Apiam Animal Health Limited Appendix 4E
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 2021
Previous period:
For the year ended 30 June 2020
Apiam Animal Health Limited Appendix 4E
2
RESULTS FOR ANNOUNCEMENT TO THE MARKET
Statutory Results Summary
CHANGES FROM PERIOD ENDED 30 JUNE
2021 2020
$m
$m
To
126.2
from
118.4
%
7
24
To
5.1
from
24
To
5.1 From
4.1
4.1
up
up
up
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
6
to
8.8
From
8.3
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
2021 Interim Dividend
Amount per
security
cents
Franked
amount per
security
Cents
1.2 cents
1.2 cents
2021 Final Dividend (declared after balance date but not yet paid) 1.2 cents
1.2 cents
Record date for determining entitlements to the dividend:
17 September 2021
Date dividend payable:
22 October 2021
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 27 September 2021.
Shareholders who elect to participate in the DRP for the 2021 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 27 September 2021 and 1 October 2021 (‘Pricing Period’). The timetable
in respect of the 2021 final dividend and DRP is as follows:
Event / Action
Record Date
Date*
17 September 2021
Election Date: Last date for shareholders to make an election to
participate in the DRP
5.00 pm (Melbourne time)
on 27 September 2021
Pricing Period Commencement Date
27 September 2021
Last Day of Pricing Period
Announcement of DRP issue price
1 October 2021
5 October 2021
Dividend Payment Date / Issue of DRP shares
22 October 2021
*All dates are subject to change
Details of the DRP can be downloaded from www.apiam.com.au. In order to participate in the DRP for
the 2021 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 27 September 2021. An online
election can be made by visiting www.boardroomlimited.com.au.
Net Tangible Asset per Security
Net Tangible assets per share
Return to shareholders
2021
-$0.11
2020
-$0.14
Dividends of $2,850,296 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 32 and 33 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 2021
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.
2021
Apiam Animal Health
ANNUAL
REPORT
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
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 2021
2
Chairman’s Message
Dear Shareholder,
In a year unlike any other, Apiam’s clear strategic pathway and previous investment in key
infrastructure enabled our experienced and dedicated management team to efficiently navigate
through the significant disruptions caused by the COVID-19 pandemic and deliver another
successful financial year. Apiam recorded overall revenue growth of 6.6% and Net Profit After
Tax growth of 24.1% compared to the previous financial year, supported by excellent growth
across our dairy and mixed animal clinics, which now contributes 60% of group revenue.
Our beef feedlot and pig segments are cyclical and faced challenges during FY21, such as the
reduction in the number of cattle on feed caused by the rebuilding of the national cattle herd. To
reduce the impact of lower animal numbers, we have continued to expand our offerings and have
invested in the development of products that will leverage Apiam’s performance as these
industries rebound over the coming months.
As has been widely reported across the media, population rates as well as animal and pet
ownership have rapidly accelerated across Australian regional growth corridors. Our Company’s
on-going focus is to capitalise on this growth in regional veterinary markets, particularly in the
fast-growth dairy and mixed animal clinic market.
Over the financial year we announced the acquisition of five regional veterinary practices. Each
of the acquisitions brought significant benefits to the Company. As well as increasing our
veterinary presence in targeted fast-growth regional hubs, they presented attractive financial
propositions for growth. Through this acquisition program, we also more than doubled our South-
East Queensland clinic presence, which will be an important growth market for Apiam in the
coming years.
We further extended our market position in FY21 with the opening of two new purpose-built
greenfield veterinary clinics, located in Shepparton and Torquay North. These locations were
carefully chosen by management to capture rapid population growth and animal ownership in the
local areas. While greenfield clinics do have a negative earnings impact in their initial year of
operating, our prior experience tells us they are highly profitable within two to three years of
opening.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
3
Organic growth initiatives also continued to prove successful at delivering business growth.
Apiam’s ProDairy and Best Mates companion animal program, both devised and implemented in-
house last year, have continued to deliver excellent growth outcomes in the current period.
Management have recently completed the pilot program for new services designed for the
Company’s pig industry customers, which will be rolled-out over the next twelve months.
Apiam’s staff are our greatest asset, and we maintain a strong focus on improving the wellbeing
and professional development of our people. For example, during the year our innovative tele-
triage program, designed to reduce the burden of after-hours work for veterinarians, was
enhanced; we trained additional mental health first aid officers across many of our locations, and
we launched a comprehensive driver training program. Industry leading initiatives were also
introduced to support and improve working conditions for our on-farm teams. We continue to
navigate through the uncertainty of the COVID-19 pandemic with robust policy and procedures in
place to maintain staff and community safety as well as business continuity. Going forward, the
wellbeing of our team remains as a top priority.
As a Company we remain well funded, continue to generate strong cash flows and are positioned
to continue with our regional expansion initiatives. In April we undertook a successful $6.0M
capital raise and welcomed new institutional investors onto our share register as well as received
continued support from existing holders. This was our first capital raise since we listed on the ASX
in 2015 and it consolidated our position to accelerate many of our recent expansion plans.
In recognition of our strong capital position the Board have declared a final dividend of 1.2 cps,
fully franked, bringing the full year dividend to 2.4 cps.
Looking forward, I am confident our experienced and dedicated management team will continue
to build on our leading regional veterinary market position and deliver another successful year in
FY22.
On behalf of the Board of Directors, I thank our shareholders for their continued support and look
forward to updating you on the progress of the Company as we head into a new financial year.
Yours sincerely,
Professor Andrew Vizard
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
4
Managing Director’s Message
Dear Shareholder,
Apiam has continued to expand and grow the footprint of our business in FY21, while at the same
time delivering revenue and profitability growth year-on-year.
Our regional expansion strategy has targeted fast-growing regional veterinary markets, and has
been underpinned by strategic acquisitions, the opening of new greenfield clinics as well as other
organic business initiatives.
Dairy & mixed animal clinics driving growth
Apiam’s reported revenue in FY21 was $126.2 million, an increase of 6.6% on the prior
comparable period (PCP). This performance occurred in the face of varying conditions across the
animal segments in which we operate, with our dairy & mixed animal clinics being a principal
driver of our growth.
In FY21, the Company’s dairy & mixed animal clinics delivered 23.7% revenue growth buoyed by
the rapid increase in animal ownership in regional and peri-urban growth corridors as well as the
easing of drought conditions supporting strong dairy results. Additionally, we recorded strong
operating leverage across this business delivering 44.2% EBIT growth. Our regional expansion
strategy was executed to increase the Company’s market share in these attractive growth
segments.
Revenues from the pig and beef feedlot businesses declined 11.4% in FY21, with beef feedlot
revenues impacted by reduced cattle numbers available for feedlots due to the rebuilding of the
national breeder herd. It has been estimated by Meat & Livestock Australia that the national beef
herd through 2020 and the early parts of 2021 has been at its lowest level since the early 1990’s.
Early signs of recovery were however seen in Q4 FY21 with cattle availability to feedlots beginning
to increase1. Industry capacity has also continued to increase in anticipation of further growth in
FY22 and FY23.
1 Meat & Livestock Australia, August 2021, National Accredited Feedlot Survey
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
5
Revenues from the pig segment continued to reflect changes in our business mix, particularly our
strategic transition to new and innovative antimicrobial and vaccine products across the intensive
animal spectrum. This has led to reduced wholesale sales of lower-margin traditional products as
we transition our business strategy in this area.
During the year we have invested in the development of new vaccines, private label products and
other services focused on the intensive animal segments to leverage growth as the industry
rebounds.
On a like-for-like basis (excluding acquisitions) our overall Group revenue fell 0.5% compared to
the prior financial year, with like-for-like dairy & mixed animal clinic revenue growth of 12.5%
offsetting the fall in feedlot and pig revenues.
Apiam have delivered gross profit growth and margin expansion in FY21, as ongoing changes in
the Company’s business mix and investment in systems delivered results. In FY21 Apiam’s gross
profit increased 11.2% to $71.1 million (with gross margin of 56.3% vs 54.0% in FY20). Over the
past 4-years, our business strategy has consistently delivered gross margin improvements, with
gross profit increasing 37.8% since FY18.
We also delivered growth in operating earnings over the financial year with EBIT growth of 11.7%
and NPAT growth of 24.1% vs PCP. A strong focus on operating cost control was maintained
over the period, with reported cost increases relating to acquisitions and employment costs in
areas strategically targeted to generate future revenue streams. The opening of two new
greenfield clinics in the second half of FY21 also had a negative impact on Apiam’s operating
earnings growth, however based on our previous experience these clinics will deliver strong
revenue and earnings outcomes for our shareholders within 2-3 years of opening.
Apiam’s cash flow and financial position remain strong, with net cash flow from operating activities
up 82.5% during the period supported by robust working capital management, and a return to
normalised inventory levels following the strategic investment in private-label products and
inventory build to mitigate potential supply issues in the prior year. The Company reported an
excellent cash conversion to earnings ratio of 117% and significant funding remains available to
execute on our growth strategies in the year ahead.
Acquisitions & greenfield clinics in targeted regional locations
Our growth strategy in FY21 has centred around investing in regional expansion and extending
our national footprint with a particular focus on our dairy operations and mixed animal veterinary
clinics, given the rapid growth in these underlying markets.
In FY21 we successfully executed four business acquisitions, which added 2 new clinics to our
network in regional NSW and 4 new clinics in Southern Queensland. This represented a material
increase in the scale of our Queensland operations, more than doubling our clinic presence year-
on-year. Southern Queensland is an important market in the Company’s regional expansion
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
6
strategy with many areas adjacent to our acquisition locations also being identified as
underserviced by veterinarians.
Following the reporting period, we also completed the acquisition of Scenic Rim Veterinary
Service and Boonah Animal Hospital (Scenic Rim Vets) which will add a further two clinics to
Apiam’s Queensland presence, taking our total presence in this state to 10 clinics. This acquisition
will also add further equine expertise which we can leverage across the broader client base
throughout the region.
Apiam opened two new greenfield clinics during FY21, located in the rapidly growing Victorian
regional towns of Shepparton and Torquay North where major housing developments are
occurring. While there is a first-year earnings impact as the clinics get established, we expect
these clinics to break even within two years of opening and generate strong returns for our
shareholders within three-years of operations.
Organic business initiatives
Apiam reported another excellent year of growth in its subscription programs, implemented across
the Group in early FY20. ProDairy, our innovative end-to-end service for dairy farmers delivered
108% growth in dairy farm enrolments and it is estimated approximately 11.2% of Australia’s dairy
cows are enrolled in the program, leaving plenty of room for further market penetration.
Opportunities for further expansion into Tasmania and New South Wales have been identified for
further action in FY22.
Similarly, Apiam’s Best Mates annual subscription animal wellness program reported 76%
membership growth this financial year. Apiam estimate that 7.3% of their active client base are
Best Mates members and we see increased client conversion to this program as a key goal in the
year ahead.
During FY21 we have also developed in-house a novel data system for the pig segment (Data
Pig), designed to enhance antimicrobial stewardship, better monitor pig health and improve
quality assurance for farmers. A pilot program was completed in Western Australian piggeries in
FY21 and we have commenced commercialisation of this platform to the Australian pig industry.
Trials continued during the year in relation to the Zoono Microbe Shield product for which we have
the exclusive licence for veterinary and agricultural applications in the USA. The application of
Zoono Microbe Shield has been demonstrated after 21 days applied to a surface to provide a
significant reduction in the levels of porcine epidemic diarrhoea virus (PEDv) and porcine
reproduction and respiratory syndrome virus (PRRSv), which are significant issues in the North
American pig industry. This study was undertaken by an independent US university. These results
provide the potential for a significant market opportunity, and Apiam has entered into an
agreement with a US pharmaceutical company to expand its sales and marketing footprint to the
US veterinary market, expected to commence in Q2 of FY22.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
7
Positive outlook
In FY22 management are focussed on continuing to execute the Company’s regional expansion
strategy, especially in areas where we have identified rapid population growth that are
underserviced by vets.
Further acquisitions are expected in the first half of the financial year, and we recently announced
that we have acquired or entered into agreements to acquire Golden Plains Group in the fast-
growth Greater Geelong region and Harbour City Veterinary Surgery in Gladstone, Queensland.
We have also recently opened an additional greenfield clinic in Highton, Geelong (VIC) in July, to
capture the significant market opportunity in this peri-urban growth region.
I would like to conclude by thanking our team of dedicated staff for their energy and commitment
to delivering on the Company’s business and professional development goals, whilst maintaining
exceptional levels of service to our clients and their animals.
Yours sincerely,
Dr Chris Richards
Managing Director
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
8
Directors’ Report
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
2021.
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
Dr Jan Tennent
Non-Executive Director
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
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.
held
directorships
An experienced company director, he has
previously
in ASX
companies, statutory bodies and research
including Animal Health
organisations
Australia,
for
body
coordinating Australia’s animal health system;
Primesafe, the statutory authority responsible
for regulating the production of safe meat in
Victoria; and the Australian Wool Corporation.
responsible
the
He is currently Chair of the Vizard Foundation
and Executive Secretary for the Hermon Slade
Foundation and the Australia & Pacific Science
Foundation.
Dr Chris Richards is the Managing Director of
ASX listed Apiam Animal Health Ltd, as well as
the Australian subsidiary entities and
joint
venture companies, which provide veterinary
services
rural
communities.
to Australian
regional and
Chris is also a Director of registered charity, Fur
Life Foundation Ltd, which raises funds to
support people in rural, regional, and remote
communities
Chris is also a Director of Apiam Solutions LLC,
a JV company based in the USA that provides
product solutions to the Northern American
production animal industries.
Chris is responsible for the strategic direction of
Apiam, which has seen the develop, grow,
acquire and integrate production and companion
animal veterinary clinics, veterinary wholesale,
logistics,
laboratory and genetics services
businesses since 1998 into the Apiam of today.
Chris is a member of Australian Pork Limited’s
Biosecurity Strategic Review Panel and ASF
Advisory Group.
Interests in Shares and Options
Interests in Shares and Options
229,366 shares
31,400,000 shares
165,430 performance rights
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
10
Mr Michael van Blommestein
Mr Richard John Dennis
Independent Non-Executive Director
Independent Non-Executive Director
GAICD
BComm, LLB
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.
Michael is an experienced director in the
animal health sector. He 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.
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
financial and operational
overseeing
integration of EYs Australian and Asian
member firms.
the
Rick is a member of Australian Super’s
Queensland Advisory Board, a member of the
Advisory Boards 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 and ASX-listed
Cettire Limited
Interests in Shares and Options
Interests in Shares and Options
108,360 shares
22,395 shares
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
11
Dr 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 and, a Principal Fellow
at the University of Melbourne.
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.
Her most recent executive management role
was CEO of Biomedical Research Victoria
is also a non-executive
(2012-2019). Jan
director of AusBiotech Limited and eviDent
Foundation Limited.
Interests in Shares and Options
57,780 shares
Company Secretary
Eryl Baron (appointed 30 November 2020)
Company Secretary
AGIA
Eryl has 20 years’ experience working in the corporate sector as a Company Secretary in a
number of industries. She is the appointed Company Secretary to a portfolio of ASX- listed
companies across a range of industries.
Eryl is an Associate member of the Governance Institute of Australia. She is experienced in
company secretarial and governance management of listed and unlisted companies.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
12
Todd Richards (resigned 30 November 2020)
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.
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
13
13
13
13
13
B
13
13
12
13
13
A
5
B
5
A
3
B
3
N/A
N/A
N/A
N/A
N/A
N/A
3
3
5
5
5
5
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 2021
13
PRINCIPAL ACTIVITIES
Apiam Animal Health Limited and subsidiaries’ (‘the Group’) principal activities include the
provision of veterinary products and services to production animals and companion animals.
There have been no significant changes in the nature of these activities during the year.
REVIEW OF OPERATIONS
In FY21, Apiam delivered growth in its key financial and operating metrics, and from a strategic
perspective pursued its regional expansion plan, targeting the rapid growth in rural and regional
veterinary markets.
Apiam reported revenue of $126.2m for FY21, an increase of 6.6% versus FY20, the previous
corresponding period (PCP). This result was driven by excellent growth in the Company’s dairy
and mixed animal segment where revenue increased 23.7% vs PCP. This segment also
accounted for 60% of the Company’s revenue in FY21 and has been the focus of Apiam’s
regional expansion in FY21, particularly its acquisition pipeline and greenfields clinic roll-out
program. This strategy is discussed in more detail in the section below.
Apiam’s pig and beef feedlot revenues fell by 11.4% in FY21 with a reduction in the number of
cattle on feed occurring this past year as a result of the rebuilding of the national cattle herd.
The Company’s revenues from the pig segment continue to reflect strategic changes in the
business mix to reduce low margin products as it transitions to alternative technologies to
further enhance its antimicrobial stewardship programs.
Group like-for-like revenue, excluding the impact of acquisitions, fell by 0.5% in FY21 reflecting
the impact of the trends as outlined above.
The Company continued to deliver sustained gross profit improvement with gross profit of
$71.1m in FY21, a 11.2% increase on PCP. This is the second year Apiam has delivered
double-digit gross profit growth, and since FY18 gross profit has increased 37.8%. The growing
contribution of the dairy & mixed animal clinics have been a key driver of this trend over the past
12-months.
Operating earnings grew on both a reported and underlying basis in FY21, as gross profit
growth offset the increased operating expenses associated with the greenfield clinic roll-out
program and acquisitions. Operating expense growth (excluding the impact of the acquisitions
and greenfield clinic expenses) increased 3.4%, mostly related to increased employment costs
to support the strong organic growth in the dairy and mixed segment.
In FY21, Apiam’s reported Earnings Before Interest and Tax (EBIT) increased 11.7% and Net
Profit After Tax (NPAT) increased 24.1% vs PCP.
The following tables are presented to assist in the interpretation of the underlying performance
of Apiam during FY21. This information is additional and provided using non-IFRS information
and terminology.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
14
Apiam FY21 Financial Result Summary – Reported
Total revenue
Gross profit
Operating expenses
One-off expenses
EBITDA
Amortisation ROU assets
Depreciation & amortisation
EBIT
Interest
Tax
Other (including minorities) 1
NPAT attributable to members
Gross margin
EBIT margin
FY21A
FY20A
Variance
%
7.8
7.2
(6.3)
0.3
1.2
(0.1)
(0.2)
0.9
0.2
(0.3)
0.2
1.0
6.6%
11.2%
12.8%
(32.8)%
8.6%
4.5%
5.3%
11.7%
(14.0)%
17.2%
-
24.1%
126.2
71.1
(55.9)
(0.7)
14.5
(2.5)
(3.8)
8.1
(1.2)
(2.0)
0.2
5.1
56.3%
6.4%
118.3
63.9
(49.5)
(1.1)
13.3
(2.4)
(3.6)
7.3
(1.4)
(1.7)
(0.1)
4.1
54.0%
6.2%
Notes:
1.
Includes a range of partner business activities incl. Sth West Equine JV, Apiam Solutions, PETstock Joint Venture, Portec
etc
Apiam FY21 Financial Result Summary – Underlying
FY21
FY20
Variance
%
Total Revenue
Gross Profit
Operating expenses
Underlying EBITDA 1
Depreciation & amortisation
Underlying EBIT 1
Underlying NPAT 1
Notes:
1. Underlying earnings exclude one-off corporate, acquisition & integration expenses (tax effected where applicable at NPAT
6.6%
11.2%
12.8%
5.6%
5.0%
6.1%
15.4%
118.3
63.9
(49.5)
14.4
(6.1)
8.3
4.8
126.2
71.1
(55.9)
15.2
(6.4)
8.8
5.6
7.8
7.2
(6.3)
0.8
(0.3)
0.5
0.7
level)
Regional expansion strategy
In FY21, Apiam have executed its regional expansion strategy, designed to capture accelerating
growth in regional veterinary markets. Many of Australia’s regions have experienced a
significant demographic shift over recent years with populations growing rapidly as people
migrate from larger cities to regional areas. There has also been the favourable broader trend of
increased animal ownership right across Australia, following COVID-19 impacts. Easing of
drought conditions has also supported growth in many dairy farms over the past 12 months.
In order to capture this market growth, and expand market share, Apiam implemented its
regional expansion strategy and has pursued growth via acquisitions, the roll-out of greenfields
clinics as well as organic growth initiatives.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
15
Acquisitions
In FY21 Apiam completed the following four acquisitions:
Don Crosby Vet Surgeons, NSW, (1 December 2020)
Knox Veterinary Clinic, QLD, (1 April 2021)
Clermont Veterinary Surgery, QLD (1 June 2021)
Samford Valley Veterinary Hospital, QLD (1 June 2021)
Following the reporting period, Apiam also completed the acquisition of Scenic Rim Veterinary
Hospital, an equine focussed practice in South-East Queensland and the Golden Plains Animal
Hospital located in the fast growth Greater Geelong region. Apiam has also announced that it
has entered into an agreement to acquire Harbour City Veterinary Surgery at Gladstone (QLD)
and Smythesdale Animal Hospital (Vic).
Each of these acquisitions was identified as meeting Apiam’s acquisition financial thresholds
and strategic criteria. In addition to the market expansion and revenue capture opportunities,
Apiam also identified the opportunity to leverage its existing support systems and realise
efficiencies between acquired clinics and existing clinics.
Greenfields clinic roll-out
During FY21 Apiam opened two new state-of-the-art greenfields veterinary clinics, under the
“Fur Life Vet” brand – at Torquay North (VIC) and Shepparton (VIC). These clinics, while
requiring investment in the first year, are expected to reach break-even profit in the second year
of opening and full financial maturity during the third year of operations.
The Company chooses greenfield clinic locations carefully, and targets both large regional cities
and peri-urban growth locations within a daily commute of a capital city. Other factors taken into
account are species mix in the region and the ability to leverage existing Apiam staff, services
and infrastructure.
An additional greenfield clinic was opened in Highton (Geelong, VIC) in July 2021 and further
clinics are in the planning and building stage, due to open in FY22.
Organic growth initiatives
Apiam continued the successful rollout of its ProDairy and Best Mates companion animal
subscription programs in FY21. Both programs were organic initiatives implemented by Apiam’s
management team in FY20 and both have delivered excellent membership growth in FY21.
Apiam has also recently launched an innovative proprietary data platform designed for its pig
customers to enhance antimicrobial stewardship, better monitor pig health as well as improve
quality assurance. A pilot program undertaken in WA piggeries has been successfully
completed and this is in the early stages of being commercialised across the broader Apiam pig
client base.
Balance sheet
Apiam’s balance sheet at the end of FY21 remains strong and reflects investment during the
year in acquisitions and business expansion.
Net debt as at 30 June 2021 was $37.2 million (up from $35.9 million at 30 June 2020). The
cash consideration component for Apiam’s acquisitions during the period was $11.7 million and
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
16
was funded via strong operating cash flow generation and a successful $6 million capital raising
undertaken by the Company in April 2021.
Cash flow
Apiam reported operating cashflow in FY21 of $13.7 million, with operating cash flow
conversion of earnings of 117%, a result of strong working capital practices and a return to
normalised inventory levels following significant product investment in FY20.
Apiam’s investing and financing cash flows in FY21 reflect the impact of the four acquisitions
settled in FY21, and the capital raise undertaken by the Company in Q4 FY21.
$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
Proceeds from share issue
Other
Net cash inflow from financing activities
Net change in cash and cash equivalents
Dividend
FY21A
FY20A
13.7
(11.7)
(4.7)
(0.2)
(16.6)
1.6
(1.9)
(2.9)
5.7
0.1
2.6
(0.4)
7.5
(13.1)
(1.6)
(0.3)
(15.0)
12.4
(1.2)
(3.2)
0.0
0.1
8.1
0.6
Apiam’s Board of Directors have declared a final fully franked interim dividend of 1.2 cents per
share (cps), supported by the Company’s solid balance sheet and growth in earnings. This
takes total dividends in respect of FY21 to 2.4 cps and implies an overall 60% payout ratio of
NPAT.
The dividend will be paid on 22 October 2021 and Apiam’s Dividend Reinvestment Plan will be
maintained.
Outlook
Apiam expect to deliver continued revenue and earnings growth in FY22, as the Company
continues to execute its regional expansion strategy via the acquisition of high-performing
veterinary businesses and the roll-out of new greenfield clinics in targeted, high-growth areas.
Business growth investment will be carefully evaluated against return on capital thresholds.
Management will also focus on the commercialisation of recent investments in new services,
technologies and products expected to underpin recovery in intensive animals (feedlot and pigs)
as market cycles improve in the coming year.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
17
DIVIDENDS
An interim dividend of $1,450,906 is 1.2c per share and was paid in April 2021. The Apiam Board
of Directors have declared the Company’s final dividend of 1.2c per share fully franked on the 30
August 2021. The final dividend of $1,604,808 will be paid on the 22 October 2021.
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.
SIGNIFICANT EVENTS SUBSEQUENT TO THE END OF THE FINANCIAL
YEAR
The Apiam Board of Directors declared the Company’s final dividend of 1.2c per share fully
franked on 30 August 2021. The final dividend of $1,604,808 will be paid on the 22 October 2021.
The Group acquired two veterinary businesses and entered into agreements for the acquisition
of two further veterinary businesses post reporting date. Further details of these acquisitions are
disclosed in Note 38 of the Financial Statements.
Apart from these events, 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.
Should COVID-19 restrictions result in the extended closure of a material number of veterinary
clinics, or if veterinary services and/or agriculture were not deemed essential services, the Groups
financial performance may be adversely impacted.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
18
Any recurring or prolonged disruption to the supply of the key products that Apiam Animal Health
sells, particularly vaccines, 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 FY21
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.
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,
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
19
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 2021
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 2021
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 and Nomination Committee (the 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 Committee has met
3 times in the FY21 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 key talent 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 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
2021
2020
2019
2018
2017
EPS (cents)
4.22c
3.63c
3.01c
3.21c
5.00c
Dividends
(cents per
share)
Net profit
before tax
($’000)
Share price
($)
2.4c
1.6c
1.6c
1.6c
0.8c
$7,036
$5,956
$4,569
$4,831
$6,315
$0.96
$0.46
$0.52
$0.75
$0.70
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
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:
Directors
Andrew Vizard
Chairman Independent
Richard Dennis
Independent
Chris Richards
Managing Director
Michael van Blommestein
Independent
Jan Tennent
Independent
Employees
Matthew White
Chief Financial Officer
Brian Scutt
Chief Operating Officer
2021 Total
2020 Total
Year
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
Short term employee benefits
Salary
and fees (i)
$
Accrued
annual leave
$
Non-monetary
benefits
$
Post-employment
benefits
Superannuation
$
Long-term
benefits
Accrued long
service leave)
$
Share-based
Payment
Performance
Rights (ii)
$
120,000
120,000
70,000
70,000
360,860
354,740
54,795
54,795
60,000
60,000
231,934
228,000
233,096
61,923
1,130,685
949,458
-
-
-
-
-
-
-
-
26,860
9,104
11,394
8,307
-
-
-
-
3,652
6,315
23,460
9,479
53,972
24,898
-
-
-
-
-
-
-
-
11,394
8,307
-
-
-
-
21,694
21,003
5,205
5,205
-
-
21,694
21,003
21,108
5,251
69,701
52,462
-
-
-
-
-
-
-
-
8,902
8,668
25,533
9,451
-
-
-
-
19,655
2,798
15,738
-
-
-
-
-
4,608
3,011
290
39
13,800
11,718
Total
$
120,000
120,000
70,000
70,000
455,243
411,273
60,000
60,000
60,000
60,000
281,543
261,127
293,692
76,692
Performance
based
percentage of
remuneration
%
0%
0%
0%
0%
6%
2%
0%
0%
0%
0%
7%
1%
5%
0%
5%
1%
60,926
1,340,478
12,249
1,059,092
(i)
(ii)
Salary and fees include salaries and allowances.
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, Chief Financial Officer and Chief
Operating Officer is the proportion expensed in that year based on the Monte Carlo valuation model.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
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 – LTI
94%
93%
95%
6%
7%
5%
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
$360,860
$231,934
$233,096
Term of agreement
Twelve month fixed term
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 long term incentive plans. The long term incentive plans run for periods of three years. 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 2021
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.
Details of the number of performance rights granted are as follows:
Name
Grant
Perform-
FY2020
Fair Value
Fair Value
FY2021
Fair Value
Fair Value
FY2022
Fair Value
Fair Value
FY2023
Fair Value
Fair Value
Date
ance
Tranche
per Right
Tranche
per Right
Tranche
per Right
Tranche
per right
Rights
granted
Chris Richards
28/11/19
248,144
82,714
$16,411
$0.1984
82,715
$22,338
$0.2701
82,715
$23,873
$0.2886
Matthew White
19/03/20
106,326
35,442
$ 4,021
$0.1135
35,442
$ 8,831
$0.2492
35,442
$ 9,099
$0.2567
-
-
-
-
-
-
Matthew White
06/04/21
67,303
Brian Scutt
23/10/20
97,510
-
-
-
-
-
-
22,434
$14,700
$0.6553
22,434
$ 8,410
$0.3749
22,435
$ 8,305
$0.3702
32,503
$15,193
$0.4674
32,503
$10,359
$0.3187
32,504
$10,612
$0.3265
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.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
25
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.
Other information
g
Options held by key management personnel
There were no options to acquire shares in the Company held during the 2021 reporting period
of key management personnel of the Group, including their related parties.
Shares held by key management personnel:
The number of ordinary shares held in the Company at 30 June 2021 held by each of the
Groups key management personnel, including their related parties, is set out below.
Personnel
Balance at
1/07/2020
Granted as
remuneration
Received
on
exercise
Chris Richards
30,000,000
Andrew Vizard
Richard Dennis
Michael van
Blommestein
Jan Tennent
Matthew White
Brian Scutt
Total
221,695
21,647
104,737
36,231
120,735
383,224
30,888,269
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
changes
Held as at
30/06/2021
1,400,000
31,400,000
7,671
748
3,623
21,549
3,010
229,366
22,395
108,360
57,780
123,745
230,000
613,224
1,666,601
32,554,870
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 2021 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
1/07/2020
Granted as
remuneration
Vested/
exercised
248,144
106,326
-
67,303
-
97,510
354,470
164,813
Forfeited/
lapsed
during year
82,714
35,442
Held as at
30/06/2021
165,430
138,187
-
97,510
118,156
401,127
-
-
-
-
Loans to key management personnel
The Group did not enter into any loans with key management personnel during the 2021 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 FY21 amounted to $364,514 (2020:
$333,600).
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
26
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 $139,725 (2020:
$125,232).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris
Richards. Lease payments made amounted to $116,462 (2020: $105,000).
The Group leases premises at Midland Highway, Lethbridge, Victoria from entities associated
with Chris Richards. Lease payments made amounted to $nil (2020: $2,018).
The Group leased premises at Midland Highway, Epsom, Victoria from entities associated with
Chris Richards. Lease payments made amounted to $nil (2020: $7,753).
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 2021
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 29 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 2021
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
30 August 2021
29
Collins Square, Tower 5
727 Collins Street
Docklands. Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne, Victoria 3001
T +61 3 8320 2222
F +61 3 8320 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 2021, 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, 30 August 2021
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.
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
30
Apiam Animal Health Limited
Financial Statements
For the year ended 30 June 2021
Apiam Animal Health Limited
Financial Statements for the year ended 30 June 2021
31
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
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
7
28
14,15
8
8
9
25
2021
$’000
126,181
23
(1,624)
(53,474)
(821)
(43,262)
(167)
(1,684)
(2,135)
(6,336)
(24)
(8,544)
79
(363)
(813)
2020
$’000
118,335
82
6,718
(61,130)
(927)
(37,681)
(460)
(1,496)
(2,120)
(5,961)
(98)
(7,983)
45
(388)
(980)
7,036
5,956
(2,040)
4,996
(1,741)
4,215
4,996
4,215
5,082
(86)
4,996
4,095
120
4,215
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
26
26
4.22
4.16
3.63
3.58
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 2021
32
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
As at 30 June 2021
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
Total equity
10
11
12
13
15
14
17
18
16
22
19
20
21
20
16
21
17
23
24
24
24
24
25
2021
$’000
2,150
13,543
-
16,041
1,577
33,311
95,077
24,536
-
220
3,487
123,320
2020
$’000
2,509
11,868
225
17,666
1,096
33,364
84,916
19,805
123
140
3,319
108,303
156,631
141,667
9,748
2,911
192
1,494
2,818
7,211
8,795
2,683
4,153
1,300
3,400
5,865
24,374
26,196
34,887
14,426
338
1,328
415
51,394
75,768
33,565
11,453
280
1,436
300
47,034
73,230
80,863
68,437
101,010
(26,692)
(6,615)
595
(79)
11,642
79,861
1,002
80,863
91,107
(26,692)
(6,615)
223
(20)
9,410
67,413
1,024
68,437
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
33
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
Note
23
23
Balance at 1 July 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
Issue of new share capital
Share placement
Transaction costs on issue of new share capital
Issue of shares to vendors of business acquired
Issue of shares on achievement of earnout for prior year
acquisition
Employee share plan
Foreign currency translation adjustment
Dividends paid
23
23
23
23
23
Transactions with owners
Profit / (Loss) for the period
Total comprehensive income for the period
Share
capital
Corporate re-
organisation
reserve
$’000
86,432
770
3,905
-
-
-
4,675
-
-
91,107
853
6,000
(300)
2,535
815
-
-
-
9,903
-
-
$’000
(26,692)
-
-
-
-
-
-
-
-
(26,692)
-
-
-
-
-
-
-
-
-
-
-
Non-
controlling
interest
acquisition
reserve
$’000
(6,615)
-
-
-
-
-
-
-
-
(6,615)
-
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2021
101,010
(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
-
-
(107)
-
-
(107)
-
-
223
-
-
-
-
-
372
-
-
372
-
-
595
$’000
-
-
-
-
(20)
-
(20)
-
-
(20)
-
-
-
-
-
-
(59)
-
(59)
-
-
(79)
$’000
7,092
-
-
-
(1,777)
(1,777)
4,095
4,095
9,410
-
-
-
-
-
-
-
(2,850)
(2,850)
5,082
5,082
11,642
$’000
60,547
770
3,905
(107)
(20)
(1,777)
2,771
4,095
4,095
67,413
853
6,000
(300)
2,535
815
372
(59)
(2,850)
7,366
5,082
5,082
79,861
$’000
762
142
-
-
-
-
142
120
120
1,024
64
-
-
-
-
-
-
-
64
(86)
(86)
1,002
Total
equity
$’000
61,309
912
3,905
(107)
(20)
(1,777)
2,913
4,215
4,215
68,437
917
6,000
(300)
2,535
815
372
(59)
(2,850)
7,430
4,996
4,4996
80,863
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest paid
Transaction costs relating to acquisition of subsidiary
Income taxes paid
Net cash (outflow)/inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Purchase of intangible assets
Proceeds from disposals of property, plant & equipment
Acquisition of subsidiaries, net of cash acquired
Payment of earnout for prior year acquisitions
Net cash (outflow)/inflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Lease payments
Proceeds from issue of share capital
Capital contribution of non-controlling interest
Transaction costs on issue of share capital
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
Note
27
32
10
2021
$'000
137,284
(120,431)
16,853
(1,153)
(167)
(1,844)
13,689
(4,737)
(244)
99
(8,629)
(3,110)
(16,621)
10,657
(9,011)
(2,894)
6,000
65
(300)
(1,944)
2,573
(359)
2,509
2,150
34
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
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
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 animals, companion animals and equine. The Group is vertically integrated with strategic
sourcing of products, custom manufacture of vaccines, in-house laboratory services and on farm delivery with its own
logistics service.
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 2021 were approved and authorised for issue by the
Board of Directors on 30 August 2021.
3
Changes in accounting policies
New Accounting Standards and Interpretations adopted during the year
The amended accounting standards and interpretations issued by the Australian Accounting Standards Board during the
year that were mandatory were adopted. None of these amendments or interpretations materially affected any of the
amounts recognised or disclosures in the current or prior year. The following IFRS Interpretations Committee (IFRIC)
agenda decisions were adopted during the year.
IFRIC agenda decision on Software-as-a-Service (SaaS) arrangements
The IFRIC has issued two final agenda decisions which impact SaaS arrangements:
Customer’s right to receive access to the supplier’s software hosted on the cloud (March 2019) – this decision
considers whether a customer receives a software asset at the contract commencement date or a service over the
contract term.
Configuration or customisation costs in a cloud computing arrangement (April 2021) – this decision discusses
whether configuration or customisation expenditure relating to SaaS arrangements can be recognised as an
intangible asset and if not, over what time period the expenditure is expensed.
The adoption of the above agenda decisions has not had a material impact on the Group.
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
36
4 Restatement of prior period intangibles provisionally accounted
Apiam acquired Animal Consulting Services Pty Ltd (ACE) in the financial year ended 30 June 2020. The acquisition was
provisionally accounted for in that period. The total consideration for ACE amounted to $15,757,000, which included
contingent consideration (earnout payment) of $3,625,000. During the year total contingent consideration was paid by the
Group. Subsequent to the acquisition, it was noted that there were customer relationships within ACE and that a portion of
goodwill recognised upon acquisition must be reclassified and recognised as an intangible asset which is amortised over
the useful life of the asset. This resulted in a restatement of each of the affected financial statement line items for prior
periods as follows:
30 June 2020
Statement of financial position (extract)
Previous
amount $'000
Adjustment
$'000
Restated amount
$'000
Goodwill
79,750
(1,746)
Trademarks and trade names
Customer relationships
Accumulated amortisation of customer relationships
Deferred tax liabilities
Total equity
-
3,223
(824)
(720)
68,513
1,773
721
(108)
(716)
(76)
78,004
1,773
3,944
(932)
(1,436)
68,437
30 June 2020
Statement of profit or loss and other
comprehensive income (extract)
Previous
amount $'000
Adjustment
$'000
Restated amount
$'000
Depreciation and amortisation of non-financial assets
Profit before income tax
Income tax expense
Total comprehensive income
(5,852)
6,065
(1,774)
4,291
(109)
(109)
33
(76)
(5,961)
5,956
(1,741)
4,215
5 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 2021.
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
37
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.
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
38
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 segments are aggregated for reporting purposes on the basis that each 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
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 8.
Intangible assets
Goodwill
Goodwill represents the future economic benefits arising from a business combination that are not individually identified and
separately recognised. See Note 5.3 for information on how goodwill is initially determined. Goodwill is carried at cost less
accumulated impairment losses. Refer to Note 5.12 for a description of impairment testing procedures.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
39
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.
Trademarks & Trade Names
Trademarks & Trade Names represents the future economic benefits arising from within a business combination that have
been identified and separately recognised. Trademarks & Trade Names are carried at cost less accumulated impairment
losses.
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 5.11). Leasehold improvements,
plant and equipment and motor vehicles are subsequently measured using the cost model, cost less subsequent
depreciation and impairment losses.
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
For any new contracts entered into, 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
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
40
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.
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
41
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,
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
42
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.
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 139’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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
43
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 34.3 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.
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
44
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.
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
45
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.
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
46
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.
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 5.15).
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 5.12).
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.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
47
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 5.3). Particularly, the fair value of contingent consideration is dependent on the outcome of many variables that
affect future profitability.
Leases – determination of the appropriate discount rate to measure lease liabilities
The Group enters into leases with third-party landlords and as a consequence the rate implicit in the relevant lease is not
readily determinable. Therefore, the Group uses its incremental borrowing rate as the discount rate for determining its
lease liabilities at the lease commencement date. The incremental borrowing rate is the rate of interest that the Group
would have to pay to borrow over similar terms which requires estimations when no observable rates are available.
Leases - Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Group’s operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain
to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
48
6
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 segments are aggregated for reporting purposes on the basis that each 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
7
Revenue
Sales revenue
Goods transferred at a point in time
Services transferred over time
Total revenue
2021
2020
$'000
126,181
(116,015)
10,166
$'000
118,335
(108,785)
9,550
10,166
23
(1,770)
(167)
(119)
(1,176)
79
7,036
(2,040)
4,996
2021
$'000
84,859
41,322
126,181
9,550
82
(1,640)
(460)
(253)
(1,368)
45
5,956
(1,741)
4,215
2020
$'000
84,782
33,553
118,335
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
8
Expenses
Profit before income tax includes the following specific expenses:
Depreciation
Leased buildings(i)
Leasehold improvements
Plant and equipment
Motor vehicles
Biological assets
Amortisation of intangibles
Total depreciation and amortisation
(i) Right of use assets
Finance costs
Interest expense on borrowings
Interest expense on lease liabilities
Share-based payments expense
Rental expense
49
2020
$’000
2,419
128
1,860
935
98
619
6,059
980
388
1,368
(29)
153
2021
$’000
2,528
258
1,946
825
24
779
6,360
813
363
1,176
335
97
9
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% (2020: 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% (2020 - 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 17 provides information on deferred tax assets and liabilities.
2021
$’000
2020
$’000
7,036
2,111
(120)
1,991
1,991
49
2,040
2,314
(274)
2,040
5,956
1,787
(13)
1,774
1,774
(33)
1,741
2,385
(644)
1,741
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
10 Cash and cash equivalents
Cash at bank and in hand
Cash and cash equivalents
11 Trade and other receivables
Trade receivables, gross
Less: allowance for expected credit losses
Other receivables
Rebates receivable
50
2020
$'000
2,509
2,509
2020
$'000
12,145
(334)
26
31
11,868
2021
$'000
2,150
2,150
2021
$'000
12,708
(309)
176
968
13,543
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 34.3 Credit risk analysis.
Balance at 1 July
Impairment loss
Balance 30 June
12
Inventories
Stock on hand, at cost
Less provision for obsolescence
Stock in transit, at cost
13 Other current assets
Prepayments
Security deposits
2021
$'000
334
(25)
309
2021
$'000
15,986
(365)
420
16,041
2021
$'000
1,411
166
1,577
2020
$'000
367
(33)
334
2020
$'000
17,560
(87)
193
17,666
2020
$'000
1,029
67
1,096
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
51
14
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
15,143
(2,373)
12,770
12,770
3,660
1,529
At 30 June 2020
At cost
Accumulated depreciation
Net book value
Year ended 30 June 2021
Opening net book value
Additions
Additions through business
combinations
Depreciation charge
Closing net book value
At 30 June 2021
Cost
Accumulated depreciation
Net book amount
i) Right of use Assets
ii)
Includes leased and owned motor vehicles
860
(296)
564
11,037
5,380
36
32,456
(6,308)
(3,674)
-
(12,651)
4,729
1,706
36
19,805
564
1,649
4,729
2,179
1,706
932
1
253
85
36
19,805
-
-
-
8,420
1,868
(5,557)
(2,528)
(258)
(1,946)
(825)
15,431
1,956
5,215
1,898
36
24,536
20,138
(4,707)
2,498
(542)
12,496
6,309
36
41,477
(7,281)
(4,411)
-
(16,941)
15,431
1,956
5,215
1,898
36
24,536
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
15 Intangible assets
At 30 June 2020
Cost
Accumulated amortization and impairment
Carrying amount at 30 June 2020
At July 1 2020
Opening net book value
Additions
Additions through business combinations
Sale of business
Amortisation
Closing net book value
At 30 June 2021
Cost
Accumulated amortization and impairment
Net book value
Goodwill
(i)
$'000
Customer
Relation-
ships (i)
$’000
Trademarks
& Trade
Names (i)
$’000
Capitalised
develop-
ment costs
$'000
78,004
-
78,004
78,004
-
10,720
(100)
-
88,624
3,944
(932)
3,012
3,012
51
-
-
(364)
2,699
88,624
-
88,624
3,995
(1,296)
2,699
1,773
-
1,773
1,773
-
-
-
-
1,773
1,773
-
1,773
2,675
(548)
2,127
2,127
269
-
-
(415)
1,981
2,941
(960)
1,981
i) Opening balances have changed due to a restatement of a prior period. Refer to Note 4.
52
Total
$'000
86,396
(1,480)
84,916
84,916
320
10,720
(100)
(779)
95,077
97,333
(2,256)
95,077
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
operating segment level. Goodwill impairment testing has been completed for each CGU Group. Refer to 15.4 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 %
2021
5.00%
2.00%
2.50%
9.33%
2021
$’000
2020
5.00%
2.00%
2.50%
9.33%
2020
$’000
Goodwill allocation across groups of CGUs
88,624
78,004
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 2021
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.
Feedlot
Dairy and mixed
Pig (a)
Balance 1 July 2020
Acquisitions
Sale of business
30 June 2021
$’000
13,330
-
-
13,330
$’000
55,997
10,720
(100)
66,617
$’000
8,677
-
-
Total
$’000
78,004
10,720
(100)
8,677
88,624
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
54
16
Leasing
Lease liabilities are presented in the statement of financial position as follows:
Lease liabilities (current)
Lease liabilities (non-current)
30 June 2021
$’000
30 June 2020
$’000
2,911
14,426
17,337
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 2021 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
Total
$’000
30 June 2021
Lease payments
Finance charges
3,308
(397)
3,009
(326)
2,907
2,891
(256)
(187)
2,100
(123)
4,554
(143)
18,769
(1,432)
Net present values
2,911
2,682
2,651
2,704
1,977
4,411
17,337
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
30 June
2021
$’000
42
55
97
2020
$’000
51
102
153
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
55
17 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
Other
Unused tax losses
Right of use assets
Depreciation
Listing and acquisition costs
Equity raising costs
The balance of deferred tax liabilities comprises temporary differences attributable
to:
Intangible assets
Customer relationships
Trademarks and trade names
2021
$'000
2020
$'000
110
109
164
237
2,267
1,896
1,440
123
(745)
111
72
3,487
2021
$'000
796
532
1,328
1,022
-
-
-
-
3,319
2020
$'000
904
532
1,436
All deferred tax assets (including tax losses and other tax credits) have been recognised in the statement of financial
position.
At 1 July 2019
(Charged)/credited:
to P&L
at 30 June 2020
(Charged)/credited:
to P&L
At 30 June 2021
Tax
losses
$'000
747
275
1,022
Provis-
ions
$'000
1,561
335
1,896
418
1,440
371
2,267
Borrow-
ing
costs
$'000
(5)
Trade
receiv-
ables
$'000
141
Listing &
acquis-
ition
costs
$'000
46
5
-
-
-
23
164
(54)
110
(46)
-
111
111
Equity
raising
costs
$'000
181
(181)
-
Invent-
ory
$'000
125
112
237
Right of
use
assets
$’000
-
Deprec-
iation
$’000
-
Total
$'000
2,796
-
-
-
-
523
3,319
72
72
(128)
109
123
123
(745)
(745)
96
3,487
All deferred tax liabilities have been recognised in the statement of financial position.
At 1 July 2019
(Charged)/credited to P&L
at 30 June 2020
(Charged)/credited to P&L
At 30 June 2021
Customer
relationships
$'000
1,316
120
1,436
(108)
1,328
Total
$'000
1,316
120
1,436
(108)
1,328
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
18 Trade and other payables
Trade payables
Sundry payables and accrued expenses
56
2020
$'000
5,583
3,212
8,795
2021
$'000
6,246
3,502
9,748
All amounts are short-term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
19 Current tax liabilities
Current tax payable
20 Borrowings
Current:
Bank loans (a)
less capitalized costs
Total current borrowings
Non-current
bank loans (a)
less capitalized costs
Total non-current borrowings
Refer to Note 35 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
Assets pledged as security
2021
$'000
1,494
2020
$'000
1,300
2021
$'000
2020
$'000
2,838
(20)
2,818
34,887
-
34,887
3,419
(19)
3,400
33,589
(24)
33,565
2021
$’000
37,725
(20)
37,705
2020
$’000
37,008
(43)
36,965
(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 3.0 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 2021
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
21 Employee benefit obligations
Leave obligations current
Leave obligations non-current
Employee benefits
57
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
2021
$'000
63,700
3,500
1,000
300
68,500
37,725
1,631
39,356
25,975
1,869
1,000
300
29,144
2021
$'000
7,211
338
7,549
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 $7,211 (2020: $5,865) 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.
22 Other current liabilities
Contingent consideration for acquisitions
Net payable to vendors on acquisition
Contract revenue
Make good provision
.
2021
$'000
-
13
16
163
192
2020
$'000
3,925
-
54
174
4,153
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
58
23 Equity
23.1 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
· share placement
· transaction costs on issue of new share capital
· employee shares issued
· shares held in employee share trust(a)
Shares issued and fully paid
2021
Shares
2020
Shares
2021
$'000
2020
$’000
116,597,135
105,897,728
91,107
86,432
3,383,552
8,768,510
2,535
3,785
1,249,470
251,994
815
120
1,295,340
7,500,000
-
179,933
(308,537)
129,896,893
1,298,025
-
-
380,878
-
116,597,135
906
6,000
(300)
102
(155)
101,010
595
-
-
175
-
91,107
91,107
Total shares authorised at the end of the period
129,896,893
116,597,135
101,010
Each share has the same right to receive dividend and the repayment of capital and represents one vote at the shareholders’
meeting of Apiam.
a) Shares held in the employee share trust at 30 June 2020. The number of shares held in the employee share trust at 30
June 2021 was 2,158,604.
24 Reserves
Details of reserves are as follows:
Balance at 1 July 2019
Employee share plan incentive
Foreign currency translation
Balance at 30 June 2020
Employee share plan incentive
Foreign currency translation
Balance at 30 June 2021
25 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)
-
-
(26,692)
-
-
(6,615)
-
-
(6,615)
Share
based
payment
reserve
Foreign
Currency
Translation
reserve
Total
$’000
330
(107)
-
223
372
-
595
$’000
-
$’000
(32,977)
-
(20)
(20)
-
(59)
(79)
2021
$’000
909
(86)
179
1,002
(107)
(20)
(33,104)
372
(59)
(32,791)
2020
$’000
845
120
59
1,024
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
59
26 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 (1.2 cents a share)
fully franked interim dividend (1.2 cents a share)
2021
Number
120,501,108
1,570,642
2020
Number
112,902,256
1,447,744
122,071,750
114,350,000
2021
$'000
1,399
1,451
2,850
2020
$'000
849
928
1,777
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 22 October 2021 (2020: 1.2c)
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
2021
$'000
9,500
2020
$'000
9,601
(679)
(400)
1,494
10,315
1,301
10,502
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
60
27 Reconciliation of cash flows from operating activities
a) Reconciliation of cash flows from operating activities
(a) Reconciliation of cash flows from operating activities
Cash flows from operating activities
Profit / (Loss) for the period
Adjustments for:
· 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
·
Net changes in working capital:
· decrease/(increase) in trade and other receivables
· decrease/(increase) in tax receivable
· 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 employee benefit obligations
· increase/(decrease) in other liabilities
· increase/(decrease) in other current liabilities
· increase/(decrease) in foreign currency translation reserve
Net cash received in operating activities
28 Employee remuneration
Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Employee benefits – expense
Wages and salaries expense
Bonus expense
Share-based payment expense (a)
Superannuation expense
Employee benefits expense
2021
$’000
4,996
6,361
125
277
22
319
(23)
(79)
(1,501)
225
1,894
(469)
(3)
741
82
(108)
988
115
(212)
(61)
13,689
2021
$’000
39,746
43
335
3,138
43,262
2020
$’000
4,215
6,059
62
(330)
21
68
(82)
(45)
3,400
282
(5,257)
(93)
(301)
(2,162)
927
(97)
593
40
227
(20)
7,507
2020
$’000
34,847
116
(29)
2,747
37,681
a) The share based payment expense in 2020 of $(29) reflects the reversal of an over accrued expense in the prior year.
Share-based employee remuneration
As at 30 June 2021, the Group maintained two share-based payment schemes for employee remuneration, the Future
Leaders Long Term Incentive Plan and the Senior Executive Long Term Incentive Plan. Performance rights under these
Plans 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 fair value of rights offered for the Future Leaders Long Term Incentive Plan is based on the share
price at grant date. The fair value of rights offered for the Senior Executive Long Term Incentive Plan is determined using
the Monte Carlo valuation model.
The number of performance rights held by employees of the Group at 30 June 2021 is set out below:
Type
Performance rights
Balance at
1/07/2020
1,355,104
Granted
1,029,280
Vested and
Exercised
(148,447)
Forfeited
(175,272)
Held as at
30/06/2021
2,060,665
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
61
29 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
2021
$
2020
$
190,294
206,905
3,148
56,000
59,148
249,442
4,730
108,500
113,230
320,135
30 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 in the 2020 financial year. The amount
owing is $Nil (2020: $79,285) this 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
accrued annual leave entitlements
non-monetary benefits
Total short-term employee benefits
Long- term employee benefits:
Accrued long service leave entitlements
Share based payments expense
Total long-term employee benefits
Post-employment benefits:
superannuation
Total post-employment benefits
Total remuneration
2021
$
1,130,685
53,972
11,394
1,196,051
13,800
60,926
74,726
69,701
69,701
2020
$
949,458
24,898
8,307
982,663
11,718
12,249
23,967
52,462
52,462
1,340,478
1,059,092
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 $364,514 (2020: $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 $139,725 (2020: $125,232).
The Group leases an artificial insemination facility in Victoria from entities associated with Chris Richards. Lease payments
made amounted to $116,462 (2020: $105,000).
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
62
The Group leases premises at Midland Highway, Lethbridge, Victoria from entities associated with Chris Richards. Lease
payments made amounted to $nil (2020: $2,018)
The Group leases premises at Midland Highway, Epsom, Victoria from entities associated with Chris Richards. Lease
payments made amounted to $nil (2020: $7,753).
All related party rentals are based on commercial rates and the terms of the lease are standard commercial terms.
31 Contingent liabilities
In the Directors’ view, there are no contingent assets or liabilities that will have a material effect on the Group.
32 Business combination
On 1 December 2020 the Group acquired 100% of the issued share capital and voting rights of Crosvet Pty Ltd (DCVS).
On 1 April 2021, the Group acquired the business assets of Knox Veterinary Clinic (KNX).
On 1 June 2021, the Group acquired the business assets of Clermont Veterinary Surgery (CVS)
On 1 June 2021, the Group acquired the business assets of Samford Valley Veterinary Hospital (SVVH)
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. The acquisitions of these veterinary
businesses expands Apiam’s presence in regional New South Wales and Queensland. On the acquisition of DCVS,
2,207,506 fully paid shares were issued at a fair value of $0.6795 per share. On the acquisition of KNX, 322,086 shares
were issued at a fair value of $0.82 per share. On the acquisition of CVS, 504,696 shares were issued at a fair value of
$0.905 per share. On the acquisition of SVVH, 349,264 shares were issued at a fair value of $0.90 per share.
Each of these business combinations have initially been accounted for on a provisional basis as at 30 June 2021. 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 2021
Fair value of consideration transferred
Amounts settled in cash
Amount settled by issue of shares at fair value
Final settlement payable / (receivable)
Total fair value of consideration transferred
Recognised amounts of identifiable net assets
Property plant and equipment
Deferred tax assets
Total non-current assets
Cash and equivalents
Inventories
Trade and other receivables
Other current assets
Total current assets
Provisions
Total non-current liabilities
Provisions
Current tax liabilities
Trade and other payables
Lease liabilities
Total current liabilities
Identifiable net assets
Goodwill on acquisition
Net cash outflow on acquisition
DCVS
$’000
3,349
1,500
-
4,849
947
22
969
10
144
144
12
310
13
13
90
112
53
830
1,085
181
4,668
3,339
KNX
$’000
981
264
-
1,245
CVS
$’000
SVVH
$’000
1,715
457
(202)
1,970
2,594
314
215
3,123
261
44
305
-
75
86
-
161
17
17
128
-
-
39
167
282
963
981
532
27
559
-
150
14
-
164
24
24
65
-
29
532
626
128
72
200
-
176
55
-
231
37
37
205
-
130
128
463
73
1,897
1,715
(69)
3,192
2,594
63
Total
$’000
8,639
2,535
13
11,187
1,868
165
2,033
10
545
299
12
866
91
91
488
112
212
1,529
2,341
467
10,720
8,629
Contribution to the Group results
For each acquisition, the period between the beginning of the reporting period and the date of acquisition was not business
as usual due to the acquisition, making it impractical to determine revenue and profit or loss generated in the period. The
period from acquisition to the end of the reporting period remains impractical to report business as usual for each acquisition
due to various integration activities impacting results within the first year of operations and the introduction of ongoing
charges for shared services within the group.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
64
33 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 Clinics NSW & QLD 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
CrosVet Pty Ltd
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
Australia
Veterinary Services
Group proportion of
ownership interests
2021
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%
100%
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%
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 2021
65
34
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 2021, 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%
(2020: +/- 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-21
30-Jun-20
Profit for the year
Equity
$’000
+1%
373
319
$’000
-1%
(373)
(319)
$’000
+1%
373
319
$’000
-1%
(373)
(319)
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
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
2021
$’000
2,150
13,543
15,693
2020
$’000
2,509
12,093
14,602
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 11) 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
2021
$’000
1,365
475
997
2,837
2020
$’000
1,332
1,007
1,550
3,889
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
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 2021, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
30 June 2021
Bank borrowings
Trade and other payables
Total
Current
Within 6
months
$’000
6 - 12
months 1 - 4 years
$’000
$’000
2,818
9,748
12,566
-
-
-
34,887
-
34,887
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
30 June 2020
Bank borrowings
Trade and other payables
Total
Current
Within 6
months
$’000
6 - 12
months
$’000
1 - 4 years
$’000
3,400
8,795
12,195
-
-
-
33,565
-
33,565
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 2021
68
35
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 2021 and 30 June 2020:
30 June 2021
Financial liabilities
Contingent consideration
Total liabilities
Net fair value
30 June 2020
Financial liabilities
Contingent consideration
Total liabilities
Net fair value
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
-
-
-
-
-
-
-
-
-
Level 1
$'000
Level 2
$'000
Level 3
$'000
-
-
-
-
-
-
3,925
3,925
3,925
-
-
-
Total
$'000
3,925
3,925
3,925
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 and Risk Management 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 2021
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 2020
Contingent consideration / (contingent consideration paid) for acquisitions
Balance at 30 June 2021
2021
$’000
3,925
(3,925)
-
2020
$’000
400
3,525
3,925
36 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 net debt to net debt and 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
2021
$'000
80,863
2,150
83,013
80,863
37,705
118,568
70%
2020
$'000
68,437
2,509
71,022
68,437
36,965
105,478
67%
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 2021
70
37 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 39 for details.
The Parent Entity had no contingent liabilities at 30 June 2021 (2020: $nil).
2021
$’000
2020
$’000
1,234
141,526
4,025
39,795
101,731
100,226
1,505
101,731
1,486
133,311
8,367
42,652
90,659
91,107
(448)
90,659
4,287
79
4,366
2,723
45
2,768
38 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 30
August 2021. The final dividend of $1,604,808 will be paid on the 22 October 2021.
On 30 July 2021 the Group acquired the business assets of Scenic Rim Veterinary Service (SRVS). The consideration
consisted of an initial cash payment of $13,741,300 and 1,678,495 fully paid shares issued at a fair value of $0.93 per share.
On 2 August 2021, the Group acquired the business assets of Golden Plains Animal Hospital (GPAH). The consideration
consisted of an initial cash payment of $1,076,073.
The Group has signed a business sale agreement to acquire the business assets of Smythesdale Animal Hospital (SAH).
The agreed consideration to be made on acquisition is an initial cash payment of $865,719.
The Group has also signed a business sale agreement to acquire the business assets of Harbour City Veterinary Surgery
(HCVS). The agreed consideration to be made on acquisition is an initial cash payment of $1,960,000 and 883,653 shares
issued at a fair value of $0.95 per share.
The acquisitions of these veterinary businesses expands Apiam’s presence in regional Queensland and Victoria. At this
time the acquisitions have not been finalised and the goodwill cannot be quantified.
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
71
39 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 Clinics NSW & QLD 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.
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 2021
Continuing operations
Revenue
Other income
Expenses
Changes in inventory
Cost of materials
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
Share of profit from equity accounted investments
Profit/(loss) before income tax
Income tax (expense)/benefit
Profit from continuing operations
Profit for the year
2021
$'000
89,636
23
(1,751)
(34,528)
(32,303)
(167)
(1,239)
(2,474)
(4,661)
(6,709)
(1,064)
79
2020
$'000
84,589
82
3,089
(40,121)
(28,973)
(460)
(1,178)
(1,805)
(4,690)
(6,754)
(1,294)
45
4,842
2,530
(1,360)
3,482
(760)
1,770
3,482
1,770
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
Set out below is a consolidated statement of financial position of the parties to the Deed.
Statement of Financial Position
as at 30 June 2021
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
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
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
2020
$’000
1,420
7,407
13,572
1,178
23,577
81,613
15,181
123
136
2,528
99,581
2021
$’000
1,317
11,229
11,822
1,228
25,596
91,144
18,877
-
216
2,491
112,728
138,324
123,158
8,390
13
959
2,838
1,050
5,760
19,010
34,887
12,908
106
47,901
66,911
7,169
3,925
536
3,798
-
4,689
20,117
44,539
-
135
44,674
64,791
71,413
58,367
99,996
(26,692)
(5,615)
3,724
71,413
89,852
(26,692)
(5,594)
801
58,367
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
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 2021 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 39 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 39.
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 2021.
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
30 August 2021
74
Collins Square, Tower 5
727 Collins Street
Docklands, Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne, Victoria 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 2021, 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 2021 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 (including Independence Standards) (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.
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 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.
Key audit matter
How our audit addressed the key audit matter
Intangible Assets – Note 15
At 30 June 2021, the carrying value of goodwill, customer
relationships and trademarks is $88 million, $2.7 million and
$1.8 million 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.
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 Group’s CGUs.
Our procedures included, amongst others:
Assessing management’s determination of the Group’s
CGUs 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;
Assessing management's allocation of goodwill resulting
from the acquisitions amongst the three CGUs;
Assessing whether management has the requisite
expertise to prepare the impairment model;
Assessing the reasonableness and appropriateness of
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 financial report for the year ended 30 June 2021, 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.
76
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.
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/auditors_responsibilites/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
2021.
In our opinion, the Remuneration Report of Apiam Animal Health Limited, for the year ended 30 June 2021 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, 30 August 2021
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
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 14 August 2021 (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
CJOEA FAMILY COMPANY PTY
LTD
PETSTOCK INVESTMENTS PTY
LTD
Ordinary
Shares
Ordinary
Shares
30,219,451
22.597
21,240,500
15.883
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
78
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
Number of
holders
1,591
Fully paid ordinary shares restricted until 1 October 2021 and quoted on
ASX
Fully paid ordinary shares restricted until 30 November 2021 and quoted
on ASX
Fully paid ordinary shares restricted until 2 December 2021 and quoted
on ASX
Fully paid ordinary shares restricted until 7 April 2022 and quoted on
ASX
Fully paid ordinary shares restricted until 27 May 2022 and quoted on
ASX
Fully paid ordinary shares restricted until 1 June 2022 and quoted on
ASX
Fully paid ordinary shares restricted until 30 July 2022 and quoted on
ASX
Fully paid ordinary shares restricted until 30 November 2022 and quoted
on ASX
Fully paid ordinary shares restricted until 7 April 2023 and quoted on
ASX
Fully paid ordinary shares restricted until 27 May 2023 and quoted on
ASX
Fully paid ordinary shares restricted until 1 June 2023 and quoted on
ASX
Fully paid ordinary shares restricted until 30 July 2023 and quoted on
ASX
Performance Rights
4
1
3
1
1
2
3
1
1
1
2
3
44
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 1,600 holders of a total of 133,733,992 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
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
79
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
306
493
260
430
111
189,174
1,281,538
2,060,417
13,113,346
117,089,517
Totals
1,600
133,733,992
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
2
10
23
9
44
0
6,820
71,512
871,970
1,103,501
%
0.14
0.96
1.54
9.81
87.55
100.00
%
0.000
0.330
3.480
42.460
53.730
2,053,803
100.000
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
133,733,992
37,820
126
0.02828
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
80
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
PETSTOCK INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
CS THIRD NOMINEES PTY LIMITED
SCOLEXIA COMMODITY PTY LTD
DONALD CROSBY & SHARRON CROSBY
CERTANE CT PTY LTD
Balance as at
Reporting Date
%
30,219,451 22.597
21,240,500 15.883
5,852,675
4.376
3,008,926
2.250
2,755,777
2.061
2,207,506
1.651
2,139,938
1.600
COBASH PTY LIMITED
1,872,006
1.400
HAMILTON ANIMAL HEALTH PTY LTD
1,564,270
1.170
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,409,907
1.054
FOUR POST INVESTMENTS PTY LTD
AILEEN MARY VANDERFEEN
MR LINCOLN O'MEARA
RACHEL LOUISE O'MEARA
MR ROGER CHARLES CARMODY & MRS MARIS MOORE
CARMODY
1,386,700
1.037
1,377,888
1.030
1,377,888
1.030
1,377,888
1.030
1,258,650
0.941
MRS KATE JUDITH MALIN
1,229,161
0.919
SONJASWRIGHT PTY LIMITED
1,211,846
0.906
DAVID FRITH PTY LTD
1,104,909
0.826
MR NEIL LEIGHTON & MRS HELEN LEIGHTON
1,104,131
0.826
CINDY JANE PTY LTD
1,045,701
0.782
Total number of shares of Top 20 Holders
Total Remaining Holders Balance
84,745,718 63.369
48,988,274 36.631
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
81
Company Secretary
The Company’s secretary is Eryl Baron.
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
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 2021
Ordinary shares
Voluntary escrow
1,103,753
30 November 2021
Ordinary shares
Voluntary escrow
1,490,194
2 December 2021
Ordinary shares
Voluntary escrow
161,043
7 April 2022
Ordinary shares
Voluntary escrow
252,348
27 May 2022
Ordinary shares
Voluntary escrow
174,632
1 June 2022
Ordinary shares
Voluntary escrow
839,248
30 July 2022
Ordinary shares
Voluntary escrow
1,103,753
30 November 2022
Ordinary shares
Voluntary escrow
161,043
7 April 2023
Ordinary shares
Voluntary escrow
252,348
27 May 2023
Ordinary shares
Voluntary escrow
174,632
1 June 2023
Ordinary shares
Voluntary escrow
839,247
30 July 2023
Apiam Animal Health Limited
Financial statements for the year ended 30 June 2021
82
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
2,053,803
44
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
Dr Jan Tennent
Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
COMPANY SECRETARY
Eryl Baron
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 2021
A P I A M . C O M . A U