of 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
Impact on fair
value
Assumption of the brand
+1% -1%
GBP'm GBP'm
Royalty rate 4.2% (0.8) 0.8
Discount rate 10.8% 0.4 (0.4)
If forecasted revenues were to change by +/-5 % in every year it
would have the e ect of a decrease/increase in the fair value of
the brand of GBP0.2 million.
17 Property, plant and equipment
Fixtures,
Plant fittings
Bearer Land and and and
plants buildings machinery equipment Total
Group GBP'm GBP'm GBP'm GBP'm GBP'm
Deemed cost
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 1 January 2022 135.6 110.8 103.3 16.1 365.8
Exchange di erences (4.1) 0.1 0.3 0.1 (3.6)
Additions 5.7 2.9 5.3 0.9 14.8
Disposals (0.2) (0.6) (3.8) (0.3) (4.9)
Transfer between categories - (0.1) 0.1 - -
Subsidiary leaving the
group - (31.4) (15.7) (2.4) (49.5)
Reclassification to held
for sale - (0.8) - - (0.8)
------ --------- --------- --------- -----
At 31 December 2022 137.0 80.9 89.5 14.4 321.8
------ --------- --------- --------- -----
Depreciation
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 1 January 2022 32.2 54.7 67.5 9.3 163.7
Exchange di erences (1.3) (0.1) 0.2 0.1 (1.1)
Charge for the year 4.5 2.4 5.7 0.8 13.4
Disposals (0.1) (0.3) (3.1) (0.3) (3.8)
Subsidiary leaving the
group - (26.1) (13.6) (1.5) (41.2)
Reclassification to held
for sale - (0.1) - - (0.1)
Impairment provision 2.7 0.6 3.0 0.1 6.4
------ --------- --------- --------- -----
At 31 December 2022 38.0 31.1 59.7 8.5 137.3
------ --------- --------- --------- -----
Net book value at 31
December 2022 99.0 49.8 29.8 5.9 184.5
------ --------- --------- --------- -----
Net book value at 31
December 2021 103.4 56.1 35.8 6.8 202.1
------ --------- --------- --------- -----
Assets in the course
of construction included
in the above:
2021
Additions 3.3 0.4 0.9 0.1 4.7
Net book value at 31
December 2021 10.2 0.6 0.6 - 11.4
------ --------- --------- --------- -----
2022
Additions 3.9 0.9 1.4 0.2 6.4
Net book value at 31
December 2022 9.7 0.7 0.9 - 11.3
------ --------- --------- --------- -----
The impairment of GBP6.4 million relates to Bardsley England and
arose due to the impact of inflation arising from the Ukraine war
on expected profitability of the operation.
In 2021, the plant and machinery impairment provision of 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.
In 2021, the reclassification to right-of-use assets arose from
changes in land registration in Tanzania.
18 Right-of-use assets
Land and Plant and
buildings machinery Total
GBP'm GBP'm GBP'm
Group
Deemed cost
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 1 January 2022 29.5 2.4 31.9
Exchange di erences 0.1 - 0.1
Additions 0.3 1.4 1.7
Disposals (0.2) (0.4) (0.6)
Subsidiary leaving the group (1.3) (1.1) (2.4)
--------- --------- -----
At 31 December 2022 28.4 2.3 30.7
--------- --------- -----
Depreciation
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 1 January 2022 2.1 1.0 3.1
Charge for the year 1.9 0.8 2.7
Disposals (0.1) (0.2) (0.3)
Subsidiary leaving the group (0.5) (0.4) (0.9)
--------- --------- -----
At 31 December 2022 3.4 1.2 4.6
--------- ---------
Net book value at 31 December 2022 25.0 1.1 26.1
--------- --------- -----
Net book value at 31 December 2021 27.4 1.4 28.8
--------- --------- -----
The Group leases many assets including land, buildings and
plant. The average lease term is 74 years (2021: 69 years).
Leases that expired in the year and were replaced by new leases
for identical or the same underlying assets resulted in additions
to right-of-use assets of GBP1.4 million (2021: GBP1.0
million).
The maturity analysis of lease liabilities is presented in note
33.
2022 2021
GBP'm GBP'm
Amounts recognised in the consolidated income
statement:
Interest expense on lease liabilities 0.8 0.7
Expense relating to short-term leases 0.2 0.1
----- -----
19 Investment properties
GBP'm
Group
Cost
At 1 January 2021 20.5
Additions 0.9
Reclassification from property, plant and equipment 3.1
-----
At 1 January 2022 24.5
Additions 2.5
-----
At 31 December 2022 27.0
-----
Depreciation
At 1 January 2021 1.4
Charge for the year -
-----
At 1 January 2022 1.4
Charge for the year 0.1
Impairment provision 0.1
-----
At 31 December 2022 1.6
-----
Net book value at 31 December 2022 25.4
-----
Net book value at 31 December 2021 23.1
-----
Included in revenue is GBP1.0 million (2021: 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 GBP0.3 million (2021: GBP0.2 million).
At the end of the year the fair value of Investment properties
was GBP35.1 million (2021: GBP34.4 million) based on vacant
possession. Investment properties were valued by the Directors
(fair value hierarchy Level 2).
20 Biological assets
Non-current: Forestry Livestock Total
GBP'm GBP'm GBP'm
Group
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 1 January 2022 12.4 1.0 13.4
Exchange di erences (0.1) - (0.1)
Additions 0.2 - 0.2
Gains arising from changes
in fair value less estimated point-of-sale
costs 1.1 0.4 1.5
Decreases due to harvesting (0.6) (0.3) (0.9)
-------- --------- -----
At 31 December 2022 13.0 1.1 14.1
-------- --------- -----
Current: 2022 2021
GBP'm GBP'm
Group
Tea 0.4 0.2
Edible nuts 2.5 2.2
Soya 5.3 3.6
Avocado 2.5 1.5
Other 0.1 0.3
--------- -----
10.8 7.8
--------- -----
Biological assets are carried at fair value. Where meaningful
market-determined prices do not exist to assess the fair value of
biological assets, the fair value has been determined based on the
net present value of expected future cash flows from those assets,
discounted at appropriate pre-tax rates. In determining the fair
value of biological assets where the discounting of expected future
cash flows has been used, the Directors have made certain
assumptions about the expected life-span of the plantings, yields,
selling prices and costs. There are no individually significant
unobservable inputs. The fair value of livestock is based on market
prices of livestock of similar age and sex.
New planting additions represent new areas planted to the
particular crop at cost.
As at 31 December 2022 the area planted to Forestry amounted to
5,798 Hectares (2021: 5,788) from which 145,856 cubic metres (2021:
157,687) were harvested during the year.
Livestock numbers were 4,246 head (2021: 4,332) at 31 December
2022.
Fair value measurement
All of the biological assets fall under level 3 of the hierarchy
defined in IFRS 13.
The basis upon which the valuations are determined is set out in
accounting policies on page 55.
Valuations by external professional valuers and those derived
from discounted cash flows both make assumptions based on
observable inputs of: yields, an increase in which will raise the
value; costs, an increase in which will decrease the value; market
prices, an increase in which will raise the value; life span of the
plantings, an increase in which will raise the value; discount
rates, an increase in which will decrease the value. These
assumptions vary significantly across 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 GBP1.3 million
(2021: GBP1.2 million) increase/decrease in the fair
value of forestry.
Current:
- Macadamia - a 10% increase/decrease in the volumes or
the prices assumed would result in a GBP1.1 million (2021:
GBP0.9 million) increase/decrease in the fair value of
macadamia growing crop.
- Avocados - a 10% increase/decrease in the volumes assumed
would result in a GBP0.2 million (2021: GBP0.2 million)
increase/decrease in the fair value of Hass avocados
growing crop. A 10% increase/decrease in selling price
assumed would result in a GBP0.3 million (2021: 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 GBP0.6 million (2021: GBP0.4
million) increase/decrease in the fair value of soya
growing crop.
Financial risk management strategies
The Group is exposed to financial risks arising from changes in
the prices of the agricultural products it produces. There are no
futures markets available for the majority of crops grown by the
Group. The Group's exposure to this risk is mitigated by the
geographical spread of its operations, selective forward selling in
certain instances when considered appropriate, and regular reviews
of available market data on sales and production. The Group
monitors closely the returns it achieves from its crops and
considers replacing its biological assets when yields decline with
age or markets change.
Further financial risk arises from changes in market prices of
key cost components. Such costs are closely monitored.
21 Investments in subsidiaries
2022 2021
GBP'm GBP'm
Company
Cost
At 1 January and 31 December 73.5 73.5
------ ------
22 Investments in associates
2022 2021
GBP'm GBP'm
Group
At 1 January 98.9 93.7
Exchange di erences 9.8 0.8
Share of (loss)/profit (note 5) (3.1) 7.2
Dividends (3.2) (3.0)
Other equity movements 0.5 0.2
----- -----
At 31 December 102.9 98.9
----- -----
Provision for diminution in value
At 1 January 26.3 26.1
Exchange di erences 3.3 0.2
----- -----
At 31 December 29.6 26.3
----- -----
Net book value at 31 December 73.3 72.6
----- -----
Details of the Group's associates are shown in note 44.
The Group's share of the results of its principal associates and
its share of the assets (including goodwill) and liabilities are as
follows:
Country
of (Loss)/ Interest Market
incorporation Assets Liabilities Revenues profit held value
GBP'm GBP'm GBP'm GBP'm % GBP'm
2022
Listed
BF&M Bermuda 665.5 (574.4) 41.2 (3.7) 36.9 59.3
United Finance
Limited Bangladesh 83.8 (74.6) 3.1 0.5 38.4 9.2
United Insurance
Company Limited Bangladesh 4.4 (1.8) 0.3 0.1 37.0 6.1
------ ----------- -------- ------- ------
753.7 (650.8) 44.6 (3.1) 74.6
------ ----------- -------- ------- ------
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
------ ----------- -------- ------- ------
23 Equity investments at fair value through other comprehensive income
Group Company
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Cost or fair value
At 1 January 28.4 43.8 0.2 0.2
Exchange di erences 2.7 - - -
Fair value adjustment (2.6) 0.8 - -
Additions 0.1 3.5 - -
Disposals (1.1) (8.1 ) - -
Fair value adjustment for
disposal (1.1) (11.6 ) - -
----- ----- ----- -----
At 31 December 26.4 28.4 0.2 0.2
----- ----- ----- -----
Provision for diminution
in value
At 1 January 0.7 1.2 0.2 0.2
Exchange di erences 0.1 - - -
Disposals (0.1) (0.5 ) - -
----- ----- ----- -----
At 31 December 0.7 0.7 0.2 0.2
----- ----- ----- -----
Net book value at 31 December 25.7 27.7 - -
----- ----- ----- -----
Equity investments at fair value through other comprehensive
income include the following:
Group
2022 2021
GBP'm GBP'm
Listed securities:
Equity securities - Bermuda 0.9 0.6
Equity securities - Japan 7.2 8.3
Equity securities - Switzerland 8.5 9.0
Equity securities - US 2.0 2.7
Equity securities - India 0.8 0.8
Equity securities - Europe 0.5 0.4
Equity securities - United Kingdom 5.4 5.3
Equity securities - Other 0.4 0.6
--------- ---------
25.7 27.7
--------- ---------
Equity investments at fair value through other comprehensive
income are denominated in the following currencies:
Group
2022 2021
GBP'm GBP'm
Sterling 5.4 5.3
US Dollar 2.0 2.7
Euro 0.5 0.4
Swiss Franc 8.5 9.0
Indian Rupee 0.8 0.8
Bermudian Dollar 0.9 0.6
Japanese Yen 7.2 8.3
Other 0.4 0.6
----------- -----------
25.7 27.7
----------- -----------
24 Money market investments at fair value through profit or loss
Group
2022 2021
GBP'm GBP'm
At 1 January 9.9 5.3
Exchange di erences 0.2 -
Fair value adjustment 0.3 0.1
Additions 2.8 5.4
Disposals (4.6) (0.9 )
---------- ----------
At 31 December 8.6 9.9
---------- ----------
Money market investments at fair value through profit or loss
include the following:
Group
2022 2021
GBP'm GBP'm
Listed securities:
Money market - Bermuda 0.1 1.6
Money market - Brazil 0.6 -
Money market - India 7.9 8.3
---------- ----------
8.6 9.9
---------- ----------
Money market investments at fair value through profit or loss
are denominated in the following currencies:
Group
2022 2021
GBP'm GBP'm
US Dollar 0.1 1.6
Brazil Real 0.6 -
Indian Rupee 7.9 8.3
----------- ----------
8.6 9.9
Current 1.3 2.7
Non-Current 7.3 7.2
----------- ----------
8.6 9.9
----------- ----------
25 Debt investments at amortised cost
Group
2022 2021
GBP'm GBP'm
At 1 January 2.6 2.7
Exchange di erences 0.1 (0.1)
Disposals (1.4) -
---------- ---------
At 31 December 1.3 2.6
---------- ---------
Debt investments at amortised cost comprises:
2022 2021
GBP'm GBP'm
Treasury infrastructure bonds - 12.2% to 12.5%
interest payable twice yearly
and redeemable in November 2022 - Kenya - 1.3
Treasury infrastructure bonds - 12.5% interest
payable twice yearly and
redeemable in November 2024 - Kenya 1.3 1.3
----- -----
1.3 2.6
----- -----
Current - 1.3
Non-Current 1.3 1.3
----- -----
1.3 2.6
----- -----
26 Other investments - heritage assets
Group Company
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Cost
At 1 January 8.7 9.8 8.8 11.0
Additions 0.1 - 0.1 -
Disposals - (0.1) - (0.1)
Reclassification to held
for sale - (1.0) - (2.1)
----- ----- ------- -----
At 31 December 8.8 8.7 8.9 8.8
----- ----- ------- -----
Heritage assets comprise the Group's and Company's investment in
fine art, philately, documents and manuscripts. The market value of
these collections is expected to be in excess of book value.
27 Inventories
2022 2021
GBP'm GBP'm
Group
Made Tea 26.3 25.7
Other agricultural produce 13.3 7.8
Work in progress 0.1 0.1
Trading stocks 1.3 1.1
Raw materials and consumables 19.4 17.0
----- -----
60.4 51.7
----- -----
Made tea inventories include the fair value of green leaf which
includes a fair value uplift of GBPnil million (2021: GBP0.2
million). Other agricultural produce is net of a GBP2.7 million
(2021: GBP0.2 million) provision which has been recognised as an
expense.
28 Trade and other receivables
Group Company
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Group
Current:
Trade receivables 29.2 32.7 - -
Amounts owed by associated
undertakings 0.1 0.1 - -
Other receivables* 23.6 4.8 - -
Prepayments and accrued
income 14.7 10.9 0.2 0.2
--------- -------- ----------- ----------
67.6 48.5 0.2 0.2
--------- -------- ----------- ----------
* Included within other receivables is GBP16.6 million of
deferred consideration which was received in January 2023 in
relation to the disposal of Associated Cold Stores & Transport
Limited, see note 40.
Non-current:
Other receivables 3.1 2.7 --
--- ---
3.1 2.7 --
--- ---
The carrying amounts of the Group's trade and other receivables
are denominated in the following currencies:
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Current:
Sterling 29.5 17.8 0.2 0.2
US Dollar 7.7 3.5 - -
Euro 0.9 0.8 - -
Kenyan Shilling 2.3 2.6 - -
Indian Rupee 17.9 16.8 - -
Malawian Kwacha 1.7 1.5 - -
Bangladesh Taka 3.4 2.1 - -
South African Rand 0.2 0.2 - -
Brazilian Real 3.1 2.5 - -
Other 0.8 0.7 - -
----- ----- ----- -----
67.5 48.5 0.2 0.2
----- ----- ----- -----
Non-current:
Sterling 0.3 0.3
Kenyan Shilling 0.6 0.5
Indian Rupee 1.6 1.4
Malawian Kwacha 0.4 0.3
Bangladesh Taka 0.2 0.2
----- -----
3.1 2.7
----- -----
Trades receivables -
days past due
Up to 31-60 61-90 Over
Current 30 days days days 91 days Total
As at 31 December
2021 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Gross carrying amount
-
trade receivables 27.1 4.1 0.8 0.3 1.2 33.5
Expected credit
loss rate - 4.9% 25.0% 66.7% 16.7% 2.4%
Lifetime ECL - 0.2 0.2 0.2 0.2 0.8
Net carrying amount 27.1 3.9 0.6 0.1 1.0 32.7
Trades receivables -
days past due
Up to 31-60 61-90 Over
Current 30 days days days 91 days Total
As at 31 December
2022 GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Gross carrying amount
-
trade receivables 24.2 3.4 0.7 0.4 1.3 30.0
Expected credit
loss rate - 2.9% 0.0% 0.0% 53.8% 2.7%
Lifetime ECL - 0.1 - - 0.7 0.8
Net carrying amount 24.2 3.3 0.7 0.4 0.6 29.2
The closing loss allowances for trade receivables reconciles to
the opening loss allowance as follows:
2022 2021
GBP'm GBP'm
Opening loss allowance 0.8 0.6
Increase in loss allowance recognised in profit
and loss during the year 0.1 0.2
Receivables written o during the year as uncollectable (0.1) -
----- -----
Closing loss allowance 0.8 0.8
----- -----
29 Cash and cash equivalents (excluding bank overdrafts)
Group Company
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Cash at bank and in hand 20.0 25.9 0.1 0.7
Short-term bank deposits 28.6 35.3 - -
Short-term liquid investments 0.7 0.6 - -
------- ------- -------- --------
49.3 61.8 0.1 0.7
------- ------- -------- --------
Cash, cash equivalents and bank overdrafts include the following
for the purposes of the cash flow statement:
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Cash and cash equivalents 49.3 61.8 0.1 0.7
Bank overdrafts (note 32) (3.7) (1.9 ) - -
----- ----- ----- -----
45.6 59.9 0.1 0.7
----- ----- ----- -----
2022 2021
E ective interest rate:
1.30 - 0.01 -
Short-term deposits 11.00% 10.25%
3.00 -
Short-term liquid investments 5.00% 4.00%
Average maturity period:
Short-term deposits 50 days 67 days
Short-term liquid investments 32 days 32 days
30 Assets classified as held for sale / Liabilities related to assets classified as held for sale
During the year the following assets were transferred to held
for sale:
Group Company
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
At 1 January 6.6 - 2.1 -
Reclassified from property,
plant and equipment 0.7 3.8 - -
Reclassified from right-of-use
assets - 3.4 - -
Reclassified from heritage
assets - 1.0 - 2.1
Reclassified from current assets - 0.7 - -
---------- --------- --------- --------
7.3 8.9 2.1 2.1
Disposals during the year (2.7) (1.6) -
Disposal of subsidiaries during
year - (2.3) - -
---------- --------- --------- --------
At 31 December 4.6 6.6 0.5 2.1
---------- --------- --------- --------
Liabilities related to assets classified as
held for sale as at 31 December:
Reclassified from lease liabilities 2.0 2.0 - -
---------- --------- --------- --------
During the year, a London property and a number of the Group's
heritage assets and other items of art have been sold, realising
cash proceeds of GBP4.5 million.
31 Trade and other payables
Group Company
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Current:
Trade payables 22.2 18.1 0.1 0.1
Other taxation and social security 2.4 4.8 - -
Other payables 26.4 26.8 0.2 0.2
Accruals and deferred income 8.8 9.5 0.7 0.6
-------- ------- --------- ---------
59.8 59.2 1.0 0.9
-------- ------- --------- ---------
Included in other taxation and social security is GBPnil (2021:
GBP0.1 million) of VAT payable by the UK operations which was
deferred from Q1 2020 as part of the UK Government deferral scheme
in relation to COVID and was fully repaid by the end of February
2022.
32 Financial liabilities - borrowings
2022 2021
GBP'm GBP'm
Group
Current:
Bank overdrafts 3.7 1.9
Bank loans 1.4 1.4
----- -----
5.1 3.3
----- -----
Current borrowings include the following amounts
secured on property, plant and equipment and
investment properties:
Bank overdrafts 0.6 0.3
Bank loans 1.4 1.4
----- -----
2.0 1.7
----- -----
Non-current:
Bank loans 4.4 4.5
----- -----
Non-current borrowings include the following
amounts
secured on plant and equipment and investment
properties:
Bank loans 4.4 4.5
----- -----
The repayment of bank loans and overdrafts
fall due as follows:
Within one year or on demand (included in current
liabilities) 5.1 3.3
Between 1 - 2 years 1.1 0.7
Between 2 - 5 years 1.1 1.2
After 5 years 2.2 2.6
----- -----
9.5 7.8
----- -----
The rates of interest payable by the Group ranged between:
2022 2021
% %
3.25
Bank overdrafts 5.00 - 21.90 - 16.50
6.90
Bank loans 7.60 - 10.50 - 7.55
33 Lease liabilities
2022 2021
GBP'm GBP'm
Group
Maturity analysis of lease liabilities is
as follows:
Within one year 2.3 3.2
Between 1 - 2 years 2.3 2.3
Between 2 - 5 years 5.4 5.0
Onwards 11.4 14.2
----- -----
21.4 24.7
----- -----
Analysed as:
Current 2.3 3.2
Non-current 19.1 21.5
----- -----
21.4 24.7
----- -----
The Group does not face a significant liquidity risk with regard
to its lease liabilities. Lease liabilities are monitored within
the individual subsidiaries' finance functions.
34 Provisions
Wages and Legal
salaries claims Others Total
GBP'm GBP'm GBP'm GBP'm
Group
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 1 January 2022 9.1 1.2 1.5 11.8
Utilised in the period (6.7) (0.3) (0.1) (7.1)
Provided in the period 8.5 - - 8.5
Subsidiary leaving the group - - (0.5) (0.5)
Unused amounts reversed in
period (1.8) - (0.1) (1.9)
--------- ------ ------ -----
At 31 December 2022 9.1 0.9 0.8 10.8
--------- ------ ------ -----
Current:
At 31 December 2022 9.1 0.9 0.8 10.8
--------- ------ ------ -----
At 31 December 2021 9.1 1.2 1.5 11.8
--------- ------ ------ -----
The wages and salaries provisions are in respect of ongoing wage
and bonus negotiations in India, Kenya and Bangladesh, the majority
of which are expected to be utilised during 2023.
Legal claims relate to the cost of the defence of the litigation
concerning our East African operations, including settlements and
the expected costs of progressive measures.
Others relate to provisions for claims and dilapidations.
Legal claims Total
GBP'm GBP'm
Company
At 1 January 2021 1.9 1.9
Utilised in the period (1.9) (1.9)
------------ -----
At 1 January 2022 - -
Utilised in the period - -
------------ -----
At 31 December 2022 - -
------------ -----
Current:
At 31 December 2022 - -
------------ -----
At 31 December 2021 - -
------------ -----
Legal claims related to the defence of the litigation concerning
our East African operations.
35 Deferred tax
The net movement on the deferred tax account is set out
below:
Group Company
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
At 1 January 38.0 39.5 0.2 0.2
Exchange di erences (0.7) (1.0) - -
Charged/(credited) to the
income statement 3.3 (2.2) - -
(Credited)/charged to other
comprehensive income (3.6) 1.7 - -
------ ----- ------- -------
At 31 December 37.0 38.0 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 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 1 January 2022 42.5 3.7 2.3 48.5
Exchange di erences (0.6) - (0.1) (0.7)
Charged/(credited) to the income
statement 0.2 (0.1) 1.5 1.6
Credited to other comprehensive
income - (3.5) - (3.5)
------------ ----------- ----- -----
At 31 December 2022 42.1 0.1 3.7 45.9
------------ ----------- ----- -----
Deferred tax assets o set (8.9)
-----
Net deferred tax liability
after o set 37.0
-----
Deferred tax assets
Pension
scheme
Tax losses asset Other Total
GBP'm GBP'm GBP'm GBP'm
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 1 January 2022 6.4 0.3 3.8 10.5
(Charged)/credited to the income
statement (2.1) (0.1) 0.5 (1.7)
Credited to other comprehensive
income - 0.1 - 0.1
---------- ------- ----- -----
At 31 December 2022 4.3 0.3 4.3 8.9
---------- ------- ----- -----
O set against deferred tax
liabilities (8.9)
-----
Net deferred tax asset after
o set -
-----
Deferred tax liabilities of GBP13.7 million (2021: GBP14.7
million) have not been recognised for the withholding tax and other
taxes that would be payable on the unremitted earnings of certain
subsidiaries. Such amounts are permanently reinvested.
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 GBP26.4 million (2021:
GBP18.4 million) in respect of losses that can be carried forward
against future taxable income.
36 Employee benefit obligations
(i) Pensions
Certain Group subsidiaries operate defined contribution and
funded defined benefit pension schemes. The most significant is the
UK funded, defined benefit scheme. The assets of this scheme are
administered by trustees and are kept separate from those of the
Group. The performance of the assets is monitored on a regular
basis by the trustees and their investment advisors. A full
actuarial valuation was undertaken as at 1 July 2020 and updated to
31 December 2022 by a qualified independent actuary. The UK defined
benefit pension scheme is closed to new entrants and with 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:
2022 2021
% per
% per annum annum
UK schemes
Rate of increase in salaries N/a N/a
Rate of increase to LPI (Limited Price Indexation) 2.35 - 2.50 -
pensions in payment 5.00 5.00
Discount rate applied to scheme liabilities 4.80 1.75
Inflation assumption (CPI/RPI) 2.35/3.05 2.50/3.20
Assumptions regarding future mortality experience are based on
advice received from independent actuaries. The current mortality
tables used are SAPS 3, males 113%/106% and females 112%/108%, on a
year of birth basis, with CMI_2021 future improvement factors and
subject to a long term annual rate of future improvement of 1.25%
per annum, smoothing parameter of 7.0, initial addition parameter
of 0.25% pa and w2020 parameter of 15%. This results in males and
females aged 65 having life expectancies of 21.4 years (2021: 21.5
years) and 22.2 years respectively (2021: 22.3 years).
2022 2021
% per annum % per annum
Overseas schemes
Rate of increase in salaries 6.00 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 - 8.00 6.50 - 6.80
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:
2022 2021
% per annum % per annum
6.00 -
Rate of increase in salaries 6.00 - 10.95 8.89
6.50 -
Discount rate applied to scheme liabilities 7.25 - 14.20 13.70
0.00 -
Inflation assumptions 0.00 - 6.00 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 5.1% decrease
Discount rate 0.5% lower 5.5% increase
Rate of RPI inflation 0.25% higher 3.0% increase
Rate of RPI inflation 0.25% lower 3.1% decrease
Life expectancy +1 year 5.4% increase
Life expectancy -1 year 5.4% decrease
The above changes in assumptions may have an impact on the value
of the scheme's investment holdings. For example, the scheme holds
a proportion of its assets in corporate bonds. A fall in the
discount rate as a result of lower UK corporate bond yields would
lead to an increase in the value of these assets, thus mitigating
the increase in the defined benefit obligation to some extent. The
sensitivities have been calculated by changing the key assumption
only and leaving all others fixed.
During the year, the UK funded scheme transferred a significant
amount of its Bond investments into a liability-driven investment
to reduce overall volatility.
Duration of the scheme liabilities
The weighted average duration of the UK scheme's liabilities is
12 years.
Analysis of scheme liabilities
The liabilities of the UK scheme are split as follows:
%
Deferred pensioners 40
Current pensioners 60
---
Total membership 100
---
(v) Actuarial valuations
2022 2021
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Equities and property 45.8 3.2 49.0 57.9 2.8 60.7
Bonds 13.0 25.5 38.5 16.3 23.5 39.8
Liability-driven investment 45.3 - 45.3 60.8 - 60.8
Diversified growth 17.0 - 17.0 45.4 - 45.4
Insurance related products - 3.6 3.6 - 3.2 3.2
Cash 5.6 10.1 15.7 18.9 12.5 31.4
------ -------- ------ ------ -------- ------
Total fair value of
plan assets 126.7 42.4 169.1 199.3 42.0 241.3
Present value of defined
benefit
obligations (127.8) (49.7) (177.5) (184.6) (51.6) (236.2)
------ -------- ------ ------ -------- ------
Total (deficit)/surplus
in the schemes (1.1) (7.3) (8.4) 14.7 (9.6) 5.1
------ -------- ------ ------ -------- ------
Amount recognised as
asset in
the balance sheet - 0.8 0.8 14.7 0.1 14.8
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 (1.1) (7.0) (8.1) - (8.6) (8.6)
------ -------- ------ ------ -------- ------
(1.1) (7.3) (8.4) 14.7 (9.6) 5.1
Related deferred tax
asset/(liability) (note
35) - 0.2 0.2 (3.7) 0.3 (3.4)
------ -------- ------ ------ -------- ------
Net (deficit)/surplus (1.1) (7.1) (8.2) 11.0 (9.3) 1.7
------ -------- ------ ------ -------- ------
Movements in the fair value of scheme assets were as
follows:
2022 2021
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
At 1 January 199.3 42.0 241.3 196.0 40.1 236.1
Expected return on
plan assets 3.4 2.7 6.1 2.4 2.3 4.7
Employer contributions - 2.0 2.0 - 3.8 3.8
Contributions paid
by
plan participants - 0.4 0.4 - 0.4 0.4
Benefit payments (8.6) (4.2) (12.8) (7.9) (4.9) (12.8)
Other adjustment - 0.3 0.3 - 0.1 0.1
Actuarial (losses)/gains (67.4) (0.8) (68.2) 8.8 0.5 9.3
Exchange di erences - - - - (0.3) (0.3)
----- -------- ----- ----- -------- -----
At 31 December 126.7 42.4 169.1 199.3 42.0 241.3
----- -------- ----- ----- -------- -----
Movements in the present value of defined benefit obligations
were as follows:
2022 2021
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
At 1 January (184.6) (51.6) (236.2) (203.0) (49.7) (252.7)
Current service cost - (2.1) (2.1) - (1.8) (1.8)
Interest cost (3.1) (3.4) (6.5) (2.5) (3.0) (5.5)
Contributions paid
by
plan participants - (0.4) (0.4) - (0.4) (0.4)
Benefit payments 8.6 4.2 12.8 7.9 4.9 12.8
Other adjustment - (0.3) (0.3) - - -
Actuarial gains/(losses) 51.3 4.1 55.4 13.0 (1.9) 11.1
Exchange di erences - (0.2) (0.2) - 0.3 0.3
------ -------- ------ ------ -------- ------
At 31 December (127.8) (49.7) (177.5) (184.6) (51.6) (236.2)
------ -------- ------ ------ -------- ------
In 2020, the total fair value of plan assets was GBP236.1
million, the present value of defined benefit obligations was
GBP252.7 million and the deficit was GBP16.6 million. 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 and 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.
Income Statement
The amounts recognised in the Income Statement are as
follows:
2022 2021
UK Overseas Total UK Overseas Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
Amounts credited/(charged)
to
operating profit:
Current service cost - (2.1) (2.1) - (1.8) (1.8)
Past service cost - - - - - -
----- -------- ----- ----- -------- -----
Total operating (charge)/credit - (2.1) (2.1) - (1.8) (1.8)
Amounts charged to
other
finance costs:
Interest income/(expense) 0.3 (0.7) (0.4) (0.1) (0.7) (0.8)
----- -------- ----- ----- -------- -----
Total credited/(charged)
to
income statement 0.3 (2.8) (2.5) (0.1) (2.5) (2.6)
----- -------- ----- ----- -------- -----
Employer contributions to defined contribution schemes are
charged to profit when payable and the costs charged were GBP5.9
million (2021: GBP5.6 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:
2022 2021
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 (67.4) (0.8) (68.2) 8.8 0.5 9.3
Gain/(loss) from
changes in demographic
assumptions 0.6 - 0.6 0.9 - 0.9
Gain/(loss) from
changes in financial
assumptions 55.5 5.3 60.8 8.5 (1.2) 7.3
Experience (losses)/gains (4.8) (1.2) (6.0) 3.6 (0.7) 2.9
----- -------- ----- ----- -------- -----
Actuarial (loss)/gain (16.1) 3.3 (12.8) 21.8 (1.4) 20.4
----- -------- ----- ----- -------- -----
Cumulative actuarial losses recognised in the Statement of
Comprehensive Income are GBP10.3 million (2021: GBP2.5 million
gain).
As the UK defined benefit pension scheme is closed to future
accrual and active members were transferred to a defined
contribution scheme, no employer contributions will be paid for the
year commencing 1 January 2023. No additional funding contributions
will be made, as the latest actuarial valuation shows a funding
surplus.
37 Share capital
2022 2021
GBP'm GBP'm
Authorised: 2,842,000 (2021: 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 (2021:
2,824,500) shares 0.3 0.3
----- -----
Group companies hold 62,500 issued shares in the Company. These
are classified as treasury shares.
38 Reconciliation of (loss)/profit from operations to cash flow
2022 2021
GBP'm GBP'm
Group
(Loss)/profit from operations (5.0) 7.6
Share of associates' results 3.1 (7.2 )
Depreciation and amortisation 12.2 11.7
Depreciation of right-of-use assets 2.2 1.3
Impairment of assets 10.1 0.5
Realised movements on biological assets - non-current (1.5) (1.5 )
Financial assets fair value through profit
or loss - gain (0.3) (0.1 )
Profit on disposal of non-current assets (0.1) -
Profit on disposal of assets classified as
held for sale (1.8) -
Loss on disposal of subsidiaries - 0.1
Profit on disposal of financial assets (0.3) (0.2 )
Movement in provisions (0.7) (7.0 )
Increase in inventories (9.8) (4.6 )
(Increase)/decrease in biological assets (2.3) 2.1
Increase in trade and other receivables (6.5) (1.4 )
Increase in trade and other payables 3.3 1.8
Di erence between employee benefit obligations
funding contributions and cost charged - (1.9 )
----- -----
Cash generated from operations 2.6 1.2
----- -----
39 Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities
arising from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are those
for which cash flows were, or future cash flows will be, classified
in the Group's consolidated cash flow statement as cash flows from
financing activities.
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 2021 2.1 2.7 1.2 10.3 16.3
Exchange di erences - (0.1) - - (0.1)
Subsidiaries 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 1 January 2022 1.4 4.5 3.2 21.5 30.6
Exchange di erences - 0.1 - - 0.1
Subsidiary leaving
the group - - (0.5) (1.0) (1.5)
New loans 0.6 0.8 - - 1.4
New finance leases - - 0.7 1.1 1.8
Loans repaid (1.6) - - - (1.6)
Lease payments - - (2.8) (0.6) (3.4)
Lease disposal - - - (0.2) (0.2)
Transfers 1.0 (1.0) 1.7 (1.7) -
---------- ----------- ------- ----------- -----
At 31 December 2022 1.4 4.4 2.3 19.1 27.2
---------- ----------- ------- ----------- -----
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.
40 Business combinations - disposals and acquisitions of businesses
Disposals Acquisitions Disposals
2022 2021 2021
GBP'm GBP'm GBP'm
Net book Fair Net book
value value value
Intangible assets 0.1 - -
Property, plant and equipment 8.3 19.5 -
Right of use asset 1.5 14.6 -
Deferred tax asset 2.1 - -
Inventories 0.1 0.7 -
Biological assets - current - 3.1 -
Trade and other receivables 4.1 4.0 -
Cash and cash equivalents (excluding
bank overdrafts) 1.6 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 (1.6) (14.9 ) -
Trade and other payables (3.4) (8.9 ) -
Provisions (0.5) - -
Amounts due to group undertakings - - (0.6 )
Liabilities related to assets classified
as held for sale - - (0.4 )
--------- ------------ ---------
12.3 6.9 0.3
Identifiable intangible assets - Goodwill - 3.6 -
Non-controlling interest - (5.3 ) -
Profit/(loss) on disposal 3.8 - (0.1 )
--------- ------------ ---------
16.1 5.2 0.2
--------- ------------ ---------
Consideration transferred:
Cash consideration and costs (0.5) 3.0 (0.1 )
Deferred consideration 16.6 2.2 0.3
--------- ------------ ---------
Total consideration 16.1 5.2 0.2
--------- ------------ ---------
Net cash (outflow)/inflow arising
on disposals/acquisitions:
Cash consideration and costs (0.5) (3.0 ) (0.1 )
Less: cash and cash equivalent balances
disposed/acquired (1.6) (0.7 ) 0.3
--------- ------------ ---------
(2.1) (3.7 ) 0.2
--------- ------------ ---------
Disposal in 2022 - Associated Cold Stores & Transport
Limited
As referred to in note 10, on 26 November 2022 the Group e
ectively disposed of its interest in Associated Cold Stores &
Transport Limited.
The cash consideration was paid on 10 January 2023.
The impact of Associated Cold Stores & Transport Limited on
the Group's results in the current and prior years is disclosed in
note 10. The gain on disposal is included in the profit for the
year from discontinued operations (see note 10).
Acquisition in 2021 - Bardsley England
On 31 July 2021, the Group acquired 60.5% of the share capital
of Bardsley Horticulture Limited, the parent company of Bardsley
England for consideration of GBP5.2 million, of which GBP3.0
million which was paid at completion with the balance of GBP2.2
million deferred with the final instalment payable by July 2023.
Bardsley England is a major fruit farming business and one of the
UK's largest apple growers.
Also on 31 July 2021, the Group subscribed for additional shares
in Bardsley Horticulture Limited for 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 the consideration paid and the
non-controlling interests share of the net assets carrying
amount.
Disposal in 2021 - Abbey Metal Finishing Limited
On 5 August 2021, the Group disposed of its interests in Abbey
Metal Finishing Company Limited and its subsidiary Atfin GmbH in
Germany to a newly incorporated company set up by GIL Investments
for the purpose of the acquisition and Aerotech GmbH
respectively.
41 Commitments
Capital commitments
Capital expenditure contracted for at the balance sheet date but
not yet incurred is as follows:
2022 2021
GBP'm GBP'm
Group
Property, plant and equipment 0.8 0.9
----- -----
42 Contingencies
In Malawi the Revenue Authority (MRA) indicated in 2021 that it
intended to collect VAT on sales made at auction and under private
treaty for export, in the period since 2017. Tea sales intended for
the export market were subject to an industry wide agreement with
the MRA and the Reserve Bank of Malawi reached at the time the
auction was established, resulting in these deemed exports being
zero rated for VAT. The MRA has raised an assessment for VAT
against Eastern Produce Malawi in connection with this which has
been appealed in light of the historic agreement and
long-established custom and practice of the industry. Following
discussions between the Malawi government, the MRA and the tea
industry, the MRA has given permission for the auction to continue
with teas deemed as export zero rated for VAT and the assessment
raised against Eastern Produce Malawi has been suspended. Eastern
Produce Malawi's estimated contingent liability for VAT on these
deemed export sales, excluding any penalties and interest, is
approximately GBP4.8 million.
In India, assessments have been received for excise duties of
GBP3.7 million, sales and entry tax of GBP0.9 million and of GBP0.7
million for income tax matters. These are being contested on the
basis that they are without technical merit.
In India, a long running dispute between our local subsidiaries
and the Government of West Bengal over the payment of a land tax,
locally called, "Salami", remains unresolved. Lawyers acting for
the Group have advised that payment of Salami does not apply,
accordingly no provisions have been made. The sum in dispute,
excluding fines and penalties, amounts to GBP1.2 million.
In the UK, HM Revenue and Customs has issued a VAT assessment
based on the application of the partial exemption rules which could
result in a potential liability of GBP1.2 million. An amount of
GBP0.2 million has been proved based on external advice received
and this assessment is being contested.
The Group operates in certain countries where its operations are
potentially subject to a number of legal claims. When required,
appropriate provisions are made for the expected cost of such
claims.
43 Financial instruments
Capital risk management
The Group manages its capital to ensure that it will be able to
continue as a going concern, while maximising the return to
stakeholders through the optimisation of its debt and equity
balance. The capital structure of the Group consists of debt, which
includes the borrowings and lease liabilities disclosed in notes 32
and 33, cash and cash equivalents and equity attributable to equity
holders of the parent, comprising issued capital, reserves and
retained earnings.
The Board reviews the capital structure, with an objective to
ensure that debt as a percentage of tangible net assets does not
exceed 50 per cent..
The ratio at the year end is as follows:
2022 2021
GBP'm GBP'm
Borrowings 9.5 7.8
Lease liabilities 21.4 24.7
----- -----
Debt 30.9 32.5
----- -----
Tangible net assets 362.6 378.5
----- -----
Ratio 8.52% 8.59%
----- -----
Debt is defined as long and short-term borrowings and lease
liabilities as detailed in notes 32 and 33.
Tangible net assets includes all capital and reserves of the
Group attributable to equity holders of the parent less intangible
assets.
Financial instruments by category
At 31 December 2022
Financial Financial
assets asset
at fair at fair
value value Financial
through
other through assets at
comprehensive profit amortised
income or loss cost Total
GBP'm GBP'm GBP'm GBP'm
Group
Assets as per Balance
Sheet
Equity investments 25.7 - - 25.7
Money market investments - 8.6 - 8.6
Bond investments - - 1.3 1.3
Trade and other receivables
excluding prepayments - - 56.0 56.0
Cash and cash equivalents - - 49.3 49.3
------------- --------- --------- -----
25.7 8.6 106.6 140.9
------------- --------- --------- -----
Other financial
liabilities
at
amortised
cost Total
GBP'm GBP'm
Group
Liabilities as per Balance
Sheet
Borrowings 9.5 9.5
Lease liabilities 21.4 21.4
Trade and other payables 59.8 59.8
--------------- -----
90.7 90.7
--------------- -----
Company
Trade and other payables 1.0 1.0
--------------- -----
At 31 December 2021
Financial Financial
assets asset
at fair at fair
value value Financial
through
other through assets at
comprehensive profit amortised
income or 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
Leases 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
--------------- -----
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 20 for
disclosures of biological assets that are measured at fair
value.
At 31 December 2022
Level 1 Level 2 Level 3 Total
GBP'm GBP'm GBP'm GBP'm
Assets
Equity investments 25.7 - - 25.7
Money market investments 8.6 - - 8.6
Bond investments 1.3 - - 1.3
------- ------- ------- -----
35.6 - - 35.6
------- ------- ------- -----
At 31 December 2021
Level 1 Level 2 Level 3 Total
GBP'm GBP'm GBP'm GBP'm
Assets
Equity investments 27.7 - - 27.7
Money market investments 9.9 - - 9.9
Bond investments 2.6 - - 2.6
------- ------- ------- -----
40.2 - - 40.2
------- ------- ------- -----
Financial risk management objectives
The Group finances its operations by a mixture of retained
profits, bank borrowings, long-term loans and leases. The objective
is to maintain a balance between continuity of funding and
flexibility through the use of borrowings with a range of
maturities. To achieve this, the maturity profile of borrowings and
facilities are regularly reviewed. The Group also seeks to maintain
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:
n To finance its operations (to mitigate liquidity risk)
n To manage currency risks arising from its operations and
arising from its sources of finance (to mitigate foreign
exchange risk)
The Group did not, in accordance with Group policy, trade in
financial instruments throughout the period under review.
(A) Market risk
(i) Foreign exchange risk
The Group has a significant exposure to the US Dollar arising
from a number of operations having a significant trading exposure
to the Dollar and as a consequence the Group holds significant US
Dollar funds and Dollar denominated investments. If the exchange
rate of the Dollar to Sterling were to move by 5 per cent, the
Group's carrying value would increase/decrease by GBP1.2 million
(2021: GBP1.0 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 GBP0.6 million (2021: GBP0.5 million), GBP0.4
million (2021: GBP0.4 million) and GBP0.4 million (2021: GBP0.5
million) respectively.
Currency risks are primarily managed through the use of natural
hedging and regularly reviewing when cash should be exchanged into
either sterling or another functional currency.
(ii) Price risk
The Group is exposed to equity securities price risk because of
investments held by the Group and classified on the consolidated
balance sheet as financial assets. To manage its price risk arising
from investments in equity securities, the Group diversifies its
portfolio.
The majority of the Group's equity investments are publicly
traded and are quoted on stock exchanges located in Bermuda, India,
Japan, Switzerland, UK and US. Should these equity indexes increase
or decrease by 5 per cent. with all other variables held constant
and all the Group's equity instruments move accordingly, the
Group's carrying value would increase/decrease by GBP1.3 million
(2021: GBP1.4 million).
The Group's exposure to commodity price risk is not
significant.
(iii) Cash flow and interest rate risk
The Group's interest rate risk arises from interest-bearing
assets and short and long-term borrowings. Borrowings issued at
variable rates expose the Group to cash flow interest rate
risk.
At 31 December 2022 if interest rates on non-sterling
denominated interest-bearing assets and borrowings had been 50
basis points higher/lower with all other variables held constant,
post-tax profit for the year would have been GBP0.1 million (2021:
GBP0.2 million) higher/lower.
The interest rate exposure of the Group's interest bearing
assets and liabilities by currency, at 31 December was:
Assets Liabilities
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Sterling 9.7 13.0 18.8 22.5
US Dollar 21.6 16.4 - -
Euro 0.2 0.4 - -
Kenyan Shilling 10.0 14.4 0.2 0.3
Indian Rupee 2.9 2.4 7.0 5.0
Malawian Kwacha 0.7 0.2 0.5 1.6
Bangladesh Taka 2.6 11.5 1.1 1.2
South African Rand 0.8 1.0 3.3 1.9
Brazilian Real 0.4 1.8 - -
Bermudian Dollar 0.2 0.4 - -
Japanese Yen 0.1 0.3 - -
Swiss Franc 0.1 - - -
-------- ------- ------------ ------------
49.3 61.8 30.9 32.5
-------- ------- ------------ ------------
(B) Credit risk
The Group has policies in place to limit its exposure to credit
risk. Credit risk arises from cash and cash equivalents, deposits
with banks and financial institutions, as well as credit exposures
to customers, including outstanding receivables and committed
transactions. If customers are independently rated, these ratings
are used. Otherwise if there is no independent rating, management
assesses the credit quality of the customer taking into account its
financial position, past experience and other factors and if
appropriate holding liens over stock and receiving payments in
advance of services or goods as required. Management monitors the
utilisation of credit limits regularly.
The Group has a large number of trade receivables, the largest
five receivables at the year end comprise 25 per cent. (2021: 21
per cent.) of total trade receivables.
(C) Liquidity risk
Ultimate responsibility for liquidity risk management rests with
the board of Directors. The Group manages liquidity risk by
maintaining adequate reserves and banking facilities by
continuously monitoring forecast and actual cash flows and managing
the maturity profiles of financial assets and liabilities.
At 31 December 2022, the Group had undrawn committed facilities
of GBP22.4 million (2021: 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.
Between Between Over
Less than 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
2022
Assets
Financial assets
at fair value through
other comprehensive
income - - - - 25.7 25.7
Financial asset
at fair value through
profit or loss 1.3 7.3 - - - 8.6
Financial assets
at amortised
cost - 1.3 - - - 1.3
Trade and other
receivables excluding
prepayments 52.9 3.1 - - - 56.0
Cash and cash equivalents 49.3 - - - - 49.3
----- ------- ------- ----- ------- -----
103.5 11.7 - - 25.7 140.9
----- ------- ------- ----- ------- -----
Liabilities
Borrowings 5.1 1.1 1.1 2.2 - 9.5
Lease liabilities 2.3 2.3 5.4 11.4 - 21.4
Trade and other
payables excluding
taxation 57.4 - - - - 57.4
----- ------- ------- ----- ------- -----
64.8 3.4 6.5 13.6 - 88.3
----- ------- ------- ----- ------- -----
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
----- ------- ------- ----- ------- -----
Included in borrowings due in less than 1 year is GBP3.7 million
(2021: GBP1.9 million) repayable on demand.
44 Subsidiary and associated undertakings
Subsidiary undertakings
The subsidiary undertakings of the Group at 31 December 2022,
are set out below and are wholly owned and incorporated in Great
Britain unless otherwise stated. The holdings are in ordinary
shares or equivalent unless otherwise stated.
Principal
country of Registered
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)
Kakuzi Plc (Incorporated in Kenya - 50.7
per cent. holding) Kenya (xi)
Koomber Tea Company Limited (Incorporated
in India) India (iv)
Jing Tea Limited (95.0 per cent. holding) UK (i)
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)
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
Duncan Products Limited (Incorporated in Bangladesh) Bangladesh (vii)
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)
Black Gold Oil Tools Limited (in liquidation) UK (xiv)
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 (ordinary
and preference shares) 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)
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 (ordinary and
preference shares) 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)
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 (ordinary
and preference shares) 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 (ordinary
and preference shares) UK (i)
Summarised financial information on subsidiaries with material
non-controlling interests
Summarised balance sheet
Eastern Produce Eastern Produce
Kenya Limited Malawi Limited
as at 31 December as at 31 December
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Current
Assets 23.7 24.0 18.2 14.8
Liabilities (19.0) (14.6) (14.1) (11.9)
---------- --------- ---------- ---------
Total current net assets 4.7 9.4 4.1 2.9
---------- --------- ---------- ---------
Non-current
Assets 28.2 27.8 26.8 31.2
Liabilities (5.4) (5.3) (8.8) (9.4)
---------- --------- ---------- ---------
Total non-current net assets 22.8 22.5 18.0 21.8
---------- --------- ---------- ---------
Net assets 27.5 31.9 22.1 24.7
---------- --------- ---------- ---------
Eastern Produce Goodricke Group
South Africa Limited Limited
as at 31 December as at 31 December
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Current
Assets 3.6 4.1 35.2 32.3
Liabilities (4.4) (3.7) (23.9) (20.2)
----------- ---------- ---------- ---------
Total current net (liabilities)/assets (0.8) 0.4 11.3 12.1
----------- ---------- ---------- ---------
Non-current
Assets 10.3 8.8 36.5 35.8
Liabilities (3.3) (2.9) (11.6) (12.5)
----------- ---------- ---------- ---------
Total non-current net assets 7.0 5.9 24.9 23.3
----------- ---------- ---------- ---------
Net assets 6.2 6.3 36.2 35.4
----------- ---------- ---------- ---------
Kakuzi Plc
as at 31 December
2022 2021
GBP'm GBP'm
Current
Assets 21.6 18.7
Liabilities (2.6) (2.5 )
------------- ------------
Total current net assets 19.0 16.2
------------- ------------
Non-current
Assets 27.6 26.3
Liabilities (7.8) (6.8 )
------------- ------------
Total non-current net assets 19.8 19.5
------------- ------------
Net assets 38.8 35.7
------------- ------------
Summarised income statement
Eastern Produce Eastern Produce
Kenya Limited Malawi Limited
for year for year
ended 31 December ended 31 December
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Revenue 40.6 36.5 30.1 25.3
----------- ---------- ----------- ----------
Profit before tax 9.9 7.0 0.7 1.2
Taxation (3.2) (2.1) (0.6) (0.6)
Other comprehensive income/(expense) 1.1 (0.8) (2.6) (1.2)
----------- ---------- ----------- ----------
Total comprehensive income/(expense) 7.8 4.1 (2.5) (0.6)
----------- ---------- ----------- ----------
Total comprehensive income/(expense)
allocated to non-controlling
interests 2.3 1.2 (0.7) (0.2)
Dividends paid to non-controlling
interests 3.7 0.2 - -
Eastern Produce Goodricke Group
South Africa Limited Limited
for year ended for year ended
31 December 31 December
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Revenue 5.5 3.4 90.5 84.6
------------- ------------ ---------- ----------
(Loss)/profit before tax (0.8) (0.4) 0.4 0.6
Taxation 0.2 0.1 (0.3) (0.1)
Other comprehensive income/(expense) 0.4 (0.5) 1.4 (1.4)
------------- ------------ ---------- ----------
Total comprehensive (expense)/income (0.2) (0.8) 1.5 (0.9)
------------- ------------ ---------- ----------
Total comprehensive (expense)/income
allocated to non-controlling
interests - (0.2) 0.4 (0.2)
Dividends paid to non-controlling
interests - - 0.2 0.2
Kakuzi Plc
for year ended
31 December
2022 2021
GBP'm GBP'm
Revenue 30.5 21.8
---------- ---------
Profit before tax 7.3 3.3
Taxation (2.3) (1.1)
Other comprehensive income/(expense) 1.1 (0.9)
---------- ---------
Total comprehensive income 6.1 1.3
---------- ---------
Total comprehensive income
allocated to non-controlling interests 3.0 0.6
Dividends paid to non-controlling interests 1.5 1.2
Summarised cash flows
Eastern Produce Eastern Produce
Kenya Limited Malawi Limited
for year ended for year ended
31 December 31 December
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Cash flows from operating
activities
Cash generated from operations 14.0 4.4 2.6 1.7
Net interest received/(paid) 0.9 0.7 (0.5) (0.5)
Income tax paid (3.0) (2.1) 0.4 (0.7)
---------- ---------- ---------- ----------
Net cash generated from operating
activities 11.9 3.0 2.5 0.5
---------- ---------- ---------- ----------
Net cash used in investing
activities (0.5) (1.0) (0.6) (0.1)
---------- ---------- ---------- ----------
Net cash used in financing
activities (12.3) (0.7) - -
---------- ---------- ---------- ----------
Net (decrease)/increase in
cash and cash
equivalents and bank overdrafts (0.9) 1.3 1.9 0.4
Cash, cash equivalents and
bank overdrafts
at beginning of year 13.6 12.3 (0.6) (1.2)
Exchange gains on cash and
cash equivalents 1.2 - 0.2 0.2
---------- ---------- ---------- ----------
Cash, cash equivalents and
bank overdrafts
at end of year 13.9 13.6 1.5 (0.6)
---------- ---------- ---------- ----------
Eastern Produce Goodricke
South Africa Limited Group Limited
for year ended for year ended
31 December 31 December
2022 2021 2022 2021
GBP'm GBP'm GBP'm GBP'm
Cash flows from operating
activities
Cash generated from operations 0.6 (0.8) 1.1 4.3
Net interest paid (0.3) (0.2) - -
Income tax paid - - (0.1) (0.1)
-------------- ------------- ----------- ----------
Net cash generated/(used in)
from
operating activities 0.3 (1.0) 1.0 4.2
-------------- ------------- ----------- ----------
Net cash used in investing
activities (1.4) (1.1) (1.6) (1.0)
-------------- ------------- ----------- ----------
Net cash generated from/(used
in)
financing activities 1.2 2.0 (1.9) (2.5)
-------------- ------------- ----------- ----------
Net increase/(decrease) in
cash and
cash equivalents and bank
overdrafts 0.1 (0.1) (2.5) 0.7
-------------- ------------- ----------- ----------
Cash, cash equivalents and
bank
overdrafts at beginning of
year 1.1 1.4 1.2 0.5
Exchange gains/(losses) on
cash
and cash equivalents 0.1 (0.2) 0.1 -
-------------- ------------- ----------- ----------
Cash, cash equivalents and
bank
overdrafts at end of year 1.3 1.1 (1.2) 1.2
-------------- ------------- ----------- ----------
Kakuzi Plc for year
ended 31 December
2022 2021
GBP'm GBP'm
Cash flows from operating activities
Cash generated from operations 11.6 8.5
Net interest received 0.5 0.5
Income tax paid (1.4) (0.9)
-------------- -------------
Net cash generated from operating activities 10.7 8.1
-------------- -------------
Net cash generated used in investing activities (10.0) (6.0)
-------------- -------------
Net cash used in financing activities (3.0) (2.3)
-------------- -------------
Net decrease in cash and cash equivalents
and bank overdrafts (2.3) (0.2)
Cash, cash equivalents and bank overdrafts
at beginning of year 10.8 11.2
Exchange gains/(losses) on cash and cash equivalents 1.0 (0.2)
-------------- -------------
Cash, cash equivalents and bank overdrafts
at end of year 9.5 10.8
-------------- -------------
Associated undertakings
The principal associated undertakings of the Group at 31
December 2022 were:
Group
interest
Principal in equity
country
of Registered Accounting capital
operation O ce date 2022 per cent.
Insurance and banking
BF&M Limited (Incorporated
in Bermuda -
common stock) Bermuda (xv) 31 December 36.9
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 O ces:
Wrotham Place (vii) Camellia House (xiii) 1368 W Herndon
(i) Bull Lane 22 Kazi Nazrul Ave
Wrotham Islam #103
Near Sevenoaks Avenue Fresno
Kent Dhaka 1000 California 93711
TN15 7AE Bangladesh USA
England
Amgoorie Tea Garden (viii) Slangrivier Road (xiv) Craigshaw Crescent
(ii) PO: Amguri Slangrivier Plaas West Tullos
Haloating - 785 Wellington Aberdeen
681 7655 AB12 3TB
Dist: Sibsagar South Africa Scotland
Assam
India
Camellia House (ix) 7 Windsor Street (xv) 112 Pitts Bay
(iii) 14 Gurusaday Road Tzaneen Road
Kolkata - 700019 850 Pembroke
West Bengal Limpopo Province Bermuda
India South Africa HM08
Koomber Tea Garden (x) New Rehema House (xvi) Clarendon House
(iv) PO: Kumbhir Rhapta Road 2 Church Street
Cachar - 788 108 Westlands Hamilton
Assam P O Box 45560 Bermuda
India GPO 00100 HM11
Nairobi
Kenya
Sessa Tea Garden (xi) Main O ce (xvii) 3rd Floor
(v) PO: Dibrugarh Punda Milia Road 180 Msasani Bay
- 786001 Makuyu Msasani
Dist: Dibrugarh P O Box 24 Dar Es salaam
Assam 01000 Thika Tanzania
India Kenya
Fazenda Maruque (xii) PO Box 53
(vi) s/n Mulanje
sala 03 Malawi
Bairro Maruque
Itaberá
São Paulo
Brazil
45 Control of Camellia Plc
Camellia Holding AG continues to hold 1,427,000 ordinary shares
of Camellia Plc (representing 51.67 per cent. of the total voting
rights). Camellia Holding AG is owned by The Camellia Private
Trust
Company Limited, a private trust company incorporated under the
laws of Bermuda as trustee of The Camellia Foundation ("the
Foundation"). The Foundation is a Bermudian trust, the income of
which is utilised for charitable, educational and humanitarian
causes at the discretion of the trustees.
The activities of Camellia Plc and its group (the "Camellia
Group") are conducted independently of the Foundation. Simon
Turner, who is a Director of Camellia Plc, is also a director of
The Camellia Private Trust Company and the president of the board
of the trustee of the Foundation. While The Camellia Private Trust
Company Limited as a trustee of the Foundation maintains its rights
as a shareholder, it has not participated in, and has confirmed to
the board of Camellia Plc that it has no intention of participating
in, the day to day running of the business of the Camellia Group.
The Camellia Private Trust Company Limited has also confirmed its
agreement that where any director of Camellia Plc is for the time
being connected with the Foundation, he should not exercise any
voting rights as a director of Camellia Plc in relation to any
matter concerning the Camellia Group's interest in any assets in
which the Foundation also has a material interest otherwise than
through Camellia Plc.
46 Related party transactions
Group
During the year the Group received rental income from the
Foundation of GBPnil (2021: GBP18,620).
During the year the Group paid contributions to the overseas
pension and post-employment schemes of GBP1,930,199 (2021:
GBP3,775,062).
Company
The Company receives financial and secretarial services from
Linton Park Plc, a directly owned subsidiary undertaking. The
amount payable for these services for 2022 was GBP422,081
(2021: GBP433,300). At 31 December 2022 GBP3,621,361 (2021:
GBP3,029,941) is owed to Linton Park Plc and is unsecured, interest
free and has no fixed terms of repayment.
Amounts due to Lawrie Group Plc, a directly owned subsidiary
undertaking of GBP16,519,492 (2021: GBP13,409,492) include an
unsecured loan note of GBP4,191,777 (2021: GBP4,191,777). The
company received interest of GBP167,671 (2021: 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 2022 amounted to GBP2,052,715 (2021: GBP1,879,504) and
GBP193,185 (2021: GBP193,187) respectively and are unsecured,
interest free and have no fixed terms of repayment.
47 Subsequent events
There were no adjusting post balance sheet events.
Report of the independent auditors
INDEPENT AUDITOR'S REPORT TO THE MEMBERS OF CAMELLIA PLC
Report on the audit of the financial statements
1. Opinion
In our opinion:
n the financial statements of Camellia Plc (the 'parent company')
and its subsidiaries (the 'Group') give a true and fair
view of the state of the Group's and of the parent company's
a airs as at 31 December 2022 and of the Group's loss for
the year then ended;
n 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);
n 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
n the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
n the consolidated income statement;
n the consolidated statement of comprehensive income;
n the consolidated and parent company balance sheets;
n the consolidated and parent company statements of changes
in equity;
n the consolidated and parent company cash flow statement;
n the basis of preparation and statement of accounting policies;
n the notes 1 to 47 related to the consolidated financial
statements; and
n the notes 1 to 47 related to the parent company financial
statements.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law,
United Kingdom adopted international accounting standards and IFRSs
as issued by the IASB. The financial reporting framework that has
been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom adopted
international accounting standards and as applied in accordance
with the provisions of the Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
auditor's responsibilities for the audit of the financial
statements section of our report.
We are independent of the Group and the parent company in
accordance with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including the
Financial Reporting Council's (the 'FRC's') Ethical Standard as
applied to listed entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is su cient
and appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters The key audit matters that we identified in
the current year were:
n Revenue recognition;
n Impairment of goodwill and intangible assets.
Within this report, key audit matters are identified
as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality The materiality that we used for the Group
financial statements was GBP1.28m 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 46 components of the Group.
Of these, 35 were subjected to a full-scope
audit whilst the 11 remaining were subject
to specific audit procedures.
Our scoping provides coverage of 100% of the
Group's revenue, 93% of the Group's result
before tax and 72% of the Group's net assets.
Significant Changes in component scoping:
changes in our We performed full scope audit on Brazil component
approach in current year (2021: specified audit procedures).
The component contributed over 10% of results
before tax.
Changes in key audit matters:
n In prior year, acquisition accounting was
considered a key audit matter but we no longer
report this as a key audit matter as there
have been no new acquisitions in the year.
n In the prior year, Provisions for uncertain
tax positions and legal matters was considered
to be a key audit matter due to impact of litigation
concerning the Group's East African operations
first identified in 2020. There are no significant
provisions or contingent liabilities remaining
from this issue. Other than the ongoing legacy
matters, we have not identified any further
significant potential litigation and therefore,
we no longer report this as a key audit matter
in current year.
n In the prior year the Fair value of biological
assets was considered to be a key audit matter
due to complexities and judgements involved.
We no longer report this as a key audit matter
based upon prior year audit experience.
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors' assessment of the Group's and
parent company's ability to continue to adopt the going concern
basis of accounting included:
n Assessing the latest cash flow forecasts of the Group to
determine whether these are consistent with the forecasts
used during the impairment review; and assess the Directors'
going concern assessment.
n 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.
n Assessing the facilities and its availability and compliance
with covenants.
n Evaluating each of the sensitivities adopted by management
and assessing downside scenarios of cash headroom over
the forecast period by performing our own sensitivity analyses
to assess the solvency of the Group over the going concern
review period.
n Assessing the reasonability of the assumptions that management
have used in their cash forecasts; and
n 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 e ect on: the overall audit strategy, the allocation
of resources in the audit; and directing the e orts 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 The Group's agricultural operations involve a wide
matter 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-o of revenue
recognition around the balance sheet date.
The Group's agricultural revenue is included within
Sale of Goods of GBP283.0m (2021: GBP238.9m) disclosed
in note 2 to the financial statements. Further
information regarding the agricultural revenue
recognition policy is in the principal accounting
policies disclosed in the financial statements.
How the scope We have performed the following procedures in
of our audit order to address the key audit matter:
responded * Obtained an understanding of the processes and
to the key controls used to record revenue transactions.
audit matter
* Assessed commercial arrangements to determine the
correct point of revenue recognition of di erent type
of shipments.
* Assessed whether revenue was recorded in the correct
period and whether cut-o of revenue is appropriate by
agreeing a sample of revenue transactions during the
period either side of the balance sheet date to the
relevant terms of business, dispatch or delivery
documentation as appropriate.
* Examined material journal entries that were posted to
revenue accounts and obtained supporting evidence to
test the appropriateness of revenue recognition.
Key observations From the work performed, we have concluded that
revenue is appropriately recognised in the correct
accounting period.
5.2 Impairment of goodwill and intangible assets
Key audit The Group holds GBP6.3m (2021: GBP10.1m) of intangible
matter description assets including GBP1.0m (2021: GBP4.6m) allocated
to goodwill and GBP3.6m (2021: GBP3.6m) allocated
to Jing Tea brand. Please also refer to the Critical
accounting estimates and judgments within accounting
policies and Note 16 to the accounts.
The risk in relation to intangibles relates to
(i) Brand value relating to Jing Tea Limited,
(ii) Goodwill on the past acquisition of tea estates
in India by Goodricke Group Limited and Amgoorie
India Limited and (iii) Goodwill related to the
prior year acquisition of Bardsley Group.
There is risk that these cash generating units
(CGUs) or groups of CGUs may not achieve the anticipated
business performance to support their carrying
value, or that the estimated fair value of the
CGUs may not support their carrying value. This
could lead to an impairment charge that has not
been recognised by management.
The Group's impairment assessment of CGUs to which
goodwill is allocated in accordance with IAS 36
Impairment of Assets are determined based upon
value in use calculations and where relevant fair
value less costs to sell calculations and are
performed by management with the help pf external
valuers where applicable. The estimates and assumptions
used within the cashflow projections require estimates,
including significant assumptions regarding future
royalty rates, discount rates and cashflows.
Intangible assets are disclosed in note 16 to
the financial statements, the valuation is discussed
as sources of estimation uncertainty, and the
valuation policy is disclosed in the principal
accounting policies.
How the scope We have performed the following procedures in
of our audit response to the key audit matter:
responded * Obtained an understanding of the processes and
to the key relevant controls related to the impairment review of
audit matter intangible assets and goodwill.
* Checked the arithmetical accuracy of the value in use
and Fair value less cost to sell calculations. We
evaluated the current year changes to the key
assumptions and assessed retrospectively whether
prior year assumptions were appropriate.
* Involved our valuation specialists in evaluating
management's royalty and discount rates. We
benchmarked the royalty rate and discount rate to
comparable companies and considered the underlying
assumptions based on our knowledge of the group and
its industry.
* Assessed the accuracy of management's revenue and
cash flow projections by comparing historical
forecasts with actual cash flows. We assesed whether
forecast cash flows were consistent with Board
approved forecasts. We also performed sensitivity
analysis as part of our overall evaluation of
forecast cash flows.
* Assessed the valuation reports issued by third party
external valuers by comparing them with similar
market transactions. We also held discussions with
the valuers to challenge the methods and assumptions
used for determining the fair value.
* Evaluated the competence, capabilities and
objectivity of third party external valuers.
* Assessed the financial statements disclosures in
relation to the impairment assessments performed.
* Also assessed the adequacy of the Group's disclosures
including the need to disclose further sensitivities
for CGUs where a reasonably possible change in a key
assumption would cause an impairment.
* We have considered the key potential impacts of
climate change
Key observations From the work performed, we have concluded that
impairment of goodwill and intangible assets is
appropriately recognised in accordance with IAS
36. In addition the relevant disclosures are appropriate
based on the results of our work.
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:
Parent company financial
Group financial statements statements
Materiality GBP1.28m (2021: GBP0.9m) GBP0.4m (2021: GBP0.3m)
Basis for 0.4% of Revenue (2021: 2% of net assets, capped
determining 0.3% of revenue). at 35% of group materiality
materiality (2021: 2% of net assets,
capped at 35% of group
materiality)
Rationale We note that the overall We have used net assets
for the benchmark size of the business, demonstrated measure given that the
applied by revenue, has remained parent company is a holding
broadly consistent with company, generating no
the prior year therefore revenue
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.
Parent company financial
Group financial statements statements
Performance 70% (2021: 70%) of group 70% (2021: 70%) of parent
materiality materiality company materiality
Basis and In determining performance materiality, we have
rationale for considered the following factors:
determining * There have been no changes to the business in their
performance operation or financial reporting process.
materiality
* 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 di erences in excess of GBP64,000 (2021:
GBP43,000), as well as di erences below that threshold that, in our
view, warranted reporting on qualitative grounds. We also report to
the Audit Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1 Identification and scoping of components
Our Group audit was scoped by obtaining an understanding of the
Group and its environment, including group-wide controls, and
assessing the risks of material misstatement at the Group level.
The Group undertakes agricultural operations in countries across
Africa, South America and Asia, with its principal crops grown in
Bangladesh, India, Kenya and Malawi. The Group's engineering
operations as well as apple and pears orchards, acquired in prior
year, are located in the UK. Of the Group's 55 principal
components, 35 were subject to a full audit and 11 were subject to
specified audit procedures where the extent of our testing was
based on our assessment of the risks of material misstatement and
of the materiality of the Group's operations at those locations. We
performed a full scope audit on the Brazil component in current
year (2021: specified audit procedures). The component contributed
over 10% of results before tax.
These 46 components represent the principal business units and
account for 100% (2021: 99%) of the Group's revenue and 98% (2021:
86%) of the Group's results before tax and 72% (2021: 87%) of the
Group's net assets. The remaining components were subject to
analytical review procedures by the Group audit team or were scoped
out on the basis of being dormant or immaterial. Our audit work on
these components in addition to the parent entity was executed to
lower levels of materiality of GBP0.4m to (35%) of group
materiality (2021: GBP0.3m (35%)).
The parent company is located in the UK and audited directly by
the group audit team. At the parent entity level we tested the
consolidation process and carried out analytical procedures to
confirm our conclusion that there were no significant risks of
material misstatement of the aggregated financial information of
the remaining components not subject to audit or audit of specified
account balances.
7.2 Our consideration of the control environment
Our risk assessment procedures include obtaining an
understanding of relevant controls to the audit.
Consistent with previous years, we have obtained an
understanding of relevant controls on the following areas:
n Financial reporting process; and
n Impairment of intangibles.
This covered some of the key accounting and reporting tools that
are used by management and the interface between various
systems.
7.3 Working with other auditors
The Group audit team are responsible for the scope and direction
of the audit process and provide direct oversight, review, and
coordination of our component audit teams. We interacted regularly
with the component team during each stage of the audit and reviewed
key working papers. In September 2022, we held a group-wide
planning meeting, in which we set out the materiality and scoping
for component teams, as well as considering significant risks
across the Group. We also held planning meetings with each of our
specialists, involving our component teams where relevant.
During our interim and year-end audit, we held regular catch-up
meetings with components to monitor progress and highlight any
issues arising. The Senior Statutory Auditor participated in all of
the final close meetings of the group's significant components. The
Senior Statutory Auditor or another senior members of the group
audit team carried out a review of the component auditor files.
Our oversight of component auditors focused on the planning of
their audit work and key judgements made. In particular, our
supervision and direction focused on the work performed in relation
to key audit matters by component teams including revenue
recognition and impairment of intangible assets and goodwill.
As part of our monitoring of component auditors, we have also
attended key audit close meetings.
7.4. Our consideration of climate-related risks
Management has considered transition and physical risks when
factoring in climate change as part of their risk assessment
process when considering the principal risks and uncertainties
facing the Group. This is set out in the strategic report on pages
21 to 31 and the principal risks set out on pages 22 to 27. The
areas of the financial statements that are notably impacted by
climate-related matters are associated with future forecasts in the
medium to long term. From the financial statements' perspective,
these risks have been focused on the valuation of goodwill and
other intangible assets and Biological assets. This is consistent
with our evaluation of the climate-related risks facing the Group
and is linked to the key audit matter as highlighted in section 5.2
above. In addition, we have:
n assessed the key financial statement line items and estimates
which are more likely to be materially impacted by climate
change risks given the more notable impacts of climate change
on the business are expected to arise in the medium to long
term.
n challenged how the Directors considered climate change in
their assessment on the Group's operations based on our
understanding of the business environment and by benchmarking
relevant assumptions with market data.
n involved our Environmental Social and Governance (ESG) specialist
in challenging the group's climate risk assessments.
n 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, including those that are specific to
the Group's sector;
-- any matters we identified having obtained and reviewed
the group's documentation of their policies and procedures
relating to:
-- identifying, evaluating and complying with laws and regulations
and whether they were aware of any instances of non-compliance;
-- detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged
fraud;
-- the internal controls established to mitigate risks of
fraud or non-compliance with laws and regulations;
-- the matters discussed among the audit engagement team including
significant component audit teams and relevant internal
specialists, including tax, valuations, pensions, ESG and
IT specialists regarding how and where fraud might occur
in the financial statements and any potential indicators
of fraud.
As a result of these procedures, we considered the opportunities
and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the following area -
revenue recognition. In common with all audits under ISAs (UK) we
are also required to perform specific procedures to respond to the
risk of management override.
We also obtained an understanding of the legal and regulatory
framework that the Group operates in, focusing on provisions of
those laws and regulations that had a direct e ect 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 e ect on the financial
statements but compliance with which may be fundamental to the
group's ability to operate or to avoid a material penalty. These
included the group's health, safety and environmental regulations
(carbon reduction, etc), Bribery Act and employee laws.
11.2 Audit response to risks identified
As a result of performing the above, we identified revenue
recognition as a key audit 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 that key audit matters.
In addition to the above, our procedures to respond to risks
identified included the following:
n reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with provisions
of relevant laws and regulations described as having a
direct e ect on the financial statements;
n enquiring of management, the Audit Committee and in-house
legal counsel concerning actual and potential litigation
and claims;
n performing analytical procedures to identify any unusual
or unexpected relationships that may indicate risks of
material misstatement due to fraud;
n reading minutes of meetings of those charged with governance,
reviewing internal audit reports; and
n in addressing the risk of fraud through management override
of controls, testing the appropriateness of journal entries
and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of a
potential bias; and evaluating the business rationale of
any significant transactions that are unusual or outside
the normal course of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members including
internal specialists and significant component audit teams, and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
12. Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
n 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
n the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
the parent company and their environment obtained in the course of
the audit, we have not identified any material misstatements in the
strategic report or the directors' report.
13. Matters on which we are required to report by exception
13.1 Adequacy of explanations received and accounting
records
Under the Companies Act 2006 we are required to report to you
if, in our opinion:
n we have not received all the information and explanations
we require for our audit; or
n 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
n the parent company financial statements are not in agreement
with the accounting records and returns.
We have nothing to report in respect of these matters.
13.2 Directors' remuneration
Under the Companies Act 2006 we are also required to report if
in our opinion certain disclosures of directors' remuneration have
not been made.
We have nothing to report in respect of this matter.
14. Use of our report
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company's members those matters we are required to state to them in
an auditor's report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company's members as a body,
for our audit work, for this report, or for the opinions we have
formed.
Makhan Chahal ACA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
3 May 2023
FIVE YEAR RECORD
2022 2021 2020 2019 2018
GBP'm GBP'm GBP'm GBP'm GBP'm
*Restated *Restated *Restated *Restated
Revenue-continuing
operations 297.2 255.3 270.1 266.0 281.3
(Loss)/profit before
tax (3.7) 7.1 7.2 20.5 50.3
Taxation (12.2) (2.6) (8.6) (7.2) (20.0)
(Loss)/profit from
continuing
operations (15.9) 4.5 (1.4) 13.3 30.3
Profit from discontinued
operations 7.6 - 0.6 1.8 2.0
Profit/(loss) attributable
to owners
of the parent (13.0) 2.3 (5.0) 8.3 25.2
Equity dividends paid 4.0 5.2 2.8 4.0 3.8
Equity
Called up share capital 0.3 0.3 0.3 0.3 0.3
Reserves 368.6 388.3 376.3 395.4 395.2
Total shareholders'
funds 368.9 388.6 376.6 395.7 395.5
Earnings/(loss) per
share
) )
- continuing operations (745.8 p 83.3 p (202.8 p 235.3 p 839.9 p
Earnings/(loss) per
share
- continuing and discontinued
) )
operations (470.7 p 83.3 p (181.0 p 300.5 p 912.4 p
Dividend paid per share 146 p 188 p 102 p 144 p 138 p
* The comparative figures have been restated following the
disposal of Associated Cold Stores & Transport Limited
APPICES
Appendix 1: Global (excluding UK) GHG emissions and energy use
data for the year to 31 December
2022 2021 2020 2019
Reporting year Global Global Global Global
(Excluding (Excluding (Excluding (Excluding
Group sectors reported UK) UK) UK) UK)
Emissions from combustion
of LPG
and Natural gas (Scope
1) (tCO(2) e) 22,867 24,008 21,555 25,350
Emissions from combustion
of diesel
and petrol for transport
and onsite
combustion (Scope 1) (tCO(2)
e) 15,030 14,866 15,324 17,501
Emissions from the combustion
of coal (Scope 1) (tCO(2)
e) 72,343 71,000 80,217 88,377
Emissions from combustion
of firewood
and other fuels (Scope
1) (tCO(2) e) 3,386 3,816 3,819 3,558
Emissions from fertilisers,
waste, livestock, land use
change and
refrigerants (Scope 1)
(tCO(2) e) 40,833 43,163 43,312 46,290
Emissions from purchase
of electricity
for own use (Scope 2,
location-based) (tCO(2)
e) 40,434 41,958 42,717 47,625
Emissions from purchase
of electricity
for own use (Scope 2,
market-based*) (tCO(2)
e) 40,434 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) 40,434 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)** 180 132 n/a n/a
Total gross Scope 1 and
Scope 2
emissions (location-based)
(tCO(2) e) 194,942 198,811 206,944 228,701
Total gross Scope 1 and
Scope 2
emissions (market-based)
(tCO(2) e) 194,942 198,795 206,944 228,701
Intensity ratio: Kg CO(2)
e/Kg of made tea 1.36 1.29 1.40 1.51
Energy equivalent from combustion
of
LPG and Natural gas (Scope
1) (GWh) 124.6 130.5 117.0 137.2
Energy equivalent from combustion
of
diesel and petrol for transport
and
onsite combustion (Scope
1) (GWh) 61.5 61.5 62.8 71.0
Energy equivalent from the
combustion
of coal (Scope 1) (GWh) 222.9 219.4 250.4 266.3
Energy equivalent from combustion
of
firewood and other fuels
(Scope 1) (GWh) 234.9 250.9 247.2 227.7
Electricity purchased for
own use
(Scope 2) (GWh) 92.0 91.4 90.5 95.5
Renewable electricity generated
for own
use (Scope 2) (Gwh) 1.0 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 0.5 n/a n/a
* 2020 is the first reporting period for which we reported our
scope 2 market-based emissions
** 2021 was the first reporting period for which we reported our
scope 3 business travel in rental cars or employee-owned
vehicles
Appendix 2: UK GHG emissions and energy use data for the year to
31 December
Reporting year 2022 2021 2020 2019
Group sectors reported UK UK UK UK
Emissions from combustion
of LPG
and Natural gas (Scope 1)
(tCO(2) e) 799 1,202 1,591 1,939
Emissions from combustion
of diesel and
petrol for transport and
onsite combustion
(Scope 1) (tCO(2) e) 4,344 4,087 3,744 5,069
Emissions from combustion
of other fuels
(Scope 1) (tCO(2) e) 549 362 88 122
Emissions from fertilisers,
waste, livestock,
land use change, and refrigerants
(Scope 1) (tCO(2) e) 245 67 13 17
Emissions from purchase of
electricity for
own use (Scope 2, location-based)
(tCO(2) e) 4,125 4,408 5,130 5,316
Emissions from purchase of
electricity for own use (Scope
2, market-based*) (tCO(2)
e) 991 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) 4,125 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) 68 15 n/a n/a
Total gross Scope 1 and Scope
2 emissions
(location-based) (tCO(2)
e) 10,062 10,126 10,566 12,463
Total gross Scope 1 and Scope
2 emissions
(market-based) (tCO(2) e) 6,928 6,889 5,468 n/a
Energy equivalent from combustion
of LPG
and Natural gas (Scope 1)
(GWh) 4.3 6.5 8.6 10.5
Energy equivalent from combustion
of
diesel and petrol for transport
and onsite
combustion (Scope 1) (GWh) 17.0 17.3 15.6 20.8
Energy equivalent from combustion
of other
fuels (Scope 1) (GWh) 2.1 1.4 0.3 0.5
Electricity purchased for
own use
(Scope 2) (GWh) 21.3 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) 0.3 0.0 n/a n/a
* 2020 is the first reporting period for which we reported our
Scope 2 market-based emissions. The increase in market-based
emissions in 2021 was primarily due to the inclusion of Bardsley
England.
** 2021 was the first reporting period for which we reported our
Scope 3 business travel in rental cars or employee-owned
vehicles.
Appendix 3: SECR reporting methodology
The scope of the reporting for SECR purposes was determined by
including the businesses in which the Group owns majority holdings
and/or fully operates. We are working to capture anything that
falls outside this boundary within the Group's reporting of its
Scope 3 emissions, which is under development.
It includes GHG (Greenhouse Gas) emissions and energy use by
businesses that were divested during the reporting period up to the
date of transfer of risk and reward pertaining to those businesses.
Similarly, it includes business that were acquired during the
reporting period from the date of transfer of risk and reward
pertaining to those businesses. The reporting period aligns with
the Group's financial reporting period. The reported figures are an
aggregation of emissions and energy consumption by the Group's
reporting units. A reporting unit is defined as a geographically
located operating entity or group of entities. For example, the
India group of companies is defined as one reporting unit. Within a
reporting unit distinction is made between 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 and Industrial Strategy and the UK Department
for Environment, Food and Rural A airs (Defra) and the
Intergovernmental Panel on Climate Change (IPCC), which are in line
with the GHG Protocol guidance. The non-UK electricity emission
factors are sourced from the International Energy Agency for Scope
2 location-based reporting. For Scope 2 market-based reporting they
are sourced directly from the electricity suppliers, where
available. For global (excluding UK) market-based emissions in
regions where renewable energy certificate (REC) systems are not
developed, market-based emission factors are calculated using
location-based grid average emission factors. For UK market-based
emissions, where supplier specific emission rates could not be
determined due to unavailability of data, UK residual mix emission
factors were used.
A standardised reporting tool is used to capture the Group's
environmental and energy data. Year on year trends in the data are
analysed and understood. Where estimates are used these are
disclosed and assessed in terms of magnitude as part of the overall
data quality.
Every 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 CO(2) e
emissions from rental cars or employee-owned vehicles where the
company is responsible for purchasing the fuel or where the company
reimburses the employee for the fuel has been estimated based on an
estimate of the kilometres travelled by employees under this
category. We did not estimate this category for prior years since
its share of the Group's total carbon footprint is relatively
immaterial.
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