Bellamy's Australia Ltd
Annual Report 2014

Plain-text annual report

Bellamy’s Australia Limited Annual Report 2014 B e l l a m y ’ s A u s t r a l i a L i m i t e d A n n u a l R e p o r t 2 0 1 4 C Bellamy’s Australia Limited Bellamy’s Australia Limited (Bellamy’s or BAL) is a Tasmanian- based branded food business which listed on the Australian Securities Exchange in August 2014. EBIT (A$’000) 2,058 1,518 442 FY2012 FY2013 FY2014 EBIT annual growth rate since FY2013 35.6% Revenue annual growth for FY2014 $50.9m 77.0% Bellamy’s offers a range of organic food and formula products for babies and toddlers. Bellamy’s products are all Australian- made and certified organic. This forms the centrepiece of Bellamy’s brand appeal and the promise of a Pure Start to Life®. Annual Report 2014 Contents 02 Chairman and Managing Director’s Report 04 Review of Operations 12 Board of Directors 13 Corporate Governance Information 14 Financial Report 01 Bellamy’s Australia LimitedChairman and Managing Director’s Report Dear Shareholders The 2014 financial year was a memorable period for our company, highlighted of course by our successful listing on the Australian Securities Exchange (ASX). It is with great pleasure that we announce the results for the 2014 financial year, posting another year of extraordinary growth of 77% in revenue and 36% in EBIT. Bellamy’s Australia Limited (Bellamy’s) has experienced an exciting and dynamic time since the close of the 30 June 2014 financial year, with its listing on the Australian securities exchange on 5 August 2014. This makes Bellamy’s one of only 6 Tasmanian companies to be listed on the ASX. Bellamy’s is focused on nurturing and growing Bellamy’s Organic, an Australian made certified organic baby and children’s food brand, operating across Australia and Asia. Bellamy’s Organic forms the key operating business of Bellamy’s. Through its outstanding growth record of average 57% growth year on year since 2011, 02 Bellamy’s Australia LimitedOutstanding growth rate year on year since 2011 57% it demonstrates that families looking for safe, trusted food for their babies and children increasingly demand organic and Australian made by Bellamy’s Organic. During 2014, Bellamy’s Organic has built a deep understanding of the complex global organic supply chain. It continues to foster relationships across the organic industry in order to encourage and support the growth and development of organic farming and food manufacturing. We also continued our roll-out of Bellamy’s Organic products across new distribution channels in Australia, particularly pharmacy and independent supermarkets. In China we have developed multiple distribution partners and channels and in South East Asia we have built our supermarkets and distributor base. The momentum of brand awareness this has generated continues, and achievements in social media marketing across Australia and Asia attest to this momentum. At its core Bellamy’s understands that the value of the brand and its products comes from the people on the Bellamy’s team. Bellamy’s Organic remains a small team. Our commitment to the benefits of organic for people and planet and our passion for excellence in Australian food manufacturing has seen Bellamy’s achieve yet another outstanding year of growth. The entire team at Bellamy’s are very proud of their achievements to date and are motivated and excited to continue to deliver high quality, nutritious and healthy products across Australia and Asia through 2015 and beyond. Rob Woolley Chair Laura McBain Managing Director and CEO 03 Annual Report 2014Review of Operations In FY2014, 15% of Bellamy’s revenue was derived from overseas markets Corporate Structure Within the consolidated group, all subsidiary entities are 100% owned by Bellamy’s Australia Limited. Bellamy’s Organic Pty Ltd is the principal operating entity within the Group. Each of Bellamy’s Organic (Hong Kong) Company Ltd, Bellamy’s Organic (South-East Asia) Pte. Ltd and Bellamy’s Food Trading (Shanghai) Co Ltd are entities involved in the distribution of Bellamy’s products in relevant offshore markets. As at the date of this report, neither Bellamy’s Kitchen Pty Ltd or Yum Mum Pty Ltd is operational. Bellamy’s Australia Limited Bellamy’s Organic Pty Ltd Bellamy’s Organic (Hong Kong) Company Ltd Bellamy’s Organic (South-East Asia) Pty Ltd Bellamy’s Kitchen Pty Ltd Yum Mum Pty Ltd Bellamy’s Food Trading (Shanghai) Co Ltd 04 Bellamy’s Australia LimitedBellamy’s offers over 30 products that are tailored to the needs of babies and toddlers: Annual Report 2014 B a b e s i f r o m b i r t h t o 6 m o n t h s B a b e s i f r o m 6 t o 1 2 m o n t h s T o d d e r s l f r o m 1 t o 3 y e a r s Baby formula, baby food pouches, dry cereals. Baby formula, baby food pouches, dry cereals, teething rusks, pasta. Toddler milk, baby food pouches, dry cereals, teething rusks, fruit snacks, fruit bars, pasta. C h i l d r e n 3 y e a r p u s l Milk drinks and snacks. 05 Review of operations (cont.) Bellamy’s Organic products are delivered to consumers through a well established retail distribution network: China • via distribution networks across major cities in China Australia • via major supermarkets and pharmacies • via a direct to market internal sales force to independent supermarkets South-East Asia • via major supermarkets in Singapore and Hong Kong • via distribution networks in Vietnam and Malaysia Online Strategy Bellamy’s has established a comprehensive strategy to deliver continued growth through: • expansion into Asian markets by growing distribution networks into new Asian markets and penetrating deeper into existing Asian markets; • expansion into other new markets by identifying key markets for growth outside of Asia; • category development outside the Baby category by leveraging Bellamy’s brand awareness into range extensions outside the Baby category; • new products within the Baby category by continuing to grow the baby proposition and through innovation and product development; and • full distribution across Australia and expanding the product range and type of distribution outlets within Australia. Australian Distribution In Australia, Bellamy’s has focused on growing the business through deep distribution across all supermarket and pharmacy channels. Through the development of an in-house sales team in Melbourne, Sydney and Brisbane, Bellamy’s has developed a diversified customer group across multiple retailing platforms. This focus has fuelled the growth in domestic revenue. Product development Bellamy’s has an internal sales and marketing team that is responsible for product development. It works closely with all elements in the supply chain and distribution network to enable a clear pathway to customers. Bellamy’s has a deep understanding of the complex global organic ingredient supply chain. Bellamy’s identifies key ingredients and works closely with suppliers to manage supply of its raw materials. Bellamy’s brings expertise to manufacturing solutions through strong relationships with ingredient suppliers, contract and toll manufacturers and contract packers. Whilst there were no new products launched in the year ended 30 June 2014, in July 2014, the business launched a new UHT supplementary milk drink, Ready to Go, nationally to major supermarkets and pharmacy chains. 06 Bellamy’s Australia LimitedFinancial Review Statutory and underlying financial performance The table below outlines the key consolidated financial performance indicators for FY2014 and the growth achieved by the company over the past 12 months. Statutory result Financial Year Ended 30 June 2014 $’000 Financial Year Ended 30 June 2013 $’000 Period movement up/(down) $’000 Revenue (from all sources) 50,927 28,842 22,085 EBIT Profit before income tax expense Income tax expense Net profit after income tax expense 2,058 1,880 (614) 1,266* 1,518 1,416 186 1,602 540 464 (800) (336) * Includes one-off cash bonuses accrued to 30 June 2014 paid to senior executives and directors as disclosed in the Prospectus. Period movement up/(down) % 76.6% 35.6% 32.8% 430.1% (21.0%) Bellamys has followed the guidance for underlying profit as issued by the ASIC Regulator Guide RG 230 –‘Disclosing non-IFRS information’. The following statement of underlying profit is unaudited. This statement should be read in conjunction with the financial statements as disclosed in this report. For the year ended 30 June 2014 Revenue (from all sources) EBIT Profit before income tax expense Income tax expense Net profit after income tax expense Statutory Profit $’000 50,927 2,058 1,880 (614) 1,266 Non Recurring Items $’000 1,400 1,400 (420) 980 Underlying Profit $’000 50,927 3,458 3,280 178 2,246 Non-recurring items of $1.4 million relate to a bonus paid to employees, directors and senior executives in June 2014. 07 Annual Report 2014Review of operations (cont.) Revenue Gross profit margins Gross revenues for the Group were $50,927,000 (2013: $28,842,000). The gross profit margin for the 2014 year was 36.2% (2013: 36.4%) Bellamy’s receives its revenue primarily from the sale of its products: • direct to consumer operations (principally supermarkets); • through distribution agents in offshore jurisdictions (that then on-sell direct to consumer operations); and • direct to consumers through Bellamy’s online store. Bellamy’s generates its revenue through the sale of some or all of its products in multiple jurisdictions including Australia, China, Singapore, Hong Kong, Vietnam, Malaysia and New Zealand. Bellamy’s has more than 30 products available for consumers although not all products are sold through all retail distribution channels nor in all jurisdictions. Bellamy’s operations team is focused on maintaining gross profit margins and works closely with suppliers and distribution channels to deliver sustainable pricing solutions for the entire supply chain. Cost of doing business The three costs of doing business are the areas of marketing, employment and other administration expenses. Bellamy’s has a relatively fixed cost base that provides it with operating leverage and the ability to grow earnings faster than revenue. As a percentage of sales, these costs are shown below for the year ended 30 June 2014 and 30 June 2013. Cost as a % of sales Employment Costs Marketing Costs Other Administrative Costs * adjusted to remove one off executive bonus of $1,400,000. 08 Year Ending 30 June 2014 6.0%* 1.6% 3.8% Year Ending 30 June 2013 7.4% 0.8% 6.4% Bellamy’s Australia LimitedStatement of Financial Position Basic and diluted earnings per share (cents) Net Assets ($’000) Net tangible assets ($’000) Net assets per share (cents) Net tangible assets per share (cents) Definitions Financial Year Ended 30 June 2014 Financial Year Ended 30 June 2013 Period movement up/(down) Period movement up/(down) 1.9 15,592 15,364 22.3 21.9 2.8* 9,477 9,477 14.6* 14.6* (0.9) (32.1%) 6,115 5,887 7.7 7.3 64.5% 62.1% 52.7% 50.0% Net Tangible Assets = Total equity less goodwill and other intangible assets Net Tangible Assets per share – Total equity less goodwill and other intangible assets/ shares on issue * Comparative results for earnings per share have been restated to reflect the capital reconstruction approved by shareholders on 10 June 2014, whereby each share was split into 6.5224 ordinary shares (refer Note 18: Share Capital). Assets Total assets have increased by $6,743,000 during the financial year ended 30 June 2014. Cash balances have increased by $1,771,000 to $$4,434,000 primarily as a result of the following: • increase in cash flows from operations of $4,299,000 compared to the 2013 year. The Group generated $773,000 net cash inflow from operating activities compared to a net cash outflow of $3,256,000 in the 2013 year. This change is largely due to the impact of the growth in revenues during the 2014 year and the collection of revenues in line with expected debtor collection cycles. Trade and other receivables have increased by $801,000, inventories have increased by $1,251,000, and prepayments have increased by $2,531,000 in line with the increased level of working capital assets required by the company as a result of its growth during the year. Intangible assets of $228,000 relate to new product development costs which have been incurred during the year related to a new UHT supplementary milk drink that was launched in July 2014. Liabilities Total liabilities increased by $629,000 to $7,198,000 during the period, mainly due to the increase in trade and other payables of $3,912,000 offset by the substantial reduction in interest bearing debt of $3,479,000. The overall increase in net working capital assets during the year was $2,418,000. Equity Equity has increased by $6,115,000 up to $15,592,000, primarily due to the net profit after tax of $1,266,000 and the issue of equity as a result of the institutional capital raising of $4,856,000 (net of institutional placement costs). 09 Annual Report 2014Review of operations (cont.) Outlook Bellamy’s continued to expand its operations internationally, with a focus on developing the brand’s opportunities in Asia, particularly China and South East Asia. Bellamy’s has taken the view that being close to these markets will best facilitate its growth. For this reason, the company has established 100% owned subsidiaries in China and Singapore, which are responsible for branding, marketing, and distribution of Bellamy’s in China and South East Asia, respectively. In January 2014, Bellamy’s appointed a Regional Sales Manager to develop operations in South East Asia, including Singapore, Malaysia, and Vietnam. A key outcome of this appointment has been the move to direct trading with major Singapore supermarket retailers, Cold Storage and Fairprice, which commenced in April 2014. In China, the operations of the company continue to focus on expanding and deepening distribution of its formula range and to continue the growth in this market. The brand awareness of Bellamy’s in China is a key driver for the growth and this is the focus of branding and marketing activities undertaken in China. Management of principal risks At Bellamy’s, we consider the identification, evaluation and control of risks to our business and corporate strategy an important underpinning to growth. This is because risk management enhances our ability to understand and respond to our external environment, enhances our ability to meet our objectives, and provides confidence to our investors for the future well being of the company. Bellamy’s continues to mature and refine our risk management approach. Risks are regularly reviewed and monitored, especially those internal and external risks that could have a material impact on our objectives. Below we detail the material risks to the business and our approach to managing these risks. 10 Bellamy’s Australia LimitedThe entire team at Bellamy’s are very proud of their achievements to date and are motivated and excited to continue to deliver high quality, nutritious and healthy products across Australia and Asia through 2015 and beyond. Ingredients and Manufacturing Change in Regulation There is a risk that laws or regulations may be introduced or amended in Australia, or in foreign jurisdictions in which Bellamy’s sells or sources it ingredients and/or products. Bellamy’s understands the sensitivity of the organic, baby and food industries. Through industry engagement and the appointment of personnel to particularly focus on and understand these regulatory issues in Australia and Asia Bellamy’s aims to respond efficiently and effectively to changes in regulation that may impact its business. Bellamy’s Organic maintains its credibility and brand strength by ensuring all of its products are certified organic. This requires Bellamy’s to rely on a complex global organic supply chain, where ingredients maintain their organic certification, and are available in sufficient quantities to meet the demands of the business. Bellamy’s has a strict quality control system that enables the business to ensure it maintains its organic certification. Ingredients are carefully selected and managed throughout the organic supply chain by a committed supply chain and quality team. Bellamy’s has developed a strong and deep understanding of the complex organic global supply chain, and has built strong relationships with key suppliers and manufacturers with whom Bellamy’s plans for forecast growth. 11 Annual Report 2014Board of Directors Rob Woolley Non-executive Chair Rob was appointed as Chair on the formation of the Company in 2007. Rob’s expertise has been instrumental in the growth of the Company to date. Rob is presently Chairman of Tandou Ltd, a director of Freycinet Coast Financial Services Ltd and a board member of Forestry Tasmania and the not-for-profit, Tasmanian Leaders Inc. Previously Rob was Managing Director of Websters Limited following twenty years as a partner at Deloitte. Rob holds a Bachelor of Economics and is a Fellow of the Institute of Chartered Accountants. Laura McBain Managing Director and CEO Laura has overseen significant change, innovation and business growth since her appointment as General Manager of Bellamy’s in 2006 and subsequent appointment as Chief Executive Officer (“CEO”) in 2011 and Managing Director and CEO in 2014. Prior to joining Bellamy’s, Laura practised as an accountant and specialised in the areas of providing business advisory and taxation services. Laura holds a Bachelor of Commerce and in 2013 completed the IMD Leadership Challenge. In 2013, Laura was named as the Telstra Tasmanian Business Woman of Year 2013 and she went on to be named the Telstra Australian Business Woman of Year for 2013 (Private and Corporate). Ian Urquhart Independent Non-executive Director Ian was appointed as a non-executive director and the company secretary on the formation of the Company in 2007. He resigned as Company Secretary in June 2014. Ian brings a wealth of financial expertise and business experience to the Board, having previously been a Chief Financial Officer and director of the PGA Group Pty Ltd for over thirty years and teaching finance and accounting at Monash University. Ian has a Bachelor of Commerce, a Masters in Administration and is a certified practising accountant (CPA). 12 Michael Wadley Independent Non-executive Director Michael was appointed a non-executive Director in 2014. Some 12 years ago Michael relocated to Shanghai where he now resides with his family. Michael has extensive experience over the past 20 years providing corporate advisory and legal services to foreign investors throughout China and to Chinese groups investing offshore. Michael is a principal at Wadley Consulting Shanghai Co. Ltd, a Senior China Consultant for Hopgood Gamin, on the Board of Directors of the Australian Chamber of Commerce in Shanghai and is a Co-Chair of the Chamber’s Financial Services Industry Working Group, a committee member of the Australian China Business Council, Queensland, and a member of the Australian Institute of Company Directors. Michael holds a Bachelor of Laws from Queensland University, and is admitted to practice the Supreme Court of Queensland, the High and Federal Courts of Australia, and is registered as a foreign lawyer in China and Hong Kong. Bellamy’s Australia LimitedCorporate Governance Information The principal governance related policies and practices which largely took effect from the ASX listing date (5 August 2014) are as follows: • Corporate Governance Statement • Board Charter • Finance, Audit and Risk Committee Charter • Diversity Policy • Shareholder Communications Policy • Continuous Disclosure Policy • Securities Trading Policy • Code of Conduct The Corporate Governance Statement which was lodged with the ASX 1 August 2014, discloses the extent to which the Company will follow the recommendations set by the ASX Corporate Governance Council in the third edition of its Corporate Governance Principles and Recommendations. The above policies and practices comply with ASX Corporate Governance Council recommendations, unless otherwise stated in the Corporate Governance Statement. In addition, many governance elements are contained in the Constitution. Details of Bellamy’s Constitution, key policies and the charters for the Board and each of its committees are available on the Company’s website under the Governance tab at bellamysaustralia.com.au. Bellamy’s Corporate Governance Regime The Board is responsible for the overall corporate governance of Bellamy’s. The Board monitors the operational and financial position and performance of Bellamy’s and oversees its business strategy, including approving the strategic goals of Bellamy’s and considering and approving its annual business plan and the associated budget. The Board is committed to maximising performance, generating appropriate level of Shareholder value and financial return and sustaining the growth and success of Bellamy’s. In conducting Bellamy’s business with these objectives, the Board seeks to ensure that Bellamy’s is properly managed to protect and enhance Shareholder interests and that Bellamy’s, its Directors, officers and personnel operate in an appropriate environment of corporate governance. Accordingly, the Board have developed and adopted a framework of corporate governance policies and practices, risk management practices and internal controls that it believes appropriate for Bellamy’s business. 13 Annual Report 2014Bellamy’s Australia Limited 14 Financial Report Annual Financial Report Bellamy’s Australia Limited ABN 37 124 272 108 Consolidated Financial Statements for the year ended 30 June 2014 Contents 15 Directors’ Report 27 Auditor’s Independence Declaration 28 Independent Auditor’s Report 30 Directors’ Declaration 31 Consolidated Statement of Profit or Loss and other Comprehensive Income 32 Consolidated Statement of Financial Position 33 Consolidated Statement of Changes in Equity 34 Consolidated Statement of Cash Flows 35 Notes to and Forming Part of the Financial Statements 66 Additional securities exchange information (unaudited) 68 Corporate Directory Annual Report 2014 Directors’ Report for the year ended 30 June 2014 The directors present their report together with the financial report of Bellamy’s Australia Limited (“the Company” or “Bellamy’s”) and of the consolidated entity (“Group”), being the company and its controlled entities, for the year ended 30 June 2014 and the auditor’s report thereon. 1. Change of company name The shareholders passed a resolution on 10 June 2014 to change the name of the company to Bellamy’s Australia Limited. Previously the company’s name was Tasmanian Pure Foods Limited. 2. Information about the directors 2.1 Names and particulars The names and particulars of the directors in office at any time during or since the end of the year are: Director Expertise, experience and qualifications Rob Woolley Non-executive Chair (Independent) Member of the Remuneration and Nomination Committee Member of the Finance, Audit and Risk Committee Rob was appointed as Chair on the formation of the Company in 2007. Rob is presently Chairman of Tandou Ltd, a director of Freycinet Coast Financial Services Ltd and a board member of Forestry Tasmania and the not-for-profit, Tasmanian Leaders Inc. Previously Rob was Managing Director of Websters Limited, following twenty years as a partner at Deloitte. Laura McBain Managing Director and CEO Rob holds a Bachelor of Economics and is a Fellow of the Institute of Chartered Accountants. Laura has overseen significant change, innovation and business growth since her appointment as General Manager of Bellamy’s in 2006 and subsequent appointment as Chief Executive Officer (“CEO”) in 2011 and Managing Director and CEO in 2014. Prior to joining Bellamy’s, Laura practised as an accountant specialising in the areas of providing business advisory and taxation services. Laura holds a Bachelor of Commerce and in 2013 completed the IMD Leadership Challenge. In 2013, Laura was named as the Telstra Tasmanian Business Woman of Year 2013 and she went on to be named the Telstra Australian Business Woman of Year for 2013 (Private and Corporate). 15 Bellamy’s Australia Limited Directors’ Report cont. for the year ended 30 June 2014 Director Expertise, experience and qualifications Ian Urquhart Independent Non-executive Director Member of the Remuneration and Nomination Committee Chair of the Finance, Audit and Risk Committee Ian was appointed as a non-executive director and the company secretary on the formation of the Company in 2007. He resigned as Company Secretary in June 2014. Ian brings a wealth of financial expertise and business experience to the Board, having previously been a Chief Financial Officer and director of the PGA Group Pty Ltd for over thirty years and teaching finance and accounting at Monash University. Michael Wadley Independent Non-executive Director Chair of the Remuneration and Nomination Committee Member of the Finance, Audit and Risk Committee Ian has a Bachelor of Commerce, a Masters in Administration and is a certified practising accountant (CPA). Michael was appointed a Non-executive Director in 2014 and is based in Shanghai. Michael has extensive experience over the past 20 years providing corporate advisory and legal services to foreign investors throughout China and to Chinese groups investing offshore. Michael is a principal at Wadley Consulting Shanghai Co. Ltd, a Senior China Consultant for Hopgood Gamin, on the Board of Directors of the Australian Chamber of Commerce in Shanghai and is a Co-Chair of the Chamber’s Financial Services Industry Working Group, a committee member of the Australian China Business Council, Queensland, and a member of the Australian Institute of Company Directors. Michael holds a Bachelor of Laws from Queensland University, and is admitted to practice the Supreme Court of Queensland, the High and Federal Courts of Australia, and is registered as a foreign lawyer in China and Hong Kong. The above named directors held office for the whole of the financial year and since the end of the financial year except for: Laura McBain Michael Wadley Janet Cameron Anthony Shadforth Robert Wilson – appointed 19 June 2014 – appointed 19 June 2014 – resigned 19 June 2014 – resigned 19 June 2014 – resigned 19 June 2014 2.2 Directorships of other listed companies Directorships of other listed companies held by the directors in the three years immediately before the end of the financial year are as follows: Director Robert Woolley Company Tandou Limited Period of directorship Since 2011 16 Annual Report 2014 Directors’ Report cont. for the year ended 30 June 2014 2.3 Director shareholdings The following table sets out each director’s relevant interest in Bellamy’s shares and options as at the date of this report. Robert Woolley Laura McBain Ian Urquhart Michael Wadley Fully paid ordinary shares No. 1,335,739 1,565,376 2,500,000 Nil Share options No. Nil 953,333 Nil Nil During or since the end of the financial year, there were no shares issued to Directors as a result of exercising options over unissued shares. The directors shareholdings shown above are held by associated entities and are subject to voluntary escrow from the date of Official Quotation of the shares until the date three days after the date of which the audited financial results of the Company and the Consolidated Entity for the year ended 30 June 2015 are disclosed to the Australian Stock Exchange (ASX). 2.4 Directors’ Meetings The number of Directors meetings held and the number of meetings attended during the financial year were: Directors Robert Woolley Laura McBain Ian Urquhart Michael Wadley Janet Cameron Anthony Shadforth Robert Wilson A Number of meetings attended during the year. B Number of meetings held during the time the Directors held office during the year. With effect from ASX listing date 5 August 2014, the board established a Finance Audit and Risk Committee and a Remuneration and Nominations Committee. Board of Directors Attended A Held B 12 2 12 1 6 8 10 12 2 12 2 9 10 10 17 Bellamy’s Australia Limited Directors’ Report cont. for the year ended 30 June 2014 3. Share options granted to directors and senior management The “Initial Grant” made on 26 June 2014, under the Employee Share Option Plan, resulted in the company issuing 2,200,000 conditional vesting options to the managing director and other senior management as part of their remuneration. The exercise price for these options is $1.00, however the options can only be exercised if the Group achieves its FY2015 Pro Forma forecast NPAT of $5.0 million as confirmed by the FY2015 financial results released to the ASX and that the holder remains an eligible employee of the Group until the FY2015 results are released. These options expire two years subsequent to vesting, which should be no later than 31 August 2017. The holders of these options do not have the right, by virtue of the option to participate in any share issue or interest issue of the company or of any other related body corporate. There have been no further options granted since the Initial Grant. Further details about share based payments to directors and key management personnel are included in the Remuneration Report (Section 16 of the Directors’ Report). 4. Company Secretary Ian Urquhart (Director) resigned as Company Secretary 10 June 2014, and Brian Green was appointed on the same date. Brian is a Chartered Accountant with extensive business advisory, accounting and tax experience and also held the role of Chief Financial Officer from 2007 up to 11 August 2014. 5. Principal Activities The principal activities of the Group during the course of the financial year were the sale and distribution of organic food and formula products for babies and toddlers. There were no significant changes to the principal activities during the year. 6. Review of operations Details of the operations of Bellamy’s during the year, the financial position and the strategies and prospects for future years can be found in the Chairman and Managing Director’s Report found on pages 4 to 11 which forms part of this Directors’ Report. 7. Changes in the state of affairs On 20 June 2014, the company completed a placement of 5,000,000 shares to various institutions at the issue price of $1.00. The institutional placement costs were $143,500 net of tax and the net increase in share capital was $4,856,500. Other than the above, there was no significant change in the state of affairs of the consolidated entity during the financial year. 18 Annual Report 2014 Directors’ Report cont. for the year ended 30 June 2014 8. Events Subsequent to reporting date Bellamy’s Australia Limited (ASX:BAL) was admitted to the ASX official list effective 5 August 2014, following the issue of 25,000,000 ordinary shares at $1.00 each pursuant to a Prospectus and Initial Public Offer document dated 4 July 2014. The net proceeds from the share issue were approximately $23.7m after taking into account capital raising costs of approximately $1.3m (net of tax). The number of ordinary shares on issue is now 95,000,392. In response to the needs of the business growth plans, on 11 August 2014 Bellamy’s Australia Limited announced the appointment of a Shona Ollington as Chief Financial Officer (CFO), allowing Brian Green the outgoing CFO to focus on the role of Company Secretary whilst also providing ongoing support to the finance and accounting team. No other matters or circumstances have arisen since the end of the year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 9. Future developments The group will continue to pursue its strategic business growth objectives through expansion into new and existing markets in Asia and beyond; category development by leveraging Bellamy’s brand awareness outside the baby and toddler category; developing new products for within the baby and toddler category and; further distribution across Australia. Further information about likely developments in the operations of the Group and the expected results of those operations in future financial years has not been included in this report as the disclosure of the information is likely to result in unreasonable prejudice to the Group. 10. Environmental regulations The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a State or Territory. 11. Dividends No dividends were paid or declared since the beginning of the financial reporting period. 12. Indemnification and insurance of officers and auditors During the financial year, the company paid a premium in respect of a contract insuring the directors of the company, the company secretary and all executive officers of the company and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or of any related body corporate against a liability incurred as such an officer or auditor. 19 Bellamy’s Australia Limited Directors’ Report cont. for the year ended 30 June 2014 13. Proceedings on behalf of the company No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings. The company was not a party to any such proceedings during the financial year. 14. Audit 14.1 Independence declaration The auditor’s independence declaration is set out on page 27 and forms part of the Directors’ Report for the year ended 30 June 2014. 14.2 Extension of audit rotation period On 15 July 2014, as a result of the proposed listing the Directors resolved to exercise the eligible term of Robert Ruddick of Ruddick’s for one additional successive financial year. ASIC have granted relief under section 342A(1) of the Corporations Act by modifying section 324DA to read as if references in that subsection to 5 successive financial years were to 6 successive financial years. 14.3 Non-audit services Details of amounts paid or payable to the auditor for non-audit services provided during the year are outlined in note 5 to the financial statements. The directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 5 to the financial statements do not compromise the external auditor’s independence, based on advice received from the Audit Committee, for the following reasons: (cid:129) all non-audit services have been reviewed and ratified by the audit committee to ensure that they do not impact the integrity and objectivity of the auditor; and (cid:129) none of the non-audit services undermine the general principles relating to auditor independence as set out in APES 110 ‘Code of Ethics for Professional Accountants’ issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Group, acting as advocate for the Group or jointly sharing economic risks and rewards. 15. Rounding off of amounts The company is a company of the kind referred to in ASIC Class Order CO 98/100, dated 10 July 1998, and in accordance with that Class Order amounts in the Directors’ Report and the financial statements are rounded off to the nearest thousand dollars, unless otherwise indicated. 20 Annual Report 2014 Directors’ Report cont. for the year ended 30 June 2014 16. Remuneration Report – audited This remuneration report, which forms part of the Directors’ Report, sets out information about the remuneration of Bellamy’s Australia Limited’s key management personnel for the financial year ended 30 June 2014. The term ‘key management personnel’ refers to those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the Group. The prescribed details for each person covered by this report are detailed below under the following headings: (cid:129) remuneration policy & strategic direction (cid:129) directors and key management personnel (cid:129) (cid:129) (cid:129) remuneration structure – fixed, short term and long term arrangements relationship between the remuneration policy and company performance remuneration of key management personnel (cid:129) employment contracts (cid:129) key management personnel share based payments and equity holdings Pursuant to Regulation 2M.3.03.02 of the Corporations Act 2001 comparative information is not required where the current financial reporting period is the first financial year that the requirements of paragraph 300(A)(1)(c) apply to a person (key management personnel). 16.1 Remuneration policy & strategic direction Bellamy’s remuneration policy aims to attract and retain the best available key management personnel to run and manage the Group. By providing a fixed remuneration component together with specific short-term and long-term incentives based on key performance areas affecting the Group’s financial results the company seeks to create goal congruence between shareholders, directors and executives. The role of the Remuneration and Nomination Committee includes assisting the Board achieve “goal congruence” by seeking to ensure that Bellamy’s: (cid:129) has coherent and appropriate remuneration policies and practices which enable Bellamy’s to attract and retain Directors and executives who will create value for Shareholders; (cid:129) fairly and responsibly remunerates Directors and executives having regard to the performance of Bellamy’s, the performance of the executives and the general market environment; (cid:129) has polices to evaluate the performance and composition of the Board, individual Directors and executives on (at least) an annual basis with a view to ensuring that Bellamy’s has a Board of effective composition, size and diversity, expertise and commitment to adequately discharge its responsibilities and duties; (cid:129) has adequate succession plans in place (including for the recruitment or appointment of Directors and senior management); and (cid:129) has policies and procedures that are effective to attract, motivate and retain appropriately skilled and diverse people that meet Bellamy’s needs and that are consistent with Bellamy’s strategic goals and human resource objectives. 21 Bellamy’s Australia Limited Directors’ Report cont. for the year ended 30 June 2014 The Remuneration and Nomination Committee together with its independent remuneration consultant continues to develop and formalise short term and long term incentive plans for board and where appropriate shareholder approval. A summary of the incentive arrangements currently in place is set out below. Services from remuneration consultants The Remuneration Committee of the Board engaged Egan Associates to review the remuneration structure and level of reward for the key management personnel (post listing) and to provide recommendations. Egan Associates were paid $38,115 for these services. The board is satisfied that the remuneration recommendations made by Egan Associates were free from undue influence by members of the key management personnel about whom the recommendations may relate. 16.2 Key management personnel The directors and other key management personnel of the Group during or since the end of the financial year were: Non-executive directors Role Robert Woolley Ian Urquhart Michael Wadley Janet Cameron Non-executive Chairman Non-executive Non-executive (appointed 19 June 2014) Non-executive (resigned 19 June 2014) Anthony Shadforth Non-executive (resigned 19 June 2014) Robert Wilson Non-executive (resigned 19 June 2014) Executive Officers Role Laura McBain CEO & appointed Managing Director 19 June 2014 16.3 Remuneration structure – post listing 16.3.1 Fixed remuneration Non-executive Directors Under ASX Listing Rules, the total amount paid to all non-executive Directors in any financial year must not exceed, in total the amount fixed in a general meeting of the Company. This amount is currently $600,000 as determined by Shareholders at an Extraordinary General Meeting held 10 June 2014. Annual Directors fees that have been agreed to be paid from the date of Listing are $125,000 to the Chair, and $55,000 to each non-executive Director. In addition, on an annual basis, the Chair of the Finance, Audit and Risk Committee will be paid $5,000 and the Chair of the Remuneration Committee will be paid $5,000. Other committee members will receive $2,500 per annum. The remuneration must not include a commission on, or a percentage of, the profits or income of the Company. Superannuation is not included in the rates prescribed above. Directors may also be reimbursed for travel and other expenses incurred in attending to Bellamy’s affairs. Non-executive Directors may be paid such additional or special remuneration as the Directors decide is appropriate where a Director performs extra work or services which are not in the capacity as a Director of the Company. There are no retirement benefit schemes for Directors other than statutory superannuation contributions. 22 Annual Report 2014 Directors’ Report cont. for the year ended 30 June 2014 Managing Director and CEO The Managing Director will receive a total fixed annual remuneration of $300,000 (exclusive of superannuation). 16.3.2 Short term incentive arrangements in place The Managing Director is eligible to receive a short term incentive cash bonus equivalent to 30% of her fixed annual remuneration ($300,000 exclusive of superannuation). The short term incentive is payable upon Bellamy’s achieving its FY2015 Pro Forma forecast NPAT of $5.0 million and other key performance indicators that ensure that the Company operates on a sustainable basis. Other senior management are also eligible to receive the cash bonus referred to above at rates not exceeding 30% of their fixed annual remuneration exclusive of superannuation. The Initial Grant of Options under the Employee Share Option Plan (ESOP) made effective 26 June 2014 to the Managing Director and CEO and other Management represents a further short term incentive. Each of the 2,200,000 Options issued under the Initial Grant entitles the holder to acquire one (1) Ordinary Share at an exercise price of $1.00 per Option subject to the vesting conditions being satisfied. These vesting conditions include the Group achieving its FY2015 Pro Forma forecast NPAT forecast of $5.0 million as confirmed by the FY2015 financial results released to the ASX and the holder remaining an eligible employee until the FY2015 results are released. The options were independently valued at $0.29 each using a Binomial Pricing Model. The value of each option will be amortised over the ensuing period to vesting date which will be no later than 31 August 2015. If the vesting conditions are not met the options lapse immediately, otherwise the options will expire two years after the vesting date – no later than 31 August 2017. 16.3.3 Long term incentives and the employee share option plan (ESOP) The granting of options under the ESOP is considered to be an effective means of motivating, retaining and attracting high quality persons as employees. Such grants will be subject to the ESOP rules and other regulatory requirements, including the ASX Listing Rules. It is envisaged that the ESOP will form an integral part the of long term incentive plans. 16.4 Relationship between remuneration policy and company performance Bellamy’s was admitted to the ASX Official List effective 5 August 2014, and as such it is too early to measure the relationship between remuneration policy and shareholder returns. In future reporting periods the company will compare total shareholder performance (dividends and share value) with the end results of the remuneration policy. The table below shows that total remuneration of Directors and other key management personnel was $1,553,021 for the year ended 30 June 2014, representing 75.4% of profit before tax of $2,058,000. The remuneration includes cash bonuses of $1,200,475 comprising a specific cash bonus of $50,475 paid to the managing director in respect of the year ended 30 June 2013, together with one off bonuses in relation to prior period services for Directors and other key management personnel totalling $1,150,000 forming part of the total one off bonuses of $1,400,000 as disclosed in the Prospectus dated 4 July 2014. In future reporting periods, the level of key management personnel remuneration as a percentage of profit before tax is expected to be significantly lower. 23 Bellamy’s Australia Limited Directors’ Report cont. for the year ended 30 June 2014 16.5 Remuneration of key management personnel Short term employment benefits Post- employ- ment benefits Salary & Fees $ Cash bonus $(ii) Other $(iii) Super’n $ Long- term employ- ment benefits Long service leave $ Share based payments Perform- ance based Options $(iv) Total $ % 15,000 400,000 75,000 15,000 50,000 2,250 15,000 15,000 15,000 – – – – – – – – – 77,250 450,000 75,000 – – – – – – – – – – – – – – – – – – – – – 490,000 65,000 2,250 15,000 15,000 15,000 81.6% 76.9% – – – – 602,250 74.70% 160,183 750,475 – 18,967 18,857 2,566 951,048 79.2% 237,433 1,200,475 75,000 18,967 18,857 2,566 1,553,298 77.40% 2014 Non-Executive Directors: R Woolley I Urquhart M Wadley(i) J Cameron(i) A Shadforth(i) R Wilson(i) Sub total Executives L McBain Total (i) Directors J Cameron, A Shadforth & R Wilson resigned 19 June 2014. M Wadley was appointed 19 June 2014. (ii) During the year ended 30 June 2014, and prior to the Prospectus Date and Listing, one off cash bonuses totalling $1,400,000 were allocated to Non-executive Directors, the Managing Director, other management and employees in respect of past services. During the year the Managing Director (L McBain) received a $50,475 cash bonus in respect of the year ended 30 June 2013 in addition to the entitlement to $700,000 of the one off cash bonuses referred to above. (iii) This includes fees paid for management services provided outside the capacity of Director. (iv) The share based payments relate to the Initial Grant of Options made effective 26 June 2014 under the ESOP, refer 16.3.2 for details. 16.6 Employment contracts Managing Director and CEO Bellamy’s entered into an employment contract with the Managing Director 24 June 2014. Under the contract the Managing Director will receive a total fixed annual remuneration of $300,000 (exclusive of superannuation). As detailed above the Managing Director is also eligible to receive a short term incentive. Subject to shareholder approval the Managing Director will be eligible to participate in further grants made under Bellamy’s employee share option plan (ESOP). Bellamy’s may terminate the employment contract in writing prior to 31 December 2015 by giving 6 months notice or payment in lieu of notice. After that date either party may terminate the employment contract on giving 6 months notice or, in Bellamy’s case, payment in lieu of notice. Bellamy’s may terminate the Managing Director’s employment contract immediately and without payment for notice or payment in lieu of notice in the event of serious misconduct or other specified circumstances. 24 Annual Report 2014 Directors’ Report cont. for the year ended 30 June 2014 16.7 Key management personnel share based payments granted as compensation and equity holdings Details of share based payments granted as compensation to key management personnel during the current financial year: Grant date Value of options No. granted granted(i) No. vested % of compen- sation for the year consisting of options % of grant forfeited 26/6/2014 953,333 $276,467 Nil Nil 0.3% Name L McBain Option series Initial Grant (i) The value of the options are amortised over the period from grant date to the vesting date for purposes of accounting and key management personnel compensation reporting. There were no options granted to key management personnel as part of their remuneration that were exercised or lapsed during the financial year. The number of options on issue at the beginning of the financial year was nil. Fully paid ordinary shares of Bellamy’s Australia Limited Non-Executive Directors: R Woolley I Urquhart M Wadley(i) J Cameron(i) A Shadforth(i) R Wilson(i) Sub total Executives L McBain(i) Total Balance at 1 July 2013 No. Net other changes(ii)(iii) Director resignations 490,286 571,249 – 2,590,152 3,155,660 – – – – 5,604,898 30,952,492 (36,557,390) 571,428 354,286 3,155,654 (3,727,082) 1,956,509 (2,310,795) Balance at 30 June 2014. No.(iv) Balance at the date of this report(v) 3,080,438 1,335,739 3,727,089 2,500,000 – – – – – – – – 7,592,327 41,810,467 (42,595,267) 6,807,527 3,835,739 240,000 1,325,376 – 1,565,376 1,565,376 7,832,327 43,135,843 (42,595,267) 8,372,903 5,401,115 (i) Directors J Cameron, A Shadforth & R Wilson resigned 19 June 2014. M Wadley and L McBain were appointed 19 June 2014. (ii) During the year there were no shares granted as compensation and no shares were received on the exercise of options. (iii) Net other changes includes the impact of the capital reconstruction approved by shareholders on 10 June 2014, whereby each ordinary share was split into 6.5224 ordinary shares. (iv) There were no shares held nominally by key management personnel as at 30 June 2014 and as at the date of this report. (v) The movement in shares held after 30 June 2014, form part of the Existing Shares to be Sold under the Offer set out the Initial Public Offer Prospectus dated 4 July 2014. The Offer included the issue of 25,000,000 new shares at $1.00 each and to facilitate the sale of 10,875,380 Existing Shares at a price of $1.00 each, prior to the admission of Bellamy’s Australia Limited to the ASX Official List. 25 Bellamy’s Australia Limited Directors’ Report cont. for the year ended 30 June 2014 Signed in accordance with a resolution of the Board of Directors. Robert G. Woolley DIRECTOR Ian A. Urquhart DIRECTOR Dated at Launceston 18th of September 2014. 26 Annual Report 2014 Auditor’s Independence Declaration Under Section 307C of the Corporations Act 2001 27 Bellamy’s Australia Limited Independent Auditor’s Report To the members of Bellamy’s Australia Limited 28 Annual Report 2014 Independent Auditor’s Report cont. To the members of Bellamy’s Australia Limited 29 Bellamy’s Australia Limited Directors’ Declaration for the year ended 30 June 2014 The directors declare that: (a) in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; (b) in the directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 1 to the financial statements; (c) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity; and (d) the directors have been given the declarations from the chief executive officer and the chief financial officer as required by s.295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Board of Directors. Robert G. Woolley DIRECTOR Ian A. Urquhart DIRECTOR Dated at Launceston 18th of September 2014. 30 Annual Report 2014 Consolidated Statement of Profit or Loss and other Comprehensive Income for the year 30 June 2014 Continuing operations Revenue Cost of sales Gross Profit Other income Direct costs Employee costs Marketing & promotion costs Administrative costs Depreciation, amortisation and impairments Earnings before net interest and tax (EBIT) Net financing costs Profit before tax Income tax (expense)/benefit Profit for the year Note 3(a) 3(b) 3(c) 3(d) 4 Other comprehensive income (net of tax) Items that may be reclassified subsequently to profit and loss Exchange differences – translating foreign operations Total comprehensive income Earnings per share Basic and diluted earnings per share (cents) 6 Diluted earnings per share (cents) 2014 $000 2013 $000 50,927 (32,507) 18,420 194 (9,042) (4,456) (829) (1,959) (270) 2,058 (178) 1,880 (614) 1,266 28,842 (18,338) 10,504 235 (4,903) (2,125) (245) (1,851) (97) 1,518 (102) 1,416 186 1,602 (13) 1,253 – 1,602 1.9 1.9 2.8* 2.8* There were no potential dilutive ordinary shares outstanding. * Comparative results for Earnings per share have been restated to reflect the capital reconstruction approved by shareholders on 10 June 2014, whereby each ordinary share was split into 6.5224 ordinary shares. The accompanying notes form part of these financial statements. 31 Bellamy’s Australia Limited Consolidated Statement of Financial Position as at 30 June 2014 Assets Current Assets Cash and cash equivalents Trade and other receivables Current tax assets Inventories Financial assets Other assets Total Current Assets Non-Current Assets Property, plant and equipment Intangible assets Deferred tax assets Total Non-Current Assets Total Assets Liabilities Current Liabilities Trade and other payables Borrowings Provisions Total Current Liabilities Non-Current Liabilities Borrowings Provisions Deferred tax liabilities Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued capital Reserves Retained profits/(Accumulated losses) Total Equity The accompanying notes form part of these financial statements. 32 Note 7 8 17 9 10 11 12 13 17 14 15 16 15 16 17 18 19 2014 $000 4,434 6,443 125 7,737 244 2,695 2013 $000 2,663 5,719 44 6,486 129 164 21,678 15,205 553 228 331 1,112 22,790 6,514 184 96 6,794 212 47 145 404 7,198 15,592 683 – 158 841 16,046 2,602 3,613 68 6,283 262 23 1 286 6,569 9,477 15,756 (7) (157) 15,592 10,900 – (1,423) 9,477 Consolidated Statement of Changes in Equity as at 30 June 2014 Foreign currency translation reserve $000 Share based payment reserve $000 Balance as at 1 July 2012 Comprehensive income Profit for the year Other comprehensive income Total comprehensive income Issue of shares Dividends Other transfers Balance as at 30 June 2013 Balance as at 1 July 2013 Comprehensive income Profit for the year Other comprehensive income Total comprehensive income Issue of shares Dividends Share based payments Issued capital $000 8,720 – – – 2,180 – – 10,900 10,900 – – – 4,856 – – – – – – – – – – – – (13) (13) – – – Balance as at 30 June 2014 15,756 (13) The accompanying notes form part of these financial statements. – – – – – – – – – – – – – – 6 6 Annual Report 2014 Retained earnings $000 (3,025) 1,602 – 1,602 – – – Total $000 5,695 1,602 – 1,602 2,180 – (1,423) 9,477 (1,423) 9,477 1,266 – 1,266 – – – 1,266 (13) 1,253 4,856 – 6 (157) 15,592 33 Bellamy’s Australia Limited Consolidated Statement of Cash Flows for the year ended 30 June 2014 Note 2014 $000 2013 $000 Cash flows from operating activities Cash receipts from customers Grants received Interest received Dividends received Cash payments to suppliers & employees Interest paid Income taxes paid Net cash from operating activities 24 Cash flows from financing activities Proceeds share issue Repayment of borrowings Proceeds from borrowings Net cash from financing activities Cash flows from investing activities Proceeds sale property plant & equipment Purchases of property, plant & equipment Purchases of intangibles Net cash used in investing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 July 2013 Effects of exchange rate changes Cash and cash equivalents at 30 June 2014 7 The accompanying notes form part of these financial statements. 54,579 26,641 77 24 4 – 76 3 (53,047) (30,124) (202) (662) 773 (122) – (3,526) 4,795 (3,630) 201 1,366 5 (145) (228) (368) 1,771 2,663 – 4,434 2,180 (181) 2,431 4,430 22 (413) – (391) 513 2,150 – 2,663 34 Annual Report 2014 Notes to and Forming Part of the Financial Statements for the year ended 30 June 2014 1. Summary of significant accounting policies Reporting entity Bellamy’s Australia Limited is a listed public company incorporated in Australia. The address of the principal place of business and registered office are as follows: 52-54 Tamar Street Launceston Tasmania 7250 The entity’s principal activities are the sale and distribution of organic food and formula products for babies and toddlers. The consolidated financial statements and notes represent those of Bellamy Australia Limited (previously Tasmanian Pure Foods Limited) and Controlled Entity (the “Consolidated Group” or “Group”). The separate financial statements of the parent entity, Bellamy Australia Limited, have not been presented within this financial report as permitted by the Corporations Act 2001. Change of company name The shareholders passed a resolution on 10 June 2014 to change the name of the company to Bellamy’s Australia Limited. Previously the company’s name was Tasmanian Pure Foods Limited. Statement of compliance These consolidated financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law. The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the company and the Group comply with International Financial Reporting Standards (‘IFRS’). The financial statements were authorised for issue on 18 September 2014 by the directors of the company. Basis of preparation These consolidated financial statements, except for cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The amounts presented in the financial statements have been rounded to the nearest thousand dollar. 35 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (a) Principles of consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Bellamy’s Australia Limited at the end of the reporting period. The parent entity controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns from its power over the entity. A list of controlled entities is contained in Note 23 to the financial statements. The assets and liabilities of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. Where controlled entities have entered or left the Group during the year, the financial performance of those entities is included only for the period that they were controlled preparing the consolidated financial statements, all intragroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation. (b) Revenue recognition Revenue is measured at fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Revenue from the sale of goods is recognised at the point of delivery as this corresponds to the transfer of significant risks and rewards of ownership of the goods and the cessation of all involvement in those goods. Interest revenue which is reported under the heading of net finance costs is recognised using the effective interest rate method. Grant income is recognised as income when the grant becomes receivable. All revenue is stated net of the amount of goods and services tax (GST). (c) Income tax The income tax expense for the financial reporting period comprises current income tax expense (income) and deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the financial year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. 36 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that the net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. Bellamy’s and its wholly owned Australian controlled entities have implemented the tax consolidation legislation. Bellamy’s, as the head entity in the tax consolidated group and its wholly owned Australian controlled entities continues to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its own right. In addition to its own current and deferred tax amounts, Bellamy’s also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group. Assets or liabilities arising under the tax funding agreement with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group. (d) Foreign currency translation Items included in the Financial Information of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Australian dollars, which is the functional and presentation currency of the Group. Transactions in foreign currencies are converted at the exchange rates in effect at the dates of each transaction. Amounts payable to or by the Group in foreign currencies have been translated into Australian currency at the exchange rates ruling on balance date. Gains and losses arising from fluctuations in exchange rates on monetary assets and liabilities are included in the income statement in the period in which the exchange rates change, except when deferred in equity as qualifying cash flow hedges. (e) Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision makers. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director. 37 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (f) Employee expenses and entitlements Provision is made for employee expenses arising to the end of the reporting period. Employee expenses that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee expenses payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy any vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows attributable to employee expenses. Provision has been made in the accounts for benefits accruing to employees up to balance date, such as annual leave, long service leave and bonuses. No provision is made for non-vesting sick leave as the anticipated pattern of future sick leave taken indicates that accumulated non-vesting leave will never be paid. Annual leave provisions are measured at their nominal amounts using the remuneration rates expected to apply at the time of settlement and are classified in other payables. Long service leave provisions are measured as the present value of expected future payments to be made in respect of services provided by employees up to reporting date. Expected future payments are discounted using market yields at reporting date on national government bonds with terms to maturity that match estimated future cash outflows. All on-costs, including superannuation, payroll tax, workers’ compensation premiums and fringe benefits tax are included in the determination of provisions. Retirement benefits costs Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions. (g) Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. (h) Borrowings Loan facilities are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities, which are not incremental costs relating to the actual drawdown of the facility, are capitalised and amortised on a straight line basis over the term of the facility. (i) Receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less any provision for doubtful debts. Trade receivables are generally due for settlement based upon trading terms negotiated with customers. Sales to export distributors are generally receivable before shipment. Sales to domestic customers are generally receivable approximately 45 days from invoice. 38 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 Collectability of trade receivables are reviewed on an ongoing basis. Debts which are known to be uncollectable are written off. A provision for doubtful debts is raised when there is objective evidence that the Group will not be able to collect all amounts due. The amount of the impairment loss is recognised in the income statement within other expenses. When a receivable for which an impairment allowance has been recognised becomes uncollectable in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement. (j) Inventories Inventories are measured at the lower of cost and net realisable value. (k) Impairment of assets Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed 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 carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). (l) Property, plant and equipment Each class of property, plant and equipment is carried at cost or fair value, less where applicable, any accumulated depreciation or amortisation. Plant and equipment Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. The carrying amount of plant and equipment is reviewed annually by the directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows which will be received from the assets’ employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Depreciation The depreciable amount of all fixed assets, excluding freehold land, is depreciated on a straight line basis over the asset’s useful life to the consolidated group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and equipment 5% – 40% The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains or losses are included in the statement of profit or loss. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings. 39 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (m) Leases Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in other long-term payables. Finance lease payments are allocated between interest expense and reduction of lease liability over the term of the lease. The interest expense is determined by applying the interest rate implicit in the lease to the outstanding lease liability at the beginning of each lease payment period. Finance leased assets are depreciated on a straight-line basis over the shorter of the asset’s estimated useful life and the lease term. Where the risks and rewards of ownership are retained by the lessor, leased assets are classified as operating leases and are not capitalised. Rental payments are charged to the income statement on a straight line basis over the period of the lease. (n) Intangibles Research and development Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when the project is expected to deliver future economic benefits and those benefits can be reliably measured. Other intangibles Trademark and website development costs are expensed as incurred due to the inherent uncertainty surrounding resultant future economic benefits and the ongoing nature of the costs. (o) Accounts payable These amounts represent liabilities for goods provided prior to the end of the reporting period and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. (p) Provisions Provisions are recognised when the company has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. (q) Financial Instruments Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. 40 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 Financial assets classified at fair value through profit and loss From time to time the group may hold listed investments for the purposes of trading, such investments are classified at fair value though profit and loss. These investments are measured at fair value with changes in carrying amount being included in profit or loss. Fair Value is determined with reference to ASX quoted bid prices. (r) Goods and Services Tax (GST) Revenues, expense and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation 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 an expense. Receivables and payables in the balance sheet are shown inclusive of GST. Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. (s) Share based payments Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 21. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve. (t) Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the new share issue are shown in equity as a deduction, net of tax, from the proceeds. (u) Critical accounting judgments and key sources of estimate uncertainty Aside from the capitalisation of $228,000 (2013: Nil) product development costs in accordance with accounting policy note 1(n) and as set out in note 13 there were no other critical accounting judgments made during the current reporting period. Aside from the booking of plant and equipment impairments totalling $135,000 (2013:Nil) in accordance with accounting policy note 1(k) and as set out in note 12 there were no other key sources of estimate uncertainty. (v) Comparative figures When required by the Accounting Standards, comparative figures are adjusted to conform to changes in presentation for the current financial year. In the event that the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements is presented. 41 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (w) Adoption of new and revised Accounting Standards The Group adopted the following Australian Accounting Standards together with the relevant consequential amendments arising from related Amending Standards, from the mandatory application date of 1 January 2013: (cid:129) AASB 10: Consolidated Financial Statements; (cid:129) AASB 12: Disclosure of Interests in Other Entities; and (cid:129) AASB 127: Separate Financial Statements. AASB 10 replaces parts of AASB 127: Consolidated and Separate Financial Statements (March 2008, as amended) and Interpretation 112: Consolidation – Special Purpose Entities. AASB 10 provides a revised definition of control and additional application guidance so that a single control model will apply to all investees. AASB 12 contains the disclosure requirements applicable to entities that hold an interest in a subsidiary, joint venture, joint operation or associate. AASB 12 also introduces the concept of a “structured entity”, replacing the “special purpose entity” concept currently used in Interpretation 112, and requires specific disclosures in respect of any investments in unconsolidated structured entities. AASB 127 prescribes the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when preparing separate financial statements. (x) New Accounting Standards for application in future periods Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to the Group, together with an assessment of the potential impact of such pronouncements on the Group when adopted in future periods are discussed below. (cid:129) AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting periods commencing on or after 1 January 2017). The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and includes revised requirements for the classification and measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting. The key changes made to the Standard that may affect the Group on initial application include certain simplifications to the classification of financial assets, simplifications to the accounting of embedded derivatives, and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge policies in line with the new hedge accounting requirements of AASB 9, the application of such accounting would be largely prospective. Although the adoption of AASB 9 may have an impact on financial instruments and hedging activities in place at the time, it is impracticable at this stage to provide a reasonable estimate of such impact. (cid:129) AASB 2012-3: Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities (applicable for annual reporting periods commencing on or alter 1 January 2014). This Standard provides clarifying guidance relating to the offsetting of financial instruments, which is not expected to impact the Group’s financial statements. 42 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (cid:129) Interpretation 21: Levies (applicable for annual reporting periods commencing on or after 1 January 2014). Interpretation 21 clarifies the circumstances under which a liability to pay a levy imposed by a government should be recognised, and whether that liability should be recognised in full at a specific date or progressively over a period of time. This Interpretation is not expected to significantly impact the Group’s financial statements. (cid:129) AASB 2013-3: Amendments to AASB 136 – Recoverable Amount Disclosures for Non-financial Assets (applicable for annual reporting periods commencing on or after 1 January 2014). This Standard amends the disclosure requirements in AASB 136: Impairment of Assets pertaining to the use of fair value in impairment assessment and is not expected to significantly impact the Group’s financial statements. (cid:129) AASB 2013-4: Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting (applicable for annual reporting periods commencing on or after 1 January 2014). AASB 2013-4 makes amendments to AASB 139; Financial Instruments: Recognition and Measurement to permit the continuation of hedge accounting in circumstances where a derivative, which has been designated as a hedging instrument, is novated from one counterparty to a central counterparty as a consequence of laws or regulations. This Standard is not expected to significantly impact the Group’s financial statements. (cid:129) AASB 2013-5: Amendments to Australian Accounting Standards – Investment Entities (applicable for annual reporting periods commencing on or after 1 January 2014). AASB 2013-5 amends AASB 10: Consolidated Financial Statements to define an “investment entity” and requires, with limited exceptions, that the subsidiaries of such entities be accounted for at fair value through profit or loss in accordance with AASB 9 and not be consolidated. Additional disclosures are also required. As neither the parent nor its controlled entities meet the definition of an investment entity, this Standard is not expected to significant impact the Group’s financial statements. 2. Segment reporting Segment revenues are derived from the sale and distribution of organic branded food products to babies and toddlers within the domestic and export segments. Management reports highlighting the financial performance and financial position of both segments continue to evolve in line with business growth. The export operations are Asian focussed and include three new wholly owned subsidiaries in Singapore, Hong Kong and Shanghai incorporated during the year. At this stage, there are no separate reportable divisions within the domestic and export segments. Segment revenues, results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly borrowings and related expenses, corporate assets, and income tax assets and liabilities. The CEO has identified gross revenues and EBIT as indicators of segment financial performance. Unallocated corporate expenses include non-executive director remuneration together with one off bonuses incurred during the year ended 30 June 2014. 43 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 External revenue is measured in a manner consistent with the income statement and there are no intersegment sales. There are four customers comprising more than 10% of external revenue. The segment financial reporting note is set out in note (a) below and is supported by a reconciliation of segment assets and liabilities to total reported assets and liabilities in note (b). (a) Segment reporting External revenue Other revenue Segment revenue Segment EBIT Unallocated corporate expenses Group EBIT Net financing costs Profit before tax from continuing operations Total segment assets Total segment liabilities Other disclosures Depreciation, amortisation & impairments Depreciation and amortisation (unallocated) Acquisition of segment assets Domestic Export Consolidated 2014 $000 2013 $000 43,401 21,230 154 219 43,555 21,449 3,828 978 2014 $000 7,526 40 7,566 328 17,188 13,181 6,214 2,592 269 – 112 97 – 413 712 300 1 – 33 2013 $000 7,612 64 2014 $000 2013 $000 50,927 28,842 194 283 7,676 51,121 29,125 723 – – – – – 4,156 (2,098) 2,058 (178) 1,701 (183) 1,518 (102) 1,880 1,416 17,900 13,181 6,514 2,592 270 – 145 97 – 413 44 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (b) Reconciliation of segment assets and liabilities Domestic Export Consolidated 2014 $000 2013 $000 17,188 13,181 2014 $000 712 2013 $000 2014 $000 2013 $000 – 17,900 13,181 4,434 2,663 125 331 44 158 22,790 16,046 6,214 2,592 300 – 6,514 2,592 143 396 145 101 3,875 1 7,198 6,569 Segment assets Unallocated Cash and cash equivalents Current tax asset Deferred tax assets Total assets Segment liabilities Unallocated Provisions (employee benefits) Borrowings Deferred tax liabilities Total liabilities 3. Operating profit Operating profit includes the following items of income and expense from continuing operations. (a) Revenue from continuing operations Sales (b) Other revenue Grants received Dividends received Fair value increment – financial assets Exchange gains/(losses) Gain/(loss) on disposal of assets Other income 2014 $000 50,927 2013 $000 28,842 Note 10 2014 $000 77 4 115 (38) – 41 194 2013 $000 64 4 49 2 (19) 135 235 45 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (c) Employee benefits Wages, salaries, bonuses & director fees Superannuation – defined contribution plan Other employee related expenses (d) Net finance costs (unrelated parties) Interest revenue Interest expense – financial liabilities (e) Other expenses from continuing operations Impairment – property, plant & equipment Depreciation – property, plant & equipment Bad and doubtful debts – trade receivables Operating lease rentals Research and development costs (excluding product development costs capitalised) Write-off obsolete stock Note 12(b) 12(b) 4. Income tax expense (a) Amounts recognised in profit or loss: Current tax expense Deferred tax expense/(benefit) Under/over provision in respect of prior years Total income tax expense/(benefit) 46 2014 $000 3,009 152 1,295 4,456 2014 $000 25 (203) (178) 2014 $000 135 135 – 164 24 306 2014 $000 586 32 (4) 614 2013 $000 1,356 101 668 2,125 2013 $000 35 (137) (102) 2013 $000 – 97 1 53 127 79 2013 $000 4 (142) (48) (186) Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (b) Numerical reconciliation between tax expense and profit before tax. Profit before tax from continuing operations Prima facie tax payable at 30% (2013:30%) Non deductible expenditure Under/over provision in respect of prior years Effect of different overseas tax rates R&D benefits Losses not previously recognised Deferred tax derecognised Total income tax expense/(benefit) Weighted average effective tax rates 5. Auditor’s remuneration Auditor of the parent entity Audit of the financial statements Other audit, tax and compliance related services Additional services in relation to the capital raising Total paid to R J Ruddick and Ruddicks 6. Earnings per share Basic & diluted (a), (b) (a) Basic earnings per share 2014 $000 1,880 564 36 (4) 56 (38) – – 614 33% 2014 Whole Dollars 50,000 10,485 19,500 79,985 2013 $000 1,416 425 17 (48) – – (593) 13 (186) (14%) 2013 Whole Dollars 25,000 4,495 – 29,495 2014 cents 1.9 2013 cents 2.8 The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders of $1,226,000 (2013: $1,602,000) and the weighted average number of shares outstanding of 65,137,378 (2013: 57,075,716 adjusted) The comparative weighted average number of shares outstanding and the resultant earnings per share results have been restated to reflect the capital reconstruction approved by shareholders on 10 June 2014, whereby each ordinary share was split into 6.5224 ordinary shares. (Refer note 18: Share Capital) 47 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (b) Diluted earnings per share Basic earnings per share equals diluted earnings per share as there are no potential dilutive ordinary shares outstanding. 7. Cash and cash equivalents Cash at bank 8. Trade and other receivables Current Trade debtors (a) Provision for doubtful debts Other debtors (a) Trade debtors – credit risk 2014 $000 4,434 2014 $000 6,151 – 292 6,443 2013 $000 2,663 2013 $000 5,504 – 215 5,719 The average number of days outstanding for trade debtors is approximately 45 days. Interest is not charged on overdue balances. Less than 5% of the balance is past the due date with all balances considered to be recoverable; hence a provision for doubtful debts is not required. The top 5 debtors comprise major Australian retail outlets and represent 63% of the total balance. 9. Inventories Current Raw materials & stores at cost Finished goods at cost 48 2014 $000 1,109 6,628 7,737 2013 $000 503 5,983 6,486 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 10. Financial assets Current Shares in an Australian listed entity at fair value through profit and loss 2014 $000 244 244 2013 $000 129 129 The shares are held for trading and changes in fair value are included in the statement of comprehensive income under the heading of other income. The fair value increment was $115,000 (2013: $49,000). 11. Other assets Current Prepayments 12. Property, plant and equipment (a) Carrying amounts Plant and Equipment At cost Accumulated depreciation Accumulated impairment losses Leasehold Improvements. At cost Accumulated depreciation Total Property Plant & Equipment 2014 $000 2,695 2,695 2014 $000 1,321 (350) (468) 503 129 (79) 50 553 2013 $000 164 164 2013 $000 1,191 (256) (333) 602 119 (38) 81 683 49 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (b) Reconciliation of carrying amount Balance as at 1 July 2012 Additions Disposals Depreciation expense Impairments(i) Balance as at 30 June 2013 Balance as at 1 July 2013 Additions Disposals Depreciation expense Impairments(i) Balance as at 30 June 2014 (i) Impairment losses Plant & equipment $000 Leasehold improvements $000 329 382 (42) (67) – 602 602 135 (5) (94) (135) 503 80 31 – (30) – 81 81 10 – (41) – 50 Total $000 409 413 (42) (97) – 683 683 145 (5) (135) (135) 553 During the year the Group carried out a review of the recoverable amount of plant and equipment where there was an indication of impairment. A previously impaired asset (Drum Dryer) was further impaired based on recent market prices of assets of similar age and condition. The Group determined that the recent market prices adjusted for disposal costs reflected the asset’s fair value and the value in use. A further impairment loss of $135,000 was recorded for the year ended 30 June 2014. (ii) Assets pledged as security Plant and equipment pledged as security for Asset Purchase Liabilities has a written down value of $110,000 (2013: 75,000). Refer note 15: Borrowings. 13. Intangible assets Product development costs Costs Accumulated amortisation 2014 $000 228 – 228 2013 $000 – – – Product Development Costs relate to new products to be marketed during the year ending 30 June 2015. The costs will be amortised over periods ranging from 2-5 years. 50 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 14. Trade and other payables Current: Unsecured: Trade payables Sundry payables and accrued expenses Related party payables 15. Borrowings Current: Unsecured borrowings: Insurance funding Secured liabilities Asset purchase liabilities(a) Debtor finance facility(b) Bank accepted letter of credit(c) Total current borrowings Non-Current Secured liabilities Asset purchase liabilities(a) Total non-current borrowings Total borrowings 2014 $000 4,505 2,009 – 6,514 2014 $000 87 97 – – 184 212 212 396 2013 $000 1,993 609 – 2,602 2013 $000 – 80 1,511 2,022 3,613 262 262 3,875 Additional information on finance facilities available (a) The asset purchase liabilities are secured by underlying assets carried at $110,000 (2013:$75,000). (b) As at 30 June 2014, the debtor finance facility limit was $2,000,000 (2013: $2,000,000), of which $2,000,000 (2013: $489,000) was undrawn. The debtor finance facility is secured by agreed trade receivables balances with a net finance security ratio of 60%. The debtor finance facility has been cancelled post 30 June 2014. (c) Bank accepted letter of credits are provided from time to time in relation to export sale orders and are secured by the underlying receivable balance. (d) The company also has a bank overdraft facility of $200,000 (2013: $200,000) of which $200,000 (2013: $200,000) was undrawn. (e) All financing facilities are also secured by a General Securities Deed. 51 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 16. Provisions Current Employee entitlements Non-Current Employee entitlements Total provisions 17. Tax (a) Current asset/(liability) Current tax asset Income tax payable (b) Deferred tax balances recognised Temporary differences relating to income Temporary differences relating to spending Inventories Other current assets Financial assets Plant and equipment Intangibles Employee entitlements Foreign exchange losses Capital raising costs (equity) Net deferred tax balances recognised Represented by Deferred tax assets Deferred tax liabilities 52 2014 $000 96 47 143 2014 $000 125 – 2014 $000 (3) 210 9 (30) (43) 8 (69) 41 14 49 186 331 (145) 186 2013 $000 68 23 91 2013 $000 44 – 2013 $000 (1) 31 127 – (9) (20) – 27 – – 157 158 (1) 157 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (c) Movement in recognised deferred tax balances Opening balance Recognised in income Recognised in equity (capital raising costs) (d) Deferred tax assets not recognised Australian Tax Consolidated Group Tax losses: capital Temporary differences: revenue 2014 $000 157 (32) 61 186 2014 $000 201 – 2013 $000 28 129 – 157 2013 $000 201 100 The potential benefits of deferred tax assets not recognised will only be realised if the conditions set out in note 1(c) are satisfied. 53 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 18. Share capital (a) Fully paid ordinary shares 70,000,392 (2013: 9,965,716) Fully paid ordinary shares carry one vote per share and carry a right to dividends. Movements in fully paid ordinary shares Balance 1 July 2012 21 June 2013 – rights issue(i) Balance 30 June 2013 10 June 2014 – share split(ii) 20 June 2014 – institutional placement(iii) 2014 $000 15,756 2013 $000 10,900 Number of shares ’000. Share capital $000 8,720 1,246 9,966 55,034 5,000 70,000 8,720 2,180 10,900 – 4,856 15,756 (i) On 21 June 2013 the company completed a 1:7 rights issue. The issue was fully subscribed and share capital increased by $2,180,000 and 1,246,000 shares were issued. (ii) On 10 June 2014, shareholders approved a 6.5224:1 share split which increased the number of shares on issue by 55,034,000. (iii) On 20 June 2014, the company completed a placement of 5,000,000 shares to various institutions at the issue price of $1.00. The institutional placement costs were $145,500 net of tax and the net increase in share capital was $4,856,500. (b) Share options granted under the Company’s employee share option plan As at 30 June 2014, the managing director and other senior management held, as part of their remuneration, conditional vesting options over 2,200,000 (2013: nil) ordinary shares of the Company comprising the Initial Grant made on 26 June 2014, under the Employee Share Option Plan (ESOP). The holders of these options do not have the right, by virtue of the option to participate in any share issue or interest issue of the company or of any other related body corporate. The options carry not rights to dividends and no voting rights. There have been no further options granted since the Initial Grant. Refer also to note 21: Share Based Payments – Employee Option Plan. (c) Dividends No dividends were declared or paid during year or since the end of financial reporting period. No dividends were paid during the previous financial year. 54 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (d) Dividend franking account As at 30 June 2014, the level of 30% franking credits available to shareholders on a tax paid basis was $586,000 (2013: $nil). The credits available are based on the balance of the dividend franking account in the prior year tax return adjusted in relation to the current income tax liabilities for the year ended 30 June 2014. The ability to utilise franking credits is dependent upon the ability to declare dividends. (e) Capital Management Management and the board of directors monitor the capital of the group in order to maintain a prudent debt to equity ratio, provide the shareholders with adequate returns and ensure that the group can effectively fund the operations in line with business growth objectives. The group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets. At balance date there were no externally imposed capital requirements. Management effectively manages the group’s capital by assessing the group’s risk and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues. Due to the business being in the early stages of its maturity cycle, management consider it prudent to maintain a low debt to equity ratio. The debt to equity ratio as at the end of the reporting period is as follows: Total borrowings Less cash and cash equivalents Net debt/(cash) Total equity Total capital (net debt + equity) Debt to equity ratio 2014 $000 396 (4,434) (4,038) 15,592 11,554 –% 2013 $000 3,875 (2,663) 1,212 9,477 10,689 11.3% 55 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 19. Reserves (net of income tax) Foreign currency translation Equity-settled employee benefits Foreign currency translation reserve Balance at the beginning of the year Exchange differences arising on translating net assets of foreign operations Income tax effect Balance at the end of the year 2014 $000 2013 $000 (13) 6 (7) – (13) – (13) – – – – – – – Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations are recognised directly in other comprehensive income and are accumulated in the foreign currency translation reserve. Equity-settled employee benefits reserve Balance at the beginning of the year Arising on share based payments Income tax effect Balance at the end of the year 2014 $000 – 6 – 6 2013 $000 – – – The reserve relates to share options granted by the Company to its employees under its Employee Share Option Plan. Further details are provided in note 21: Share Based Payments. 56 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 20. Financial risk management (a) Financial risk management policies The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable and loans to subsidiaries. As at 30 June 2014, the group does not have any derivative financial instruments (2013: Nil). (b) Financial risk exposures The group is exposed to liquidity and credit risks with limited exposure to interest rate, foreign exchange and equity price risk. Liquidity risk is managed by monitoring forecast cash flows ensuring that adequate unutilised borrowing facilities are maintained. Credit risk arises from exposure to customers and deposits with financial institutions. Management monitors credit risk by actively assessing and rating quality and liquidity of counter parties. Due to low debt to equity ratios the group has limited exposure to interest rate risk. As at 30 June 2014, the total borrowings were $396,000 under fixed interest borrowing arrangements. The Group is also exposed to interest rate risk on cash balances held, largely as a result of a $5,000,000 capital placement completed in June 2014 as part of an overall capital raising plan to fund future business growth and the resultant working capital requirements, in both domestic and Asian markets. As at 30 June 2015, the Group’s interest bearing cash position was $3,497,000. A 1% movement in interest rates would impact profit before tax by $35,000 (2013:$26,000), however looking forward the impact would be higher given that on 5 August 2014, the Company was admitted to the ASX Official List on the back of a $25,000,000 capital raising. Foreign exchange risk is also limited as trading to date has been conducted primarily in Australian dollars, However as the business expands into Asia the exposure to foreign exchange risk may increase. The Group has equity price risk as a result of its listed equity investment holdings valued at fair value through profit and loss $244,000 (2013: 129,000). Fair value of listed equity investments is determined with reference to quoted ASX bid prices. A 10% movement in equity prices would impact the carrying value of the listed investments and profit before tax by $24,000 (2013: $13,000). (c) Categories of financial instruments Other than equity investments classified at fair value through profit and loss classified under the heading of current financial assets, all the nature and categories of all other financial instruments are apparent from the face of the Statement of Financial Position. (d) Carrying value of financial assets and financial liabilities Refer note 15: Borrowings. (e) Access to financing facilities The carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements are considered to approximate their fair values. 57 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (f) Financial instrument composition and maturity analysis Weighted Average Interest Rate % Floating Interest Rate $000 Consolidated Group 2014 Fixed Interest Rate Mature within 1 Year $000 Fixed Interest Rate Mature later than 1 Year $000 Non interest bearing $000 Total 2014 $000 2.3% 6.4% 3,497 – – 3,497 – – – 3,497 – – – – – (184) (184) (184) – – – – – (212) (212) (212) 937 6,443 125 7,505 (6,514) – (6,514) 991 4,434 6,443 125 11,002 (6,514) (396) (6,910) 4,092 Weighted Average Interest Rate % Floating Interest Rate $000 Consolidated Group 2013 Fixed Interest Rate Mature within 1 Year $000 Fixed Interest Rate Mature later than 1 Year $000 Non interest bearing $000 Total 2013 $000 1.8% 7.4% 7.0% 6.4% 2,618 – – 2,618 – (1,511) – – (1,511) 1,107 – – – – – – (2,022) (80) (2,102) (2,102) – – – – – – – (262) (262) (262) 45 5,719 44 5,808 (2,602) – – – (2,602) 3,206 2,663 5,719 44 8,426 (2,602) (1,511) (2,022) (342) (6,477) 1,949 Financial assets Cash and cash equivalents Receivables Current tax asset Total financial assets Financial Liabilities Trade payables Borrowings Total financial liabilities Net financial assets Financial assets Cash and cash equivalents Receivables Current tax asset Total financial assets Financial Liabilities Trade payables Debtor finance facility Bank accepted letter of credit Asset purchase facility Total financial liabilities Net financial assets 58 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 21. Share based payments – employee share option plan (ESOP) (a) Initial Grant – 2,200,000 options – 26 June 2014 The managing director and other senior management held, as part of their remuneration, conditional vesting options over 2,200,000 (2013: nil) ordinary shares of the Company comprising the Initial Grant which was made on 26 June 2014, under the Employee Share Option Plan (ESOP). The exercise price for these options is $1.00, however the options can only be exercised if the Group achieves its FY2015 Pro Forma forecast NPAT of $5.0 million as confirmed by the FY2015 financial results released to the ASX and that the holder remains an eligible employee of the Group until the FY2015 results are released. These options expire two years subsequent to vesting, which should be no later than 31 August 2017. There have been no further options granted since the Initial Grant. (b) Other movements During the current financial year and the previous financial year there were no options exercised, expiring or forfeited. As at 30 June 2014, there were no options exercisable. (c) Fair value of options granted during the year The fair value of the options granted during the year) was $0.29. There were no options granted in the previous financial year. The options granted were priced using a binomial option pricing model with the following key inputs: (i) Weighted average share price: $1.00 (ii) Exercise price: $1.00 (iii) Expected term to maturity: 3.25 years (iv) Risk free interest rate: 3.5% (v) Early exercise assumptions – not applicable given conditional vesting terms. (vi) Number of time steps: 1,000 (vii) Volatility: 32%. As Bellamy’s listed on the ASX on 5 August 2014, volatility was calculated by reference to the volatility of publicly listed companies that are comparable to Bellamy’s. The volatility was calculated as the average volatility of the comparable companies over a four year period up to the grant date of the options. 59 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 22. Related party transactions Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Balances and transactions between the Company and its controlled entities, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. Transactions between related parties are executed on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Transactions with related parties: (a) Key management personnel compensation The key management personnel compensation included in ‘employee costs ’ (see note 3(c)) is as follows: Short term benefits Post employment benefits Other long term benefits Share based payments 2014 $ 2013 $ (whole dollars) 1,512,000 19,000 19,000 3,000 335,000 14,000 – – 1,553,000 349,000 (b) Individual Directors and executive compensation disclosures Information regarding individual Directors and executives compensation and some equity instruments disclosures as required by the Corporations Regulations 2M.3.03 is provided in the remuneration report section of the Directors’ Report. Apart from the details disclosed in this note, no Director has entered into a material contract with the Company or Group since the end of the previous financial year and there were no material contracts involving Directors’ interests existing at year end. There were no loans outstanding at reporting date between the Company and the Group and key management personnel. (c) Other key management personnel transactions with the company or its controlled entities From time to time, key management personnel of the Company or its controlled entities, or their related entities, may purchase goods from the Group. These purchases are on the same terms and conditions as those entered into by other Group employees or customers and are trivial or domestic in nature. 60 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 (d) Shareholdings The number of ordinary shares held in Bellamy’s Australia Limited as at the date of this report and as at the end of the reporting period, by each key management person, including their related parties, are as follows: Directors R Woolley I Urquhart M Wadley(i) L McBain(i) Balance held at the date of this report Balance held 30 June 2014(ii) Balance held 1 July 2013 3,080,438 3,727,089 – 3,080,438 3,727,089 – 1,565,376 1,565,376 490,286 571,249 NA 240,000 (i) Appointed 19 June 2014. Prior to that L McBain was a key management person. (ii) The increase in the number of shares held during the year ended 30 June 2014 includes the impact of the capital reconstruction approved by shareholders on 10 June 2014, whereby each ordinary share was split into 6.5224 ordinary shares. (iii) The movement in shares held after 30 June 2014, form part of the Existing Shares to be Sold under the Offer set out the Initial Public Offer Prospectus dated 4 July 2014. The Offer included the issue of 25,000,000 new shares at $1.00 each and to facilitate the sale of 10,875,380 Existing Shares at a price of $1.00 each, prior to the admission of Bellamy’s Australia Limited to the ASX Official List. (e) Options over ordinary shares The number of options over Bellamy’s Australia Limited ordinary shares held as at the date of this report and as at the end of the reporting period, by each key management person, including their related parties are set out below. L McBain (Managing Director) held 953,333 options all of which were granted as compensation during the year. None of the options held have vested and none of the options held are exercisable. 23. Subsidiaries Name Bellamy’s Organic Australia Pty Ltd TPF Properties Pty Ltd(c) Bellamy’s Kitchen Pty Ltd Yum Mum Pty Ltd Bellamy’s Organic (Hong Kong) Company Ltd Bellamy’s Organic (South East Asia) Pte Ltd Bellamy’s Food Trading (Shanghai) Co Ltd Principal activity Place of incorporation and operation (a) (b) (b) (b) (a) (a) (a) Australia Australia Australia Australia Hong Kong Singapore(d) China (d) Ownership % 2014 100 (c) 100 100 100 100 100 2013 100 100 100 100 (d) (d) (d) (a) Sale and distribution of organic food and formula products for babies and toddlers. (b) Non-operating. (c) In June 2014, TPF Properties Pty Ltd was sold for a nominal sum of $1. At the time of sale the company was dormant and had net assets amounting to $0. (d) These entities were incorporated during the year and currently their respective financial reporting periods are not synchronised with the parent entity. The auditors of these entities are not related to the auditor of the parent entity. 61 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 24. Additional cash flow information Reconciliation of profit for the year to net cash from operating activities Profit after tax Adjust for non- cash items Depreciation Impairment – plant and equipment Loss on sale – plant and equipment Financial assets – fair value through profit or loss Share based payments Movements in working capital (Increase)/decrease in trade receivables (Increase)/decrease in inventories (Increase)/decrease in other assets (Increase)/decrease in net tax assets (Decrease)/increase in trade payables (Decrease)/increase in provisions Net cash from operating activities During the year there were no reportable non cash financing and non cash investing activities. 25. Operating lease arrangements Non-cancellable operating lease commitments Not later than 1 year Later than one year and not later than 5 years Later than 5 years Operating lease commitments primarily relate to office leasing arrangements. 2014 $000 165 165 – 330 62 2014 $000 2013 $000 1,266 1,602 135 135 – (115) 6 (737) (1,251) (2,531) (49) 3,862 52 773 97 – 19 (49) – (3,994) (3,287) (98) (142) 2,273 53 (3,526) 2013 $000 53 53 – 106 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 26. Commitments for expenditure Plant and equipment Intangibles 2014 $000 – – – 2013 $000 – – – 27. Contingent Liabilities and Contingent Assets As at the date of this report the Group is not aware of any reportable contingent liabilities or contingent assets. 28. Events subsequent to balance date Bellamy’s Australia Limited (ASX:BAL) was admitted to the ASX official list effective 5 August 2014, following the issue of 25,000,000 ordinary shares at $1.00 each pursuant to a Prospectus and Initial Public Offer document dated 4 July 2014. The net proceeds from the share issue was approximately $23.7m after taking into account capital raising costs of approximately $1.3m (net of tax). The number of ordinary shares on issue is now 95,000,392. In response to the needs of the business growth plans, on 11 August 2014 Bellamy’s Australia Limited announced the appointment of a Shona Ollington as Chief Financial Officer (CFO), allowing Brian Green the outgoing CFO to focus on the role of Company Secretary whilst also providing ongoing support to the finance and accounting team. No other matters or circumstances have arisen since the end of the year which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 63 Bellamy’s Australia Limited Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 29. Parent entity supplementary information The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian Accounting Standards. 2014 $000 2013 $000 12,503 10,700 65 5 12,568 10,705 594 33 627 18 – 18 11,941 10,687 15,756 10,900 (7) (3,808) 11,941 (3,608) (3,608) – – – – 213 10,687 (166) (166) – – – Statement Of Financial Position Assets Current Assets Non-Current Assets Total Assets Liabilities Current Liabilities Non-Current Liabilities Total Liabilities Net Assets Equity Issued Capital Reserves Retained Earnings Total Equity Statement of Profit or Loss and Other Comprehensive Income Profit/(loss) for the year Total comprehensive income Guarantees Contingent liabilities Contractual commitments 64 Annual Report 2014 Notes to and Forming Part of the Financial Statements cont. for the year ended 30 June 2014 30. Changes made to the Preliminary Final Report – Appendix 4E On August 29 2014, Belllamy’s Australia Limited lodged its first Preliminary Final Report (Appendix 4E) with the ASX. In preparing the statutory financial statements, some of the disclosures made in the Appendix 4E have been reclassified or restated. It is important to note that the changes have not affected the profit, other comprehensive income, operating cash flows or net assets as previously reported in the Appendix 4E. The changes are summarised below: (a) Current tax assets are now shown separately on the face of the Statement of Financial Position as a reclassification from Trade and Other Receivables (b) Net interest expense shown of the face of the Statement of Profit or Loss and Other Comprehensive Income has been re-labelled Net financing costs. (c) Cash receipts from customers and cash payments to suppliers and employees as shown in the Statement of Cashflows have been grossed up to correctly include GST collections and remittances. 65 Bellamy’s Australia Limited Additional securities exchange information (unaudited) for the year ended 30 June 2014 Bellamy’s Australia Limited and controlled entities The following additional information is provided in accordance with the ASX Listing Rules as at 29 August 2014. Number of holders of equity securities Ordinary share capital 95,000,392 shares are held by 1,478 shareholders. At a general meeting, every shareholder present in person or by proxy, attorney or representative has one vote on a show of hands, on a poll, one vote for each fully paid share held. Unlisted options over ordinary share capital 2,200,000 options are held by 6 individual option holders. The options were granted pursuant to the Employee Share Option Plan (ESOP). The options do not carry any voting rights. Restricted securities There are 17,567,222 fully paid ordinary shares in the Company that are subject to voluntary escrow for the period commencing from the date of quotation of the company’s shares on the ASX (5 August 2014), and ending on the date three days after the audited Company accounts for the financial year ending 30 June 2015 have been released to the ASX. On August 5 2014, an initial substantial shareholder notice was lodged with the ASX in respect of these fully paid ordinary shares which represent 18.49% of voting power. None of the beneficial holders of these shares under escrow are substantial shareholders in their own right. Ordinary shares No. of holders No. of shares % of shares 185 491 338 425 39 128,303 1,644,225 3,053,478 12,994,212 77,180,174 0.14% 1.73% 3.21% 13.68% 81.24% 1,478 95,000,392 100.00% Distribution of holders of equity securities Number of equity securities held 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over Total 66 Annual Report 2014 Additional securities exchange information (unaudited) cont. for the year ended 30 June 2014 Substantial shareholders Name Bellamy’s Australia Ltd ( restricted securities – refer above) The Black Prince Private Foundation Ellerston Capital Limited and its associates Quality Life Pty Ltd (Bruce Neil Family A/C) AMP Limited and its related bodies corporate Twenty largest shareholders Rank Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Black Prince Private Foundation National Nominees Limited Quality Life Pty Ltd J P Morgan Nominees Australia Limited RBC Investor Services Australia Nominees Pty Limited UBS Nominees Pty Ltd HSBC Custody Nominees (Australia) Limited HSBC Custody Nominees (Australia) Limited-Gsi Eda BNP Paribas Noms Pty Ltd Krisami Investments Pty Ltd HSBC Custody Nominees (Australia) Limited – A/C 2 Vermilion 21 Pty Ltd Mrkat Pty Ltd Suetone Pty Ltd Robert Thomas Wilson Buduva Pty Limited AMP Life Limited Mr Ralf Thomas Rodl Citicorp Nominees Pty Limited Citicorp Nominees Pty Limited Top 20 holders of ordinary fully paid shares Total remaining holders balance TOTAL Number of ordinary shares % of voting power advised 17,567,622 14,000,000 9,000,000 8,186,278 6,207,081 18.49% 14.74% 9.47% 8.62% 6.53% Number of ordinary shares held % of capital held 14,000,000 14.74% 9,021,207 8,186,278 6,639,152 6,524,838 4,400,000 3,972,766 3,650,000 3,553,325 2,500,000 1,566,199 1,565,376 1,335,739 1,304,480 1,155,397 1,000,000 625,258 600,000 533,789 502,946 9.50% 8.62% 6.99% 6.87% 4.63% 4.18% 3.84% 3.74% 2.63% 1.65% 1.65% 1.41% 1.37% 1.22% 1.05% 0.66% 0.63% 0.56% 0.53% 72,636,750 22,363,642 76.46% 23.54% 95,000,392 100.00% 67 Bellamy’s Australia Limited Corporate Directory Offices and Officers Principal registered office & Principal administration office Bellamy’s Australia Limited 52-54 Tamar Street Launceston TAS 7250 Telephone: Facsimile: Internet: (03) 6332 9200 (03) 6331 1583 bellamysaustralia.com.au Company secretary Mr Brian Green Location of share registry Link Market Services Limited Level 1, 333 Collins Street Melbourne VIC 3000 68 www.colliercreative.com.au #BEO0003 B e l l a m y ’ s A u s t r a l i a L i m i t e d A n n u a l R e p o r t 2 0 1 4 A bellamysaustralia.com.au Bellamy’s Australia Limited 

Continue reading text version or see original annual report in PDF format above