Bellamy’s Australia Limited
Annual Report 2014
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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
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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.
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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