Annual Report
2024
bubsaustralia.com
For personal use only
Contents
FY24 Review
3
Bubs Strategic Review
4
Year at a Glance
5
From our Chair and CEO
6
Performance at a Glance
9
Review of Operations and Financial Results
10
Risk Statement
12
Directors’ Report
15
Board of Directors
16
Directors’ Report
19
Remuneration Report (Audited)
22
Auditor’s Independence Declaration
29
Financial Statements
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 the Financial Statements
36
Directors’ Declaration
63
Consolidated Entity Disclosure Statement
64
Independent Auditor’s Report
65
Other Information
70
Corporate Directory
IBC
1
For personal use only
1
FY24 Review
01
2
3
For personal use only
Bubs Strategic Review
Year at a
Glance
USA GROWTH
ENGINE
The US delivered record growth in FY24, where Bubs continued to sell under the FDA’s enforcement
discretion. Bubs continued to follow the FDA’s guidelines, demonstrating meaningful progress on its US
clinical trial, with 382 patients enrolled in the Growth Monitoring Study as at 23 August 2024. Bubs achieved
95% of its target enrolments for the study, with FDA approval expected in October 2025.
Bubs’ revenue growth in the US market has been fuelled by strong consumer demand, endorsement from
healthcare professionals, social media advocacy, and robust trial and repeat purchases. Available in more than
5,800 brick & mortar retailers, major e-commerce platforms, and with a first mover advantage, Bubs is well
placed to capture the expected growth in premium speciality formulas for years to come.
CHINA RESET
The China reset strategy progressed well, with Bubs achieving 27% revenue growth over FY23. In addition to
Bubs’ core infant product portfolio, there was strong demand for Bubs’ adult goat formula in China, with sales
of adult goat products up 79% over FY23.
Importantly, the Bubs’ premium brand positioning and pricing architecture has been restored with the
average selling price (RRP) increasing 15% YOY.
Bubs’ brands continue to perform strongly in the CBEC channel, and Bubs’ O2O sales strategy has also
progressed with Bubs’ products stocked in 138 new O2O stores across China in June, bringing the total O2O
stores stocking our products to over 300.
With the Bubs Supreme stock overhang from the previous distributor having now been cleared in the
marketplace, combined with new products and further penetration of the O2O channel, Bubs is anticipating
50% revenue growth in China in FY25.
PORTFOLIO
OPTIMISATION
Bubs recently launched new product variants, including new look labels and new pack formats, with key US
retailers at the end of FY24 which are expected to perform strongly in FY25. One of Bubs’ new variants – Essential
has already won one of the most prestigious American consumer awards – the Good Housekeeping Parenting
Award, and Essential is expected to contribute strongly to Bubs’ continued US revenue growth in FY25.
Similar to the US, the new look labels and pack formats have also recently been launched in China and are
performing strongly.
SWEAT THE
ASSETS
Bubs’ state of the art manufacturing facility in Victoria is now operating at approximately 60% of capacity up
from 31% in FY23. Additionally, our Deloraine canning facility has been operating on a double shift, five days
per week, since January 2024.
US FDA annual site audit successfully completed.
WORKING
CAPITAL
Net operating cash flow for FY24 was $(26.3)m, an improvement from $(46.5)m in FY23.
Bubs raised $17.4m in December 2023 via a Placement and Share Purchase Plan to fund future strategic
growth. The proceeds raised were used to invest in working capital, including commencing a second
production shift at Deloraine, expanding capacity, inventory build to mitigate stock shortages, and funding for
regulatory costs in the US to obtain FDA approval.
Average monthly cash burn for FY24 was $2.3m, noting this includes $12.4m of one-off non-recurring costs
such as FDA regulatory costs and consulting fees ($5.6m), litigation ($2.7m), capital raising costs ($1.7m), and
ERP implementation costs ($1.0m). Excluding these one-off non-recurring costs, normalised cash burn was
$1.2m per month.
REVENUE GROWTH
IN ALL REGIONS
• USA revenue of $35.0m, up 46% on pcp
• Q4 record scan revenue of $11.2m
• In June, achieved USD $1m in weekly scan sales
• Good Housekeeping Parenting Award
1.
As at 23 August 2024
2.
Circana Scan Dollars ($000’s), Coles, Woolworths and AU
My Chemist Group Combined to MAT 28/07/24
USA RECORD
REVENUE GROWTH
• 95% of target infant enrolment achieved1
• GRAS application submitted
• US FDA annual site audit successfully completed
• Permanent market access expected in October 2025
US FOOD & DRUG
ADMINISTRATION (FDA)
• Australia revenue of $21.6m, up 24% on pcp
• No1# Goat brand in the Goat IMF category with
52%2 market share
• Bubs’ scan sales growing 12.1%2 MAT or 6x faster
than the market
• Bubs’ goat scan sales growing 17%2 MAT
RECORD GROWTH & MARKET
SHARE IN AUSTRALIA
• China revenue of $17.3m, up 27% on pcp (FY23: $14m)
• China reset gathering pace with 38% revenue growth
in H2 over H1
• Bubs’ premium brand positioning restored with the
average selling price (RRP) increasing 15% YOY
• Bubs’ O2O sales strategy progressing, with Bubs’
products stocked in over 300 outlets
CHINA RESET
WELL UNDERWAY
USA
$35.0m
Up 46% on pcp (FY23: $23.9m)
Representing 44% of revenue
Australia
$21.6m
Up 24% on pcp (FY23: $17.3m)
Representing 27% of revenue
China
$17.3m
Up 27% on pcp (FY23: $13.6m)
Representing 22% of revenue
ROW
$5.9m
Up 12% on pcp (FY23: $5.2m)
Representing 7% of revenue
5
4
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
For personal use only
From our
Chair and CEO
Dear Fellow Shareholders,
In FY24 we embarked on the first year of our three-year strategic
plan and turnaround, focused on a 5-point plan to responsibly
manage capital and to grow and maximise shareholder value.
1. USA Growth Engine
2. China Reset
3. Portfolio Optimisation
4. Sweat Existing Assets
5. Working Capital
This first year in our turnaround strategy was a pivotal one and
an important step in the right direction. We achieved very strong
growth in our two key strategic export markets, with US revenue
up 46% and China revenue up 27% on FY23. We also saw strong
growth in our home market and our rest of world markets
including Japan and Vietnam. Pleasingly, we achieved total revenue
of $80m during the year, in line with our revenue guidance.
Over the past year, we have focussed on delivering against each
one of our strategic pillars that we announced in announced in
August 2023. Pleasingly, we have made excellent progress against
each strategic pillar, and we are on track to achieve our medium
term financial and operational ambitions.
FY24 was a significant year for the Company as we continued to
build on our momentum in the US and reset our China business.
We also upgraded and refreshed our master brand, introduced
new packaging and tin sizes, reformulated products, implemented
a new ERP system – SAP, and moved to a second shift at our state-
of-the-art Deloraine canning facility in Victoria. This significant
program of operational activities required careful planning and
seamless execution to ensure Bubs’ high quality clean label
nutrition products remained competitive, available and accessible
to customers and consumers in our global markets.
USA GROWTH ENGINE
The US delivered record growth in FY24, with revenue of $35.0m,
up 46% on pcp. Bubs’ revenue growth in the US market has
been fuelled by strong consumer demand, endorsement from
healthcare professionals, social media advocacy, and robust
trial and repeat purchases. Available in more than 5,800 brick &
mortar retailers, major e-commerce platforms, and with a first
mover advantage, Bubs is well placed to capture the expected
growth in premium speciality infant formulas for years to come.
FDA
Post balance date, Bubs enrolled its 400th and final infant in
the Growth Monitoring Study (GMS). The GMS and clinical trial
are being conducted as part of the regulatory requirement and
guidelines set by the U.S Food and Drug Administration (FDA),
for permanent access to the US infant formula market. Bubs
intends to formally submit the completed GMS and clinical trial
documentation early in 2025, with the FDA’s regulatory approval
expected in October 2025.
Importantly, Bubs’ 400th infant enrolment is a demonstration of
meaningful progress throughout all aspects for the regulatory
process in line with the FDA transition guidelines, following
earlier completion of the ‘protein efficiency ratio (PER) study’, and
submission of the ‘generally accepted as safe’ (GRAS) application.
This represents a significant milestone in the clinical trial. Bubs’
first infant was enrolled in the GMS in late August 2023 and
completing enrolment within 13 months in a competitive market
is testament to the focus and experience of Bubs’ advisers and
the quality of the contract research organisation (CRO).
Bubs first began importing its infant formulas into the US in May
2022 as a response to the infant formula shortage. Bubs was the
first company to offer assistance from abroad, participating in
the US government’s ‘Operation Fly Formula’ program and Bubs
was the second company in the world to be granted ‘temporary
enforcement discretion’.
Since then, Bubs has been steadily building its premium branded
infant formula portfolio of evidence based clean label nutrition
for American families, caregivers and paediatricians and has now
cemented its position as the leading goat milk formula brand in
the United States.
CHINA RESET
Bubs’ China reset strategy has also progressed well, with 27%
revenue growth on pcp. In addition to the demand for Bubs’ core
infant product portfolio, there was also strong demand for our
adult goat formula in China, with sales of adult goat products up
79% on pcp.
Importantly, the Bubs’ premium brand positioning and pricing
architecture has now been restored with the average selling price
(RRP) increasing 15% YOY.
Our brands continue to perform strongly in the CBEC channel
and Bubs’ O2O sales strategy is gaining traction, with products
stocked in 138 new O2O stores across China in June, bringing the
total O2O stores stocking Bubs’ products to over 300.
With the Bubs Supreme inventory overhang from the previous
distributor having now been cleared in the marketplace,
combined with new product development and further
penetration of the O2O channel, Bubs is anticipating 50%
revenue growth in China in FY25.
AUSTRALIA & REST OF WORLD (ROW)
Last year, Bubs achieved $21.6m of revenue domestically,
representing 24% growth on pcp (FY23: $17.3m). Bubs is the
largest player in the Australian goat IMF market, with 52%1
market share. Bubs is also the fastest growing MAT supplier in
Australian major retailers, growing at 12.1%1, or 6x faster than
the market growth of 2.2%1 and demand for Bubs’ branded goat
IMF remains very strong.
1
Circana Scan Dollars ($000’s), Coles, Woolworths and AU My Chemist Group Combined to MAT 28/07/24
2
6th September 2024 – The Wirecutter, The Best Baby Formula. https://www.nytimes.com/wirecutter/reviews/best-baby-formula/
Bubs achieved $5.9m and 12% revenue growth in other
international markets (FY23 $5.2m). Growth in the ROW operating
segment has been driven by Japan and Vietnam. Revenue for
ROW has grown at a CAGR of 20% from FY20 ($2.5m) to FY24
($5.9m), highlighting the strong momentum in these markets.
On 16 August 2024 Bubs was granted authorisation to sell both
Bubs Goat and Bubs Essential infant formula under Health
Canada’s Interim Policy and Transition Strategy via discretionary
enforcement, which will enable Bubs to launch into the
~US$340m Canadian market in H2 FY25.
PORTFOLIO OPTIMISATION
At the end of FY24, Bubs launched new product variants with key
US retailers, including new look labels and new pack formats which
are expected to perform strongly in FY25. One of the new variants –
Essential – has already won one of the most prestigious American
consumer awards – the Good Housekeeping Parenting Award, and
Essential is expected to contribute strongly to Bubs’ continued US
revenue growth in FY25. A recent NY Times Wirecutter “The best baby
formula” review2 featured two of Bubs infant formula products, and
Bubs Goat Milk IMF Stage 1 was the best-selling IMF product on the
US Amazon e-commerce site in May.
Similar to the US, the new look labels and pack formats have also
recently been launched in China and are already performing strongly.
In Australia, the Bubs’ brand has gone from strength to strength
with the Bubs’ portfolio growing 6x faster than the market. Bubs’
Goat infant formula is the clear market leader with a 52% share of
the market.
7
6
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
From our Chair and CEO
For personal use only
Katrina Rathie
Chair
Reg Weine
CEO & Managing Director
Performance
at a Glance
SWEAT EXISTING ASSETS
Bubs’ state of the art manufacturing facility in Victoria is now
operating at approximately 60% of capacity, up from 31% in
FY23. Since January 2024, Bubs’ Deloraine canning facility has
been operating on a double shift, five days per week. In June it
successfully passed the US FDA annual site audit.
Deloraine was designed and built for SAMR registration. Whilst
Bubs is not currently pursuing a SAMR registration, obtaining
access to additional China label SAMR registrations may provide
an additional future pathway for sustained growth.
WORKING CAPITAL
In December 2023, Bubs raised $17.4m via a Placement and
Share Purchase Plan, supported by Australian and international
institutional and sophisticated investors. The proceeds were
used to invest in working capital, including initiating a second
production shift at Deloraine, increasing capacity, building
inventory to prevent stock shortages, and covering regulatory
costs in the US to secure FDA approval.
Management’s continued focus on costs delivered a significant
reduction in net operating cash flow for FY24 at $(26.3)m, an
improvement from $(46.5)m in FY23.
Average monthly cash burn for FY24 was $2.3m, noting this
includes $12.4m of one-off non-recurring costs such as FDA
regulatory costs and consulting fees ($5.6m), litigation ($2.7m),
capital raising costs ($1.7m), and ERP implementation costs
($1.0m). Excluding these one-off non-recurring costs, normalised
cash burn was $1.2m per month.
LITIGATION
During the year, Bubs settled the proceedings in the Federal
Court of Australia with Ms Kristy-Lee Newland Carr and Mr
Dennis Lin.
Bubs was also pleased to agree binding terms to resolve all
outstanding matters with respect to its Chinese Joint Venture
with Zhitong (Hangzhou) Health Technology Co Ltd.
Bubs has commenced arbitration proceedings against Alice and
Willis for the recovery of an alleged $5.6 million debt, damages
and costs, and the case is expected to be heard in late 2024.
3
Earnings before interest, tax, depreciation and amortisation is a non-IFRS measure. Non-IFRS measures have not been subject to audit or review
4
Before share based payments
OUTLOOK
The successful introduction of Bubs’ new product variants
and pack sizes in the US will be a key determinate of Bubs’
performance in FY25. Group revenue is forecast to grow ~28% in
FY25, targeting revenue of $102m. This includes revenue growth
of 50% in both the US and China. Bubs is targeting a gross
margin >40% in FY25 with positive EBITDA3,4.
While non-recurring costs affected our statutory loss for
FY24, their absence in FY25, combined with sustained strong
momentum across all markets and cost-reduction initiatives,
provides a clear pathway for positive trading EBITDA3 (before
shared based payments) in FY25.
We are excited about the future of our Company given the
significant progress we have made in the first year of our three-
year strategic plan. Our award-winning, clean-label certified
infant nutrition products continue to gain popularity across all
key global markets. With a first-class management team in place,
we are confident in the Company’s future and the successful
execution of our strategic plan and turnaround.
Finally, we would like to thank our shareholders for their
continued support and interest in the Company.
1. FINANCIAL
FY24 represented a significant improvement over FY23. Total
revenue reached $79.7m, marking a robust 33% increase from
FY23’s $60.1m. The Company reported a statutory net loss of
$(21.0)m, a substantial reduction from the $(108.4)m loss in FY23.
This first year of our turnaround strategy was crucial and a
strong step forward as we continue to build momentum in the
US and reset our business in China. We saw strong growth in our
domestic and key international markets, including Japan and
Vietnam. Notably, we achieved $80 million in revenue for the
year, aligning with our guidance.
The Group reported FY24 revenue of $79.7 million, a 33% increase
over the pcp. The statutory after-tax loss of $(20.9) million reflects
an 81% improvement compared to FY23’s $(108.4) million. Full-year
EBITDA recorded a loss of $(19.7) million, a notable improvement
from the underlying EBITDA loss of $(69.1)m1,2 million in FY23.
Bubs achieved revenue growth in all regions, with US revenue
46% higher than pcp (FY23: $23.9m). The US now contributes
44% of total revenue, up from 40% in FY23. The improvement
in EBITDA is due to the growth in revenue, tighter control of
operating expenses, improved gross margins and product mix,
and rationalisation of poor performing SKUs.
PERFORMANCE BY REGION
• USA: revenue of $35.0m, up 46% on pcp,
representing 44% of revenue (FY23: $23.9m)
• Australia: revenue of $21.6m, up 24% on pcp,
representing 27% of revenue (FY23: $17.3m)
• China: revenue of $17.3m, up 27% on pcp,
representing 22% of revenue (FY23: $13.6m)
• ROW: revenue of $5.9m, up 12% on pcp,
representing 7% of revenue (FY23: $5.2m)
2. WORKING CAPITAL
Net operating cash flow for FY24 was $(26.3)m, an improvement
from $(46.5)m in FY23.
Bubs raised $17.4m in December 2023 via a placement and share
purchase plan to fund future strategic growth. The proceeds
raised have been invested in working capital, including starting
a second production shift at Deloraine, expanding capacity,
building inventory to prevent stock shortages, and funding
regulatory costs in the US to secure FDA approval.
1
Before share based payments
2
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) is a non-IFRS measure. Non-IFRS measures have not been subject to audit or review.
3
Underlying earnings before interest, tax, depreciation and amortisation excluding impairment of $36.2m in FY23, is a non-IFRS measure. Non-IFRS
measures have not been subject to audit or review
Average monthly cash burn for FY24 was $2.3m, noting this
includes $12.4m of one-off non-recurring costs such as FDA
regulatory costs and consulting fees ($5.6m), litigation ($2.7m),
capital raising costs ($1.7m), and ERP implementation costs
($1.0m). Excluding these one-off non-recurring costs, normalised
cash burn was $1.2m per month.
3. CASH POSITION
Bubs held $17.5m in cash reserves as at 30 June 2024, with a
further $5.0m of headroom on its bank facilities, totalling $22.7m
of available cash liquidity.
4. ENTERPRISE RESOURCE PLANNING (ERP)
As Bubs has rapidly evolved its organisation infrastructure over
the past few years, the internal business administrative systems
have become stretched and challenged. During the course of the
past 12 months the Board initiated an ERP project to address this
risk. Accordingly, the business proceeded with an enterprise-
wide ERP project which saw the successful implementation of
SAP By-Design.
5. FY25 OUTLOOK
The successful introduction of Bubs’ new product variants and
pack sizes in the US will be a key determinate of Bubs’ success
in FY25. Bubs is currently forecasting Group revenue growth of
~28% in FY25, targeting revenue of $102m, including revenue
growth of 50% in both the US and China. Bubs is targeting a
gross margin >40% in FY25 with positive EBITDA1,3.
While the impact of the non-recurring costs impacted our
statutory loss for FY24, their absence in FY25 when coupled with
the continued strong momentum in all markets and cost out
initiatives, provides a clear pathway to positive trading EBITDA3
(before shared based payments) in FY25.
9
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
8
For personal use only
Review of Operations
and Financial Results
REVENUE
The Group delivered revenue of $79.7million in FY24, up 33% year
on year. Notably, revenue for the sale of Bubs’ infant formula
totalled $62.4 million.
The Group’s gross revenue1 reached $98.6 million, a 34% increase
from FY23 ($73.8 million). This includes gross revenue1 from the
sale of Bubs’ infant formula of $79.2 million, an increase of 31%
compared to FY23 ($60.7m). This contributed to approximately
80% to the Group’s Gross revenue1.
UNITED STATES
Our key target market, the USA, delivered growth for Bubs, with
revenue of $35.0 million an increase of 46% on FY23 ($23.9m),
surpassing US$1.0m in weekly scan sales, selling over 27,000 tins
in the week ending 9 June.
CHINA
China achieved revenue of $17.3 million, a 27% increase on FY23
($13.6m). The CBEC and O2O sales strategy is progressing well,
and we were stocked in 300 O2O stores. Revenue for adult goat
dairy products, which is predominantly sold in China, was $11.3
million for the year, an increase of 70% on FY23 ($6.7m).
AUSTRALIA
Domestically, we are one of the fastest growing infant formula
manufacturers in the category and the fastest growing premium
brand, achieving revenue of $21.6 million and growth of 24% on
FY23 ($17.3m) across Australia’s leading retailers. Bubs is the largest
player in the domestic goat IMF2 market with 52%3 market share.
REST OF WORLD
Rest of World markets are also performing strongly with revenue
of $5.9 million and growth of 12% on FY23 ($5.2m) with strong
performances from the Japan and Vietnam markets.
1
Gross revenue is a non-IFRS measure. Non-IFRS measures have not been subject to audit or review. Gross revenue represents the revenue recognised
without rebates and marketing contribution totalling $18.9 million in FY24.
2
IMF (Infant Milk Formula) refers to Baby formula products including both Infant and Toddler.
3
Data sourced from: Circana Scan Dollars ($000’s), Coles, Woolworths and AU My Chemist Group Combined QTR To 28/07/24
4
Underlying gross profit is a non-IFRS term, excludes net inventory provision / reversal and bulk and ingredients revenue. Non-IFRS measures have not been
subject to audit or review
5
Operating expenses to revenue ratio excludes Depreciation & Amortisation and Share Based payments expense.
6
Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) is a non-IFRS measure. Non-IFRS measures have not been subject to audit or review.
7
Earnings before Interest and Tax is a non-IFRS measure. Non-IFRS measures have not been subject to audit or review.
GROSS MARGIN
The Group’s gross profit margin saw an improvement, reaching
49% for FY24, compared to (16%) in FY23. This positive shift is
attributed to an underlying gross profit4 rate of 41%, along with
the release of prior year inventory provisions amounting to $20.6
million. Notably, the reduction in inventory provisions to $4.6
million from $25.2 million in the previous year, reflects enhanced
inventory management by the Group.
OPERATING EXPENSES
Operating expenses as a percentage of revenue5 decreased to
73%, from 99% in FY23. The operating expenses include the
following:
• Legal and accounting costs of $4.9 million.
• Marketing and promotional costs of $14 million.
• Consulting fees of $2.9 million.
• Non-recurring ERP costs of $1 million and FDA costs of
$5.6 million.
STATUTORY RESULTS
The EBITDA6 loss was $19.7million (FY23: $105.2 million) and the
reconciliation to the statutory loss before tax is set out in the
table below.
FY24
$
FY23
$
Loss before tax
(20,488,985)
(107,484,539)
Interest Income
334,827
518,982
Finance cost
(241,384)
(452,470)
EBIT7 Loss
(20,582,429)
(107,551,051)
Depreciation and amortisation
(878,634)
(2,320,272)
Impairment
-
(36,165,080)
Underlying EBITDA Loss
(19,703,795)
(69,065,698)
BALANCE SHEET
The Group had $17.5 million in cash and cash equivalents at 30
June 2024 (30 June 2023: $26.1m) and $5.3 million external debt
at balance date with $5 million unused.
GOING CONCERN
On 30 June 2024, the Group is in a net current asset position of
$31.1million (2023: $35.4m). At 30 June 2024, the Group has $17.5
million in available cash and cash equivalents and $5.0 million in
committed un-drawn bank facilities (Note C8). The Group made a
FY24 loss after tax of $21.0 million (FY23: $108.4m).
Post 30 June 2024, the Group extended the $10.0 million facility
with National Australia Bank for a further 12 months to
29 August 2025. (Note C8).
Net cash outflows from operating activities in FY24 were $26.3
million (FY23: $46.5m) which included the following:
• Legal costs of $3.7 million in relation to ongoing litigation
matters, including the Group’s former customers in China.
• Enterprise resource planning (ERP) costs of $1.0 million.
• U.S. Food and Drug Administration (FDA) costs $5.6 million.
• Costs relating to the closure of the joint venture of $0.5 million.
The directors have considered the Group’s revenue projections
and cash flow forecasts based on current market conditions and
business plans to determine the appropriateness of preparing
the financial report on a going concern basis.
The Group acknowledges the inherent uncertainty in their
earnings forecast, which includes assumptions such as:
• Increased customer base, ranging of products, number of
stores for each product in the USA and achieving projected
sales volumes in FY25 with the smaller tin sizes.
• Attainment of the permanent U.S. Food and Drug
Administration approval in FY25 to continue operating in
the USA and managing expenses to obtain it. The Group
is currently operating under discretionary approval until
permanent approval is expected to be obtained in FY25.
• Continuing the revenue growth in China through the success
of the CBEC and O2O strategy.
• Continuing improvement of the working capital position
through detailed demand planning and forecasting.
• Reduced operating expenses through stringent expense
management, and cost optimisation and estimated expenses
relating to litigation matters.
Due to the uncertainty surrounding the above matters, a material
uncertainty exists which may cast doubt on the Group’s ability
to continue as a going concern and therefore whether it may be
able to realise its assets and discharge its liabilities in the normal
course of business.
Notwithstanding the above, based on the current information
and actions being taken, the Directors consider that it is
appropriate for the financial report to be prepared on a going
concern basis. Should the cash flow forecasts not be achieved,
there is a material uncertainty as to whether the Group will be
able to continue as a going concern and realise its assets and
extinguish its liabilities in the normal course of business at the
amounts stated in the financial report.
The Consolidated Financial Statements do not include any
adjustments relating to the recoverability and classification of
recorded asset amounts or to the amounts and classification of
liabilities that may be necessary should the Group be unable to
continue as a going concern.
11
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
10
Review of Operations and Financial Results
For personal use only
Risk Statement
BUSINESS RISKS
Bubs has identified certain risks with the potential to materially impact the Group’s performance and prospects, and has implemented
measures to manage those risks, as summarised below:
USA Regulatory Approval/
Non Compliance with US FDA
Audit and Regulations
There is a risk that the FDA may not approve Bubs’ application for permanent access to the US
infant formula market, which would impact future operational and financial performance. Bubs
is constantly monitoring and addressing this risk through the use of external expert resources
in the United States, as well as its own industry-leading in-house regulatory and compliance
specialists. Bubs regularly meets with the US FDA to demonstrate its meaningful progress
and compliance with the FDA’s temporary enforcement discretion and transition to regulatory
approval guidelines.
Product contamination,
recall & food safety
As with all food businesses, Bubs faces ongoing risks of contamination and product recalls.
To manage this risk, the Group has implemented robust approved supplier programs, quality
and environmental testing and end-product testing which is well in excess of regulatory
requirements and industry standards. The Group also demands a strong food safety culture, and
continues to be at the forefront of improvements in food safety management.
Reliance on third party suppliers
The Group is exposed to an ongoing risk of disruption or failures of third party suppliers. The
Group mitigates this inherent supply chain risk by entering contracts with multiple suppliers for
important classes of production inputs, auditing suppliers and by ongoing consideration and
assessment of the security of the Groups’ supply chains generally.
Major Retailer Product Deletion
There is a risk that one of Bubs’ customers (e.g., an e-commerce platform or one of our retailers)
may delete one or more of Bubs’ products from its website or product range offering across their
retail network. To manage this risk, the Group continually monitors developments in key markets,
conducts regular major account reviews, and places a high importance upon the maintenance of
strong relationships with key suppliers.
Fraud
Theft or dishonest activity resulting in loss or misappropriation of organisation’s resources
has the potential to adversely affect the Group’s operations and financial position. The Group
manages this risk through the implementation of appropriate policies and procedures,
authority limits, software, and segregation of duties, all of which is overseen by the Group’s
Chief Financial Officer and finance team.
Day to Day operational risk
The Group is subject to a range of operational risks including of damage to operating assets
and equipment, equipment failure or breakdowns, human error or accidents, IT system
failures, external services failures, industrial action or disputes, and natural disasters. This risk
is managed through the formulation of business continuity plans and the maintenance of
appropriate policies of insurance.
Slow moving and obsolete stock
The generation of slow-moving or obsolete inventory represents a financial risk with the
potential to dilute gross margin and overall profitability. The Group manages this risk by
observing rigorous supply & demand forecasting processes together with careful inventory
management. The maintenance of strong supplier & customer relationships also provides the
Group with further protection against this risk.
Capital Adequacy
Due to rapid growth in the US market, Bubs has a relatively high working capital requirement
which needs to be carefully managed to ensure that the business operates at an appropriate
level. Bubs manages this risk through monthly cashflow forecasting and active management of
debtors, creditors and inventory. Bubs also has access to a trade finance facility with the NAB.
Employee Retention
The loss of key personnel or high staff turnover could lead to the loss of valuable corporate
knowledge, negatively impacting the Group’s operational and financial performance in the short
to medium term. Bubs mitigates this risk through a robust employee engagement program, a
positive company culture and a commitment to core values. This includes implementing annual
performance reviews, individual development plans, salary benchmarking, and offering share-
based retention incentives.
Other than as described above, the Group does not consider that it faces any material exposure to social or environmental risks that
would materially impact the Group’s ability to create or preserve value for security holders over the short, medium or longer term.
12
13
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Risk Statement
For personal use only
1
2
Directors’ Report
02
14
15
For personal use only
MR PAUL JENSEN
B Com (Accounting and
Commercial Law), FAICD
Non-Executive Director
(appointed 20 March 2023)
Paul Jensen joined the Bubs Board as independent Non-Executive Director and Chair of the
Audit and Risk Committee in April 2023 and brings perspectives drawn from his extensive
professional career. Paul is based in Sydney, Australia.
Paul has more than 20 years’ Board experience as a professional director with both ASX listed,
public and private corporations across consumer goods, equity capital markets, banking,
government, philanthropy, and indigenous affairs.
He brings an international perspective gained from an executive career working in New
Zealand, Australia, and the United Kingdom. In both his executive and non-executive career
Paul has been focused on shareholder value creation. Paul is a critical thinker and highly
proficient in financial disciplines to manage risk, drive growth and create sustainable value.
He is deeply committed to ensuring strong governance, risk management and compliance
principles are actively exhibited, and that a constructive culture is present.
He currently holds the position of Non-Executive Director and Treasurer for the Australia Made
Campaign Limited, which on behalf of the Australian Government administers the highly
recognised and trusted Australian Made / Australian Grown trademarks, he is Chairman of
Carbon Conscious Investments Limited, Alterra Limited and the Watarrka Foundation Limited
(supporting remote Aboriginal communities in the NT) and is a Non-Executive Director of GNS
Wholesale Limited and ReMade Australia Limited. Paul is a Fellow of The Australian Institute of
Company Directors.
MR REG WEINE
Managing Director &
Chief Executive Officer
(appointed on 28 August 2023)
Reg Weine joined the Bubs Board in April 2023 as an independent Non-Executive Director and
is a dynamic and trusted member of the board. He is based in Melbourne Victoria, near our
Deloraine canning operations.
Reg is an executive with over 25 years’ experience in fast moving consumer goods (FMCG) and
agri-food and more than 15 years working in international markets and trade. An experienced
CEO, Reg was previously Managing Director of SPC Ardmona (Coca-Cola Amatil), CEO of
Australia’s largest and oldest privately-owned dairy business – Bulla Dairy Foods, and Director
of Sales and International at Blackmores Limited.
Reg has a Bachelor of Business from Monash University, is a graduate of the Australian
Institute of Company Directors and is a Certified Practicing Marketer and Fellow of the
Australian Marketing Institute. In 2019 Reg completed the AGSM@UNSW Business School
Governance for Social Impact certificate and completed the Wharton Executive Education –
Venture Capital program.
MR STEVE LIN
Non-Executive Director
Steve Lin has been a Director on the Bubs board since 2019 and is based in Hong Kong and the
USA. Steve is the Managing Partner of C2 Capital and represents Bubs’ largest shareholder, C2
Capital, which has a holding of 8.55%. C2 was established in 2018 to provide growth capital and
operational support for companies to scale in China. The firm’s anchor investor is Alibaba Group.
Steve currently serves on the Board of three North American consumer products companies,
Stella & Chewy’s, a leading pet food company in the US, Petcurean a leading pet food
company in Canada and China and KDC/ONE, one of the world’s largest OEM/ODM
manufacturers in beauty, personal care and home care.
A highly experienced board director, Steve has been doing business in China for 30 years
including serving on company and university boards. More broadly, Steve also has more than
30 years of investment, operations, and management experience in Asia and the US
Prior to joining C2 Capital, Steve worked for Morgan Stanley, Goldman Sachs, GMAC Commercial
Holding Corp (subsequently, Capmark Financial Group) and Laureate Education in New York,
Hong Kong and Tokyo. Steve has a bachelor’s degree in economics from Harvard College.
Ms Katrina Rathie has served on the Bubs Board as an independent Non-Executive Director
since July 2021, before becoming Chair in April 2023. Ms Rathie is Chair of the Board and Chair
of the Nomination & Remuneration Committee. She is a Fellow of the Australian Institute of
Company Directors and a Member of Chief Executive Women.
Ms Rathie is a well-known Chinese-Australian business leader, Non-Executive Director and
distinguished lawyer, based in Sydney Australia. Ms Rathie has deep experience in law,
governance, infant formula, fast moving consumer goods, consumer brands, intellectual
property and international trade between Australia, China, Asia and the USA. In March 2022,
Ms Rathie was appointed by the Governor-General to serve as a Non-Executive Director of
multi-cultural broadcaster SBS. She has served on government, listed, private, for purpose and
community boards, including serving as a Non-Executive Director of the Starlight Children’s
Foundation, NSWRU/Waratah’s Rugby and pre-eminent educational institutions.
Ms Rathie had a distinguished 35-year career as a trusted advisor and partner at top tier
global law firm King & Wood Mallesons, including seven years as Partner in Charge, Sydney
(2014 – 2021).
To Bubs, Ms Rathie brings strong skills in governance, strategy, leadership, networks,
international connections and cultural skills. As a trusted advisor to leading Fortune 500
companies, ASX listed companies and start-ups over three decades, she has deep experience
in helping consumer brands grow and flourish in Australia, Asia and USA. She has lived
in America and advised Australian companies on how to do business in the USA, and
international companies on how to do business in Australia.
Ms Rathie was named the overall winner in the prestigious Board & Management category in
AFR 100 Women of Influence Awards (2019), recognised for her outstanding contributions to
leadership in the law, advancement of gender and cultural diversity across Australia and Asia.
She is the NSW Patron of the Asian Australian Lawyers Association. She holds a Commerce/
Law (Accounting) degree from UNSW Sydney and is admitted to practice as a solicitor in
Australia and as an Attorney & Counsellor of the New York Bar.
MS KATRINA RATHIE
B Com (Accounting & Financial
Management)/LLB UNSW Sydney,
FAICD
Non-Executive Director/ Chair
(appointed 21 July 2021)
Board of Directors
THE BOARD OF DIRECTORS
The directors present their report together with the consolidated financial statements of Bubs Australia Limited as a consolidated
entity consisting of Bubs Australia Limited (the “Company”) and the entities it controlled (“the Group”) for the financial year ended
30 June 2024 and the auditor’s report thereon.
DIRECTOR PROFILES
The names of the directors in office at any time during and since the end of the financial year are:
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Directors’ Report
16
17
For personal use only
MR JAY STEPHENSON
MBA, FCPA, FGIA, MAICD, CPA
(Canada), CMA (Canada)
Company Secretary
(appointed 1 September 2015)
Mr Stephenson has been involved in business development for over 30 years including
approximately 26 years as Director, Chief Financial Officer and Company Secretary for various
listed and unlisted entities in resources, IT, manufacturing, food, wine, hotels and property. Mr
Stephenson has been involved in business acquisitions, mergers, initial public offerings, capital
raisings, business restructuring as well managing all areas of finance for companies.
RECORD OF ATTENDANCE AT THE BOARD MEETINGS
Director attendance at Board and Committee meetings during the year is set out below.
Board Meetings
Nomination &
Remuneration
Committee
Audit and
Risk Committee
Held
Attended
Held
Attended
Held
Attended
K Rathie (Non-Executive Director/ Chairman)
11
11
2
2
4
4
P Jensen (Non-Executive Director)
11
11
2
2
4
4
S Lin (Non-Executive Director)
11
11
2
2
4
4
R Weine (Managing Director & Chief Executive Officer)
11
11
N/A
N/A
N/A
N/A
Directors’ Report
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There was no significant change in the state of affairs of the Group during the financial year.
PRINCIPAL ACTIVITIES
The Group offers a significant range of organic baby food, goat milk infant formula products, adult goat milk powder products and
fresh dairy products. The Group also provides canning services of nutritional dairy products.
ENVIRONMENTAL REGULATIONS
The Group is not aware of any matter which requires disclosure with respect to any significant environmental regulation in respect of
its operating activities.
EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD
In July 2024, the Group renewed its $10 million facility with NAB under the same terms as FY24. The renewed facility expires on
29 August 2025.
There have been no other subsequent events since 30 June 2024 that have significantly affected or could significantly affect the
reported results from operations or the Company’s financial position for the year then ended.
DIVIDENDS
No dividends have been paid or declared since the start of the financial year (2023: Nil).
INDEMNIFICATION AND INSURANCE OF DIRECTORS, OFFICERS AND AUDITORS
The Group has paid insurance premiums in respect of Directors’ and Officers’ liability insurance for current and past Directors and
Officers. Insurance does not indemnify the Directors and Officers where there is conduct involving lack of good faith.
The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or
agreed to indemnify an officer, director or auditor of the Group against a liability incurred as such an officer, director or auditor.
PROCEEDINGS ON BEHALF OF THE GROUP
The Group has an ongoing legal dispute with its former customers - Alice Trading Ltd and Willis Trading Ltd. The outcome of the
currently pending and potential future legal actions, of a legal nature cannot be predicted with certainty. Such matters can raise
complex legal issues and are subject to many uncertainties including but not limited to the facts and circumstances of each matter.
The directors have given consideration to such matters which are or may be subject to claims, penalties and litigation as of the
reporting date and are of the opinion that any litigation arising from such action would not have a material effect on the Group’s
financial performance.
No person has applied for leave of court to bring proceedings on behalf of the Group or intervene in any proceedings to which the
Group is a party for the purpose of taking responsibility on behalf of the Group for all or part of those proceedings.
ROUNDING
The financial report is presented in Australian dollars and all values are rounded to the nearest dollar.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Directors’ Report
18
19
For personal use only
GENDER DIVERSITY
The Group has a strong commitment to diversity and recognises the value of attracting and retaining employees with different
backgrounds, gender, culture, knowledge, experience, and abilities. Diversity contributes to the Group’s business success and benefits
individuals, clients, teams, shareholders, and stakeholders. The Group’s business policies, practices and behaviours promote diversity
and equal opportunity and creates an environment where individual differences are valued, and all employees have the opportunity
to realise their potential and contribute to the Group’s success.
As at 30 June 2024
As at 30 June 2023
Male
Percentage
Male (%)
Female
Percentage
Female (%)
Male
Percentage
Male (%)
Female
Percentage
Female (%)
Board
3
75
1
25
3
75
1
25
Senior management
5
83
1
17
5
83
1
17
Employees
36
47
41
53
40
47
45
53
Total
44
51
43
49
48
51
47
49
UNISSUED SHARES
At the date of this report, the Group has no unissued shares under option.
NON-AUDIT SERVICES
No non-audit services were provided by KPMG during the year ended 30 June 2024.
Details of amounts paid or payable to the auditor during the year are outlined in Note G3 to the financial statements.
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is attached to this
financial report.
Remuneration Report
Dear Shareholders,
On behalf of the Board, I am pleased to present the Remuneration Report for the year ended 30 June 2024.
The Nomination and Remuneration Committee (the Committee) advises the Board on the policies and practices of the Company
regarding the remuneration of Non-Executive Directors, the Executive Leadership Team (ELT) and other senior leaders of the Group
and reviews all components of the Group’s remuneration practices relevant to its employees. The Committee Charter sets out the
objectives, responsibilities and authority of the Committee in relation to remuneration matters.
Robust processes are in place for supporting and evaluating the performance of the CEO, ELT and other senior leaders. The Board
and CEO determine and agree annual targets and objectives for the Company based on the Company’s strategic plan, supported by
comprehensive and collaborative operational planning and financial budgeting processes. The CEO is accountable to the Board for
the delivery of the agreed targets and objectives. The targets and objectives agreed between the Board and the CEO are discussed
with, and cascaded to, each member of the ELT and captured in individual performance plans. The CEO uses the performance plans to
facilitate individual conversations with each member of the ELT. The performance discussions are documented and form the basis of
the annual performance review that each ELT member undertakes with the CEO at the end of the performance period.
The Board’s policy for remunerating the CEO, ELT and other senior leaders is to provide market-based remuneration packages
comprising a blend of fixed and variable at-risk incentive-based remuneration, with clear links between individual and Company
performance and individual reward. The Committee reviews the remuneration of the CEO, ELT and, as an aggregate, all other
employees at least annually.
The Committee seeks external professional advice from time to time on remuneration matters. During FY24, external consultants
Godfrey Remuneration Group Pty Ltd (GRG) were engaged to provide market practice information, benchmarking data and make
remuneration recommendations regarding fixed remuneration and variable rewards including short term incentives (STI) and long-
term incentives (LTI) for the CEO, ELT and selected senior leaders. Any recommendations provided by GRG in relation to remuneration
of Key Management Personnel of Bubs were made free from undue influence by any Key Management Personnel to whom the
recommendations related to. Bubs paid GRG $58,300 for the benchmarking, STI plan design, LTI plan design, and services rendered.
The outcome of the ELT’s performance over the course of the year is one factor considered when any changes to fixed annual
remuneration or any award of variable remuneration and incentives are determined.
Katrina Rathie
Chair
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Directors’ Report
20
21
For personal use only
Remuneration Report (Audited)
8
EBIT (Earnings before Interest and Tax) is a non - IFRS measure. Non-IFRS measures are not subject to audit.
9
EBITDA relates to Earnings before Interest, Tax, depreciation and amortisation and is a non-IFRS measure. Non-IFRS measures are not subject to audit.
This Remuneration Report for the year ended 30 June 2024 forms part of the Directors’ Report. It has been prepared in accordance
with the Corporations Act 2001 (Cth) (the Act), the Corporations Regulations 2001 (Cth) and AASB124 Related Party Disclosures and
audited as required by the Act. It also includes additional information and disclosures that are intended to enable a deeper
understanding by shareholders of Bubs’ remuneration governance and practices.
KEY MANAGEMENT PERSONNEL
The term key management personnel (KMP) refers to those persons having the authority and responsibility for planning, directing,
and controlling the activities of the Group, directly or indirectly and includes any Director of the Group. The disclosures in this report
have been audited.
The KMP of the Group during the year ended 30 June 2024 were:
• Katrina Rathie (Independent Non-Executive Chair, Chair of the Nomination and Remuneration Committee)
• Steve Lin (Non-Executive Director)
• Paul Jensen (Independent Non-Executive Director, Chair of the Audit and Risk Committee)
• Reg Weine (Managing Director and Chief Executive Officer – appointed 28 August 2023)
• Robin Johnston (Chief Financial Officer — appointed on 1 February 2024, Interim Chief Financial Officer from 24 May 2023)
• Richard Paine (Chief Operating Officer, Interim Chief Executive Officer 10 May 2023 – 28 August 2023)
REMUNERATION STRUCTURE
The Nomination and Remuneration Committee (the Committee) was established on 1 February 2022 and advises the Board on the
policies and practices employed in the remuneration of the Group’s Directors and other KMP. The Committee is also responsible for
reviewing all components of the Group’s remuneration practices pertinent to its employees. The Committee makes recommendations
to the Board however, all decision-making authority in relation to remuneration remains with the Board.
In consultation with external remuneration consultants, the Board’s policy for remunerating executives is to provide market-based
remuneration packages comprising a blend of fixed and variable at-risk incentive-based remuneration with clear links between Group
and individual employee performance and reward.
The Board seeks to set aggregate compensation at a level that provides the Group with the ability to attract and retain Directors and
KMP of the highest calibre. The amount of aggregate compensation sought to be approved by shareholders and the manner in which
it is apportioned amongst the Directors and other KMP is reviewed annually.
The following table provides the summary of Group’s earnings and movement in shareholder wealth for the five years to 30 June 2024:
2024
$
2023
$
2022
$
2021
$
2020
$
Revenue
79,703,759
60,110,627
89,297,324
39,312,738
54,644,952
EBIT8 Loss
(20,582,429)
(107,551,051)
(10,445,126)
(76,515,692)
(15,037,949)
EBITDA9 Loss
(19,703,795)
(105,230,779)
(7,751,929)
(73,110,674)
(11,307,097)
Share price at year end
0.130
0.180
0.595
0.435
0.925
Basic loss per share
(0.03)
(0.15)
(0.02)
(0.12)
(0.01)
Total dividend (cents per share)
-
-
-
-
-
FIXED REMUNERATION
Key Management Personnel’s fixed remuneration is based on a matrix of an individual qualifications, skills and experience, their
individual performance and their current level of remuneration relative to the market. Fixed remuneration is reviewed on an annual
basis, and where appropriate, is adjusted based on consideration of individual performance and market remuneration movement.
The overall level of KMP reward takes into account the performance of the Group over a number of years. This ensures that the Group
attracts, motivates, and retains high calibre executives so they can deliver on the Group’s business strategy and contribute to the
Group’s ongoing financial performance.
Total fixed remuneration (TFR) comprises of base salary, superannuation in accordance with the statutory rates and allowances. The
Board reviews and approves all changes to fixed remuneration.
VARIABLE REMUNERATION
For FY24 the only KMP that variable remuneration applied to was the MD/CEO. FY24 Short term incentive (STI)
The STI focuses on performance goals which align with the Group’s direction, driving outcomes, and rewarding high performance over
the financial year. STI values are generally calculated as a percentage of fixed remuneration. STI values and performance targets are
approved by the Board annually.
STI payments are determined and paid annually following the finalisation of audited Group results and are contingent on the
achievement of Group financial targets and specific agreed personal objectives.
The Link Between Performance and Reward in FY24
Each element of remuneration should be designed to work with the other elements of remuneration to produce an appropriate range
of remuneration outcomes linked to performance, market benchmarks and the Company’s strategy, as well as working together to
incentivise and reward an appropriate range of behaviours.
SHARE RIGHTS ISSUED TO CEO
On 31 August 2023, Bubs issued Shares Rights to the incoming Chief Executive Officer & Managing Director (CEO/MD) and was subject
to Shareholder approval . The framework of the approach to the STI award for the CEO/MD is set based on achievement against an
EBITDA financial KPI.
The following performance rights were issued:
Sign-on retention rights (SOR Rights)
SOR Rights have “time-based” vesting conditions where period held determines the number of shares that will vest.
• 1,000,000 share rights vest on 30 June 2024 - These rights vested upon completion of the service period on 30 June 2024;
• 1,000,000 share rights vest on 30 June 2025;
• 1,000,000 share rights will vest on 30 June 2026.
The sign-on retention rights were approved by shareholders and granted on 14 November 2023 and valued at $0.17 per share.
Short-term incentive performance rights (STI Performance Rights)
STI Performance Rights are “performance-based” but have no market conditions. The number of rights that vest is dependent on the
following results at 30 June 2024:
• 2,591,716 share rights will be issued if the Group achieves the budgeted Trading EBITDA10 loss; or
• 3,887,574 share rights will be issued if the Group achieves at least break-even in Trading EBITDA10.
Due to the Trading EBITDA10 hurdles not being met, no STI Performance Rights were vested in FY24.
The above short-term incentives were approved by shareholders and granted on 14 November 2023 and valued at $0.17 per share.
FY24 Long term incentives (LTI)
LTI Performance rights
The LTI program provides the potential for the CEO to receive payment over and above fixed remuneration and short-term incentive.
These programs are discretionary, appropriate to the results delivered by the Group, and based on the principle of reward for
performance. The purpose of a LTI is to focus the KMP’s efforts on the achievement of sustainable long-term shareholder value
creation and the long-term financial success of the Group
The following Long Term performance rights (LTI rights) were issued to the CEO/MD:
• No Rights will vest if the share price is less than $0.35 ;or
• 1,795,082 Rights will vest if the share price is at least $0.35 (Threshold LTI) ;or
• 3,590,164 Rights will vest if the share price is at least $0.50 (Target LTI) ;or
• 7,180,328 Rights will vest if the share price is at least $1.00 (Stretch LTI).
If the Company’s performance is between Threshold LTI and Target LTI, or Target LTI and Stretch LTI, a pro-rata amount of the LTI
Performance Rights will lapse so that the participant will receive a pro-rata amount of the relevant award on a straight-line basis.
The Company’s share price will be measured by reference to the average of the 5-day VWAP (Volume-weighted average price)
immediately after the date the Company’s FY26 audited financial results are released to the ASX (Review Date).
The LTI rights were granted on 14 November 2023 and valued at $0.05. The rights will vest on 30 June 2026.
10
Trading EBITDA refers to the Earnings Before Interest, Tax, Depreciation, and Amortisation derived from the Company’s operating activities, excluding
significant one-off items as defined in the employment contract or determined by the Board. Trading EBITDA is a non -IFRS measure. Non-IFRS measures
are not subject to review or audit.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Directors’ Report
22
23
For personal use only
EXECUTIVE CONTRACTS
The remuneration and other terms of employment for KMP executives are covered in formal employment contracts. The Group may
terminate an executive immediately for cause, in which case the executive is not entitled to any payment other than the value of total
fixed remuneration (and accrued entitlements) up to the termination date.
KMP executive
Notice period by
the Group
Notice period by
Executive
Payment in
lieu of notice
Reg Weine (Chief Executive Officer and Managing Director)
Appointed on 28 August 2023
12 months
12 months
Yes
Richard Paine (Chief Operating Officer)
Interim Chief Executive Officer to 28 August 2023
3 months
3 months
Yes
Robin Johnston (Chief Financial Officer)
Resigned on 26 June 2024, effective post the release of FY24 annual report
3 months
3 months
Yes
NON-EXECUTIVE DIRECTORS’ REMUNERATION
The Group’s remuneration policy for Non-Executive Directors aims to ensure that the Group can attract and retain suitably qualified
and experienced Directors having regard to:
• the level of fees paid to Non-Executive Directors of other comparable Australian listed companies.
• the growing size and complexity of the Group’s operations.
• the responsibilities and work requirements of Board members; and
• the skills and diversity of Board members.
Under the ASX Listing Rules, the total amount paid to all Non-Executive Directors in any financial year must not exceed the amount
fixed in a general meeting of the Group.
This amount is currently $500,000 (2023: $500,000) as determined by Shareholders at the AGM held on 14 November 2023. The
Board’s present policy for Non-Executive Directors, the Chair of the Nomination and Remuneration Committee and the chair of the
Audit and Risk Committee is set out below.
The annual remuneration rate for the year ended 30 June 2024 and exclusive of superannuation.
Position
Annual
remuneration
Chair of the Board
$170,000
Non-Executive Director
$100,000
Chair of Nomination and Remuneration Committee & Chair of the Audit & Risk Committee
$20,000
Committee member
$10,000
COMPANY SECRETARY
Jay Stephenson is contracted on a monthly basis as Company Secretary at a rate of $30,000 per annum.
OTHER RELATED PARTY TRANSACTIONS WITH KMP
No key management personnel or any other related party has entered into any other contracts with the Group since the end of the
previous financial year. All of the above transactions were considered to be on an arms’ length basis.
DETAILS OF THE NATURE AND AMOUNT OF EACH ELEMENT OF THE REMUNERATION
Table A(1): Remuneration for Executive KMP
Short Term
Post
Employ-
ment
Other Long Term
Year
Salary &
fees
$
Annual
Leave
$
Cash
Bonus
$
Non-
monetary
$
Superan-
nuation
$
Long
service
leave
$
Share Based
Payments -
Share rights
$
Total
Perfor-
mance
related
%
Reg Weine [1]
2024
608,366
42,550
-
-
34,385
9,212
296,127
990,640
2%
2023
-
-
-
-
-
-
-
-
0%
Richard Paine [2]
2024
367,782
24,255
105,000
-
46,420
5,251
-
548,708
0%
2023
363,982
26,923
-
-
41,700
5,829
-
438,434
0%
Robin Johnston
2024
330,441
11,392
-
-
13,213
-
-
355,046
0%
2023
49,758
-
-
-
-
-
-
49,758
0%
Dennis Lin [3]
2024
-
-
-
-
-
-
-
-
0%
2023
406,603
22,436
-
-
44,013
4,469
(7,274)
470,246
0%
Kristy Carr [4]
2024
-
-
-
-
-
-
-
-
0%
2023
537,360
46,408
-
90,000
75,632
10,076
(13,093)
746,383
0%
Iris Ren [5]
2024
-
-
-
-
-
-
-
-
0%
2023
339,058
32,657
-
-
27,500
5,829
-
405,043
0%
2024
1,306,589
78,197
105,000
-
94,018
14,463
296,127
1,894,395
2023
1,696,761
128,424
-
90,000
188,845
26,203
(20,367)
2,109,864
[1] STI and LTI share rights issued to the CEO and approved by the AGM on 14 November 2023
[2] Richard Paine’s remuneration includes remuneration for his tenure as Interim Chief Executive Officer until 28 August 2023.
[3] Dennis Lin ceased to be the Executive Chairman on 6 April 2023 and resigned as a Non-Executive Director on 30 May 2023.
[4] Kristy Carr ceased as Chief Executive Officer & Managing Director on 10 May 2023 and resigned as a Non-Executive Director on 30 May 2023.
[5] Iris Ren resigned as Chief Financial Officer on 24 May 2023, effective on 15 August 2023 and she ceased to be KMP in FY23.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Directors’ Report
24
25
For personal use only
Table A(2): Remuneration for Non-Executive Directors
Short Term
Post Em-
ployment
Other Long Term
Year
Director
fees
$
Special
Exertion
fees
$
Non-
monetary
$
Superan-
nuation
$
Long
service
leave
$
Share Base
Payments-
options
$
Total
Perfor-
mance
related
%
Katrina Rathie
2024
197,744
-
-
34,952
-
-
232,696
-
2023
122,974
120,000
-
14,290
-
-
257,264
-
Steve Lin [1]
2024
-
-
-
-
-
-
-
-
2023
-
-
-
-
-
-
-
-
Paul Jensen
2024
141,525
-
-
-
-
-
141,525
-
2023
37,071
60,000
-
-
-
-
97,071
-
Reg Weine [2]
2024
20,000
-
-
2,200
-
-
22,200
-
2023
127,846
-
-
2,923
-
-
130,769
-
Dennis Lin [3]
2024
-
-
-
-
-
-
-
-
2023
10,382
-
-
1,090
-
-
11,472
-
Total
2024
359,269
-
-
37,152
-
-
396,420
2023
298,273
180,000
-
18,303
-
-
496,576
[1] Steve Lin’s services were remunerated by C2 Capital Partners in FY23 and FY24.
[2] Reg Weine ceased being a Non-Executive Director in August 2023 when he was appointed as the Chief Executive Officer and Managing Director.
[3] Dennis Lin ceased as an executive Director on 6 April 2023 and a Non – Executive Director on 30 May 2023.
FULLY PAID ORDINARY SHARES OF BUBS AUSTRALIA LIMITED
Table B: Movement in the shares of Bubs held, directly, indirectly or beneficially, by each KMP, including their
related parties
At the beginning of
the year
Purchase of shares
Other
change
Shares disposed
At the end of the
year
Katrina Rathie [1]
2024
1,095,970
240,000
-
-
1,335,970
2023
1,000,000
95,970
-
-
1,095,970
Steve Lin [2]
2024
-
-
-
-
-
2023
-
-
-
-
-
Paul Jensen [3]
2024
100,000
360,000
-
-
460,000
2023
-
100,000
-
-
100,000
Reg Weine [4]
2024
-
600,000
-
-
600,000
2023
-
-
-
-
-
Robin Johnston
2024
-
250,000
-
-
250,000
2023
-
-
-
-
-
Richard Paine [5]
2024
228,391
333,576
-
-
561,967
2023
1,500
333,576
-
(106,685)
228,391
Iris Ren [6]
2024
-
-
-
-
-
2023
-
333,576
-
-
333,576
Kristy Carr [7]
2024
-
-
-
-
-
2023
13,620,600
545,852
(14,166,452)
-
-
Dennis Lin [8]
2024
-
-
-
-
-
2023
-
5,074,061
(5,074,061)
-
-
[1] Shares are held by Rathie Superannuation Pty Limited.
[2] On 30 June 2023 and 30 June 2024, 76,288,510 shares were held by C2 Capital Partners, of which Steve Lin is the Managing Director.
[3] Shares are held by Taranaki Holdings Pty Ltd.
[4] Shares are held by Barnbougle Investments Pty Limited and Muirfield Securities Pty Ltd.
[5] In FY24, Richard Paine converted 333,576 share rights following the release of FY23 accounts into ordinary shares.
[6] Iris Ren resigned as Chief Financial Officer on 24 May 2023, effective on 15 August 2023 and she ceased to be KMP in FY23.
[7] Kristy ceased to be a KMP on 30 May 2023
[8] Dennis Lin ceased as Chairman of the Board on 6 April 2023 and as a Non-Executive Director on 30 May 2023
SHARE BASED PAYMENTS
Table C: Share-based payments granted as remuneration to KMP STI Share rights
Number
of share
rights
held at
the be-
ginning
of the
year Grant date
Number
of share
rights
granted
Fair
Value
of share
rights
granted
Vesting
date
Number
vested
Number
Exer-
cised
Number
Expired
Number
lapsed
Number
of share
rights
held at
the end of
the year
Reg Weine*
2024
- 14-Nov-23
3,887,574
660,888 30-Jun-24
-
-
-
(3,887,574) [1]
-
2024
- 14-Nov-23 1,000,000 170,000 30-Jun-24
1,000,000 [2]
-
-
- 1,000,000
2023
-
-
-
-
-
-
-
-
-
-
Richard
Paine
2024
333,576
-
-
-
-
333,576 (333,576)
-
-
-
2023
667,152
-
-
-
-
333,576 (333,576)
-
-
333,576
Iris Ren [3]
2024
-
-
-
-
-
-
-
-
-
-
2023
667,152
-
-
-
-
333,576 (333,576)
-
-
333,576
Kristy Carr
2024
-
-
-
-
-
-
-
-
-
-
2023
1,091,704
-
-
-
-
545,852 (545,251)
-
(545,852)
-
Dennis Lin
2024
-
-
-
-
-
-
-
-
-
-
2023
606,502
-
-
-
-
303,251 (303,251)
-
(303,251)
-
* The STI share rights were approved to be issued at the AGM held on 14 November 2023.
[1] Due to the performance measures not being met, the FY24 STI rights have lapsed.
[2] Reg Weine met his service condition at 30 June 2024, therefore his sign on rights vested.
[3] Iris Ren resigned as Chief Financial Officer on 24 May 2023, effective on 15 August 2023 and she ceased to be KMP in FY23
LTI SHARE RIGHTS
LTI Share rights granted to KMP
Movement in the LTI share rights granted to KMP during the year
Number of
share Rights
held at the
beginning of
the year
Grant
date
Number
of share
rights
granted
Fair Value
of share
rights
granted
Vesting
date
Number
vested
Number
Exercised
Number
Expired
Number
lapsed
Number of
share rights
held at the
end of the
year
Reg Weine 2024
- 14-Nov-23
7,180,328
359,016 30-Jun-26
-
-
-
-
7,180,328
2024
- 14-Nov-23
1,000,000
170,000 30-Jun-25
-
-
-
-
1,000,000
2024
- 14-Nov-23
1,000,000
170,000 30-Jun-26
-
-
-
-
1,000,000
2023
-
-
-
-
-
-
-
-
-
-
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Directors’ Report
26
27
For personal use only
LTI OPTIONS
No LTI options were granted in FY24.
Movement in the LTI options granted to KMP during the year
Number of
options
held at the
beginning of
the year
Number
of options
granted
Number
exercised
Number
expired
Number
forfeited
Number
cancelled
Number of
options held
at the end of
the year
Number
vested and
exercisable
at the end
of the year
Dennis Lin
2024
-
-
-
-
-
-
-
-
2023
4,770,810
(4,770,810)
-
Kristy Carr
2024
-
-
-
-
-
-
-
-
2023
4,770,810
-
-
- (4,770,810)
-
-
-
Iris Ren
2024
-
-
-
-
-
-
-
-
2023
400,000
-
-
-
-
-
400,000
400,000
Richard Paine
2024
400,000
-
- (400,000)
-
-
-
-
2023
400,000
-
-
-
-
-
400,000
400,000
This Directors’ report is signed in accordance with a resolution of the board of Directors:
Katrina Rathie
Chair
Melbourne
Dated: 28 August 2024
Auditor’s Independence Declaration
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Bubs Australia Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Bubs Australia Limited
for the financial year ended 30 June 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
J. Carey
Partner
Melbourne
28 August 2024
29
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
28
Auditor’s Independence Declaration
For personal use only
1
Financial
Statements
03
30
31
For personal use only
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Note
2024
$
2023
$
Revenue
B2
79,703,759
60,110,627
Cost of sales
B3
(41,006,176)
(69,466,176)
Gross profit/(loss)
38,697,583
(9,355,549)
Other Income
273,334
199,996
Distribution and selling costs
(7,223,888)
(5,512,785)
Marketing and promotion costs
(13,876,131)
(15,873,517)
Administrative and other costs
B3
(37,572,798)
(34,041,328)
Expected credit losses
(880,529)
(6,785,873)
Impairment
C5
-
(36,165,080)
Operating Loss
(20,582,429)
(107,534,136)
Interest income
334,827
518,982
Finance cost
B3
(241,384)
(452,470)
Net Finance income/(cost)
93,443
66,512
Share of net profits of joint ventures accounted for using the equity method
-
(16,914)
Loss before tax
(20,488,986)
(107,484,539)
Income tax expense
B5
(500,072)
(868,303)
Loss for the year after tax
(20,989,058)
(108,352,842)
Other comprehensive income
Other comprehensive income that may be reclassified to profit or loss in
subsequent periods (net of tax)
Exchange difference on translation of foreign operations
(330,577)
(249,561)
Other comprehensive income/(loss) for the year, net of tax
(330,577)
(249,561)
Total comprehensive loss for the year
(21,319,635)
(108,602,403)
Loss per share
Basic (loss) per share (dollars)
B4
(0.03)
(0.15)
Diluted (loss) per share (dollars)
B4
(0.03)
(0.15)
The accompanying notes form part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
Note
2024
$
2023
$
Assets
Current Assets
Cash and cash equivalents
D3
17,523,474
26,052,523
Trade and other receivables
C1
9,323,240
7,914,587
Inventories
C2
28,225,946
20,767,492
Other assets
C3
4,548,035
2,624,480
Total Current Assets
59,620,695
57,359,082
Non-Current Assets
Plant and equipment
C4
4,038,370
4,438,440
Right of use assets
C7
1,335,400
1,930,243
Intangible assets
C5
1,201,444
1,204,780
Investment in associates
E
-
116,907
Other assets
C3
558,442
549,145
Total Non-Current Assets
7,133,656
8,239,515
Total Assets
66,754,351
65,598,597
Liabilities
Current Liabilities
Trade and other payables
C6
17,720,241
16,673,764
Contract liabilities
2,663
124,307
Lease liabilities
C7
727,432
679,239
Borrowings
C8
5,283,866
2,000,000
Provisions
C9
4,795,933
2,438,969
Total Current Liabilities
28,530,135
21,916,279
Non-Current Liabilities
Lease liabilities
C7
986,325
1,726,648
Provisions
C9
366,191
275,452
Total Non-Current Liabilities
1,352,516
2,002,101
Total Liabilities
29,882,651
23,918,380
Net Assets
36,871,700
41,680,218
Equity
Issued capital
D5
356,757,916
340,568,767
Share based payments reserve
D6
12,256,032
11,934,065
Foreign currency translation reserve
(625,347)
(294,770)
Accumulated losses
(331,516,901)
(310,527,844)
Total Equity
36,871,700
41,680,218
The accompanying notes form part of these consolidated financial statements.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Financial Statements
32
33
For personal use only
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
2024
Issued Capital
$
Share Based
Payments
Reserve
$
Equity
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total equity
$
Balance at 1 July 2023
340,568,767
11,934,065
-
(294,770)
(310,527,844)
41,680,218
Comprehensive income
Loss for the year
-
-
-
-
(20,989,058)
(20,989,058)
Other comprehensive loss
-
-
-
(330,577)
-
(330,577)
Total comprehensive loss
-
-
-
(330,577)
(20,989,058)
(21,319,635)
Other equity transactions:
Issue of shares
D5
17,375,750
-
-
-
-
17,375,750
Capital raising costs, net of tax
D5
(1,186,601)
-
-
-
-
(1,186,601)
Share based payment expense
D6
-
321,967
-
-
-
321,967
Balance at 30 June 2024
356,757,916
12,256,032
-
(625,347)
(331,516,901)
36,871,700
The accompanying notes form part of these consolidated financial statements.
2023
Issued Capital
$
Share Based
Payments
Reserve
$
Equity
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total equity
$
Balance at 1 July 2022
274,851,116
11,332,626
4,246,021
(45,209)
(202,175,003)
88,209,551
Comprehensive income
Loss for the year
-
-
-
-
(108,352,842)
(108,352,842)
Other comprehensive loss
-
-
-
(249,561)
-
(249,561)
Total comprehensive loss
-
-
-
(249,561)
(108,352,842)
(108,602,403)
Other equity transactions:
Issue of shares
D5
67,743,690
-
(4,246,021)
-
-
63,497,669
Capital raising costs, net of tax
D5
(2,026,039)
-
-
-
-
(2,026,039)
Share based payment expense/
(benefit)
D6
-
601,439
-
-
-
601,439
Balance at 30 June 2023
340,568,767
11,934,065
-
(294,770)
(310,527,844)
41,680,218
The accompanying notes form part of these consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
Note
2024
$
2023
$
Cash flows from operating activities
Receipts from customers
77,687,943
77,286,737
Payments to suppliers, employees and government
(104,109,086)
(123,846,485)
Interest received
334,827
518,982
Interest paid
(241,384)
(452,470)
Net cash used in operating activities
D4
(26,327,700)
(46,493,236)
Cash flows from investing activities
Purchases of plant and equipment
(174,241)
(240,227)
Payments to Deloraine vendors relating to Deloraine acquisition
-
(4,000,000)
Purchases of intangible assets
(15,583)
(6,605)
Net cash used in investing activities
(189,824)
(4,246,832)
Cash flows from financing activities
Proceeds from borrowings
4,800,000
-
Repayment of borrowings
(1,800,000)
-
Proceeds from share issue
17,375,750
63,020,588
Transaction costs relating to issue of shares
(1,695,145)
(2,026,039)
Payment of lease liabilities
(692,130)
(512,963)
Net cash from financing activities
17,988,475
60,481,587
Net increase/(decrease) in cash and cash equivalents
(8,529,049)
9,741,519
Cash and cash equivalents at the beginning of the financial year
26,052,523
16,311,005
Total cash and cash equivalents at the end of the year
17,523,474
26,052,523
The accompanying notes form part of these financial statements.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Financial Statements
34
35
For personal use only
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
A. BASIS OF PREPARATION
CORPORATE INFORMATION
The consolidated financial statements cover Bubs Australia Limited as a consolidated entity consisting of Bubs Australia Limited and
the entities it controlled (“the Group”) for the year ended 30 June 2024. The financial report is presented in Australian dollars, which is
Bubs Australia Limited’s functional and presentational currency.
The Group is a for-profit entity that is a listed public company limited by shares, incorporated and domiciled in Australia. The Group’s
principal activity is the manufacturing and sale of organic baby food, infant formula products, adult goat milk powder and fresh dairy
products. The Group also provides canning services for nutritional dairy products.
The annual report was authorised for issue, in accordance with a resolution of directors, on 28 August 2024.
BASIS OF PREPARATION
The consolidated financial statements are general-purpose financial statements, which have been prepared in accordance with
Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the
Corporations Act 2001. These consolidated financial statements also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board (‘IASB’).
The consolidated financial statements, apart from the cash flow information and deferred consideration payable, have been prepared
on an accruals basis and are based on historical costs.
GOING CONCERN BASIS OF ACCOUNTING
The Group have prepared the consolidated financial statements for the year ended 30 June 2024 on a going concern basis, which assumes
continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
FINANCIAL RESULTS
On 30 June 2024, the Group is in a net current asset position of $31.1million (2023: $35.4m). At 30 June 2024, the Group has $17.5
million in available cash and cash equivalents and $5.0 million in committed un-drawn bank facilities (Note C8).
The Group made a FY24 loss after tax of $21.0 million (FY23: $108.4m). Post 30 June 2024, the Group extended the $10.0 million
facility with National Australia Bank for a further 12 months to 29 August 2025 (Note C8). Net cash outflows from operating activities
in FY24 were $26.3million (FY23: $46.5m) which included the following:
• Legal costs of $3.7million in relation to ongoing litigation matters, including the Group’s former customers in China.
• Enterprise resource planning (ERP) costs of $1.0 million.
• U.S. Food and Drug Administration (FDA) costs $5.6million.
• Costs relating to the closure of the joint venture of $0.5million
FUTURE FINANCIAL PERFORMANCE
The directors have considered the Group’s revenue projections and cash flow forecasts based on current market conditions and
business plans to determine the appropriateness of preparing the financial report on a going concern basis.
The Group acknowledges the inherent uncertainty in their earnings forecast, which includes assumptions such as:
• Increased customer base, ranging of products, number of stores for each product in the USA and achieving projected sales
volumes in FY25 with the smaller tin sizes.
• Attainment of the permanent U.S. Food and Drug Administration approval in FY25 to continue operating in the USA and
managing expenses to obtain it. The Group is currently operating under discretionary approval until permanent approval is
expected to be obtained in FY25.
• Continuing the revenue growth in China through the success of the CBEC and O2O strategy.
• Continuing improvement of the working capital position through detailed demand planning and forecasting.
• Reduced operating expenses through stringent expense management, and cost optimisation and estimated expenses relating to
litigation matters.
Due to the uncertainty surrounding the above matters, a material uncertainty exists which may cast doubt on the Group’s ability to
continue as a going concern and therefore whether it may be able to realise its assets and discharge its liabilities in the normal course
of business.
Notwithstanding the above, based on the current information and actions being taken, the Directors consider that it is appropriate
for the financial report to be prepared on a going concern basis. Should the cash flow forecasts not be achieved, there is a material
uncertainty as to whether the Group will be able to continue as a going concern and realise its assets and extinguish its liabilities in
the normal course of business at the amounts stated in the financial report.
The Consolidated Financial Statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts or to the amounts and classification of liabilities that may be necessary should the Group be unable to continue as a
going concern.
NEW, REVISED OR AMENDING ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
Several other amendments and interpretations were applied for the first time in the 2024 financial period, but do not have a material
impact on the consolidated financial statements of the Group.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not
been early adopted by the Group for the annual reporting year ended 30 June 2024.
IFRS 18 was issued in April 2024 and replaces IAS 1 Presentation of Financial Statements. The new standard introduces new
requirements for the Statement of Profit or Loss, including:
• new categories for the classification of income and expenses into operating, investing and financing categories, and
• presentation of subtotals for “operating profit” and “profit before financing and income taxes”.
Additional disclosure requirements are introduced for management-defined performance measures and new principles for
aggregation and disaggregation of information in the notes and the primary financial statements and the presentation of interest and
dividends in the statement of cash flows.
The new standard is effective for annual periods beginning on or after 1 January 2027 and will first apply to the Group for the financial
year ending 30 June 2028.
This new standard is not expected to have an impact on the recognition and measurement of assets, liabilities, income and expenses,
however there will likely be changes in how the Statement of Profit or Loss and Statement of Financial Position line items are
presented as well as some additional disclosures in the notes to the financial statements. The Group is in the process of assessing the
impact of the new standard.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
The amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements provide guidance and examples to help
entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting
policy disclosures that are more useful by replacing the requirement for entities to disclose their ‘significant’ accounting policies with
a requirement to disclose their ‘material’ accounting policies and adding guidance on how entities apply the concept of materiality in
making decisions about accounting policy disclosures.
The amendments have had an impact on the Group’s disclosures of accounting policies, but not on the measurement, recognition or
presentation of any items in the Group’s consolidated financial statements.
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
Income Tax The amendments to IAS 12 Income Taxes narrow the scope of the initial recognition exception, so that it no longer applies
to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities.
The amendments had no impact on the Group’s consolidated financial statements.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
36
37
For personal use only
International Tax Reform—Pillar Two Model Rules – Amendments to IAS 12 Income Taxes
The amendments to IAS 12 have been introduced in response to the OECD’s BEPS Pillar Two rules and include:
• A mandatory temporary exception to the recognition and disclosure of deferred taxes arising from the jurisdictional
implementation of the Pillar Two model rules; and
• Disclosure requirements for affected entities to help users of the financial statements better understand an entity’s exposure to
Pillar Two income taxes arising from that legislation, particularly before its effective date.
The mandatory temporary exception – the use of which is required to be disclosed – applies immediately. The remaining disclosure
requirements apply for annual reporting periods beginning on or after 1 January 2023, but not for any interim periods ending on or
before 31 December 2023.
The amendments had no impact on the Group’s consolidated financial statements as the Group is not in scope of the Pillar Two
model rules as its revenue is less than €750 million/year.
MATERIAL ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the financial statements requires management to make judgements, estimates and assumptions. The most
material use of judgements and estimates has been applied to the following areas. Refer to the respective notes for additional details.
Reference
Recoverability of trade and other receivables
Note C1
Valuation of inventory
Note C2
B. GROUP PERFORMANCE
This section explains the results and performance of the Group for the year, including segment information, earnings per share and
taxation.
B1. OPERATING SEGMENTS
Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the
chief operating decision maker (the Board) in order to allocate resources to the segment and assess its performance.
In FY23 and FY24, the Group had identified a single operating segment being the sale of nutritional food, adult powder and providing
canning services of nutritional dairy products. Accordingly, the financial information presented in the consolidated statement of profit
or loss and other comprehensive income, and the consolidated statement of financial position was the same as that presented to the
chief operating decision maker.
B2. REVENUE
GEOGRAPHIC INFORMATION
2024
$
2023
$
Australia
21,560,307
17,343,758
China
17,330,158
13,621,330
USA
34,956,864
23,904,446
Rest of World
5,856,430
5,241,093
Total
79,703,759
60,110,627
The revenue information above is based on the locations of the customers. The Group had one external customer who generated
greater than 10 percent of the Group’s revenue at 30 June 2024 amounting to $19,995,645 (2023: two customers amounting to
$12,567,897).
99.4% of the Group’s assets are located in Australia.
Set out below is the disaggregation of the Group’s revenue from contracts with customers:
2024
$
2023
$
Sale of Infant Formula
62,434,749
48,613,317
Sale of Nutritional Products
1,888,457
2,939,978
Sale of Adult Goat Dairy Products
11,324,488
6,673,844
Sale of Raw Materials
3,431,854
606,104
Canning services
624,211
1,277,384
Total revenue from contracts with customers
79,703,759
60,110,627
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
38
39
For personal use only
RECOGNITION AND MEASUREMENT
Under AASB 15 Revenue from Contracts with Customers, revenue is recognised at an amount that reflects the consideration to which
an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise
judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts
with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs
directly related to fulfilling a contract.
Sale of products
The Group has identified the following revenue streams by product type:
• Infant Formula
• Nutritional Products
• Adult Goat Dairy Products
• Raw materials
For all revenue streams, the Group’s contracts with customers for the sale of products include one performance obligation. For
most customers the Group has concluded that revenue from the sale of products should be recognised at the point in time when
the products are transferred to the customer, generally on delivery of the products or when the goods are picked up at the Group’s
warehouse. Customers obtain control of products when the goods are delivered to and have been accepted by the customer. If the
order is requested for pickup, control passes when the goods are picked up by the customer.
For customers where there is a right of return, the performance obligation is seen to have been met when the risks and rewards are
transferred, where revenue is recognised when the goods are sold to the end customer. Invoices are generated at that point in time
and are usually payable within 30 - 90 days.
Some contracts contain trade spend terms, early payment discounts and may permit the customer to return an item for replacement
or refund.
The Group recognises revenue from the sale of goods measured at the fair value of the consideration received or receivable, net of
returns, volume rebates and marketing contribution.
For the year ended 30 June 2024, the Group has not recognised any right to recover or refund liability as there is no expectation for
goods to be returned.
Rebates and marketing contribution
Rebates and marketing contribution with customers are recognised as a reduction of revenue. Under AASB 15 Revenue from Contracts
with Customers, marketing contributions give rise to variable consideration. To estimate the variable consideration to which it is
entitled, the Group applies the ‘most likely amount method’ for contracts with marketing contribution. The selected method that best
predicts the amount of variable consideration is primarily driven by the marketing contribution agreed with the customers. The Group
then applies the requirements on constraining estimates of variable consideration and recognises a refund liability for the expected
future rebates.
Provision of canning services
The Group provides canning services for nutritional dairy products. The Group recognises revenue from the canning services
measured at the fair value of the consideration received or receivable. The revenue represents the Group’s right to an amount of
consideration that is unconditional. Where the Group controls the promised goods before transferring them to the customers, the
Group is a principal and recognises the full amount of goods and canning services as revenue when the production is complete.
Where the Group does not control the promised goods and solely provides canning services to the customers, the Group is an agent
and recognises the revenue for the canning services when the production is complete.
Where contracts with customers have minimum volume commitments over the term of the agreement and the customer is not able
to fulfil minimum volume commitment, the Group is entitled to charge a penalty fee of the shortfall volume. This gives rise to variable
consideration. To estimate the variable consideration to which it is entitled, the Group applies the ‘expected value method’.
KEY ESTIMATE AND JUDGEMENT
The Group estimates variable consideration to be included in the transaction price for the sale of products with rebates and market
contribution.
The Group estimates variable consideration to be included in the transaction price of the canning service with minimum volume
commitments.
The Group estimates the expected volume based on customer forecasts and accumulated purchases to date.
B3. EXPENSES
2024
$
2023
$
Cost of sales
Production costs
61,598,495
42,195,685
Net inventories provision/(reversal)
(20,592,319)
27,270,491
Total
41,006,176
69,466,176
Included in administrative and other expenses are the following:
Listing and registry fees
399,217
404,723
Accountancy and legal fees
4,905,082
3,802,567
Insurance
1,250,479
1,050,770
Travel costs
787,526
1,235,747
Consultancy fee
2,936,851
7,090,641
Occupancy costs
850,853
661,680
Depreciation and amortisation
878,634
2,320,272
Implementation of Enterprise resource planning (ERP)
980,027
1,079,076
Total
12,988,669
17,645,476
Employee costs
Wages and salaries
13,198,871
13,130,723
Superannuation
1,042,756
1,171,378
Share based payments
321,967
601,439
Total
14,563,594
14,903,540
Finance costs
Interest expense
187,412
324,996
Interest expense on lease liabilities
53,972
127,474
Total
241,384
452,470
B4. LOSS PER SHARE (LPS)
2024
$
2023
$
Loss attributable to the Group used in calculating basic and diluted LPS
(20,989,058)
(108,352,842)
Weighted average number of ordinary shares for basic LPS
832,289,946
739,265,049
Basic LPS (dollars)
(0.03)
(0.15)
Diluted LPS (dollars)
(0.03)
(0.15)
RECOGNITION AND MEASUREMENT
Basic LPS is calculated as net loss attributable to the Group divided by the weighted average number of ordinary shares outstanding
during the financial year.
Diluted LPS adjusts the figures used in the determination of basic earnings per share to take into account the after-income tax effect
of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
40
41
For personal use only
B5. INCOME TAXES
2024
$
2023
$
Consolidated profit or loss
Income tax benefit/(expense)
Current tax
-
-
Income tax benefit/(expense) reported in the statement of profit or loss
(500,072)
(868,303)
Numerical reconciliation of income tax benefit and tax at the statutory rate
Accounting loss before income tax benefit
20,488,985
107,484,539
Income tax benefit calculated at 30% (2023 30%)
6,146,696
32,245,362
Effect of different tax rates of subsidiary operating in other jurisdiction11
-
Tax effect of amounts not taxable in calculating income tax benefit
Share based payments
(96,590)
(180,432)
Non-deductible costs
(35,602)
(98,443)
Impairment
-
(10,849,524)
Income tax losses not recognised
(11,832,932)
(12,038,628)
Temporary difference not recognised
5,318,356
(9,946,638)
Income tax benefits/(expense)
(500,072)
(868,303)
Deferred tax assets/(liabilities) arise from the following:
2024
Opening Balance
Recognised in
Profit or Loss
Recognised
in equity
Closing Balance
Trade and other receivables
-
(2,837,901)
-
(2,837,901)
Inventories
-
(1,364,407)
-
(1,364,407)
Intangible assets
(361,434)
721,867
-
360,433
Plant and equipment
(226,914)
133,636
-
(93,278)
Right of use assets
(579,073)
979,693
-
400,620
Lease liabilities
-
(514,127)
-
(514,127)
Trade and other payables
-
(86,129)
-
(86,129)
Provisions
422,270
(825,856)
-
(403,586)
Carried forward tax losses
-
4,990,629
-
4,990,629
Capital raising costs
745,151
(1,697,478)
500,072
(452,254)
-
(500,072)
500,072
-
2023
Opening Balance
Recognised in
Profit or Loss
Recognised
in equity
Closing Balance
Trade and other receivables
420,814
(420,814)
-
-
Inventories
291,427
(291,427)
-
-
Intangible assets
(11,540,569)
11,179,135
-
(361,434)
Plant and equipment
(201,689)
(25,225)
-
(226,914)
Right of use assets
(339,298)
(239,775)
-
(579,073)
Lease liabilities
494,734
(494,734)
-
-
Trade and other payables
114,387
(114,387)
-
-
Provisions
306,873
115,397
-
422,270
Carried forward tax losses
10,020,424
(10,020,424)
-
-
Capital raising costs
432,897
(556,049)
868,303
745,151
-
(868,303)
868,303
-
11
New Zealand statutory tax rate is 28%. China statutory tax rate is 2.5% as the taxable income is less than RMB 1 million. USA statutory tax rate is 21%.
The income tax expense or benefit for the year is the tax payable on that year’s taxable income based on the applicable income tax
rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused
tax losses and the adjustment recognised for prior years, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable
profits; or
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, the timing of the
reversal can be controlled, and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset only where
there is a legally enforceable right to offset deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
Bubs Australia Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group (‘TCG’) and Bubs Australia
Limited is the head entity of the tax consolidated group.
KEY ESTIMATE AND JUDGEMENT
Recovery of deferred tax assets
Judgement is required to be made by the Group in assessing whether deferred tax assets and certain deferred tax liabilities are
recognised on the consolidated statement of financial position. As detailed above, in the year ended 30 June 2024, Bubs has
recognised deferred tax assets up to the carrying amount of deferred tax liabilities. Deferred tax assets are recognised for unused
tax losses, unused tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be
available against which they can be used. Probable is considered more likely than not.
Judgement is required when deferred tax assets are reviewed at each reporting date. Deferred tax assets may be reduced to the extent
that it is no longer probable that future taxable profits will be available.
Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend
on estimates of future sales, operating costs, capital expenditure, dividends and other capital management transactions. Judgements
are also required about the application of income tax legislation.
Changes in expectations for the future performance of the business may impact the amount of deferred tax assets recoverable and
recognised on the statement of financial position and the amount of other tax losses and temporary differences not yet recognised.
At 30 June 2024, the Group had $ 45,927,048 (2023: $39,412,473) of unrecognised tax losses.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
42
43
For personal use only
C. OPERATING ASSETS AND LIABILITIES
This section provides details of the Group’s operating assets, and liabilities incurred as a result of trading activities, used to generate
the Group’s performance.
C1. TRADE AND OTHER RECEIVABLES
30/06/2024
$
30/06/2023
$
Trade debtors
15,256,411
14,373,217
Allowance for credit losses
(7,051,338)
(6,776,007)
Other receivables
1,118,167
266,982
Receivable from associates
-
50,395
Total
9,323,240
7,914,587
The following table details trade receivables at risk based on the Group’s provision matrix.
30/06/2024
Not past
due
<30 days
31–60
days
61–90 days
91–120 days
>120 days
Total
Estimated total gross carrying
amount at default
170,207
92,464
25,682
117,243
12,350
6,633,392
7,051,338
Provision for credit losses
7,051,338
30/06/2023
Not past
due
<30 days
31–60
days
61–90 days
91- 120 days
>120 days
Total
Estimated total gross carrying
amount at default
127,600
13,455
35,611
850,598
1,066,149
4,682,594
6,776,007
Provision for credit losses
6,776,007
The Group’s exposure to credit risks related to trade and other receivables are disclosed in Note D2 Financial risk management.
RECOGNITION AND MEASUREMENT
The Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss,
transaction costs. Trade receivables are measured at the transaction price determined under AASB 15 Revenue from Contracts with
Customers. Further details are disclosed in Note B2 Revenue.
Financial instruments are subsequently measured at fair value through profit or loss (FVPL), amortised cost, or fair value through
other comprehensive income (FVOCI). The classification is based on two criteria: the Group’s business model for managing the assets;
and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal amount
outstanding (the ‘SPPI criterion’).
The Group’s trade and other receivables and financial assets are measured at amortised cost that are held within a business model
with the objective of holding the financial assets to collect contractual cash flows that meet the SPPI criterion.
The Group adopted a forward-looking expected credit loss (ECL) approach for impairment losses for ECLs for financial assets not held
at FVPL.
ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that
the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate.
KEY ESTIMATE AND JUDGEMENT
For trade receivables, the Group has applied the standard simplified approach and has calculated ECLs based on lifetime expected
credit losses. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment. The Group considers a financial asset in default when
internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before
considering any credit enhancements held by the Group.
C2. INVENTORIES
30/06/2024
$
30/06/2023
$
Raw materials
15,714,241
13,911,736
Finished goods
12,511,705
6,855,756
Total
28,225,946
20,767,492
The amount of inventory that was written off during the year was $243,739 (2023: $1,129,736).
Having regard to the inventories on hand at 30 June 2024, the expiry dates of the inventory and sales forecasts, management has
recognised an inventory obsolescence provision of $4,634,605 (2023: $25,226,924). The cost of inventories recognised as an expense
during the year was $ 61,598,495 (2023: $42,195,685).
RECOGNITION AND MEASUREMENT
Inventories are valued at the lower of cost and net realisable value. Cost is calculated using the standard costing method (2023:
weighted average cost). The change in costing methodology did not have a material impact on the opening inventory balances
therefore a restatement of prior year balances is not required.
Net realisable value represents the estimated selling price in the ordinary course of business, less estimated costs of completion and
the estimated costs necessary to make the sale.
KEY ESTIMATES AND JUDGEMENTS
Recovery of inventory
Estimation of net realisable value includes assessment of expected future turnover of inventory held for sale and the expected future
selling price of such inventory. Management assessed the recoverability of inventories based on changes in trading and economic
conditions, and changes in country specific regulations that may impact these estimations in future periods. This expected turnover
method is also used to determine the realisable use of ingredients, including powder.
C3. OTHER ASSETS
30/06/2024
$
30/06/2023
$
Current
Prepayments and other assets
1,200,147
615,777
Deposits paid
1,187,604
490,656
Prepayment for purchase of raw materials
2,160,284
1,518,047
4,548,035
2,624,480
Non-current
558,442
549,145
Security bond
558,442
549,145
RECOGNITION AND MEASUREMENT
Prepayment for purchase of raw materials
Prepayment for purchase of raw materials represent payments for purchases of raw materials prior to ownership passing to the
Group.
Deposits paid
Deposits paid represent payments to suppliers in relation to goods not received or services not rendered. These deposits are
refundable to the Group.
Security bond
Security bond represents payments to the landlord securing the obligations of the Group under the lease contract of the Deloraine
Dairy site.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
44
45
For personal use only
C4. PLANT AND EQUIPMENT
RECOGNITION AND MEASUREMENT
Building and
improvements
$
Production
equipment
$
Motor
Vehicle
$
Office
equipment
$
Total
$
Cost
As at 30 June 2022
1,635,735
3,846,370
25,000
320,882
5,827,989
Additions
71,968
238,546
-
183,686
494,199
Disposals
-
(6,557)
(25,000)
(3,150)
(34,707)
As at 30 June 2023
1,707,703
4,078,359
-
501,418
6,287,481
Additions
43,984
14,660
-
115,596
174,241
Disposals
(16,454)
(32,552)
-
(94,282)
(143,288)
As at 30 June 2024
1,735,233
4,060,467
-
522,732
6,318,434
Accumulated depreciation and impairment
As at 30 June 2022
(379,731)
(955,360)
(8,283)
(117,761)
(1,461,134)
Depreciation
(90,625)
(232,556)
(264)
(78,540)
(401,985)
Disposals
-
5,532
8,547
-
14,079
As at 30 June 2023
(470,356)
(1,182,384)
-
(196,301)
(1,849,041)
Depreciation
(106,128)
(268,627)
-
(183,659)
(558,414)
Disposals
16,454
8,978
-
101,959
127,391
As at 30 June 2024
(560,030)
(1,442,033)
-
(278,001)
(2,280,064)
Net book value
As at 30 June 2023
1,237,348
2,895,975
-
305,117
4,438,440
As at 30 June 2024
1,175,203
2,618,434
-
244,731
4,038,370
Plant and equipment are stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure
that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their expected
useful lives as follows:
Building and improvements 15–20 years
Production equipment
12–19 years
Motor Vehicle
10 years
Office equipment 4 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date. An item
of plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses
between the carrying amount and the disposal proceeds are taken to profit or loss.
C5. INTANGIBLE ASSETS
Goodwill
Brand Name
Patents,
trademarks &
Software
Other
Intangibles
Total
Cost
As at 30 June 2022
90,614,673
4,691,634
107,110
47,096,599
142,510,016
Additions
-
-
8,970
-
8,970
Disposals
-
-
-
-
-
As at 30 June 2023
90,614,673
4,691,634
116,080
47,096,599
142,518,986
Additions
-
-
15,600
-
15,600
Disposals
-
-
(715)
-
(715)
As at 30 June 2024
90,614,673
4,691,634
130,965
47,096,599
142,533,871
Accumulated depreciation and impairment
As at 30 June 2022
(90,040,602)
-
(61,570)
(13,363,447)
(103,465,619)
Amortisation
-
-
(15,436)
(1,668,072)
(1,683,508)
Impairment
-
(4,100,000)
-
(32,065,081)
(36,165,080)
Disposals
-
-
-
-
-
As at 30 June 2023
(90,040,602)
(4,100,000)
(77,006)
(47,096,599)
(141,314,207)
Amortisation
-
-
(18,935)
-
(18,935)
Disposals
-
-
715
715
As at 30 June 2024
(90,040,602)
(4,100,000)
(95,226)
(47,096,599)
(141,332,427)
Net book value
As at 30 June 2023
574,071
591,634
39,074
-
1,204,780
As at 30 June 2024
574,071
591,634
35,739
-
1,201,444
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
46
47
For personal use only
Goodwill
Goodwill is recognised on business acquisitions, representing the excess of the fair value of the consideration transferred over the
Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the business recognised at the
date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated
impairment losses. For the purposes of impairment testing, goodwill acquired in a business combination is, from the date of
acquisition, allocated to the Group’s cash-generating units that are expected to benefit from the synergies of the combination.
Brand names
Brand names in Infant Food Co and Nulac Foods CGUs are considered to have an indefinite life and are not amortised.
As at 30 June 2024, these assets were tested for impairment.
Other Intangibles
Included in Other Intangibles are:
• CNCA (Certification and Accreditation Administration of the People’s Republic of China) licence held by Deloraine Dairy. The
licence was fully impaired in FY23.
• Customer contract/lists acquired in a business combination that were fully impaired in FY23.
IMPAIRMENT TESTING FOR CASH GENERATING UNITS (CGUS) INCLUDING GOODWILL
Goodwill and brand names allocation
For the purposes of impairment testing, goodwill and other intangible assets with an indefinite useful life are allocated to the Group’s
CGUs which represent the lowest level within the Group at which goodwill and brand names are monitored by internal management
and are no higher than an operating segment.
Goodwill and intangible assets with an indefinite useful life are allocated to the Group’s CGUs as follows:
2024
$
2023
$
Infant Food Co
1,165,705
1,165,705
Nulac Foods
-
-
Deloraine Dairy
-
-
Total
1,165,705
1,165,705
RECOGNITION AND MEASUREMENT
Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. An asset’s recoverable amount is the higher of an assets or CGU’s fair value less costs of
disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
Nulac and DLD CGUs do not carry any goodwill or indefinite life intangible assets as at 30 June 2024 and there are no material
indicators of impairment that would necessitate further impairment testing at year end.
For the Infant Food Co CGU, the recoverable amount has been calculated based on the value in use, using a discounted cash flow
(DCF) approach. The DCF uses post-tax cash flow projections that are based on the most recent budget/forecast and growth through
the forecast period of 5 years. Discount rates has been updated to reflect the current market conditions.
In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
Infant Food Co
30/06/2024
$
30/06/2023
$
Compound annual growth rate in revenue (years 1–5)
6.25%
4.72%
Compound annual growth rate in expenses (years 1–5)
(2.93%)
(0.98%)
Discount rate (post tax)
9.76%
12.88%
Discount rate (pre-tax)
13.94%
18.40%
Terminal growth
2.50%
2.50%
Headroom
$169.8m
$30.3m
The impairment assessment concluded that the recoverable amount exceeds the carrying amount for The Infant Food Co CGU at 30
June 2024. As a result, no impairment of goodwill and intangible assets has been recognised for this CGU.
SENSITIVITY ANALYSIS
The calculation of value in use for the CGUs is most sensitive to the following assumptions:
• Revenue growth
• Expense growth
Revenue Growth
Revenue projections have been constructed with reference to the FY24 results and five-year forward-looking plans with the earlier
years being estimated through specific volume assumptions based on known opportunities, while years thereafter are adjusted
for performance trends across the particular regions. The five-year revenue growth focus assumes that full FDA registration will be
obtained in FY25 for the US market. Should the registration be unsuccessful and the shortfall in revenue cannot be substantiated by
other opportunities, further impairment on intangible and other assets may be required.
Expenses
Management forecasts operating costs based on the current structure of the business, adjusting for inflationary increases but not
reflecting future restructuring and cost-saving measures.
Having regard to the current business performance, holding all other assumptions constant, Management has determined that a 10%
compound annual decrease in revenue or a 10% compound annual increase to expenses would not result in an impairment loss.
C6. TRADE AND OTHER PAYABLES
30/06/2024
$
30/06/2023
$
Trade payables
11,606,070
11,653,901
Other payables
500,950
433,038
Customer deposits
5,613,221
4,545,453
Payable to associates
-
41,372
Total
17,720,241
16,673,764
RECOGNITION AND MEASUREMENT
Trade and other payables
Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost due to their short-term
nature, and they are not discounted. They represent liabilities recognised when the Group becomes obligated to make future
payments resulting from the purchase of goods and services. The amounts are unsecured.
The carrying value of trade and other payables approximates their fair value.
Customer Deposits
Customer deposits are cash considerations received from customers, for which the Group has not yet provided goods or
services in exchange
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
48
49
For personal use only
C7. LEASES
RIGHT OF USE ASSETS
Buildings
$
Equipment
$
Total
$
Cost
As at 30 June 2022
3,714,733
76,042
3,790,775
Additions
76,868
39,343
116,211
As at 30 June 2023
3,791,601
115,385
3,906,986
Additions
-
-
-
As at 30 June 2024
3,791,601
115,385
3,906,986
Accumulated depreciation and impairment
As at 30 June 2022
(1,335,700)
(54,344)
(1,390,044)
Depreciation
(565,818)
(20,880)
(586,698)
As at 30 June 2023
(1,901,518)
(75,224)
(1,976,742)
Depreciation
(569,431)
(25,413)
(594,844)
As at 30 June 2024
(2,470,949)
(100,637)
(2,571,586)
Net book value
As at 30 June 2023
1,890,083
40,161
1,930,244
As at 30 June 2024
1,320,652
14,748
1,335,400
The Group leases several assets including buildings and IT equipment. The lease terms range from 2–10 years (2023: 1.2–10 years).
Extension options are included in a number of leases across the group. These are used to maximise operational flexibility in terms of
managing the assets used in the group’s operations. The majority of extension options held are exercisable only by the group and not
by the respective lessor.
AMOUNTS RECOGNISED IN PROFIT AND LOSS
30/06/2024
$
30/06/2023
$
Depreciation expense on right-of-use assets
594,844
586,699
Interest expense on lease liabilities
53,972
127,474
Expense relating to short-term leases
407,396
70,103
The total cash outflow for leases amount to $692,130 (2023: $512,963).
LEASE LIABILITIES
30/06/2024
$
30/06/2023
$
Current
727,432
679,239
Non-current
986,325
1,726,648
1,713,757
2,405,887
Maturity analysis
Year 1
806,050
791,602
Year 2
681,537
806,050
Year 3
298,515
681,537
Year 4
1,496
298,515
Year 5
-
1,496
Onwards
-
-
1,787,598
2,579,200
Less Interest
73,841
173,312
Total
1,713,757
2,405,887
The Group does not face a significant liquidity risk with regard to its lease liabilities. All lease obligations are denominated in
Australian dollars.
RECOGNITION AND MEASUREMENT
Applying AASB 16 Leases, for all leases, the Group:
• Recognises right-of-use assets and lease liabilities in the consolidated statement of financial position, initially measured at the
present value of the future lease payments, with the right-of-use asset adjusted by the amount of any prepaid or accrued lease
payments.
• Recognises depreciation of right-of-use assets and interest on lease liabilities in the consolidated statement of profit or loss.
• Separates the total amount of cash paid into a principal portion (presented within financing activities) and interest (presented
within financing activities) in the consolidated statement of cash flows.
• Lease incentives (e.g., rent free period) are recognised as part of the measurement of the right-of-use assets and lease liabilities
Under AASB 16, right-of-use assets are tested for impairment in accordance with AASB 136 Impairment of Assets.
For short-term leases (lease term of 12 months or less) and leases of low-value assets (which includes tablets and personal computers,
small items of office furniture and telephones), the Group has opted to recognise a lease expense on a straight-line basis as permitted
by AASB 16. This expense is presented within ‘Administrative and other costs’ in the Consolidated Statement of Profit or Loss and Other
Comprehensive Income.
The Group has used the following practical expedients when applying the cumulative catch-up approach to leases previously
classified as operating leases applying AASB 16:
• The Group has applied a single discount rate to a portfolio of leases with reasonably similar characteristics.
• The Group has elected not to recognise right-of-use assets and lease liabilities to leases for which the lease term ends within 12
months of the date of initial application.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
50
51
For personal use only
C8. BORROWINGS
30/06/2024
$
30/06/2023
$
Current
5,283,866
2,000,000
5,283,866
2,000,000
The Group has a facility with National Australia Bank. Total limit of the facility is $10 million (2022: $10 million) with $5 million drawn as
at 30 June 2024 (2023: $2 million). This security is categorised as a level 2 security within the fair value hierarchy.
Post 30 June 2024, the facility has been renewed for a further 12 months to 29 August 2025, refer to Going concern disclosures in Note A.
RECOGNITION AND MEASUREMENT
Borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently
measured at amortised cost using the effective interest method. The carrying value of borrowings approximates their fair value due to
relatively short-term maturity.
C9. PROVISIONS
30/06/2024
$
30/06/2023
$
Current
Annual leave and long service leave
766,823
951,796
Other provisions
4,029,110
1,487,173
4,795,933
2,438,969
Non-Current
Long service leave
248,433
162,176
Make good provision
117,758
113,276
366,191
275,452
RECOGNITION AND MEASUREMENT
Annual leave and long service leave
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is
probable that settlement will be required, and they are capable of being measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12 months are measured at their nominal values using
the remuneration rate expected to apply at the time of settlement. Provisions made in respect of employee benefits which are not
expected to be settled within 12 months are measured as the present value of the estimated future cash outflows to be made by the
Group in respect of services provided by employees up to the reporting date.
Other provisions
Provisions made for employee retention bonuses and other financial obligations including legal, audit and consulting fees and credit
notes to customers.
D. CAPITAL AND FINANCIAL RISK MANAGEMENT
This section outlines how the Group manages its capital structure and its exposure to financial risk and provides details of its balance
sheet liquidity and access to financing facilities.
D1. CAPITAL MANAGEMENT
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern so that in due course it can
provide returns for stakeholders and maintain an optimum capital structure.
In order to maintain or adjust the capital structure, the Group manages the level of debt such that it remains prudent and facilitates
the execution of the operational plan and provides flexibility for growth.
D2. FINANCIAL RISK MANAGEMENT
Exposure to credit risk, foreign currency risk and liquidity risk arises in the normal course of the Group’s business.
The Group’s financial risk management processes and procedures seek to minimise the potential adverse impacts that may arise from
the unpredictability of financial markets.
Policies and procedures are reviewed periodically to reflect both changes in market conditions and changes in the nature and volume
of Group activities.
As at 30 June 2024 there were no derivative financial instruments in place. Specific risk management objectives and policies are set
out below.
The Group uses various methods to measure different types of risk exposures. These methods include ageing analysis for credit risk,
and sensitivity analysis in the case of foreign exchange risks and equity price risk.
CREDIT RISK MANAGEMENT
Credit risk is the risk of financial loss to the Group if a customer or the counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Group’s receivables from customers.
30/06/2024
$
30/06/2023
$
Cash and cash equivalent (counterparty risk)
17,523,474
26,052,523
Trade receivables (customer credit risk)
8,205,074
7,647,604
Other receivables
1,118,166
266,983
Prepayment for purchase of raw materials
2,160,284
1,518,047
Deposits paid
1,746,046
1,039,801
30,753,044
36,524,958
Counterparty risk
At balance date, the Group’s bank accounts were held with National Australia Bank Limited, Australia and New Zealand Bank Limited,
Commonwealth Bank of Australia and Bank of the West. The Group does not have any other concentrations of counterparty credit risk.
Customer credit risk
The Group’s exposure to customer credit risk is influenced mainly by the individual characteristics of each customer. The majority of
sales are to major retailers with established creditworthiness and minimum levels of default.
New customers are analysed individually for creditworthiness, taking into account credit ratings where available, financial position,
previous trading experience and other factors.
In monitoring customer credit risk, customers are assessed individually by their debtor ageing profile. Monitoring of receivable
balances on an ongoing basis minimises the exposure to bad debts.
For trade receivables and contract assets, the Group has applied the standard’s simplified approach and has calculated ECLs based on
lifetime expected credit losses.
The Group considers a financial asset in default when internal or external information indicates that the Group is unlikely to receive
the outstanding contractual amounts in full before considering any credit enhancements held by the Group.
Other credit risk
The Group is exposed to related party credit risk and other credit risk. In monitoring related party credit risk and other credit risk, the
related parties and counterparties are analysed individually for creditworthiness, taking into account credit ratings where available,
financial position and other factors.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
52
53
For personal use only
Ageing of trade receivables at the reporting date:
30/06/2024
$
30/06/2023
$
Neither past due nor default
2,268,118
5,130,004
Past due but not impaired
Past due up to 30 days
3,285,643
550,358
Past due 31 to 60 days
437,735
1,881,310
Past due 61 to 90 days
694,811
85,932
Past due more than 90 days
1,518,767
-
8,205,074
7,647,604
Movement in allowance for doubtful debts
30/06/2024
$
30/06/2023
$
Allowance of doubtful debts
Balance at beginning of the year
6,776,007
21,752
Amount charged to the statement of profit or loss and other comprehensive income
880,529
(21,752)
Provision provided/(utilised)
(605,198)
6,776,007
7,051,338
6,776,007
Market risk
Market risk is the risk that changes in market prices will affect the Group’s income or the value of its holdings in financial instruments.
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates to the AUD dollar.
Market risk exposures are monitored by management on an ongoing basis and there has been no change during the year to the
Group’s exposure to market risks or the manner in which it manages and measures risk.
FOREIGN CURRENCY RISK MANAGEMENT
The Group enters into the transactions in Australia, New Zealand, China, USA and Europe and is exposed to currency risk arising from
movements in the currencies of those countries against the AUD dollar. Expressed in AUD dollars, the table below indicates material
exposure and sensitivity to movements in exchange rates on the profit or loss of the Group based on closing exchange rates as at 30
June, applied to the Group’s financial assets/(liabilities) at 30 June.
Exchange rates and assets and liabilities held in foreign currencies will fluctuate over the course of normal operations. The analysis is
performed consistently from year to year.
Net exposure on reporting date
(Payable)/Receivable
Impact on pre-tax profit/(loss)
+10%
-10%
2024
$
$
$
Movement on exchange rate
NZ Dollar
(252,672)
22,970
(28,075)
USD Dollar
2,046,036
(186,003)
227,337
RMB Dollar
(131,780)
11,980
(14,642)
Euro Dollar
(51,025)
4,639
(5,669)
Net Exposure
1,610,559
(146,414)
178,951
Net exposure on reporting date
(Payable)/Receivable
Impact on pre-tax profit/(loss)
+10%
-10%
2023
$
$
$
Movement on exchange rate
NZ Dollar
121,606
(11,055)
13,512
USD Dollar
668,542
(60,777)
74,282
RMB Dollar
(109,388)
9,944
(12,154)
Euro Dollar
(43,407)
3,946
(4,823)
Net Exposure
637,353
(57,942)
70,817
INTEREST RISK MANAGEMENT
The Group’s main interest rate risk arises from borrowings, which expose the Group to cash flow interest rate risk. The risk is
considered immaterial.
LIQUIDITY RISK MANAGEMENT
Liquidity risk is the risk that the Group will be unable to meet its obligations as they fall due. This risk is managed by establishing a
target minimum liquidity level, ensuring that ongoing commitments are managed with respect to forecast available cash inflows.
The Group holds significant cash reserves which enable it to meet its obligations as they fall due, and to support operations in the
event of unanticipated external events.
The Group has one facility with $5,000,000 (2023: $2,000,000) drawn at 30 June 2024. Total limit of facility is $10,000,000. Post 30
June 2024, the facility has been renewed for a further 12 months to 29 August 2025, refer to Going concern disclosures in Note A.
Contractual undiscounted maturities of financial liabilities:
Contractual cash flows
2024
Carrying
amount
Total
2 months
or less
2-12 months
1-2 years
3-5 years
More
than 5
years
Non-derivative financial liabilities
Lease liability
1,704,212
1,787,597
134,341
671,708
681,537
300,011
-
Trade and other payables
17,720,241
17,720,241
17,720,241
-
-
-
-
Borrowings
5,283,866
5,283,866
-
5,283,866
-
-
-
Payable to associates
-
-
-
-
-
-
-
Net Exposure
24,708,319
24,791,704
17,854,582
5,955,574
681,537
300,011
-
Contractual cash flows
2023
Carrying
amount
Total
2 months
or less
2-12 months
1-2 years
3-5 years
More
than 5
years
Non-derivative financial liabilities
Lease liability
2,458,889
2,579,199
131,933
659,668
806,050
981,548
-
Trade and other payables
16,632,392
16,632,392
16,632,392
-
-
-
-
Borrowings
2,000,000
2,000,000
-
2,000,000
-
-
-
Payable to associates
41,372
41,372
-
41,372
-
-
-
Net Exposure
21,132,653
21,252,963
16,764,325
2,701,040
806,050
981,548
-
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
54
55
For personal use only
D3. CASH AND CASH EQUIVALENTS
30/06/2024
$
30/06/2023
$
Cash at bank
17,523,474
26,052,523
17,523,474
26,052,523
Interest is earned at floating rates based on daily bank deposit rates.
RECOGNITION AND MEASUREMENT
Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with
an original maturity of three months or less that are readily convertible to known amounts of cash, and which are subject to an
insignificant risk of changes in value. The carrying value of cash and cash equivalents approximates their fair value.
D4. CASH FLOW INFORMATION
Reconciliation of after-tax profit with net cash flows from operating activities
30/06/2024
$
30/06/2023
$
(Loss) after income tax expense for the year
(20,989,058)
(108,352,842)
Income tax benefit/(expense)
500,072
868,303
Share-based payments
321,967
601,439
Impairment
-
36,165,080
Depreciation and amortisation
1,173,363
2,721,938
Impairment of Investments in Associates
116,907
-
Net foreign exchange loss
(330,577)
(249,561)
Loss on disposal of plant and equipment
23,181
-
Decrease/(increase) in trade and other receivables
(1,408,653)
16,564,978
Decrease/(increase) in inventories
(7,458,454)
7,291,010
Decrease/(increase) in other assets
(1,648,986)
7,196,515
Increase/(decrease) in trade and other payables
924,833
(10,739,006)
Increase/ (decrease) in provisions
2,447,705
1,438,910
Net cash outflow from operating activities
(26,327,700)
(46,493,236)
D5. SHARE CAPITAL
30/06/2024
30/06/2023
Shares
$
Shares
$
Movement in share capital
Balance at the beginning of the year
751,357,408
340,568,767
612,775,580
274,851,116
Exercise of options
-
-
4,770,810
477,081
Placement of Shares
139,006,000
17,375,750
121,193,439
63,020,588
Share Issue transaction costs (net of tax)
-
(1,186,601)
-
(2,026,039)
Share issue to employees
1,766,630
-
3,075,959
-
Share issue to Willis Trading Limited
-
-
9,541,620
4,246,021
Balance at the end of the period
892,130,038
356,757,916
751,357,408
340,568,767
Fully paid ordinary shares carry one vote per share and carry the right to dividends. Fully paid ordinary shares have no par value.
Placement of shares
On 21 December 2023, the Group completed the institutional component of the $17.4million (before costs) equity raise at $0.125 per
fully paid ordinary share. The institutional component consisted of a placement of 112 million new shares to institutional investors
(“Institutional placement”), raising $14 million. The Group also completed the retail component (“Retail Entitlement Offer”) which raised
$3.4million at $0.125 per fully paid ordinary share in the Company. The company issued 27 million shares in this offer.
Share issue to employees
Exercise of share rights granted to employees and key management personnel in FY22 and valued at $0.595 per right and vested at the
date of release of the Group’s FY23 audited results to ASX. These rights did not have a performance hurdle and were exercised in FY24.
D6. SHARE BASED PAYMENTS RESERVE
30/06/2024
$
30/06/2023
$
Balance at the beginning of the year
11,934,065
11,332,626
Share based payment expense
321,967
601,439
Balance at the end of the period
12,256,032
11,934,065
SHARE BASED PAYMENTS RESERVE
The equity settled payments reserve is used to record the value of share-based payments.
D7. CONTINGENT LIABILITIES
From time-to-time entities within the Group are party to various legal actions as well as enquiries from regulators and government
bodies that have arisen in the normal course of business.
The Group is party to ongoing litigation with its former customers in China, Alice Trading Ltd and Willis Trading Ltd. The outcome of
the currently pending and potential future legal actions, of a legal nature cannot be predicted with certainty. Such matters can raise
complex legal issues and are subject to many uncertainties including but not limited to the facts and circumstances of each matter.
The Group has given consideration to such matters which are or may be subject to claims, penalties and litigation as of the reporting
date and are of the opinion that any litigation arising from such action would not have a material effect on the Group’s financial
performance.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
56
57
For personal use only
E. ASSOCIATES
BUBS BRAND MANAGEMENT SHANGHAI CO.LTD
On 6 May 2019, the Group and Beingmate Baby & Child Food Co., Ltd (‘Beingmate’) established a joint venture company Bubs Brand
Management Shanghai Co. Ltd (‘Bubs Brand Management’).
The Group contributed 49% of registered capital RMB 4,900,000 in FY20. In April 2021, the Group and the Beingmate reached an
agreement to wind up Bubs Brand Management and the liquidation process was completed on 15 January 2024.
During the current year, the associate’s loss after tax was $245,024 (2023: $32,653). The carrying amount of the associate of $116,907
(2023: $116,907) was written off during the year and recognised in administrative and other costs.
CAPELA DAIRY NUTRITION CO. PTY LTD
On 19 June 2020, Capela Dairy Nutrition Co. Pty Ltd (‘Capela Dairy’) was established and was a wholly owned subsidiary of the Group.
On 1 March 2021, 80% interest in Capela Dairy was transferred to Grand Products Investment Pty Ltd (‘Grand Products’) at a price of
$80. The Group is not required to contribute any working capital.
The associate does not have any assets and was carried at $Nil carrying amount as at 20 June 2024 (2023: $Nil)
RECOGNITION AND MEASUREMENT
The Group has determined that it does not have joint control of Bubs Brand Management and Capela Dairy, and they are therefore
outside the scope of AASB 11 Joint Arrangements. As such, The Group’s investment in both entities is accounted for as an associate
under AASB 128 Investments in Associates and Joint Ventures.
The financial results of the associates are used by the Group to apply the equity method. Where associates apply different accounting
policies to the Group, adjustments are made upon application of the equity method.
Investments in associates are carried in the consolidated Statement of Financial Position at cost plus post-acquisition changes in
the Group’s share of net assets of the associates, less impairment in value. The consolidated Statement of Profit or Loss reflects the
Group’s share of the results of operations of the associate.
Where there has been a change in the associates’ other comprehensive income or equity, the Group recognises its share of any
changes and discloses this, when applicable in the consolidated Statement of Other Comprehensive Income.
When the Group’s share of losses in an associate equal or exceeds its interest in the associate, including any unsecured long-term
receivables and loans, the Group does not recognise further losses unless it has incurred obligations or made payments on behalf of
the associate.
F. GROUP STRUCTURE
F1. PARENT ENTITY
Bubs Australia Limited is the ultimate parent of the Group.
F2. SUBSIDIARIES
Country of
incorporation
Principal Activity
Class of Shares
% Owned
2024
% Owned
2023
The Infant Food Holding Co. Pty Limited
Australia
Non-trading
Ordinary
100%
100%
The Infant Food Co. Pty Limited
Australia
Trading Company
Ordinary
100%
100%
Bubs IP Pty Ltd (formerly Bubs Australia
Pty Limited)
Australia
Holder of IP and
trademarks
Ordinary
100%
100%
Nulac Foods Pty Ltd
Australia
Trading Company
Ordinary
100%
100%
Bubs New Zealand Pty Limited
New Zealand
Trading Company
Ordinary
100%
100%
Australia Deloraine Dairy Pty Ltd
Australia
Trading Company
Ordinary
100%
100%
Aussie Bubs Inc
USA
Trading Company
Ordinary
100%
100%
Bubs (Shanghai) Trading Co. Ltd
China
Non-trading
Ordinary
100%
100%
F3. PARENT ENTITY INFORMATION
Set out below is the supplementary information of the legal parent entity.
2024
$
2023
$
Result of parent entity
Profit/(Loss) for the year
(5,371,743)
(41,851,677)
Other comprehensive income
-
-
Total comprehensive loss for the year
(5,371,743)
(41,851,677)
Financial position of parent entity at year end
Current assets
5,971,352
12,609,784
Total assets
107,903,652
84,994,639
Current liabilities
(660,439)
380,722
Total liabilities
(8,307,153)
380,722
Net assets
99,596,499
84,613,918
Issued share capital
384,756,709
364,321,539
Reserves
12,231,989
13,287,041
Accumulated losses
(297,392,199)
(292,994,662)
Total Equity
99,596,499
84,613 ,918
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
58
59
For personal use only
OTHER DISCLOSURES
G1. RELATED PARTY TRANSACTIONS
KEY MANAGEMENT PERSONNEL
Key management personnel are defined as those persons having significant authority and responsibility for planning, directing and
controlling the activities of the Group.
Key management personnel compensation:
Key management personnel disclosures
30/06/2024
$
30/06/2023
$
Short-term employee benefits
1,849,055
2,393,457
Post-employment benefits
131,170
207,148
Long-term benefits
14,463
26,202
Share-based payments
296,127
(20,367)
Key management personnel disclosures
2,290,815
2,606,440
TRANSACTIONS WITH RELATED PARTIES
The following table provides details of transactions that were entered into for the relevant financial year.
Sales to related
parties
Purchases from
related parties
Amounts owed to
related parties
Amounts owed by
related parties
2023
2024
2023
2024
2023
2024
2023
2024
2023
Joint venture in which the parent is a venturer:
Bubs Brand Management Shanghai Co. Ltd
-
-
-
-
-
42,402
-
50,939
Total
-
-
-
-
-
42,402
-
50,939
All of the above transactions were considered to be on an arms’ length basis.
G2. SHARE BASED PAYMENTS
OPTIONS
No Share based payments expense was recognised in relation to options exercisable for the year ended 30 June 2024 (2023: $Nil)
The movements in the options are as follows:
Number of Options
Balance at 1 July 2022
10,741,620
Options granted to employees during the year (Exercisable at $0.65)
-
Options exercised during the year (Exercisable at $0.10)
(4,770,810)
Options lapsed during the year (Exercisable at $0.65)
(4,770,810)
Balance at 30 June 2023
1,200,000
Options granted to the employees during the year
-
Options exercised during the year
-
Options lapsed during the year (Exercisable at $0.65)
(1,200,000)
Balance at 30 June 2024
-
SHARE RIGHTS
Share based payments expense in relation to the share rights granted in FY24 is as follows:
30/06/2024
$
30/06/2023
$
Share rights issued to the CEO
321,967
(13,093)
Share rights issued to the Executive Chairman
-
(7,274)
Share rights issued to the KMP
-
326,017
Share rights issued to the employees
-
295,789
321,967
601,439
SHARE RIGHTS ISSUED TO CEO
On 31 August 2023, Bubs issued Employee Shares Rights to incoming Chief Executive Officer & Managing Director. The following
Rights were issued:
I. Sign-on retention rights (SOR Rights)
SOR Rights have “time-based” vesting conditions where period held determines the number of shares that will vest.
• 1,000,000 share rights vest on 30 June 2024, - These rights vested upon completion of the service period on 30 June 2024.
• 1,000,000 share rights vest on 30 June 2025,
• 1,000,000 share rights will vest on 30 June 2026.
The sign – on retention rights were approved by shareholders and granted on 14 November 2023 and valued at $0.17 per share.
II. Short-term incentive performance rights (STI Performance Rights)
STI Performance Rights are “performance-based” but have no market conditions. The number of rights that vest is dependent on
the following results at 30 June 2024:
• 2,591,716 share rights will be issued if the Group achieves the budgeted Trading EBITDA12 ; or
• 3,887,574 share rights will be issued if the Group achieves at least break-even in Trading EBITDA10 .
Due to the Trading EBITDA10 hurdles not being met, no STI Performance Rights were vested in FY24.
The performance rights were approved by shareholders and granted on 14 November 2023 and valued at $0.17 per share.
III. Long Term performance rights (LTI rights)
The purpose of a LTI is to focus the KMP’s efforts on the achievement of sustainable long-term shareholder value creation and the
long-term financial success of the Group.
The framework of the approach to the LTI award for the CEO/MD is set as below:
• No Rights will vest if the share price is less than $0.35 ;or
• 1,795,082 Rights will vest if the share price is at least $0.35 (Threshold LTI) ;or
• 3,590,164 Rights will vest if the share price is at least $0.50 (Target LTI) ;or
• 7,180,328 Rights will vest if the share price is at least $1.00 (Stretch LTI).
If the Company’s performance is between Threshold LTI and Target LTI, or Target LTI and Stretch LTI, a pro-rata amount of the LTI
Performance Rights will lapse so that the participant will receive a pro-rata amount of the relevant award on a straight-line basis.
The Company’s share price will be measured by reference to the average of the 5-day VWAP immediately after the date the
Company’s FY26 audited financial results are released to the ASX (Review Date).
The LTI rights were granted on 14 November 2023 and valued at $0.05. The rights will vest on 30 June 2026.
At 30 June 2024, 14,067,902 share rights were outstanding (FY23 2,226,856).
12
Trading EBITDA refers to the Earnings Before Interest, Tax, Depreciation, and Amortisation derived from the Company’s operating activities, excluding
significant one-off items as defined in the employment contract or determined by the Board. Trading EBITDA is a non -IFRS measure. Non-IFRS measures
are not subject to review or audit.
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
Notes to the Financial Statements
60
61
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RECOGNITION AND MEASUREMENT
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is
measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The
fair value of the options granted is measured using the Black-Scholes pricing model, taking into account the terms and conditions
upon which the options were granted. The amount recognised as an expense is adjusted over the period to reflect the number of
awards for which the related service and non-market vesting conditions are expected to be met but is not adjusted when market
performance conditions are not met.
Expected volatility has been based on an evaluation of the historical volatility of the Group’s share price, particularly over the historical
period commensurate with the expected term. The expected term of the instruments has been based on historical experience and
general option holder behaviour.
The fair value of share rights granted is recognised as an employee expense with a corresponding increase in equity. The fair value is
measured at share price on the grant date. The amount recognised as an expense is adjusted over the period to reflect the number
of awards for which the related service and non-market vesting conditions are expected to be met but is not adjusted when market
performance conditions are not met.
KEY ESTIMATE AND JUDGEMENT
Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which
depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the
valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them.
G3. AUDITORS REMUNERATION
During the financial year the following fees were paid or payable for services provided by the auditor of the Group:
2024
$
2023
$
Audit services
Audit or review of the financial statements
708,850
963,915
708,850
963,915
G4. SUBSEQUENT EVENTS
There have been no subsequent events since 30 June 2024 that have significantly affected or could significantly affect the reported
results from operations or financial position for the year then ended.
G5. ACCOUNTING POLICIES AND NEW ACCOUNTING STANDARDS
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Bubs Australia Limited (‘company’ or
‘parent entity’) as at 30 June 2024 and the results of all subsidiaries for the year then ended. Bubs Australia Limited and its subsidiaries
together are referred to in these financial statements as the ‘Group’.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct
the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are
deconsolidated from the date that control ceases.
Intercompany transactions, balances, and unrealised gains on transactions between entities in the Group are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. The accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without
the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book
value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest
in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises the fair value of the
consideration received and the fair value of any investment retained together with any gain or loss in profit or loss.
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2024
In the opinion of the directors of Bubs Australia Limited (the ‘Company’):
The consolidated financial statements and notes that are set out on pages 32 to 62 and the Remuneration report on pages
22 to 28 in the Directors’ report, are in accordance with the Corporations Act 2001, including:
• Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the financial year ended
on that date; and
• Complying with Australian Accounting Standards and the Corporations Regulations 2001; and
• There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
• The information disclosed in the consolidated entity disclosure statement is true and correct
The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the CEO, COO and CFO for
the financial year ended 30 June 2024.
The directors draw attention to Note A to the consolidated financial statements, which includes a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
Dated at Melbourne this 28th day of August 2024.
63
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Annual Report - 30 June 2024
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Independent Auditor’s Report
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
AS AT 30 JUNE 2024
Set out below is relevant information relating to entities that are consolidated in the consolidated financial statements at the end of
the financial year as required by the Corporation Acts 2001 (S. 295 (3A)(a)):
Body Corporate,
partnership, or
Trust
Place
incorporated
% held directly or
indirectly by the
Company in the Body
Corporate
Australia or
foreign tax
resident
Jurisdiction
for foreign
residents
Parent entity:
Bubs Australia Limited
Body Corporate
Australia
-
Australian
N/A
Subsidiaries:
The Infant Food Holding Co. Pty
Limited
Body Corporate
Australia
100%
Australian
N/A
The Infant Food Co. Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Australia Deloraine Dairy Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Bubs IP Pty Ltd (formerly Bubs
Australia Pty Limited)
Body Corporate
Australia
100%
Australian
N/A
Nulac Foods Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Bubs New Zealand Pty Limited
Body Corporate
New Zealand
100%
Foreign
New Zealand
Aussie Bubs Inc
Body Corporate
USA
100%
Foreign
USA
Bubs (Shanghai) Trading Co. Ltd
Body Corporate
China
100%
Foreign
China
BASIS OF PREPARATION
DETERMINATION OF TAX RESIDENCY
Section 295 (3A) of the Corporation Acts 2001 requires that the tax residency of each entity which is included in the Consolidated
Entity Disclosure Statement (CEDS) be disclosed. In the context of an entity which was an Australian resident. ‘Australian resident”
has the meaning provided in the Income Tax Assessment Act 1997.The determination of tax residency involves judgment as the
determination of tax residency is highly fact dependent and there are currently several different interpretations that could be adopted,
and which could give rise to a different conclusion on residency.
In determining tax residency, the consolidated entity has applied the following interpretations:
• Australian tax residency
The consolidated entity has applied current legislation and judicial precedent, including having regard to the Commissioner of
Taxation’s public guidance in Tax Ruling TR 2018/5.
• Foreign tax residency
The consolidated entity has applied current legislation and where available judicial precedent in the determination of foreign
tax residency. Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its
determination of tax residency to ensure applicable foreign tax legislation has been complied with.
Katrina Rathie
Chair
Melbourne
Dated: 28 August 2024
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
Independent Auditor’s Report
To the shareholders of Bubs Australia Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Bubs Australia Limited (the Company).
In our opinion, the accompanying Financial
Report of the Company gives a true and fair
view, including of the Group’s financial
position as at 30 June 2024 and of its
financial performance for the year then
ended,
in
accordance
with
the
Corporations Act 2001, in compliance with
Australian Accounting Standards and the
Corporations Regulations 2001.
The Financial Report comprises:
•
Consolidated Statement of Financial Position as at
30 June 2024;
•
Consolidated Statement of Profit or Loss and Other
Comprehensive Income, Consolidated Statement of
Changes in Equity, and Consolidated Statement of
Cash Flows for the year then ended;
•
Consolidated Entity Disclosure Statement and
accompanying
basis
of
preparation
as
at
30 June 2024;
•
Notes, including material accounting policies; and
•
Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year end or from time to time during
the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
Independent Auditor’s Report
65
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
64
For personal use only
Valuation of inventory ($28.2m)
Refer to Note C2 Inventories to the Financial Report
The key audit matter
How the matter was addressed in our audit
Valuation of inventory is a key audit matter due
to the:
•
size of the inventory balance relative to the
Group’s financial position (42% of total
assets); and
•
extent of judgement involved by the Group
in determining the net recoverable value.
Such judgements may have a significant
impact on the Group’s provision and
therefore the overall carrying value of
inventories, necessitating additional audit
effort.
The most significant areas of judgement we
focused on was in assessing the Group’s:
•
expected selling price of inventory; and
•
future usage of inventory.
We involved our senior audit team members in
assessing this key audit matter.
Our procedures included:
•
assessing the appropriateness of inventory
valuation accounting policies applied by the
Group against the requirements of accounting
standards and our understanding of the
business;
•
obtaining an understanding of the Group’s
processes relating to inventory provisioning and
valuation;
•
attending a sample of year end inventory
counts across the Group including inventory
held at third-party locations. We observed the
Group’s process which included identifying
slow moving and potentially obsolete inventory,
and performed sample counts ourselves
comparing count results to the Group’s testing
the existence and condition of inventory;
•
assessing the integrity of the inventory
valuation
models
used,
including
the
mathematical accuracy of the underlying
calculations;
•
comparing a sample of individual inventory
carrying values against current selling prices (as
a proxy for expected selling price of inventory
and net realisable value) to identify individual
products at risk of being recorded in excess of
their net realisable value;
•
challenging the Group's judgements relating to
the provision for slow moving inventory
specifically the expected future usage of
inventory. We assessed recent demand for the
Group’s products in comparison to forecast
demand, ageing inventory and our knowledge
of the Group’s business strategy;
•
assessing the disclosures in the Group’s
financial report against the requirements of
accounting standards.
Material uncertainty related to going concern
We draw attention to Note A. Basis of preparation, “Going Concern basis of accounting” in the financial
report. The conditions disclosed in Note A. Basis of preparation, indicate a material uncertainty that
may cast significant doubt on the Group’s ability to continue as a going concern and, therefore, whether
it will realise its assets and discharge its liabilities in the normal course of business, and at the amounts
stated in the financial report. Our opinion is not modified in respect of this matter.
In concluding there is a material uncertainty related to going concern we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going
concern. This included:
•
Analysing the cash flow projections by:
•
Evaluating the underlying data used to generate the projections for consistency with other
information tested by us, our understanding of the Group’s intentions, and past results and
practices;
•
Assessing the planned levels of operating cash inflows and outflows, including capital
expenditures, for feasibility, timing and consistency of relationships to the Group’s historical
results, particularly in light of recent loss making operations, results since year end,
assumptions around attainment of the permanent U.S. Food and Drug Administration approval,
and our understanding of the business, industry and economic conditions of the Group;
•
Assessing significant non-routine forecast cash inflows and outflows including the impact of new
product development in key markets for feasibility, quantum and timing. We used our knowledge
of the client, its industry and current status of those initiatives to assess the level of associated
uncertainty;
•
Reading correspondence with existing financiers to understand the terms of current financing
arrangements and assessing the level of associated uncertainty; and
•
Evaluating the Group’s going concern disclosures in the financial report by comparing them to our
understanding of the matter, the events or conditions incorporated into the cash flow projection
assessment, the Group’s plans to address those events or conditions, and accounting standard
requirements. We specifically focused on the principal matters giving rise to the material
uncertainty.
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matter described below to be the Key Audit Matter.
Independent Auditor’s Report
67
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
66
For personal use only
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of
Bubs Australia Limited for the year ended
30 June 2024, complies with Section 300A
of the Corporations Act 2001.
Directors’ responsibilities
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration Report
in accordance with Section 300A of the Corporations Act
2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 13 to 23 of the Directors’ report for the year ended
30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
J. Carey
Partner
Melbourne
28 August 2024
Other Information
Other Information is financial and non-financial information in Bubs Australia Limited’s annual report
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Review of
Operations and Financial Results and the Director’s Report (including the Remuneration Report). The
Bubs Strategic Update, Year at a Glance, From our Chair and CEO, Risk Statement, and Performance
at a Glance are expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
and will not express an audit opinion or any form of assurance conclusion thereon, with the exception
of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information.
In doing so, we consider whether the Other Information is materially inconsistent with the Financial
Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report in accordance with the Corporations Act 2001, including giving a
true and fair view of the financial position and performance of the Group, and in compliance
with Australian Accounting Standards and the Corporations Regulations 2001;
• implementing necessary internal control to enable the preparation of a Financial Report in
accordance with the Corporations Act 2001, including giving a true and fair view of the financial
position and performance of the Group, and that is free from material misstatement, whether
due to fraud or error; and
• assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
• to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
• to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
22 to 28
Independent Auditor’s Report
69
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
68
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OTHER INFORMATION
1. SHAREHOLDING AS AT 23 AUGUST 2024
(a)
Distribution of shareholders
Range
Total holders
Units
% Units
1–10,000
18,038
56,740,811
6.36
10,001–20,000
2,737
41,086,676
4.61
20,001–30,000
1,234
31,360,017
3.52
30,001–50,000
1,174
47,345,375
5.31
50,001–100,000
1,105
81,827,371
9.17
100,001 Over
1,195
633,769,788
71.04
Rounding
-0.01
Total
25,483
892,130,038
100.00
(b)
Unmarketable parcels
Minimum Parcel Size
Holders
Units
Minimum $500.00 parcel at $0.1300 per unit
3,847
12,256
18,588,567
(c)
Voting rights
The voting rights attached to each class of equity security are as follows: Ordinary shares: each ordinary share is entitled to one vote
when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands
(d)
Top 20 shareholders – Ordinary Shares
Rank
Name
Units
1
C2 CAPITAL GLOBAL EXPORT-TO-CHINA FUND
76,288,510
2
CW RETAIL HOLDINGS PTY LTD
24,713,254
3
CITICORP NOMINEES PTY LIMITED
20,764,597
4
ATATURK INVESTMENTS PTY LTD
13,343,991
5
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
12,968,076
6
MONEX BOOM SECURITIES (HK) LTD
8,276,510
7
MR JIANLIN ZHOU
7,558,000
8
MR BENJAMIN PAUL LANDON
7,001,271
9
BNP PARIBAS NOMINEES PTY LTD
6,776,207
10
KEONG LIM PTY LIMITED
5,346,000
11
COSTA ASSET MANAGEMENT PTY LTD
5,200,000
12
LAVYA PTY LTD
4,800,666
13
BNP PARIBAS NOMINEES PTY LTD
4,778,012
14
STABLE CHARTER LIMITED
4,615,385
15
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
4,526,438
16
MR XIN FAN
4,300,000
17
FINCLEAR SERVICES PTY LTD
4,247,730
18
MS LIYING WANG
4,200,000
19
A Z GLOBAL CORPORATION PTY LTD
4,097,911
20
CARR FAMILY PTY LIMITED
4,041,841
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
227,844,399
Total Remaining Holders Balance
665,285,639
CORPORATE DIRECTORY
The name of the Company Secretary is Jay Stephenson
Registered office
23 Nina Link, Dandenong South, VIC 3175 Australia
Principal office
23 Nina Link, Dandenong South, VIC 3175 Australia
Registers of securities
Computer Investor Services Pty Ltd
Stock exchange listing
Quotation has been granted for all the ordinary shares of the Company on all member exchanges of the Australian Securities
Exchange Limited
Unquoted securities
Share rights over unissued shares - The Group has 14,067,902 share rights.
DIRECTORS
Steve Lin
Katrina Rathie
Paul Jensen
Reg Weine
COMPANY SECRETARY
Jay Stephenson
REGISTERED OFFICE AND DOMICILE
Bubs Australia Limited is a company limited by shares, incorporated and domiciled in Australia.
Its registered office is:
23 Nina Link, Dandenong South VIC 3175 Australia
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 2, Reserve Bank Building 45 St George’s Terrace Perth WA 6000
AUDITORS
KPMG
Tower Two, Collins Square 727 Collins Street
Melbourne VIC 3008
AUSTRALIAN STOCK EXCHANGE
ASX Code: BUB
Bubs Australia Limited and Controlled Entities
Annual Report - 30 June 2024
70
For personal use only
For personal use only