Apiam Animal Health Limited Appendix 4E
1
Apiam Animal Health Limited
ASX: AHX
APPENDIX 4E
PRELIMINARY FINAL REPORT
COMPANY DETAILS
Name of entity:
Apiam Animal Health Limited
ACN:
604 961 024
Reporting period:
For the year ended 30 June 2020
Previous period:
For the year ended 30 June 2019
Apiam Animal Health Limited Appendix 4E
2
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Statutory Results Summary
CHANGES FROM PERIOD ENDED 30 JUNE
%
6
32
32
to
to
to
up
up
up
2020 2019
$m
$m
118.4
from
111.7
4.2
from
4.2 From
3.2
3.2
Revenue from ordinary activities
Net profit attributable to members
Profit from ordinary activities after tax attributable to
members
Underlying EBIT (Incl. non-controlling interests)
Up
23
to
8.4
From
6.8
Underlying EBIT (Earnings Before Interest and Tax) is considered by Management to be a useful
indicator of business profitability and excludes one-off corporate costs as well as integration and
acquisition expenses. Further commentary on the annual results can be found in the ‘Operating and
Financial Review’ section within the Directors’ report of the attached Annual Financial Report.
Dividends
2020 Interim Dividend
Amount per
security
cents
Franked
amount per
security
Cents
0.8 cents
0.8 cents
2020 Final Dividend (declared after balance date but not yet paid) 1.2 cents
1.2 cents
Record date for determining entitlements to the dividend:
18 September 2020
Date dividend payable:
23 October 2020
Apiam Animal Health Limited Appendix 4E
3
Dividend reinvestment plans
The Company initiated a Dividend Reinvest Plan (DRP) on the 25 August 2017 which provides
shareholders with the opportunity to utilise all or part of their dividends to purchase shares in the
Company. Shareholders electing to participate must nominate by 28 September 2020.
Shareholders who elect to participate in the DRP for the 2020 final dividend will be issued shares at a
DRP issue price which will be the average of the daily market price of Apiam’s shares over the period
of five trading days between 28 September 2020 and 2 October 2020 (‘Pricing Period’). The timetable
in respect of the 2020 final dividend and DRP is as follows:
Event / Action
Record Date
Date*
18 September 2020
Election Date: Last date for shareholders to make an election to participate in
the DRP
5.00 pm (Melbourne time) on
28 September 2020
Pricing Period Commencement Date
28 September 2020
Last Day of Pricing Period
Announcement of DRP issue price
Dividend Payment Date / Issue of DRP shares
*All dates are subject to change
2 October 2020
5 October 2020
23 October 2020
Details of the DRP can be downloaded from www.apiam.com.au. In order to participate in the DRP for
the 2020 final dividend, shareholders should ensure that their DRP Election Form is received, or an
online election is made, by no later than 5.00 pm (Melbourne time) on 28 September 2020. An online
election can be made by visiting www.boardroom.com.au.
Net Tangible Asset per Security
Net Tangible assets per share
Return to shareholders
2020
-$0.14
2019
-$0.04
Dividends of $1,776,972 were paid during the period; no share buy backs were conducted during the
year.
Basis of Preparation
This report is based on the consolidated financial statements which have been audited by Grant
Thornton Audit Pty Ltd. The audit report is included within the Company’s Annual Report which
accompanies this Appendix 4E.
Apiam Animal Health Limited Appendix 4E
4
Entities over which control has been gained or lost during the period:
Refer to Note 31 and 32 of the attached Financial Statements for details of entities over which control
has been gained. There were no entities over which control was lost.
Associates and Joint Venture Entities
The Company has no associate companies and 3 joint venture entities.
Other information required by Listing Rule 4.3A
Other information requiring disclosure to comply with Listing Rule 4.3A is contained in the 30 June 2020
Annual Report (which includes the Directors’ Report) which accompanies this Appendix 4E.
Accounting Standards
This Report has been compiled using Australian Accounting Standards and International Financial
Reporting Standards.
2020
Apiam Animal Health
ANNUAL
REPORT
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
Contents
Chairman’s Message
Managing Director’s Message
Director’s Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report
Additional Information
1
2
4
8
20
29
31
32
33
34
35
73
74
77
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
2
Chairman’s Message
Dear shareholder,
The 2020 financial year has been a challenging period for much of Australia, having faced
drought, bushfires and more recently the wide-spread impacts of the global COVID-19 pandemic.
In the face of these strong headwinds, Apiam’s business model and strategy has proven to be
resilient and consequently we have reported a strong trading performance for the 12-months to
30 June 2020 (FY20).
Apiam’s revenue in FY20 increased 6.0% to $118.4 million (FY19: $111.7 million) underpinned
by Apiam’s diversified customer segments, broad product and service offering as well as new
business initiatives and acquisitions over the period. It was particularly pleasing to see our
ProDairy consultancy program, the exclusive distribution agreement with Zoono Animal Health
and the launch of the Best Mates companion animal program, all new business initiatives
developed and implemented by management during FY20, driving new revenue streams and
enhanced earnings opportunities.
Apiam’s statutory Net Profit After Tax was $4.2 million in FY20 up 31.8% on FY19, a result that
is testament to our long-term strategic plan of targeted acquisitions as well as investment in our
business infrastructure and technology to generate cost efficiencies. This year we have seen the
benefits of this strategy on many levels including efficiencies at the clinic-level as well as cost
savings at the corporate level.
In FY20 we also completed the strategic acquisitions of ACE Laboratory Services, Grampians
Animal Health and Devoted Vets in Warragul. Each of these businesses featured a compelling
rationale – either the addition of a specialist service offering that was attractive to our customer
base, or a new high-growth regional exposure. All the acquisitions made during the past year
have performed extremely well and are making a strong financial contribution to our business.
Looking ahead, we expect that COVID-19 will be an on-going challenge for many individuals,
communities and companies. I reassure shareholders that Apiam’s business model, as a provider
of essential animal health services in regional and rural areas, is robust and very well placed,
even during these difficult times. For veterinarians, hygiene and safety have always been at the
forefront of what we do. Our safety protocols are well established and our teams are experienced
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
3
in managing risks presented by infectious agents. Importantly, the fundamentals of our business
remain unchanged. Our scale and geographically dispersed business model across rural
Australia provides Apiam with the capacity to remain resilient in the face of changing conditions.
We enter FY21 with confidence, ready to address the needs of our customers, respond to
challenges and pursue growth. We will continue to execute our business strategy and deliver first-
class services and quality products to our clients. Our investment in our business infrastructure is
expected to further leverage our performance and deliver greater efficiencies.
Apiam has a solid balance sheet supported by stable cash flows. In consideration of this, and in
line with our improved earnings performance during FY20, the Board have declared a 1.2 cents
per share final dividend. This brings the full year dividend to 2 cents per share an increase from
1.6 cents per share in FY19.
As a Company we feel strongly about working with our regional communities and supporting them
through their recovery from the challenges they have faced over the past year. To assist with this
Apiam donated $135,000 to our Fur Life Charitable Foundation. This, together with other
donations raised by the Foundation has all been donated to Rural Aid who have a specialised
counselling program to support rural communities as well as to three regional wildlife
organisations working to improve native animal wellbeing in those areas most affected by
bushfires.
To close, I especially thank the entire Apiam staff who, without exception, faced these
extraordinary times with a degree of professionalism, dedication, flexibility and teamwork that
made me, and my fellow Board members, proud to be a part of the Apiam team.
I also thank Apiam’s shareholders for their continued support and commitment to our business
strategy. I look forward to updating shareholders of our continued progress in the coming year.
Yours sincerely,
Professor Andrew Vizard
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
4
Managing Director’s Message
Dear Shareholder,
Despite the many challenges faced by regional communities, businesses and the broader
economy in the 12-months to 30 June 2020 (FY20), Apiam has delivered a strong period of
growth, particularly in the second half of the year. Our business model has proved robust and
stable in the face of COVID-19 and our strategy to make acquisitions and grow our portfolio of
products and services has provided additional opportunities.
Strengthening financial results
In FY20, Apiam’s revenue grew 6.0% to $118.4 million (FY19: $111.7 million) underpinned by
Apiam’s diversified customer segments.
Apiam’s dairy and companion animal segment revenues performed strongly, particularly as
underlying industry conditions in many regional dairy areas recovered in the second half due to
higher rainfall. The revenues from our beef feedlot segment performed well but came off the back
of a record FY19 performance, while revenues from pigs were impacted mainly by the reduction
of low margin wholesale sales.
New initiatives introduced at the beginning of FY20 also made a strong contribution to revenue
growth including our Best Mates companion animal program, the ProDairy consultancy program
and our exclusive agreement to distribute Zoono Group’s specialised disinfectant products. These
initiatives are described further below.
Our business strategy to execute strategic acquisitions, target higher-value products and services
and to roll-out our Practice Management System across FY19 and H1 FY20 to generate
efficiencies at the clinic-level, has delivered a strong improvement in gross margins to 54.1% in
FY20 (up from 50.3% in FY19).
Operating costs have also continued to be a key management focus and the investment we have
made in our company infrastructure is delivering increasing cost efficiencies, in turn increasing
our bottom-line. I am pleased to report we have delivered 23.3% growth in our underlying
Earnings Before Interest & Tax (before non-recurring costs) and 31.8% growth in statutory Net
Profit After Tax.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
5
Expansion of products & services delivering growth
Apiam remains committed to its long-term strategic plan consisting of three core pillars –
enhancing operations process & capacity, increasing our animals under management and
expanding our product and service range. In FY20, Apiam has significantly progressed its product
and service expansion strategy, offering new and specialised services to enhance animal health
and wellbeing.
We launched our Best Mates companion animal program in July 2019 and have worked on
expanding this across our clinic footprint throughout FY20. This is a whole of life health and
wellness program with an annual subscription charge, offering total care for pets. Since launching
Best Mates, member growth has been very strong, with members growing from 501 as at the end
of FY19 to 3,155 as at the end of FY20. Growth on a quarterly basis was particularly strong in Q3
& Q4, reflective of increased pet ownership during COVID-19 restrictions. Approximately 4.5% of
Apiam’s active patients were Best Mates members as at the end of FY20, leaving a strong
opportunity for continued growth in FY21.
ProDairy is another new initiative we launched in early FY20. This is also an innovative service
model offering dairy farmers an end-to-end service that extends across areas such as staff
training, direct ordering capability and risk management & planning. A full marketing program to
support growth of this program was launched in April 2020 and Apiam has had significant success
in Victoria to date, with an estimated 10% of Victoria’s dairy cows subscribed to the program.
Further growth in other operating regions is expected in the coming year.
In November 2019, Apiam executed an agreement with Zoono Animal Health to distribute the
Zoono Group (ASX:ZNO) proprietary sanitiser and protectant technology for use in livestock
facilities in Australia, and to US-based swine customers. Since this time, Apiam has experienced
strong growth in customer demand particularly following its listing on the Australian Register of
Therapeutic Goods as an effective disinfectant for hard surfaces against COVID-19. It has also
proved effective against other bacteria and viruses.
Apiam expects to see strong sales momentum continue for Zoono’s products within livestock
sectors as a growing awareness and requirement for hygiene is expected to be a long-term
customer trend.
Acquisitions with compelling rationale
Apiam executed three acquisitions during FY20. ACE Laboratory Services (ACE) was acquired
in October 2019 and was the largest of Apiam’s acquisitions in FY20 with initial consideration of
$12.4 million. ACE is a highly specialised business with a custom vaccine and diagnostic
laboratory service offering. Its main customers are large production animal producers. The
acquisition is highly complementary to Apiam’s business and we have identified its core markets
as attractive and high growth opportunities as farming trends evolve, especially with demand for
alternatives to antimicrobials growing rapidly. Since acquisition, ACE has performed strongly and
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
6
we have identified many new customer opportunities across our client base for its specialised
service offering.
Grampians Animal Health and Devoted Vets in Warragul were smaller acquisitions that expanded
Apiam’s regional footprint into areas identified as strategic. Grampians Animal Health is
headquartered in Hamilton, one of Australia’s largest and most productive sheep farming regions
and consists of a large regional mixed animal veterinary clinic and a production animal
consultancy business.
Both the Grampians Animal Health and Devoted Vets acquisitions have both performed in-line
with expectations and have delivered immediate growth opportunities as a result of operating
within Apiam’s corporate network.
Supporting our customers & communities
The extreme weather events of the past 12-months, and the COVID-19 pandemic has meant our
regional customers and communities have endured challenging conditions. This year, Apiam has
been particularly focussed on how to best support our customers and communities as well as
optimising our Fur Life Foundation. This year Apiam’s Fur Life Foundation has contributed
$150,000 directly back into local communities via sponsorship of regional wildlife charities and
Rural Aid who has a specialised counselling program to support rural communities.
During the year we also launched our own in-house Mental Health Strategy initiative as part of
our ongoing commitment to the wellbeing of our employees. This strategy was also made
available to a number of our regional customers and our Customer Assistance Program has been
used to date by clients across the dairy, feedlot and pig industries.
Outlook
While the 2021 financial year brings with it uncertainty associated with COVID-19, Apiam is well
positioned to pursue its strategic framework and deliver further growth. We will continue to grow
our product and service offering as well as work with our customers and their communities to
ensure optimal animal health, wellbeing and safety.
Apiam’s diversified business and customer segments ensure business resilience and our ability
to continue to leverage our back-end systems and infrastructure is expected to continue our
earnings growth trajectory. Our strong balance sheet, manageable debt levels and stable
operating cash flows also ensure we are well positioned to navigate the year ahead.
I conclude by thanking our shareholders for your continuing support. I also thank my Board
colleagues and dedicated employees for your ongoing commitment and hard work to move our
company into its next stage of growth.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
7
Yours Sincerely,
Dr Chris Richards
Managing Director
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
8
The Directors present their report on the consolidated entity consisting of Apiam Animal Health
Limited (Apiam) and the entities it controlled at the end of, or during, the year ended 30 June
Directors’ Report
2020.
DIRECTORS
The names and details of the Company’s directors in office during the financial year and until the
date of this report are as follows.
Professor Andrew Vizard
Non-Executive Chairman
Dr Christopher Richards
Managing Director
Mr Michael van Blommestein
Non-Executive Director
Mr Richard John Dennis
Non-Executive Director
Professor Jan Tennent
Non-Executive Director
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
9
INFORMATION ON DIRECTORS
Professor Andrew Vizard
Dr Christopher Richards
Independent Non-Executive Chairman
Managing Director
BVSc(Hons), MVPM, FAICD
BSc, BVSc, MAICD
Professor Vizard is a Principal Fellow at the
Faculty of Veterinary and Agricultural
Sciences, University of Melbourne and
previously Associate Professor of Veterinary
Epidemiology and Director of The Mackinnon
Project, a recognised leader in sheep and beef
veterinary consultancy. An experienced
company director, he has previously held
directorships in Animal Health Australia, the
body responsible for coordinating Australia’s
animal health system, Primesafe, the statutory
authority
the
production of safe meat in Victoria and the
Australian Wool Corporation. In the previous
four years, Professor Vizard was a non-
executive director of the Ridley Corporation
Limited.
responsible
regulating
for
formation.
Chris has been Managing Director of Apiam
Animal Health since
Since
establishing a pig veterinary services business
in 1998, Chris has been responsible for the
strategic direction of the company including the
development, acquisition and integration of
other veterinary clinics, veterinary wholesale,
logistics and genetic services businesses that
form the integrated company that Apiam is
today. Chris is a Director of Apiam Animal
Health and its subsidiary and joint venture
companies.
Interests in Shares and Options
Interests in Shares and Options
221,695 shares
30,000,000 shares
248,144 performance rights
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
10
Mr Michael van Blommestein
Mr Richard John Dennis
Independent Non-Executive Director
Independent Non-Executive Director
GAICD
BComm, LLB, CA, MAICD
Michael was a Vice President and Country
Manager of Australia and New Zealand for
Zoetis and managed the spin-off of Zoetis
from Pfizer Australia. An experienced director
in the animal health sector, Michael presided
over Animal Medicines Australia, the peak
industry body for five years and was a
member of the board for nearly a decade.
Michael played an integral role in leading and
overseeing the transition of Animal Health
Alliance into Animal Medicines Australia and
has also served on the board of Animal Health
Association Japan. Michael also acts as a
consultant to IRP Health, a company focused
on alternate solutions to antibiotic usage in
production, companion animal and humans.
Rick held a number of senior roles for over 35
years with Ernst & Young (EY) and was the
Managing Partner of EYs Queensland
practice on two occasions from 2001-2007
and from 2014-15. Rick also held a number
of executive management roles at EY,
including Deputy COO and CFO for the Asia-
Pacific practice where he was responsible for
overseeing
financial and operational
integration of EYs Australian and Asian
member firms. Rick is a member of Australian
Super’s Queensland Advisory Board, a
member of the Advisory Board of EWM Group
and HLB Chessboard, and an external
member of the Audit & Risk Committee of
Racing Queensland. He is also a non-
executive director of Open Minds and ASX-
listed Motorcycle Holdings Limited.
the
Interests in Shares and Options
Interests in Shares and Options
104,737 shares
21,647 shares
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
11
Professor Jan Tennent
Independent Non-Executive Director
PhD, BSc (Hons), GCertMgt, FTSE, FASM,
GAICD
Jan is a Fellow of the Australian Academy of
Technology and Engineering and the Australian
Society for Microbiology, a Principal Fellow at
the University of Melbourne and a Collaborative
Professor at the University of Osaka (2017-
2020). She is an internationally recognised
researcher with specialist knowledge of
antimicrobial resistance mechanisms and the
discovery and commercialisation of vaccines.
Jan has held senior roles at CSIRO, CSL, and
Pfizer Animal Health where she was the
Director of Business Development and Global
Alliances in the APAC region. For the past eight
years, Jan has been the CEO of Bio 21 Australia
/ Biomedical Research Victoria. She is also a
non-executive director of AusBiotech Limited
and the eviDent Foundation Limited, and the
founder of ConnectBio consultancy.
Interests in Shares and Options
36,231 shares
Company Secretary
Todd Richards
Todd (BBus, Accounting) is a Certified Practicing Accountant (FCPA) and Company Secretary.
His background includes experience in completing IPOs, M&A transactions and capital raising for
ASX listed companies. He is Company Secretary for a number of listed and private companies
and his corporate secretarial experience in the listed space includes roles in fin-tech, digital
media, agri-business, e-commerce and building services.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
12
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors and of each Board committee held
during the year and the number of meetings attended by each Director or their alternate were as
follows:
Directors
Board Meetings
Audit & Risk Management
Committee
Remuneration &
Nomination Committee
Andrew Vizard
Chris Richards
Michael van
Blommestein
Richard Dennis
Jan Tennent
A
11
11
11
11
11
B
11
11
11
11
11
A
4
B
4
A
3
B
3
N/A
N/A
N/A
N/A
N/A
N/A
3
3
4
4
4
4
N/A
N/A
3
3
Column A denotes the number of meetings the Director was entitled to attend and column B
denotes the number of meetings the Director attended.
COMMITTEE MEMBERSHIP
As at the date of this report, the Company has an Audit & Risk Management Committee and a
Remuneration & Nomination Committee of the Board of Directors
Members of the Audit & Risk Management Committee during the period were:
Richard Dennis (Chair)
Andrew Vizard
Jan Tennent
Members of the Remuneration & Nomination Committee during the period were:
Michael van Blommestein (Chair)
Andrew Vizard
Jan Tennent
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
13
PRINCIPAL ACTIVITIES
REVIEW OF OPERATIONS
Apiam has produced a solid result for the 12-months to 30 June 2020 (FY20) reporting revenue
growth and significant earnings improvement.
Revenue for FY20 increased 6.0% to $118.4 million, up from $111.7 million in FY19 (the prior
corresponding period - pcp), despite industry and wider economic COVID-19 challenges across
the period. This was underpinned by Apiam’s diversified business model, exposure to a wide
range of animal segments and the acquisitions made over the period.
In particular, Apiam’s dairy and mixed animal segment revenues grew strongly compared to pcp,
as greater rainfall significantly improved conditions for customers across the second half of FY20
and the majority of Apiam’s companion animal clinics delivered double-digit revenue growth. Beef
feedlot revenues maintained a solid performance, albeit off a record performance in FY19.
Revenues from the pig segment continued to be affected by industry specific challenges.
Like-for-like revenue, excluding the impact of acquisitions made during the year, fell 5.1% in FY20
reflecting the impact of drought in the first half of FY20 and the reduction in low margin wholesale
sales in the pig segment.
As part of Apiam’s on-going strategy to diversify the business and address these industry
challenges, the Company introduced a number of new business initiatives in FY20. Apiam
launched the specialised ProDairy consultancy program and the Best Mates companion animal
programs early in the period. In November 2019, Apiam also entered into an exclusive agreement
with Zoono Animal Health to distribute the Zoono Group’s (ASX: ZNO) proprietary protection
disinfectant technology for use in livestock in Australia and to US-based swine customers.
In FY20, Apiam made three strategic business acquisitions – ACE Laboratory Services,
Grampians Animal Health and Devoted Vets in Warragul, and these made an important financial
contribution to the business over the period. Apiam also continued to generate operating
efficiencies in many areas.
Apiam reported gross profit of $64.0 million in FY20, an increase of 13.8% on the pcp and a gross
margin of 54.1% (FY19: 50.3%). These strong improvements reflect the benefits at the clinic level
of Apiam’s investment in the roll-out of its comprehensive Practice Management System to all
locations, enabling consistent pricing and management of revenues and costs across clinics.
Underlying EBIT in FY20 (excluding one-off corporate, acquisition and integration expenses) was
$8.4 million, compared to $6.8 million in FY19, up 23.3%, a reflection of strict operating cost
control and targeted expenditure. Reported NPAT for the year was $4.2 million (FY19: $3.2
million), up 31.8% on pcp.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
14
The following tables are presented to assist in the interpretation of the underlying performance of
Apiam during FY20. This information is additional and provided using non-IFRS information and
terminology.
Apiam FY20 Financial Result Summary – Underlying
Total Revenue
Gross Profit
Operating expenses
Underlying EBITDA 1
Amortisation ROU assets 2
Depreciation & amortisation
Underlying EBIT 1
Underlying NPAT 1
FY20
FY19
Variance
%
118.4
64.0
(49.6)
14.4
(2.4)
(3.6)
8.4
4.9
111.7
56.2
(46.2)
10.0
0.0
(3.2)
6.8
4.0
6.7
7.8
(3.4)
4.4
(2.4)
(0.4)
1.6
0.9
6.0%
13.8%
7.3%
43.4%
-
11.3%
23.3%
23.0%
One-off expenses
Notes:
1. Underlying earnings exclude one-off corporate, acquisition and integration expenses (tax effected where applicable at
(1.1)
(1.2)
2.
NPAT level)
The current period (FY20) has been impacted by the first time adoption of the new accounting standard AASB 16 Leases
but the comparative (FY2019) has not been adjusted.
Apiam FY20 Financial Result Summary – Reported
Total revenue
Gross profit
Operating expenses
One-off expenses
EBITDA
Amortisation ROU assets 1
Depreciation & amortisation
EBIT
Interest
Tax
Other (including minorities) 2
NPAT attributable to members
Gross margin
EBIT margin
Notes:
1.
FY20
118.4
64.0
(49.6)
(1.1)
13.3
(2.4)
(3.6)
7.4
(1.4)
(1.8)
(0.1)
4.2
54.1%
6.2%
FY19
Variance
%
6.7
7.8
(3.4)
0.1
4.5
(2.4)
(0.4)
1.7
(0.2)
(0.4)
(0.1)
1.0
6.0%
13.8%
7.3%
(9.0)%
50.2%
-
11.3%
29.8%
20.1%
25.0%
-
31.8%
111.7
56.2
(46.2)
(1.2)
8.9
0.0
(3.2)
5.7
(1.1)
(1.4)
0.0
3.2
50.3%
5.1%
The current period (FY20) has been impacted by the first time adoption of the new accounting standard AASB 16 Leases
but the comparative (FY2019) has not been adjusted
Includes a range of partner business activities incl. Sth West Equine JV, Apiam Solutions, PETstock Joint Venture, Portec
etc
2.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
15
Apiam’s financials in FY20 have been affected by the first-time adoption of AASB 16 Leases on
1 July 2019. Prior period comparatives in FY19 have not been adjusted. A summary analysis of
Apiam’s key profit metrics pre & post AASB 16 Leases adoption in FY20 is set out below.
Apiam FY20 Financial Result Underlying - Pre & Post AASB16
$m 1
Total revenue
Post AASB 16 in FY20
EBITDA
EBIT
NPAT
FY2020A
118.4
FY2019A (not AASB
16 adjusted)
111.7
Variance
6.7
%
6.0%
14.4
8.4
4.9
10.0
6.8
4.0
4.4
1.6
0.9
43.4%
23.3%
23.0%
Pre AASB 16 in FY20
EBITDA
EBIT
NPAT
Notes:
1 All figures presented on an underlying basis to exclude one-off corporate, acquisition and integration expenses (tax effected
where applicable at the NPAT level)
11.9
8.3
5.0
10.0
6.8
4.0
1.8
1.5
1.1
18.4%
21.7%
26.9%
Acquisitions
As part of Apiam’s strategic acquisition program, the Company completed three important
acquisitions in FY20 – ACE Laboratory Services (ACE), Grampians Animal Health and Devoted
Vets in Warragul.
ACE was acquired in October 2019 and is a market leading, highly specialised autogenous
(custom) vaccine and diagnostic laboratory service provider to large production animal producers.
The acquisition is highly complementary to Apiam’s business. The diagnostic laboratory services
are a natural fit with traditional animal veterinary services and offers Apiam an attractive product
and service extension that can be leveraged across the Company’s large production animal
footprint. Additionally, the business’ performance and innovative track record is world class. The
consideration for ACE was $16 million, of which initial consideration comprised $12.375 million
and deferred consideration is payable in 12-months from the date of acquisition subject to
performance ($3.625 million).
Apiam also acquired Grampians Animal Health in December 2019. This business comprises a
large, regional mixed animal veterinary practice and a production animal consultancy business.
Grampians Animal Health is located in the Western District of Victoria which is one of Australia’s
largest and most productive sheep farming regions. This is another highly complementary
acquisition and the business not only enables Apiam to leverage its asset base and infrastructure
in this region but offers a range of skills and expertise that enhance Apiam’s offering and add to
its existing skill base. The acquisition is a fundamental pillar of the Company’s regional expansion
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
16
strategy and will take the South West Victorian operation to seven clinics. The consideration for
Grampians Animal Health was $4.65 million, including deferred consideration of $0.3 million.
Devoted Vets is a small regional veterinary clinic acquisition in Warragul, Victoria, operating in an
attractive and strategic regional location.
Business development initiatives
During the year, as part of Apiam’s on-going strategy to deliver new revenue streams the
Company implemented a number of business initiatives designed with attractive margin and
growth opportunities.
The Best Mates companion animal program was launched in July 2019 and has been rolled out
across the whole clinic footprint in FY20. This is a whole of life health and wellness program for
companion animals with a recurring revenue opportunity as it is based on a subscription service
model. Since launching Best Mates, member growth has been very strong, with members growing
from 501 as at the end of FY19 to 3,155 as at the end of FY20.
ProDairy is also based on a subscription model offering dairy farmers an end-to-end dairy
consulting and supply service. This already has strong penetration in the Victorian market with
further growth in other operating regions expected,
A further product extension executed during the year was Apiam’s exclusive agreement to
distribute Zoono Group’s proprietary sanitiser and protectant technology for use in livestock
facilities in the markets of Australia and to US-based swine customers. Apiam has experienced
strong demand for this product, particularly following its listing on the Australian Register of
Therapeutic Goods as an effective disinfectant for hard surfaces against COVID-19. It has also
proved effective against other bacteria and viruses including influenza.
Balance sheet
Apiam’s balance sheet remains solid, with manageable debt levels serviced by stable cash flows.
As at 30 June 2020, Apiam’s net borrowings increased to $34.5 million up from $24.9 million as
at prior financial year end. This movement mostly reflects the $13.4 million cash component of
the three acquisitions made during FY20.
Apiam also made a strategic increase in inventory in FY20 as it executed the full market launch
of its private label product range and began the exclusive distribution of Zoono products.
Cash flow
Apiam reported operating cashflow in FY20 of $7.5 million, however this excludes $2.3 million of
lease payments now classified as financing cash outflow following the first time adoption of
AASB16 Leases in FY20.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
17
Apiam’s investing and financing cash flows in FY20 reflect the impact of the three acquisitions
made in FY20, and the 70% - 80% debt financing utilised.
$M
Net cash provided by operating activities
Acquisition of subsidiary, net of cash
Purchases of property, plant and equipment
Purchases of Intangible assets
Net cash used in investing activities
Net changes in financing
Dividends paid to shareholders
Repayment of lease liabilities
Other
Net cash inflow from financing activities
Net change in cash and cash equivalents
Dividend
FY20A
7.5
(13.1)
(1.5)
(0.4)
(15.0)
12.4
(1.2)
(3.2)
0.1
8.1
0.6
FY19A
4.9
(0.3)
(2.1)
(0.7)
(3.1)
0.2
(1.0)
-
(0.6)
(1.4)
0.4
Apiam’s Board of Directors have declared a fully franked dividend of 1.2 cents per share (cps),
supported by the Company’s solid balance sheet and growth in earnings over FY20. This brings
total dividends paid in respect of FY20 to 2.0 cps, implying a 56% payout ratio of NPAT.
The final dividend will be paid on 23 October 2020 and Apiam’s Dividend Reinvestment Plan will
be maintained.
Outlook
Apiam is well placed to deliver revenue and earnings growth in FY21, despite the current
challenges posed by COVID-19. The product and service offering extension that has been the
focus of the Company’s FY20 strategy will continue to accelerate new revenue streams, and
further operating leverage is expected to enhance earnings margins.
DIVIDENDS
An interim dividend of $927,624.56 is 0.8 cps and was paid in April 2020. The Apiam Board of
Directors have declared the Company’s final dividend of 1.2c per share fully franked on the 20
August 2020. The final dividend of $1,399,166 will be paid on the 23 October 2020.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the opinion of the Directors there were no significant changes in the state of affairs of the
consolidated entity during the financial period, except as otherwise noted in this Report.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
18
SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL
YEAR
Apart from the final dividend declared, there are no other matters or circumstances that have
arisen since the end of the year that have significantly affected or may significantly affect either:
the entity’s operations in future financial years
the results of those operations in future financial years; or
the entity’s state of affairs in future financial years.
LIKELY DEVELOPMENTS, BUSINESS STRATEGIES AND PROSPECTS
The Company’s strategy is to build on the solid foundation it has established as an integrated
animal health business servicing the rural production and companion animal sectors, and ensure
we can meet the needs of a market which is experiencing strong growth.
The Company expects to continue to invest through acquisition, new greenfield sites, partnerships
and further recruitment of leading expertise to ensure we have the capability required to prosper
in the expanding global animal health industry.
KEY RISKS AND BUSINESS CHALLENGES
Apiam Animal Health operates in the Production Animal industry and in particular the pig, feedlot
cattle and dairy cattle sectors. Any downturn or disruption in these sectors, particularly if it results
in substantial reductions in livestock numbers or production volume, will adversely impact the
Company.
Any recurring or prolonged disruption to the supply of the key products that Apiam Animal Health
sells, particularly vaccines for pigs, may have an adverse effect on the financial performance of
the Company.
No single client or buying group accounts for more than 10% of Apiam Animal Health’s FY20
revenue. However, if there is consolidation within Apiam Animal Health’s client base, this may
lead to a concentration of the Company’s client exposure risk and may adversely affect the
margins that the Company is able to generate on the sale of its products and services to these
client groups.
Apiam Animal Health’s business model depends substantially on its senior management team
and key personnel to oversee the day-to-day operations and strategic management of the
Company. There is a risk that operating and financial performance of the Company would be
adversely affected by the loss of one or more key persons.
ENVIRONMENTAL REGULATION
The Managing Director reports to the Board on any environmental and regulatory issues at each
Directors meeting, if required. There are no matters that the Board considers need to be reported
in this report.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
19
GREENHOUSE GAS AND ENERGY DATA REPORTING REQUIREMENTS
The Group is not subject to the reporting requirements of either the Energy Efficiency
Opportunities Act 2006 or the National Greenhouse and Energy Reporting Act 2007.
UNISSUED SHARES UNDER OPTION
There were no unissued ordinary shares of Apiam under option at the date of this report.
SHARES ISSUED DURING OR SINCE THE END OF THE YEAR AS A RESULT
OF EXERCISE OF OPTIONS
During the financial year, the Company did not issue ordinary shares as a result of the exercise
of options.
DEEDS OF ACCESS, INDEMNITY AND INSURANCE FOR DIRECTORS AND
OFFICERS
Access
The Company has entered into deeds of access, indemnity and insurance with each Director
which contain rights of access to certain books and records of the Company.
Indemnification
Under the constitution of the Company, the Company is required to indemnify all Directors and
officers, past and present, against all liabilities allowed under law. Under the deed of access,
indemnity and insurance, the Company indemnifies parties against all liabilities to another person
that may arise from their position as an officer of the Company or its subsidiaries to the extent
permitted by law. The deed stipulates that the Company will meet the full amount of any such
liabilities, including reasonable legal costs and expenses.
The company has agreed to indemnify its auditors, Grant Thornton Audit Pty Ltd, to the extent
permitted by law, against any claim by a third party arising from the Company’s breach of its
agreement. The indemnity requires the Company to meet the full amount of any such liabilities
including a reasonable amount of legal costs.
Insurance
Under the constitution of the Company, the Company may arrange and maintain directors’ and
officers’ insurance for its Directors to the extent permitted by law and under the deed of access,
indemnity and insurance, the Company must maintain insurance cover for each Director for the
duration of the access period.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
20
Remuneration Report
REMUNERATION REPORT (AUDITED)
This remuneration report outlines the director and executive remuneration arrangements of the
Company and the Group in accordance with the requirements of the Corporations Act 2001 and
its Regulations. For the purposes of this report, key management personnel (KMP) of the Group
are defined as those persons having authority and responsibility for planning, directing, and
controlling major activities of the Company and the Group, directly or indirectly, including any
director (whether executive or otherwise) of the parent.
For the purposes of this report, the term “executive” encompasses the senior executives and
general managers of the Group.
Details of Key Management Personnel
(I) DIRECTORS
Andrew Vizard
Chairman (Independent Non-executive)
Chris Richards
Managing Director (Executive)
Michael van Blommestein
Director (Independent Non-executive)
Richard Dennis
Director (Independent Non-executive)
Jan Tennent
Director (Independent Non-executive)
(II) EXECUTIVES
Matthew White
Chief Financial Officer
Brian Scutt
Chief Operating Officer
The Remuneration Report is set out under the following main headings:
Principles used to determine the nature and amount of remuneration;
Details of remuneration;
Service agreements;
Share-based remuneration;
Bonuses included in remuneration;
Non-executive director remuneration; and
Other information.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
21
a
Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive strategy and supporting incentive programs and
frameworks are:
•
•
•
to align rewards to business outcomes that deliver value to shareholders;
to drive a high performance culture by setting challenging objectives and rewarding high
performing individuals; and
to ensure remuneration is competitive in the relevant employment market place to
support the attraction, motivation and retention of executive talent.
The Group has structured a remuneration framework that is market competitive and
complementary to the reward strategy of the Group.
The Remuneration Committee operates in accordance with its charter as approved by the Board
and is responsible for reviewing and recommending compensation arrangements for the Directors
and the Executive Team. The remuneration committee has met 3 times in the FY20 reporting
period.
The Committee engaged the services of Korn Ferry Hay Group to undertake bench-marking for
the executive team remuneration in FY17. The Committee has also engaged Grant Thornton
Australia Limited and HRAscent to formulate an equity management plan for principal and senior
vets which was approved in FY17 and implemented in FY18.
The remuneration structure that has been adopted by the Group consists of the following
components:
fixed remuneration being annual salary;
•
• Long term incentives; and
• short term incentives, being bonuses.
The Remuneration Committee assesses the appropriateness of the nature and amount of
remuneration on a periodic basis by reference to recent employment market conditions with the
overall objective of ensuring maximum stakeholder benefit from the retention of a high quality
Board and Executive Team. The company’s key financial metrics are as follows:
Item
2020
2019
2018
2017
2016
EPS (cents)
3.69c
3.01c
3.21c
5.00c
0.08c
Dividends
(cents per
share)
Net profit
before tax
($’000)
Share price
($)
1.6c
1.6c
1.6c
0.8c
-
$6,065
$4,569
$4,831
$6,315
$1,068
$0.46
$0.52
$0.75
$0.70
$1.49
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
22
b
Details of remuneration
Details of the nature and amount of each element of the remuneration of each Key Management Personnel (KMP) of Apiam are shown in the table
below:
Short term employee benefits
Salary
and fees (i)
$
Cash bonus
$
Non-monetary
benefits
$
Post-employment
benefits
Superannuation
$
Long-term
benefits
Long service
leave (ii)
$
Share-based
Payment
Performance
Rights (iii)
$
Directors
Andrew Vizard
Chairman Independent
Richard Dennis
Independent
Chris Richards
Managing Director
Michael van Blommestein
Independent
Charles Sitch
Independent
Jan Tennent
Independent
Employees
Matthew White
Chief Financial Officer
Brian Scutt
Chief Operating Officer
2020 Total
2019 Total
Year
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
2020
2019
120,000
120,000
70,000
70,000
354,740
350,072
54,795
54,795
-
22,416
60,000
55,000
228,000
225,000
61,923
-
949,458
897,283
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,307
13,674
-
-
-
-
-
-
-
-
-
-
8,307
13,674
-
-
-
-
21,003
20,531
5,205
5,205
-
2,129
-
-
21,003
20,532
5,251
-
52,462
48,397
-
-
-
-
7,888
5,208
-
-
-
-
-
-
4,040
1,293
1,032
-
12,960
6,501
Total
$
120,000
120,000
70,000
70,000
401,389
389,485
60,000
60,000
-
24,545
60,000
55,000
255,841
246,825
68,206
-
-
-
-
-
9,451
-
-
-
-
-
-
-
2,798
-
-
-
12,249
1,035,436
-
965,855
Performance
based
percentage of
remuneration
%
0%
0%
0%
0%
2%
0%
0%
0%
0%
0%
0%
0%
1%
0%
0%
0%
0%
0%
(i)
(ii)
(iii)
Salary and fees include salaries and allowances.
Long term benefits include long service leave entitlement accruals.
Share based payment performance rights are long term incentive performance plans which will lapse if they are not vested within three years of grant date. The performance rights will vest
annually over three years upon the Company achieving a minimum of 12% share price growth per year. The amount recognised for the Managing Director and Chief Financial Officer was $9,451
and $2,798 respectively and is the proportion expensed to that year based on the Monte Carlo valuation model.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
23
The relative proportions of remuneration that are linked to performance and those that are fixed
are as follows:
Name
Executive Directors
Chris Richards
Other Key Management Personnel
Matthew White
Brian Scutt
Fixed remuneration
At risk – STI
100%
100%
100%
-
-
-
Service agreements
c
Remuneration and other terms of employment for the Executive Directors and other key
management personnel are formalised in a Service Agreement. The major provisions of the
agreements relating to remuneration are set out below:
Base salary
$354,740
$228,000
$230,000
Term of agreement
5 years from listing
No fixed term
No fixed term
Notice period
Twelve (12) months
Six (6) months
Three (3) months
Name
Chris Richards
Matthew White
Brian Scutt
Bonus provisions
Chris Richards:
Matthew White:
Brian Scutt:
Nil
Nil
Nil
Bonuses included in remuneration
d
There were no short-term incentive cash bonuses awarded or made available as remuneration to
each key management personnel during the financial year.
Long Term Incentive Plan
e
Remuneration of key management personnel includes performance rights which are offered as
part of a long term incentive plan. The performance period for the plan runs for a three year
period from 1 July 2019 to 30 June 2022. The performance measures are assessed annually
and are based on the share price growth of the company and subject to continued employment.
The annual share price growth requirement is set out below for each financial year during the
performance period.
Share Price Growth
Less than 12%
Above 12% but less than 31%
% of Performance Rights that may vest
Nil – Tranche lapses and Performance Rights cancelled
Between 50% and 100%, as determined on a pro-rata,
straight line basis
At or above 31%
100% allocation of Tranche
Share Price Growth shall be measured by comparing the Baseline Share Price against the
Closing Share Price in each year of the Performance Period. The baseline share price will be
calculated by assessing the volume weighted average price (VWAP) of shares for the 30
calendar days following the lodgement of the annual report in the prior financial year. The
closing share price shall be calculated by assessing the VWAP of shares for the 30 calendar
days following the lodgement of the annual report for the current financial year of the
performance period.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
24
The performance rights are allocated equally over a three-year period. The performance rights
for each financial year during the performance period will vest subject to meeting the share
price growth rate and remaining in continuous employment through to the annual vesting date of
31 October.
Tranche A – one third of the rights in the FY2020 year
Tranche B – one third of the rights in the FY2021 year
Tranche C – one third of the rights in the FY2022 year
Details of the number of performance rights granted are as follows:
Name
Performance
Grant Date
Tranche A –
Tranche B –
Tranche C –
Rights granted
FY2020
FY2021
FY2022
Chris Richards
Matthew White
Brian Scutt
248,144
106,326
-
28/11/19
82,714
19/3/20
35,442
-
-
82,715
35,442
-
82,715
35,442
-
Each tranche of performance rights which have not vested will expire if the applicable
performance measures are not met during the performance period.
The company has chosen share price growth as the performance measure as it believes the
fundamental driver for executive remuneration should be long term financial performance that
generates value for Apiam shareholders.
Non-Executive Director remuneration
f
Clause 13.1(a) of the Company’s Constitution (Constitution) provides the limit for the aggregated
remuneration of non-executive directors which is currently set at $750,000. The Directors of the
Company are entitled to apportion and distribute this aggregate Non-Executive Directors’
remuneration as they determine.
The Non-Executive Directors of the Company receive the following fees (which total $310,000):
• Chairman (One): $120,000 per annum;
• Directors (Three): $60,000 per annum, each; and
• Chair of the Audit and Risk Management Committee $10,000 (in addition to the directors
fees), such amounts being inclusive of any superannuation payments.
The ASX Listing Rules and Constitution allows the Company to increase the aggregate amount
of remuneration payable to Non-Executive Directors of the Company pursuant to Shareholder
approval at a general meeting.
g
Other information
Options held by key management personnel
There were no options to acquire shares in the Company held during the 2020 reporting period
of key management personnel of the Group, including their related parties.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
25
Shares held by key management personnel:
The number of ordinary shares held in the Company at 30 June 2020 held by each of the
Groups key management personnel, including their related parties, is set out below.
Personnel
Balance at
1/07/2019
Granted as
remuneration
Received
on
exercise
Chris Richards
28,951,805
Andrew Vizard
Richard Dennis
Michael van
Blommestein
Jan Tennent
Matthew White
Brian Scutt
214,153
20,912
101,174
35,000
117,776
-
Total
29,440,820
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
changes
1,048,195
7,542
735
3,563
1,231
2,959
Held as at
30/06/2020
30,000,000
221,695
21,647
104,737
36,231
120,735
-
-
1,064,225
30,505,045
None of the shares included in the table above are held nominally by key management personnel
Performance rights held by key management personnel:
The number of performance rights held at 30 June 2020 by each of the Group’s key
management personnel, including their related parties, is set out below.
Personnel
Chris Richards
Matthew White
Brian Scutt
Total
Balance at
1/07/2019
Granted as
remuneration
Vested/
exercised
Forfeited/
lapsed
during year
-
-
-
-
248,144
106,326
-
354,470
-
-
-
-
-
-
-
-
Held as at
30/06/2020
248,144
106,326
-
354,470
Loans to key management personnel
The Group did not enter into any loans with key management personnel during the 2020 year.
The number of key management personnel included in the Group aggregate at year end is Nil.
The Group does not have an allowance account for receivables relating to outstanding loans and
has not recognised any expense for impaired receivables during reporting period.
Other transactions with key management personnel
The Group rents premises at Piper Lane, Bendigo East, Victoria. The premises are owned by an
entity associated with Chris Richards. Rental payments in FY20 amounted to $333,600 (2019:
$333,600).
The Group rents premises at Rubicon Street, Smithton, Tasmania. The premises are owned by
an entity associated with Chris Richards. Rent payments made amounted to $125,232 (2019:
$125,232).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris
Richards. Lease payments made amounted to $105,000 (2019: $105,000).
The Group leases premises at Midland Highway, Lethbridge, Victoria from entities associated
with Chris Richards. Lease payments made amounted to $2,018 (2019: $16,818).
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
26
The Group leases premises at Hoskin Street, Quarry Hill, Victoria from entities associated with
Chris Richards. Lease payments made amounted to $- (2019: $15,002).
The Group leases premises at Midland Highway, Epsom, Victoria from entities associated with
Chris Richards. Lease payments made amounted to $7,753 (2019: $18,652).
All related party rentals are based on commercial rates and the terms of the lease are standard
commercial terms.
End of audited Remuneration Report.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
27
Environmental legislation
Apiam operations are not subject to any particular or significant environmental regulation under a
law of the Commonwealth or of a State or Territory in Australia.
Indemnities given to, and insurance premiums paid for, auditors and officers.
Insurance of officers
During the year, Apiam paid a premium to insure officers of the Group. The officers of the Group
covered by the insurance policy include all Directors. The liabilities insured are legal costs that
may be incurred in defending civil or criminal proceedings that may be brought against the officers
in their capacity as officers of the Group, and any other payments arising from liabilities incurred
by the officers in connection with such proceedings, other than where such liabilities arise out of
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their
position or of information to gain advantage for themselves or someone else to cause detriment
to the Group.
Details of the amount of the premium paid in respect of insurance policies are not disclosed as
such disclosure is prohibited under the terms of the contract.
The Group has not otherwise, during or since the end of the financial year, except to the extent
permitted by law, indemnified or agreed to indemnify any current or former officer of the Group
against a liability incurred as such by an officer.
Non-audit services
During the year, the Company’s auditors performed certain other services in addition to their
statutory audit duties.
The Board has considered the non-audit services provided during the year by the auditor and, in
accordance with written advice provided by resolution of the Audit and Risk Management
Committee, is satisfied that the provision of those non-audit services during the year is compatible
with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 for the following reasons:
•
•
all non-audit services were subject to the corporate governance procedures adopted by the
Company and have been reviewed by the Audit and Risk Management Committee to ensure
they do not impact upon the impartiality and objectivity of the auditor; and
the non-audit services do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they
did not involve reviewing or auditing the auditor’s own work, acting in a management or
decision-making capacity for the Company, acting as an advocate for the Company or jointly
sharing risks and rewards.
Details of the amounts paid to the auditors of the Company and its related practices for audit and
non-audit services provided during the year are set out in Note 28 to the financial statements.
A copy of the Auditor’s Independence Declaration as required under s307C of the Corporations
Act 2001 is included on page 28 of this financial report and forms part of this Directors’ Report.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to
bring proceedings on behalf of the Company, or to intervene in any proceedings to which the
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
28
Company is a party, for the purpose of taking responsibility on behalf of the Company for all or
part of those proceedings.
Rounding of amounts
Apiam is a type of Company referred to in ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the
financial report have been rounded to the nearest $1,000 (where rounding is applicable), or in
certain cases, to the nearest dollar under the option permitted in the Instrument.
Signed in accordance with a resolution of the Directors:
Dr Christopher Irwin Richards
Managing Director
Melbourne
24 August 2020
29
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 9320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Apiam Animal Health Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Apiam
Animal Health Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have
been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
C S Gangemi
Partner – Audit & Assurance
Melbourne, 24 August 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
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Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
30
Apiam Animal Health Limited
Financial Statements
For the year ended 30 June 2020
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
31
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue
Other income
Expenses
Changes in inventory
Cost of materials
Costs of consumables and services
Employee benefit expenses
Acquisition expenses
Property expenses
Freight, vehicle and transport expenses
Depreciation and amortisation expense
Depreciation of biological assets
Other operating expenses
Share of profit from equity accounted investments
Interest on lease liabilities
Finance costs
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit from continuing operations
Profit for the year
Profit attributable to:
Owners of Apiam Animal Health Limited
Non-controlling interests
Total comprehensive income/ (loss) for the period
Note
6
27
13,14
7
7
8
24
2020
$’000
118,335
82
6,718
(61,130)
(927)
(37,681)
(460)
(1,496)
(2,120)
(5,853)
(98)
(7,982)
45
(388)
(980)
2019
$’000
111,720
19
(308)
(55,324)
(970)
(33,085)
(392)
(3,452)
(1,899)
(3,147)
(46)
(7,425)
18
-
(1,140)
6,065
4,569
(1,774)
4,291
(1,419)
3,150
4,291
3,150
4,171
120
4,291
3,165
(15)
3,150
Earnings per share for profit attributable to the ordinary
equity holders of the company:
Note
Cents
Cents
Basic earnings per share
Diluted earnings per share
25
25
3.69
3.65
3.01
3.00
The above statement of profit or loss should be read in conjunction with the accompanying notes
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2020
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As at 30 June 2020
Current assets
Note
Cash and cash equivalents
Trade and other receivables
Tax receivable
Inventories
Other current assets
Total current assets
Non-current assets
Intangible assets
Property, plant and equipment
Biological assets
Investments
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Other current liabilities
Current tax liabilities
Borrowings
Employee benefit obligations
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Employee benefit obligations
Deferred tax liabilities
Other liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Equity attributable to owners of the parent
Share capital
Corporate re-organisation reserve
Non-controlling interest acquisition reserve
Share based payment reserve
Foreign currency translation reserve
Retained earnings
Non-controlling interest
9
10
11
12
14
13
16
17
15
21
18
19
20
19
15
20
16
22
23
23
23
23
24
Total equity
The above statement should be read in conjunction with the accompanying notes
32
2019
$’000
1,873
13,399
507
10,947
1,003
27,729
65,225
8,381
220
95
2,796
76,717
2020
$’000
2,509
11,868
225
17,666
1,096
33,364
84,276
19,805
123
140
3,319
107,663
141,027
104,446
8,795
2,683
4,153
1,300
3,400
5,865
26,196
33,565
11,453
280
720
300
46,318
72,514
9,596
-
400
230
3,707
4,852
18,785
23,035
-
273
784
260
24,352
43,137
68,513
61,309
91,107
(26,692)
(6,615)
223
(20)
9,486
67,489
1,024
68,513
86,432
(26,692)
(6,615)
330
-
7,092
60,547
762
61,309
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
33
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
Balance at 1 July 2018
Issue of shares to vendors of business acquired
Issue of new share capital
Employee share plan
Dividends paid
Transactions with owners
Profit / (Loss) for the period
Total comprehensive income for the period
Balance at 30 June 2019
Issue of new share capital
Issue of shares to vendors of business acquired
Employee share plan
Foreign currency translation adjustment
Dividends paid
Transactions with owners
Profit / (Loss) for the period
Total comprehensive income for the period
Balance at 30 June 2020
Note
22
22
Share
capital
Corporate re-
organisation
reserve
$’000
85,775
-
657
-
-
657
-
-
86,432
770
3,905
-
-
-
4,675
-
-
$’000
(26,692)
-
-
-
-
-
-
-
(26,692)
-
-
-
-
-
-
-
-
Non-
controlling
interest
acquisition
reserve
$’000
(6,615)
-
-
-
-
-
-
-
(6,615)
-
-
-
-
-
-
-
-
91,107
(26,692)
(6,615)
The above statement should be read in conjunction with the accompanying notes
Share
based
payment
reserve
Foreign
Currency
Translation
Reserve
Retained
earnings
Total
attributable to
owners of
parent
Non-
controlling
interest
$’000
-
-
-
330
-
330
-
-
330
-
-
(107)
-
-
(107)
-
-
223
$’000
-
-
-
-
-
-
-
-
-
-
-
-
(20)
-
(20)
-
-
(20)
$’000
5,607
-
-
-
(1,680)
(1,680)
3,165
3,165
7,092
-
-
-
(1,777)
(1,777)
4,171
4,171
9,486
$’000
58,075
-
657
330
(1,680)
(693)
3,165
3,165
60,547
770
3,905
(107)
(20)
(1,777)
2,771
4,171
4,171
67,489
Total
equity
$’000
58,725
-
784
330
(1,680)
(566)
3,150
3,150
61,309
912
3,905
(107)
(20)
(1,777)
2,913
4,291
4,291
$’000
650
-
127
-
-
127
(15)
(15)
762
142
-
-
-
-
142
120
120
1,024
68,513
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Note
Interest paid
Transaction costs relating to acquisition of subsidiary
Income taxes paid
Net cash (outflow)/inflow from operating activities
26
Cash flows from investing activities
Payments for property, plant and equipment
Payments for biological assets
Purchase of intangible assets
Proceeds from disposals of property, plant & equipment
Acquisition of subsidiaries, net of cash acquired
Net cash (outflow)/inflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Lease payments
Capital contribution of non-controlling interest
Dividends paid to company shareholders
Net cash (outflow)/inflow from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of the year
The above statement should be read in conjunction with the accompanying notes
31
9
2020
$'000
133,977
(123,721)
10,256
(1,347)
(460)
(942)
7,507
(1,646)
-
(340)
82
(13,097)
(15,001)
22,583
(10,171)
(3,242)
142
(1,182)
8,130
636
1,873
2,509
34
2019
$'000
123,800
(115,838)
7,962
(1,140)
(385)
(1,553)
4,884
(1,860)
(266)
(706)
19
(254)
(3,067)
15,516
(15,301)
(699)
127
(1,023)
(1,380)
437
1,436
1,873
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
35
Notes to the Consolidated Financial Statements
1
Nature of operations
Apiam Animal Health Limited and subsidiaries’ (‘the Group’) principal activities include the provision of veterinary products
and services to production and companion animals. Apiam services production animals throughout their life cycle, including
the provision of:
-
-
-
-
-
-
-
-
-
-
-
-
systems to assist in herd health programs;
production advice;
consulting services and products to assist in the prevention of animal diseases;
technologies to manage compliance with legislative requirements on pharmaceutical use;
advice and services in respect of animal welfare compliance;
retail animal health product sales;
on-farm delivery of products via its own logistics capability;
third party auditing services of industry quality assurance programs;
technology development for animal health management;
ancillary services such as sales and/or delivery of genetics and associated products;
on-farm and on-line training programs for clients; and
veterinary services for companion animals
There have been no significant changes in the nature of these activities during the year.
2
General information and statement of compliance
The consolidated general purpose financial statements of the Group have been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of
the Australian Accounting Standards Board (AASB). Compliance with Australian Accounting Standards results in full
compliance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB). Apiam Animal Health Limited is a for-profit entity for the purpose of preparing the financial statements.
Apiam Animal Health Limited is the Group’s Ultimate Parent Company. Apiam Animal Health Limited is a Public Company
incorporated and domiciled in Australia. The address of its registered office and principal place of business is 27-33 Piper
Lane, East Bendigo, Victoria 3550.
The consolidated financial statements for the year ended 30 June 2020 were approved and authorised for issue by the
Board of Directors on 24 August 2020.
3
Changes in accounting policies
New standards adopted as at 1 July 2019
AASB 16 Leases
AASB 16 ‘Leases’ replaces AASB 117 ‘Leases’ and several lease related interpretations. The new Standard has been
applied using the modified retrospective approach. Prior periods have not been restated and there have been no
adjustments to opening retained earnings on transition to AASB 16.
The adoption of this new Standard has resulted in the Group recognising a right-of-use asset and related lease liability in
connection with all former operating leases except for those identified as low-value or having a remaining lease term of less
than 12 months from the date of the initial application. The lease liabilities were measured at the present value of the
remaining lease payments, discounted using the incremental borrowing rate appropriate to the underlying term and security
of each lease as of 1 July 2019. The right of use assets for property lease is measured on a retrospective basis as if the
new rules had always been applied and other right of use assets were measured at the amount equal to the lease liability.
The adoption of the standard resulted in reduced operating expenses and increased depreciation and interest expense.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
36
For contracts in place at the date of initial application, the Group has elected to apply the definition of a lease from AASB
117 and interpretation 4 and has not applied AASB 16 to arrangements that were previously not identified as leases under
AASB 117 and interpretation 4.
Instead of performing an impairment review on the right-of-use assets at the date of initial application, the Group has relied
on its historic assessment as to whether leases were onerous immediately before the date of initial application of AASB 16.
On transition to AASB 16 the weighted average incremental borrowing rate applied to lease liabilities recognised under
AASB 16 was 2.965%.
The Group has benefited from the use of hindsight for determining lease term when considering options to extend and
terminate leases.
The following is a reconciliation of total operating lease commitments at 30 June 2019 to the lease liabilities recognised at
1 July 2019:
Total operating lease commitments disclosed at 30 June 2019
CPI increases not recognised under AASB16
Operating lease liabilities before discounting
Discounted using incremental borrowing rate
Reasonably certain extension options
Finance lease obligations
Total lease liabilities recognised under AASB 16 at 1 July 2019
10,119
(492)
9,627
(553)
4,655
1,685
15,414
The adoption of AASB 16 has resulted in the following impacts to the financial statements for the year ending 30 June 2020:
Income Statement:
• A decrease in rental expense
• An increase in depreciation expense
Statement of financial position
• An increase in property, plant & equipment
• An increase in current liabilities
• An increase in non-current liabilities
Statement of cash flows
• An increase in net cash flows from operating activities
• A decrease in net cash flows from financing activities
Interpretation 23 Uncertainty over Income Tax Treatments
2,040
2,419
12,770
2,187
10,650
2,012
2,012
Interpretation 23 requires that assessment of whether the effect of uncertainty over income tax treatment should be
included in the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.
The interpretation outlines the requirements to determine whether an entity considers uncertain tax treatments separately,
the assumptions an entity makes about the examination of tax treatments by taxation authorities, how an entity
determines taxable profit (tax loss), tax basis, unused tax losses, unused tax credits and tax rates and how an entity
considers changes in facts and circumstances.
The Group has adopted Interpretation 23 from 1 July 2019, based on an assessment of whether it is “probable” that a
taxation authority will accept an uncertain tax treatment. This assessment takes into account that for certain jurisdictions in
which the company operates, a local tax authority may seek to open a company’s books as far back as inception of the
company. Where it is probable, the company has determined tax balances consistently with the tax treatment used or
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
37
planned to be used in its income tax filings. Where the Group has determined that it is not probable that the taxation
authority will accept an uncertain tax treatment, the most likely amount or expected value has been used in determining
taxable balances (depending on which method is expected to better predict the resolution of the uncertainty). There has
been no material impact from the adoption of interpretation 23 in this reporting period.
Accounting Standards issued but not yet effective and not been adopted
early by the Group
At the date of authorisation of these financial statements, several new, but not effective Standards and amendments to
existing Standards, and Interpretations have been published by the AASB. None of these Standards or amendments to
existing Standards have been adopted early by the Group.
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the
effective date of the pronouncement.
4
Summary of accounting policies
Overall considerations
The consolidated financial statements have been prepared using the significant accounting policies and measurement
bases summarised below.
Basis of consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries as of 30 June 2020.
The parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary
and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30
June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and
losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on
consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted
by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from
the effective date of acquisition, or up to the effective date of disposal, as applicable.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets
that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners
of the parent and the non-controlling interests based on their respective ownership interests.
Business combination
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the
Group to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred,
liabilities incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising
from a contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether
they have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and
liabilities assumed are generally measured at their acquisition-date fair values.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
38
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of:
(a) fair value of consideration transferred, (b) the recognised amount of any non-controlling interest in the acquiree, and (c)
acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable
net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount (ie gain on a
bargain purchase) is recognised in profit or loss immediately.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at acquisition date. The measurement period ends on
either the earlier of (i) 12 months from the date of acquisition or (ii) when the acquirer receives all the information possible
to determine fair value.
Business combinations under common control are accounted for in the accounts prospectively from the date the group
obtains the ownership interest.
Assets and liabilities are recognised upon consolidation at their existing carrying amount in the financial statements of the
Acquiree. Any difference between the fair value of the consideration paid and the book value / carrying amount at which the
assets and liabilities are recorded is recognised directly in the Corporate re-organisation reserve in equity.
Foreign currency translation
Functional and presentation currency
The consolidated financial statements are presented in Australian Dollars ($AUD), which is also the functional currency of
the Parent Company.
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange
rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from
the settlement of such transactions and from the re-measurement of monetary items at year end exchange rates are
recognised in profit or loss.
Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange
rates at the date of the transaction), except for non-monetary items measured at fair value which are translated using the
exchange rates at the date when fair value was determined.
Segment reporting
Apiam identifies its operating segments based on the species to which the Group provide veterinary services and supply
animal health products. The Group’s three (3) operating segments are:
• Dairy and Mixed;
• Feedlots;
• Pigs;
The operating segments are aggregated for reporting purposes on the basis that each business segment has sales
consisting predominantly of S4 products, over the counter products and service revenue and that these products and
services exhibit similar economic characteristics across each business.
Revenue
Revenue arises mainly from the sale of veterinary products and services.
To determine whether to recognise revenue, the Group follows a 5-step process:
1. Identifying the contract with a customer
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
39
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as performance obligation(s) are satisfied
When the Group enters into transactions involving its products and services, the total transaction price for a contract is
allocated amongst the various performance obligations. Revenue is recognised either at a point in time or over time, when
the Group satisfies performance obligations by transferring the promised goods or services to its customers.
Sale of veterinary products and services
Revenue from the sale of veterinary products is recognised when the Group transfers control of the goods to the customer
and/or as contractual performance obligations are satisfied. Revenue from the sale of veterinary services is recognised as
the services are provided.
Interest and dividend income
Interest income and expenses are reported on an accrual basis using the effective interest method. Dividends, other than
those from investments in associates, are recognised at the time the right to receive payment is established.
Operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin. Expenditure
for warranties is recognised and charged against the associated provision when the related revenue is recognised.
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during
the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing costs
are expensed in the period in which they are incurred and reported in finance costs Note 7.
Intangible assets
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and
separately recognised. See Note 4.2 for information on how goodwill is initially determined. Goodwill is carried at cost less
accumulated impairment losses. Refer to Note 4.11 for a description of impairment testing procedures.
Customer Relationships
Customer Relationships represents the future economic benefits arising from existing customers within a business
combination that have been individually identified and separately recognised. Customer relationships are amortised over
the anticipated life of the relationship.
Capitalised development costs
Capitalised development costs represent costs that are directly attributable to the development of the Group’s IT
infrastructure and intellectual property. Capitalised development costs are measured at cost less accumulated amortisation
and accumulated impairment losses. Amortisation is recognised on a straight-line basis over its expected useful life.
Property, plant and equipment
Leasehold improvements, plant and equipment, motor vehicles and assets under construction
Leasehold improvements, plant and equipment, motor vehicles and assets under construction are initially recognised at
acquisition cost or manufacturing cost, including any costs directly attributable to bringing the assets to the location and
condition necessary for it to be capable of operating in the manner intended by the Group’s management. Plant and
equipment and motor vehicles also include property held under finance lease (see Note 4.10). Leasehold improvements,
plant and equipment and motor vehicles are subsequently measured using the cost model, cost less subsequent
depreciation and impairment losses.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
40
Depreciation is recognised on a straight-line basis to write down the cost less estimated residual value of buildings, IT
equipment and other equipment. The following useful lives are applied:
•
•
Leasehold improvements: 10 - 33%
Plant & equipment: 10 – 33%
• Motor vehicles: 20 - 25%
In the case of leasehold property, expected useful lives are determined by reference to comparable owned assets or over
the term of the lease, if shorter.
Assets under construction commence depreciation once the asset is put into service.
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the
disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or other
expenses.
Leased assets
As described in Note 3, the Group has applied AASB 16 using the modified retrospective approach and therefore
comparative information has not been restated. This means comparative information is still reported under AASB 117 and
Interpretation 4.
Accounting policy applicable from 1 July 2019
For any new contracts entered into on or after 1 July 2019, the Group considers whether a contract is, or contains a lease.
A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a
period of time in exchange for consideration’. To apply this definition the Group assesses whether the contract meets three
key evaluations which are whether:
•
•
•
the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Group
the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout
the period of use, considering its rights within the defined scope of the contract
the Group has the right to direct the use of the identified asset throughout the period of use. The Group assess whether
it has the right to direct ‘how and for what purpose’ the asset is used throughout the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance sheet. The
right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct
costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any
lease payments made in advance of the lease commencement date (net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of
the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use
asset for impairment when such indicators exist. At the commencement date, the Group measures the lease liability at the
present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is
readily available or the Group’s incremental borrowing rate.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
41
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance
fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is
remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss
if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients.
Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense
in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have been included in property, plant and equipment and
lease liabilities have been recognised as current and non-current.
Accounting policy applicable before 1 July 2019
Finance leases
The economic ownership of a leased asset is transferred to the lessee if the lessee bears substantially all the risks and
rewards of ownership of the leased asset. Where the Group is a lessee in this type of arrangement, the related asset is
recognised at the inception of the lease at the fair value of the leased asset or, if lower, the present value of the lease
payments plus incidental payments, if any. A corresponding amount is recognised as a finance lease liability. Leases of
land and buildings are classified separately and are split into a land and a building element, in accordance with the relative
fair values of the leasehold interests at the date the asset is recognised initially.
See Note 4.9 for the depreciation methods and useful lives for assets held under finance lease. The corresponding finance
lease liability is reduced by lease payments net of finance charges. The interest element of lease payments represents a
constant proportion of the outstanding capital balance and is charged to profit or loss, as finance costs over the period of
the lease.
Operating leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged to
the statement of profit & loss and other comprehensive income on a straight-line basis over the lease term. Associated
costs, such as maintenance and insurance, are expensed as incurred.
Impairment testing of goodwill, other intangible assets and property, plant and
equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash
inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at
cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected to benefit from synergies
of the related business combination and represent the lowest level within the Group at which management monitors goodwill.
Cash-generating units to which goodwill has been allocated are tested for impairment at least annually. All other individual
assets, customer relationships or cash-generating units are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds
its recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the value-in-use,
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
42
management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate
in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly
linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and
asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect management’s
assessment of respective risk profiles, such as market and asset-specific risks factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-
generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With
the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously
recognised may no longer exist. An impairment charge is reversed if the cash-generating unit’s recoverable amount
exceeds its carrying amount.
Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument. Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised
when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction
price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs
(where applicable). Financial assets other than those designated and effective as hedging instruments are classified into
the following categories:
•
•
•
amortised cost
fair value through profit and loss (FVTPL)
fair value through other comprehensive income (FVOCI)
The classification is determined by both:
•
•
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as
FVTPL):
•
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash
flows
•
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest
on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall
into this category of financial instruments as well as listed bonds that were previously classified as held-to-maturity under
AASB 139.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
43
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to collect and sell’ are
categorised at fair value through profit and loss. Further, irrespective of business model financial assets whose contractual
cash flows are not solely payments of principal and interest are accounted for at FVTPL. All derivative financial instruments
fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting
requirements apply.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss. The fair values of financial
assets in this category are determined by reference to active market transactions or using a valuation technique where no
active market exists.
Financial assets at fair value through other comprehensive income (FVOCI)
The Group accounts for financial assets at FVOCI if the assets meet the following conditions:
•
•
they are held under a business model whose objective it is “hold to collect” the associated cash flows and sell and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
Any gains or losses recognised in other comprehensive income (OCI) will be recycled upon derecognition of the asset.
Impairment of financial assets
AASB 9’s impairment requirements use more forward-looking information to recognise expected credit losses – the
‘expected credit loss (ECL) model’. This replaced AASB 39’s ‘incurred loss model’. Instruments within the scope of the new
requirements included loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables,
contract assets recognised and measured under AASB 15 and loan commitments and some financial guarantee contracts
(for the issuer) that are not measured at fair value through profit or loss.
Recognition of credit losses is no longer dependent on the Group first identifying a credit loss event. Instead the Group
considers a broader range of information when assessing credit risk and measuring expected credit losses, including past
events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash
flows of the instrument. In applying this forward-looking approach, a distinction is made between:
• financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit
risk (‘Stage 1’) and
• financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is
not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date.
‘12-month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised
for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the
expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract assets and
records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows,
considering the potential for default at any point during the life of the financial instrument. In calculating, the Group uses its
historical experience, external indicators and forward-looking information to calculate the expected credit losses using a
provision matrix. The Group assess impairment of trade receivables on a collective basis as they possess shared credit risk
characteristics they have been grouped based on the days past due. Refer to Note 33.3 for a detailed analysis of how the
impairment requirements of AASB 9 are applied.
Classification and measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group
designated a financial liability at fair value through profit or loss.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
44
Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial
liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognised
in profit or loss. All derivative financial instruments that are not designated and effective as hedging instruments are
accounted for at FVTPL.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs are assigned on the basis of weighted average
cost. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling
expenses.
Income taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation Office
(ATO) and other fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date.
Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current
tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of
assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on
the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or
accounting profit. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is
not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will
not occur in the foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable
income, based on the Group’s forecast of future operating results which is adjusted for significant non-taxable income and
expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in
full.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax assets and
liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except
where they relate to items that are recognised in other comprehensive income (such as the revaluation of land) or directly
in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term, highly liquid
investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes
in value.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
45
Equity, reserves and dividend payments
Share capital
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing
of shares are deducted from share capital, net of any related income tax benefits.
Corporate re-organisation reserve
The Corporate re-organisation reserve represents the difference between the fair value of the consideration paid and the
fair value of assets and liabilities acquired in a business combination whereby the business acquired was under common
control at the date of acquisition.
Non-controlling interest acquisition reserve
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of the
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate
reserve within equity attributable to owners.
Non-controlling interest
Represents the portion of the net assets of subsidiary’s that are not 100% owned by the Group.
Retained earnings
Retained earnings include all current and prior period retained profits. Dividend distributions payable to equity shareholders
are included in other liabilities when the dividends have been approved in a general meeting prior to the reporting date. All
transactions with owners of the parent are recorded separately within equity.
Share based payments reserve
Recognises share-based payments accrued in employee incentive share plan.
Foreign currency translation reserve
Exchange differences relating to the translation of the Group’s controlled entities from their functional currencies into
Australian dollars are brought to account directly to the foreign currency translation reserve.
Employee benefits
Short-term employee benefits
Short-term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within
twelve (12) months after the end of the period in which the employees render the related service. Examples of such benefits
include wages and salaries, non-monetary benefits and accumulating sick leave. Short-term employee benefits are
measured at the undiscounted amounts expected to be paid when the liabilities are settled.
Other long-term employee benefits
The Group’s liabilities for annual leave and long service leave are included in other long term benefits as they are not
expected to be settled wholly within twelve (12) months after the end of the period in which the employees render the related
service. They are measured at the present value of the expected future payments to be made to employees. The expected
future payments incorporate anticipated future wage and salary levels, experience of employee departures and periods of
service, and are discounted at rates determined by reference to market yields at the end of the reporting period on high
quality corporate bonds that have maturity dates that approximate the timing of the estimated future cash outflows. Any re-
measurements arising from experience adjustments and changes in assumptions are recognised in profit or loss in the
periods in which the changes occur.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
46
The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group does
not have an unconditional right to defer settlement for at least twelve (12) months after the reporting period, irrespective of
when the actual settlement is expected to take place.
Post-employment benefit plans
The Group provides post-employment benefits through various defined contribution plans.
Share-based employee remuneration
The Group operates equity-settled share-based remuneration plans for its employees. None of the Group’s plans feature
any options for a cash settlement.
All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.
Where employees are rewarded using share-based payments, the fair values of employees’ services are determined
indirectly by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and
excludes the impact of non-market vesting conditions (for example profitability and sales growth targets and performance
conditions).
Provisions, contingent liabilities and contingent assets
Provisions for product warranties, legal disputes, onerous contracts or other claims are recognised when the Group has a
present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will
be required from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and
implemented, or management has at least announced the plan’s main features to those affected by it. Provisions are not
recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation. Where
there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations. Provisions are discounted to their present values, where the time value of money is
material.
Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation is
recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such situations
are disclosed as contingent liabilities unless the outflow of resources is remote in which case no liability is recognised.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is
not recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the
asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown
inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing and
financing activities, which are disclosed as operating cash flows.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
47
Rounding of amounts
The Parent Entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instruments 2016/191 and accordingly, amounts in the financial statements and directors’ report have been rounded off to
the nearest $1,000, or in certain cases, the nearest dollar.
Significant management judgement in applying accounting policies
When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions
about the recognition and measurement of assets, liabilities, income and expenses.
Significant management judgement
The following are significant management judgements in applying the accounting policies of the Group that have the most
significant effect on the financial statements.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Group’s
future taxable income against which the deferred tax assets can be utilised. In addition, significant judgement is required
in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions (see Note 4.14).
Estimation uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement of
assets, liabilities, income and expenses is provided below. Actual results may be substantially different.
Impairment
In assessing impairment, management makes determination with regard to the allocation of groups of cash generating units
for the purpose of impairment testing. Management estimates the recoverable amount of each asset or cash-generating
unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to
assumptions about future operating results and the determination of a suitable discount rate (see Note 4.11).
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utility of certain
software and IT equipment.
Trade receivables
Management estimates the recoverable amount of any outstanding trade receivable balances at reporting date and
recognises an allowance for expected credit losses based on past due amounts and prior trading history.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at
each reporting date. The future realisation of these inventories may be affected by future technology or other market-driven
changes that may reduce future selling prices.
Customer relationships
Management reviews its estimate of the carrying value of customer relationships at reporting date and recognises an
allowance for impairment if required.
Business combinations
Management uses valuation techniques in determining the fair values of the various elements of a business combination
(see Note 4.2). Particularly, the fair value of contingent consideration is dependent on the outcome of many variables that
affect future profitability.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
48
5
Segment reporting
Identification of reportable operating segments
Management identifies operating segments based on the species to which the Group provide veterinary services and supply
animal health products. The Group’s three (3) operating segments are:
• Dairy and Mixed;
• Feedlots;
• Pigs;
Each of these operating segments is managed separately as each species group requires specific veterinary expertise
resources and marketing approach. These operating segments are monitored and strategic decisions are made on the basis
of adjusted segment operating results.
The operating segments are aggregated for reporting purposes on the basis that each business segment has sales
consisting predominantly of S4 products (prescription based pharmaceuticals), over the counter products and veterinary
service revenue and that these products and services exhibit similar economic characteristics across each segment.
Corporate overheads that cannot be allocated to a specific segment are disclosed separately.
The revenues and profit generated by the Group’s operating segments are summarised as follows:
Segment information
Revenue from external customers
Segment operating costs
Segment adjusted operating profit before tax
Total reporting segment operating profit
Other income
Corporate overheads
Acquisition and integration costs
Restructure costs
Finance costs
Share of profit from equity accounted investments
Net profit before tax
Income tax
Net profit after tax
6
Revenue
Sales revenue
Goods transferred at a point in time
Services transferred over time
Total revenue
2020
2019
$'000
118,335
(108,676)
9,659
$'000
111,720
(104,138)
7,582
9,659
82
(1,640)
(460)
(253)
(1,368)
45
6,065
(1,774)
4,291
2020
$'000
87,930
30,405
118,335
7,582
19
(1,388)
(392)
(130)
(1,140)
18
4,569
(1,419)
3,150
2019
$'000
76,768
34,952
111,720
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
7
Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Leased buildings
Leasehold improvements
Plant and equipment
Motor vehicles
Biological assets
Amortisation of intangibles
Total depreciation and amortisation
Finance costs
Interest expense on borrowings
Interest expense on lease liabilities
Share-based payments expense
Rental expense
49
2019
$’000
-
101
1,686
992
46
368
3,193
1,140
-
1,140
302
2,193
2020
$’000
2,419
128
1,860
935
98
511
5,951
980
388
1,368
(29)
153
8
Income tax expense
The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective
tax rate of the Group at 30% (2019: 30%) and the reported tax expense in profit or loss are as follows:
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 30% (2019 - 30%)
Adjustments for non-deductible expenses:
Sundry items
Income tax expense
Adjustment for current tax in prior periods
Total current tax expense
Tax expense comprises
Current tax expense/(benefit)
Deferred tax expense/(benefit)
Tax expense/(benefit)
Note 16 provides information on deferred tax assets and liabilities.
2020
$’000
2019
$’000
6,065
1,820
(13)
1,807
1,807
(33)
1,774
2,362
(588)
1,774
4,569
1,371
(1)
1,370
1,370
49
1,419
1,106
313
1,419
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
9
Cash and cash equivalents
Cash at bank and in hand
Cash and cash equivalents
10 Trade and other receivables
Trade receivables, gross
Less: allowance for expected credit losses
Other receivables
Rebates receivable
50
2019
$'000
1,873
1,873
2019
$'000
12,637
(367)
184
945
13,399
2020
$'000
2,509
2,509
2020
$'000
12,145
(334)
26
31
11,868
All amounts are short-term. The net carrying value of trade receivables is considered a reasonable approximation of fair
value. An allowance for expected credit losses has been recognised using a provision matrix based on historical credit loss
rates. Refer to Note 33.3 Credit risk analysis.
Balance at 1 July
Impairment loss
Balance 30 June
11
Inventories
Stock on hand, at cost
Less provision for obsolescence
Stock in transit, at cost
12 Other current assets
Prepayments
Security deposits
2020
$'000
367
(33)
334
2020
$'000
17,560
(87)
193
17,666
2020
$'000
1,029
67
1,096
2019
$'000
400
(33)
367
2019
$'000
11,352
(417)
12
10,947
2019
$'000
947
56
1,003
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
51
13
Property, plant and equipment
Details of the Group’s property, plant and equipment and their carrying amount are as follows:
Leased
Buildings
(i)
Leasehold
improve-
ments
Plant and
equipment
Motor
vehicles
(ii)
Assets
under
construction
Total
$’000
$’000
$’000
$’000
$’000
$’000
-
-
-
-
13,729
-
-
1,414
-
572
(169)
403
403
-
150
139
-
-
9,301
4,991
1,146
16,010
(4,428)
(2,847)
(185)
(7,629)
4,873
2,144
961
8,381
4,873
2,144
961
8,381
-
1,034
702
-
-
-
493
30
-
-
-
-
-
-
13,729
1,677
871
1,414
(925)
(925)
(2,373)
(128)
(1,880)
(961)
-
(5,342)
12,770
564
4,729
1,706
36
19,805
15,143
(2,373)
12,770
860
11,037
5,380
36
32,456
(296)
(6,308)
(3,674)
-
(12,651)
564
4,729
1,706
36
19,805
At 30 June 2019
At cost
Accumulated depreciation
Net book value
Year ended 30 June 2020
Opening net book value
Adjustment on transition to AASB16
Additions
Additions through business
combinations
Leased buildings from business
combinations
Transfer to capitalised development
costs
Depreciation charge
Closing net book value
At 30 June 2020
Cost
Accumulated depreciation
Net book amount
i) Right of use Assets
ii)
Includes leased and owned motor vehicles
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
14 Intangible assets
At 30 June 2019
Cost
Accumulated amortization and impairment
Carrying amount at 30 June 2019
At July 1 2019
Opening net book value
Additions
Acquisition of subsidiary
Transfer from assets under construction
Amortisation
Closing net book value
At 30 June 2020
Cost
Accumulated amortization and impairment
Net book value
52
Total
$'000
65,869
(644)
65,225
65,225
340
18,297
925
(511)
84,276
85,648
(1,372)
84,276
Customer
Relation-
ships
$’000
Capitalised
develop-
ment costs
$'000
Goodwill
$'000
61,506
-
61,506
61,506
-
18,244
-
-
79,750
79,750
-
79,750
3,223
(609)
2,614
2,614
-
-
-
(215)
2,399
3,223
(824)
2,399
1,140
(35)
1,105
1,105
340
53
925
(296)
2,127
2,675
(548)
2,127
Impairment testing
Goodwill is allocated to groups of cash generating units (CGU) for the purpose of impairment testing. The allocation is made
to those cash generating units that are expected to benefit from the business combination in which the goodwill arose. The
units are identified at the lowest level at which goodwill is monitored for internal management purposes, which is also the
segment level. Goodwill impairment testing has been completed for each CGU Group. Refer to 14.4 for the goodwill
allocated to each CGU Group.
The recoverable amounts of the cash-generating units were determined based on value-in-use calculations, covering a
detailed one year forecast with annual growth rates applied over a five year term, followed by an extrapolation of expected
cash flows for the units’ remaining useful lives using the growth rates determined by management. The present value of
the expected cash flows of each group of CGUs is determined by applying the following key assumptions:
Annual sales growth %
Annual operating expenses growth rate %
Long-term growth rate %
Post-tax discount rate %
2020
5.00%
2.00%
2.50%
9.33%
2020
$’000
2019
5.00%
2.00%
2.50%
9.33%
2019
$’000
Goodwill allocation across groups of CGUs
79,750
61,506
The Directors and management have considered and assessed reasonably possible changes for key assumptions and have
not identified any instances that could cause the carrying amount for any of the segments to exceed its recoverable amount.
Growth rates
The annual sales growth rate of 5%, annual operating expense growth rate of 2% and the long-term growth rate of 2.50%
reflect the average growth rates for the industry.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
53
Discount rates
The post-tax discount rate of 9.33% reflect appropriate adjustments relating to market risk and other risk factors. The
discount rate is applied to the three groups of CGU’s because the CGU groups share common risks.
Cash flow assumptions
Management’s key assumptions include stable profit margins, based on experience in this market. The Group’s
management believes that this is the best available input for forecasting this mature market. Cash flow projections reflect
stable profit margins achieved immediately before the budget period. Efficiency improvements have been taken into account
and prices and wages reflect publicly available forecasts of inflation for the industry.
Apart from the considerations described in determining the value-in-use of the groups of cash generating units described
above, management is not currently aware of any other probable changes that would necessitate changes in its key
estimates.
Goodwill is managed at the groups of cash generating unit’s level which is also reflective of the level of operating segment
being Pig, Feedlot, Dairy and mixed.
The following is a summary of the groups of cash generating unit’s to which goodwill is allocated.
Balance 1 July 2019
Acquisitions
30 June 2020
Feedlot
Dairy and mixed
$’000
12,788
620
13,408
$’000
48,718
7,694
56,412
Pig (a)
$’000
Total
$’000
-
61,506
9,930
9,930
18,244
79,750
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
54
15
Leasing
Lease liabilities are presented in the statement of financial position as follows:
Lease liabilities (current)
Lease liabilities (non-current)
30 June 2020
$’000
30 June 2019
$’000
2,683
11,453
14,136
-
-
-
The Group has leases for its warehouses, clinics, offices, motor vehicles and equipment. With the exception of short-term
leases and leases of low-value assets, each lease is reflected in the balance sheet as a right-of-use asset and a lease
liability.
The lease liabilities are secured by the related underlying assets. Future minimum lease payments at 30 June 2020 were
as follows:
Minimum lease
payments due
Within
one year
One to
two years
$’000
$’000
Two to
three
years
$’000
Three
to four
years
$’000
Four to
five
years
$’000
After
five
years
$’000
30 June 2020
Lease payments
Finance charges
3,050
(367)
2,603
(310)
2,410
2,313
1,919
3,192
(243)
(177)
(117)
(137)
Total
$’000
15,487
(1,351)
Net present values
2,683
2,293
2,167
2,136
1,802
3,055
14,136
Lease payments not recognised as a liability
The group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months
or less) or for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In
addition, certain variable lease payments are not permitted to be recognised as lease liabilities and are expensed as
incurred.
The expense relating to payments not included in the measurement of the lease liability is as follows:
Short term leases
Leases of low value assets
30 June 2020
$’000
51
102
153
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
16 Deferred tax assets and liabilities
Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:
The balance of deferred tax assets comprises temporary differences attributable to:
Current assets
Trade and other receivables
Inventories
Current liabilities
Provisions
Borrowing costs
Other
Unused tax losses
Equity raising costs
Listing and acquisition costs
The balance of deferred tax liabilities comprises temporary differences attributable
to:
Intangible assets
Customer relationships
2020
$'000
164
237
1,896
-
1,022
-
-
3,319
2020
$'000
720
720
55
2019
$'000
141
125
1,561
(5)
747
181
46
2,796
2019
$'000
784
784
All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of financial
position.
At 1 July 2018
(Charged)/credited:
to P&L
at 30 June 2019
(Charged)/credited:
to P&L
acquisition of a
subsidiary
At 30 June 2020
1,022
Tax
losses Provisions
$'000
$'000
1,520
751
Borrowing
costs
$'000
(9)
Trade
receivables
$'000
198
Listing &
acquisition
costs
$'000
91
Equity
raising
costs
$'000
362
Inventory
$'000
196
Total
$'000
3,109
(4)
747
275
41
1,561
335
1,896
4
(5)
5
-
(57)
141
23
164
(45)
(181)
46
181
(71)
125
(313)
2,796
(46)
(181)
-
-
112
237
523
3,319
All deferred tax liabilities have been recognised in the statement of financial position.
At 1 July 2018
(Charged)/credited to P&L
at 30 June 2019
(Charged)/credited to P&L
At 30 June 2020
Customer
relationships
$'000
867
(63)
784
(64)
720
Total
$'000
867
(63)
784
(64)
720
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
17 Trade and other payables
Trade payables
Sundry payables and accrued expenses
56
2019
$'000
7,482
2,114
9,596
2020
$'000
5,583
3,212
8,795
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
18 Current tax liabilities
Current tax payable
19 Borrowings
Current:
Bank loans (a)
less capitalized costs
lease liability (b)
less deferred interest charges
Total current borrowings
Non-current
bank loans (a)
less capitalized costs
lease liability (b)
less deferred interest charges
Total non-current borrowings
Refer to Note 34 for information on financial instruments.
Secured liabilities and assets pledged as security
The total secured liabilities (current and non-current) are as follows:
Bank loans
Less capitalised borrowing costs
Lease liability
Less deferred interest charges
Assets pledged as security
2020
$'000
1,300
2019
$'000
230
2020
$'000
3,419
(19)
-
-
3,400
33,589
(24)
33,565
2019
$'000
2,983
(20)
793
(49)
3,707
22,123
(29)
986
(45)
23,035
2020
$’000
37,008
(43)
-
-
36,965
2019
$’000
25,106
(49)
1,779
(94)
26,742
(a) Bank loans are secured by first ranking general security agreements in relation to the current and future assets
of Apiam and each wholly-owned subsidiary.
(b) The lease liabilities are effectively secured over the assets to which the lease relates.
Banking covenants
The key financial covenants applicable to bank facilities are:
-
-
Maximum gearing ratio of a ratio of 45% (ratio of net debt to net debt & equity): and
Maximum operating leverage ratio of a ratio of 4.0 times (ratio of net debt to EBITDA):
The Group complied with all bank covenants during the period.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Total facilities
Bank - term loan facilities
Bank - master asset finance agreement for equipment finance
Bank - overdraft facility
Bank - credit card facility
Used at reporting date
Bank - term loan facilities
Bank - master asset finance agreement for equipment finance
Unused at reporting date
Bank - term loan facilities
Bank - master asset finance agreement for equipment finance
Bank - overdraft facility
Bank - credit card facility
20 Employee benefit obligations
Leave obligations current
Leave obligations non-current
Employee benefits
57
2019
$'000
59,700
3,500
1,000
300
64,500
25,057
1,684
26,741
34,643
1,816
1,000
300
37,759
2019
$'000
4,852
273
5,125
2020
$'000
59,700
3,500
1,000
300
64,500
36,965
1,299
38,264
22,735
2,201
1,000
300
26,236
2020
$'000
5,865
280
6,145
The provision for employee benefits relates to the group’s liability for long service leave and annual leave.
Amounts not expected to be settled within the next 12 months
The current portion of this liability includes all of the accrued annual leave, the unconditional entitlements to long service
leave where employees have completed the required period of service and also those where employees are entitled to pro-
rata payments in certain circumstances. The entire amount of the provision of $5,865 (2019: $4,852) is presented as current,
since the group does not have an unconditional right to defer settlement for any of these obligations. However, based upon
experience, the group does not expect all employees to take the full amount of accrued leave or require payment within the
next twelve months.
21 Other current liabilities
Contingent consideration for acquisitions
Contract revenue
Make good provision
.
2020
$'000
3,925
54
174
4,153
2019
$'000
400
-
-
400
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
58
22 Equity
22.1 Share capital
The share capital of Apiam consists only of fully paid ordinary shares; the shares do not have a par value. All shares are
equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholders’ meeting of
Apiam.
Shares issued and fully paid
· beginning of the period
· shares issued as consideration for business
acquisitions
· shares issued on achievement of earnout for
prior year acquisition
· issued under dividend reinvestment plan
· employee shares issued
2020
Shares
2019
Shares
2020
$'000
2019
$’000
105,897,728
104,693,843
86,432
85,775
8,768,510
251,994
1,298,025
380,878
-
-
1,203,885
-
3,785
120
595
175
91,107
91,107
-
-
657
-
86,432
86,432
Shares issued and fully paid
116,597,135
105,897,728
Total shares authorised at the end of the period
116,597,135
105,897,728
Each share has the same right to receive dividend and the repayment of capital and represents one vote at the shareholders’
meeting of Apiam.
23 Reserves
Details of reserves are as follows:
Balance at 1 July 2018
Employee share plan incentive
Balance at 1 July 2019
Employee share plan incentive
Foreign currency translation
Balance at 30 June 2020
24 Non-controlling interests
Issued capital
Current year earnings
Retained profits carried forward
Total non-controlling interests
Corporate
reorganisation
reserve
$’000
(26,692)
Non-
controlling
interest
acquisition
reserve
$’000
(6,615)
-
-
(26,692)
-
-
(6,615)
-
-
(26,692)
(6,615)
Share
based
payment
reserve
Foreign
Currency
Translation
reserve
$’000
-
330
330
(107)
-
223
$’000
-
-
-
-
(20)
(20)
2020
$’000
845
120
59
1,024
Total
$’000
(33,307)
330
(32,977)
(107)
(20)
(33,104)
2019
$’000
703
(15)
74
762
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
59
25 Earnings per share and dividends
Earnings per share
Both the basic and diluted earnings per share have been calculated using the profit attributable to shareholders of the Parent
Company as the numerator.
The weighted average number of shares for the purposes of diluted earnings per share to the weighted average number of
ordinary shares used in the calculation of basic earnings per share is as follows:
weighted average number of shares used in basic earnings per share
weighted average number of performance rights
weighted average number of shares used in diluted earnings per share
Dividends
During the year, the following dividends were declared and paid.
fully franked final dividend (0.8 cents a share)
fully franked interim dividend (0.8 cents a share)
2020
Number
112,902,256
1,447,744
114,350,000
2019
Number
105,204,602
410,444
105,615,046
2020
$'000
849
928
1,777
2019
$'000
838
842
1,680
In addition and since the end of the financial year, Directors have declared a fully franked final dividend of 1.2c per
ordinary share to be paid on 23 October 2020 (2019: 0.8c)
Franking credits
The amount of the franking credits available for
subsequent:
Balance at the end of the reporting period
Franking debits that will arise from the payment of
dividends recognised as a liability at the end of the
reporting period
franking credits that will arise from the payment of the
amount of provision for income tax
2020
$'000
9,601
(400)
1,301
2019
$'000
7,950
(363)
230
10,502
7,817
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
60
26 Reconciliation of cash flows from operating activities
depreciation and amortisation expense
doubtful debt expense
obsolete stock provision
amortisation of borrowing expenses
share benefits expense
profit on sale of fixed assets
share of profit in equity accounted investments
gains on derecognition of contingent consideration payable
(a) Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit / (Loss) for the period
Adjustments for:
·
·
·
·
·
·
·
·
Net changes in working capital:
·
·
·
·
·
·
·
·
decrease/(increase) in trade and other receivables
decrease/(increase) in inventories
decrease/(increase) in other assets
decrease/(increase) in deferred tax asset
increase/(decrease) in trade and other payables
increase/(decrease) in income tax payable
increase/(decrease) in deferred tax liability
increase/(decrease) in provisions
Net cash received in operating activities
27 Employee remuneration
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Employee benefits – expense
Wages and salaries expense
Bonus expense/(reversal)
Share-based payment expense (a)
Superannuation expense
Employee benefits expense
2020
$’000
4,291
5,972
62
(330)
21
68
(82)
(45)
3,400
(5,257)
(93)
(301)
(1,936)
1,209
(64)
593
7,507
2020
$’000
34,847
116
(29)
2,747
37,681
2019
$’000
3,150
3,193
102
(238)
16
330
(19)
(18)
726
546
(158)
313
(2,674)
(364)
(83)
62
4,884
2019
$’000
30,288
42
302
2,453
33,085
a) The share based payment expense of $(29) reflects the reversal of an over accrued expense in the prior year.
Share-based employee remuneration
As at 30 June 2020, the Group maintained a share-based incentive payment plan for employee remuneration.
Performance rights under this scheme will vest if certain conditions are met. Participants have to achieve performance
targets and have to be employed until the end of the agreed vesting period. Upon vesting, each participant will be issued
with ordinary shares as defined in the incentive plan.
The number of performance rights held by employees of the Group at 30 June 2020 is set out below:
Type
Performance rights
Balance at
1/07/2019
2,396,863
Granted
818,896
Vested
(330,878)
Forfeited
(1,529,777)
Held as at
30/06/2020
1,355,104
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
61
28 Auditor remuneration
Audit services – Grant Thornton Audit Pty Ltd
Remuneration for audit or review of financial statements
Other services – Grant Thornton
•
taxation services
• due diligence services
Total other services remuneration
Total auditor’s remuneration
2020
$
2019
$
206,905
177,934
4,730
108,500
113,230
320,135
29,160
61,715
90,875
268,809
29 Related party transactions
The Group’s related parties include key management, post-employment benefit plans for the Group’s employees and others
as described below.
Unless otherwise stated, none of the transactions incorporate special terms and conditions and no guarantees were given
or received. Outstanding balances are usually settled in cash.
The Group provided short term finance to its joint venture entity, South West Equine. The amount owing is $79,285 (2019:
$nil) during the year.
Transactions with key management personnel
Key management of the Group are the executive members of Apiam’s Board of Directors and members of the Executive
Team. Key management personnel remuneration includes the following expenses:
Short-term employee benefits:
salaries including bonuses and non-monetary benefits
non-monetary benefits
Total short-term employee benefits
Long- term employee benefits:
long service leave
LTI performance rights
Total long-term employee benefits
Post-employment benefits:
superannuation
Total post-employment benefits
Total remuneration
2020
$
949,458
8,307
957,765
12,960
12,249
25,209
52,462
52,462
1,035,436
2019
$
897,283
13,674
910,957
6,501
-
6,501
48,397
48,397
965,855
Other transactions with key management personnel
The Group rents premises at Piper Lane, Bendigo East, Victoria. The premises are owned by an entity associated with Chris
Richards. Rental payments made amounted to $333,600 (2019: $333,600).
The Group rents premises at Rubicon Street, Smithton, Tasmania. The premises are owned by an entity associated with
Chris Richards. Rent payments made amounted to $125,232 (2019: $125,232).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris Richards. Lease payments
made amounted to $105,000 (2019: $105,000).
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
62
The Group leases premises at Midland Highway, Lethbridge, Victoria from entities associated with Chris Richards. Lease
payments made amounted to $2,018 (2019: $16,818)
The Group leases premises at Hoskin Street, Quarry Hill, Victoria from entities associated with Chris Richards. Lease
payments made amounted to $- (2019: $15,002).
The Group leases premises at Midland Highway, Epsom, Victoria from entities associated with Chris Richards. Lease
payments made amounted to $7,753 (2019: $18,652).
All related party rentals are based on commercial rates and the terms of the lease are standard commercial terms.
30 Contingent liabilities
In the Directors’ view, there are no contingent assets or liabilities that will have a material effect on the Group.
31 Business combination
On 1 October 2019 the Group acquired 100% of the issued share capital and voting rights of Animal Consulting Enterprises
Pty Ltd (ACE).
On 1 November 2019, the Group acquired the business assets of Devoted Vets (DVW).
On 1 December 2019, the Group acquired 100% of the issued share capital and voting rights of Grampians Animal Health
(GAH).
The following detailed table highlights the fair value of the identifiable assets acquired and liabilities assumed as at the date
of acquisition for each of the business combinations undertaken in the period. ACE Laboratory Services is an autogenous
(custom) vaccine and diagnostics laboratory service provider to large production animal producers. The acquisitions of
GAH and DVW expand Apiam’s presence in the Western District and Gippsland regions of Victoria. On the acquisition of
ACE, 5,788,120 fully paid shares were issued at a fair value of $0.4276 per share. On the acquisition of GAH, 2,980,390
shares were issued at a fair value of $0.4394 per share.
Each of these business combinations have initially been accounted for on a provisional basis as at 30 June 2020. The
measurement period for provisional accounting ends on either the earlier of 12 months from the date of acquisition or when
the acquirer receives all the information possible to determine the fair value.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
Fair value of consideration transferred
Amounts settled in cash
Amount settled by issue of shares at fair value
Contingent consideration
Total fair value of consideration transferred
Recognised amounts of identifiable net assets
Property plant and equipment
Deferred tax assets
Intangible assets
Total non-current assets
Cash and equivalents
Inventories
Trade and other receivables
Total current assets
Provisions
Total non-current liabilities
Provisions
Current tax liabilities
Trade and other payables
Total current liabilities
Identifiable net assets
Goodwill on acquisition
Net cash outflow on acquisition
ACE
$’000
9,657
2,475
3,625
15,757
459
140
3
602
113
890
1,342
2,345
-
-
357
162
496
1,015
1,932
13,825
9,544
DVW
$’000
566
-
-
566
65
24
-
89
-
102
98
200
-
-
61
-
53
114
175
391
566
63
Total
$’000
13,340
3,785
3,925
21,050
871
229
53
1,153
243
1,130
1,896
3,269
24
24
577
162
853
1,592
GAH
$’000
3,117
1,310
300
4,727
347
65
50
462
130
138
456
724
24
24
159
-
304
463
699
4,028
2,987
2,806
18,244
13,097
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
64
32 Interests in subsidiaries
Composition of the Group
Set out below details of the subsidiaries held directly by the Group:
Name of the Subsidiary
Chris Richards & Associates Pty Ltd
Country Vet Wholesaling Pty Ltd
Apiam Logistics Services Pty Ltd
Apiam Management Pty Ltd
Southern Cross Feedlot Services Pty Ltd
Westvet Wholesale Pty Ltd
Portec Veterinary Services Pty Ltd
Pork Storks Australia Pty Ltd
McAuliffe Moore & Perry Pty Ltd
Warrnambool Veterinary Clinic Pty Ltd
Scottsdale Veterinary Services Pty Ltd
Smithton Veterinary Service Pty Ltd
AAH - Dubbo Vet Hospital Pty Ltd
AAH - Bell Vet Services Pty Ltd
CVH Gippsland Pty Ltd
CVH Southern Riverina Pty Ltd
AAH Veterinary Services Pty Ltd
CVH iVet Pty Ltd
Tasvet Wholesale Pty Ltd
Quirindi Feedlot Services Pty Ltd
Quirindi Veterinary Clinic Pty Ltd
Quipolly Equine Centre Pty Ltd
AAH Veterinary Clinics Pty Ltd
Gympie & District Veterinary Services Pty Ltd
Apiam Solutions LLC
Fur Life Foundation Ltd
South Yarra Pharma Pty Ltd
Animal Consulting Enterprises Pty Ltd
The Trustee for Grampians Animal Health
Unit Trust
Significant judgements and assumptions
Country of
incorporation
and principal
place of
business
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
USA
Australia
Australia
Australia
Principal activity
Veterinary services
Wholesale supply
Transport
Payroll
Veterinary services
Wholesale supply
Veterinary services
Genetics
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Veterinary services
Dormant
Dormant
Veterinary services
Veterinary services
Veterinary services
Veterinary Services
Veterinary Services
Distribution
Charity
Veterinary Services
Manufacturing
Australia
Veterinary Services
Group proportion of
ownership interests
2020
100%
100%
100%
100%
100%
100%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
51%
100%
100%
100%
100%
2019
100%
100%
100%
100%
100%
100%
49%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
51%
0%
0%
0%
0%
The Group holds 49% of the ordinary shares and voting rights in Portec Veterinary Services Pty Ltd (‘Portec’).
One (1) other investor holds 51% in order to ensure compliance with statutory laws applicable in Western Australia where
Portec Veterinary Services Pty Ltd (Portec) conducts its operations. Management has assessed its involvement in Portec
in accordance with AASB 10’s control definition and guidance. It was concluded that the Apiam Group has outright control.
In making its judgement, management considered the Group’s voting rights, the relative size and dispersion of the voting
rights held by the other shareholder and the extent of participation by the shareholder in general meetings. Experience
demonstrates that the other shareholder participates such that they do not prevent the Group from having the practical
ability to direct the relevant activities of Portec unilaterally.
Losing control over a subsidiary during the reporting period
There was no loss of control over a subsidiary during the reporting period.
Interests in unconsolidated structured entities
The Group has no interests in unconsolidated structured entities.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
65
33
Financial instrument risk
Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The main types of risks are market risk, credit
risk and liquidity risk.
The Group’s risk management is coordinated at its headquarters, in close cooperation with the Board of Directors, and
focuses on actively securing the Group’s short to medium-term cash flows by minimising the exposure to financial markets.
Long-term financial investments are managed to generate lasting returns.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options.
The most significant financial risks to which the Group is exposed are described below.
Market risk analysis
The Group is exposed to market risk through its use of financial instruments and specifically to interest rate risk, which result
from both its operating and investing activities.
Interest rate sensitivity
The Group’s policy is to minimise interest rate cash flow risk exposures on long-term financing. At 30 June 2020, the Group
is exposed to changes in market interest rates through bank borrowings at variable interest rates.
The following table illustrates the sensitivity of profit and equity to a reasonably possible change in interest rates of +/- 1%
(2019: +/- 1%). These changes are considered to be reasonably possible based on observation of current market conditions.
The calculations are based on a change in the average market interest rate for each period, and the financial instruments
held at each reporting date that are sensitive to changes in interest rates. All other variables are held constant.
30-Jun-20
30-Jun-19
Profit for the year
Equity
$’000
+1%
319
270
$’000
-1%
(319)
(270)
$’000
+1%
319
270
$’000
-1%
(319)
(270)
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
66
Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to credit risk
from financial assets including cash and cash equivalents held at banks, trade and other receivables. The Group’s maximum
exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised
below:
Classes of financial assets:
Cash and cash equivalents
trade and other receivables
2020
$’000
2,509
12,093
14,602
2019
$’000
1,873
13,906
15,779
The credit risk is managed on a group basis based on the Group’s credit risk management policies and procedures.
The credit risk in respect of cash balances held with banks and deposits with banks are managed via only banking with
major reputable financial institutions.
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by group
and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit ratings
and/or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only with
creditworthy counterparties.
In respect of trade and other receivables, the Group is not exposed to any significant credit risk exposure to any single
counterparty or any group of counterparties having similar characteristics. Trade receivables consist of a large number of
customers in various industries and geographical areas. Based on historical information about customer default rates
management consider the credit quality of trade receivables that are not past due or impaired to be good.
Trade receivables are written off (ie. derecognised) when there is no reasonable expectation of recovery.
The Group’s management considers that all of the above financial assets that are not impaired or past due for each of the
30 June reporting dates under review are of good credit quality.
At 30 June, the Group has made an allowance for expected credit losses (see Note 10) based on past due amounts and
prior trading history. The amounts at 30 June analysed by the length of time past due, are:
Past due under 30 days
Past due 30 days to under 60 days
Past due 60 days and over
Total
2020
$’000
1,332
1,007
1,550
3,889
2019
$’000
2,279
594
1,470
4,343
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
67
Liquidity risk analysis
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity needs by
monitoring scheduled debt servicing payments for long-term financial liabilities as well as forecast cash inflows and outflows
due in day-to-day business. The data used for analysing these cash flows is consistent with that used in the contractual
maturity analysis below. Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as
well as on the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day lookout period
are identified monthly. Net cash requirements are compared to available borrowing facilities in order to determine headroom
or any shortfalls. This analysis shows that available borrowing facilities are expected to be sufficient over the lookout period.
The Group’s objective is to maintain cash and marketable securities to meet its liquidity requirements for 30-day periods at
a minimum. This objective was met for the reporting periods. Funding for long-term liquidity needs is additionally secured
by an adequate amount of committed credit facilities and the ability to sell long-term financial assets.
The Group considers expected cash flows from financial assets in assessing and managing liquidity risk, in particular its
cash resources and trade receivables. The Group’s existing cash resources and trade receivables significantly exceed the
current cash outflow requirements. Cash flows from trade and other receivables are all contractually due within one (1)
month.
As at 30 June 2020, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
30 June 2020
Bank borrowings
Trade and other payables
Total
Current
Within 6
months
$’000
6 - 12
months 1 - 4 years
$’000
$’000
3,400
8,795
12,195
-
-
-
33,565
-
33,565
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
30 June 2019
Bank borrowings
Finance lease liabilities
Trade and other payables
Total
Current
Within 6
months
$’000
6 - 12
months
$’000
1 - 4 years
$’000
3,003
409
9,596
13,008
-
335
-
335
23,672
941
-
24,613
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the
liabilities at the reporting date.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
68
34
Fair value measurement
Fair value measurement of financial instruments
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three
(3) levels of a fair value hierarchy. The three (3) levels are defined based on the observability of significant inputs to the
measurement, as follows:
•
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
Level 3: unobservable inputs for the asset or liability
The following table shows the levels within the hierarchy of financial assets and liabilities measured at fair value on a
recurring basis at 30 June 2020 and 30 June 2019:
30 June 2020
Financial liabilities
Contingent consideration
Total liabilities
Net fair value
30 June 2019
Financial liabilities
Contingent consideration
Total liabilities
Net fair value
Level 1
$'000
Level 2
$'000
Level 3
$'000
-
-
-
-
-
-
3,925
3,925
3,925
Level 1
$'000
Level 2
$'000
Level 3
$'000
-
-
-
-
-
-
400
400
400
Total
$'000
3,925
3,925
3,925
Total
$'000
400
400
400
Measurement of fair value of financial instruments
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair
values, in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based
on the characteristics of each instrument, with the overall objective of maximising the use of market-based information. The
finance team reports directly to the Chief Financial Officer (CFO) and to the Audit Committee. Valuation processes and fair
value changes are discussed among the Audit Committee and the valuation team at least every year, in line with the Group’s
reporting dates.
The valuation techniques used for instruments categorised in Level 3 are described below:
Contingent consideration (Level 3)
The fair value of contingent consideration related to the acquisition of business combinations is considered to be face value
as the payments become due within the next six (6) months.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
69
The following table provides information about the sensitivity of the fair value measurement to changes in the most significant
inputs:
Significant unobservable input
Estimate of the input
Sensitivity of the fair value measurement to input
Probability of meeting target
100%
-
Level 3 Fair value measurements
The reconciliation of the carrying amounts of financial instruments classified
within Level 3 is as follows:
Contingent consideration
Balance at 1 July 2019
Contingent consideration for acquisitions
Balance at 30 June 2020
2020
$’000
400
3,525
3,925
2019
$’000
400
-
400
35 Capital management policies and procedures
The Group’s capital management objectives are:
•
•
to ensure the Group’s ability to continue as a going concern, and
to provide an adequate return to shareholders;
by pricing products and services commensurately with the level of risk.
The Group monitors capital on the basis of the carrying amount of equity less cash and cash equivalents as presented on
the face of the statement of financial position. The Group’s goal in capital management is to maintain a gearing ratio below
45% (ratio of debt to equity). This is in line with the Group’s covenants resulting from the banking facilities it has taken out
from December 2015.
Management assesses the Group’s capital requirements in order to maintain an efficient overall financing structure while
avoiding excessive leverage. This takes into account the subordination levels of the Group’s various classes of debt. The
Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the
risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the
amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
The amounts managed as capital by the Group for the reporting periods under review are summarised as follows:
Total equity
Cash and cash equivalents
Capital
Total equity
Borrowings
Overall financing
Capital-to-overall financing ratio
2020
$'000
68,513
2,509
71,022
68,513
36,965
105,478
67%
2019
$'000
61,309
1,873
63,182
61,309
26,742
88,051
72%
The Group has honoured its covenant obligations, including maintaining capital ratios, since the banking loans were taken
out in December 2015.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
70
36 Parent entity information
Information relating to Apiam Animal Health Limited (‘the Parent Entity’):
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Retained earnings / (Accumulated losses)
Total equity
Statement of profit or loss and other comprehensive income
Profit for the year
Other comprehensive income
Total comprehensive income
The Parent Entity has entered into a deed of cross guarantee. Refer Note 38 for details.
The Parent Entity had no contingent liabilities at 30 June 2020 (2019: $nil).
2020
$’000
2019
$’000
1,486
133,311
8,367
42,652
90,659
91,107
(448)
90,659
1,363
112,886
5,517
27,553
85,333
86,488
(1,155)
85,333
2,723
45
2,768
2,597
18
2,615
37 Post-reporting date events
The Apiam Board of Directors have declared the Company’s final dividend of 1.2c per share fully franked on the 20
August 2020. The final dividend of $1,399,166 will be paid on the 23 October 2020.
38 Deed of cross guarantee
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of the
others:
Chris Richards & Associates Pty Ltd
Country Vet Wholesaling Pty Ltd
Apiam Logistics Services Pty Ltd
Apiam Management Pty Ltd
Southern Cross Feedlot Services Pty Ltd
Westvet Wholesale Pty Ltd
Pork Storks Australia Pty Ltd
McAuliffe Moore & Perry Pty Ltd
Warrnambool Veterinary Clinic Pty Ltd
Scottsdale Veterinary Services Pty Ltd
Smithton Veterinary Service Pty Ltd
AAH - Dubbo Vet Hospital Pty Ltd
AAH - Bell Vet Services Pty Ltd
CVH Gippsland Pty Ltd
CVH Southern Riverina Pty Ltd
CVH Border Pty Ltd
Tasvet Wholesale Pty Ltd
By entering into the deed, the wholly-owned entities have been relieved of the requirement to prepare financial statements
and a directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments
Commission.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
71
Set out below is a consolidated statement of profit or loss and other comprehensive income of the parties to the Deed.
Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2020
Continuing operations
Revenue
Other income
Expenses
Changes in inventory
Cost of materials
Costs of consumables and services
Employee benefit expenses
Listing and acquisition expenses
Property expenses
Freight, vehicle and transport expenses
Depreciation of property, plant and equipment
Other operating expenses
Finance costs
Other financial items
Share of profit from equity accounted investments
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit from continuing operations
Profit for the year
2020
$'000
84,589
82
3,089
(39,297)
(824)
(28,973)
(460)
(1,178)
(1,805)
(4,690)
(6,754)
(1,275)
(19)
45
2019
$'000
91,416
9
(536)
(42,536)
(912)
(27,920)
(392)
(3,003)
(1,754)
(2,551)
(6,540)
(1,138)
(15)
18
2,530
4,146
(760)
1,770
(1,326)
2,820
1,770
2,820
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
Set out below is a consolidated statement of financial position of the parties to the Deed.
Statement of Financial Position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Intangible assets
Property, plant and equipment
Biological assets
Investments
Deferred tax assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Amounts payable to vendors for business acquisitions
Current tax liabilities
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Equity attributable to owners of the parent
- share capital
- corporate reorganization reserve
- non-controlling interest acquisition reserve
- retained earnings
Total Equity
72
2019
$’000
1,389
11,836
10,483
960
24,668
62,912
7,094
220
91
2,344
72,661
2020
$’000
1,420
7,407
13,572
1,178
23,577
81,613
15,181
123
136
2,528
99,581
123,158
97,329
7,169
3,925
536
3,798
4,689
8,893
400
105
3,707
4,298
20,117
17,403
44,539
135
-
44,674
64,791
23,035
222
-
23,257
40,660
58,367
56,669
89,852
(26,692)
(5,594)
801
58,367
85,630
(26,692)
(5,856)
3,587
56,669
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
73
Directors’ Declaration
1
In the opinion of the Directors of Apiam Animal Health Limited:
a The consolidated financial statements and notes of Apiam Animal Health Limited are in
accordance with the Corporations Act 2001, including
i Giving a true and fair view of its financial position as at 30 June 2020 and of its performance
for the financial year ended on that date; and
ii Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
b There are reasonable grounds to believe that Apiam Animal Health Limited will be able to
pay its debts as and when they become due and payable.
c There are reasonable grounds to believe that the members of the extended closed group
identified in Note 38 will be able to meet any obligations or liabilities to which they are, or
may become, subject by virtue of the deed of cross guarantee described in Note 38.
2 The Directors have been given the declarations required by Section 295A of the
Corporations Act 2001 from the Managing Director and Chief Financial Officer for the
financial year ended 30 June 2020.
3 Note 2 confirms that the consolidated financial statements also comply with International
Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Dr Christopher Irwin Richards
Managing Director
Melbourne
24 August 2020
74
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Apiam Animal Health Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Apiam Animal Health Limited (the Company), and its subsidiaries (the Group),
which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit
or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
75
Key audit matter
Intangible Assets – Note 14
How our audit addressed the key audit matter
At 30 June 2020 the carrying value of goodwill and customer
relationships is $79.8M and $2.4M respectively, and is
allocated to three separate group cash-generating units
(“CGU’s”).
In accordance with AASB 136 Impairment of Assets, the
Group is required to assess if there are any indicators of
impairment and in respect to goodwill, assess if the carrying
value of each CGU is in excess of the recoverable value.
Our procedures included, amongst others:
Assessing management’s determination of the group
CGU's based on the nature of the business and the
economic environment in which the units operate;
Reviewing the impairment model for compliance with
AASB 136 Impairment of Assets;
Assessing whether management has the requisite
expertise to prepare the impairment model;
Assessing the reasonableness and appropriateness of
This area is a key audit matter due to the high level of
management judgement and estimation required to determine
the recoverable value of the CGU’s.
inputs and assumptions to the model by;
Evaluating managements future cash flow forecasts
and obtain an understanding of the process by which
they were developed;
Assessing managements key assumptions for
reasonableness by comparing long term growth rates
to historical results and economic and industry
forecasts;
Considering the reasonableness of the revenue and
cost forecasts against current year actuals;
Obtaining from management available evidence to
support key assumptions;
Performing a sensitivity analysis on the key
assumptions; and
Utilising an auditor's expert to assess the
reasonableness of the certain key inputs and
assumptions used in the model.
Testing the underlying calculations for mathematical
accuracy of the model;
Assessing customer relationships for indicators of
impairment; and
Evaluating the disclosures in the financial statements for
appropriateness and consistency with accounting
standards.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
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.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
76
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is 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 the Australian Auditing
Standards 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 this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 20 to 26 of the Directors’ report for the year ended 30 June
2020.
In our opinion, the Remuneration Report of Apiam Animal Health Limited, for the year ended 30 June 2020 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
C S Gangemi
Partner – Audit & Assurance
Melbourne, 24 August 2020
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
77
ASX Additional Information
Additional Securities Exchange Information
In accordance with ASX Listing Rule 4.10, the Company provides the following information to
shareholders not elsewhere disclosed in this Annual Report. The information provided is current as
at 7 August 2020 (Reporting Date).
Corporate Governance Statement
The Company’s Directors and management are committed to conducting the Group’s business in
an ethical manner and in accordance with the highest standards of corporate governance. The
Company has adopted and substantially complies with the ASX Corporate Governance Principles
and Recommendations (Third Edition) (Recommendations) to the extent appropriate to the size
and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that
were in operation throughout the financial year for the Company, identifies any Recommendations
that have not been followed, and provides reasons for not following such Recommendations
(Corporate Governance Statement).
In accordance with ASX Listing Rules 4.10.3, the Corporate Governance Statement will be
available for review on Apiam’s website (http://www.apiam.com.au/corporate-governance/) and will be
lodged together with an Appendix 4G with ASX at the same time that this Annual Report is lodged
with ASX. The Appendix 4G will particularise each Recommendation that needs to be reported
against by Apiam and will provide shareholders with information as to where relevant governance
disclosures can be found.
The Company’s corporate governance policies and charters are all available on Apiam’s website
(http://www.apiam.com.au/corporate-governance/).
Substantial holders
As at the Reporting Date, the names of the substantial holders of the Company and the number
of equity securities in which those substantial holders and their associates have a relevant
interest, as disclosed in substantial holding notices given to the Company, are as follows:
Holder of Equity Securities
Class of
Equity
Securities
Number of
Equity
Securities held
% of total
issued
securities
Christopher Richards
Regal Funds Management Pty
Limited
Ordinary
Shares
Ordinary
Shares
30,000,000
25.730%
14,599,379
12.52%
Number of holders
As at the Reporting Date, the number of holders in each class of equity securities:
Class of Equity Securities
Fully paid ordinary shares
Fully paid ordinary shares restricted until 1 October 2020 and quoted on
ASX
Number of
holders
1,197
4
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
78
Fully paid ordinary shares restricted until 2 December 2020 and quoted
on ASX
Fully paid ordinary shares restricted until 1 October 2021 and quoted on
ASX
Fully paid ordinary shares restricted until 2 December 2021 and quoted
on ASX
Performance Rights
2
4
2
46
Voting rights of equity securities
The only class of equity securities on issue in the Company which carries voting rights is ordinary
shares.
As at the Reporting Date, there were 1,203 holders of a total of 116,597,135 ordinary shares of the
Company.
At a general meeting of the Company, every holder of ordinary shares present in person or by
proxy, attorney or representative has one vote on a show of hands and on a poll, one vote for each
ordinary share held. On a poll, every member (or his or her proxy, attorney or representative) is
entitled to vote for each fully paid share held and in respect of each partly paid share, is entitled to
a fraction of a vote equivalent to the proportion which the amount paid up (not credited) on that
partly paid share bears to the total amounts paid and payable (excluding amounts credited) on that
share. Amounts paid in advance of a call are ignored when calculating the proportion.
Distribution of holders of equity securities
The distribution of holders of equity securities on issue in the Company as at the Reporting Date
is as follows:
Distribution of ordinary shareholders
Holdings Ranges
Holders
Total Units
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 999,999,999
145
335
219
393
111
74,084
921,521
1,762,053
12,890,724
100,948,753
Totals
1,203
116,597,135
%
0.06
0.79
1.51
11.06
86.58
100
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
79
Distribution of performance rights holders
Holdings Ranges
Holders
Total Units
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – 999,999,999
Totals
0
4
17
23
2
46
0
16,234
123,369
875,415
354,470
1,369,488
%
0.00
1.190
9.010
63.920
25.880
100
Less than marketable parcels of ordinary shares (UMP Shares)
The number of holders of less than a marketable parcel of ordinary shares based on the closing
market price at the Reporting Date is as follows:
Total Shares
UMP Shares
UMP Holders
% of issued shares
held by UMP holders
116,597,135
75,094
146
0.0644
Twenty largest shareholders
The Company only has one class of quoted securities, being ordinary shares. The names of the
20 largest holders of ordinary shares, and the number of ordinary shares and percentage of
capital held by each holder is as follows:
Holder Name
CJOEA FAMILY COMPANY PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED
UBS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
BRISPOT NOMINEES PTY LTD
CS THIRD NOMINEES PTY LIMITED
Balance as at
Reporting Date
%
29,208,707
25.051
6,695,065
5.742
3,480,702
2.985
3,189,002
2.735
2,969,671
2.547
2,788,791
2.392
SCOLEXIA COMMODITY PTY
2,315,248
1.986
GFS SECURITIES
2,061,544
1.768
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
80
CS FOURTH NOMINEES PTY LIMITED
2,029,429
1.741
COBASH PTY LIMITED
1,872,006
1.606
MR ANDREW CARRINGTON WHALE
1,490,195
1.278
HAMILTON ANIMAL HEALTH PTY LTD
1,490,195
1.278
MRS KATE JUDITH MALIN
1,389,161
1.191
FOUR POST INVESTMENTS PTY LTD
MR NEIL LEIGHTON & MRS HELEN LEIGHTON
MR ROGER CHARLES CARMODY & MRS MARIS
MOORE CARMODY
SONJASWRIGHT PTY LIMITED
AILEEN MARY VANDERFEEN
LINCOLN O’MEARA
RACHEL LOUISE O’MEARA
1,386,700
1.189
1,279,131
1.097
1,258,650
1.079
1,211,846
1.039
1,157,624
0.993
1,157,624
0.993
1,157,624
0.993
Total number of shares of Top 20 Holders
69,588,915 59.683%
Total Remaining Holders Balance
47,008,220 40.317%
Company Secretary
The Company’s secretary is Mr Todd Richards.
Registered Office
The address and telephone number of the Company’s registered office is:
27- 33 Piper Lane
East Bendigo VIC 3550
Telephone: +61 (0)3 5445 5999
Share Registry
The address and telephone number of the Company’s share registry, Boardroom Pty Limited,
are:
Street Address:
Boardroom Pty Limited
Level 12, 225 George Street
Sydney New South Wales 2000
Telephone: (02) 9290 9600
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2020
81
Stock Exchange Listing
The Company’s ordinary shares are quoted on the Australian Securities Exchange (ASX issuer
code: AHX).
Escrow
Class of restricted
securities
Type of restriction
Number of
securities
End date of escrow
period
Ordinary shares
Voluntary escrow
2,894,060
1 October 2020
Ordinary shares
Voluntary escrow
1,490,196
2 December 2020
Ordinary shares
Voluntary escrow
2,894,060
1 October 2021
Ordinary shares
Voluntary escrow
1,490,194
2 December 2021
Unquoted equity securities
The number of each class of unquoted equity securities on issue, and the number of their holders,
are as follows:
Class of restricted
securities
Number of unquoted Equity
Securities
Number of holders
Performance Rights
1,369,488
46
Other Information
The Company is not currently conducting an on-market buy-back.
There are no issues of securities approved for the purposes of item 7 of section 611 of the
Corporations Act which have not yet been completed.
No securities were purchased on-market during the reporting period under or for the purposes of
an employee incentive scheme or to satisfy the entitlements of the holders of options or other rights
to acquire securities granted under an employee incentive scheme.
CORPORATE
DIRECTORY
DIRECTORS
Professor Andrew Vizard
Dr Christopher Richards
Mr Michael van Blommestein
Mr Richard Dennis
Professor Jan Tennent
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Todd Richards
REGISTERED OFFICE
27-33 Piper Lane
East Bendigo VIC 3550
T 03 5445 5999
F 03 5445 5914
E investorrelations@apiam.com.au
AUDITORS
Grant Thornton Australia
Collins Square, Tower 5
727 Collins Street
Melbourne VIC 3008
BANKERS
National Australia Bank
500 Bourke Street
Melbourne VIC 3000
SHARE REGISTRY
Boardroom Registry Pty Ltd
Level 12, 225 George Street
Sydney NSW 2000
T 1300 737 760
F 02 9279 0664
E enquiries@boardroomlimited.com.au
STOCK EXCHANGE
LISTING
Australian Securities Exchange
Level 4, North Tower, Rialto
525 Collins Street
Melbourne VIC 3000
ASX CODE
AHX
WEBSITE
apiam.com.au
ANNUAL REPORT 2020
A P I A M . C O M . A U