Camellia Regulatory News (CAM)

CAMELLIA PLC

Final results for the year ended 31 December 2021

2021 Highlights

Strategic developments

Outlook

Malcolm Perkins, Chairman, stated:

"Camellia withstood a range of challenges in 2021, several of which were unprecedented. The combination of these and the long-term decision in 2020 to exit Horizon Farms in climate challenged California, and the purchase of Bardsley England in the UK in 2021 meant that Group profit was significantly impacted. That said, the resilience and commitment of our people has enabled us to continue to focus on our strategy of expansion in areas of expertise while divesting non-core businesses.

2022 has started well with good prices being achieved in the Kenya tea market and a strong opening for India and Bangladesh, albeit early in the season. The remaining crops are developing in line with our expectations for the stage of the growing cycle with volumes ahead of those of 2021. The impact of substantial rises in energy prices and in fertiliser costs is being felt across all our agriculture operations and we expect rising inflation to also lead to further increases in wages. Overall however, we expect higher profits in the year ahead."

* Profit before tax excluding separately disclosed significant items, details of which can be found in note 1 and note 4 to the Accounts later in this announcement

This announcement contains inside information for the purpose of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

ENQUIRIES

CAMELLIA AT A GLANCE

We are an international Group - a global family of companies focussed on agriculture across the world. Headquartered in the UK we are passionate about our produce, our communities and sustainable agriculture worldwide.

We grow healthy life-enhancing products for a world hungry for ethically produced natural food.

Our purpose

We are committed to doing the right thing: ethically and commercially, globally and locally.

We invest for the long-term:

Sustainability

Our businesses can and should grow with respect and care for the environment and the communities in which we operate rather than at a cost to them. We invest in innovative technology and cutting-edge agricultural practices to ensure that these environments and communities are protected and enhanced.

Innovation

Research into, and development of, agricultural techniques and technology allows us to continually improve efficiency and sustainability within our operations. Innovation is not only a driving force for improved profitability but also a powerful tool to reduce our environmental impact and benefit our communities.

Long-termism

We see ourselves as custodians, holding our business in trust for future generations. We have a responsibility to ensure the growth and continuity of all our businesses.

Economic contribution

Each of our operations plays a significant role in its local economy, infrastructure and community. Our contribution includes employee wages and benefits, smallholder crop procurement, training in agronomic practices, contracting local service providers, capital investment, taxes, community projects and exports.

Our business is made up as follows:

Agriculture

2021: Revenue - £238.8 million, adjusted trading profit* £13.1 million, trading profit £13.2 million

Other investments

Food Service and Engineering

2021: Revenue - £37.3 million, adjusted trading loss* £2.3 million, trading loss £2.3 million

* Figures quoted above are extracted from note 1 to the Accounts

** Collections are stated at cost

DIRECTORS AND ADVISERS

CHAIRMAN'S STATEMENT

2021 has been another challenging year for all our staff and the communities in which we operate as they have continued to work through the pandemic and the on-going impact it has had on operations globally. We have seen inspiring collaboration with local governments and communities as they have pulled together to deal with the consequences of the pandemic.

The results for 2021 reflect a profit before tax of £7.1 million after a number of one off items with an aggregate net costs of £1.7 million (2020: profit before tax of £7.8 million after one off net costs of £8.2 million). Profits were also impacted by the important long-term strategic changes made in the last two financial years to the Agriculture portfolio.

Strategy

Despite the unprecedented challenges, the resilience and commitment of our people has enabled us to continue to focus on our strategy of expansion in areas of expertise, while divesting non-core businesses. We noted in our 2021 Interim Report that the Board was undertaking a series of measures aimed at re-balancing the Group's portfolio of investments in order to take better advantage of its strengths, and thereby improve profitability and share price performance. Significant steps have been taken to diversify our interests in agriculture where we have scale and expertise, and sell those businesses where we have fewer long-term strategic advantages.

Further details are provided in the Operational report.

Dividend

Reflecting confidence in the Group's long-term future, the Board is recommending a final dividend in respect of the year ended 31 December 2021 of 102p per share increasing the total dividend for the year to 146p per share.

Outlook

With significant uptake of vaccines, there are signs of the world returning to normality, but we do not believe that normal trading conditions will emerge until 2023 at the earliest, and may be further delayed by the disastrous war in Ukraine.

The substantial rise in energy prices will continue to affect our global supply chain, with an increase in the cost of shipping affecting us and our customers alike. Linked to the increasing price of natural gas, fertiliser prices have increased substantially with the impact being felt in the cost of production across all our agricultural operations. Furthermore, rising inflation will to lead to further increases in wages.

On a more positive note, the year has started well for our agricultural operations with good prices being achieved in the Kenya tea market and a strong opening for India and Bangladesh, albeit it is very early in the season. The remaining crops are developing in line with what we would expect at this stage in the growing cycle.

Directors

We were deeply saddened by the passing of Chris Relleen, Senior independent non-executive Director, in August 2021. We shall all remember Chris' contribution to the Board and miss his wise counsel, humility and humour.

I am delighted to welcome our new non-executive Directors, Rachel English and Stephen Buckland. Rachel English, a chartered accountant, has extensive international and general management experience, having founded and served on the board of several significant businesses. She has a particular focus on ESG matters. Stephen Buckland is a trustee of The Sir Percival Griffiths' Tea Planters Trust and also The Camellia Foundation, a UK charity whose primary donor of the same name is the ultimate majority shareholder of Camellia Plc. Stephen previously held positions within the Camellia Group's agricultural and banking businesses.

As announced previously, Tom Franks, having substantially achieved the objective of focusing the Group's investments into the core activities of agriculture and food and beverage distribution, has indicated his

wish not to stand for re-election at the forthcoming Annual General Meeting in June. I would like to thank Tom for his contribution to the business through a challenging few years and we wish him well for the future. The Board is initiating a search process to identify a new CEO.

In addition, and as previously announced, two of our independent non-executive Directors, William Gibson and Gautam Dalal, have also indicated that they will not be standing for re-election at the forthcoming Annual General Meeting. I would like to thank both of them for their contributions to the business. Further appointments of new non-executive Directors to the Board will be announced in due course.

Staff

I am grateful to our staff around the world for their continued hard work and dedication in challenging circumstances, and for the progress we have made together.

Malcolm Perkins

Chairman

30 May 2022

OPERATIONAL REPORT

Overview

2021 was a challenging year, with the COVID pandemic continuing to impact trading. Poor weather conditions in India and lower production in Kenya resulted in lower bought leaf volumes which contributed to Group tea production being slightly lower than in 2020. Avocado revenues significantly reduced due to lower volumes and prices. These falls were in part offset by revenues generated by Bardsley England, which was acquired during the year but which saw volumes impacted by the late frost earlier in the season. Revenue for 2020 included the results for Horizon Farm, which was sold during that year. Profits were impacted by these important strategic changes to the Agriculture portfolio.

Strategic matters

As previously announced, the Group continues to focus on its strategy to expand the Agriculture division continuing the further diversification of crop and location, and on disposing of non-core assets.

Acquisitions and divestments

At the end of July 2021 the Group acquired an 80% controlling stake in Bardsley England with the remaining 20% stake purchased in November. The Group's expertise in managing large scale bearer crops and its existing relationships with Bardsley England's customer base and other major UK retailers will provide synergies. The acquisition provides a larger Group footprint in the UK, which will in time reduce our effective corporation tax rate. The market for UK apples has good potential to grow significantly due to increasing demand for local produce and a resulting reduction in apple imports.

In line with the Group's strategy to focus on agriculture, the Group sold its interests in Abbey Metal Finishing Company Limited in August 2021 and its subsidiary Atfin GmbH in Germany in July 2021. In late December 2021, the BMT division of AJT Engineering was sold to its management. Part of the Camellia Collection was sold at auction in the early part of 2022 with further items due to be sold later in the year.

Ukraine

We have all been deeply disturbed by the reports coming out of Ukraine, and I am pleased to say that our Bardsley England operation in Kent has successfully accommodated a number of refugees and provided employment.

The war is impacting the Group in a number of ways of which the following are the most significant at this stage:

COVID

Whilst our businesses were able to keep trading throughout the pandemic, they were all affected to some extent, whether through lockdowns and absences interrupting operations, or market disruption. The Group's operations continued to protect employees and communities, whilst taking account of a wide variation in national and cultural responses to the pandemic. All our operations have continued to work closely with local governments, communities and the Group's clients in their response to the COVID pandemic.

Human Rights

As a consequence of the allegations faced by the Group in 2020/21 which have now been finalised, we have further enhanced our Human Rights commitment including greater governance, reporting and training and we have established significant measures around employee and community welfare. Current information on these measures can be found on the Camellia Plc website.

Brexit

Extensive preparations were undertaken ahead of Brexit to mitigate the impact on our UK businesses in 2021 and although the supply to the EU of our Jing branded tea was affected, we did not experience any material effect on our trading operations as a whole.

Performance

Agriculture

In total, Agriculture made a trading profit of £13.2 million (2020: £nil) on revenue of £238.8 million (2020: £249.6 million), as set out in note 1 to the Accounts. The release of provisions for wage agreements offset by the restructuring costs for Bardsley England amounted to a net gain of £0.1 million (2020: £nil). Our 2020 results were also impacted by a number of one off items, the largest of which were costs of £16.1 million in respect of legal and other costs associated with the allegations arising from the actions of certain of our African operations.

Agriculture's adjusted trading profit* was £13.1 million (2020: £16.1 million).

Tea

* See note 1 to the Accounts

Estate production & manufacturing

Group tea production in 2021 was 99.1mkg, marginally down on 2020 levels (2020: 99.5mkg) due to lower bought leaf volumes in India. However, we achieved record production in Bangladesh where the impact of our investment in irrigation and replanting provided positive returns. Kenya and Malawi experienced high crops, both nationally and at the Group's operations.

Pricing and operations

Tea pricing for most operations was above that of last year, with our estates being rewarded for concentrating their efforts on the production of high quality teas. Total sales volumes were lower.

Shipping logistics have been a challenge throughout the year with many delivery delays experienced by customers. With volatile trading conditions persisting into 2022, shipping logistics will take some considerable time to settle, particularly with the recent flooding impact at Durban Port in South Africa in April 2022.

India

Our estate crop for 2021 was on par with last year. The impact of continued poor and varied weather meant that our crop did not recover to 2019 levels.

Our net selling prices firmed significantly for both Dooars and Assam CTC teas from demand in the internal packet tea market, up over 10% against the prior year. Darjeeling prices were up on prior year by 11%, due to good quality and improved first flush volumes. 2022 has seen the last of the limited tea stocks left over from 2021 sold and the first auction of the new season opened in March 2022 with strong pricing. The market has remained firm for the early part of the new season and going forward pricing will be determined by regional production volumes and demand.

The Assam Orthodox (rolled leaf tea) market, however, was down 3% on prior year as it continued to be impacted by ongoing political and economic volatility in Iran which subdued demand and kept prices relatively flat.

North India market pricing overall has remained strong due to limited supply and is supported by 100% import tariffs. North India export volumes were down c.9%, with prices in the export market remaining under pressure with reduced sales of Orthodox tea.

State elections were held in Assam and West Bengal in March 2021, with no change to the incumbent Governments in each State. Wage negotiations were concluded in both States resulting in 22% and 15% increases in Assam and West Bengal respectively.

Investment in replanting continued with 167Ha of planting completed (2020: 164Ha) and a further 120Ha uprooted in preparation for future planting.

Bangladesh

Despite a slow, dry start to the season, Bangladesh reported a record crop up 15% on the prior year. The impact of several years of investment in replanting and irrigation contributed to our improved yields.

Our average net selling price remained strong through the season, up 20% on prior year, with limited COVID restrictions allowing local demand to flourish whilst being supported by very low volumes of imports.

National production achieved record levels at 12% up on prior year, principally as a result of a 40% increase in bought leaf volumes. The continued rapid escalation of the bought leaf sector volumes, if left unchecked, presents challenges to the market with a risk that potential oversupply results in downward pressure on pricing.

2022 has seen prices remain under pressure for prior season teas due to the high volumes of inventory carried forward. The market for new season teas has started firm and is expected to remain relatively stable as stocks are now depleted and the new season production has yet to gain momentum. Pricing thereafter will be driven by the level of production over the summer months.

Wage negotiations for 2021/2022 are ongoing between the Bangladesh Tea Association and the Trade Unions and are due to be settled imminently. Provisions have been made for expected increases relating to 2021.

Having reduced replanting in 2020 to concentrate on infilling young tea areas, the total area planted in 2021 was increased to 143Ha (2020: 105Ha), of which 131Ha was replanting and 12Ha was newly planted areas.

Kenya

Our Kenyan estates produced their second highest ever crop in 2021, albeit down 8% on the previous year. The national crop was also the second highest on record.

As a part of many ongoing initiatives to address structural issues within the tea industry in Kenya, the Government in July implemented a reserve pricing mechanism for The Kenya Tea Development Agency ("KTDA") teas which make up over c.66% of the national production. This intervention has had a positive impact on prices for higher quality teas within the Kenyan market, including those produced by the Group. The "all average price" at Mombasa auction was 3% up on 2020, driven principally by improved quality teas. Export levels were c.9% up on 2020 with strong demand from Pakistan, Egypt, Russia, UAE and Sudan. Low retail pricing and increased competition from other beverages in western markets continues to be a challenge for the industry.

Our average selling price in 2021 was up on prior year by 6%. We have continued to outperform our commercial grower competitors in the district with a price differential of 16%, by concentrating on quality. In 2022 our prices continued to firm initially but then weakened towards the end of the first quarter with predictions of a normal long rains season. In aggregate, our average selling prices in the five months to the end of May 2022 were significantly higher than the same period of 2021 though the benefit of this has been partially offset by lower production volumes. Pricing levels looking forward will depend on production volumes and the impact of the reserve pricing policy for KTDA teas.

Wage rates increased by 7% for 2020 and 2021 and negotiations are ongoing for 2022 and 2023.

We replanted a total of 50Ha (2020: 47Ha) whilst uprooting 52Ha for replanting in 2022.

Malawi

Our Malawi crop in 2021 was the second highest on record, up 15% on 2020, with strong cropping throughout the year and good out of season rains at the mid-year point.

Fertiliser prices in 2021 increased by 45%. The impact of this on the cost of production was mitigated by careful management of usage.

Malawi prices remained under pressure for much of the year with teas from the plainer West of Rift Kenyan's still proving a value substitute to buyers. Our average selling price was 3% down on 2020 due to the lag effect of prices responding to an improving Kenyan market. The auction was temporarily suspended in the early part of 2021 due to the previously reported lack of clarity around interpretation of VAT rules on local sales for export.

Global logistics issues, including a lack of containers and delayed shipping times, has resulted in deliveries taking much longer to reach customers.

While selling prices in 2022 in Malawi have firmed, they are below those of the same period of 2021. The market is expected to be volatile for a period due to uncertainty relating to logistics and will also be influenced by the general direction of the Kenya market. Our production volumes in Malawi for the year so far are in line with that of last year.

A minimum wage was implemented for the tea industry in Malawi in January 2021. Negotiations are ongoing with the union, with further increases expected from August 2022.

On 26 May 2022, the Reserve Bank of Malawi announced that it will stop supporting the currency and allow the exchange rate to reflect market fundamentals. This is expected to result in a devaluation of the Kwacha of c.25%.

There was no replanting in Malawi for a second successive year, a decision taken to conserve resources in light of difficult trading conditions.

Instant tea, branded tea & tea rooms

India

Sales volumes of our packet tea in India fell by 14%, whilst net prices increased by 11%. Despite increasing demand for tea, packet sales have come under pressure due to fierce competition in the branded market. However, the packet tea operation has continued to innovate with new product development and the release of new product lines in Ready to Drink, fortified (health) teas and premium tea bags.

Instant tea production in 2021 was up marginally on the previous year. Sales volumes and average prices however were both down 10% due to lower demand from a key customer, leading to a lower contribution from the operation.

Due to COVID lockdowns, our tea lounges and kiosks were closed periodically during 2021. These outlets continue to be developed as part of the India marketing and value addition strategy.

UK

Trading improved for Jing Tea as COVID restrictions were eased in many of its markets, but revenue remained below pre-pandemic levels. Supplies into the EU have also been impacted by Brexit with the business contracting for EU warehousing space during the year to alleviate import complexities. Jing launched its Ready to Drink Jasmine Pearls Sparkling Tea in 2021, which has gained initial positive traction in the market.

Nuts & fruits

* See note 1 to the Accounts

Macadamia

The Group's production volumes increased 24% on 2020 due to improved weather in South Africa, and an increased crop in Kenya with further areas of maturing orchard coming into bearing and increasing maturity of existing orchards.

Overall, our average net selling price was down 16% on 2020, which was in part due to the large volume of nuts of industrial grade from the Group's Malawian operation. Sales volumes were up 60% on 2020. Profits benefitted from the efficiencies generated by higher production and favourable sales mix.

Harvesting of the 2022 crop is underway and the indications are that volumes will be ahead of 2021 levels.

Global production volumes were up on prior year with the two major producers, Australia and South Africa up 10% and 11% respectively. Higher carryover stocks from Australia and Kenya are anticipated in 2022 with downward pressure on prices, particularly on grades for the ingredients market.

The Nut in Shell market in China was over supplied and prices declined mid-year leading to surplus kernel supply, particularly for the ingredients grades which further suppressed the market.

The global macadamia kernel market remains under pressure due to the ongoing impact of COVID on certain market segments. In the USA, import levels were similar to 2020 but remain approximately 30% below 2018/19 levels.

Avocado

Our own Avocado production was down 22% on last year, due in large part to the biannual nature of the production and this also impacted the volumes packed for smallholders and outgrowers. Our pricing was down 9% on last year, due to high volumes in the market from Peru and Colombia during a critical sales window. Unfortunately, due to the lower volumes the season could not be extended to take advantage of improved pricing at the end of Q3.

The Pinkerton harvest is well advanced with volumes ahead of 2021, however we expect prices to be lower. The Hass season has now started with volumes expected to be significantly ahead of 2021 reflecting the fact that it is an 'on year' for Hass.

We continue to strengthen our avocado growth strategy by diversifying our origin portfolio, with further plantings in Tanzania and Kenya. We planted 37Ha (2020: 13Ha) at our new farm in Tanzania and a further 44Ha (2020: 85Ha) in Kenya. In 2022 to date 96Ha have been planted in Tanzania. At Beja farm in South Africa 80Ha has been prepared to be planted in 2022, of which 38Ha has already been planted.

Other fruits

Apples & Pears

Bardsley England was acquired at the end of July and we have taken significant steps to improve costs and profitability including closing one of its two packhouses and streamlining its administrative operations. The benefit of these will be seen in 2022. The orchards were severely affected in April 2021 by frost resulting in a lower than expected level of apple production. Partner grower crops were also similarly adversely affected.

The last of the 2021 season stock is being sold at prices in line with our expectations. It is too early to predict the crop profile for 2022.

Grapes

Grape production at our South African operation was up 8% on 2020. The grapes were high quality and were sold to local commercial-scale winemakers. The 2022 harvest in South Africa has resulted in a record production, well ahead of expectation.

Blueberries

2021 was the second year of full production of our 10Ha trial in Kenya, with production rising steadily, although it is still below where we would like it to be. The majority of the crop was sold locally at good prices.

Indications from the trial are that the variety planted does not perform optimally in Kenyan conditions and that other varieties will have to be considered. There are already other varieties being trialled in small areas and at least one of these is showing much greater potential than the current dominant variety planted. The reason for establishing a trial was to test plant establishment, agronomy practices and varieties and this is being achieved very successfully, particularly on the initial two objectives. The results indicate further work is required on optimal variety selection, which will continue to be the focus going forward.

Other agriculture

2021: Revenue - £11.4 million (2020: £10.2 million), trading profit £4.8 million (2020: £2.2 million)

Arable

Despite some challenging weather, we were overall very pleased with our soya, maize and sorghum crop production results. Prices for our soya crop were 60% higher than the prior year and our sorghum prices more than doubled, reflecting global markets. This led to substantially increased profits for our operation in Brazil.

Rubber

Production was up 5%, with pricing up 39% on last year, due to increased demand from manufacturing sectors and also an increased price for petroleum-based synthetic rubber products. However, prices remain lower than the cost of production.

Forestry

Kakuzi's forestry volumes were on par with last year with the main focus on fence post sales. The production of quality timber products are also being investigated as a potential diversified and value-added product line.

Our Brazil operations had no eucalyptus timber sales during the year but expects to restart these in 2022. Pine timber sales were more than double the previous year and resin sales continued throughout the year, both providing a useful contribution to profits.

Livestock

Births were down significantly on last year, however, revenues were up on last year as COVID restrictions were eased.

Goat production was introduced at Kakuzi during the year. It is anticipated that the herd will provide a diversified source of revenue to complement beef sales.

Other investments

Engineering - AJT Engineering, Abbey Metal Finishing and Atfin

A trading loss of £2.3 million (2020: £1.5 million loss) on revenue of £15.3 million (2020: £19.3 million) was recorded across this group of companies, as set out in note 1 to the Accounts.

AJT Engineering has continued to experience lower activity from the oil and gas sector, but its site services division has seen an increase in trading as COVID related restrictions were lifted and access to client sites was restored.

In line with our strategy, the Group sold its interests in Abbey Metal Finishing Company Limited and its subsidiary Atfin GmbH in Germany during the year.

AJT Engineering's BMT division was sold to its management in December 2021.

Food Service - ACS&T

ACS&T broke even in the year (2020: £0.5 million trading profit) on revenue of £22.0 million (2020: £21.2 million).

ACS&T's trading was challenging as a result of the impact of the COVID pandemic on the UK food service sector. The national LGV driver shortage in the UK has also affected margins in its transport division, though volumes have increased. 2022 has started much stronger following the lifting of COVID restrictions.

Associates

2021 Share of results: 7.2 million

BF&M

BF&M made a substantial contribution to our performance in 2021 recording net income up 19% at Bermudian $25.7 million (2020: Bermudian $21.6 million) due to a 15% uplift in gross premiums written in the period compared to the prior year. This was driven by increased property and group health premiums and new business. Short term claims and adjustment expenses increased by 53% to Bermudian $14.8 million while life and health policy benefits decreased by 24% to Bermudian $77.5 million.

United Finance and United Insurance

Our two associate companies in Bangladesh, United Insurance and United Finance, produced lower results reflecting more challenging economic conditions in Bangladesh due to the COVID pandemic.

The underwriting profit for United Insurance decreased due to a decrease in gross premiums, higher claims and increased cost of reinsurance.

While United Finance's net operating income was 6% higher than that of the prior year due to an increase in the number of new loans sanctioned and lower borrowing costs, margins were impacted due to the effect of inflation on the overhead base.

Investment portfolio

The total value of the portfolio at 31 December 2021 was £40.2 million (2020: £50.6 million). During the year a net £12.4 million was realised from the investment portfolio in part to fund the acquisition and refinancing of Bardsley England.

Investment property

Work continues on the development of the Linton Park estate. The development of two properties into three residential units started in May 2021 and these are due for completion by mid-2022. Following refurbishment in 2020, a further investment property in central London was let during the year.

Renovation work commenced at Wrotham Place during the year to convert it to residential use.

In terms of the Group's London property portfolio, the decision was made during the year to close the Group's offices at 1 Hobart Place. A residential property in central London was sold in February 2022. Both these properties were categorised as "held for sale" at 31 December 2021.

Collections

Part of the art and manuscript collection with a net book value of £2.7 million was classified as held for sale on the Group's balance sheet at the end of 2021, and is scheduled for sale during 2022. To date, a portion of this has been sold realising proceeds of £3.0 million and generating a gain on sale of £1.0 million which will be reflected in our 2022 results.

Tom Franks

Chief Executive

30 May 2022

FINANCIAL REPORT

Overview of results

Revenue for the Group fell to £277.2 million from £291.2 million in 2020. This reflected the 4% reduction in revenue in Agriculture to £238.8 million (2020: £249.6 million) as a result of lower tea crops, reduced packet tea sales volumes at improved prices in India, and reduced production volumes and prices of avocado, offset in part by the revenues of Bardsley England acquired part way through the year. 2020 revenue also reflected the results of Horizon Farms which was sold during that year. Revenue at ACS&T improved in the year despite the challenges presented by COVID lockdowns. Revenue from Engineering was down reflecting the sales of Abbey Metal Finishing and Atfin.

Adjusted profit before tax was £8.8 million (2020: £16.0 million). Adjusted profit before tax is before net costs of £1.7 million relating to a number of large separately disclosed items, further details of which are set out in note 4 to the Accounts and below. (2020: separately disclosed net loss of £8.2 million also relating to a number of large separately disclosed items).

Profit before tax in 2021 was £7.1 million (2020: £7.8 million). This decrease in profit before tax reflects, inter alia, the effect of the lower profits from avocado and the impact of the Bardsley England acquisition offset in part by improved profits from tea and at BF&M. The 2020 results included profits for Horizon Farms of £4.5 million which was sold during 2020 due to concerns about the severe climate risks in California. In addition 2021 profit before tax reflects a number of separately disclosed items:

The profit after tax for the year ended 31 December 2021 was £4.5 million (2020: Loss after tax £0.8 million).

In addition, our financial assets recorded at fair value through other comprehensive income (part of the investment portfolio) recorded a post tax gain of £1.8 million which has been reflected in Other Comprehensive Income.

Equity attributable to the owners of Camellia was up at £389.8 million (2020: £376.6 million) with net cash and cash equivalents net of borrowings of £54.0 million (2020: £90.1 million) and financial assets at fair value through profit or loss (money market funds) of £7.2 million (2020: £5.3 million).

Acquisition

The acquisition and subscription for new shares to obtain an 80% interest in Bardsley England on 31 July 2021 resulted in goodwill arising on acquisition of £3.6 million. £2.2 million of the purchase price is deferred with part payable in 2022 and the balance due in 2023.

In November 2021, the remaining 20% was acquired for £1.7 million in cash. At the same time, a loan due to Bardsley England by BX Technologies (previously part of the Bardsley family's group) of £1.1 million was repaid.

Impairments

The impairment to the goodwill relating to Abbey Metal Finishing arises from the losses incurred in the period prior to sale.

COVID and Ukraine impacts

As set out in the Operational report on page 7, our businesses are currently operating broadly as normal despite the ongoing pandemic and the uncertainty arising from the war in Ukraine. Our experience over the last two years has given us valuable insight into how the pandemic impacts our markets and our operations. Although the war in Ukraine has had limited impact on the Group to date, there remains uncertainty about how it might impact the tea market and input costs going forwards. Accordingly, we continue to take actions to conserve cash by focusing on efficiencies, minimising our operating costs and focusing capital expenditure across the Group.

However, with our substantial cash resources, our investment portfolio and limited gearing, we continue to be well placed to withstand a further period of disruption to our operations and sales.

Currencies

Over the course of the year, Sterling strengthened against the majority of our operating currencies. This has resulted in a loss on foreign exchange translation of £4.0 million (2020: loss £22.6 million) which is reflected in the Statement of Comprehensive Income. Had we translated our profit before tax for the year using the same average rates as last year, our results for 2021 would have been £1.7 million higher. Our profit before tax includes an exchange gain of £0.4 million on transactions during the year (2020: gain £2.2 million).

On 26 May 2022, the Reserve Bank of Malawi announced that it will stop supporting the currency and allow the exchange rate to reflect market fundamentals. This is expected to result in a devaluation of the Kwacha of c.25%.

Cash

The Group's net cash position reduced to £59.9 million at 31 December 2021 (2020: £94.9 million) reflecting, inter alia, net cash outflows from continuing operating activities of £11.9 million (2020: inflow £12.9 million).

We spent £11.6 million on investment in our existing operations and investment property and incurred a net cash outflow in the year of £9.6 million acquiring 100% of Bardsley England. Investment portfolio disposals net of reinvestments contributed £12.4 million to financing cashflows in the year.

Group borrowings in the form of loans amounted to £5.9 million at the end of the year (2020: £4.8 million).

We expect capital expenditure in 2022 to be higher than our depreciation charge and in excess of recent historical levels as we continue to invest in our key strategic growth priorities.

As previously highlighted, a number of the Group's key trading subsidiaries have minority shareholders such that when cash is repatriated to the UK by way of dividends, those minorities are entitled to their share of the relevant dividend. In a number of cases, withholding taxes are also payable from our share of those dividends.

Funds are reserved within our subsidiary companies to ensure wherever possible a level of headroom exists against the risk of crop losses and adverse price movements, such as are possible as a result of COVID and the Ukraine conflict and to fund long-term development projects.

Taxation

The Group's effective tax rate of 36.6% (2020: 110.3%) reflects the use of current year UK trading losses to offset taxable gains arising on investment disposals. The tax charge also reflects the recognition of a significant deferred tax liability relating to the surplus on the UK Pension Scheme.

The acquisition of Bardsley England will bring a UK profit stream for the Group which is expected to assist in reducing the Group's effective tax rate in future.

Following discussions with the Bangladesh Revenue Authority regarding the withholding tax rate applicable to branch remittances, this liability has increased to £3.4 million. These discussions have facilitated the remittance of significant funds to the UK.

Tax and other provisions

As is normal at this time of the year, we have ongoing wage negotiations relating to prior periods in Bangladesh and India. We consider we have made adequate provision for their likely outcome.

Despite progress being made during 2021, we continue to have a number of significant uncertain tax situations totalling £13.7 million, which have been disclosed previously and which are detailed in note 41 to the Accounts.

Pensions and other employment benefits

The Group operates a number of defined benefit pension schemes, the largest of which is in the UK.

The 2020 triennial valuation for the UK scheme, concluded early in 2021, shows a funding surplus and no contributions are required to be made to the scheme for the next three years. On an IAS 19 basis, at the end of 2021 the UK scheme had a surplus of £14.7 million.

The overseas defined benefit schemes are located in Bangladesh and India. Our businesses in Kenya, India and Bangladesh also have obligations to pay terminal gratuities based on years of service and, in some cases, based on salaries.

In aggregate, our employee benefit schemes currently show a net surplus on an IAS 19 basis of £5.1 million (2020: £16.6 million deficit).

Accounting for defined benefit schemes is prescribed by IAS 19 and the quantum of the deficit continues to be highly sensitive to small changes in assumptions as regards wage inflation and gilt yields in the relevant jurisdictions and to asset performance. This year a net actuarial gain of £20.4 million (2020: gain £4.3 million) is reflected in the Statement of Comprehensive Income. The net gain this year arises primarily from the UK scheme where strong asset performance and the effect of higher interest rates benefited the Scheme.

Our Income Statement also reflects current and past service costs of £1.8 million (2020: net cost £2.2 million) and £0.8 million (2020: £0.7 million) in respect of employee benefit interest cost.

Susan Walker

Chief Financial Officer

30 May 2022

ENVIRONMENTAL AND SOCIAL REPORT

At Camellia, ESG (Environmental, Social and Governance) is integral to our business. We believe that the success of all our operations is fundamentally connected to the communities and environments, including the wider supply chains, in which we operate. Our Group ESG report ("Custodianship") published in 2020 illustrates not only the ESG initiatives undertaken across the Group but also explains the Group's approach to each of these principles. We intend to publish our next edition of Custodianship later this year. We have aligned ourselves to seven of the United Nations Sustainable Development Goals ("SDGs"):

The Group's ESG initiatives are based on our fundamental belief that we are custodians of our operations, ensuring they undergo a process of continuous improvement. This enables them to be passed on to the next generation whilst caring for the environments in which they are based and for those communities who depend on them.

The Group's approach to ESG is the responsibility of the Strategy group (as described on page 40) which is supported in certain key areas by the Safeguarding and Stewardship committee which is described in more detail below. The boards of the Group's operating companies closely consider their respective governance protocols and the environmental impact of their ongoing operations and investment decisions, with regard to both Group requirements and local regulations and legislation. The Group's approach to Governance is set out in the Corporate Governance report.

Environmental

Climate change is a significant risk to the Group's agricultural operations. We seek to mitigate the impact of this risk by diversifying our agricultural production in both origin and crop. We also continue to plant more drought resistant crop varieties and use other initiatives, such as restorative farming methods and sustainable irrigation.

In addition to minimising our environmental impact, we protect and enhance forests and water bodies for local flora and fauna. The material environmental impacts that arise from the Group's operations fall broadly into three categories: (i) greenhouse gas emissions from on-site combustion of fuels to power the tea factory driers; (ii) use of fertilisers; and (iii) extraction of water for irrigation of crops. Water is extracted from a variety of sources, but we seek to maximise rainwater capture by creating large reservoirs wherever possible from which to irrigate sustainably.

The Group also oversees c.11,100Ha of indigenous forests and conservation areas and a further 7,500Ha of commercial forestry (eucalyptus, pine, cypress). These areas, in combination with fields of perennial crops sequester significant amounts of carbon and act as an important carbon sink, which once quantified will offset some of the Group's emissions. We have estimated sequestration of our core crops and our managed eucalyptus estates, which we comment on in more detail below.

We use appropriate partners to support the Group in achieving environmental protection and emission footprint reduction initiatives and are continuously exploring technologies that can reduce our environmental footprint. In addition to minimising our environmental impact, we protect and enhance forests and water bodies for local flora and fauna.

Environmental reporting

The Group continues to report under SECR (Streamlined Energy & Carbon Reporting) Regulations, which is set out in the rest of this section. The Group has not been subject to any environmental fines during the reporting period.

Global GHG emissions (excluding UK) and energy use data for the year to 31 December

* 2020 is the first reporting period for which we reported our scope 2 market-based emissions

** 2021 is the first reporting period for which we reported our scope 3 business travel in rental cars or employee-owned vehicles

*** Due to increased granularity of our Scope 1 and 2 reporting we have restated 2019 and 2020

Changes in Scope 1 & Scope 2 emissions

The Group's Scope 1 & 2 location-based emissions (excluding UK) reduced by 4% during the reporting period. This was primarily due to a reduction in volumes of made tea produced in India, partially offset by an increase in volumes in Bangladesh. In the tea drying process the Indian operations rely on coal and the Bangladesh operations rely on natural gas. Where possible, and with infrastructure permitting, cleaner fuel sources and efficiency improvements are being implemented. For example, installation of natural gas turbines, and investments in hydro-electric generators.

We report the made tea intensity ratio (2021:1.29kg CO2e per kg of made tea; 2020: 1.40kg) and we continue to invest to improve the carbon efficiency of our tea factories. We are happy to report that in 2021 there has been an 8% decrease in the Group's location-based made tea carbon intensity, mainly due to lower production in India. We are also pleased to observe that our Kenyan and Malawian tea operations have continued to improve both thermal and electrical energy efficiency in their tea factories.

As mentioned above, the Group's perennial crops sequester significant amounts of carbon. In last year's annual report, we reported that we conducted a study with Ricardo Plc to estimate the volume of carbon sequestered by the Group's key crops and managed forestry. Sequestration forms an integral part of the Group's ambitions to become net zero and we are assessing how to implement this.

UK GHG emissions and energy use data for the year to 31 December

* 2020 is the first reporting period for which we reported our Scope 2 market-based emissions. The increase in market-based emissions in 2021 was primarily due to the inclusion of Bardsley England.

** 2021 is the first reporting period for which we reported our Scope 3 business travel in rental cars or employee-owned vehicles.

Environmental certifications

AJT Engineering and ACS&T are ISO 14001 certified. The framework of which helps the entities improve building energy efficiency, reduce waste streams, and increases awareness of potential environmental risk factors. Many of our global operations are Rainforest Alliance certified and some are Global G.A.P. certified.

Energy efficiency action taken

In the period covered by the report, the Group's operations have implemented a range of energy efficiency initiatives. We set out some of the key examples below:

In aggregate, we expect the above energy saving initiatives and several smaller initiatives to result in 2.3 GWh saving in energy per annum.

In addition, the Group is continuing with its programme of replacing existing energy sources with renewable energy sources, amounting to an additional 227 MWh in 2021. The main initiatives to date include the installation of solar generation at several operations in India, Bangladesh, Kenya and Brazil, as well as the installation of hydro turbines in India. In the UK most sites are on green tariff electricity contracts. The Group's operations have also assessed potential energy efficiency initiatives that can be implemented over the next five years. We set out examples of the key initiatives below:

We expect the above initiatives to provide significant savings in energy over the next five years. The Group will continue with its program of replacing existing energy sources with renewable energy sources where possible. Our ultimate intention is to set energy use reduction targets across our operations.

Social

The Group's businesses are fundamentally connected to the welfare of the communities and environments in which we operate. We proactively invest to ensure these environments are protected and improved. Our focus is on the long-term stability, security and continuity of our businesses and those communities. To this end we are working with our supply chain, customers, national governments, trade unions and NGOs to improve of the livelihoods of our employees and their communities.

Healthcare, education and housing

Healthcare, education and housing continue to be integral parts of the Group's operations. For example, the majority of our tea estates in India and Bangladesh have a hospital and a qualified doctor, in addition to central referral hospitals owned and managed by the operations. Our African businesses run dispensaries established on their estates, offering medical services and care to employees, their dependents, and people from surrounding communities. These are manned by qualified medical personnel from our operations and services are free to employees and their dependents. Across the Group we continue to operate 50 hospitals and 85 dispensaries that we either own and/or operate. In 2021, the Group performed 880,000 patient treatments, of which 515,000 treatments were for Group employees, at its hospitals.

In many of our operations we provide childcare and education to our employee's families from nursery up to secondary school. During the year we continued to run 178 nurseries and creches, 76 primary schools and six secondary schools. In total we educated more than 32,000 children. In certain circumstances, our operations will provide land or other resources to contribute to the running of local schools which are not owned and/or operated by us.

We also provide housing to a large number of employees and their families. The housing is owned and managed by our Group operations and is provided and maintained in line with widely recognised international certifications. The Group owns c.48,000 houses accommodating c.291,000 people, of whom c.67,000 are employed.

2021 continued to be a year impacted by the effects of the COVID pandemic. Our operations have made significant efforts to provide safe working and living environments for our employees as well as the wider communities in which we operate. More information on these initiatives is contained in our ESG report.

Human Rights

We are determined to promote the safeguarding of Human Rights across our Group and its supply chains.

The Board has decided to enhance its governance and safeguarding oversight functions to comply with the UN Guiding Principles on Business and Human Rights and has established a Safeguarding and Stewardship committee which is further described on page 42. The purpose of the committee is to promote the highest standards in protecting and promoting Human Rights across the Group and an internationally respected firm of specialists has been appointed to enable our larger Group companies to review their Human Rights positions and to assist them in making improvements where necessary. Our Group wide Human Rights Policy and Social Code of Conduct is also designed to support Group companies in their efforts to continually improve the development and operation of their individual policies and procedures in this regard. 

Approved by the Board

Amarpal Takk

Company Secretary

30 May 2022

Appendix to Environmental & Social report

SECR reporting methodology

The scope of the reporting for SECR purposes was determined by including the businesses in which the Group owns majority holdings and/or fully operates. It includes GHG (Greenhouse Gas) emissions and energy use by businesses that were divested during the reporting period up to the date of transfer of risk and reward pertaining to those businesses. Similarly, it includes business that were acquired during the reporting period from the date of transfer of risk and reward pertaining to those businesses. The reporting period aligns with the Group's financial reporting period. The reported figures are an aggregation of emissions and energy consumption by the Group's reporting units. A reporting unit is defined as a geographically located operating entity or group of entities. For example, the India group of companies is defined as one reporting unit. Within a reporting unit distinction is made between different sites, field operations and factory operations.

The conversion and emission factors used in calculating the Group's emissions are as per those published by the UK Department for Business, Energy & Industrial Strategy and the UK Department for Environment, Food and Rural Affairs (Defra), which are in line with the GHG Protocol guidance. The non-UK electricity emission factors are sourced from the International Energy Agency for Scope 2 location-based reporting. For Scope 2 market-based reporting they are sourced directly from the electricity suppliers, where available. For global (excluding UK) market-based emissions in regions where renewable energy certificate ("REC") systems are not developed, market-based emission factors are calculated using location-based grid average emission factors. For UK market-based emissions, where supplier specific emission rates could not be determined due to unavailability of data, UK residual mix emission factors were used.

A standardised reporting tool is used to capture the Group's environmental and energy data. Year on year trends in the data are analysed and understood. Where estimates are used these are disclosed and assessed in terms of magnitude as part of the overall data quality.

Every effort is made to ensure the environmental data that we report is accurate. However, should more accurate or complete data be available for prior years, we will restate if it results in a movement of at least 5% in the reported data. We may restate carbon emissions even when there is no change in consumption data, due to corrections to the emissions factors provided by Defra.

The Scope 3 element pertaining to energy use and CO2e emissions from rental cars or employee-owned vehicles where the company is responsible for purchasing the fuel or where the company reimburses the employee for the fuel has been estimated based on an estimate of the kilometres travelled by employees under this category. We did not estimate this category for prior years since its share of the Group's total carbon footprint is relatively immaterial.

STRATEGIC REPORT

Business review

The Company is required to set out in this report a fair review of the business of the Group during the year ended 31 December 2021 and a description of the principal risks and uncertainties facing the Group. A fair review of the business of the Group is incorporated within the Chairman's statement and the Operational report on pages 5 to 18. The Chairman's statement and the Operational report, together with information contained within the report of the Directors, highlight the key factors affecting the Group's development and performance. Further details of the financial performance and position of the Group are set out in the Financial report on pages 16 to 18. Other matters are dealt with below.

Group strategy

The Board has adopted the following strategy for the Group:

The progress against this strategy during the year is set out in further detail in the Operational report, the Environmental and Social report, and within the Report of the Directors.

Business model

The Group consists of operations engaged in Agriculture, Other Investments and Associates. These operations are managed on a divisional basis with regular reports made to the Board on performance against the annual budget. Each operation is expected to perform against an agreed strategy with goals and targets for the short, medium and long-term. These are summarised below.

Agriculture

To focus on our tea, macadamia, avocado and newly acquired apple crops, where we have scale and geographic diversity, and further maintain our portfolio of crops and products in order to retain the diversity of location and crop which has historically proven so valuable in spreading the Group's political and commodity price risk. Where appropriate opportunities arise, to add to our production capability in bearer plant agriculture, as well as to make aligned acquisitions and investments to enable us to capture more of the value chain.

With all our Agriculture operations we will have regard to the potential threats arising from politics and the impact of climate change, particularly in water stressed areas and will adapt our portfolio of operations accordingly.

Other investments & Associates

AJT Engineering. To keep our presence in the oil services sector under review, in line with our strategy of expansion in areas of expertise, while divesting in non-core businesses.

ACS&T. To keep our presence in the cold storage and transport sector under review in line with our Group strategy to focus on core areas of expertise.

Investment portfolio. The Group has a portfolio, principally of listed investments, the strategy for which remains to invest in high quality companies where we believe that there is long-term value. This portfolio also enables us to balance our geographic risk exposure.

Investment property. Maintain the existing portfolio and maximise returns from it. Part of the portfolio may be sold to accelerate the Group's investment in agriculture.

Collections. The Group has collections of art, philately and manuscripts, part of which may be realised to facilitate the increased focus on our core agricultural business.

Associates. The Group has three associate companies in the financial services sector of which BF&M, the listed Bermudian insurance business is the most significant. With all our Associates, we continually monitor our investment and may increase or decrease our holding in the future.

S172 statement

This section 172 statement should be read in conjunction with the Environmental and Social report, this Strategic report, the Corporate Governance report and the Statement of Directors' Responsibilities.

In performing their duty under section 172(1) (a) to (f) of the Companies Act 2006, Directors have acted in a way that they have considered, in good faith, to promote the success of the Group as a whole, whilst carefully considering the interests of shareholders and other stakeholders which have an impact on the long-term success and sustainability of the Group, including suppliers, customers, employees, the communities in which the Group operates and the impact on the environment.

Long-term

The Board has undertaken a series of measures aimed at re-balancing the Group's portfolio of investments in order to take better advantage of its strengths, and thereby to improve profitability. This included investment in social and environmental initiatives, in particular, to mitigate the impact of climate change. These measures include accelerating agricultural diversification and divesting of certain assets which we consider to be non-core, details of which are covered elsewhere in this report. Key risks, potential impact and mitigations are included in the "Principal Risks and Uncertainties" section below.

Stakeholders

The Board recognises the value of stakeholder relationships and the key role that these play in the Group's sustainability and success over the longer term. Good progress has been reported from the Safeguarding and Stewardship committee as it continues to support members of the Group in initiatives to protect and promote Human Rights and a peaceful, long-term and mutually beneficial relationship between the activities of businesses within the Group and the communities affected by them. Many environmental and social initiatives are initiated by staff in our operations each year, which we highlight on our website, various social media platforms and in the Group's ESG report. Further information can be found in the Environmental and Social report.

In order to track progress made, and in line with our culture of ongoing feedback, a second annual employee engagement survey, Your Voice, was undertaken during 2021. The survey gathered anonymous and open feedback from employees to support local management decisions as well as to provide Board insights. All employees in the UK were invited to respond, including from Bardsley England. Key questions from the survey were also put to a proportion of employees in our largest companies outside of the UK, which provided further insight. The results of the survey are continuing to be used to plan key initiatives and track progress on key areas such as recognition, development, leadership, mental health and wellbeing and feedback on how employees feel their company has continued to respond to the COVID pandemic. The positive trends identified included confidence in the communications and working practices related to the COVID pandemic, understanding of company goals and values and how individual performance contributes to the success of the Group. Opportunities to improve were agreed in partnership with employees at a company level and examples include continued clear and open communication, ongoing performance management and feedback, and a continued focus on learning and development. Your Voice will be repeated in 2022 to continue the momentum of ongoing employee feedback.

We have worked closely with our suppliers and customers to manage the challenges and disruption caused by the COVID pandemic and have continued to develop our relationship with these stakeholders across our operations through consistent engagement and regular meetings.

Further examples of how the views of stakeholders are provided to the Board include the annual cycle of information from management reporting, committees and meetings and operational visits in the UK and abroad. The Board conducts regular reviews of how to continue to engage effectively with stakeholders and there is on‑going dialogue between members of the Board and stakeholders.

Principal risks and uncertainties

There are a number of possible risks and uncertainties that could impact the Group's operations. The Group regularly monitors these risks at operational and Group level, i.e. operational risks are raised by the operations directly to members of the Strategy group; Group risks are reviewed by the Group General Counsel and raised to the Audit committee; and risks considered and raised to the Strategy group are further raised to the Board. Information on the Group's financial risks is disclosed in note 42 of the Accounts.

Material risks relating to the Group's principal operations, with additions and updates for 2021, are noted in the table below. Whilst there has been a decrease in the overall risk and potential impact to the Group in relation to UK and Overseas Pensions, Legal & Regulation and prolonged impact of a pandemic, the Group considers that there has been an increase in overall risk and potential impact in relation to the cost of production (increased cost of fuel and fertiliser) and from the war in Ukraine. The overall materiality of individual risks or magnitude of impact on the Group as a whole in other areas has not changed significantly from the previous year.

Agriculture

Group principal policies - GPPs

There are a range of issues that are important to the Group and to all of our operations, whatever sector they operate in. These are set out in the Group Principal Policies which are periodically cascaded across the Group. Each operation is required to prescribe its own local policies based upon the Group Principal Policies. On an annual basis, each significant operation confirms to Group its adherence with the Group Principal Policies. Ultimately, our individual operations have experts who are best placed to identify how each policy can be implemented and applied which in turn enables them to operate responsibly and ethically over the long-term.

Notwithstanding the fact that overall responsibility for the implementation and enforcement of the GPPs rests with the management of each operating company, certain GPPs (such as the Anti-Bribery and Corruption GPP, the Modern Slavery GPP and the Tax GPP) include provisions which are directly effective. This is the case where observance of these provisions is required in order for Camellia Plc to comply with its own legal and regulatory obligations.

The GPPs can therefore be grouped into the following four categories:

The High-level GPPs comprise the Certification and Traceability GPP, the Health and Safety GPP, the Environment GPP, the Employee Welfare GPP and Social Code of Conduct GPP. The Compliance GPPs comprise the Anti-Bribery and Corruption GPP, and the Whistleblowing GPP. A summary of each principal policy is set out below and they are set out in full on our website.

High-level GPPs

Certification and traceability

As part of our end to end supply chain, our operations are required to meet the requirements of our customers and suppliers in terms of certifications and traceability. The vast majority of our tea gardens are RFA certified and all our macadamia, avocado and winery processing facilities are FSSC 22000 certified. Across the Group, many operations have also obtained ISO14001, ISO9001 and ISO45001 and many other appropriate accreditations, such as Red Tractor for our Bardsley England operation.

Health and safety

We take responsibility for our people by promoting good health and providing a safe and healthy workplace to protect all employees, contractors, visitors and the public from foreseeable work hazards. All operations are required to comply with local health and safety legislation, regulations and to obtain certifications from external authorities.

Environmental

We are mindful of the environment in which we operate, recognising that our operations require natural resources and that our operations generate emissions and waste. We understand and comply with current applicable legislation in the jurisdictions in which we operate. Our operations are each required to commit to policies which reduce their environmental footprint and which include (where appropriate), carbon, recycling, waste and water.

Employee welfare

Our employees are at the heart of what we do, and their safety and welfare is paramount, as described in Environmental and Social report. Operations are required to have policies and procedures in place which cover equality, health, personal development, training, diversity, and (where appropriate) education, housing and sanitation.

We consciously and continuously work towards encouraging equality in management positions across our operations. The Group complies with local regulations to encourage employees with disabilities to work in our operations and where necessary, makes appropriate adjustments to working practices.

Social code of conduct

As an international Group, we have interests in companies in various countries with very different levels of income and education. We believe that it is critical that we respect the cultures of the people of those countries but we also recognise the important role our Group companies and their suppliers play in helping us to source sustainably and responsibly. Our social code of conduct ('Code') provides the foundation for our engagement with our Group and its supply chains. It sets out our broad expectations for their independently developed policies and procedures regarding basic compliance with applicable law, respect for the workforce and their Human Rights, environmental management and anti-corruption.

Human Rights

We respect and support Group companies' efforts to respect the dignity, wellbeing and Human Rights of the Group's employees, the communities in which the Group operates and those who may be impacted by the Group's operations. Our commitment to respecting internationally recognised Human Rights in line with the principles and guidance contained in the UN Guiding Principles on Business and Human Rights is set out in our Human Rights Policy, which underpins principles of internationally recognised Human Rights as relevant to our Group's operations, including those set out in the International Bill of Human Rights and the International Labour Organisation's Declaration on Fundamental Principles and Rights at Work and OECD Guidelines for Multinational Enterprises. We recognise that while states have a duty to protect Human Rights, companies have a responsibility to respect Human Rights and this means acting with due diligence to avoid infringing the Human Rights of others and addressing the adverse impacts companies may have caused, be connected to, or be linked to.

Respecting Human Rights is not only important to us and Group employees but is of importance to all of our shareholders, investors, customers, consumers, the communities where the Group operates and civil society groups. There is both a business and a moral case for supporting the promotion of Human Rights across the Group and its supply chain and our Group-wide Human Rights Policy is therefore designed to support Group companies in their development and operation of policies and procedures addressing these standards. We understand that Human Rights often compete, and that the resolution of these conflicts may be impossible for Group companies to achieve to everyone's satisfaction. We also understand that no amount of work on the part of the Group in promoting Human Rights can wholly eradicate the risk of Human Rights being breached by someone intent on causing harm, or careless as to whether harm is caused. We therefore recognise this is a journey and that our performance will evolve as we mature our practices. Despite the possibility of imperfect outcomes we will continuously seek to improve our Human Rights efforts.

Compliance GPPs

Anti-Bribery and corruption

The Company has adopted an anti-bribery policy which complies primarily with the requirements of the UK Bribery Act 2010 although the Board also requires compliance with the laws of all countries in which the Group operates.

All Group employees, officers and executives, and all those acting for or on the Group's behalf are strictly prohibited from offering, paying, soliciting or accepting bribes or kickbacks, including facilitation payments.

Compliance with the anti-bribery policy is monitored by the individual operations and incidents are reported to the anti-bribery officer for such operation.

In addition, the Board has adopted an anti-facilitation of tax evasion policy which complies with the requirements of the UK Criminal Finances Act 2017. The policy has been introduced across the Group and its compliance is monitored at Group and by individual operations.

Whistleblowing

Our whistleblowing policy provides guidelines for people who feel they need to raise certain issues in confidence. It is designed to protect those raising a genuine concern, in line with the Public Interest Disclosure Act 1998 or other jurisdictional legislation. Each operation is required to have a designated Local Whistleblowing Officer. Group employees have access to the whistleblowing officer for the individual operation, as well as the Group Whistleblowing Officer or the chairman of the Audit committee.

Modern slavery GPP

The Group continues to comply with the requirements of the Modern Slavery Act 2015, to ensure that modern slavery and human trafficking are not taking place either within the Group or in the supply chains of our operations. A copy of the statement for the year ended 31 December 2021 is available on the Company's website. In some countries, it is both the cultural norm and permissible for parents to involve their children in the production process. We do not subscribe to this approach and the use of child labour is prohibited across the Group. All Group operations are required to confirm this statement and adopt local policies and procedures to ensure continued compliance. This includes setting out codes of conduct when working alongside customers and suppliers.

Tax principles

The Group's tax principles include: compliance with applicable tax laws; payment of the correct tax amounts; interpretation of tax law; undertaking tax planning based on commercial rationale; and transparency with tax authorities.

Key financial performance indicators

The nature of the Group's principal activities is such that the Board takes a long-term view of its operations, particularly in Agriculture.

The Board reviews monthly reports with a range of financial and other indicators to monitor the performance of each division depending on the nature of its operations.

For the Agriculture division, the Board receives monthly profit and operating performance information, data on sales prices and volumes, costs of production and crop volumes against budget and on a per unit basis. Rainfall and other climate data are also considered.

For the Engineering and Food Service divisions, the Board receives monthly profit and operating performance information.

For Investments, the value and performance of the share portfolio is reviewed quarterly.

For Associates, the Board receives revenue and profitability information when those companies release information to their respective shareholders.

Certain of the key financial performance indicators are included in the Operational report on pages 7 to 15.

Non-financial performance indicators

Operations have developed non-financial KPIs that are relevant to it, these are regularly monitored and include:

The Board, or the Strategy group (as appropriate), considers such KPIs by exception where local operations notify that significant material issues have emerged.

Employees

Employees are kept informed on matters affecting them and the performance of the Group by their local management as well as through internal publications, the Camellia Plc website, social media and operational visits. A new communication tool was implemented at the Camellia Head Office and two UK companies in 2021, which provides a portal of news, updates, policies and social media feeds, as well as the opportunity to book annual leave and access key work related information on an automated system. Kenyan and Indian operations have social media platforms which support employee engagement and Kakuzi uses YouTube videos to communicate news and information about staff and their roles within the operation.

As set out in the Group's Employee Welfare Policy, operating companies give due consideration to employment applications received from disabled persons and give employees who become disabled every opportunity to continue their employment.

The table below provides a breakdown of the gender of the Directors and employees on 31 December 2021.

Approved by the Board

Amarpal Takk

Company Secretary

30 May 2022

REPORT OF THE DIRECTORS

The Directors present their report together with the audited consolidated accounts for the year ended 31 December 2021.

Principal activities

The Company is a public company limited by shares, which is quoted on the AIM Market of the London Stock Exchange and incorporated and domiciled in England and Wales. The principal activities of its subsidiary undertakings comprise:

Fostering business relationships is of paramount importance to the Directors, as set out in the s172 Statement in the Strategic report. Further details of the Group's activities are included in the Strategic report and the Operational report.

Results and dividends

The profit after tax for the year amounted to £4.5 million (2020: loss after tax £0.8 million). The Board is proposing a final dividend for the year 2021 of 102p per share payable on 29 July 2022 to holders of the ordinary shares registered at the close of business on 8 July 2022. Therefore, the total dividend payable for 2021 is 146p per share (2020: 144p per share). Details are shown in note 11 to the Accounts.

Directors

The Directors are listed on page 4. The following Directors had beneficial interests in the shares of the Company.

Under the Company's articles of association all the Directors are required to retire annually. Accordingly, Malcolm Perkins, Susan Walker, Graham Mclean, Frédéric Vuilleumier, Simon Turner and Stephen Buckland will retire and, being eligible, will seek re-election at the forthcoming Annual General Meeting ("AGM"). Tom Franks, William Gibson and Gautam Dalal have indicated that they do not wish to stand for re-election at the AGM. Rachel English was appointed as an independent non-executive Director effective from 6 May 2022 and will seek election to the Board at the AGM.

None of the Directors or their families had a material interest in any contract of significance with the Company or any subsidiary during, or at the end of, the financial year.

Executive Directors

Malcolm Perkins was appointed a Director in 1999 and Chairman in 2001, having joined Eastern Produce (Holdings) Limited, now Linton Park Plc, in 1972. He is a chartered accountant, a member of the Safeguarding and Stewardship committee and Chairman of the Nomination committee.

Tom Franks, a chartered accountant, was appointed as Chief Executive with effect from 1 September 2015. He joined Camellia as Deputy Chief Executive in October 2014.

Graham Mclean, a qualified agriculturalist, was appointed as Director of Agriculture in October 2014. He was previously regional director of the Group's operations in Africa and has worked for the Group for more than 25 years. He is a non-executive director of Kakuzi Plc.

Susan Walker was appointed Chief Financial Officer for the Group on 4 June 2015. She joined Camellia as Finance Director Designate on 1 July 2014. She is a chartered certified accountant and a non-executive director of Goodricke Group Limited and United Finance Limited.

Non-executive Directors

William Gibson was appointed as an independent non-executive Director in September 2014 and was appointed as the senior independent non-executive director in September 2021. He was previously chairman and managing director of Westminster Press and an executive director of the Financial Times Group. He is chairman of the Remuneration committee, chairman of the Safeguarding and Stewardship committee, and a member of the Audit and Nomination committees.

Frédéric Vuilleumier was appointed as an independent non-executive Director in March 2013. He is a partner of Oberson Abels SA, a law office based in Geneva, Switzerland. He was a member of the Audit committee until April 2019.

Gautam Dalal was appointed as an independent non-executive Director in March 2018. He was previously a partner at KPMG and a founder-director of the UK India Business Council, a member of the Asian Business Association and a director of AMREF Health Africa's International Board. He was appointed chairman of the Audit committee in September 2021.

Simon Turner was appointed as a non-executive Director in March 2020. After an earlier career in the legal profession, he is now president of the board of the trustee of The Camellia Foundation. He became a member of the Remuneration and Nomination committees in September 2021.

Stephen Buckland was appointed as a non-executive Director in November 2021. He previously held positions within the Camellia Group's agricultural and banking businesses. He is a trustee of two charities: The Sir Percival Griffiths' Tea Planters Trust and The Camellia Foundation, a UK charity whose primary donor of the same name is the ultimate majority shareholder of Camellia Plc. He became a member of the Audit committee in December 2021.

Rachel English was appointed as an independent non-executive Director in May 2022. She is a chartered accountant and has extensive international and general management experience, having founded and served on the board of several significant businesses, including as chair of Acacia, a FTSE 250 company, and previously served on the audit committee of the UK Department for International Development. She has substantial experience and interest in ESG matters.

Company Secretary

Amarpal Takk was appointed as Group General Counsel and Company Secretary in April 2018. He is a qualified solicitor of England and Wales. He was appointed a member of the Safeguarding and Stewardship committee in December 2020.

Substantial shareholdings

As at 6 May 2022 the Company has been advised of the following interests in its share capital:

Share capital and purchase of own shares

The Company's share capital comprises one class of ordinary shares of 10p per share which carry no restrictions on the transfer of shares or on voting rights (other than as set out in the Company's articles of association). There are no agreements known to the Company between shareholders in the Company which may result in restrictions on the transfer of shares or on voting rights in relation to the Company. Details of the issued share capital are contained in note 36 to the Accounts.

At the AGM in 2021, shareholders gave authority for the Company to purchase up to 276,200 of its own shares. This authority expires at the conclusion of this year's AGM at which a resolution proposing renewal of the authority will be submitted to shareholders.

Auditors

A resolution proposing the reappointment of Deloitte LLP will be put to the AGM.

Each of the persons who were Directors at the time when this Directors' report was approved has confirmed that:

Energy and carbon disclosure

In compliance with the SECR requirements, our greenhouse gas emissions, energy consumption and energy reduction initiatives are reported within the Environment and Social report on pages 19 to 24.

Employees & stakeholders

The Directors have had regard to the need to foster the Company's business relationships with employees, suppliers, customers and others, and the effect of that regard, including on the principal decisions taken by the Company during the financial year. Details in relation to employees and stakeholders are set out in the s172 Statement on page 26 and the Employee section on page 34.

R&D

The Group invests in research and development projects within its operations in order to improve efficiency and grow revenues. In Kenya, Malawi and India technical departments are focussed on various projects to improve harvesting efficiency, pest and disease identification and control, energy efficiency and implement colour sorting technology. New agricultural technologies are also being trialled where possible, including the use of drones, robotics and automated manufacturing systems.

We continue to collaborate with various organisations, for example, the Cambridge Environmental Sustainability Strategy committee and working with the Gatsby Foundation on potential value-added ventures. In Kenya we use precision specification eucalyptus trees for furniture and other construction applications. In Kenya we are running a commercial blueberry trial to evaluate the viability of different varieties. In Brazil, research and development is ongoing into water saving irrigation systems, and satellite imaging for soil, nutrient and crop profiling help to identify climate impact and plant nutrient requirements. These initiatives will help to inform our decisions on the implementation of precision farming technologies.

Future development

Details of future developments are set out in the Operational report and the Strategic report.

Going concern

The Directors, at the time of approving the financial statements, considered the Group's business activities together with the main trends and factors likely to affect the Group, the most recent business performance of the Group, including the impacts of the pandemic, as described in the Operational report on pages 7 to 15.

The Directors considered the impact of the current COVID environment and the Ukraine conflict on the business for the next 15 months.

The Directors have considered several variables which may impact on revenue, profits and cash flows. In light of the nature of our business and our experience of trading through the pandemic over the last two years, we expect our Agriculture businesses will continue to operate broadly as currently. In the UK we have assumed that the food service market recovers gradually over the course of the next year.

At 31 December 2021, the Group had cash and cash equivalents net of borrowings of £54.0 million. In addition, the Group had undrawn short-term loan and overdraft facilities of £23.7 million and a portfolio of liquid investments with a fair market value of £40.2 million.

The Directors have modelled various severe but plausible scenarios using assumptions including the combined effect of reduced sales volumes for tea, reduced avocado exports, reduced sales volumes for macadamia and reduced partner grower apple volumes during 2022. The revenue and operational impact of such volume reductions across our operations would have a substantially negative impact on Group profitability. We have also considered the risk of price reductions during 2022 for our tea, macadamia and avocado crops combined with higher than expected energy and fertiliser costs across all operations.

Historically in the Tea division restrictions on, or reductions in, the supply of tea either regionally or globally have led to higher selling prices and this was borne out in India during 2020 and 2021 and in Bangladesh in 2021. However, for prudence for the purposes of our downside scenario planning we have not reflected increased selling prices for tea nor any significant mitigating reductions to our operating cost base in our tea operations. We have however assumed that in certain scenarios aspects of our investment programme would be curtailed.

Under both the base case and the downside scenario, the Group is expected to continue to have sufficient headroom relative to the funding available to it.

The Directors believe that the Company and the Group are well placed to manage their financing and other business risks satisfactorily and, have a reasonable expectation that the Company and the Group will have adequate resources to continue in operational existence for the foreseeable future. The Directors therefore continue to adopt the going concern basis in preparing the financial statements.

Financial risk management

Information on the Group's financial risk management objectives and policies and on the exposure of the Group to relevant risks in respect of financial instruments is set out in note 42 of the Accounts.

Corporate governance

The Company's statement on corporate governance can be found in the Corporate Governance report on pages 39 to 43.

Political donations

The Company has no political affiliations and does not make political donations. Its operations work with governments and other parties around the world on issues that are important to our customers, and stakeholders, communities and to the interests of the business.

Approved by the Board

Amarpal Takk

Company Secretary

30 May 2022

CORPORATE GOVERNANCE

Statement of compliance

The Company is committed to complying with the Quoted Companies Alliance's ("QCA") Corporate Governance Code for Small and Mid-size Quoted Companies ("QCA Code"). The Chairman considers the application of standards of corporate governance that are appropriate for the Group's nature, status, profile, size and circumstances to be important in ensuring the Group is managed for the long-term benefit of all stakeholders. The table on our website sets out how we comply with the ten principles of the QCA Code.

The Group consists of a portfolio of businesses which are grouped into independently managed divisions. These divisions report into the Board by function against a variety of metrics including budgets and business plans.

The Board

The Board currently comprises ten Directors, six of whom are non-executive Directors as set out on page 4.

The remaining Directors are executive Directors, including the Chairman. William Gibson has been designated as the senior independent non-executive Director. The names and brief biographical details of each Director appear on pages 35 and 36. Following the decision of three Directors not to stand for re-election at the AGM, a recruitment process is underway.

The Board has established Remuneration, Audit and Nomination committees. Terms of reference of each of the committees can be viewed on the Company's website. The Board has also established the Safeguarding and Stewardship committee.

The Board is responsible for managing the Group's business and has adopted a schedule of matters reserved for its approval. The schedule is reviewed periodically and covers, inter alia, the following areas:

A full copy of the schedule is available on the Company's website.

A report summarising the Group's financial and operational performance is provided to Directors each month. Each Director has sufficient information in advance of Board meetings to enable informed judgements to be made on matters referred to the Board. The Board met 13 times in 2021.

Attendance by Directors at Board and committee meetings held during the year was as follows:

* Where a meeting was not quorate, decisions were raised to and approved by the Board.

Board evaluation

An internal review, led by the Company Secretary and the Chairman, was undertaken this year. This was based upon a series of questions and each Director had the opportunity to contribute and challenge, which enabled a constructive and quality debate during Board meetings. In order to enhance and further strengthen the Board, the decision was taken to appoint a new independent non-executive Director.

Executive committees

The Board has established the Strategy group, consisting of the Chairman, the executive Directors of the Board and the Group General Counsel. The Board has also established two Executive Committees. The Agriculture Executive Committee is chaired by the Director of Agriculture and includes the Chief Executive, Chief Financial Officer, the Group General Counsel and heads of all the key agricultural operations. The Engineering and Food Service Executive Committee is chaired by the Chief Executive and includes the Chief Financial Officer, the Managing Directors of the UK businesses, the Group General Counsel, the UK Investment Manager and the UK Head of Human Resources.

Investments and Associates report directly to the Chief Executive.

Nomination committee

The committee is chaired by Malcolm Perkins. Its other members are William Gibson and Simon Turner.

The principal responsibilities of the committee are set out below:

The committee met once during the year to consider the appointment of Stephen Buckland. Other matters were raised to and approved by the Board.

Audit committee

The committee is chaired by Gautam Dalal (Chris Relleen chaired the committee up to 5 August 2021). The other members of the committee during the year were Stephen Buckland and William Gibson. During 2021, the committee met on three occasions.

The principal responsibilities of the committee are set out below and were undertaken during the year:

The Audit committee assesses whether suitable accounting policies have been adopted and whether management has made appropriate estimates and judgements. In the year under review, the Audit committee considered the following matters in relation to the financial statements:

Going concern

The committee considered the appropriateness of the going concern principle of accounting used in preparing the financial statements in the context, in particular, of the potential impact of the pandemic and the conflict in Ukraine on the Group's cash requirements.

Biological assets

One of the key areas of judgement that the committee considered in reviewing the financial statements was the valuation of biological assets in accordance with IAS 41. Valuations are based on discounted cash flows or are carried out by external professional valuers. These were considered for consistency of approach and assumptions agreed as reasonable. For more details see note 19 to the Accounts.

Pensions

The valuation of the pension schemes obligations is conducted by independent actuaries and due to the size of the obligation a relatively minor change to the assumptions made could result in a material change in the quantum of the obligation. The committee considered the competence of the actuaries and the key assumptions adopted and concluded that the work performed is sufficient to support the valuation.

Accounting for the acquisition of Bardsley England

A detailed exercise was undertaken to identify and allocate a fair value to the separately identifiable assets and liabilities relating to the Bardsley England business at the date of acquisition. The committee considered the assumptions made and concluded that the basis of allocation of the purchase price to the assets and liabilities acquired was appropriate.

Carrying value of intangible assets

The Group's carrying values of the Jing and Tea City brands and of the goodwill relating to the two Assam estates purchased in 2019 were discussed in light of the trading of those businesses. In particular consideration was given to the uncertainties regarding timing of recovery from the impact of COVID and the range of future revenue growth rates for Jing.

The carrying value of the goodwill relating to Bardsley England which arose on the acquisition of that group of companies during 2021 was also considered in context of the future expectations of growth rates for partner grower volumes and the potential impact of inflation on margins.

The committee considered the fair value of the Group's holdings and whether any impairment in the carrying value had occurred and agreed that apart from the £0.5 million impairment in respect of Abbey Metal Finishing, no impairment provisions were required.

Carrying value of tangible assets

The committee considered the fair value of the Group's investment property portfolio, the carrying value of plant and equipment at the engineering subsidiaries, and the carrying value of certain of the Indian and Bangladeshi estates in the context of COVID impacts on trading and third party valuations and agreed that no impairment had occurred during the year.

Carrying value of BF&M

The Group's carrying value of BF&M was lower than the share price for BF&M at 31 December 2021. The committee considered the fair value of the Group's holding and whether any impairment in the carrying value had occurred and in view of the expected control premium associated with our holding concluded that no impairment is required.

Provisions

The bases of provisions for material uncertain tax situations were considered by the committee as were the provisions for wage increases in Bangladesh and India. Consideration was given to the accounting implications of the recent VAT assessment in Malawi and management's judgement that it should continue to be disclosed as a contingent liability. The committee is satisfied that the provisions represent best estimates of the likely liabilities.

External auditor

To assess the effectiveness of the external audit process, the external auditor is required to report to the Audit committee and confirm their independence in accordance with ethical standards and that they had maintained appropriate internal safeguards to ensure their independence and objectivity. In addition to the steps taken by the Board to safeguard the auditor's objectivity, Deloitte operates a five-year rotation policy for audit partners for a listed entity.

The committee reviewed those non-audit services provided by the external auditor and satisfied itself that the scale and nature of those services were such that the external auditors objectivity and independence were safeguarded.

The committee confirms that the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy.

Remuneration committee

The committee is chaired by William Gibson and the other member is Simon Turner (Chris Relleen was a member up to 5 August 2021).

The responsibilities of the committee include:

The Remuneration report appears on pages 45 to 46.

Safeguarding & Stewardship committee

The Safeguarding and Stewardship committee has continued to promote its mission of meeting the highest standards in protecting and promoting Human Rights across the Group. The committee meets regularly throughout the year and is chaired by William Gibson. Other members of the committee are Malcolm Perkins and Amarpal Takk. Louise Nicholls and Vinita Singh are independent members of the committee. Louise is the managing director of a Human Rights and sustainability management consultancy in the UK, prior to which she was the head of sustainability for a large UK supermarket and Vinita has previously worked on empowering individuals and workers within supply chains based in India and across a variety of sectors, including helping businesses to understand how they can contribute to improving working conditions.

The principal objectives of the committee are set out below:

Insurance

The Company purchases insurance to cover its Directors and officers, and those of its subsidiaries in respect of legal actions against them in their capacity as Directors of the Company. All Directors have access to independent professional advice at the Company's expense.

Share capital structure

The share capital of the Company is set out in note 36.

Internal control and risk management systems

The Directors acknowledge that they are responsible for maintaining a sound system of internal control. During the year, the Audit committee, on behalf of the Board, reviewed the effectiveness of the framework of the Group's system of internal control, the principal features of which are described below.

The key management philosophy of the Company is that the responsibility for efficient day to day operations remains with the local management at the operational level. Accountability and delegation of authority are clearly defined with regular communication between Group head office and the management of the individual operations. Our key operations have internal audit functions reporting to local audit committees. The performance of each operation is continually monitored centrally including a critical review of annual budgets, forecasts and monthly sales, profits and cash reports. Financial results and key operational statistics and variances from approved plans are carefully monitored. Group senior management regularly visit operations. However, any system of internal control can provide only reasonable, and not absolute, assurance against material mis-statement or loss.

Approved by the Board

Amarpal Takk

Company Secretary

30 May 2022

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable law and regulations. Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the Group financial statements in accordance with United Kingdom adopted international accounting standards in conformity with the requirements of the Companies Act 2006. The financial statements also comply with International Financial Reporting Standards (IFRSs) as issued by the IASB. The Directors have also chosen to prepare the parent company financial statements under United Kingdom adopted international accounting standards. Under Company law the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, International Accounting Standard 1 requires that Directors:

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Responsibility statement

We confirm that to the best of our knowledge:

This responsibility statement was approved by the Board of Directors on 30 May 2022.

Malcolm Perkins

Chairman

30 May 2022

REMUNERATION REPORT

This report is drawn up in accordance with the Companies Act 2006 and the AIM Rules for Companies.

Remuneration committee

Details of the Remuneration committee are set out on page 42.

Policy on Directors' remuneration

The policy agreed by the committee is as follows:

In implementing the second point, the Company does not operate profit related bonus, share option or share incentive schemes for Directors as the Group's activities are based largely on agriculture, which is highly dependent on factors outside management control such as the weather and market prices.

The policy is designed to ensure that the Directors manage the Group's businesses for the long-term in line with the strategy of the Group.

In determining this remuneration policy and the remuneration of Directors, consideration has been given to the relevant provisions of the QCA Guidelines.

The remuneration policy was approved by shareholders at the 2020 AGM and applies for a period of three years until 2023. The committee considers any views expressed by shareholders on Directors' remuneration.

At the AGM on 3 June 2021, the Remuneration Report for the year to 31 December 2020 was approved by shareholders with 99.90% of the votes cast in favour, 0.03% of the votes cast against and 508 votes withheld.

Service contracts