1
CLOVER CORPORATION
LIMITED
ABN 85 003 622 866
Annual Report
For the Year Ended
31 July 2024
2
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE DIRECTORY
Directors
Mr Rupert A Harrington
Non-Executive Director and Chairman
Mr Graeme A Billings
Non-Executive Director
Ms Toni L Brendish
Non-Executive Director
Mr Ian D Glasson
Non-Executive Director
Dr Simon P Green
Non-Executive Director
Mr Peter J Davey
Chief Executive Officer and Managing Director
Company Secretary
Mr Andrew G M Allibon
Registered Office
39 Pinnacle Road
Altona North VIC 3025
Telephone:
(03) 8347 5000
Facsimile:
(03) 8347 5055
Auditors
PKF Melbourne Audit & Assurance Pty Ltd
Level 15, 500 Bourke Street
Melbourne VIC 3000
Share Registry
Computershare Investor Services Pty Limited
Level 3, 60 Carrington Street
Sydney NSW 2000
Telephone:
1300 850 505
Australian Securities Exchange Code
Ordinary Shares
CLV
Website
http://www.clovercorp.com.au
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
3
Table of Contents
Chairman’s Report
4
Managing Director’s Report
5 - 6
About Clover
7
Directors’ Report
8 - 23
Remuneration Report
14 - 23
Corporate Governance Statement
24 - 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 - 59
Consolidated Entity Disclosure Statement
60
Directors’ Declaration
61
Independent Audit Report
62 - 66
Auditors’ Independence Declaration
67
ASX Additional Information
68 - 69
Vision
To optimise the health and development of adults, infants and children.
Purpose Statement
In collaboration with key market participants, Clover develops customised high value nutritional
ingredients that enhance the wellbeing and dietary needs of their customers.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CHAIRMAN’S REPORT
4
Dear Shareholders
On reflecting on the performance of the Clover Corporation over the past financial year, it has been
again a year of two distinct halves.
In the initial six months we witnessed a significant decline in revenue due to reduced demand in the
infant formula market, which has also been exacerbated by the lower global birth rate. Management
responded by reducing operating expenses, improving working capital, whilst continuing to focus on
new product development and customer engagement.
The market stabilised during the second half resulting in strong sales and profit performance in the
final quarter and an improved forward order book.
During the year Clover continued its strategic focus on improving and diversifying its supply chain.
As previously reported the performance of Melody Dairies has been unsatisfactory. Changes to the
ownership structure provides better alignment of capacity usage and the opportunity for a new
management structure. This has resulted in a profitable outcome in the final quarter.
A state-of-the-art fish oil extraction facility was established on time and on budget in Ecuador in the
past year. This strategic investment will provide improved supply chain and cost benefits for Clover
in the coming years.
Clover continues its commitment to drive growth by expediting the commercialisation of innovative
products.
The Company recently announced the successful development of a commercial powdered Choline
product. A patent application has been registered to protect our IP. Choline is essential for lipid
disposition in the human body and is mandated for use in infant formula and used in prenatal
products. Customer trials are expected in H1FY 25.
Our business development team continues implementation of the strategy to use our encapsulated
powders and Gelphorm in nutraceutical markets. As you may be aware customer trials and shelf
testing in these high-quality markets result in extended lead times for market acceptance.
The planning for commercialisation of Premneo continues. A critical step for regulatory approval in
various markets, including ANZ and EU is completion of an independent safety data study. The
results of this are currently under expert review and should pave the way for market access.
Whilst our traditional infant formula customer base has been challenged during the year, the
turnaround in sales in the second half, and strengthening in the final quarter provides confidence that
we should see a return to normalised revenue patterns in FY25.
On behalf of the Board of Directors, I extend my sincere thanks to you, our shareholders, for your
continued support. I also want to acknowledge the dedication of our employees and management in
responding to the fluctuating demands of our customers throughout the year.
Mr Rupert A Harrington
Chairman
Date: 23 September 2024
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
MANAGING DIRECTOR’S REPORT
5
Revenue and Profit
The fiscal year 2024 was challenged due to reduced demand in the infant formula market, which has
been affected by lower global birth rates and the exit of pipeline fill inventory for many manufacturers
dealing with the renewal of licensing requirements in China
The company reported a total revenue of $62.2m which was in line with guidance, marking a decline
from the previous year’s $79.9m.
Net profit after tax (NPAT) also saw a significant drop, falling to $1.5m from $6.2m in FY23.
Second Half Performance
The second half of the year delivered revenue of $34.9m, a 28% increase on the 1st half, and a
second half NPAT of $2.2m. The last quarter delivered improved orders, including those from our
Chinese customers.
Operating Expenses and Gross Margin
Operating expenses for the year were $12.9m, down 6.6% from $13.8m in FY23. This reduction was
achieved through lower headcount and cost management.
As a consequence of lower sales volumes and value, decisions on manufacturing commitments and
scrapping of aged inventory has impacted the overall reported gross margin.
Product Diversification and Inventory Management
The company continues to diversify its product offerings, adding new customers in the food and
nutraceutical markets.
Inventory levels were reduced to $29.6m, a $7.3m decrease from the previous year.
Financial Health
The balance sheet remains strong with a cash position as at 31 July 2024 of $12.2m. Stronger sales
in the second half of the year and low debtor levels contributed to this healthy cash position. At the
same time, additional loan repayments were made late in the year which will reduce interest costs in
FY25.
A final dividend of 0.75 cent per share was declared.
Key Highlights
Ecuador Facility
The facility in Ecuador, situated in a major fishing port has commenced production. This facility is
uniquely positioned to source and efficiently extract oil from the heads of tuna fish. Extraction of the
oil, before the heads are turned into ‘meal’, optimises the value of the responsibly caught fish in the
region. All the fish sourced are managed within the IATTC (Inter American Tropical Tuna
Commission) guidelines which follows EU standards of responsible sourcing. The strategic decision
to vertically integrate into the supply chain was driven by challenges during the pandemic, evolving
global events, heightened regulations, and intensified competition. The facility is expected to meet up
to 50% of the company’s current oil requirements, providing cost savings and a timely return on
capital.
Melody Dairies - New Zealand
A change in the ownership structure of Melody Dairies, a spray drying facility in Hamilton, New
Zealand took place in December 2023.
Food Innovation Waikato (FIW) sold its 11% holding and relinquished the management contract to run
the facility. Clover increased its holding by 2%, and now holds 43.9% of the facility with the other
major partner in Landcorp purchasing the remaining 9%. Landcorp subsequently sold 12% of its
holding to Spring Sheep in July 2024. As a shareholder, SpringSheep is very much aligned with
Clover around optimisation of the facility.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
MANAGING DIRECTOR’S REPORT cont
6
At the same time FIW exited the business, a new management team was installed by Clover and
SpringSheep to run the facility, with the business operating profitably in the final quarter of FY24.
Growth Platforms
Choline
Having now successfully completed a series of trials, moving from the laboratory to scaled production,
the company has filed for IP for a unique Choline powder. The benefit to potential customers is that
the unique free flowing powder removes manual handling and manufacturing challenges in the
prenatal and infant formula markets where Choline is a specified ingredient. The mother and baby
segment for Choline is projected to reach ~ $150m in 2024, with a CAGR of 6%.
Premneo
Regulators required a review of all available clinical trials involving DHA and preterm infants to prove
safety. The study has been completed and is now under review by clinical experts. Clover is
confident that the conclusions will pave the way for regulatory approvals.
Conclusion
Despite facing challenges in the infant formula market and global economic conditions, the company
has managed to maintain a strong financial position through strategic inventory management,
continued product diversification, and new market development in FY24.
The Ecuador facility is expected to support future growth and cost reduction opportunities.
As we move into FY25, Clover aims to build on the demand profile achieved in the last quarter.
Diversification remains a core focus with our powders being used in the nutraceutical markets in
addition to major long-term projects including Gelphorm and Premneo providing a channel for growth
outside the infant formula market. At the same time the ability to extend our offering with existing
infant formula customers using our unique powdered Choline product is exciting.
Mr Peter J Davey
Managing Director & CEO
Date: 23 September 2024
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
ABOUT CLOVER
7
Company Focus:
Clover seeks to improve human nutrition and quality of life by developing value-added nutrients for use
in foods or as nutritional supplements. In doing so, Clover provides a competitive advantage for its
customers, value to shareholders and a working environment in which employees can fully utilise and
develop their respective skills.
Company History:
Clover was formed in 1988 as a family-owned Australian Company providing lipid-based ingredients for
the food industry. Clover was listed on the ASX in November 1999.
In November 2002, Clover entered a joint venture with the Queensland-based Food Spectrum Group
of companies. The incorporated joint venture, Nu-Mega Ingredients Pty Limited (Nu-Mega), was 70%
owned by Clover. The joint venture ceased in November 2007 when Clover acquired the remaining
30% of Nu-Mega to make it a wholly owned subsidiary. Nu-Mega has significantly expanded its
markets, introducing new products with a focus on encapsulation technology and the delivery of
bioactive nutritional ingredients.
Company Operations:
Clover operates from two Australian controlled sites, a newly established fish oil recovery plant in
Ecuador and the 43.9% owned spray drying facility in New Zealand:
•
The Company’s registered office and manufacturing plant for tuna oils and related products,
Head Office, Customer Service, Quality Assurance, and Sales and Marketing departments
are in Altona, Victoria.
•
Innovation, Research & Development, Product Development, Technical Support departments
are in Brisbane, Queensland.
•
Fish oil recovery plant located in Manta, Ecuador.
•
Melody Dairies Spray Drying facility which is located in Hamilton, New Zealand.
Company Technology and Products.
The major focus of the Company is on the delivery of bioactive ingredients using proprietary
encapsulation technology to produce ready-to-blend products containing tuna oil and/or other nutritional
lipids. The health benefits of omega-3 fatty acids in the diet have been well documented and this has
assisted in developing the expanding global market for products containing these nutritionally important
dietary components. One material that Clover uses is tuna oil, which is high in DHA (docosahexaenoic
acid), an essential fatty acid, which is recognized for its importance in brain, nerve and eye tissue
development in babies and infants. Clover, through its subsidiary Nu-Mega, supplies refined Omega 3
oils and a range of other encapsulated ingredients for use in infant formula, nutraceuticals,
pharmaceuticals, and sports nutrition markets.
In addition to its own internally developed intellectual property, Clover has licensed patented technology
from the Commonwealth Scientific Industrial Research Organisation (CSIRO) for the encapsulation of
marine and algal oils to protect them from oxidation and degradation. Nu-Mega’s Driphorm® range of
microencapsulated powders enables the addition of Hi-DHA® tuna and/or algal oils to a broad spectrum
of products in a convenient and stable dry powder form. These ingredients are marketed globally.
Clover continues to seek other nutritional and medical applications for its products, as well as
developing new types of products, often in conjunction with customers.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
DIRECTOR’S REPORT
8
Your directors present their report on the consolidated entity consisting of Clover Corporation Limited
(“the Company”) and the entities it controlled (“the consolidated entity”) at the end of, or during, the
year ended 31 July 2024.
Directors
The following persons were directors of Clover Corporation Limited during the financial year and up to
the date of this report:
Name and qualifications
Experience and special responsibilities
Mr Rupert A Harrington
BTech, MSc, CDipAF, MAICD.
Non-Executive Director since 1 July 2015
Appointed Chairman 21 September 2017
Chair of the Nomination Committee
Mr Graeme A Billings
BCom, FCA, MAICD
Non-Executive Director since 14 May 2013
Chair of the Audit Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Mr Harrington is an experienced company Director with
over 30 years’ experience as a Non-Executive Director of
companies operating in manufacturing, industrial services,
health and technology. He has been involved in private
equity since 1987 and is considered to be one of the key
founders of the Australian industry.
He joined the Board of Clover in 2015 and has been
Chairman since 2017.
Mr Harrington is Non-Executive Director of Pro Pac
Packaging Limited (ASX:PPG) and was previously a Non-
Executive Director of Integral Diagnostics Limited (ASX:
IDX – resigned December 2021) and Bradken Limited,
Advent Partners and others.
Mr Billings has been a Chartered Accountant since 1980. Mr
Billings was a partner at Coopers and Lybrand and then
PricewaterhouseCoopers (PwC) for 24 years.
Mr Billings was head of PwC’s Melbourne Assurance
practice for several years as well as Global Leader of PwC’s
Industrial Products and Manufacturing industry group.
Mr Billings brings a range of financial, corporate governance,
internal control, commercial and corporate transactional
skills to the Company.
Other current non-executive Company directorships:
Chairman (appointed 2020) of Amotiv Limited (ASX:AOV)
and Chairman of Austco Healthcare Limited (ASX:AHC),
appointed 2015.
Previously, Graeme was Chairman of Korvest Ltd (resigned
in August 2021) and a Non-Executive Director and Audit
Committee Chair of DomaCom Ltd (resigned in June 2021).
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
DIRECTOR’S REPORT
9
Mr Peter J Davey
MBA, GradDip Bus., Dip.Art (Design),
GAICD.
Managing Director since 11 November
2014
Mr Ian D Glasson
BEng (Hons) MIE Aust, GAICD
Non-Executive Director since 1 February
2017
Member of the Audit Committee
Chair of the Remuneration Committee
Member of the Nomination Committee
Mr Davey has a track record of building businesses across
a diverse range of industry sectors. He has held senior
management positions within a number of manufacturing
and distribution companies operating in competitive and
diverse markets. Mr Davey has particular strengths in sales
and marketing, and development and implementation of
strategies for growth.
Mr Davey was formerly Executive Manager AgriProducts
and a director of Viterra Australia Limited, responsible for the
AgriProducts division that traded in agricultural inputs,
fertilizer, seed and wool. In earlier roles, Mr Davey headed
the Sales and Marketing divisions of FMP Products and Hi
Fert Pty Ltd.
During his career, Mr Davey has had a particular focus on
marketing-based businesses operating in the Asia and
Oceania regions.
Other current Non-Executive Company directorships:
Chairman Melody Dairies Ltd Partnership, appointed 30
October 2018.
Mr Glasson is former CEO of PGG Wrightson based in
Christchurch, New Zealand. He was formerly CEO of Gold
Coin Group / Zuellig Agriculture which managed a portfolio
of animal feed operations and farming ventures throughout
South East Asia. Prior to that he was CEO for seven years
of Sucrogen (formerly the sugar business of listed entity
CSR and now owned by Wilmar) which generated revenues
of nearly $2 billion and had extensive contacts across the
local and international food and beverage sector and retail
market.
He has also had extensive agribusiness experience with
Goodman Fielder and Gresham Rabo, as well as spending
the first sixteen years of his career in the oil and gas sector
with Esso.
Other current Company Non-Executive directorships:
Ricegrowers Ltd (ASX:SGLLV), appointed 2016.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
DIRECTOR’S REPORT
10
Name and qualifications
Experience and special responsibilities
Ms. Toni L Brendish
B.Com, Grad Dip Business Admin, FAICD.
Non-Executive Director since 20 October
2020
Member of the Audit Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Toni has more than 30 years’ experience working in blue
chip FMCG, healthcare, manufacturing, agriculture, and
telecommunication companies in Asia, Australia, and New
Zealand, including over 20 years in Chief Executive
Officer / Managing Director roles.
Toni Brendish’ s most recent executive role was as Chief
Executive Officer of Westland Milk Products in the South
Island of New Zealand. Prior to this, Toni spent 11 years
working for the Danone Group as Managing Director of
their Infant Formula and Dairy businesses in Australia,
New Zealand, Malaysia and Indonesia.
She has also worked for Kimberly-Clark and Colgate
Palmolive, together with a number of other blue chip FMCG
organisations.
Toni is currently a non-executive director of ASX-listed
Cobram Estate Olives Ltd (ASX:CBO). She was appointed
as a shareholder representative director on the board of
Prolife Foods, a private New Zealand consumer foods
business with brands including Mother Earth and Scoop
and Weigh. Toni is also on the board advisory committee
for dairy farming and milk producers, Aurora Dairies.
Dr Simon P Green
BSc(Hons), PhD, GAICD
Non-Executive Director since 20 October
2020
Member of the Audit Committee
Member of the Remuneration Committee
Member of the Nomination Committee
Simon has 32 years of experience in the biotechnology
industry focused on the discovery, development and
commercialisation of life saving medicines.
He was actively involved in CSL’s global expansion over a
17-year period and held roles as Senior Vice President,
Global Plasma R&D and General Manager of CSL’s
manufacturing plants in Germany and Australia.
Simon is currently the founder and CEO of Immunosis Pty
Ltd, a start-up diagnostics Company.
He is also a Non-Executive Director and Chair of
Remuneration and Nomination Committee of Syntara
Limited (ASX:SNT).
Simon previously served as a Non-Executive Director for
Acrux Pty Ltd, an ASX listed Company from 2016-2019.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
DIRECTOR’S REPORT
11
Mr Andrew G M Allibon,
B.Bus, CA
Chief Financial Officer & Co. Secretary
Mr Allibon is a Chartered Accountant with over 28 years’
experience in executive finance roles across a range of
industries operating in the Asia and Oceania regions.
Prior to joining Clover Corporation, he was CFO for the
Leef Independent Living Solutions group of companies,
since acquired by Independent Living Solutions (ILS) a
leader in healthcare equipment solutions.
Other current Company Directorships:
- Melody Dairies Ltd Partnership.
Principal Activities
The principal activities of the consolidated entity during the financial year were the refining and sale of
natural oils, the production of encapsulated powders and the research and product development of
functional food and infant nutrition ingredients. There were no significant changes in the nature of the
principal activities of the consolidated entity during the financial year.
Operating Results
The results for this report are for the financial year ended 31 July 2024, the comparative period being
the financial year ended 31 July 2023. Total revenue from sale of goods decreased 22.1% to
$62,207,000. Net profit after tax is $1,514,981 (FY23: profit of $6,205,316).
Review of Operations
A full review of operations is included in the Chairman’s Report appearing on page 4 and the Managing
Director’s report appearing on pages 5 to 6 of this Annual Report.
Employees
The consolidated entity had a headcount of 60 employees as at 31 July 2024 (FY23: 56 employees).
Events Subsequent to Reporting Date
No matter or circumstance has arisen since 31 July 2024 that has significantly affected or may
significantly affect the consolidated entity’s state of affairs in future financial years.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
DIRECTOR’S REPORT
12
Significant changes in the State of the Affairs
Other than in the accompanying Financial Report, there were no significant changes in the state of the
affairs of the consolidated entity during the financial year.
Likely Developments
The consolidated entity will continue to pursue its policy of increasing the profitability and market share
of its operating businesses during the next financial year.
Dividends
A fully franked final dividend of 0.75 cent per share for the 12 months ended 31 July 2023 was paid on
20 November 2023. The total final FY23 dividend paid was $1,252,496.
The Directors have declared a fully franked final dividend of 0.75 cent per share ($1,252,496) in respect
of the year ended 31 July 2024. The record date for this dividend will be 22 October 2024 with payment
due on 18 November 2024. No interim dividend was paid for FY24.
The total dividend declared in respect to FY24 is 0.75 cent per share, a decrease of 0.75 cent per share
compared with the total dividend declared for FY23.
Environmental Regulations
The consolidated entity’s operations are subject to environmental regulations under the laws of the
Commonwealth and State. The consolidated entity complies with all applicable environmental
regulations.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
DIRECTOR’S REPORT
13
Directors’ Meetings
The number of directors’ meetings (including meetings of sub-committees of directors) and number of
meetings attended by each of the directors of the Company during the financial year are:
Directors Meetings
Nomination
Committee
Meetings
Audit Committee
Meetings
Remuneration
Committee
Meetings
Director
Number
Eligible
to
Attend
Number
Attended
Number
Eligible
to
Attend
Number
Attended
Number
Eligible
to
Attend
Number
Attended
Number
Eligible
to
Attend
Number
Attended
R A Harrington
15
14
3
2
-
-
-
-
G A Billings
13
13
3
3
4
4
6
6
P J Davey
15
15
-
-
-
-
-
-
I D Glasson
13
13
3
3
4
4
6
6
Ms T L Brendish
13
13
3
3
4
4
6
6
Dr S P Green
13
12
3
3
4
3
6
6
Insurance of Directors and Officers
During the financial year, the Company paid a premium in respect of a contract insuring its directors
and officers against all liabilities to another person (other than the Company or a related body corporate)
that may arise from their position, except where the liability arises out of conduct involving lack of good
faith. The contract covers any past, present or future director, secretary, executive officer or employee
of the Company and its controlled entities. Further details have not been disclosed due to confidentiality
provisions of the contract of insurance.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agree to indemnify
the auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the
auditor of the Company or any related entity.
Rounding Off of Amounts
The Company is of a kind referred to in ASIC Corporations Instrument (Rounding in Financial/ Directors’
Reports) 2016/191, and accordingly amounts in the Financial Report and the Directors’ Report have
been rounded off to the nearest thousand dollars, unless otherwise stated.
Proceedings on behalf of the Company
No person has applied for leave of the Court to bring proceedings on behalf of the Company or to
intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or any part of those proceedings.
Unissued shares or interests under option
As of the date of this report there are 64,491 Performance Rights offers whose conditions have been
met, entitling recipients to one share per right for issue. An additional 2,485,713 performance rights
are available, subject to meeting relevant conditions.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (audited)
14
The Remuneration Report outlines the director and executive remuneration arrangements of the
Company for the 2024 financial year in accordance with the requirements of the Corporations Act
2001 and its Regulations. It has been audited in accordance with section 300 of the Corporations Act
2001 (as amended).
(i) Key Management Personnel
Key Management Personnel (KMP) in this report are those individuals having responsibility for
planning, directing and controlling the major activities of the Company during the financial year. They
include Non-Executive Directors, CEO and CFO. The Directors and Chief Executive Officer
determined that those persons having authority and responsibility for planning, directing and
controlling activities are as listed below.
Name
Position
Directors
R A Harrington
Non-Executive Chairman
G A Billings
Non-Executive Director
T L Brendish
Non-Executive Director
I D Glasson
Non-Executive Director
Dr S P Green
Non-Executive Director
P J Davey
Chief Executive Officer and Managing Director
Executive KMP
P J Davey
Chief Executive Officer and Managing Director
A G M Allibon
Chief Financial Officer and Company Secretary
(ii) Remuneration Policy
The Company operates from four locations across Australia, New Zealand, Ecuador and markets its
products internationally. All Executive KMP are based in Australia.
Through an effective remuneration framework, the Company aims to:
•
Provide fair and equitable rewards;
•
Align rewards to business outcomes that are linked to creation of shareholder value;
•
Stimulate a high performance culture;
•
Encourage the teamwork required to achieve business and financial objectives;
•
Attract, retain and motivate high calibre employees; and
•
Ensure that remuneration is competitive in relation to peer companies in Australia.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
15
(iii) Remuneration Framework Responsibilities
The Board has a People & Culture Committee to assist it in designing a suitable remuneration
framework for the Company. Responsibilities of the People & Culture Committee include reviewing
and making recommendations to the Board on the following issues:
•
The structure of the total remuneration package (TRP) including base salary, other benefits,
Short Term Incentive (STI) and share-based long-term incentive for the CEO;
•
The mechanism to be used to review and benchmark the competitiveness of this TRP;
•
Changes in the amounts of different components of the TRP following annual performance
review of the CEO;
•
Review and consideration of the structure of incentive plans operating within the Company
from time to time;
•
The Key Performance Indicators (KPIs) to be set for the CEO for each financial year;
•
Review of performance against these KPIs at the end of each financial year, and
recommendation on the amount of STI to be paid to the CEO;
•
Decision on whether the Long-Term Incentive (LTI) Plan will be offered for any year; the
number of performance rights to be awarded to the CEO and specified Executives under this
plan when offered; and setting of associated performance indicators for future assessment;
•
Determination of the number of performance rights vesting at the end of each assessment
period of the LTI Plan, based on financial performance and other strategic indicators
previously established; and
•
The remuneration and any other benefits of the Non-Executive Directors.
The People & Culture Committee consists of four independent Non-Executive directors, Mr Ian
Glasson (Chair), Ms Toni Brendish, Dr Simon Green and Mr Graeme Billings. The Company Secretary
or General Manager of People & Culture may act as secretary for the Committee.
The Board Chairperson and any other Non-Executive Directors may attend committee meetings in an
ex officio capacity. Executives including the CEO, and any advisors retained by the Committee may
attend by invitation. More information on People & Culture Committee meetings held during the year
and Directors’ attendance at these meetings can be found on page 13 of this report.
The Board is responsible for reviewing and resolving on recommendations from the People& Culture
Committee, including:
•
Considering matters relating to remuneration of Executives reporting to the CEO;
•
Approving the establishment of or amendment to employee share, performance rights and
any other deferred incentive plan; and
•
Considering matters related to Executive succession planning.
(iv) Non-Executive Directors’ Remuneration
Total Non-Executive Directors’ remuneration including superannuation paid at the statutory prescribed
rate for the year ended 31 July 2024 was $494,014. These fees are within the NED pool fee of
$750,000 which was approved in the November 2021 AGM.
The Board believes that the remuneration approved for Non-Executive Directors must:
•
enable the Company to attract and retain suitably qualified directors with appropriate
experience and expertise; and
•
be appropriate in the context of the overall financial performance of the Company.
The People & Culture Committee reviews fees for Non-Executive directors regularly, utilising data on
and trends in Director and Chairperson remuneration in the relevant group of the top 500 ASX-listed
companies in Australia (from published reports), as well as data obtainable on director remuneration
in a number of peer companies either from the same industry or with similar market capitalisation and
financial performance. Remuneration consultants have been used to assist in this process.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
16
The Board has to date employed a remuneration policy whereby only fees and statutory
superannuation benefits are payable to NED’s. The tables on pages 19-21 of this report shows fees
paid to Non-Executive Directors for the 2024 and 2023 financial years.
They do not participate in any share or performance rights plans. Non-Executive Directors are entitled
to reimbursement of travel or other reasonable expenses incurred by them while discharging their
duties.
(v) Executive Remuneration and Link to Business Strategy
The diagram below outlines components which may be included as part of the TRP for Executives.
TOTAL REMUNERATION PACKAGE
Total fixed remuneration
(cash salary,
superannuation and
non-monetary benefits)
+
STI (cash
payment)
+
LTI (performance
rights)
=
Total
Remuneration
Package
FIXED
VARIABLE
The Managing Director and specified Executives (Executives) are eligible for STI payments, while the
Managing Director and Executives may also have access to an LTI in the form of Performance Rights.
The most recent LTI Offer was made to the CEO and Executives in August 2024.
The total fixed remuneration of the Managing Director is set against market benchmarks by use of a
remuneration consultant. The Company seeks this benchmark information every 2-3 years. It was
reviewed during the FY23 for setting remuneration from FY24.
Non-Executive Directors are responsible for appointing, briefing external consultants and managing
this process. At other times, increases in fixed remuneration are determined by consideration of CPI
salary increases applied across the whole Company, and use of published information on CEO/MD
salaries in the top 500 ASX-listed companies and in companies from related industries of similar
market capitalisation and financial status, as described for review of fees for Non-Executive Directors.
The Company’s Executive remuneration is directly linked to its business strategy. The People &
Culture Committee engages in an annual strategy review with management, identifying key goals and
challenges for the year and the longer term. Following this, business plans and an annual budget are
prepared and approved, with KPIs (both financial and non-financial) established for the business.
These are the basis for KPIs for the CEO, set by the Board, and for other Executives, set by the CEO.
A formal review of the achievement of each Executive is conducted by the CEO annually and
proposed changes in fixed remuneration and the STI to be paid are submitted to the Board for
approval. As noted in section (iii) of the Remuneration Report, the performance of the CEO against
agreed KPIs is reviewed by the Remuneration Committee, and recommendations on adjustment to
total fixed remuneration and payment of the STI are made to the Board, for approval.
The STI is a variable cash payment with the maximum payment based on a percentage of the
Executive’s total fixed remuneration. For the Managing Director 50% applied in FY24 (50% in FY23),
while for other Executives, 10-20% applied in FY24 (10-20% applied in FY23).
The Company awards STI payments on evidence that the Executives have achieved targeted work
plan objectives and dealt with unexpected challenges in a way that contributes to both short-term
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
17
performance and long-term prospects of the Company. The Board retains discretion to vary STI
payments outside of the set formula to recognise overall Company performance and changes in the
Company’s circumstances during the year.
KPIs set for the CEO and individual executives each year include financial, strategic and operational
targets as summarised in the table below. The financial targets are set at two levels, with the initial
target establishing a gateway to an entitlement to an STI payment.
For FY24, the financial targets were not achieved, which has meant that the ‘gateway’ was not met.
The Board whilst having discretion on changes in the Company circumstances has considered this
position and confirmed that an STI has not been awarded for the FY24 year. This is noted on page
20.
Table STI Weightings
KPI type
Possible STI
weighting
CEO
Possible
STI
weighting
Exec
Description - Examples
Link to Company Strategy
Financial
50%
40-60%
Achievement of revenue, profit
and free cash flow targets set
for the year in the annual
budget.
Sets target for growth in sales and profits
for each year, contributing to increasing
shareholder value. Net free cash flow
provides for further investment in the
business and capacity to pay dividends
each year.
Environment,
Social &
Governance
20%
20-40%
Establishment of agreed plans
to secure the sustainability of
the Company and progress
towards their implementation.
Sustainability KPIs address the medium
to long term prospects for the Company,
including developing new products,
technologies, expanding markets,
contracting with customers and suppliers,
forming alliances, and contributing to
mitigation of business risk.
Establishment of agreed plans
to continue developing the
cultural & social behavioural
norms of the Company
KPI’s that focus on a safe working
environment, continual improvement in
collaboration and addressing emerging
governance issues.
Strategic
30%
20-50%
Commercial development of
new products from the R&D
team; expansion of sales –
new products, new customers;
meeting regulatory challenges;
manufacturing efficiencies and
cost effective sourcing of raw
materials; effective
management of inventory,
debtors and creditors (working
capital requirements).
Strategic KPIs address key priorities for
the Company to advance to the next
stage of its planned strategic direction, in
the key management areas of Sales and
Marketing, R&D output, Manufacturing,
Regulatory and Cash Management.
Examples include fast-tracking the output
from the R&D team into profitable
products attracting new sales.
Adjustment to the changing nature of the
market, to raw material availability and to
manufacturing efficiency are all required
to maintain both short term performance
of the Company, and longer term growth.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
18
(vi) Long Term Incentive Plan
An LTI may be offered each year to the CEO at the discretion of the Board.
The incentive, when offered, is in the form of Performance Rights (rights to receive shares in the
Company) which are delivered according to the terms of the Clover Corporation LTI Plan and a Letter
of Invitation from the Board to the CEO, setting out the terms for vesting of Performance Rights at the
end of an assessment period. Performance Rights are issued for nil consideration and entitle the
recipient to receive one Clover Corporation share at no cost for each Performance Right that vests at
the end of the assessment period.
The number of Performance Rights offered for a financial year is determined from a percentage of the
CEO’s total fixed remuneration for that year. This dollar value is converted into a number of
Performance Rights based on the Volume Weighted Average Price of Clover Corporation shares on
the ASX for the two-week period up to and including the last day of the previous financial year. Hurdles
for vesting of Performance Rights reflect long term growth and financial performance of the Company
relevant to current and future growth in shareholder value, including such parameters as Earnings per
Share (EPS) growth over a three-year period, Return on Equity (ROE) over the same period, and
achievements in building the Company’s product portfolio, as reflected in New Product Sales.
Executives may also be invited to participate in the Company’s LTI Plan. Performance Rights offered
are on the same basis as for the CEO with the number calculated by taking a percentage of the
Executive’s total fixed remuneration for that year and converting this value to the number of
Performance Rights granted using the same methodology as for the CEO, as described above.
Shares underlying Performance Rights that vest as a result of achievement of performance hurdles
are either purchased on-market by the Company on behalf of the CEO and Executives, or shares can
be issued provided that in the case of the CEO (who is also a director of the Company) shareholder
approval is obtained. Any Performance Rights not vesting at the end of the assessment period lapse.
During the FY24 year, 35,693 shares that had vested, were issued to the Employee Incentive Plan
participants.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
19
A summary of the Performance Rights current during the financial year are:
Year of
Offer
Components
Allocation
Performance
conditions
Targeted
result
Year ended
31 July 2024
Targeted
Result
Year Ended
31 July 2025
Targeted
Result
Year Ended
31 July 2026
2021
Financial
50%
Target – 5%
compound growth on
FY21 NPAT / EPS
Not
achieved
Target – 15%
compound growth on
FY21 NPAT / EPS
Not
achieved
Strategic
50%
Partially
Achieved
2022
Financial
50%
Target – 5%
compound growth on
FY22 NPAT / EPS
Pending
Target – 15%
compound growth on
FY22 NPAT / EPS
Pending
Strategic
50%
Pending
2023
Financial
50%
Target – 5%
compound growth on
FY23 NPAT / EPS
Pending
Target – 15%
compound growth on
FY23 NPAT / EPS
Pending
Strategic
50%
Pending
The most recent performance assessment period of the 2021 Performance Rights ended on 31 July
2024 and the board of directors of the Company determined that a strategic element of the relevant
performance conditions had been satisfied for the FY24 period. In consequence, some of the 2021
Performance Rights that have vested for both KMP and Executives can now be exercised.
The performance rights for KMP whose conditions have been met, and their vesting profile:
As at
31 July 2024
31 July 2024
Fair value of the
rights as
compensation *
As at
31 July 2023
31 July 2023
Fair value of the
rights as
compensation
P Davey
35,144
17,221
27,266
29,993
A Allibon
7,624
3,736
-
-
42,768
20,957
27,266
29,993
* Note: The actual value of the Performance Rights will be dependent on the Clover share price at
the time of vesting. Rights valued at 31 July 2024 ($0.49) are based on the VWAP price of
the ASX market close price for the last 10 business days of the year (FY23 - $1.10).
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
20
Rights whose
conditions
were fulfilled
in years
preceding
31 July 2022
Rights whose
conditions
were fulfilled in
year ending 31
July 2023
Rights whose
conditions
were fulfilled
in year
ending 31
July 2024
Sub-total
Rights whose
conditions
were fulfilled
Rights yet to be
fulfilled,
subject to
achievement of
targets and
service
conditions
Rights
Exercised &
Exercisable
Total open
Rights
#
#
#
#
#
#
#
P Davey
910,505
27,266
35,144
972,915
1,087,267
(972,915)
1,087,267
A Allibon
-
-
7,624
7,624
386,523
(7,624)
386,523
910,505
27,266
42,768
980,539
1,473,790
(980,539)
1,473,790
(viii) Remuneration of Non-Executive Directors and Executive KMP
The following tables disclose details of the remuneration of the Directors and Executive KMP of the
consolidated entity.
2024
Salary
and Fees
Superannuation
Contributions
STI
Non-cash
Benefits
LTI
Total
Directors
$
$
$
$
$
$
R A Harrington
130,092
14,364
-
-
-
144,456
G A Billings
3
83,700
9,242
-
-
-
92,942
P J Davey
1,2
515,755
27,500
-
23,678
17,221
584,154
I D Glasson
3
83,700
9,242
-
-
-
92,942
Ms T L Brendish
73,700
8,137
-
-
-
81,837
Dr S P Green
73,700
8,137
-
-
-
81,837
960,647
76,622
-
23,678
17,221
1,078,168
Salary
and Fees
Superannuation
Contributions
STI
Non-cash
Benefits
LTI
Total
Executive KMP
$
$
$
$
$
$
A G.M. Allibon
1
276,918
27,648
-
-
3,736
308,302
276,918
27,648
-
-
3,736
308,302
1.
STI gateway not achieved for FY24.
2.
LTI consists of fair value of rights whose conditions were fulfilled in year ending 31 July 2024
3.
ARC & Remuneration Committee Chair positions remuneration includes additional $10,000 p.a.
2023
Salary
and Fees
Superannuation
Contributions
STI
Non-cash
Benefits
LTI
Total
Directors
$
$
$
$
$
$
R A Harrington
125,089
13,186
-
-
-
138,275
G A Billings
3
75,666
7,976
-
-
-
83,642
P J Davey
1,2
498,417
27,500
-
8,232
29,993
564,142
I D Glasson
3
75,666
7,976
-
-
-
83,642
Ms T L Brendish
70,865
7,470
-
-
-
78,335
Dr S P Green
70,865
7,470
-
-
-
78,335
916,568
71,578
-
8,232
29,993
1,026,371
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
21
2023
Salary
and Fees
Superannuation
Contributions
STI
Non-cash
Benefits
LTI
Total
Executive KMP
$
$
$
$
$
$
A G.M. Allibon
1
258,922
25,420
-
-
-
284,342
258,922
25,420
-
-
-
284,342
1.
STI gateway not achieved for FY23. No recognition in FY23. FY22 was provided for in FY22 / paid in FY23
2.
LTI consists of fair value of rights whose conditions were fulfilled in year ending 31 July 2023
3.
ARC & Remuneration Committee Chair positions remuneration includes additional $4,800 p.a.
(ix) Employment Contracts
There are no specific employment contracts with Non-Executive Directors. Non-Executive Directors
are appointed under a letter of appointment and are subject to election and rotation requirements as
set out in the ASX listing rules and the Company’s constitution, per the ‘Board Nomination Policy and
Procedure for Selection and Appointment of Directors’ policy, which can be viewed in the Corporate
Governance section of the Company’s website at www.clovercorp.com.au.
Managing Director Mr Peter Davey was employed by the Company under a contract of employment
dated 24 October 2017. The contract provides for base salary and continuing access to incentive
remuneration subject to Remuneration Committee approval, 6 months’ termination notice by either
party, and non-solicitation and non-compete clauses.
Other Executives (standard contract)
All other Executives have rolling contracts. The Company may terminate the Executive’s employment
agreement by providing between 1 to 6 months’ written notice or providing payment in lieu of the
notice period (based on the fixed component of the executive’s remuneration), together with statutory
termination entitlements. The Company may terminate the contract at any time without notice if
serious misconduct has occurred. Where termination with cause occurs, the Executive is only entitled
to that portion of remuneration that is fixed, and only up to the date of termination.
(x) Minimum Shareholding Policy
To ensure Board members and KMP are aligned with the interests of shareholders, from 1 July
2023 the Board introduced a Minimum Shareholding Policy. It requires the Non-Executive Directors
and other KMP to build and maintain a minimum shareholding by the latter of the 3rd anniversary of
the policy or the 3rd anniversary of the KMP’s appointment. The minimum shareholding is
measured on the value of purchases made by each NED or KMP relative to directors’ fees or salary.
KMP and Directors are required to meet a minimum shareholding equivalent as per the prescribed
percentage of their total fixed remuneration and annual director fees as outlined below.
Managing Director and CEO
50 %
CFO
50 %
Non-Executive Directors
100 %
At the date of this report – full compliance has been met by KMP and Non-Executive Directors
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
22
Directors’ interests
The relevant interest of each director in the share capital of the Company, as notified by the directors
to the Australian Securities Exchange in accordance with section 205G(1) of the Corporations Act
2001, at the date of this report is as follows:
Ordinary
Shares
Performance
Rights*
Director
R A Harrington
728,921
-
G A Billings
50,000
-
P J Davey
609,762
35,144
I D Glasson
80,000
-
T L Brendish
43,455
-
Dr S P Green
36,234
-
1,548,372
35,144
* There are an additional 1,087,267 performance rights available to Mr Davey subject to
meeting relevant performance and employment conditions.
KMP Interests
Ordinary
Shares
Performance
Rights*
A.G. M Allibon
270,000
7,624
270,000
7,624
*
There are an additional 386,523 performance rights available to Mr Allibon subject to meeting
relevant performance and employment conditions.
Auditor’s Independence and Non-audit Services
The Board of Directors is satisfied that the provision of non-audit services during the period is
compatible with the general standard of independence for auditors imposed by the Corporations Act
2001. The directors are satisfied that the services disclosed below did not compromise the external
auditor’s independence for the following reasons:
•
all non-audit services are reviewed and approved by the Board of Directors prior to
commencement to ensure they do not adversely affect the integrity and objectivity of the auditor;
and
•
the nature of the services provided do not compromise the general principles relating to auditor
independence as set out in the APES110 Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.
The following fees for non-audit services were paid/payable to the external auditors during the year
ended 31 July 2024:
$
Taxation structural and compliance services
15,015
15,015
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
REMUNERATION REPORT (Continued)
23
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations
Act 2001 has been received by the Directors, and a copy is attached at page 67.
Signed in accordance with a resolution of the Board of Directors.
Mr Rupert A Harrington
Chairman
Melbourne
Date: 23 September 2024
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
24
The Board of Clover Corporation Limited is committed to ensuring its policies and practices reflect
good corporate governance and recognises that for the success of the Company an appropriate
culture needs to be nurtured and developed throughout all levels of the Company.
This statement outlines the Company’s Corporate Governance practices in place throughout the year,
unless otherwise stated, and has been summarised into sections in line with the 8 core principles set
out in the ASX Corporate Governance Council’s “Corporate Governance Principles and
Recommendations – 4th Edition”.
Principle 1 – Lay solid foundations for management and oversight
The Board is ultimately responsible for the operations, management and performance of the
Company. In discharging this responsibility, the Board delegates to senior management whose role
it is to manage the Company in accordance with the directions and policies set by the Board. The
Board monitors the activities of senior management in the performance of their delegated duties.
It is the responsibility of the Board to determine policies, practices, management and the operations
of the Company and to ensure that the Company is compliant with statutory, legal and other regulatory
obligations.
Responsibilities of the Board include the following:-
•
Determining corporate strategies, policies and guidelines for the successful performance of the
Company in the present and in the future;
•
Monitoring the performance and conduct of the Company;
•
Accountability to shareholders;
•
Ensuring that risk management procedures and compliance and control systems are in place
and operating effectively to ensure a safe operating and inclusive environment
•
Monitoring the performance and conduct of senior management, and ensuring adequate
succession plans are in place; and
•
Ensuring the Company continually builds an honest and ethical culture.
The Board has delegated responsibility for the following to management:
•
Day to day management of the Company;
•
Production of performance measurement reports;
•
Managing the compliance and risk management systems;
•
Management of staff including, appointment, termination, staff development and performance
measurement.
The Company has a Board Charter which is disclosed on its website using the following address
https://www.clovercorp.com.au/en/invest-our-business/governance/ that sets out the respective roles
and responsibilities of its board and management, and those matters which are expressly reserved to
the board and those which are delegated to management.
The CEO is responsible for ensuring that the responsibilities delegated by the Board to management
are properly discharged.
The performance of the CEO is evaluated by the Board with reference to the overall performance of
the Company, its subsidiaries and associates in which the CEO represents the Company. Both
qualitative and quantitative measures are used to evaluate performance.
The CEO evaluates the performance of the other senior executives and reports to the Board. The
Board also reviews the performance of these executives via their attendance at Board meetings and
the monthly Board reports.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
25
Principle 1 – Lay solid foundations for management and oversight (continued)
The performance of the senior executives of the Company was assessed, as set out above, during
the reporting period.
The Company conducts an annual evaluation of the performance of the Board, its Committees and
individual Directors.
The Board is responsible for evaluating candidates and recommending individuals for appointment as
Directors. The Company undertakes appropriate background and screening checks prior to
nominating a Director for election by shareholders.
The Company maintains written agreements with each Director and senior Executives that sets out
the terms of their appointment and outlines all relevant roles and obligations.
The Company Secretary is accountable to the Board, through the Chairman, and is responsible for
advising the Board and its Committees on governance matters, monitoring the Board and ensuring
Committee policies and procedures are followed, and coordinating the timely completion of Board
and Committee papers.
Diversity
The Company values and respects the skills that people with diverse backgrounds, experiences and
perspectives bring to the organisation. The Company is committed to rewarding performance and
providing opportunities that allow individuals to reach their full potential irrespective of background or
difference. When appointing or promoting people within the organisation the most suitably qualified
candidates are selected. As a result, diversity is promoted throughout the organisation.
In March 2012, the Company established a Diversity Policy to formalise its commitment to providing
equal access to opportunities irrespective of background, beliefs or other factors. The policy is
regularly updated and may be viewed in the Corporate Governance section of the Company’s web
site at www.clovercorp.com.au. The policy governs the conduct of the Company, its wholly owned
subsidiaries and all Directors and employees of those entities.
As at 31 July 2024 the organisation had a headcount of 60 employees. As the Company has less
than 100 employees, it is not a relevant employer under the Workplace Gender Equality Act 2012,
despite this the Company has adopted the ASX Corporate Governance Principles and
Recommendations on diversity and works to the following principles:
•
Ensuring targets are based on current workforce data including growth, promotions and
attrition, and that they are achievable and provide stretch goals
•
Incorporating targets in leaders’ KPIs to improve accountability and sponsorship
•
Sharing gender targets and updates on achievements, internally and externally, including
reporting to the board on a regular basis.
Clover is committed to inclusion at all levels of the organisation regardless of gender, marital or
family status, sexual orientation, gender identity, age disabilities, ethnicity, religious beliefs, cultural
background, socio-economic background, perspective and/or experience, and to creating and
fostering a supportive and understanding environment by providing opportunities and development
that allow individuals to reach their full potential irrespective of background or difference.
The company has revisited key policies, strategies and frameworks that attract, retain, and
encourage participation and inclusion of both men and women in FY24. Our goal is to continue to
maintain and improve our gender balance and strengthen our retention rate of women by creating
an environment that encourages women’s participation, inclusion, development, and growth.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
26
The proportion of women employees in the whole organisation was 36%. The Company’s objective
is to incrementally grow this as vacancies allow and suitably qualified candidates are available. The
aim is to achieve female representation at all levels of 40% or more.
The Company will continue to ensure that neither gender or diversity differences interfere with the
employment of individuals based on their suitability for the position available and aspires to achieve
greater diversity.
Principle 2 – Structure the Board to add value
The Company’s constitution states that its Board is to comprise no less than three and no more than
ten Directors. The names and details of the Directors of the Company at the date of this statement
are set out in the Directors’ Report.
At the date of this report the Board consisted of five Non-Executive Directors and one Executive
Director. Each Director has undertaken to provide the Board with all information that is relevant to
the assessment of his/her independence in a timely manner. The Board has assessed the
independence of its members and is of the view that the following Directors are independent:
Mr R A Harrington
Non-Executive
Mr G A Billings
Non-Executive
Mr I D Glasson
Non-Executive
Ms T L Brendish
Non-Executive
Dr S P Green
Non-Executive
The Company has established a Nomination Committee which currently consists of four independent
Non-Executive Directors and is chaired by one of the independent Non-Executive directors. The
Committee periodically reviews the Board’s membership having regard to the Company’s particular
needs, both present and future. Where a Board member is due for re-election at the next Annual
General Meeting, that Director abstains from consideration of their nomination for re-election.
The Company has a Nomination Committee Charter that sets out the process by which new Director
candidates are identified and selected, the use of professional intermediaries and the requirement for
a diverse range of candidates to be considered. This policy may be viewed in the Corporate
Governance section of the Company’s web site at www.clovercorp.com.au.
The Nomination Committee considers the structure, balance and skills of the Board in making
decisions regarding appointment, retirement and nominations for re-election. When a vacancy
occurs, the necessary and desirable skills, expertise and experience required to complement the
Board are identified and a process to identify the most appropriate candidates is implemented. The
committee engages recruitment consultants and other independent experts to undertake research
and assessment as required.
Directors are initially appointed by the full Board, subject to election by the shareholders of the
Company at the next Annual General Meeting. Under the Constitution, one third of the Board is
required to retire from office each year. Retiring Directors may stand for re-election subject to
approval by the Board.
The Company has an established induction procedure which allows new Board appointees to
participate fully and actively in Board decision making at the earliest opportunity.
The Board considers that the current Directors bring an appropriate mix of skills, breadth and depth
of knowledge and experience and diversity to meet the Board’s responsibilities and objectives. The
range of skills and experience possessed by the each of the Directors is set out in the Directors’
Report, and is summarised in the table below:
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
27
Principle 2 – Structure the Board to add value (continued)
Skill Category
Description of Attribute
Board Capability
Governance
Board experience as a director of an ASX listed company,
demonstrated commitment to highest standards of governance
including experience with companies subject to rigorous
governance standards and member of a governance body.
Significant
Risk and
Compliance
Experience with the establishment of risk and compliance
frameworks and the identification and monitoring key risks to
the Company.
Significant
Leadership
Sustainable success in business at a Senior Executive level or
practice leadership level in relevant sectors including
manufacturing, finance, R&D and consumer products.
Significant
R&D / Product
Development
Knowledge and experience (local & international) of
developing and commercialising new science-based products
with health offerings.
Adequate
Strategy
Experience in developing, implementing, and challenging a
plan of action designed to achieve the long-term goals of the
Company.
Significant
Financial and
Accounting
Experience in financial accounting and reporting, corporate
finance and internal financial controls. Includes the ability to
probe the adequacy of financial controls.
Significant
Quality and Safety
Experience related to work health and safety governance
and/or quality governance.
Significant
Regulatory, Legal,
and Public Policy
Experience in Government relations, public and regulatory
policy or qualified legal professional.
Developing
Business
Acquisition and
Integration
Experience in M&A and implementation / business integration.
Significant
People, Culture
and Remuneration
Management experience in relation to workplace culture,
remuneration, organisational development, succession,
diversity, and human resource management and or ASX listed
company Remuneration Committee membership.
Significant
Technology
Strategy and
Governance
Knowledge and experience in IT including artificial intelligence
(AI), privacy, data management, cyber security, document
protection and Digital Experiences
Adequate
Environment and
Social
Experience in environmental and social governance.
Adequate
Global Experience
Expertise in understanding the challenges of growing
international trading and operational expansion
Significant
In the discharge of their duties and responsibilities the Directors, either individually or jointly, have the
right to seek independent professional advice at the Company’s expense. In respect of advice to
individual Directors, the prior approval of the Chairman is required; such approval is not to be
unreasonably withheld. The Chairman is entitled to receive a copy of any such advice obtained.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
28
Principle 2 – Structure the Board to add value (continued)
The Chairman is responsible for monitoring and assessing the performance of individual Directors,
each Board committee and the Board as a whole. The Chairman interviews each Director and
provides feedback regarding their performance. In 2024 each Director independently completed an
external confidential assessment of the performance of the Board. The results of the assessments
are compiled into a written report which is presented to the Board and discussed. The performance
of each Director of the Company was assessed during the reporting period.
Principle 3 – Act lawfully, ethically and responsibly
Code of Conduct
The Company has an established code of conduct dealing with matters of integrity and ethical
standards, which can be viewed at the Corporate Governance section of the Company’s web site at
www.clovercorp.com.au.
The Board recognises the need for the Directors and employees to adhere to the highest standards
of behaviour and business ethics.
All Directors and employees are expected to abide by the code of conduct which covers a number of
areas including the following:-
•
Professional conduct and ethical standards;
•
Compliance with laws and regulations;
•
Relationships with shareholders, customers, suppliers and competitors;
•
Confidentiality and continuous disclosure;
•
Standards of workplace behaviour and equal opportunity;
•
Privacy and anti-discrimination;
•
Proper use of Company assets;
•
The environment; and
•
Investigation and reporting of breaches of the code.
Share Trading
The Company has established a share trading policy which may be viewed in the Corporate
Governance section of the Company’s web site at www.clovercorp.com.au.
Whistle Blowing
The Company has established a Whistleblower policy which can be viewed at the Corporate
Governance section of the Company’s web site at www.clovercorp.com.au. It is the responsibility of
the Company Secretary and Managing Director to regularly update the board as to whether any
material incidents have been reported under that policy. With respect to confidentiality, our
employees have a range of options in respect of who they may contact including an Officer of Clover
Corporation, ASIC, APRA, the Auditors, an Actuary or legal practitioner.
Anti-bribery and Corruption
The Company has established an Anti-bribery and Corruption policy which can be viewed at the
Corporate Governance section of the Company’s web site at www.clovercorp.com.au. It is the
responsibility of the Company Secretary and Managing Director to regularly update the board as to
whether any material incidents have been reported under that policy.
Principle 4 – Safeguard integrity in financial reporting
The Company has an established Audit Committee, which has a formal charter outlining the
committee’s function, composition, authority, responsibility and reporting. The Audit Committee
charter may be viewed in the Corporate Governance section of the Company’s web site at
www.clovercorp.com.au.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
29
There are currently four members of the Audit Committee, all of whom are non-executive Directors
and are considered to be independent (refer to principle 2 above).
Mr Billings, who is the Chair of the Audit & Risk Committee, is not the Chairman of the Board. The
Chairman of the Board is not a member of the Audit Committee (but may attend committee meetings
in an ex officio capacity). The details of the Audit Committee members at the date of this statement
and their attendance at meetings are set out in the Directors’ Report.
The Non-Executive Chairman, CEO, and Company Secretary may attend Audit Committee meetings
by invitation. The external auditors, PKF, are requested by the Audit Committee to attend appropriate
meetings to report on the results of their half-year review and of their planning for and result of the full
year audit.
The function of the Audit Committee is to assist the Board in fulfilling its statutory and fiduciary
responsibilities relating to:
•
The external reporting of financial information, including the selection and application of
accounting policies;
•
The independence and effectiveness of the external auditors;
•
The effectiveness of internal control processes and management information systems;
•
Compliance with the Corporations Act, ASX Listing Rules and any other applicable requirements;
•
The application and adequacy of risk management systems within the Company.
The CEO and the Chief Financial Officer are required to state in writing to the Board, by submission
to the Audit Committee, that the Company’s financial statements present a true and fair view, in all
material respects, of the Company’s financial position and operational results and that they are in
accordance with relevant accounting standards. A declaration under Section 295A of the
Corporations Act from the CEO and Chief Financial Officer has been received in respect of the current
reporting period.
Before it is released to the market, the Chairman reviews any periodic corporate reports.
Principle 5 – Make timely and balanced disclosure
The Board recognises the need to ensure that all investors have equal and timely access to material
information regarding the Company and for announcements to be factual, clear, balanced and
complete.
The Company has established a Continuous Disclosure Policy to ensure compliance with the ASX
and Corporations Act continuous disclosure requirements which can be viewed at the Corporate
Governance section of the Company’s web site at www.clovercorp.com.au. The policy requires timely
disclosure through the ASX Company announcements platform of information concerning the
Company that a reasonable person would expect to have a material effect on the price or value of the
Company’s securities, or which would materially influence the decision making of investors. Internal
procedures are in place to ensure that relevant information is communicated promptly. The Company
Secretary is the nominated continuous disclosure officer for the Company.
It is the responsibility of the Company Secretary to ensure the board receives copies of all market
announcements promptly after they have been made.
The Company will not release any information publicly, including any new and substantive investor or
analyst presentation, that is required to be disclosed through the ASX, until the Company has received
formal confirmation of its release to the market by the ASX.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
30
Principle 6 – Respect the rights of security holders
The Board is committed to ensuring that shareholders are fully informed of all material matters
affecting the Company in a timely manner.
The dissemination of information is mainly achieved as follows:-
•
An Annual Report is distributed (electronically if preferred) to shareholders in November each
year;
•
A newsletter is periodically distributed to shareholders;
•
Announcements to the ASX and press releases advising of events which are of particular
significance to the progress and prospects of the Company, and
•
Significant information is also posted on the Company’s website.
In addition, shareholders are encouraged to attend and participate in the Annual General Meeting
(AGM) of the Company. The external auditor attends the AGM to answer shareholders’ questions
with regard to the conduct of the audit and the content of the Auditor’s Report. The Company ensures
that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a
show of hands. The Company’s shareholders may elect to receive information from the Company
and its registry electronically. Otherwise the Company and its registry will communicate by post with
shareholders who have not elected to receive information electronically. The Company’s share
registry helps to manage these shareholder communication preferences. The Company’s share
registry is Computershare Investor Services Pty Ltd; https://www.computershare.com.au
Principle 7 – Recognise and manage risk
The Company is committed to identifying and managing areas of significant business risk to protect
shareholders, employees, earnings and the environment. Arrangements in place include:-
•
Regular detailed financial, budgetary and management reporting;
•
Procedures to manage financial and operational risks;
•
Regular monthly ‘deep dives’ to assess risk in each Board meeting;
•
Established organisational structures, procedures and policies dealing with the areas of health
and safety, environmental issues, industrial relations and legal and regulatory matters;
•
Comprehensive insurance and risk management programs;
•
Procedures requiring Board approval for all borrowings, guarantees and capital expenditure
beyond minor levels;
•
Where applicable, the utilisation of specialised staff and external advisors; and
•
Regular operational audits undertaken by major customers.
Management is responsible for the design and implementation of a risk management and internal
control system which manages the material business risks of the Company and reporting to the Board
on whether those risks are being managed efficiently. Management reported to the Board on an
ongoing basis during the current reporting period.
Whilst the Company does not have an internal audit function, the Board of Directors regularly reviews
the external risks to the Company and confirms it has conducted such a review his financial period.
The Board reviews and approves management’s plans to reduce the impact of potential risks and
monitors progress against these plans.
The Company’s risk management approach is to identify, evaluate, and mitigate or manage its
financial, operational and business risks. Our risk assessment approach includes an estimation of
the likelihood of risk occurrence and potential impacts on the financial results. Risks are assessed
across the business and reported to the Audit & risk Committee and to the Board where required
under the Company’s Risk Management Framework.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CORPORATE GOVERNANCE
31
Principle 7 – Recognise and manage risk (continued)
The Board remains optimistic about future trading performance but acknowledges there are certain
factors that may pose a risk to the achievement of business strategies and future performance, in
particular the potential ongoing impact of supply chain challenges and commodity price movements.
The focus of the Company’s risk management efforts this year has also included consideration of
political risk in the context of its international investments and operations, capacity management,
cyber risk as well as broader environmental and sustainability activities.
Other than as disclosed, the Company does not have any exposure to economic, environmental and
social sustainability risks to disclose during the reporting period. The Board is monitoring the evolving
debate and expected reporting requirements in future periods around mandatory climate change and
sustainability reporting disclosures.
The CEO and the Chief Financial Officer are required to state in writing to the Board, by submission
to the Audit Committee, that the risk management and internal control compliance systems are
operating efficiently and effectively. In their declaration under section 295A of the Corporations Act
the CEO and Chief Financial Officer have made this statement in respect of the current reporting
period.
Principle 8 – Remunerate fairly and responsibly
The Company has established a People & Culture Committee which currently consists of four
independent, non-executive Directors. Mr Ian Glasson is the Chair of the People & Culture
Committee. The Committee makes recommendations to the full Board on remuneration matters and
other terms of employment for Executive Directors and Non-Executive Directors.
Senior executive performance is continually monitored by the CEO and the CEO’s performance is
subject to continuous monitoring by the full Board.
The remuneration of the CEO is reviewed annually by the People & Culture Committee, which consists
of only Non-Executive Directors. The remuneration of the senior executive staff is reviewed annually
by the full Board after taking into consideration the recommendations of the People & Culture
Committee and the CEO.
The CEO and senior executive staff are remunerated by way of salary, performance incentive
payments, non-monetary benefits, and superannuation contributions.
Non-Executive Director’s fees are reviewed periodically by the full Board after taking into
consideration the Company’s performance, market rates, level of responsibility and the
recommendations of the People & Culture Committee. Non-Executive Directors are remunerated by
way of fees in the form of cash and superannuation contributions and are not entitled to receive bonus
payments or any equity-based remuneration.
Remuneration is set so as to attract and retain suitable personnel and to motivate them to pursue the
long-term growth and success of the Company.
Further information of Directors’ and Executive remuneration is set out in the Remuneration Report.
For further information concerning the corporate governance practices of the Company refer to the
corporate governance section of the Company’s web site at www.clovercorp.com.au.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
32
Notes
2024
2023
$'000
$'000
Revenue
2
62,207
79,875
Net Exchange Gains / (Losses)
3
172
294
Net Interest expense
3
(899)
(730)
Raw materials, consumables & conversion costs
(45,345)
(56,137)
Marketing and sales expenses
(4,818)
(5,691)
Administration and corporate expenses
(5,556)
(5,514)
Research and development expenses
(2,493)
(2,572)
New Market Development Costs
(865)
(677)
Share of net profit of investments accounted for
under the equity method
(486)
(487)
Profit before income tax
3
1,917
8,361
Income tax (expense)
4
(402)
(2,156)
Profit after tax for the period attributable to
members of the parent entity
1,515
6,205
Other comprehensive profit/(loss)
Items that may be reclassified subsequently to profit
or loss:
Foreign currency translation adjustments
(386)
822
Total comprehensive profit for the year
1,129
7,027
Earnings per share (EPS)
Basic earnings per share (cent per share)
22
0.91
3.72
Diluted earnings per share (cent per share)
22
0.91
3.72
This Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2024
33
Notes
2024
2023
$'000
$'000
Current assets
Cash and cash equivalents
6
12,259
9,437
Trade and other receivables
7
13,711
11,948
Inventories
8
29,554
36,877
Other current assets - prepayments
1,357
1,744
56,881
60,006
Non-current assets
Property, plant and equipment
9
10,692
9,103
Right of use assets
10
1,845
2,238
Investments in associates
11
11,251
11,662
Deferred tax assets
4
1,816
1,286
Intangible assets
12
1,907
1,907
27,511
26,196
Total assets
84,392
86,202
Current liabilities
Trade and other payables
13
5,087
4,647
Interest bearing liabilities
14
3,435
1,743
Lease liability
15
411
386
Current tax liabilities
-
594
Short-term provisions
16
898
919
9,831
8,289
Non-current liabilities
Interest bearing liabilities
14
5,033
7,690
Lease liability
15
1,508
1,893
Deferred tax liability
4
892
1,142
Long-term provisions
16
58
37
7,491
10,762
Total liabilities
17,322
19,051
Net assets
67,070
67,151
Equity
Issued capital
17
36,270
36,270
Reserves
18
(1,199)
(855)
Retained profits
31,999
31,736
Total equity
67,070
67,151
This Statement of Financial Position should be read in conjunction with the accompanying notes.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
34
Issued
capital
Retained
profits
Share-
based
payment
reserve
Foreign
currency
translation
reserve
Total
$'000
$'000
$'000
$'000
$'000
Balance at 1 August 2022
35,603
28,448
-
(1,011)
63,040
Profit attributable to members of the
entity
-
6,205
-
-
6,205
Other comprehensive income
-
-
-
822
822
Total Comprehensive Income for the
year
6,205
822
7,027
Transactions with Owners in their
capacity as owners
Dividend paid
-
(2,917)
-
-
(2,917)
Shares issued for the period
667
667
Share-based payment reserve
-
-
(666)
-
(666)
Balance at 31 July 2023
36,270
31,736
(666)
(189)
67,151
Balance at 1 August 2023
36,270
31,736
(666)
(189)
67,151
Profit attributable to members of the
entity
-
1,515
-
-
1,515
Other comprehensive income
-
-
-
(386)
(386)
Total Comprehensive Income for the
year
1,515
(386)
1,129
Transactions with Owners in their
capacity as owners
Dividend paid
-
(1,252)
-
-
(1,252)
Shares issued for the period
-
-
-
-
-
Share-based payment reserve
-
-
42
-
42
Balance at 31 July 2024
36,270
31,999
(624)
(575)
67,070
This Statement of Changes in Equity should be read in conjunction with the accompanying notes.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
35
Notes
2024
2023
$ '000
$ '000
Cash flows from operating activities
Receipts from customers
60,730
87,489
Payments to suppliers and employees
(49,069)
(78,122)
Net Interest paid
(899)
(730)
Income tax paid
(2,308)
(1,901)
Net cash inflow from operating activities
21
8,454
6,736
Cash flows from investing activities
Acquisition of plant and equipment
(2,328)
(1,639)
Investment in MDLP
(287)
-
Loans to Associates
(356)
(890)
Net cash outflow on investing activities
(2,971)
(2,529)
Cash flows from financing activities
Dividends paid
5 (a)
(1,252)
(2,917)
Loan Drawdowns
5,000
-
Repayment of interest-bearing liabilities
(5,966)
(1,735)
Lease payments
(443)
(229)
Net cash outflow on financing activities
(2,661)
(4,881)
Net increase / (decrease) in cash held
2,822
(674)
Cash and cash equivalents at the beginning of the
period
9,437
10,111
Cash and cash equivalents at the end of the period
6
12,259
9,437
This Statement of Cash Flows should be read in conjunction with the accompanying notes.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
36
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report covers Clover Corporation Limited (“the Company”) and controlled entities (“the
consolidated entity or “the Group”). Clover Corporation Limited is a listed public Company,
incorporated and domiciled in Australia.
Basis of preparation
The financial report is a general-purpose financial report that has been prepared in accordance with
Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001.
The financial report also complies with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board.
The consolidated financial statements have been prepared on the basis of historical cost, except for
certain financial instruments that are measured at fair value. All amounts are presented in Australian
dollars, unless otherwise noted.
The consolidated entity has applied the relief available to it in ASIC Corporations Instrument
(Rounding in Financial/ Directors’ Reports) 2016/191 and accordingly amounts in the financial report
and the directors’ report have been rounded off to the nearest thousand dollars, unless otherwise
stated.
The financial report was authorised for issue on 23 September 2024 by the Board of Directors.
This Note 1 details the material accounting policies adopted by the consolidated entity in the
preparation of the financial report.
(a) (i)
Changes in accounting policy and disclosures, standards and interpretations
The consolidated entity has adopted all amendments to Australian Accounting Standards which
became applicable for the consolidated entity from 1 August 2023. No significant impact has arisen
on recognition, measurement, or disclosure in the financial report from application of these standards.
(b) Principles of consolidation and investment in associates
Investment in controlled entities
The consolidated financial statements incorporate the financial statements of Clover Corporation
Limited and entities controlled by the Company and its subsidiaries. All subsidiaries have a reporting
date of 31 July.
Investment in associates
Associates are entities over which the consolidated entity has significant influence but not control or
joint control. Investments in associates are accounted for using the equity method. Under the equity
method, the share of the profits or losses of the associate is recognised in profit or loss and the share
of the movements in equity is recognised in other comprehensive income. Investments in associates
are carried in the statement of financial position at cost plus post-acquisition changes in the
consolidated entity’s share of net assets of the associate. Goodwill relating to the associate is
included in the carrying amount of the investment and is neither amortised nor individually tested for
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
37
impairment. Dividends received or receivable from associates reduce the carrying amount of the
investment.
(c) Income tax
In determining the current tax position, Research and Development incentive allowances are
accounted as tax credits, reducing income tax payable and current tax expense.
Tax consolidation
Clover Corporation Limited and its wholly-owned Australian subsidiaries have not formed an income
tax consolidated group under tax consolidation legislation.
(d) Inventories
Costs are assigned on the basis of weighted average costs.
(e) Property, plant and equipment
Each class of property, plant and equipment is carried at cost, less where applicable any accumulated
depreciation and impairment losses.
Depreciation
The depreciable amount of all fixed assets are depreciated on a straight-line basis.
The depreciation rates used for each class of depreciable assets are:
Class of asset
Depreciation Rates
Buildings, at cost
4.00% - 15.00%
Plant and equipment, at cost
5.00% - 33.33%
Furniture and equipment, at cost
10.00% - 33.00%
(f)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost.
Right-of-use assets are depreciated on a straight-line basis in a accordance with lease terms.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease
liability for short-term leases with terms of 12 months or less and leases of low-value assets. Lease
payments on these assets are expensed to profit or loss as incurred.
(g) Leases
A lease liability is recognised at the commencement date of a lease. The lease liability is initially
recognised at the present value of the lease payments to be made over the term of the lease,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the
consolidated entity's incremental borrowing rate.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
38
(h) Financial instruments
Financial assets
The consolidated entity’s financial assets are measured at amortised cost and comprise trade and
other receivables and cash and cash equivalents.
Allowance for expected credit losses (ECL)
For trade receivables and contract assets, the consolidated entity applies a simplified approach in
calculation of ECLs. Thus, the consolidated entity does not track changes in credit risk, but instead
recognises a loss allowance based on lifetime ECLs at each reporting date. The consolidated
entity’s current impairment allowance has been based on historical credit loss experience, adjusted
for forward looking factors specific to the debtors and the economic environment and future
positions.
The loss allowance is recognised in profit or loss.
Financial liabilities
The consolidated entity measures all financial liabilities at amortised cost.
The financial liabilities of the consolidated entity comprise trade payables, bank and other loans and
lease liabilities.
(i)
Impairment of assets
At each reporting date, the consolidated entity reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset’s carrying value. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset.
Any excess of the asset’s carrying value over its recoverable amount is expensed to profit or loss.
(j)
Intangibles
Goodwill
Goodwill is carried at cost less accumulated impairment losses.
(k) Foreign currency transactions and balances
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars which is the Company’s
functional and presentation currency.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-
end exchange rate.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
39
(l)
Revenue
Revenue from sale of inventory is recognised at the point in time when control of the assets is
transferred to the customer, which is generally upon delivery.
All revenue is stated net of the amount of goods and services tax (GST).
(m) Employee benefits
Provision is made for the consolidated entity’s liability for employee benefits arising from services
rendered by employees to the reporting date.
(n) Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards in respect of shares, in the form of performance rights, that are
provided to employees in exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value has been
calculated using the VWAP for each period in which the performance rights have been awarded. No
account is taken of any other vesting conditions.
The cost is recognised in employee benefits expense, together with a corresponding increase in
equity, over the period in which the service and, where applicable, the performance conditions are
fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at
each reporting date until the vesting date reflects the extent to which the vesting period has expired
and the consolidated entity’s best estimate of the number of equity instruments that will ultimately
vest. The expense or credit in the statement of profit or loss for a period represents the movement in
cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest because non-market performance
and/or service conditions have not been met. Where awards include a market or non-vesting
condition, the transactions are treated as vested irrespective of whether the market or non-vesting
condition is satisfied, provided that all other performance and/or service conditions are satisfied.
(o) Operating segments
An operating segment is a component of an entity that engages in business activities from which it
may earn revenues and incur expenses (including revenues and expenses relating to transactions
with other components of the same entity), whose operating results are regularly reviewed by the
entity's chief operating decision maker to make decisions about resources to be allocated to the
segment and assess its performance and for which discrete financial information is available. This
includes start-up operations which are yet to earn revenues.
Operating segments have been identified based on the information provided to the CEO and CFO.
(p) Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data; obtained both
externally and within the consolidated entity.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
40
Key estimate
Impairment
The consolidated entity assesses impairment at each reporting date by evaluating conditions and
events specific to the consolidated entity that may be indicative of impairment triggers. Recoverable
amounts of relevant assets are reassessed using value-in-use calculations performed. In assessing
recoverable amounts, several key estimates are made.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and
judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and
makes assumptions to allocate an overall expected credit loss rate for each group. These
assumptions include recent sales experience, historical and future collection rates.
Key judgements
Impairment of goodwill:
Goodwill is allocated to the tuna oil cash-generation units which are based on the controlled entity’s
principal activities. The Company assessed the recoverable amount of goodwill and determined that
no impairment was required at reporting date. Recoverable amounts of relevant assets are
reassessed using value-in-use calculations that incorporate various key assumptions.
Refer to Note 12 for further details on the assumptions used in these calculations.
Inventory realisation:
The measurement of inventory at the lower of cost and net realisable value requires judgements to
be made in respect of the forecast demand for the consolidated entity’s products and the matching
of raw material purchasing and the manufacturing process to meet forecasts. The possibility that
inventory lines may exceed optimum levels or be obsolete is factored into adjustments necessary
to measure inventory at net realisable value, should it be determined to be lower than cost.
Certain lines of inventory are carried at net realisable value, that being lower than cost (refer to
Note 8). The impact of net realisable value adjustments on the financial result for the year is
disclosed in Note 3.
Income tax:
Deferred tax assets are recognised for unused tax losses and tax offsets to the extent that it is
probable that taxable profit will be available against which the losses and offsets can be utilised.
Management judgement is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future taxable profits together with future tax
planning strategies.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
41
Consolidated
2024
2023
$'000
$'000
2. Revenue and other income
Operating activities:
Sales of goods
62,207
79,875
Other income:
Interest revenue
-
-
Total revenue
62,207
79,875
The disaggregation of revenue from
contracts with customers is as follows:
Timing of revenue:
Goods transferred at a point in time
62,207
79,875
Geographical location:
Australia / New Zealand
29,672
32,105
Asia
17,124
20,225
Europe / Middle East
12,845
24,536
Americas
2,566
3,009
62,207
79,875
3. Expenses
Profit before income tax includes the following items:
Employee benefits expense
8,839
7,836
Share-based payments expense / (credit)
42
-
Inventory Scrap / Impairment
1,200
867
Melody Dairies contractual charges
-
-
Depreciation and amortisation:
- buildings
340
357
- plant and equipment
359
251
- office furniture and equipment
39
59
- right-of-use assets
427
252
1,165
919
Net exchange Gains / (Losses)
172
294
Interest expense
899
730
Minimum lease payments:
-
short term leases
571
567
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
42
Consolidated
2024
2023
$'000
$'000
4. Income tax expense:
(a) The components of tax expense comprise:
Current tax
(378)
2,097
Deferred tax asset
530
277
Deferred tax liability
250
(218)
402
2,156
(b) Reconciliation of income tax expense/(credit):
The aggregated amount of income tax expense attributable to
the period differs from the amount’s prima facie payable on
profits from ordinary activities. The difference is reconciled as
follows:
Prima facie tax payable on group profit before income tax at
30%
575
2,508
Tax effect amounts:
-
Research and development claim
(49)
(597)
-
Lower tax rates in foreign jurisdictions
36
-
-
Prior period tax losses brought to account
(126)
-
-
Sundry other
(34)
245
Income tax expense/ attributable to profit
402
2,156
(c) Deferred tax assets
Deferred tax asset
1,816
1,286
The deferred tax assets balance comprises the following
temporary differences:
Impairment of inventory
288
134
Provisions
344
341
Lease Liability
303
356
Other temporary differences
881
455
1,816
1,286
Reconciliation:
Opening balance
1,286
1,009
(Charges) / credits to income statement
530
277
Closing balance
1,816
1,286
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
43
Consolidated
2024
2023
$'000
$'000
(d)
Deferred tax liability
892
1,142
The deferred tax liability comprises the following
temporary differences:
Prepayments
38
45
Book / tax Assets
459
477
Lease Asset
291
347
Unrealised foreign exchange
104
198
Other temporary differences
-
75
892
1,142
Reconciliation:
Opening balance
1,142
924
Charges / (credits) to income statement
(250)
218
Closing balance
892
1,142
5. Dividends
(a) Dividend paid during the period
Final dividend for the year ended 31 July 2023 of 0.75 cent per
share (FY22: 1.0 cent per share) fully franked at the tax rate of
30%, paid 20 November 2023
1,252
1,664
Interim dividend for the year ended 31 July 2024 of 0.0 cent per
share (FY23: 0.5 cent per share)
-
1,253
1,252
2,917
Franking account balance
Franking credits available for subsequent financial years
13,113
13,299
The above available amounts are based on the balance of the dividend franking account at the
period end adjusted for franking credits that will arise from the payment of the current tax liability;
franking debits that will arise from payment of dividends recognised as a liability at period end; and
franking credits that will arise from dividends recognised as a receivable at period end.
There were no dividend or distribution reinvestment plans operating during the financial period.
(b) Dividends declared after reporting date
The Directors have declared a final dividend for the financial year ended 31 July 2024 of 0.75 cent
per share (FY23: final 0.75 cent per share) fully franked at 30%, payable on 18 November 2024, but
not recognised as a liability at the end of the financial period.
The record date for this dividend will be 22 October 2024.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
44
Consolidated
2024
2023
$'000
$'000
6. Cash and cash equivalents
Cash at bank
12,259
9,437
12,259
9,437
7. Trade and other receivables
Current
Trade debtors
11,997
11,070
Less: expected credit losses
(214)
(54)
Net Trade Debtors
11,783
11,016
Loan to Associate
1,246
890
Income Tax Receivable
541
-
Other debtors
141
42
Total current trade and other receivables
13,711
11,948
Provision for impairment of receivables
Trade receivables are amounts due from customers for goods sold in the ordinary course of
business. They are generally due for settlement between 30 and 120 days and therefore are
classified as current. Other receivables generally arise from transactions outside the usual
operating activities of the consolidated entity. Settlement timeframes may vary, though their
classification is current.
Refer to Note 26 for more information on credit risk of trade and other receivables.
8. Inventories
Raw materials
16,110
21,478
Goods in transit
1,136
1,034
Finished goods
13,347
14,644
30,593
37,156
Less: provision for inventory obsolescence
(1,039)
(279)
Total Inventories
29,554
36,877
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
45
Consolidated
2024
2023
$'000
$'000
9. Property, plant and equipment
Land, at cost
2,000
2,000
Buildings, at cost
6,190
6,234
Less: accumulated depreciation
(2,829)
(3,049)
Total Buildings
3,361
3,185
Plant and equipment, at cost
6,008
2,827
Less: accumulated depreciation
(1,211)
(959)
Total plant and equipment
4,797
1,868
Capital WIP
212
1,991
Furniture and equipment, at cost
679
377
Less: accumulated depreciation
(357)
(318)
Total furniture and equipment
322
59
Total property, plant and equipment
10,692
9,103
Reconciliation of the carrying amounts of each class of asset at the beginning and the
end of the current financial period:
Land
Balance at beginning of the period
2,000
2,000
Carrying amount at the end of the period
2,000
2,000
Buildings
Balance at beginning of the period
3,185
2,752
Additions
347
-
Transfers In
169
790
Depreciation expense
(340)
(357)
Carrying amount at the end of the period
3,361
3,185
Plant and equipment
Balance at beginning of the period
1,868
1,343
Additions, net of disposals
1,608
-
Transfers In
1,573
751
Depreciation expense
(252)
(226)
Carrying amount at the end of the period
4,797
1,868
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
46
Consolidated
2024
2023
$'000
$'000
Capital WIP
Balance at beginning of the period
1,991
1,740
Additions
286
1,639
Transfers Out
(1,958)
(1,487)
Foreign currency translation
-
124
Depreciation expense
(107)
(25)
Carrying amount at the end of the period
212
1,991
Furniture and equipment
Balance at the beginning of the period
59
192
Additions, net of disposals
85
-
Transfers In / (Out)
216
(74)
Depreciation expense
(39)
(59)
Carrying amount at the end of the period
321
59
10. Right of use assets
Right of use assets – premises
2,693
2,659
Less: accumulated depreciation
(848)
(421)
1,845
2,238
Balance from prior year
2,238
1,150
Additions to Right of use assets
-
1,340
Foreign currency translation
34
-
Depreciation expense
(427)
(252)
Carrying amount at end of period
1,845
2,238
11. Investment in associates
Investment in Melody Dairies
11,251
11,662
Total Investment in associates
11,251
11,662
The consolidated entity has a 43.9% (FY23: 41.9%) interest in Melody Dairies, a limited
partnership established for the purpose of undertaking construction and operation of a
manufacturing facility in New Zealand. The objective of the project is to enable expansion of the
consolidated entity’s capacity to deliver its products to the market, through its equity interest in
the project.
The consolidated entity’s interest in Melody Dairies is accounted using the equity method in the
consolidated financial statements. As of the reporting date, the consolidated entity’s investment
is represented by its share of assets, cash and related working capital amounts to an equity
accounted total of $13.894m, net of $2.643m in equity accounted operating losses and translation
adjustments.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
47
Melody Dairies continues to be in breach of its banking covenant with the Bank of New Zealand
(BNZ) loan agreement. BNZ has acknowledged the breach and has not taken any action in
relation to the breach. The total value of the borrowings held by Melody Dairies is $NZ 20.1m
with BNZ.
The presence of a covenant breach can lead to the total borrowings falling due within 12
months and were this to happen Clover and the other partners would be required to fund their
share of these borrowings.
Consolidated
2024
2023
$'000
$'000
12. Intangible assets
Goodwill on acquisition, at cost
1,907
1,907
Total intangible assets
1,907
1,907
There were no acquisitions of controlled entities in FY24 (FY23: None).
Impairment assessment
Goodwill is allocated to the tuna oil cash-generating unit which is based on the controlled entities’
principal activities.
During the 31 July 2024 financial year, the Company assessed the recoverable amount of
goodwill relating to the tuna oil segment and determined that goodwill is not impaired. The
recoverable amount of the cash-generating unit, being the assets of the cash-generating unit and
goodwill, was assessed by reference to the cash-generating unit’s value-in-use. Value-in-use is
calculated based on the present value of cash flow projections over a 5-year period approved by
the Board of Directors. The cash flows are discounted using a pre-tax 12% risk rate and 2%
annual growth rate. Management believes that any reasonable possible change in key
assumptions on which recoverable amount is based would not cause the aggregate carrying
amount of the cash generating unit to exceed its recoverable amount.
Consolidated
2024
2023
$'000
$'000
13. Trade and other payables
Current
Trade creditors
5,081
3,961
Sundry creditors and other accruals
6
686
5,087
4,647
14. Interest bearing liabilities
Current interest-bearing liabilities
3,435
1,743
Non-current interest-bearing liabilities
5,033
7,690
8,468
9,433
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
48
Assets pledged as security
The interest-bearing liabilities are secured by a first mortgage over the investment in Melody
Dairies (with a carrying value of $11.251m), land and buildings (with a carrying value of $5.361m),
as well as a general charge over the consolidated entity’s assets.
Consolidated
2024
2023
$'000
$'000
15. Lease liabilities
Current lease liabilities
411
386
Non-current lease liabilities
1,508
1,893
1,919
2,279
The Company is reasonably certain that the lease term (inclusive of options) of the newly occupied
facility in Queensland will be exercised and have disclosed the lease term as 10 years. The facility
in Ecuador has an initial lease period of 5 years with options to extend that lease period for a further
10 years.
16. Provisions
Aggregate employee entitlements:
Current
-
Annual Leave
453
488
-
Long Service Leave
440
431
-
International Obligations
5
-
898
919
Non-current
-
Long Service Leave
58
37
Total employee entitlements
956
956
< 1 year
1 -5 years
> 5 years
Total
undiscounted
lease
liabilities
Lease liabilities
included in the
Statement of
Financial Position
$’000
$’000
$’000
$’000
$’000
2024
Lease Liabilities
411
1,242
266
2,103
1,919
2023
Lease Liabilities
475
1,832
241
2,548
2,279
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
49
Consolidated
2024
2023
$'000
$'000
17. Issued capital
(a) Issued and paid-up capital
166,999,431 (FY23:166,999,431) fully paid ordinary
shares
36,270
36,270
Total contributed equity
36,270
36,270
The Company has issued share capital amounting to 166,999,431 ordinary shares of no-par value.
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of shares held. At shareholders’ meetings, each ordinary share is entitled
to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
(a) Movement in ordinary shares
The Company issued nil shares during the financial period.
Rights to capital
At the reporting date there were 64,491 performance rights offers whose conditions had been met,
entitling recipients to one share per right, which vested as at 31 July 2024. In the case of the CEO
/ Managing Director’s 35,144 rights, these rights will require shareholder approval at the November
2024 Annual General Meeting for shares to be issued.
There are an additional 1,640,231 performance rights available to entitling recipients that have
been granted but are still subject to meeting conditions of achievement in future years.
(b) Capital management
The Company’s objective in managing capital is to continue to provide shareholders with attractive
investment returns and ensure that the Company can fund its operations and continue as a going
concern.
The Company’s capital consists of shareholders’ equity plus net debt. The movement in equity is
shown in the Consolidated Statement of Changes in Equity.
There are no externally imposed capital requirements other than meeting the bank covenants imposed
by two of the lending facilities as at 31 July 2024. The Company was compliant with all covenants.
To maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or raise debt.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
50
Consolidated
2024
2023
$'000
$'000
18. Reserves
Foreign currency translation
(575)
(189)
Share-based payment reserve
(624)
(666)
Total
(1,199)
(855)
The foreign currency translation reserve records exchange differences arising on translation of the
financial statements of foreign subsidiaries.
The Long-Term Incentive Plan grants shares in the Company to certain employees. The fair value of
performance rights granted under the Long-Term Incentive Plan is recognised as an employee
expense with a corresponding increase in the equity reserve.
19. Share-based payments
Certain employees (including key management personnel) have been granted performance rights
under the consolidated entity’s Long Term Incentive Plan during the current and previous financial
year. The performance rights do not give the holder a legal or beneficial interest in ordinary fully paid
shares in the Company until those rights vest. Prior to vesting, performance rights do not carry a right
to vote or receive dividends. When the performance rights have vested, ordinary fully paid shares will
be allocated, and these shares will rank equally with existing shares.
The following table summarises the performance conditions in respect of active grants for which 50%
of the performance rights that are subject to a particular condition vest on achievement of the target,
and a further 50% on achievement of the stretch goals.
Targeted
result
Year ended
31 July 2024
Targeted
result
Year ended
31 July 2025
Targeted
result
Year ended
31 July 2026
Targeted
result
Year ended
31 July 2027
Issue Date
August 2021
August 2022
August 2023
August 2024
Vesting and Test Date
July 2024
July 2025
July 2026
July 2027
Financial Measure
Target
5%
compound
growth on
FY21 NPAT
5%
compound
growth on
FY22 NPAT
5%
compound
growth on
FY23 NPAT
Average
NPAT Target
over 3 years
Financial Measure
Stretch
15%
compound
growth on
FY21 NPAT
15%
compound
growth on
FY22 NPAT
15%
compound
growth on
FY23 NPAT
Average
NPAT Stretch
over 3 years
In relation to the rights granted, the performance condition shown in the table accounts for 50% of the
total potential LTI and the other 50% is based upon achievement of targeted levels of new product
sales and strategic goals.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
51
The movement in the number of rights on issue is summarised in the following table.
Number of
rights
Opening
balance
Granted
Closing
balance
Weighted
average fair
value of
grants issued
$’000
31 July
2023
Fulfilled /
(Lapsed)
(Vested)
To be
fulfilled
Total rights
870,038
(834,346)
(35,692)
1,202,315
1,202,315
$ 1,454
31 July
2024
Total rights
1,202,315
(1,137,824)
(64,491)
2,485,712
2,485,712
1,758
The weighted average fair value of the performance rights granted to employees was historically
determined on the basis of the price paid by the Company to acquire the settlement shares on market.
In the current financial year, the weighted average fair value of the rights granted has been calculated
on the last 10 days VWAP share price relative to each year of issue.
20. Parent Company information
Consolidated
2024
2023
$'000
$'000
Current assets
97
225
Non-current assets
37,286
37,774
Total assets
37,383
37,999
Current liabilities
257
95
Total liabilities
257
95
Net assets
37,126
37,904
Equity
Issued capital
36,270
36,270
Reserves
(624)
(666)
Accumulated Gains / (Losses)
1,480
2,300
Total equity
37,126
37,904
Net profit for the period before other comprehensive
income
433
(406)
Total comprehensive income for the period
433
(406)
Earnings per share (cents per share)
0.3c
(0.2c)
In FY24 and FY23 no dividend was issued by Nu-Mega Ingredients Pty Ltd to Clover Corporation
Limited.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
52
Country of
Incorporation
Percentage Owned
Controlled entities:
2024
2023
%
%
Clover Corporation Ltd Employee Incentive
Plans Trust
Australia
100
100
Nu-Mega Ingredients Pty Limited
Australia
100
100
Subsidiaries:
- Nu-Mega Ingredients Limited
United Kingdom
100
100
- Nu-Mega Ingredients (USA) Inc
United States of America
100
100
- Nu-Mega Ingredients (NZ) Limited
New Zealand
100
100
- Nu-Mega Ingredients NL B.V.
Netherlands
100
100
- Nu-Mega Ingredients Ecuador NMI S.A.
Ecuador
100
100
- Prem Neo Pty Ltd
Australia
100
100
21. Reconciliation of cash flow from operating activities to
Operating Profit
Profit for the period
1,515
6,205
Non cash items :
- Amortisation and depreciation
1,165
808
- Foreign exchange on international assets & liabilities
(172)
(293)
- Melody Dairies Limited Partnership Loss
486
487
- Employee benefits not paid in cash
-
-
Change in assets and liabilities, net of the effects of purchase of
subsidiaries
Decrease /(Increase) in receivables
(1,763)
7,614
(Increase)/Decrease in other assets
387
1,414
(Increase)/Decrease in inventories
7,323
(912)
(Decrease)/Increase in payables
440
(8,913)
(Decrease)/Increase in employee entitlements
-
70
Decrease/(Increase) in deferred tax assets
(530)
223
(Decrease)/Increase in current tax liability
(250)
-
Decrease(/Increase) in other
(147)
33
Net cash inflow from operating activities
8,454
6,736
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
53
22. Earnings per share
The following reflects the income and share data used in the calculation of basic and diluted
earnings per share:
2024
2023
$ 000
$ 000
(a) Reconciliation of earnings to net profit or loss
Profit attributable to members of the parent entity
1,515
6,205
Earnings used to calculate basic and diluted EPS
1,515
6,205
(b) Weighted average number of ordinary shares
outstanding during the period used in the calculation
of basic earnings per share
166,999,431
166,999,431
(c) Weighted average number of ordinary shares
outstanding during the period used in the calculation
diluted earnings per share
166,999,431
166,999,431
(d) Basic earnings per share (cents per share)
0.91c
3.72c
(e) Diluted earnings per share (cents per share)
0.91c
3.72c
The weighted average number of potential dilutive ordinary shares in FY24 is accounted for by:
-
Shares Issued
Nil
Nil
23. Auditor's remuneration
2024
$
2023
$
Remuneration of the auditor of the parent
entity in respect of:
- Auditing and reviewing the financial reports of the
Company and the controlled entities
116,491
105,000
- Taxation structuring and compliance services
15,015
15,290
131,506
120,290
24. Related party transactions
(a) Ultimate parent entity:
Clover Corporation Limited is the ultimate parent entity of the consolidated entity.
(b) Ownership interests:
Information in relation to ownership interest in controlled entities is provided in Note 20.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
54
25. Key management personnel compensation
(a) Names and positions held in the consolidated entity of key management personnel in office at any
time during the period were:
2024
$
2023
$
Short-term benefits
1,365,013
1,280,721
Long-term benefits
21,457
29,993
1,386,470
1,310,714
(b) Performance rights:
There were 42,768 Performance Rights offers available to Key management personnel whose
conditions have been met as at 31 July 2024. There were an additional 128,303 Performance Rights
offers available to key management personnel, subject to meeting relevant conditions which were not
met. The right to convert 42,768 Performance Rights to key management personnel was satisfied in
financial year ending 31 July 2024.
(c) Shareholding:
Balance
31 July 2023
Shares
Purchased
& (Sold)
Converted
Rights
Retirement
Balance
31 July 2024
Directors
R A Harrington
528,921
200,000
-
-
728,921
G A Billings
50,000
-
-
-
50,000
P J Davey
551,360
31,136
27,266
-
609,762
I D Glasson
60,000
20,000
-
-
80,000
T Brendish
27,055
16,400
-
-
43,455
DR S Green
36,234
-
-
-
36,234
1,253,570
267,536
27,266
-
1,548,372
KMP
A Allibon
89,000
181,000
-
-
270,000
Name
Position
Directors
R A Harrington
Non-Executive Chairman
G A Billings
Non-Executive Director
T Brendish
Non-Executive Director
I D Glasson
Non-Executive Director
Dr S Green
Non-Executive Director
P J Davey
Chief Executive Officer and Managing Director
Executive KMP
A G Allibon
Chief Financial Officer and Company Secretary
Key management personnel remuneration has been included in the Remuneration
Report section of the Directors’ Report.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
55
26. Management of financial risk
The consolidated entity's principal financial instruments consist of cash, deposits with bank, accounts
receivable, payables and borrowings.
Financial risk management policies
The consolidated entity manages its exposure to key financial risks, including interest rate and
currency risk in accordance with the consolidated entity's financial risk management policies. The
majority of sales are transacted in US dollars and Australian dollars. The objective of the policies is to
support the delivery of the consolidated entity's financial targets whilst protecting future financial
security.
Primary responsibility for identification and control of financial risks rests with the audit and risk
committee under the authority of the board. The board reviews and agrees policies for managing
each of the risks identified below, including the review of credit risk policies and future cash flow
requirements.
Specific financial risk exposures and management
The main risks arising from the consolidated entity's financial instruments are interest rate risk, foreign
currency risk, price risk, credit risk and liquidity risk. Interest rate risk is not significant given the
consolidated entity has minimal borrowings. The consolidated entity uses different methods to
measure and manage different types of risks to which it is exposed. These include monitoring levels
of exposure to foreign exchange risk and assessments of market forecasts for foreign exchange rates.
Ageing analysis and monitoring of specific credit allowances are undertaken to manage credit risk
and liquidity risk is monitored through the development of future rolling cash flow forecasts.
(a) Foreign currency risk
As a result of the consolidated entity having cash balances, trade receivables and trade payables
denoted in foreign currency, the consolidated entity's statement of financial position can be affected
by movements in the relevant exchange rates relative to the Australian dollar. The consolidated entity
utilises foreign exchange hedges to manage its exposure to currency fluctuations arising from the
purchase of goods and services in foreign currency.
At 31 July 2024, the consolidated entity had the following financial assets and liabilities denominated
in foreign currency.
2024
2023
$'000
$'000
Financial assets
Cash and cash equivalents
3,993
2,177
Trade and other receivable
6,627
3,814
Total financial assets
10,620
5,991
Financial liabilities
Trade and other payables
(1,596)
(3,036)
Total financial liabilities
(1,596)
(3,036)
At 31 July 2024, had the Australian Dollar moved as illustrated in the table below with all other
variables held constant, profit after tax and equity would have been affected as follows:
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
56
26. Management of financial risk (continued)
Foreign exchange movement
Post Tax Profit
Change in Equity
Higher/(Lower)
Higher/(Lower)
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Change in Profit
AUD:USD + 5%
(357)
(392)
(357)
(392)
AUD:USD - 5%
395
434
395
434
AUD:EUR + 5%
(137)
(303)
(137)
(303)
AUD:EUR - 5%
151
336
151
336
AUD/NZD + 5%
(280)
(291)
(280)
(291)
AUD/NZD - 5%
310
321
310
321
Significant assumptions used in the foreign currency exposure sensitivity analysis include:
•
Reasonable estimates of movements in foreign exchange rates were determined based on a
review of the last two years’ historical movements and economic forecasters’ expectations.
•
The reasonable movement of 5% was calculated by taking the spot rates for each currency
as at reporting date, moving this spot rate by 5% and then re-converting the foreign currency
into Australian dollars at the revised spot rate.
•
The net exposure at reporting date is representative of what the consolidated entity was, and
is expecting, to be exposed to in the next twelve months from reporting date.
(b) Price risk
The consolidated entity's exposure to commodity and price risk is considered minimal. There are
annual fixed price purchase contracts in place for forecast raw material requirements. From time to
time it may be necessary to purchase raw materials from outside of the agreements.
(c) Credit risk
Credit risk arises from the financial assets of the consolidated entity, which comprise cash and cash
equivalents, trade and other receivables. The consolidated entity's exposure to credit risk arises from
potential default of the counter party, with a maximum exposure equal to the carrying amount of the
financial assets.
The consolidated entity trades only with recognised, creditworthy third parties, and as such collateral
is not requested nor is it the consolidated entity's policy to securitize its trade and other receivables.
It is the consolidated entity's policy that all customers who wish to trade on credit terms are subject to
credit verification procedures including an assessment of their independent credit rating, financial
position, past experience and industry reputation. Risk limits are set for each individual customer in
accordance with parameters monitored by the CEO.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
57
26. Management of financial risk (continued)
These risk limits are regularly monitored. A breakdown of receivables showing those within/out of
terms is shown below. Receivable balances are monitored on an ongoing basis to minimize the
occurrence of bad debts.
Trade receivables as at 31 July 2024
Consolidated
2024
2023
$'000
$'000
Trade receivables:
Within terms
9,800
8,901
Over terms
1,983
2,112
Total
11,783
11,013
As at 31 July 2024, 3 customers make up the provision for Doubtful debts. One of these customers
is in voluntary administration with low confidence of recovering any portion of the debt. The amount
provided is $277,000 for this one customer.
For the remaining financial assets there are no significant concentrations of credit risk within the
consolidated entity and financial instruments are spread amongst a number of AAA rated financial
institutions.
(d) Liquidity risk
Liquidity risk arises from the financial liabilities of the consolidated entity and the consolidated entity’s
subsequent ability to meet these obligations to repay their financial liabilities and other obligations as
and when they fall due.
The consolidated entity's objective is to maintain a balance between continuity of funding and flexibility
through the use of cash balances, borrowings, working capital and leasing.
Maturity analysis of financial assets and liability based on management's expectations
The risk implied from the values shown in the tables below, reflects a balanced view of cash inflows
and outflows. Leasing obligations, trade payables and other financial liabilities mainly originate from
the financing of assets used in the consolidated entity’s ongoing operations such as property, plant,
equipment and investments in working capital.
Consolidated
Balance as at
31 July 2024
Less
than 1
year
1-5 years
Over 5
years
$'000
$'000
$'000
$'000
Realisable cash flows from
financial assets
Cash and cash equivalents
12,259
12,259
-
-
Trade and other receivables
13,170
13,170
-
-
Anticipated cash inflows
25,429
25,429
-
-
Financial liabilities and
obligations due for payment
Trade and other payables
5,087
5,087
-
-
Interest bearing liabilities
8,468
3,435
5,033
-
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
58
Leasing liabilities
1,919
320
1,389
210
Anticipated cash outflows
15,474
8,842
6,422
210
Net inflow/(outflow)
9,955
16,587
(6,422)
(210)
(e) Interest rate risk
The consolidated entity’s primary interest rate risk arises from long-term borrowings. The
consolidated entity’s bank loans outstanding, totalling $8,468,000 (FY23: $9,433,000) are principal
and interest payment loans, bearing interest at a weighted average current annual rate of 8.1%.
(f) Fair value
All assets and liabilities recognised in the statement of financial position, whether they are carried at
cost or at fair value, are recognised at amounts that represent a reasonable approximation of fair
value, unless otherwise stated in the applicable notes.
The carrying amounts of cash and bank balances, other receivables and other payables approximate
their fair values due to their short-term nature.
27. Operating segments
Identification of reportable segments
The consolidated entity operates in the industry of manufacturing tuna oil and encapsulated products
in Australia. Financial information about the business is reported to and reviewed by the Chief
Executive Officer and Board of Directors on a monthly basis, in order to assess performance and
determine the allocation of resources.
Geographical information
Revenues from external customers by domestic and export location of operations and information
about its non-current assets by location of assets is shown in the following table.
Revenue from
external customers
Non-current assets
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Australia / New Zealand
29,672
32,105
20,796
22,228
Asia
17,124
20,225
-
-
Europe / Middle East
12,845
24,536
-
-
Americas
2,566
3,009
4,808
1,804
Total
62,207
79,875
25,604
24,032
During the financial year there were 2 customers who represented 25% and 17% of total sales
respectively (FY23: 25% and 15% respectively).
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
NOTES TO THE FINANCIAL STATEMENTS (Continued)
FOR THE FINANCIAL YEAR ENDED 31 JULY 2024
59
28. Events subsequent to reporting date
No matter or circumstance has arisen since 31 July 2024 that has significantly affected, or may
significantly affect the consolidated entity's operations, the results of those operations, or the
consolidated entity's state of affairs in future financial years.
29. Contingencies
There are no contingent liabilities at the reporting date.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
Consolidated Entity Disclosure Statement
60
Name of Entity
Type of
Entity
Trustee,
partner or
participant
in JV
% of
share
capital
Place of
Business /
Country of
Incorporation
Australia
resident
or foreign
resident
Foreign
jurisdiction(s)
of foreign
residents
Nu-Mega Ingredients Pty Ltd
Company
-
100
Australia
Australia
n/a
Nu-Mega Ingredients Limited
Company
-
100
United
Kingdom
Foreign
United
Kingdom
Nu-Mega Ingredients (USA) Inc
Company
-
100
United
States of
America
Foreign
United
States of
America
Nu-Mega Ingredients (NZ) Limited
Company
-
100
New
Zealand
Foreign
New Zealand
Nu-Mega Ingredients NL BV
Company
-
100
Netherlands
Foreign
Netherlands
Nu-Mega Ingredients Ecuador NMI SA
Company
-
100
Ecuador
Foreign
Ecuador
Prem Neo Pty Ltd
Company
-
100
Australia
Australia
n/a
Basis of Preparation
This Consolidated Entity Disclosure Statement (CEDS) has been prepared in accordance with the
Corporations Act 2001 and includes information for each entity that was part of the consolidated entity
as at the end of the financial year in accordance with AASB 10: Consolidated Financial Statements.
Determination of Tax Residency
Section 295 (3A)(vi) of the Corporations Act 2001 defines tax residency as having the meaning in the
Income Tax Assessment Act 1997. The determination of tax residency involves judgement as there
are 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 Tax Commissioner’s public guidance in Tax Ruling TR 2018/5:
•
Foreign tax residency
Where necessary, the consolidated entity has used independent tax advisors in foreign jurisdictions
to assist in its determination of tax residency to ensure applicable foreign tax legislation has been
complied with (see section 295 (3A)(vii) of the Corporations Act 2001).
Partnerships and trusts
Entities are typically taxed on a flow through basis. Australian tax law generally does not contain
corresponding residency tests for partnerships and trusts, and these additional disclosures on the tax
status of partnerships and trusts have been provided where relevant.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
DIRECTORS DECLARATION
61
The Directors of Clover Corporation Limited declare that in their opinion:
(a) the financial statements and notes of the consolidated entity are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 July 2024
and of its performance for the period ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
(b) the financial statements and notes also comply with International Financial Reporting Standards
as disclosed in note 1;
(b) there are reasonable grounds to believe that the consolidated entity will be able to pay its debts
as and when they become due and payable; and
(a) The Consolidated Entity Disclosure Statement on page 60 is true and correct.
This declaration has been made after receiving the declarations required to be made to the directors
in accordance with section 295A of the Corporations Act 2001 for the financial year ending 31 July
2024.
This declaration is made in accordance with a resolution of the Board of Directors.
Mr Rupert A Harrington
Chairman
Melbourne
Date: 23 September 2024
62
PKF Melbourne Audit & Assurance Pty Ltd is a member of PKF Global, the network of member firms of PKF International Limited, each of which is a separately owned legal entity and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm(s). Liability limited by a scheme approved under Professional Standards Legislation.
PKF Melbourne Audit & Assurance Pty Ltd
ABN 75 600 749 184
Level 15, 500 Bourke Street
Melbourne, Victoria 3000
T: +61 3 9679 2222
F: +61 3 9679 2288
info@pkf.com.au
pkf.com.au
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CLOVER CORPORATION LIMITED
Report on the Financial Report
Auditor’s Opinion
We have audited the accompanying financial report of Clover Corporation Limited (the Company) and its controlled
entities (collectively the Group), which comprises the consolidated statement of financial position as at 31 July 2024,
the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes
in equity, and the consolidated statement of cash flows for the year then ended, notes to the financial statements,
including material accounting policy information, the consolidated entity disclosure statement, and the Directors’
Declaration of the Company and the consolidated entity (the Group) comprising the Company and the entities it
controlled at the year’s end or from time to time during the financial year.
In our opinion, the accompanying financial report is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group’s financial position as at 31 July 2024 and of its financial performance for
the year ended on that date; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 year. These matters were addressed in the context of our audit of the financial report as
a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each
matter below, our description of how our audit addressed the matter is provided in that context.
Key audit matter – Valuation of goodwill
How our audit addressed this matter
As at 31 July 2024, the carrying value of goodwill
totalled $1,906,935 (2023: $1,906,935), as disclosed in
note 12 of the financial report. The accounting policy
in respect to these assets is outlined in note 1 (i)
Intangible Assets.
An annual impairment test for goodwill and other
indefinite life intangible assets is required under AASB
136 Impairment of Assets. Management’s testing has
been performed using a discounted cash flow model
(Impairment Model) to estimate the value-in-use of
the Cash-Generating Unit (CGU) to which these
intangible assets have been allocated.
The evaluation of the recoverable amount required
the Group to exercise significant judgement in
determining key assumptions.
The outcome of this impairment assessment could
vary if different assumptions were applied.
Due to these factors, we consider the valuation of
goodwill to be a Key Audit Matter.
Our procedures included but were not limited to:
•
Assessing the appropriateness of Management’s
determination that a single CGU is appropriate in
assessing impairment;
•
Assessing the integrity and mathematical accuracy of
the Impairment Model;
•
Assessing the reasonableness of the cash flow budget
approved by the Directors, comparing to actual
results, and considering trends, strategies, and
outlooks;
•
Assessing the reasonableness of inputs into the
Impairment Model;
•
Assessing the short and medium term growth rates
applied in the forecast cash flow, considering
historical results and available industry data;
•
Performing sensitivity analysis around the key
assumptions within the cash-flow projections, to
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
INDEPENDENT AUDITOR’S REPORT
63
consider the likelihood of such movements occurring
sufficient to give rise to impairment; and
•
Reviewing the appropriateness of the disclosures in
the financial report.
Key audit matter – Valuation of investment in
associate (Melody Dairies)
How our audit addressed this matter
Clover holds a 43.9% equity interest in Melody Dairies
a New Zealand entity which is presented as an
investment in an associate in the financial statements.
The equity accounted carrying amount of the
investment is disclosed in note 11 as $11,251,00
(2023: $11,662,000).
The evaluation of the recoverable amount of the
investment in the associate required the Group to
exercise significant judgment in determining key
assumptions, assessing financial performance, and
projecting future cash flows. The outcome of this
impairment assessment could vary substantially if
different assumptions were applied.
Due to these factors, we consider valuation of
investment in associate (Melody Dairies) as a Key
Audit Matter.
Our procedures included but were not limited to:
•
Assessing the integrity and mathematical accuracy of
the Impairment Model;
•
Assessing the reasonableness of the cash flow
forecasts, comparing to actual results, and considering
trends, strategies, and outlooks;
•
Considered the terms, conditions & impact of the take
or pay arrangements relating to the operation of the
Melody Dairy facility & the related forecast model;
•
Assessing the reasonableness of inputs into the
Impairment Model;
•
Assessing the short and medium term growth rates
applied in the forecast cash flow, considering
historical results and available industry data;
•
Performing sensitivity analysis around the key
assumptions within the cash-flow projections, to
consider the likelihood of such movements occurring
sufficient to give rise to impairment; and
•
Reviewing the minutes of Melody Dairies directors’
meetings and financial statements through 31 July
2024 for evidence of concerns as to the current state
of the business or its outlook; and
•
Reviewing the appropriateness of the disclosures in
the financial report.
Key audit matter – Banking arrangements in
Investment in associate (Melody Dairies)
How our audit addressed this matter
Clover holds a 43.9% equity interest in Melody Dairies
a New Zealand entity which is presented as an
investment in an associate in the financial statements.
The equity accounted carrying amount of the
investment is disclosed in note 11 as $11,251,00
(2023: $11,662,000).
During the year there was breach of a covenant within
a banking facility agreement held by Melody
Dairies. The total value of the borrowings held by
Our procedures included but were not limited to:
•
Confirming our understanding of the terms and
conditions of the banking facility agreement held by
Melody Dairies including the potential consequences
of a covenant breach;
•
Reviewing the financial performance and cashflow
position of Melody Dairies as at 30 June 2024;
•
Discussing with the Board and Management of Clover
in relation to their understanding of the banking
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
INDEPENDENT AUDITOR’S REPORT
64
Melody Dairies is $NZD20.05m (2023: $NZ20.8m) with
the bank of New Zealand.
The presence of a covenant breach can lead to the
total borrowings falling due within 12 months and
were this to happen Clover and the other partners
would be required to fund their share of these
borrowings.
On the basis that this scenario would have cashflow
implications for Clover as an equity owner of Melody
Dairies we consider this a Key Audit Matter.
relationship Melody Dairies has and the consequences
if these borrowings fell due within 12 months;
•
Noting that whilst the bank has not provided a formal
written waiver at the date of this audit report, it is the
view of the board that the banking relationship
remains strong and there is no intention to action the
consequences of this covenant breach; and
•
Assessing the appropriateness of the disclosures
included in note 11.
Key audit matter – Revenue recognition
How our audit addressed this matter
The Group’s sales revenue amounted to $62,207,000
during the year (2023: $79,875,000). Note 1(m)
Revenue describes the accounting policies applicable
to distinct revenue streams, noting that revenue from
the sale of goods, after adjusting for discounts or
allowances, is recognised upon the delivery of goods
to customers. Shipments dispatched but not yet
delivered to customers are classified as goods in
transit inventories.
On the basis of the significance of the account and the
processes used to determine the recognition point,
we have considered revenue recognition as a Key
Audit Matter.
Our procedures included but were not limited to:
•
Evaluating a sample of contracts, identifying
contracted performance obligations, and agreeing
revenue amounts to the records accumulated as
inputs
to
the
financial statements,
including
supporting billing systems and bank records; these
procedures enabled our assessment of the values
recorded and the timing of revenue recognition
aligned to fulfilment of the Group’s performance
obligations, transferred at a point in time;
•
Evaluating the cut-off process and its reliability to
fairly account for dispatches not yet transferred to
customers at the reporting date and the recognition
of revenue in accordance with the Group’s accounting
policies; and
•
Assessing the consistency of the Group’s accounting
policies in respect of revenue recognition with the
criteria prescribed by the applicable standard, AASB
15 Revenue from contracts with customers.
Other Information
The Directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 31 July 2024 but does not include the financial report and our Auditor’s
Report thereon.
Our opinion on the financial report does not cover the other information and, accordingly, we do not express any form
of assurance conclusion thereon, with the exception of our opinion on the Remuneration Report.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report, or our knowledge obtained
in the audit, or otherwise appears to be materially misstated.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
INDEPENDENT AUDITOR’S REPORT
65
If, based on the work we have performed, we conclude that there is a material misstatement of the other information
we obtained prior the date of the Auditor’s Report, we are required to report that fact. We have nothing to report in
this regard.
Directors’ Responsibilities for the Financial Report
The Directors of the Company are responsible for the preparation of:
a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 ; and
b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001,
and for such internal control as the Directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due
to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the Directors either intend to liquidate the Group or cease operations, or have no realistic alternative but to do
so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individual or in aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the Directors.
•
Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events and conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
INDEPENDENT AUDITOR’S REPORT
66
•
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the group financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Directors, we determine those that were of most significance in the audit of
the financial report of the current year and are therefore the key audit matters. We describe these matters in our
auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Auditor’s Opinion
We have audited the Remuneration Report included in pages 14 to 23 of the Directors’ Report for the year ended 31
July 2024. In our opinion, the Remuneration Report of Clover Corporation Limited for the year then ended complies
with Section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
PKF
Kenneth Weldin
Melbourne, 23 September 2024
Partner
CLOVER CORPORATION LIMITED
ABN 85 003 622 866
INDEPENDENT AUDITOR’S REPORT
67
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF CLOVER CORPORATION LIMITED
In relation to our audit of the financial report of Clover Corporation Limited for the year ended 31 July 2024, I declare
to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001; and
(b) no contraventions of any applicable code of professional conduct.
PKF
Kenneth Weldin
Melbourne, 23 September 2024
Partner
CLOVER CORPORATION LIMITED
ABN: 85 003 622 866
Additional ASX Information
68
ASX Information
Additional information required by the Australian Securities Exchange Listing Rules and not disclosed
elsewhere in this report.
Distribution of shareholders as at 31 July 2024
Category
1 – 1,000
941
1,001 – 5,000
1,175
5,001 – 10,000
525
10,001 – 100,000
646
100,001 and over
90
Total Number of Holders
3,377
Total number of holders of less than a marketable parcel. The minimum
parcel of $500 @ $.4850 per unit (1,031 parcels)
949
Voting rights
On a show of hands every Shareholder present in person or by proxy at a general meeting shall have
one vote.
Where a poll is demanded, every Shareholder present in person or by proxy at a general meeting
shall have one vote for every ordinary share held.
CLOVER CORPORATION LIMITED
ABN: 85 003 622 866
Additional ASX Information
69
Twenty largest shareholders as at 31 July 2024*
Rank
Name
Number of
Fully Paid
Ordinary Shares
Percentage
of Issued
Ordinary
Shares (%)
1
WASHINGTON H SOUL PATTINSON & COMPANY LIMITED
32,717,159
19.59
2
CITICORP NOMINEES PTY LIMITED
22,108,065
13.24
3
UBS NOMINEES PTY LTD
16,414,463
9.83
4
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
13,359,928
8.00
5
ANACACIA PTY LTD
11,618,012
6.96
6
EVELIN INVESTMENTS PTY LIMITED
7,550,000
4.52
7
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
7,427,140
4.45
8
INCANI & PAPADOPOULOS SUPER PTY LTD
2,010,000
1.20
9
MR PETER HOWELLS
1,380,000
0.83
10
GANESH SUPER FUND
1,128,457
0.68
11
BNP PARIBAS NOMS PTY LTD
1,127,044
0.67
12
NEWECONOMY COM AU NOMINEES PTY LIMITED
960,983
0.58
13
MR GARRIE ELLICE
960,000
0.57
14
MR PEI YIN FOO
900,000
0.54
15
BNP PARIBAS NOMS (NZ) LTD
870,430
0.52
16
BAOBAB NOMINEES PTY LTD
861,011
0.52
17
MS NINA TSCHERNYKOW
858,881
0.51
18
MORGAN STANLEY AUST SECURITIES (NOMINEE) Pty Ltd
783,764
0.47
19
CONNAUGHT CONSULTANTS (FINANCE) PTY LTD
741,000
0.44
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED A/c2
719,184
0.43
124,495,521
74.55
42,503,820
25.45
166,999,341
100.00
* As shown on the register, beneficial holdings may differ.
Securities quoted by the ASX
All the Company’s issued ordinary shares are quoted by the ASX under the code CLV.
Register of securities
New South Wales
Computershare Investor Services Pty Limited
Level 3, 60 Carrington Street
Sydney NSW 2000
Telephone: 1300 850 505