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Registered number: 03996686
REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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CARAVELA LIMITED
Company Information
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CARAVELA LIMITED
Contents
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CARAVELA LIMITED
Group strategic report
For the Year Ended 31 December 2024
The Directors present their Strategic Report for Caravela Limited (the 'Company') and its subsidiaries (together, the 'Group') for the year from 1 January 2024 to 31 December 2024 (the 'year').
Caravela Limited is a green coffee company focusing exclusively on responsibly sourcing and selling high quality Latin American coffees. The Company aims to build mutually beneficial relationships between outstanding coffee producers, coffee roasters and coffee consumers, contributing to the development of a long-term sustainable coffee industry, from farm to cup.
The Company was founded in London in May 2000. In 2002, it opened its first coffee export operation in Colombia to source high quality coffee directly from small coffee producers whilst guaranteeing traceability and transparency to roasters around the world. Since then, the Company has grown into a multi-country operation with sourcing, processing, and export operations in seven Latin American countries and import operations in Australia, Europe, North America and Taiwan, thereby creating value at each step of the coffee supply chain.
Throughout the 25 years in business, Caravela has pioneered many concepts that are now commonplace in the specialty coffee industry such as grading coffee by cup quality (and not bean size), microlots, the use of GrainPro© liners for storing green and parchment coffee, vacuum packing coffee and developing better techniques for drying coffee to extend quality and shelf life, among others.
Caravela’s vision is to be the preeminent supplier of outstanding Latin American coffees to the most discerning coffee roasters throughout the globe, predicated on our unbreakable commitment to quality, professionalism, transparency, integrity, efficiency, innovation, and excellent customer service.
In April 2019 we welcomed Oikocredit Ecumenical Development Cooperative Society UA (Oikocredit) as a shareholder after purchasing Annona Sustainable Investments BV stake in the Company. Oikocredit is an experienced social investor that aims to maximise social impact while safeguarding the environment and generating fair financial returns.
Our business model is built upon five basic principles:
∙Direct Relationships
∙Education
∙Sustainability
∙Traceability
∙Transparency
One of the main differences between Caravela and most green coffee traders is that 100% of the coffee we source is purchased directly from individual coffee producers, most of them small and medium in size, and the totality of the coffee we sell is sold directly to coffee roasters worldwide. Our vertically integrated supply chain means that we do not work with intermediaries, neither on the buy or the sell-side, which allows us to deliver unsurpassed quality and consistency year-round and in the long-term, while being able to provide full traceability and transparency from the coffee farm to the consumer. This is what ultimately differentiates us from the rest and is the main reason why Caravela is the preferred supplier of high-quality Latin American coffee to some of the world’s most demanding and leading specialty coffee roasters.
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CARAVELA LIMITED
Group strategic report (continued)
For the Year Ended 31 December 2024
Another one of our differentiating factors is our focus on education to coffee producers, which is based on the firm belief that without education to producers the long-term growth of the specialty coffee industry will be limited, and coffee producer’s sustainability will be jeopardised. That is why in each of the Latin American countries where we have company-owned operations we run a grower education program called “PECA” (for the acronym of the program in Spanish: Programa de Educación a Caficultores). PECA focuses on working hand-in-hand with coffee producers with the goal of achieving higher productivity, better cup quality and higher incomes through the education of best practices. To finance the PECA program, the Company allocates 10 cents of every lb sold, which represents close to 15% of the overall company overhead.
PECA helps us work hand in hand with our farmer partners to understand the challenges they face in producing better coffees. In 2024, our team of 30 technicians and agronomists completed over 4,392 farm visits for technical advice and trained 1,518 producers on better agricultural and processing practices. To achieve this our PECA team covered close to 278,878 km with the associated emissions offset, as demonstrated through our carbon neutrality status.
We trained 1,518 producers during farm-to-farm visits, and more than 1,532 producers attended our 106 Farmer Field Schools (FFS). Overall, Caravela has a positive impact in more than 25,000 people in coffee farming communities in Latin America.
In 2024 we worked with 2,796 small and medium sized producers in seven Latin American countries and analysed more than 18,161 individual lots. The average farm size of our producer partners is 4.8 ha.
Our team on the ground was composed of 45 quality obsessed Caravelians and 28 PECA educators. In total, 51% of our team is dedicated to helping coffee growers produce better coffee.
Over the course of the year, we paid close to USD 2.4 million in quality premiums to producers, which represents a price premium of almost 25 cents versus the Average ‘C’ Market price of 2024 or a 10% premium on top of the C market.
We invested around USD 1,800,000 in new infrastructure, machinery and equipment, including two brand new dry mills (one for Guatemala and one for Mexico). We invested USD 260,000 in development and software in 2024. The two new dry mills were installed and started operation in late 2024. These investments will allow us to bring efficiencies and additional control to the supply chain, and to add value for both customers and farmers.
In 2024 we maintained our B-Corp certification and for the tenth straight year in a row achieving 141.7 points, which positions Caravela as an industry leader.
For further information about our impact, please visit https://caravela.coffee /our-impact
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CARAVELA LIMITED
Group strategic report (continued)
For the Year Ended 31 December 2024
At origin, Caravela has company-owned infrastructure and export companies in Colombia, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua and Peru. In each of these countries, we have multiple purchasing labs, dry mills and a full quality control, logistics and administration teams. The Company also sources coffee in Honduras but does not have its own export operations in this country.
In total, we operate in seven Latin American coffee origins, with over 220 employees, 39 purchasing points and cupping labs, more than 17,000 square meters of coffee parchment drying facilities, 5 dry processing mills (trilladoras) with state-of-the-art optical sorting equipment, a cross border farmer education program led by expert agronomists and a quality analysis team comprised of more than 31 highly trained coffee cuppers that work day in and day out with our farmers providing constant feedback and support.
On the import side, we have a team of more than twenty coffee professionals focused on sales, quality assurance, logistics and administration. Our offices are located in London (United Kingdom), Houston (USA), Sydney (Australia), Taipei (Taiwan), and Dublin (Ireland). At the end of 2024, 35% of our employees are female, distributed as follows:
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CARAVELA LIMITED
Group strategic report (continued)
For the Year Ended 31 December 2024
In 2024, we invoiced and delivered coffee to 360 coffee roasters in 25 countries in five continents. The coffee sold to our worldwide customers was sourced from 2,796 individual coffee producers in the seven Latin American countries where we operate, 89% of them smallholder producers that own less than five hectares of land.
Distribution of Sales by Destination outside Latin America (based on 60-kg bags)
During 2024 Caravela continued reshaping its management structure with the goals of improving collaboration, empowering individuals, and better responding to the changing needs of the coffee industry. Under the name “One Caravela”, this initiative emphasizes self-management across the organization.
As part of our business, we are faced with operational, quality and financial risks that the Company recognises and mitigates.
Quality risk is mitigated by our very high standards at the purchase point, as well as the work undertaken by PECA on the ground. As producers understand the importance of quality as a pre-requisite for higher prices, they themselves become quality obsessed and therefore work hard to produce the best coffee they can. Our risk mitigation tool then is the relationship we develop with the producer as well as constant supervision at the purchase lab and the different quality controls we have implemented.
On the operational side, we face risk regarding the movement of our coffee from purchasing to our processing facilities and then onwards to customers. We measure our performance on this matter via our OTIF (On-Time In-Full) KPI.
From a financial perspective, we again face many risks regarding our exposure to futures markets, local currency movements against the US Dollar in the countries where we handle business, as well as the credit worthiness of our suppliers and customers. We mitigate these risks by utilising financial hedging strategies such as the use of future contracts for hedging our physical coffee position, options to cover for unexpected price movements, forward currency contracts to hedge our currency exposure and trade credit insurance to protect us from the risk of non-payment by customers.
In 2024 we saw a decrease in the local differentials paid for coffee in the countries where we operate. In addition, we saw an increase in the C market prices during the year. As a result of these price movements our cost of coffee was higher than in 2023.
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CARAVELA LIMITED
Group strategic report (continued)
For the Year Ended 31 December 2024
Caravela therefore is continuing its farmer outreach efforts through our PECA program. We expect that through market access, consistent high prices and added value to farmers we can minimise the risk of lower quality and non-delivery.
We use futures contracts to hedge almost 100% of our sales and purchases of coffee. This means that we are exposed to hedging gains or losses. There are two types of hedging gains or losses:
∙Realized hedging gains or losses correspond to fully fixed (buy-sell) future contract positions. In this case we have an actual cash movement that is offset by the sale of the physical inventory. As such, our current hedging losses will be compensated by the sale of the physical inventory in the future and therefore will be recovered when that inventory is sold to final customers. The effect of those hedging losses is in effect only inter-temporary, as any losses are recouped with the sale of the physical coffee. At the same time any gains are also given back when actual coffee is sold.
∙Unrealized hedging on the other hand corresponds to losses or gains on contracts partially fixed (either sale or buy). Since our position is typically long (we buy a futures market when the customer price fixes) as the market moves lower, we have unrealized hedging losses. The effect of these losses is merely on asset valuation and there is no cash effect for the Company.
In 2023 we implemented hedge accounting for our coffee futures position. We can calculate the realized and unrealized gains or losses for each lot of coffee that we have under contract or that we have in inventory. We therefore only recognize the gain or loss in the Profit and Loss account when we recognize the sale of the coffee. By implementing hedge accounting we can isolate the effect of the volatility of the C market in our Profit and Loss account and have a better representation of the Company’s operating position.
During the year, we also saw a reduction in the depreciation of Latin American currencies and a reduction in FX volatility.
Climate Change is perhaps one of coffee’s greatest risks to our business, therefore PECA is fundamental in working together with coffee producers to provide them with the tools and the training necessary to withstand and hopefully overcome this major threat.
The EU Anti-Deforestation Regulation (EUDR) will have an impact on coffee (among other products) imports into the EU starting on 1 January 2026. Starting on this date all coffee imported into the EU must be sourced from deforestation free farms. This regulation means that importers need to have complete traceability to each of the farms where coffee is produced. In addition, the geo-location of each farm needs to be validated against deforestation data to demonstrate that the farm is deforestation free.
Caravela has full traceability of 100% of the coffee we source. We started the process of confirming the geo-location of each farm that supplies to us with the aim of being EUDR ready by November 2025. Once this process is completed, we will be able to offer our customer coffee that complies with EUDR.
Caravela also faces risks which are external and that may have an impact in our business, such as macroeconomic changes, political changes in the countries where we operate, changes in regulations and commerce laws, etc. While there are no ready-made tools for mitigating these risks, Management constantly works to understand our position on different fronts and to set up scenarios for risk mitigation.
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CARAVELA LIMITED
Group strategic report (continued)
For the Year Ended 31 December 2024
The Directors report a good trading year, however we saw a decrease in volumes and sales. The company remained profitable during the year. USD sales decreased by 6%, our Gross Profit decreased by 2% and our EBITDA increased by 2%.
The results for the Group are set out on the Consolidated Statement of Comprehensive Income on page 22 and have been summarised below.
Trading conditions in 2024 were complex as C market prices continued to rise. We saw significant volatility in prices and local differentials. We also continued to see logistical delays at all Latin American ports which negatively impacted our ability to deliver on time. In addition, inflationary pressures at consumer level continue to add uncertainty on the short- and medium-term demand front.
With higher prices we are seeing how roasters are constantly trying to maintain their cost of goods sold. In some instances, we have seen roasters sacrifice quality looking for lower prices. However, we continue to attract consumers by engaging them with higher quality coffees and continuing to splurge on coffees that represent better quality.
We remain committed to investing in our supply chain and partnering with our farmers and roasters to continue to deliver the best possible tasting coffee. Our diversified portfolio of origins and coffees give us a competitive advantage in the market and help us become strategic suppliers to our customers.
Management continues to work with the aim of consolidating our operations throughout Latin America and becoming a “one-stop-shop” for high quality, fully traceable and sustainable coffee. We measure performance using Key Performance Indicators to track growth and profitability.
We track our sales (in 60-kg bags) to roasters on a monthly, quarterly and annual level, and we use it to measure growth. Additionally, we measure our consolidated EBITDA and Operating profit per pound of coffee sold as these are measures of our profitability as a Group.
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CARAVELA LIMITED
Group strategic report (continued)
For the Year Ended 31 December 2024
Net assets decreased by 1% from 2023 to 2024. Within the balance sheet, liabilities decreased by 0.2% reflecting better use of our credit facilities.
Although total assets have remained relatively stable, there have been notable variances: an increase of USD 1.0 million in fixed assets as the Company invested in 2 new dry mills in Guatemala and Mexico. This increase was offset by a reduction of inventory and debtors.
The present report comprises the following companies that are part of the Caravela Group:
∙Caravela Coffee Australia Pacific Pty Ltd (Australia)
∙Caravela Coffee LLC (United States)
∙Caravela Colombia S.A.S (Colombia)
∙Caravela Guatemala S.A. (Guatemala)
∙Caravela Limited (UK) – parent Company
∙Caravela Mesoamerica S.A. de C.V. (El Salvador)
∙Caravela Nicaragua S.A. (Nicaragua)
∙Caravela Peru S.A.C (Peru)
∙Caravela-Ecuador S.A. (Ecuador) – previously called Ecuavirmax
∙Agroalimentos Caravela de Mexico S.A. de C.V. (Mexico)
∙Caravela Asia Limited (Taiwan)
∙Caravela Coffee Europe Ltd (Ireland)
∙Caravela Europe BV (The Netherlands)
Due to the size of the Company and its subsidiaries, the Company is required to prepare consolidated financial statements. Refer to note 2.2 for further information.
The following statement describes how the directors have had regard to the matters set out in section 172 (1) (a) to (f) when performing their duty under section 172 of the Companies Act 2006.
The board aims to have a material positive impact on all its stakeholders through the Company’s business and operations. All decisions take into account:
∙The likely consequences of any decision in the long term.
∙The interest of the Company’s employees.
∙The need to foster the Company’s business relationships with suppliers, customers and others.
∙The Company’s operation in the community and the environment.
∙The desirability of the Company maintaining a reputation for high standards of business conduct.
∙The need to act fairly as between members of the Company.
The above matters are defined as “Stakeholder Interest”.
Our business is based on the idea of long-term relationships between two key stakeholders: our coffee suppliers and our customers. We believe that only by adding value to both these groups we will be successful.
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CARAVELA LIMITED
Group strategic report (continued)
For the Year Ended 31 December 2024
100% of our coffee is bought directly from small and medium sized coffee farmers, who sell directly to Caravela in one of our purchase stations. The price we pay is transparent and directly tied to the quality of the beans delivered. We have programs in place (see PECA) where we partner with our coffee grower partners to help them improve their quality and productivity.
We firmly believe that we can help our customers success by not only delivering great, consistent coffees but also by providing, traceability, transparency and education across the board. We aim to develop a long-term relationship with each of our more than 500 customers.
Our team is the reason behind our success. Team members are actively encouraged to participate in local decision making and to contribute in the Company’s larger initiatives. We have programmes in place to identify and develop talent in our team, and all team members are provided with hard skills and soft skills training.
During 2024 we continued the move towards becoming a self-managed organization, based on employee accountability. Our goal is to empower all the Caravela team members to decide what is in the best interest of the Company, clients and suppliers.
Caravela was the first Green Coffee Trader to achieve Carbon Neutral Silver Standard certification for our Global Operations. This was verified by One Carbon World. We have achieved our goal to become Carbon Neutral by 2025. We continue to work on diverse initiatives towards our goal of becoming Net Zero by 2030, including our coffee supply chain.
As a for profit company, Caravela always considers the effects of our decisions in our ability to re-pay our debt and protect the investment of our shareholders. We believe that true sustainability is only achieved where all parts of the chain can benefit, from farmers, to other suppliers, customers, coffee drinkers and of course our Company by having resources to continue to invest and grow.
This report was approved by the board on
A Cadena
Director
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CARAVELA LIMITED
Directors' report
For the Year Ended 31 December 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The principal activity of the Group, including the Company and its subsidiaries, is the trade of high quality green coffee from Latin America.
The profit for the year, after taxation, amounted to $300,855 (2023: $1,523,395).
Subsequent to the year end, an ordinary dividend of $380,000 (2023: $380,000) has been proposed for approval by the shareholders for the year ended 31 December 2024.
The directors who served during the year were:
A Cadena
J Hector
G Ghiretti
J Green
M Wright
The directors are responsible for preparing the Group Strategic Report, the Directors' Report and the financial statements 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 have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and 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 Group and Company and hence forth taking reasonable steps for the prevention and detection of fraud and other irregularities.
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
The Group and Company intends to continue to invest in its existing Latin American subsidiaries to gain more control of the product, obtain efficiencies and be as close as possible to farmers. We continue to invest in our technological tools that help us be more efficient and productive.
The directors expect with reasonable certainty that their current borrowing facilities will be available for a minimum period of at least one year from the date of approval of these financial statements and do not have any concerns over meeting its financial covenants attached to its borrowing facilities. Based on these forecasts and action plans, the directors consider it is appropriate for the Group and Company financial statements to be prepared on the going concern basis.
Objectives and policies
Financial instruments are classified and accounted for according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Where shares are issued, any component that creates a financial liability of the Company is presented as a liability in the balance sheet. The corresponding dividends relating to the liability component are charged as an interest expense in the profit and loss account.
Credit risk, liquidity risk and cash flow risk
The business' principal financial instruments comprise bank balances, trade debtors, creditors, bank loans and cumulative preference shares. The main purpose of these instruments is to finance the business' operations.
In respect of bank balances, the liquidity risk is managed by maintaining a balance between the continuity of funding and flexibility through the timing of collecting debts and payments of liabilities. All of the business' cash balances are held in such a way that achieves a competitive rate of interest. The business makes use of hedging and forward contracts to eliminate risk.
Trade debtors are managed in respect of credit and cash flow risk by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. The amounts presented in the balance sheet are net of allowances for any doubtful debts.
Creditors' liquidity is managed by ensuring sufficient funds are available to meet amounts due.
The bank loans are a short-term liability to provide working capital. Profits are being retained in the form of bank balances to ensure sufficient funds are available when the loans mature.
Price risk
Our business operates in an environment where fluctuations in commodity prices, exchange rates, and other market variables can significantly impact financial performance. To mitigate the adverse effects of price volatility, we employ strategic hedging through future contracts and FX non-delivery forwards. These contracts allow us to mitigate the risk of price and currency movements.
Our risk management strategies have adapted to ensure continued resilience and stability in the face of market uncertainties.
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
Future Contracts Hedge
Our risk management approach involves the use of future contracts as a primary tool for hedging against price risks and non-delivery forward contracts for hedging against currency movements.
Risk Management objectives
The objectives of our risk management activities related to derivative contracts are as follows:
Price Stability: To minimize the impact of price volatility on our financial performance by locking in prices through hedging.
Cost Control: To manage input costs and maintain competitive pricing for our products by strategically hedging against price fluctuations.
Margin Protection: To safeguard revenue streams and profit margins by mitigating the downside risks associated with adverse price movements.
Strategic Planning: To support long-term strategic planning and decision-making by providing greater certainty and predictability in our cost structure and revenue projections.
The Group maintains a Transparency Hotline where employees and other stakeholders can express views on matters that affect them anonymously.
In addition, during 2024 the Group implemented the Great Place to Work (GPTW) assessment in all the operations. The outcome was an overall satisfaction index of 81%, which is a very good result. The assessment also allowed us to identify potential areas for improvement, as we aim to foster a corporate culture based on self-awareness and self-management.
The Group is committed to a policy and practice under which they recognize their obligations not to discriminate unlawfully against people with disabilities at any stage of employment, and undertake:
1.to seek to employ people with disabilities in jobs suited to their aptitudes, abilities, and qualifications, making any reasonable adjustments necessary to do so;
2.to seek to ensure that employees with disabilities are considered for promotion according to their aptitudes, abilities, and qualifications, making any reasonable adjustments necessary to do so;
3.to ensure that assessments are carried out of the scope of reasonable adjustments which may be made to the workplace and its environment, so as to make it possible to retain an employee with a disability or to recruit a person with a disability;
4.to make any reasonable alterations to company premises required to ensure that they are accessible and safe for people with disabilities; and
5.to make reasonable changes to the workplace and to employment arrangements so that a person with disability is not at any substantial disadvantage compared to a non-disabled person.
At the time of approving the Directors' Report, there are qualifying third party indemnity insurance provisions in force for the benefit of the directors.
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
1.Our 2030 Net Zero Commitment
With a defined baseline and a solid monitoring platform to track our emissions and the impact of our mitigation measures, our commitment is to achieve a net zero status for our operations in 2030. To achieve this objective, we are committed to take action upon every operation site and on every operation activity to reduce our emissions, mitigate our impact and maximize our environmental efficiency. Parallelly, we are developing our compensation transition strategy for 2030 which will allow us to transit from offsetting, to insetting 100% of the remaining non-mitigated operation emissions within our own supply chain.
2.Reduction Strategy and Mitigation Measures for 2030
To increase our overall environmental efficiency by 20% for 2030 Caravela Coffee is committed to:
Scope 1:
∙Fuel Consumption:
To address the largest source of emissions in scope 1, we are reducing the amount of company vehicles, mitigating the direct emissions from fossil fuels to 30%.
Scope 2:
∙Energy Consumption:
Through employee training and awareness, and process optimization we aim to minimize energy requirements for all our dry mill operations, reducing by at least 5% the yearly energy consumption from now to 2030, a cumulative reduction of 25% for standing milling operations and a baseline emission rate for newly developed milling operations.
Scope 3:
∙Water consumption:
Our milling processes do not involve the use of water and its consumption is reduced to our quality assurance operation, which represents a fixed source of emissions. For this reason mitigation measures will focus on employee awareness and training and the responsible use of water for human consumption and in operation sites.
∙Materials consumption:
Although we have promoted the development of new materials for coffee export, plastic bags increase the recyclability of such, aiming to address one of the main sources of emissions in this category, Caravela is committed to developing relationships with current or new plastic liner bags for exporting green coffee beans that develop technologies that reduce the amount of fossil fuel based plastics in the liners and reduce upstream emissions for this material and mitigate end of life emissions at our roaster partners operations by at least 20% for 2030 from currently used materials.
∙Waste Generation:
Year by year we have been continuously reducing the emissions sourcing from organic waste generation coming as a byproduct from our milling operations. By developing waste management relationships, we keep diverging evermore volume of waste across our dry mills from being disposed in landfills to be reused to power energy production, be used as an input for largescale composting processes, or be upcycled to produce plaster wood used in building houses for vulnerable communities. We are committed to reduce emissions from coffee milling byproducts by 20% yearly and assure that for 2030, 100% of organic waste from dry mills is responsibly managed and no organic waste goes to land fill. Also, through employee awareness and engagement with local waste manager suppliers at each operation site we aim to recycle 100% of our recyclable materials resulting from the operation.
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
∙Coffee Freight:
By developing internal systems to track all coffee freight for parchment and green coffee happening in each origin, and employee training and awareness, we have set a target reduction goal for all seven export operations of at least 5% with respect to the previous year. This measure will give a cumulative reduction of 25% with respect to our baseline year.
∙Business Travel:
Air business travel represents our biggest source of emissions in this category. Therefore, after three consecutive years of assessment we have developed a carbon budget for each operation role. This measure intends to optimize business travel at every level of the Company, setting to cap to emissions independently of the growth of the operation. Through this measure and by reducing the carbon budget by at least 5 % yearly, we aim to achieve a 25% reduction of emissions from air travel for 2025.
∙Employee Commuting:
We have reduced our emissions from employee commuting by permanently establishing and promoting a culture of hybrid work for office staff with a maximum of three in office workdays. Through employee awareness we aim to inspire our collaborators to commit their personal commuting to less carbon intensive transportation types.
3.Compensation Transition Strategy
In 2023, we started our journey of transitioning from compensating 100% of our scope 1,2 and 3 emissions through carbon credits, which support certified projects in countries outside our operation, to being able to compensate 100% of our scope 1, 2 and 3 emissions through renewable energies investment in new dry mill facilities, reliable and certified carbon sinks initiatives within our own supply chain at the farm level (such as reforestation projects or scaled transformation of coffee farm organic waste into biochar that returns the organic carbon to the soil and sequesters it on a long term basis).
In the sections below we discuss our journey to scale in our seven Latin American operations with a combination of these approaches. We aim to have a traceable and transparent in-setting strategy that accounts for 100% of our global emissions.
The total Carbon Footprint for 2024 of the activities measured = 2,239 tonnes CO2e.
Scope 1 (direct emissions) emissions are those from activities owned or controlled by an organisation.
Scope 2 (indirect) emissions are those released into the atmosphere that are associated with the consumption of purchased electricity, heat, steam and cooling. These indirect emissions are a consequence of an organisation’s energy use but occur at sources not owned or controlled.
Scope 3 (other indirect) emissions are a consequence of actions that occur at sources not owned or controlled and not classed as Scope 2 emissions.
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
The most significant sources of CO2e emissions identified for the Group are:
- Emissions arising from 3rd party freight and logistics (71% of the total carbon footprint).
In 2024, we have completed a second year of implementation of our inbound platform to centralize and optimize the collection of company activity data. This platform includes a dashboard to track emissions, aiding in the identification, execution and monitoring of reduction and mitigation strategies. Even though the journey is of constant improvement, our greener coffee platform has set the milestone for a consistent and systemic collection of activity data for our carbon footprint assessment.
Emissions arising from well-to-tank based on our fuel usage (18% of the total carbon footprint).
The most common approach for calculating GHG emissions is through the application of documented and approved GHG emissions conversion factors. These factors are calculated ratios that relate GHG emissions to a proxy measure of activity at an emissions source.
Further detail on emissions factors and the methodology behind them can be found at: https://www.gov.uk/government /collections /government-conversion -factors-for-company -reporting
The activity data or amount of ‘resources’ used are multiplied by the relevant emissions factors to calculate total Greenhouse Gas equivalent (CO2e) emissions.
GHG emissions = activity data x emission conversion factor
There are seven main GHGs that contribute to climate change, as covered by the Kyoto Protocol: carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3). Different activities emit different gases and an organisation should report on the Kyoto Protocol GHG gases produced by its activities.
CO2e is the universal unit of measurement to indicate the global warming potential (GWP) of GHGs, expressed in terms of the GWP of one unit of CO2. The GWPs used in the calculation of CO2e are based on the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4) over a 100-year period (this is a requirement for inventory/national reporting purposes).
All conversion factors used in this report are in units of kilograms of carbon dioxide equivalent (kg CO2e).
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
Farm-level
Agriculture is understood today as one of the biggest threats to forest conservation in the Neotropics and as a main driver of global warming and GHG emissions. Nevertheless, Caravela is convinced that it is possible to produce high quality coffee through practices in equilibrium with the environment and with respect of endangered ecosystems.
Therefore, our PECA team works together with coffee grower communities, whose daily actions have a direct effect on endangered forest systems, in promoting the adoption not only of sustainable agricultural practices that preserve the ecosystem services (water, soil, biodiversity) in the region, but also behavioural changes that encourage waste management, reforestation practices, forest preservation, no deforestation, and biodiversity conservation.
Since 2020, through our coffee grower education program team (PECA), Caravela has begun to measure the environmental impact of the coffee production by measuring the carbon footprint of coffee growers' farms through the Cool Farm Tool calculation platform.
The results of these measurements are used as a basis for the PECA team to work to provide coffee growers with technical advice on crop extension that will allow them to improve the productivity and quality of their crops. It also provides the coffee grower with an ecosystem of guidance and accompaniment for decision making with respect to the adoption of sustainable agricultural practices such as the treatment of wastewater, the correct management of the coffee pulp and the optimal use of fertilizers, among others, in addition to protecting the productivity of the soil in the long term.
We are aware that there is a responsibility in measuring the environmental impact on coffee farms, as well as helping coffee producers in their will of reducing their own individual environmental impact.
As of the end of 2024 we have measured more than 1100 farms (corresponding to 37% of all PECA farms). Our goal is to continue to measure carbon footprint at a farm level with a minimum of 50% of PECA farms in number.
This has resulted in a better understanding of carbon sequestration across the supply chain. More work is planned to improve the understanding about how much carbon is being sequestered through the growing phase to support in setting of emissions within the Caravela Coffee supply chain.
In 2024 we achieved the One Carbon World Carbon Neutral International Standard Status for the 4th consecutive year by measuring, reducing and compensating our carbon footprint. This is important as it allows global balancing of emissions while emissions reduction strategies are being implemented. Caravela was also the first green coffee trader to achieve Carbon Neutral Silver Standard certification for our global operations verified by One Carbon World. We plan to continue working with One Carbon World to measure and compensate our carbon footprint.
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
∙Caravela started assessing its carbon emissions in 2016 and through the years, we have increased the scope of our assessment to cover all 13 countries we are present in (seven export operations and four import offices) and set an emissions footprint baseline for the year 2021.
∙2021 was the second year Caravela assessed all three scopes under a third-party assessment through One Carbon World. We piloted a more robust data collection methodology to better represent all Caravela’s activities; from buying coffee at more than 40 buying stations across seven countries in Latin America to delivering it in destination ports all around the world. For 2021, we assessed a base environmental efficiency of 0.55 kg of CO2-eq / kg of green coffee exported including all three scopes.
∙During 2022, we faced logistical challenges at major U.S. ports, necessitating unprecedented land freight efforts to ensure timely green coffee deliveries to North American roasters. Consequently, our GHG emissions in the U.S. increased significantly, around 630 Tons CO2-eq. Uncharacteristic emissions in the US impacted on our overall operational efficiency, which declined by 33% compared to 2021.
∙In 2023, we advanced our carbon emissions reduction plan, aligning with our 2021 baseline. While moving in the right direction, we keep building in our efforts to optimize land coffee freight logistics, to reduce company vehicle emissions, to optimize energy use at dry mills, to promote hybrid work, and to develop innovative waste management partnerships.
∙In 2024, through reductions in scope 1 (direct emissions) and 3 (supply chain emissions), Caravela has assessed an increase in environmental efficiency (kg of CO2/Kg GC) by 9% with respect to our 2021 base line assessment.
Scope 1
∙As part of a new company policy, Caravela has eliminated the use of company-owned vehicles to reduce Scope 3 emissions linked to business travel. This shift promotes more environmentally conscious travel behaviour and enables the adoption of lower-emission transport options, contributing to a more sustainable and efficient travel culture across the organization.
Scope 2
∙Caravela invested in 2019 in the installation of solar panels that supply close to 25% of the energy requirements of the dry milling process in Colombia, which is our biggest processing unit.
∙Through investment in energy efficient machinery and better practices within our biggest dry mill operation in Colombia we have been able to reduce our carbon footprint by a further 25% from 2021 to 2024.
Scope 3:
∙Caravela also worked on increasing the efficiency on its internal logistics operation and develop protocols and strategies to better use the space during coffee freight. During 2024, we reduced the overall amount of GHG emitted by 20%, while increasing our overall environmental efficiency for coffee freight by 6%.
∙During 2024 we formalized the partnership with waste management partners across all seven operations and have steered 100% of the organic waste from our dry milling operation from landfills to the production of energy through combustion, reducing in almost 70% the total emissions related to waste generation.
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CARAVELA LIMITED
Directors' report (continued)
For the Year Ended 31 December 2024
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that:
∙so far as the director is aware, there is no relevant audit information of which the Company and the Group's auditor is unaware; and
∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company and the Group's auditor is aware of that information.
On 21 February 2025 the Group renewed one of its financing facilities used for the purchase of parchment coffee in Peru and Mexico as referred to in note 29 of these financial statements.
The auditor, RSM UK Audit LLP, will be proposed for reappointment in accordance with section 485 of The Companies Act 2006.
This report was approved by the board on
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CARAVELA LIMITED
Independent auditor's report to the members of Caravela Limited
We have audited the financial statements of Caravela Limited (the 'parent Company') and its subsidiaries (the 'Group') for the year ended 31 December 2024, which comprise the Consolidated statement of comprehensive income, the Consolidated statement of financial position, the Company statement of financial Position, the Consolidated statement of changes in equity, the Company statement of changes in equity, Consolidated statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Group and parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion,
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Group's or the parent Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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CARAVELA LIMITED
Independent auditor's report to the members of Caravela Limited (continued)
The other information comprises the information included in the annual report other than the financial statements and our Auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Group strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Group strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and the parent Company and their environment obtained in the course of the audit, we have not identified material misstatements in the Group strategic report or the Directors' report.
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CARAVELA LIMITED
Independent auditor's report to the members of Caravela Limited (continued)
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
The extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities are instances of non-compliance with laws and regulations. The objectives of our audit are to obtain sufficient appropriate audit evidence regarding compliance with laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, to perform audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements, and to respond appropriately to identified or suspected non-compliance with laws and regulations identified during the audit.
In relation to fraud, the objectives of our audit are to identify and assess the risk of material misstatement of the financial statements due to fraud, to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud through designing and implementing appropriate responses and to respond appropriately to fraud or suspected fraud identified during the audit.
However, it is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the entity's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the group audit engagement team and component auditors:
∙obtained an understanding of the nature of the industry and sector, including the legal and regulatory framework that the group and parent company operate in and how the group and parent company are complying with the legal and regulatory framework;
∙inquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;
∙discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.
As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are FRS 102, the Companies Act 2006 and tax compliance regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements which included reviewing financial statement disclosures and inspecting correspondence with local tax authorities.
The most significant laws and regulations that have an indirect impact on the financial statements are those in relation to health and safety. We performed audit procedures to inquire of management whether the group is in compliance with these law and regulations and inspected correspondence with licensing or regulatory authorities.
The group audit engagement team identified the risk of management override of controls and the existence and cut-off of revenue as the areas where the financial statements were most susceptible to material misstatement due to fraud. Audit procedures performed included but were not limited to testing manual journal entries and other adjustments and evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business, agreeing samples of revenue entries in to the general ledger to supporting documentation, and testing a sample of revenue entries with close proximity to the period end to ensure they were recognised in the correct accounting period.
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CARAVELA LIMITED
Independent auditor's report to the members of Caravela Limited (continued)
All relevant laws and regulations identified at a Group level and areas susceptible to fraud that could have a material effect on the consolidated financial statements were communicated to component auditors. Any instances of non-compliance with laws and regulations identified and communicated by a component auditor were considered in our group audit approach.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's report.
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
25 Farringdon Street
EC4A 4AB
14 July 2025
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CARAVELA LIMITED
Consolidated statement of comprehensive income
For the Year Ended 31 December 2024
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CARAVELA LIMITED
Registered number: 03996686
Consolidated statement of financial position
As at
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CARAVELA LIMITED
Registered number: 03996686
Consolidated statement of financial position (continued)
As at 31 December 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 11 July 2025.
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CARAVELA LIMITED
Registered number: 03996686
Company statement of financial position
As at
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CARAVELA LIMITED
Registered number: 03996686
Company statement of financial position (continued)
As at 31 December 2024
As permitted by s408 Companies Act 2006, the Company has not presented its own profit and loss account and related notes as it prepared Group accounts. The Company's loss for the year was $427,803 (2023: the Company's profit for the year was $1,066,554).
The financial statements were approved and authorised for issue by the board and were signed on its behalf on
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