Leading sustainable
aquaculture.
AnnuAl RepoRt 2022
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OUR VISION
“To be a global leader
in aquaculture, inspiring
culinary experiences
around the world
through our sustainable
premium seafood.”
CleAn SeAS SeAfood limited ABn 61 094 380 435
Our Story:
Ocean to Plate
Clean Seas is the global leader in the full cycle breeding, production and sale
of Yellowtail Kingfish and is renowned world‑wide for its exceptionally high
quality fish. Our company is recognised for innovation and it’s high degree
of expertise in the farming of Yellowtail Kingfish. We are the largest producer
of aquaculture Yellowtail Kingfish outside of Japan. Our diverse customer base
has long appreciated the consistently high quality of our fish and our reliability
in supplying our fresh and frozen range to markets all over the world 52 weeks
of the year.
Contents
WHo We ARe
WHAt We do
CHAiRmAn’S RepoRt
fY22 peRfoRmAnCe HiGHliGHtS
meet ouR BoARd And mAnAGement
ouR CompetitiVe AdVAntAGe
StRAteGiC oBJeCtiVeS
ConSolidAted finAnCiAl StAtementS
2
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8
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11
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CleAn SeAS SeAfood limited
AnnuAl RepoRt 2022
1
WHO WE ARE
Our Location
Our Hatchery and Farms are located on
South Australia’s Spencer Gulf. This location is
critical to the outcomes we have been able to
achieve for our fish, with the proximity to the
cold waters off the Southern Ocean there’s a
constant movement of oceanic water coming
into the Gulf. The Gulf spans more than
22,000km2. This vast area allows for constant
flushing, through our farming environment,
into the Gulf and then back out again. Due to
low rainfall and the absence of rivers in the
region, the Gulf has low amounts of organic
materials, herbicides, pesticides, and other
pollutants from land farming flowing into it.
This unique location allows Clean Seas to
produce our mighty Spencer Gulf Kingfish.
Existing inshore licenses allowing
production of up to 10,000 tonnes.
SPENCER
GULF AREA
LICENSE CAPACITY
(TONNES)
WHYALLA
ARNO BAY
PORT LINCOLN
ADELAIDE
~10,000
3,500
2,500
4,000
Port Lincoln
Arno Bay
Whyalla
Total
2
WHAT WE DO
Yellowtail Kingfish,
Clean Seas is committed
to continual innovation
and development
Clean Seas Yellowtail Kingfish are indigenous
to the remote crystal clear waters of the
Spencer Gulf, which we believe gives us a
significant advantage in terms of the quality
of our product and in our sustainability
credentials. As the global leader in full cycle
breeding and farming of Yellowtail Kingfish,
Clean Seas is committed to innovating and
developing all aspects of aquaculture and
business processes from hatchery to farm
through to processing and on to our customers.
All with the view to providing the highest
quality products possible while maintaining
and improving sustainability into the future.
Hatcheries
Marine Farms
Harvesting
Processing
‑95°c
SensoryFresh™
Markets
S
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CleAn SeAS SeAfood limited
AnnuAl RepoRt 2022
3
WHAT WE DO
Hatcheries
The mighty Spencer Gulf Kingfish
story starts in Arno Bay, where life
begins for all our fish. Our team
of dedicated scientists oversee
this critical process. Each year
the hatchery produces over one
million fingerlings from our unique,
selectively bred broodstock that
are indigenous to the waters of the
Spencer Gulf. The care, time, and
effort that our team put in at this
vital stage, ensure these little fish
flourish and get the best possible
start in life. After approximately
3 months our fish are ready to go to
sea. The fingerlings can be moved into
open sea pens in the pristine waters
of South Australia’s Spencer Gulf.
WHAT WE DO
Marine Farms
While at sea our fish continue to be
fed specifically formulated feeds which
are nutritionally balanced for optimal
health and growth. Our practices
are sustainable and certified by the
Aquaculture Stewardship Council (ASC).
Safeguarded against predators and
encountering minimal stress along
the way, our fish remain at sea for
up to 24 months, and are humanely
harvested once they reach the optimal
size for each market. Minimising stress
on our fish throughout the process
has and will remain our priority.
Pristine Waters
Feeding
Fish Husbandry
& Bathing
Continual R&D
and compliance
with ASC
Certification
Predator Control
Net
Management
4
CleAn SeAS SeAfood limited
AnnuAl RepoRt 2022
5
WHAT WE DO
Processing
Our Royal Park processing plant
in Adelaide processes our fish
for markets around the world.
Fresh Spencer Gulf Kingfish is
delivered to customers around the
world twice per week, 52 weeks
per year. It is distributed to markets
across Europe, North America, and
Asia within four days of harvest.
Our SensoryFresh™ (premium frozen)
product is shipped around the world
in specialised ‑35ºC refrigerated
containers. Our unique freezing
technology and cold storage
capabilities give our products a clear
advantage versus all other frozen
Kingfish offerings. This provides
end‑to‑end quality control from
egg‑to‑customer, thus increasing the
Company’s market opportunities and
delivering significant cost and carbon
footprint benefits. While Clean Seas
remains focussed on its ability to
deliver the highest quality fresh
Yellowtail Kingfish products globally,
the flexibility provided by liquid
nitrogen rapid freezing enables
Clean Seas to meet customer demand
for premium quality frozen products
to both food service and retail.
Another benefit of the nitrogen
freezing technology is that it also
supports balancing the rate of
biomass growth and provides
flexibility to support the ongoing
expansion of market demand
across a multitude of channels.
6
Highly
awarded and
sustainable
Australian Food Awards
“Best Fish” 2016, 2017 & 2018
Delicious Produce Awards 2018
Gold Medal Winner “From the Sea”
Food SA Industry Awards
2018 Primary Producer of the Year
Gold Standard Accreditation
in Sustainable Aquaculture
South Australian Export
Awards “Overall Exporter
of the Year” 2019
WHAT WE DO
Markets
Our Spencer Gulf Kingfish from
South Australia brand is featured on
menus in many of the best restaurants
around the world including but
not limited to Melbourne, Sydney,
Milan, New York City, London, Vienna,
Barcelona, Hamburg, Lisbon, Oslo,
Zurich, Paris, Rome, Frankfurt, Munich,
Los Angeles, Toronto, Venice, Berlin,
Geneva, Shanghai, Hong Kong, Bangkok
and many more. Our South Australian
Yellowtail brand has given Clean Seas
the ability to diversify into new
channels and markets, particularly
specialty retailers, mainstream
foodservice, home meal kits companies
and supermarkets. The Clean Seas
SensoryFresh™ nitrogen frozen product
range represents a significant advantage
over the other frozen offerings in the
market. Recent product testing with a
leading European distributor showed
SensoryFresh™ is vastly superior to the
competing products. Utilisation of
the frozen product supply chain with
SensoryFresh™ enables Clean Seas
to reach new markets and develop
channels around the world that are
not easily accessible with fresh fish.
The cost and carbon footprint
advantages of sea freight versus air
freight allows for more competitive
pricing to enable profitable volume
growth in global markets.
CLEAN SEAS SEAFOOD LImITED
AnnuAl RepoRt 2022
7
Equally important in achieving our
financial performance was our ability
to substantially improve working
capital, and the reduction in inventory
months cover to 12 in June 2022
from a peak of 27 in June 2020 was
key to achieving the improvement in
financial performance and cash flow.
With excess live fish biomass and
frozen inventory cleared, production
costs reduced by 19% and we expect
further improvement in costs in FY23.
To achieve this in an environment of
high inflation and rising commodity
prices is an outstanding result.
Our strong commercial performance
and reduced cost base has allowed us
to deliver a positive operating cash
flow in FY22 and we are on track to
achieve our goal of being operating
profit and cash flow positive in FY23.
At a Board level we welcomed Katelyn
Adams as a Director in June 2021,
and with her 15 years of accounting
and board experience, servicing
predominantly ASX listed companies,
she is now Chair of the Company’s
Audit and Risk and Remuneration and
Nominations Committees. To ensure
the highest standards of Board
oversight and accountability are met,
the Board and Senior Management
team have engaged with a specialist
corporate governance and board
leadership consultancy.
Our Company was founded on full
lifecycle breeding and farming values,
and to growing of a native fish in its
natural environment give us significant
quality and sustainability benefits. This
unique growout proposition allows us
to produce a premium, ocean reared
product in the perfect environment for
Yellowtail Kingfish. We also apply this
philosophy to other aspects of our
supply chain, with our best practice
liquid nitrogen SensoryFresh™ freezing
technology allowing us to deliver our
Spencer Gulf provenance using a low
cost and low carbon footprint frozen
supply chain.
To further enhance our sustainability
narrative, this year we announced an
exciting collaboration to assess the
methane mitigation potential of
Asparagopsis. This innovative project
seeks to find a sustainable solution
to offset the carbon and nitrogen
typically generated through aquaculture
operations while producing a product
that has been shown to substantially
reduce the methane emissions of
cattle. A successful outcome would
provide significant sustainability
benefits to both aquaculture and
agriculture and reduce Clean Seas’
cost of production and represents
an exciting window into the future
of sustainable protein production.
Speaking of the future, our team
remain focussed on building
commercial opportunities, leveraging
our unique species and farming model.
We expect to increase production in
FY23 to maintain year on year sales
volumes and optimal frozen inventory
levels, and with strong demand and
premium pricing delivered in H2 FY22
expected to be maintained in FY23,
this will translate into positive cash
flow and operating profits.
Work will also continue on defining
an appropriate level of investment
in infrastructure, which will focus on
unlocking the benefits from increased
scale and improved operational
leverage, while managing financial risk,
and we expect to be able to show our
progress in this respect over the next
12 months.
We are justifiably proud of what the
entire Clean Seas team has achieved,
and now have the foundations in
place to deliver a truly successful and
financially viable business. We are on
track to achieve our goal, namely being
the highest quality, most sustainable
and lowest cost producer of Yellowtail
Kingfish globally.
Thank you for your support of our
business and best wishes to you all.
Travis Dillon
Chairman
Chairman’s
Report
“ I am pleased to
present the 2022
Annual Report for
Clean Seas Seafood
Limited (ASX:CSS,
OSE:ASX).”
I would like to begin by acknowledging
the Indigenous communities of
Australia, and in particular the Kaurna
and Barngarla people on whose land
and waters we farm and conduct our
business. We pay our respects to their
Elders past and present.
Despite lingering effects of the global
pandemic, and ongoing economic
uncertainty, the financial year ended
30 June 2022 has been a successful
one for Clean Seas.
Our team has made significant
progress against the strategic plan
and delivered a financial performance
exceeding our expectations. We have
leveraged the sale of excess frozen
inventory to build awareness and
expand market and channel
penetration. We have benefitted from
a growing awareness and acceptance
of Yellowtail Kingfish globally, and
the strong resonance of commercial
messaging, highlighting quality,
culinary flexibility and Spencer Gulf
provenance has delivered substantial
growth in sales volume and revenue.
8
FY22 Performance
Highlights
FY22 highlights the turnaround and strong foundation
RECORD SALES
VOLUmES OF
COST OF
PRODUCTION OF
3,757 TONNES
Up 19% on FY21
$12.38/KG
Reduced by 19% from FY21
RECORD REVENUE OF
$66.2 MILLION
Up 37% on FY21
RECORD OPERATING
CASH FLOW OF
$6.2 MILLION
REDUCED
INVENTORY COVER
fRom 16 to
12 months
SIGNIFICANT AVAILABLE
CASH AND FUNDING OF
$39.6 MILLION
CleAn SeAS SeAfood limited
AnnuAl RepoRt 2022
9
10
Meet our Board
and Management
Travis Dillon
Chairman, Independent Non‑Executive
Director (Joined October 2020)
Travis has extensive agribusiness
experience, with a strong commercial
and strategic mindset. He was formerly
CEO & MD of Ruralco Holdings and
is currently Chairman of Terragen
Holdings Limited (ASX:TGH),
Chairman of Select Harvests Limited
(ASX:SVH), Non-Executive Director
of Lifeline Australia and member
of the CSIRO Agriculture and Food
Advisory Committee.
Katelyn Adams
Independent Non‑Executive Director
(Joined June 2021)
Katelyn has over 15 years of accounting
and board experience, servicing
predominantly ASX listed companies.
Katelyn is a Chartered Accountant and
Partner of the Corporate Advisory
division of HLB Mann Judd in Adelaide,
as well as the Company Secretary of
various listed and private companies.
Katelyn has extensive knowledge in
corporate governance, ASX Listing Rule
requirements, IPO and capital raising
processes, and is also the Chair of the
Audit and Risk, and the Remuneration
and Nominations Committees.
Marcus Stehr
Independent Non‑Executive Director
(Joined September 2000)
Marcus is a founding Director and has
over 30 years of hands on experience in
marine finfish aquaculture operations
encompassing Tuna, Kingfish and
Mulloway. Marcus is Managing Director
of Australian Tuna Fisheries Pty Ltd
and holds leadership roles in a number
of industry Associations. Member of
the Remuneration and Nominations
Committee.
Gilbert Vergères
Non‑Executive Director
(Joined March 2020)
Gilbert has more than 30 years of
experience in the financial industry,
worked for several Swiss private banks,
and was Managing Director and Member
of the Board of an asset management
company before joining Bonafide as a
Partner in 2013. Bonafide is a boutique
asset management company focusing
and investing in the aquaculture and
seafood sectors globally.
Rob Gratton
Chief Executive Officer
(Joined March 2019)
Rob has over 25 years’ experience
in Banking, Corporate Finance and
Accounting in Australia, the USA and
UK, including CFO & Co Sec roles at
Jurlique and kikki.K, and senior finance
positions at JP Morgan Investment
Bank in London and New York.
David Brown
Chief Financial Officer
(Joined January 2018)
David has over 14 years’ experience
in Corporate Finance and Accounting
roles across breadth of industries and
is a Chartered Accountant. Prior to
Clean Seas, David held senior positions
at KPMG and Grant Thornton
specialising in Corporate Finance.
CLEAN SEAS SEAFOOD LImITED
AnnuAl RepoRt 2022
11
OUR COmPETITIVE ADVANTAGE
Our competitive
advantage and
opportunities
Clean Seas competitive advantage
begins with its unsurpassed cold water
farmed product, a native species being
produced in its natural waters, and
is the outcome of 20 years of Kingfish
selective breeding and farming
experience. The market for Kingfish, and
indeed for sustainably sourced protein
continues to grow, and our Spencer Gulf
Kingfish from South Australia as well as
South Australian Yellowtail Kingfish are
the leading full cycle bred and farmed
Kingfish brands. Clean Seas holds market
leadership positions in Australia and
Europe, with access to the largest
(North America) and fastest growing
(Asia) Kingfish markets in the world.
Markets
Global (farmed) Kingfish market has grown
at an average of over 29% per annum over
the last 10 years, yet the species is still
relatively unknown compared to other
premium seafood.
Clean Seas has market leadership in
Australia and Europe with strong market
growth potential in Europe where per
capita consumption rates are less than
10% of Australia.
Products
Farmed Kingfish attracts premium pricing
versus wild caught due to its consistent
high quality and reliable year-round supply.
Hiramasa is considered the premium
Kingfish species.
Spencer Gulf:
– Only cold water farmed Kingfish
outside Japan.
– Leading full cycle bred and farmed
Kingfish brands.
– Sustainable proposition not available
to ranched and wild caught production.
– Unique Spencer Gulf provenance story.
– Sensory research in Australia judged
as Best in Class.
– Outstanding flexibility whether raw
or cooked, fresh or frozen.
SensoryFresh™:
– World leading freezing technologies
provide strong product quality advantages
over traditional frozen processes and
supply chains.
12
Breeding & farming
Clean Seas is the global leader in full life cycle
breeding and farming of Yellowtail Kingfish.
20 years selective breeding, established
infrastructure and intellectual property is a
key competitive advantage and a significant,
sustainable and economic advantage.
The cold waters of the Spencer Gulf provide
a truly unique, pristine environment for the
ocean farming of Kingfish.
Clean Seas scale provides opportunity
for automation not (economically) available
to other smaller farmers.
Seriola Lalandi (Hiramasa) is native to the
Spencer Gulf and thrives in this environment.
Stakeholder funding
& communities
Long standing and positive social licence
with local Spencer Gulf communities –
in strong contrast to other aquaculture
operators in other parts of the world.
Supportive regulatory environment.
High level of engagement and support
from local, state and national governments.
AUS-UK free trade agreement expected
to improve competitive position.
Committed and loyal group of
approximately 4,000+ shareholders.
Supportive and engaged banking partner.
Supply chain
Funding
In house processing of whole fresh and value
added products provides end-to-end control
from egg to customer.
Liquid nitrogen technology provides scope
for further new product development and
channel diversification.
SensoryFresh™ and Icefresh™ technologies
allow for lower cost shipping options without
impacting on product quality.
People & culture
A restructured executive team provides the
leadership and experience to profitably grow
the business and bring agility and efficiency.
Deeply skilled global sales and marketing
organisation will be key to future growth.
Highly experienced and deeply passionate
farm and breeding teams represent a strong
source of competitive advantage.
High calibre Board with strong
experience in aquaculture, food industry
and international business.
Funding headroom with cash and undrawn
facilities of $39.6m (including $12.9m in cash)
at 30 June 2022.
Clean Seas is the
global leader in full
life cycle breeding
and farming of
Yellowtail Kingfish.
CleAn SeAS SeAfood limited
AnnuAl RepoRt 2022
13
STRATEGIC OBJECTIVES
Building scale around a
premium and sustainable
farming operation
14
DIVERSIFICATION
Growth (Markets
& Products)
Clean Seas focus for the next
12 to 24 months is to continue
to diversify into new markets
and channels and consolidate
and maximise the premium
restaurant business.
Offering customers the ability
to choose a high quality, flexible
product, grown sustainably in
its natural waters.
SCALE
Costs of Production
Clean Seas has made significant
structural changes to reduce cost
and promote efficiency.
Reducing excess inventory will
substantially reduce Clean Seas’
costs of production, and when
combined with increased scale
and automation Clean Seas will
realise increased competitiveness
in new and existing markets.
CleAn SeAS SeAfood limited
AnnuAl RepoRt 2022
15
Consolidated
Financial Statements
For the year ended 30 June 2022
ABN 61 094 380 435
16
Contents
Directors’ Report�����������������������������������������������������������������������������������������������������������������������������������������18
Auditor’s Independence Declaration���������������������������������������������������������������������������������������������������35
Corporate Governance Statement��������������������������������������������������������������������������������������������������������36
Consolidated Statement of Profit or Loss and Other Comprehensive Income���������������������37
Consolidated Statement of Financial Position���������������������������������������������������������������������������������38
Consolidated Statement of Changes in Equity��������������������������������������������������������������������������������39
Consolidated Statement of Cash Flows����������������������������������������������������������������������������������������������40
Notes to the Consolidated Financial Statements����������������������������������������������������������������������������41
1. Nature of operations .................................................................................................................................................41
2. General information and statement of compliance ....................................................................................41
Changes in accounting policies ............................................................................................................................41
3.
4.
Summary of accounting policies ..........................................................................................................................41
5. Operating segments .................................................................................................................................................51
Revenue ..........................................................................................................................................................................52
6.
7. Other income ...............................................................................................................................................................52
Fish husbandry expense ..........................................................................................................................................53
8.
Finance income and finance costs.......................................................................................................................53
9.
Income tax expense ..................................................................................................................................................54
10.
11. Cash and cash equivalents .....................................................................................................................................54
12. Trade and other receivables ...................................................................................................................................54
13. Financial assets and liabilities ...............................................................................................................................55
Inventories .....................................................................................................................................................................56
14.
15. Biological assets – current ......................................................................................................................................56
16. Property, plant and equipment .............................................................................................................................57
17. Biological assets – non‑current .............................................................................................................................58
Intangible assets .........................................................................................................................................................58
18.
19. Right‑of‑use assets .....................................................................................................................................................59
20. Trade and other payables ........................................................................................................................................59
21. Borrowings ....................................................................................................................................................................59
22. Convertible notes .......................................................................................................................................................60
23. Provisions .......................................................................................................................................................................60
24. Employee remuneration ..........................................................................................................................................61
25. Equity ...............................................................................................................................................................................62
26. Earnings per share and dividends ........................................................................................................................63
27. Reconciliation of cash flows from operating activities ..............................................................................64
28. Auditor remuneration ...............................................................................................................................................64
29. Related party transactions and key management personnel disclosures ..........................................65
30. Contingent assets and liabilities ..........................................................................................................................65
31. Capital commitments ...............................................................................................................................................66
32.
Interests in subsidiaries............................................................................................................................................66
33. Leases ..............................................................................................................................................................................66
34. Financial instrument risk .........................................................................................................................................68
35. Fair value measurement ..........................................................................................................................................71
36. Capital management policies and procedures ...............................................................................................72
37. Parent entity information .......................................................................................................................................72
38. Post‑reporting date events .....................................................................................................................................72
Directors’ Declaration�������������������������������������������������������������������������������������������������������������������������������73
Independent Auditor’s Report��������������������������������������������������������������������������������������������������������������� 74
ASX Additional Information��������������������������������������������������������������������������������������������������������������������78
Clean SeaS Seafood limited
17
ANNUAL REPORT 2022 Directors’ Report
The Directors of Clean Seas Seafood Limited (‘Clean Seas’) present their Report together with the financial statements of
the Consolidated Entity, being Clean Seas Seafood Limited (‘the Company’) and its Controlled Entities (‘the Group’) for the
for the year ended 30 June 2022.
diReCtoRS
The following persons held office as Directors of Clean Seas during and since the end of the financial year:
• Mr Travis Dillon – Chairman;
• Ms Katelyn Adams;
• Mr Marcus Stehr; and
• Mr Gilbert Vergères.
ComPanY SeCRetaRY
The following persons were Company Secretary of Clean Seas during and since the end of the financial year:
• Eryl Baron (Joint Company Secretary); and
• Rob Gratton (Joint Company Secretary).
PRinCiPal aCtiVitieS
The principal activities of the consolidated Group during the financial year were:
• The propagation of Spencer Gulf Hiramasa Yellowtail Kingfish, producing fingerlings for sale and growout; and
• The growout of Spencer Gulf Hiramasa Yellowtail Kingfish for harvest and sale.
The Group continues to enhance its operations through new research and the application of the world’s best practice
techniques to deliver Spencer Gulf Hiramasa Kingfish of premium quality.
The Group recognised an impairment of $0.2 million to remove the remaining Southern Bluefin Tuna (SBT) due to the age
and health of the remaining fish and sold its SBT quota. While the Group retains the intellectual property to restart these
operations at a later date, there are currently no plans to undertake further SBT research programs.
The consolidated financial statements are presented in Australian Dollars (‘$AUD’), which is also the functional currency
of the Parent Company.
18
Directors’ Report (Continued)
ReVieW of oPeRationS and finanCial ReSUltS
The Board and Management of Clean Seas report a statutory profit after tax for the year of $8.7 million, which compares
to a statutory loss after tax of $32.1 million in FY21.
Financial performance
$’000
Revenue
Tonnes
Operating Results1
Revenue $/kg
Farmgate $/kg
Production costs $/kg
Underlying gross profit $/kg
Indirect & R&D costs $/kg
Underlying operating EBITDA $/kg
Statutory Results ($’000)
Underlying gross profit1
Underlying operating EBITDA1
Underlying adjustments
Impairment
Restructuring costs
AASB 141 SGARA and cost allocation
Total underlying adjustments
Statutory EBITDA
Statutory NPAT
Production Metrics (tonnes)
Net growth
Harvest volumes
Closing Live Fish biomass
Frozen inventory
fY22
66,164
3,757
17.61
14.20
(12.38)
1.82
(3.10)
(1.28)
6,835
(4,824)
(211)
–
18,328
18,117
13,293
8,676
3,152
2,919
3,509
164
fY21
48,460
3,166
15.31
12.37
(15.29)
(2.92)
(3.43)
(6.35)
(9,279)
(20,131)
(9,882)
(1,381)
4,517
(6,746)
(26,877)
(32,097)
2,229
3,416
3,295
1,056
Change
(fav/Unfav)
37%
19%
2.30
1.83
2.91
4.74
0.33
5.07
16,114
15,307
n/a
n/a
13,811
24,863
40,170
40,773
41%
-15%
6%
-84%
1. Underlying EBITDA and Gross Profit in this report are categorised as non‑IFRS financial information provided to assist readers to better
understand the financial performance of the underlying operating business. They have not been subject to audit or review by the Company’s
external auditors.
Clean SeaS Seafood limited
19
ANNUAL REPORT 2022 Directors’ Report (Continued)
finanCial PeRfoRmanCe
Sales volumes and revenue
Sales performance summary
Region
Australia
Europe
North America
Asia
Total sales volumes (tonnes)
Group revenue ($’000)
Revenue $/kg
fY18
1,381
1,050
92
117
2,640
41,650
15.78
fY19
1,439
1,023
116
120
2,698
46,149
17.10
fY20
1,332
813
226
53
2,424
40,313
16.63
fY21
1,809
904
406
47
3,166
48,460
15.31
fY22
2,153
1,237
307
60
3,757
66,164
17.61
Clean Seas’ achieved revenue of $66.2 million in FY22, representing a 37% increase on FY21 revenue and 64% on FY20
revenue. The result highlights the Company’s ability to grow both sales volumes and Revenue $/kg.
Total sales volumes for FY22 of 3,757 tonnes, represent a 19% increase on FY21, reflecting the unprecedented and broad
demand for Kingfish globally. This has been achieved despite ongoing uncertainty and disruption to markets and supply
chains and highlights the continued growth in awareness and appetite for Yellowtail Kingfish globally.
Australian sales volumes increased by 19% to 2,153 tonnes in FY22 and represent 62% of total sales volumes. The result
represents a significant achievement and demonstrates the growing demand for Kingfish in the premium food service
sector in Australia.
Sales volumes in Europe increased by 37% to 1,237 tonnes in FY22. The rebound in the European market was driven by the
demand for premium frozen Kingfish.
During FY21 sales in North America included 282 tonnes of clearance frozen sales to Hofseth North America in support of
retail launches in this market. Due to strong demand in higher margin channels globally, these programs did not continue
in FY22. Sales in North America were largely to premium customers, and the 307 tonnes achieved in FY22 represented a
165% increase on pre‑pandemic (FY19) sales.
Sales mix
Fresh
Frozen
Total sales volumes (tonnes)
Fresh revenue $/kg
Frozen revenue $/kg
Revenue $/kg
fY18
1,978
662
2,640
17.02
12.06
15.78
fY19
2,138
560
2,698
17.36
16.14
17.10
fY20
1,836
588
2,424
17.38
14.30
16.63
fY21
2,159
1,007
3,166
16.92
11.84
15.31
fY22
2,549
1,208
3,757
19.29
14.06
17.61
Due to the COVID‑19 disruptions in FY20, Clean Seas had surplus live fish biomass and frozen inventory. The Company was
able to use excess inventory in FY22 to substantially grow Frozen sales volumes by 20%. Due to demand exceeding supply,
frozen revenue per kg increased to $14.06/kg in FY22, and in Q4 FY22 revenue $ per kg reached $18.45/kg.
Approximately 819 tonnes or 68% of total frozen sales in FY22 were sold into the European market. This reflects the
Company’s strategic decision to establish a more significant customer base for its frozen products, utilising its innovative
premium frozen technology, SensoryFresh. This has allowed Clean Seas to offset the higher airfreight charges as a result of
COVID‑related transport disruptions with greater utilisation of a lower cost and lower carbon footprint frozen supply chain.
The Fresh business continued its rebound following the FY20 disruption and reached 2,549 tonnes in FY22, representing
a growth of 18% on FY21. Revenue $/kg increased by 14% to record highs of $19.29/kg.
20
Directors’ Report (Continued)
Production costs
16.00
15.00
14.00
13.00
12.00
11.00
10.00
9.00
8.00
.
g
k
/
$
s
t
s
o
c
n
o
i
t
c
u
d
o
r
P
2.35
8.88
FY18
15.29
2.66
2.47
10.14
2.50
11.05
12.38
2.45
FY19
FY20
FY21
FY22
Production costs $/k.g
Production costs $/k.g
Average feed costs
Average feed costs
2.75
2.65
2.55
2.45
2.35
2.25
A
v
e
r
a
g
e
f
e
e
d
p
r
i
c
e
$
/
k
g
.
Production costs were elevated in FY21 in comparison to historical periods due to the additional cost of holding excess
inventory, which was driven by the FY20 COVID‑19 disruption. The Company has made substantial progress to rectify
inventory levels, with this, Clean Seas has seen production costs reduce to $12.38/kg in FY22.
Production costs are expected to continue to decrease in future years, however, the cost of feed has put significant
pressure on costs, with average feed cost per kg reaching $2.66/kg for the full year FY22, and in Q4 FY22 feed prices reached
approximately $2.80/kg. With feed representing approximately 60% of total production cost, further increases in the cost
of feed will slow the company’s ability to return to historical lows in FY18.
Underlying gross profit
The improvement in Underlying Gross Profit to $1.82/kg reflects improvements in pricing and production costs. More importantly,
it reflects the progress made against the strategic plan which focused on using surplus inventory to drive trials and long‑term
growth in the food service market and maximize the conversion of excess frozen inventory into cash.
Despite increasing feed costs, Underlying Gross Profit is ahead of expectations due to improved pricing, and Clean Seas
expects to achieve further improvements in Gross Profit per kg due to month‑on‑month growth in farmgate revenue
per kg for both fresh and frozen products.
indirect costs
5.00
4.50
4.00
3.50
3.00
2.50
2.00
.
g
k
/
$
4.54
2.91
3.09
3.43
3.10
FY18
FY19
FY20
FY21
FY22
The downward trend in indirect cost $/kg continued in FY22, reducing by $0.33/kg to $3.10/kg in FY22. The improvement
in indirect costs represents improved operational leverage, reduction in spending across sales & marketing and lower frozen
storage costs due to lower inventory holdings, which was in line with our strategy to improve the working capital position.
Clean SeaS Seafood limited
21
ANNUAL REPORT 2022
Directors’ Report (Continued)
Underlying eBitda
Reflecting the underlying performance of the business by excluding the impact of SGARA and historical costs adjustments
($18.3 million), and biological asset Impairment ($0.2 million), underlying EBITDA improved to a loss of ($4.8 million).
Profitability was primarily impacted by the discounted sell‑through of surplus frozen inventory in Q1 FY22, and by elevated
production costs resulting from the carrying cost of excess frozen inventory and live biomass. These factors have been
partially offset by the rebound in revenue per kg as the Company rectified it’s inventory imbalance and benefitted from
increased awareness and demand for its high quality Yellowtail Kingfish.
Adjustments to underlying EBITDA include:
•
Impairment: The SBT operations is not a current focus for the Group, and until sufficient resources are available there
are no plans to undertake further SBT research programs as a consequence the Group has recognised an impairment of
$211k to remove the remaining Southern Bluefin Tuna due to the age and health of the remaining fish; and
• SGARA and cost allocation: Live fish biomass and frozen inventory is accounted for in accordance with AASB 141 Agriculture.
Under AASB 141, the Company is required to recognise a gain or loss in the Profit and Loss when changes occur to live
fish biomass (i.e. net growth) or expected future profits (i.e. movements in Farmgate $/kg). For the purposes of calculating
Underlying EBITDA, the Company eliminates these entries. Furthermore, to calculate Underlying EBITDA, the Company
has included the required entries to reflect a historical cost Profit and Loss.
Statutory net profit
Clean Seas has delivered a statutory profit in FY22 of $8.7 million driven by improvement in operating earnings coupled
with a significant increase in the growth of Live Fish biomass asset (+41%) and increase in valuation. Under AASB 141,
the Company is required to recognise a gain or loss in the Profit and Loss when changes occur to live fish biomass
(i.e. net growth) or expected future profits (i.e. changes in valuation).
CaSH floW
Cash flow summary
$’000
Underlying operating cash flow
Underling adjustment
Restructuring costs
Litigation settlement & expense
Statutory operating cash flow
Investing cash flow
Financing cash flow
Net increase/(decrease) in cash held
operating cash flow
fY18
(6,815)
–
–
(6,815)
(4,854)
16,679
5,010
fY19
fY20
(8,200)
(14,033)
–
(1,142)
(9,342)
(3,220)
757
(11,805)
–
14,007
(26)
(2,411)
30,877
28,440
fY21
(9,196)
(637)
–
(9,833)
(3,323)
21,059
7,903
fY22
6,218
–
–
6,218
(5,753)
(17,555)
(17,090)
Cash receipts for the full year ended 30 June 2022 reached $67.4 million, which exceeded FY21 by $22 million, representing
a 50% increase. The significant growth in cash receipts reflects the improved operating conditions in Australia and Europe
following the lifting of COVID‑19 restrictions. Furthermore, the Company benefited from:
• Optimising working capital by selling down frozen inventory by 892 tonnes to 164 tonnes at 30 June 22 and was
compounded by a 19% increase in revenue per kg for frozen products to $14.06/kg; and
• Continued growth in fresh sales volumes (+18% on FY21) and revenue per kg (+14%).
Feed payments increased by 13% to $22.3 million in FY22 driven by an increase in Live Fish biomass growth by 41% and
a 9% increase in the average feed price. While payments to suppliers increased by 9% driven by the higher cost of freight
and increase operating costs associated with a growing biomass.
The growth in cash receipts more than offset the increase in costs, which allowed Clean Seas to report a Full Year of
operating cash flow of $6.2 million.
22
Directors’ Report (Continued)
investing cash flow
Clean Seas continued to invest in capex during FY22, which includes a split of maintenance and growth capex:
• Growth capex: $2.1 million for two vessels;
• Maintenance capex: $3.9 million in new cages, nets, vehicles and processing plant improvements; and
•
Investment in IceFresh™ defrosting technology of $0.8 million.
The Company also received $0.8 million in Government Grants and sold its Southern Bluefin Tuna quota for $0.2 million.
financing cash flow
During FY22 Clean Seas focused on reducing debt and further strengthening our balance sheet, which included the
repayment of convertible notes ($6.7 million) and short and medium term debt ($13.2 million).
fUndinG
Current cash and undrawn facilities
($’000)
Cash at bank
Undrawn working capital facility
Undrawn senior debt facility
Undrawn asset finance facility
Total cash and undrawn facilities
fY18
5,534
10,000
–
3,868
19,402
fY19
1,004
4,725
–
1,679
7,408
fY20
22,169
3,504
14,000
2,667
42,340
fY21
30,072
2,529
14,000
3,713
50,314
fY22
12,982
10,163
12,009
4,418
39,572
In December 2021, Clean Seas renewed its debt facility with the Commonwealth Bank of Australia and retained existing
facility limits totalling $32.15 million. The Finance Facility comprises a $12 million Trade Finance Facility, $14 million Market
Rate Loan Facility, $6 million Equipment Finance Facility and $150,000 Corporate Card Facility. This is an ongoing facility
subject to annual review and is secured against all Group assets.
The Group is subject to financial covenants, including operating cash flows and current ratio, which are reviewed quarterly.
The Group was compliant with all its covenants as at 30 June 2022.
At 30 June 2022, the Company had utilised $1.84 million of its working capital facility to fund feed payments and
approximately $2 million to invest in growth assets (vessels). The undrawn facilities will provide sufficient headroom
for working capital and fund planned capital investment projects.
SiGnifiCant CHanGeS in tHe State of affaiRS
There have been no significant changes in the state of affairs.
eVentS aRiSinG SinCe tHe end of tHe RePoRtinG PeRiod
There are no other matters or circumstances that have arisen since the end of the year that has significantly affected
or may significantly affect either:
•
•
•
the entity’s operations in future financial years;
the results of those operations in future financial years; or
the entity’s state of affairs in future financial years.
Clean SeaS Seafood limited
23
ANNUAL REPORT 2022 Directors’ Report (Continued)
liKelY deVeloPmentS, BUSineSS StRateGieS and PRoSPeCtS
The Company has made significant progress against its strategic objectives, building channel and market awareness,
growing sales volumes and revenues, reducing costs and strengthening its balance sheet. The Company expects strong
demand for its premium ocean‑reared Kingfish to continue, and aims to leverage this by:
• Highlighting the quality, flexibility and Spencer Gulf provenance of its Yellowtail Kingfish;
• Maintaining and improving key financial and operating metrics including Kingfish survival rates, Gross Profit/kg,
indirect costs and inventory months cover;
• Tight cost controls throughout all aspects of the business; and
• Targeted investments in resources and infrastructure to grow production capacity and improve production efficiencies,
including feed automation.
infoRmation on diReCtoRS and KeY manaGement
mr travis dillon – Chairman, independent non‑executive director
Mr Dillon was appointed to the Company Board on 21 October 2020.
Mr Dillon holds an Advanced Diploma of Agriculture (RBM), a Master of Business Administration from Australian Institute
of Business and is a Member of the Australian Institute of Company Directors.
Mr Dillon has extensive agribusiness experience, with a strong commercial and strategic mindset. He was formerly CEO & MD
of Ruralco Holdings and is currently Chairman of Terragen Holdings Limited (ASX:TGH), Chairman of Select Harvests Limited
(ASX:SVH), Non‑Executive Director of Lifeline Australia and member of the CSIRO Agriculture and Food Advisory Committee.
Mr Dillon’s shareholding at signing date was 118,176 shares.
ms Katelyn adams – independent non‑executive director
Ms Adams was appointed to the Company Board on 1 June 2021. She is also the Chair of the Audit and Risk, and the
Remuneration and Nominations Committees.
Ms Adams has over 15 years of accounting and board experience, servicing predominantly ASX listed companies. Katelyn is a
Chartered Accountant and Partner of the Corporate Advisory division of HLB Mann Judd in Adelaide, as well as the Company
Secretary of various listed and private companies. Katelyn has extensive knowledge in corporate governance, ASX Listing
Rule requirements, IPO and capital raising processes, as well as a strong technical accounting background.
Ms Adams holds a Bachelor of Commerce and is a Chartered Accountant.
Ms Adams did not hold any shares in Clean Seas at the date of this report.
mr marcus Stehr – non‑executive director
Mr Stehr was appointed to the Company Board on incorporation in September 2000. He was a member of the Remuneration
and Nominations Committee.
Mr Stehr’s technical qualifications include Master Class 4 Fishing/Trading Skippers certificates, MED 1 and Dive Master
certificates. Commercial qualifications include business management courses spanning post graduate studies in Business
and completion of the Company Director’s Course. He is a Fellow of the Australian Institute of Company Directors.
Mr. Stehr has more than 25 years hands on experience in marine finfish aquaculture operations encompassing Tuna,
Kingfish and Mulloway.
In addition to being Managing Director of Australian Tuna Fisheries Pty Ltd (a major shareholder in Clean Seas),
Stehr Group Pty Ltd and Sanchez Tuna Pty Ltd, Mr Stehr makes a strong contribution to the Australian fishing and
aquaculture industries as:
• Board member of the Australian Southern Bluefin Tuna Industry Association Ltd;
• Director of the Australian Maritime and Fisheries Academy (Australian Fisheries Academy Ltd);
•
•
Industry member of Southern Bluefin Tuna Fishery Management Advisory Committee; and
Industry representative on the Southern Bluefin Tuna Management Advisory Committee.
Mr Stehr’s shareholding at signing date was 117,930 shares.
24
Directors’ Report (Continued)
mr Gilbert Vergères – non‑executive director
Mr Vergères was appointed to the Company Board on 3 March 2020.
Mr Vergères is one of three Partners of Bonafide Wealth Management AG, who, through their mutual investment funds is
Clean Seas’ largest shareholder. Based in Liechtenstein, Bonafide Wealth Management AG was established in 2008 to focus
exclusively in the Fish & Seafood Sector and is today considered one of the pre‑eminent global investors in aquaculture.
Mr Vergères had a long career in Finance in Switzerland, where he worked at several Swiss private banks. In 1998, he
started his own business operations and has been Managing Director and member of the Board of Directors at an asset
management company until 2013 before establishing the Bonafide Global Fish Fund with his two partners in 2012.
Mr Vergères is located in Asia reflecting the Bonafide Funds focus on aquaculture investments in the Asia Pacific region.
Mr Vergères shareholding at signing date was 320,176 shares.
ms eryl Baron – Company Secretary
Ms Baron (AGIA) was appointed as Company Secretary on 3 December 2020. Ms Baron has an extensive background in
providing corporate secretarial and corporate governance services to listed companies in a wide range of industries.
mr Rob Gratton – Chief executive officer
Mr Gratton was appointed as Chief Executive Officer on 3 December 2020 having been acting in the role since August 2020,
and was appointed Joint Company Secretary on 4 June 2019. Mr Gratton was previously Clean Seas’ Chief Financial Officer.
He has over 20 years’ experience in Banking, Corporate Finance and Accounting roles in Australia, the United Kingdom and
United States. Mr Gratton was CFO and Company Secretary at Jurlique and kikki.K, and has also held senior positions at
JP Morgan Investment Bank in London and New York, after starting his career at Westpac in Australia.
mr david Brown – Chief financial officer
Mr Brown was appointed as Chief Financial Officer on 3 December 2020, having previously been Group Controller and
Joint Company Secretary. He has over 14 years’ experience in Corporate Finance and Accounting roles across breadth of
industries and is a Chartered Accountant. Prior to commencing with Clean Seas, Mr Brown held senior positions at KPMG
and Grant Thornton specialising in Corporate Finance.
diReCtoRS’ meetinGS
The number of Board meetings and meetings of Board Committees held during the year, and the number of meetings
attended by each Director is as follows:
Director’s name
Travis Dillion
Katelyn Adams
Marcus Stehr
Gilbert Vergères
Board Meetings
Audit and Risk Committee
Remuneration and
Nominations Committee
A
10
10
10
10
B
10
10
10
10
A
5
5
5
–
B
5
5
5
–
A
4
4
–
4
B
4
4
–
4
Where:
Column A is the number of meetings the Director was entitled to attend as a member.
Column B is the number of meetings the Director attended (all Directors are entitled to attend Committee meetings).
Clean SeaS Seafood limited
25
ANNUAL REPORT 2022 Directors’ Report (Continued)
UniSSUed SHaReS UndeR oPtion
There are no share options issued at the date of this report.
The Company issued 2,959,302 share rights during the financial year. The Company had 3,275,069 share rights,
which remain outstanding at 30 June 2022. Further details are provided in the Remuneration Report.
Post 30 June 2022, 30,000 shares were issued as a result of exercising share rights.
SHaReS iSSUed dURinG oR SinCe tHe end of tHe YeaR aS a ReSUlt of eXeRCiSe
The Company issued 18,483 shares during the financial year as a result of the exercise of share rights.
RemUneRation RePoRt (aUdited)
The Directors of Clean Seas Seafood Limited (‘the Group’) present the Remuneration Report for Non‑Executive Directors and
other Key Management Personnel, prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2001.
The Remuneration Report is set out under the following main headings:
(a) Principles used to determine the nature and amount of remuneration;
(b) Details of remuneration;
(c) Service agreements;
(d) Bonuses included in remuneration; and
(e) Other information.
(a) Principles used to determine the nature and amount of remuneration
The principles of the Group’s executive remuneration strategy and supporting incentive programs and frameworks are:
•
•
•
•
to attract and retain high calibre senior executives;
to align rewards to business outcomes that deliver value to shareholders;
to drive a high performance culture by setting challenging objectives and rewarding high performing individuals; and
to ensure remuneration is competitive in the relevant employment market place to support the attraction, motivation
and retention of executive talent.
The Board has established a Remuneration and Nominations Committee which operates in accordance with its charter
as approved by the Board and is responsible for determining and reviewing compensation arrangements for the Directors
and the Executive Team.
The advice of independent remuneration consultants is taken from time to time so as to establish that Directors’ fees
and Executive remunerations are in line with market standards, however, Clean Seas did not use remuneration consultants
in FY22.
non‑executive director remuneration
In accordance with best practice corporate governance, the remuneration of Non‑Executive Directors is structured
separately from that of Executive Directors and Senior Executives.
The Company’s Non‑Executive Directors receive only fees (including statutory superannuation where applicable) for their
services and the reimbursement of reasonable expenses. The Board reviews its fees to ensure the Company’s Non‑Executive
Directors are fairly remunerated for their services, recognising the level of skill and experience required to conduct the role
and to have in place a fee scale which enables the Company to attract and retain talented Non‑Executive Directors.
Non‑Executive Directors do not receive any shares, options or other securities in addition to their remuneration and are not
eligible to participate in any Company share plans or any other incentive plans that may be in operation. They do not receive
any retirement benefits other than compulsory superannuation where applicable.
During FY21, the Board elected to reduce the number of Non‑Executive Directors from 5 to 4. Additionally, the Directors
agreed to a 20% reduction in their fees, effective from 1st August 2020 until 30 June 2021. The 20% reduction was removed
from 1 July 2022.
26
Directors’ Report (Continued)
The aggregate remuneration paid to all the Non‑Executive Directors (inclusive of statutory superannuation) may not
exceed the current “fee pool” limit of $600,000, which was set at the 2018 AGM on 13 November 2018. This ‘fee pool’ is
only available to Non‑Executive Directors, as Board membership is taken into account in determining the remuneration paid
to Executive Directors as part of their normal employment conditions. In FY22 total fees paid to Non‑Executive Directors
was $400,500.
The fees payable to Non‑Executive Director and Committee fees are summarised below:
Changes in Non‑Executive Directors and committee fees
Chairman
Non‑Executive Director
Audit and Risk Committee Chair
Audit and Risk Committee member
Remuneration & Nomination Committee Chair
Remuneration & Nomination Committee member
2022
$
150,0002
70,000
15,000
7,500
12,000
6,000
20211
$
120,0002
56,000
12,000
6,000
9,600
4,800
Change
$
30,000
14,000
3,000
1,500
2,400
1,200
1. The above table reflects the annualised Non‑Executive Director and Committee fees following the to the 20% reduction applied from
1 August 2020 to 30 June 2021.
2. Chairman’s fees are inclusive of all committee fees.
executive remuneration
The remuneration structure adopted by the Group for FY22 consists of the following components:
•
•
•
fixed remuneration being annual salary and benefits;
short term incentives, being cash bonuses; and
long term incentives, being share based remuneration, in the case of the CEO and Senior Executives.
The Remuneration and Nominations Committee assess the appropriateness of the nature and amount of remuneration
on a periodic basis by reference to recent employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality Executive Team.
The payment of bonuses is reviewed by the Remuneration and Nominations Committee annually as part of the review
of executive remuneration and a recommendation is put to the Board for approval. All bonuses must be linked to
pre‑determined performance criteria.
Short term incentive (Sti)
The Group’s performance measures involve the use of annual performance objectives, metrics and performance appraisals.
Financial targets are based on Operating EBITDA while non‑financial targets are based on strategic goals set in relation to
the main priorities for each position.
The performance measures are set annually after consultation with the Directors and executives and are specifically tailored
to the areas where each executive has a level of control. The measures target areas the Board believes hold the greatest
potential for business improvement, expansion and profit and cover financial and non‑financial measures.
The Key Performance Indicators (‘KPI’s’) for the KMP in FY22 are summarised as follows:
• CEO: Operating EBITDA in FY22, workplace health and safety, leadership & culture, funding, stakeholder management
and biomass capacity; and
• CFO: Operating EBITDA in FY22, funding, capital projects, workplace health and safety and culture.
Clean SeaS Seafood limited
27
ANNUAL REPORT 2022 Directors’ Report (Continued)
long term incentive (lti)
The Company maintains an annual Long Term Incentive (LTI) plan for Executives. This plan grants share rights to eligible
employees, and the Rights have the potential to vest into Ordinary Shares over a three year period, subject to the Company
delivering increased shareholder value.
The Company’s LTI Plan has primarily been linked to share price and EPS growth delivery over a three year performance
period and is underpinned by the Company’s longer term vision. Given the significant targeted growth trajectory and in
recognition of the volatility and inherent operational risks in aquaculture and their impact on future results, the Company
has elected to include annual vesting assessments. The annual vesting is weighted towards the delivery of EPS growth in
each year. If EPS growth target is not achieved, vesting for that year lapses unless the target for the following year is
achieved. Summary of LTI’s granted is presented below.
Share right tranche
FY21 Tranche 1
FY21 Tranche 2
FY21 Tranche 3
FY22 Tranche 1
Grant date
21‑Jan‑22
21‑Jan‑22
21‑Jan‑22
21‑Jan‑22
Valuation
price
exercise
price
0.520
0.415
0.344
0.625
nil
nil
nil
nil
number
of rights
426,067
426,066
426,066
1,681,103
Vesting
dates
30‑Jun‑23
30‑Jun‑23
30‑Jun‑23
30‑Jun‑23
No share rights vested into Ordinary Shares in FY22 for key management.
Performance reviews
Management have regular annual performance reviews in accordance with established procedures.
Pursuant to the Board’s and Board Committee’s respective Charters, the Board conducts annual evaluations of its
performance, the performance of its Committees, the Chairman, individual Directors and the key governance processes
that support the Board’s work. The respective Board Committee Charters also require the Committees to evaluate their
performance and composition at least annually to determine whether they are functioning effectively by reference to
current best practice. This evaluation is presented to the Board for review.
Voting and comments made at the Company’s last annual General meeting
The resolution for adoption of the Remuneration Report for the financial year ending 30 June 2021 was passed by 97.3%
of votes in a poll at the Company’s 2021 Annual General Meeting. The Company received no specific feedback on its
Remuneration Report at the Annual General Meeting.
The Directors consider that the relevant remuneration packages of the Board and Executives are appropriate.
Consequences of performance on shareholder wealth
In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following
measures in respect of the current financial year and the previous five financial years:
Item
Basic EPS (cents)
Profit/(loss) before tax ($’000)
Profit/(loss) after tax ($’000)
Net assets ($’000)
Share price at 30 June (cents)1
2022
5.26
8,676
8,676
80,742
52.0
2021
2020
(27.36)
(32,097)
(32,097)
68,532
52.5
(15.57)
(14,454)
(14,454)
72,458
55.5
2019
1.73
1,446
1,446
73,542
90.5
20181
4.33
3,380
3,380
71,769
5.0
2017
0.02
202
202
51,553
4.6
1. Earnings per share for the period ended 30 June 2018 was restated in order for the calculation to incorporate the 20:1 share consolidation,
which was completed on 3 December 2018.
28
Directors’ Report (Continued)
-
r
o
f
r
e
P
e
c
n
a
m
d
e
s
a
b
-
n
e
c
r
e
p
f
o
e
g
a
t
-
n
u
m
e
r
n
o
i
t
a
r
e
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
0
%
5
3
%
5
1
%
2
4
%
2
2
%
8
2
%
1
1
,
2
2
9
1
0
2
1
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29
ANNUAL REPORT 2022
Directors’ Report (Continued)
(c) Service agreements
Remuneration and other terms of employment for the Key Management Personnel are formalised in a Service Agreement.
The major provisions of the agreements relating to remuneration are set out below:
Name
Rob Gratton (CEO)
David Brown (CFO)
Base
salary
($)
422,500
297,500
motor
vehicle/
allowance
Yes
No
term of
agreement
Ongoing
Ongoing
notice
period
9months
3months
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Other Key Management Personnel
Rob Gratton
David Brown
(d) Bonuses included in remuneration
fixed
remuneration
maximum
at risk – Sti
maximum
at risk – lti
49%
49%
15%
15%
36%
36%
Details of the short‑term incentive cash bonuses awarded as remuneration to each Key Management Personnel for FY22, the
percentage of the available bonus that was awarded in the financial year and the percentage that was forfeited because the
performance criteria were not achieved is set out below. No part of the bonus carries forward to future years. The awarded
bonuses have been recognised in FY22.
Other Key Management Personnel
Rob Gratton
David Brown
(e) other information
included in
remuneration
($)
Percentage
vested
during the
year
Percentage
forfeited
during the
year
106,875
97,500
75%
100%
25%
-
Shares held by Key management Personnel
The number of ordinary shares in the Company during the 2022 reporting period held by each of the Group’s Key
Management Personnel, including their related parties, is set out below:
Year ended 30 June 2022 – ordinary shares
Personnel
T Dillon
K Adams
M Stehr
G Vergeres
R Gratton
D Brown
Totals
Balance
at start
of year
70,176
-
117,930
320,176
455,647
-
963,929
Granted as
remuneration
Received
on exercise
other
changes1
Held at
the end of
reporting
period
-
-
-
-
-
-
-
-
-
-
-
-
48,000
118,176
-
-
-
-
-
-
117,930
320,176
455,647
-
48,000
1,011,929
1. Changes are on market purchases and disposals, purchases via Placement and personnel ceasing to be a KMP.
No options to acquire shares are held by Key Management Personnel.
30
Directors’ Report (Continued)
Share rights held by Key management Personnel
Share rights granted under the LTI Equity Incentive Plan are set out below:
Year ended 30 June 2022 – share rights
Personnel
R Gratton
D Brown
Totals
Balance
at start
of year
138,877
106,829
245,706
other
changes
Granted as
remuneration
exercised
lapsed
-
-
-
1,158,525
669,369
1,827,894
-
-
-
-
-
-
Held at
the end of
reporting
period
1,297,402
776,198
2,073,600
The share rights will vest if specified performance targets are achieved and the Executive remains employed by the
Company for three years including the year for which the share rights were granted, or in other circumstances agreed
with the executive or at the discretion of the Board. Each share right on exercise converts to one ordinary share, subject
to adjustment in specified circumstances. No amount is payable on vesting or exercise.
None of the share rights have vested or were exercisable at the end of the reporting period.
other transactions with Key management Personnel
The Group’s related parties comprise its key management and entities associated with key management.
A substantial shareholder in Clean Seas Seafood Limited is Australian Tuna Fisheries Pty Ltd (ATF) (Marcus Stehr is a Director).
ATF and its associated entities controlled 3.77% of issued shares at 30 June 2022 (2021: 4.68%) and it is associated with
Stehr Group Pty Ltd, H & A Stehr Superannuation Fund, Sanchez Tuna Pty Ltd and Marcus Stehr Australia Pty Ltd. These
transactions were as follows:
Australian Tuna Fisheries Pty Ltd:
– Receipts for ice, expenses, SBT quota lease and contract labour
– Payments for towing, contract labour, fish feed, marina and net shed rent and electricity
Stehr Group Pty Ltd
– Payments for office rent
Marcus Stehr Australia Pty Ltd
– Receipt from the sale of SBT Quota
2022
$’000
4
(1,545)
(36)
175
2021
$’000
3
(536)
(45)
-
The following balances are outstanding as at the reporting date in relation to transactions with related parties:
Current payables
– Australian Tuna Fisheries Pty Ltd
– Stehr Group Pty Ltd
Current receivables
– Marcus Stehr Australia Pty Ltd
end of aUdited RemUneRation RePoRt.
Clean SeaS Seafood limited
2022
$’000
2021
$’000
–
–
–
59
-
-
31
ANNUAL REPORT 2022 Directors’ Report (Continued)
WoRKPlaCe HealtH and SafetY
Year Ended 30 June
Lost time injury frequency rate based on a lost shift
2022
4.2
2021
7.8
Clean Seas Lost Time Injury Frequency Rate (LTIFR) decreased to 4.2 in FY22 compared to 7.8 in FY21 (per million hours
worked.) A total of 63 days was lost in FY22 due to one medically treated injury. The Group has again placed significant focus
in the areas of compliance with best practice standards for plant and chemical management; and strengthen our ‘Safety
First’ Culture. Clean Seas continues to promote the values and behaviours that make Clean Seas a great place to work.
We’ve increased our focus on ‘how’ we carry out our duties as well as ‘what’ we do every day.
StaKeHoldeR enGaGement
Clean Seas has maintained its commitment to engaging with its customers, suppliers, investors, and the community.
Clean Seas has supported the Port Lincoln High School, Cleve Area School and Whyalla Secondary College, providing course
content and site visits to help inspire careers in aquaculture, and contributed to the Dive into Aquaculture pilot program
for industry pathways. In FY22 Clean Seas established a scholarship with the Playford Trust to provide financial support
and an internship program to two undergraduates in a marine science discipline.
Clean Seas is an active supporter of local community and environmental initiatives and in FY22 Clean Seas sponsored the
Mortlock Shield, Port Lincoln Business Excellence Awards, SALT festival, the West Coast Youth fundraiser, Port Lincoln History
Group and Clean Up Australia Day.
tHiRd PaRtY aCCReditationS
Through our accreditation with the Aquaculture Stewardship Council (ASC) and Friends of the Sea we have demonstrated the
importance of our animal welfare, sustainability, and environmental credentials. The ASC is an independent, international
non‑profit organisation that manages the world’s leading certification and labelling programme for responsible aquaculture.
This important certification recognises that customers around the world are increasingly looking for sustainable and
responsibly farmed seafood products and underpins everything we do at Clean Seas.
Clean Seas is committed to managing its farming operations using best practice methods and practices to grow world class,
high quality Yellowtail Kingfish whilst ensuring that the environment and ecology of the waters farmed remain pristine and
safeguard the long term sustainability of our operations.
Clean Seas champions world’s best practice in sustainability and intentionally exceeds stringent government regulations to
ensure viable stocks for the future. Consequently, we were the first Aquaculture company in the Southern Hemisphere certified
sustainable by the internationally recognised Friends of the Sea accreditation system, which audits seafood operations
in over 50 countries. Environmental impact is managed by fallowing and stocking limits and is strictly monitored by the
South Australian government.
SUStainaBilitY
Clean Seas was founded with sustainability as a core value, with initial R&D focussed on closing the lifecycle of Yellowtail
Kingfish, reducing reliance on wild stocks and flow on impacts to the marine ecosystem. These values are reflected in the
Company’s ongoing operations.
Clean Seas’ Yellowtail Kingfish breeds and grows naturally in the waters of Spencer Gulf, meaning that farming here is ideal
for the fish and the business. The Company’s farm locations within the vast waters of Spencer Gulf allow for site rotations
and fallowing periods. For land‑based operations, including the Arno Bay hatchery facility Clean Seas sources its electricity
from a GreenPower™ certified supplier.
Clean Seas seeks to continue to enhance its sustainability credentials, through projects which are focused on reducing the
Group’s future impact on climate change.
32
Directors’ Report (Continued)
asparagopsis collaboration with CH4
In August 2022, Clean Seas and CH4 announced an R&D collaboration to assess the methane mitigation potential of
Asparagopsis at Clean Seas’ Arno Bay hatchery. This innovative R&D collaboration seeks a sustainable solution to offset
the carbon and nitrogen typically generated through aquaculture, while providing a product that has been shown to
substantially reduce the methane emissions of cattle. Clean Seas will make available existing infrastructure at its Arno Bay
hatchery, whilst CH4 will contribute the funding and resources required to operate the facility. A successful outcome would
provide significant sustainability benefits to both aquaculture and agriculture and reduce Clean Seas’ cost of production.
Kingfish diet development
Clean Seas continues to work closely with feed suppliers and conduct extensive in‑house research to improve feed
formulations, integrate alternative ingredients with enhanced sustainability credentials and improve the overall
performance of its Yellowtail Kingfish feeds.
enViRonmental leGiSlation
The Group’s operations are subject to Commonwealth and State regulations governing marine and hatchery operations,
processing, land tenure and use, environmental requirements including site specific environmental licences, permits and
statutory authorisations, workplace health and safety and trade and export.
The Group’s management regularly and routinely monitor compliance with the relevant environmental regulations and
compliance is regularly reported to the Board.
The Group has well established procedures to monitor and manage compliance with existing environmental regulations
and new regulations as they come into force.
The Directors believe that all regulations have been met during the period covered by this Annual Financial Report and
are not aware of any significant environmental incidents arising from the operations of the consolidated entity during
the financial year.
Further information in relation to specific regulated areas of the operation is as follows:
• The Arno Bay Hatchery is licensed to operate under an Aquaculture Land based Category C License issued by the
South Australian Minister for Primary Industries and Regional Development under the Aquaculture Act 2001. The licensee
is required to comply with the requirements of all statutes, regulations, by‑laws, ordinances, rules, notices or orders
lawfully given pursuant to the Aquaculture Act 2001, Aquaculture Regulations 2016, Environment Protection (Water
Quality) Policy 2015 and the Livestock Act 1997. Clean Seas has not recorded any breaches of the license requirements;
• The Group operates 22 marine aquaculture licences issued by The South Australian Minister for Agriculture, Food and
Fisheries under the Aquaculture Act 2001. The licensee is required to comply with the requirements of all statutes,
regulations, by‑laws, ordinances, rules, notices or orders lawfully given pursuant to the Aquaculture Act 2001, Aquaculture
Regulations 2016, Environment Protection (Water Quality) Policy 2015 and the Livestock Act 1997. There has been no
material recorded breaches of the license requirements; and
• The Royal Park processing plant is licensed by the South Australian Environment Protection Authority under Part 6 of
the Environment Protection Act 1993 to operate as a fish processing works. The Licensee must be aware of and comply
with their obligations under the Environment Protection Act 1993, the Environment Protection Regulations 2009, the
Environment Protection Policies made under the Environment Protection Act 1993 and the requirements of any National
Environment Protection Measure which operates as an Environment Protection Policy under the Environment Protection
Act 1993. Clean Seas has not recorded any breaches of the licence requirements.
Clean SeaS Seafood limited
33
ANNUAL REPORT 2022 Directors’ Report (Continued)
indemnitieS GiVen to and inSURanCe PRemiUmS Paid foR diReCtoRS, offiCeRS and aUditoRS
Under rules 50 and 51 of the Company’s Constitution, each of the Company’s Directors, the Company Secretary and every
other person who is an officer is indemnified to the extent permitted by law and Directors and Officers Liability Insurance
has been implemented. The terms of the insurance contract prohibit the Company from disclosing the level of premium paid.
Each Director, Company Secretary, CFO and CEO has entered into a Deed of Indemnity and Access which indemnifies a
Director or officer against liabilities arising as a result of acting as a Director or officer subject to certain exclusions and
provides for related legal costs to be paid by the Company. The Deed requires the Company to maintain an insurance policy
against any liability incurred by a Director or officer in his or her capacity as a Director or officer during that person’s term
of office and seven years thereafter. It also provides a Director or officer with a right of access to Board papers and other
documentation while in office and for seven years thereafter.
The consolidated entity has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
consolidated entity or any related entity against a liability incurred by the auditor. During the financial year, the consolidated
entity has not paid a premium in respect of a contract to insure the auditor of the consolidated entity or any related entity.
non‑aUdit SeRViCeS
During the year, Grant Thornton, the Company’s auditors, performed certain other services in addition to their statutory
audit duties.
The Board has considered the non‑audit services provided during the year by the auditor and, in accordance with written
advice provided by resolution of the Audit and Risk Committee, is satisfied that the provision of those non‑audit services
during the year is compatible with, and did not compromise, the auditor independence requirements of the Corporations
Act 2001 for the following reasons:
• All non‑audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed
by the Audit and Risk Committee to ensure they do not impact upon the impartiality and objectivity of the auditor; and
• The non‑audit services do not undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own
work, acting in a management or decision‑making capacity for the Company, acting as an advocate for the Company
or jointly sharing risks and rewards.
Details of the amounts paid to the auditors of the Company, Grant Thornton, and its related practices for audit and
non‑audit services provided during the year are set out in Note 28 to the Financial Statements.
A copy of the Auditor’s Independence Declaration as required under s307C of the Corporations Act 2001 is included on
page 35 of this financial report and forms part of this Directors’ Report.
PRoCeedinGS of BeHalf of tHe ComPanY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
RoUndinG of amoUntS
Clean Seas is a type of Company referred to in ASIC Class Order 2016/191 and therefore the amounts contained in this
report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable), or in certain
cases, to the nearest dollar under the option permitted in the Class Order.
Signed in accordance with a resolution of the Directors.
Travis Dillon
Chairman
31 August 2022
34
Auditor’s Independence Declaration
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Auditor’s Independence Declaration
To the Directors of Clean Seas Seafood Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit
of Clean Seas Seafood Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and
belief, there have been:
a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
I S Kemp
Partner – Audit & Assurance
Adelaide, 31 August 2022
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
Legislation.
#7871627v2w
Clean SeaS Seafood limited
35
ANNUAL REPORT 2022
Corporate Governance Statement
The Company’s Directors and management are committed to conducting the Group’s business in an ethical manner and
in accordance with the highest standards of corporate governance. The Company has adopted and substantially complies
with the ASX Corporate Governance Principles and Recommendations (Fourth Edition) (Recommendations) to the extent
appropriate to the size and nature of the Group’s operations.
The Company has prepared a statement which sets out the corporate governance practices that were in operation
throughout the financial year for the Company, identifies any Recommendations that have not been followed, and
provides reasons for not following such Recommendations (Corporate Governance Statement).
In accordance with ASX Listing Rules 4.10.3 and 4.7.4, the Corporate Governance Statement will be available for review on
the Company’s website and will be lodged together with an Appendix 4G with ASX at the same time that this Annual Report
is lodged with ASX. The Appendix 4G will particularise each Recommendation that needs to be reported against by the
Company and will provide shareholders with information as to where relevant governance disclosures can be found.
The Company’s corporate governance policies and charters are all available on the Company’s Website
https://www.cleanseas.com.au/investors/corporate‑governance/.
36
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
For the year ended 30 June 2022
Revenue
Other income
Net gain arising from changes in fair value of biological assets
Fish husbandry expense
Employee benefits expense
Fish processing and selling expense
Frozen selling expense
Impairment – frozen inventory and biological assets
Depreciation and amortisation expense
Other expenses
Profit/(Loss) before finance items and tax
Finance costs
Finance income
Profit/(Loss) before tax
Income tax benefit/(expense)
Profit/(Loss) for the year after tax
Other comprehensive income for the year, net of tax
Total comprehensive profit/(loss) for the year
Earnings per share from continuing operations:
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
notes
6
7
15
8
24.1
14/15/17
16/18/19
9
9
10
26.1
26.1
2022
$’000
66,164
369
20,036
(32,115)
(13,367)
(12,702)
(11,001)
(211)
(3,832)
(3,880)
9,461
(786)
1
8,676
–
8,676
–
8,676
5.26
4.86
2021
$’000
48,460
1,454
1,444
(29,549)
(13,784)
(10,982)
(10,618)
(9,882)
(3,810)
(3,420)
(30,687)
(1,415)
5
(32,097)
-
(32,097)
-
(32,097)
(27.36)
(27.36)
Note: This statement should be read in conjunction with the notes to the financial statements.
Clean SeaS Seafood limited
37
ANNUAL REPORT 2022 Consolidated Statement of Financial Position
As at 30 June 2022
Assets
Current
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Biological assets
Current assets
Non‑current
Property, plant and equipment
Right‑of‑use assets
Biological assets
Intangible assets
Non-current assets
TOTAL ASSETS
Liabilities
Current
Trade and other payables
Borrowings
Provisions
Current liabilities
Non‑current
Convertible notes
Borrowings
Provisions
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Equity attributable to owners of the Parent:
– Share capital
– Share rights reserve
– Accumulated losses
TOTAL EQUITY
notes
2022
$’000
2021
$’000
11
12
14
15
16
19
17
18
20
21
23
22
21
23
12,982
5,299
7,693
1,943
49,591
77,508
30,072
6,383
11,252
1,565
32,505
81,777
17,543
15,955
736
117
3,554
21,950
99,458
9,456
4,532
1,335
15,323
–
3,093
300
3,393
18,716
80,742
288
244
3,736
20,223
102,000
8,900
12,030
1,253
22,183
9,551
1,434
300
11,285
33,468
68,532
25.1
25.2
227,901
224,772
507
102
(147,666)
(156,342)
80,742
68,532
Note: This statement should be read in conjunction with the notes to the financial statements.
38
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Balance at 1 July 2020
Loss for the year
Share placement
Convertible note conversions
STI paid via shares
Share rights reserve movement
Balance at 30 June 2021
Profit for the year
Share placement
Convertible note conversions
Share rights reserve movement
Balance at 30 June 2022
notes
25.1
25.1
25.1
25.2
25.1
25.1
25.2
Share
capital
$’000
195,937
23,359
3,763
203
1,510
Share rights
reserve
$’000
accumulated
losses
$’000
766
-
-
-
(664)
(124,245)
(32,097)
-
-
-
-
total
equity
$’000
72,458
(32,097)
23,359
3,763
203
846
224,772
102
(156,342)
68,532
(345)
3,457
17
227,901
–
–
405
507
8,676
–
–
–
8,676
(345)
3,457
422
(147,666)
80,742
Note: This statement should be read in conjunction with the notes to the financial statements.
Clean SeaS Seafood limited
39
ANNUAL REPORT 2022 Consolidated Statement of Cash Flows
For the year ended 30 June 2022
Operating activities
Receipts from customers
Payments to suppliers excluding feed
Payments for feed
Payments to employees
Litigation and insurance proceeds
Government grants received
Net cash used in operating activities
Investing activities
Purchase of property, plant and equipment
Purchase of intangible asset
Proceeds from Government Grants
Proceeds from sale of property, plant and equipment
Proceeds from sale of intangible asset
Interest received
Net cash used in investing activities
Financing activities
Gross proceeds from issue of shares
Share issue expenses
Repayment of convertible notes
Proceeds from borrowings
Repayment of borrowings
Interest paid
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
notes
2022
$’000
2021
$’000
67,376
(27,448)
(22,282)
(11,428)
–
–
27
6,218
(6,004)
(779)
813
41
175
1
44,940
(25,225)
(19,767)
(11,405)
370
1,254
(9,833)
(3,328)
-
-
-
-
5
(5,753)
(3,323)
–
(1,124)
(6,662)
4,156
(13,167)
(758)
(17,555)
(17,090)
30,072
12,982
24,973
(890)
-
10,849
(12,647)
(1,226)
21,059
7,903
22,169
30,072
11
Note: This statement should be read in conjunction with the notes to the financial statements.
40
Notes to the Consolidated Financial Statements
For the year ended 30 June 2022
1. natURe of oPeRationS
Clean Seas Seafood Limited and its subsidiaries (‘the Group’) principal activities include finfish sales and tuna operations.
These activities comprise the following:
• Finfish sales – The propagation, growout and sale of Yellowtail Kingfish; and
• Tuna operations – Research and development activities relating to Southern Bluefin Tuna.
During the period the Group discontinued its Tuna operations, which is not a focus for the Group, and until sufficient
resources are available there are no plans to undertake further Southern Bluefin Tuna (SBT) research programs. As a
consequence, the Group recognised an impairment to remove the remaining Southern Bluefin Tuna due to the age and
health of the remaining fish and sold its SBT quota.
2. GeneRal infoRmation and Statement of ComPlianCe
The consolidated general purpose financial statements of the Group have been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board (‘AASB’). Compliance with Australian Accounting Standards results in full compliance with
the International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’).
Clean Seas Seafood Limited is a for‑profit entity for the purpose of preparing the financial statements.
Clean Seas Seafood Limited is the Group’s Ultimate Parent Company and is an ASX listed Public Company (ASX:CSS)
incorporated and domiciled in Australia. The Group also has a secondary listing on Euronext Growth Oslo (OSE:CSS).
The address of its registered office and its principal place of business is 7 Frederick Road, Royal Park, SA, Australia, 5014.
The consolidated financial statements for the year ended 30 June 2022 were approved and authorised for issue by the
Board of Directors on 31 August 2022.
3. CHanGeS in aCCoUntinG PoliCieS
3.1 new and revised standards that are effective for these financial statements
There have been no new or revised standards became effective for the first time to annual periods beginning on or after
1 July 2021.
3.2 accounting standards issued but not yet effective and not being adopted early by the Group
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations
to existing standards have been published but are not yet effective, and have not been adopted early by the Group.
Management anticipates that all of the relevant pronouncements will be adopted in the Group’s accounting policies
for the first period beginning after the effective date of the pronouncement.
The accounting standards that have not been early adopted for the year ended 30 June 2022 but will be applicable to the
Group in future reporting periods have been reviewed and they have been considered to be insignificant to the Group.
4. SUmmaRY of aCCoUntinG PoliCieS
4.1 overall considerations
The consolidated financial statements have been prepared using the significant accounting policies and measurement
bases summarised below.
4.2 Basis of consolidation
The Group financial statements consolidate those of the Parent Company and its subsidiaries as of 30 June 2022. The Parent
controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the
ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 30 June.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains
and losses on transactions between Group companies. Where unrealised losses on intra‑group asset sales are reversed
on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the
financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting
policies adopted by the Group.
Clean SeaS Seafood limited
41
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from
the effective date of acquisition, or up to the effective date of disposal, as applicable.
4.3 foreign currency translation
functional and presentation currency
The consolidated financial statements are presented in Australian Dollars (‘$AUD’), which is also the functional currency
of the Parent Company.
foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange
rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the
settlement of such transactions and from the re‑measurement of monetary items at year end exchange rates are recognised
in profit or loss.
Non‑monetary items are not retranslated at year‑end and are measured at historical cost (translated using the exchange
rates at the date of the transaction), except for non‑monetary items measured at fair value which are translated using the
exchange rates at the date when fair value was determined.
4.4 Segment reporting
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of
Directors in assessing performance and determining the allocation of resources. The Group’s two operating segments are:
• Finfish Sales: All finfish grow out and sales other than propagated Southern Bluefin Tuna (“SBT”). Currently the segment
includes Yellowtail Kingfish of various sizes. All fish produced are aggregated as one reportable segment as the fish are
similar in nature, they are grown and distributed to similar types of customers and they are subject to a similar regulatory
environment; and
• Tuna Operations: Propagated Southern Bluefin Tuna operations are treated as a separate segment. All costs associated
with the breeding, grow out and sales of SBT are aggregated into one reportable segment. During FY22 the Group
discontinued its Tuna operations, which is not a focus for the Group, and until sufficient resources are available there are
no plans to undertake further Southern Bluefin Tuna (SBT) research programs. As a consequence, the Group recognised
an impairment to remove the remaining Southern Bluefin Tuna due to the age and health of the remaining fish and sold
its SBT quota.
Each of these operating segments is managed separately as they require different technologies, resources and capabilities
and are at a different stage of development.
The measurement policies the Group uses for segment reporting under AASB 8 are the same as those used in its
financial statements.
Corporate assets which are not directly attributable to the business activities of any operating segment are not allocated
to a segment.
There have been no changes from prior periods in the measurement methods used to determine reported segment profit
or loss.
4.5 Revenue
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated
entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the
transaction price which takes into account estimates of variable consideration and the time value of money; allocates the
transaction price to the separate performance obligations on the basis of the relative stand‑alone selling price of each
distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a
manner that depicts the transfer to the customer of the goods or services promised.
42
Notes to the Consolidated Financial Statements (Continued)
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur.
The measurement constraint continues until the uncertainty associated with the variable consideration is subsequently
resolved. Amounts received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which is
generally at the time of delivery.
interest income
Interest income and expenses are reported on an accrual basis using the effective interest method.
Government grants
The Group applies AASB 120 Accounting for Government Grants and Disclosure of Government Assistance in accounting for
the JobKeeper wage subsidy, whereby a credit is recognised in other income over the period necessary to match the benefit
of the credit with the costs for which they are intended to compensate.
4.6 operating expenses
Operating expenses are recognised in profit or loss upon utilisation of the service or at the date of their origin.
4.7 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised
during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Other borrowing
costs are expensed in the period in which they are incurred and reported in finance costs (see Note 9).
4.8 intangible assets
Recognition of intangible assets
Acquired intangible assets
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and install the specific
software. Acquired fish quotas, water leases and licences and Icefresh™ are capitalised on the basis of costs incurred
to acquire.
Subsequent measurement
All intangible assets are accounted for using the cost model whereby capitalised costs are amortised on a straight‑line basis
over their estimated useful lives once they are ready for use, where these assets are considered finite. Residual values and
useful lives are reviewed at each reporting date. In addition, they are subject to impairment testing as described in Note 4.11.
The following useful lives are applied:
• Primary Industries and Regions South Australia (PIRSA) water leases and licences: indefinite; and
•
Icefresh™: 15 years.
When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference between the proceeds
and the carrying amount of the asset, and is recognised in profit or loss within other income or other expenses.
Clean SeaS Seafood limited
43
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
4.9 Property, plant and equipment
land and buildings
Freehold land and buildings are recognised at their cost less accumulated depreciation and impairment losses.
As no finite useful life for land can be determined, related carrying amounts are not depreciated.
Plant and equipment
Plant and equipment is initially recognised at acquisition cost or manufacturing cost, including any costs directly attributable
to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by
the Group’s management. Plant and equipment also includes leasehold property held under a finance lease (see Note 4.10).
These assets are subsequently measured using the cost model, being cost less subsequent depreciation and
impairment losses.
Depreciation is recognised on a straight‑line basis to write down the cost less estimated residual value of buildings,
plant and equipment. The following depreciation rates are applied:
• buildings: 2.5% – 13%;
• vessels: 5% – 7.5%;
•
cages and nets: 10% – 33%;
• motor vehicles: 12.5% – 15%;
•
computers: 25% – 33%; and
• other plant and equipment: 5% – 33%.
In the case of leasehold property, expected useful lives are determined by reference to comparable owned assets or over
the term of the lease, if shorter.
Material residual value estimates and estimates of useful life are updated as required, but at least annually.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the
disposal proceeds and the carrying amount of the assets and are recognised in profit or loss within other income or
other expenses.
4.10 leased assets
leases
The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a
right‑of‑use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except
for short‑term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as
tablets and personal computers, small items of office furniture and telephones). For these leases, the Group recognises the
lease payments as an operating expense on a straight‑line basis over the term of the lease unless another systematic basis
is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its
incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• Fixed lease payments (including in‑substance fixed payments), less any lease incentives receivable;
• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
• The amount expected to be payable by the lessee under residual value guarantees;
• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
44
Notes to the Consolidated Financial Statements (Continued)
The lease liability is presented as Borrowings in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability
(using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right‑of‑use asset) whenever:
• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the
assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised
lease payments using a revised discount rate;
• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed
residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an
unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which
case a revised discount rate is used); and
• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease
liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a
revised discount rate at the effective date of the modification.
The right‑of‑use assets comprise the initial measurement of the corresponding lease liability, lease payments made at
or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently
measured at cost less accumulated depreciation and impairment losses.
Right‑of‑use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the right‑of‑use asset reflects that the Group expects to exercise
a purchase option, the related right‑of‑use asset is depreciated over the useful life of the underlying asset. The depreciation
starts at the commencement date of the lease.
The right‑of‑use assets are presented as a separate line in the consolidated statement of financial position.
The Group applies AASB 136 to determine whether a right‑of‑use asset is impaired and accounts for any identified
impairment loss as described in the ‘Property, Plant and Equipment’ note 4.9.
4.11 impairment testing of other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash
inflows (cash‑generating units). As a result, some assets are tested individually for impairment and some are tested at
cash‑generating unit level.
An impairment loss is recognised for the amount by which the asset’s or cash‑generating unit’s carrying amount exceeds
its recoverable amount, which is the higher of fair value less costs to sell and value‑in‑use. To determine the value‑in‑use,
management estimates expected future cash flows from each cash‑generating unit and determines a suitable interest rate
in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly
linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and
asset enhancements. Discount factors are determined individually for each cash‑generating unit and reflect management’s
assessment of respective risk profiles, such as market and asset‑specific risks factors.
Impairment losses for cash‑generating units reduce first the carrying amount of any goodwill allocated to that cash‑generating
unit. Any remaining impairment loss is charged pro rata to the other assets in the cash‑generating unit. With the exception
of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no
longer exist. An impairment charge is reversed if the cash‑generating unit’s recoverable amount exceeds its carrying amount.
Clean SeaS Seafood limited
45
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
4.12 financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when
the financial asset and substantially all the risks and rewards are transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Financial assets are classified according to their business model and the characteristics of their contractual cash flows.
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction
price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs
(where applicable).
Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets, other than those designated and effective as hedging
instruments, are classified into the following four categories:
• Financial assets at amortised cost;
• Financial assets at fair value through profit or loss (FVTPL);
• Debt instruments at fair value through other comprehensive income (FVTOCI); and
• Equity instruments at FVTOCI.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items, except for impairment of trade receivables which is presented within other expenses.
financial assets at amortised cost
Financial assets with contractual cash flows representing solely payments of principal and interest and held within a
business model of ‘hold to collect’ contractual cash flows are accounted for at amortised cost using the effective interest
method. The Group’s trade and most other receivables fall into this category. The change in classification has not impacted
the carrying value of the Group’s financial assets.
impairment of financial assets
The Group uses a simplified approach in accounting for trade and other receivables and records the loss allowance at the
amount equal to the expected lifetime credit losses. The Group uses its historical experience, external indicators and
forward‑looking information to calculate the expected credit losses using a provision matrix. The Group have assessed
the impact of the impairment model and no adjustment was required in Group’s financial statements.
Classification and subsequent measurement of financial liabilities
The Group’s financial liabilities include borrowings, trade and other payables and derivative financial instruments.
Financial liabilities are measured subsequently at amortised cost using the effective interest method, except for financial
liabilities held for trading or designated at FVTPL, that are carried subsequently at fair value with gains or losses recognised
in profit or loss. All derivative financial instruments that are not designated and effective as hedging instruments are
accounted for at FVTPL.
All interest‑related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are
included within finance costs or finance income.
46
Notes to the Consolidated Financial Statements (Continued)
4.13 inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all expenses directly attributable to the
manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity.
Costs of ordinarily interchangeable items are assigned using the first in, first out cost formula. Net realisable value is the
estimated selling price in the ordinary course of business less any applicable selling expenses.
4.14 income taxes
Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other
comprehensive income or directly in equity.
Current income tax assets and/or liabilities comprise those obligations to, or claims from, the Australian Taxation Office
(‘ATO’) and other fiscal authorities relating to the current or prior reporting periods that are unpaid at the reporting date.
Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current
tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of
assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill or on the
initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting
profit. Deferred tax on temporary differences associated with investments in subsidiaries and joint ventures is not provided
if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the
foreseeable future.
Deferred tax assets and liabilities are calculated, without discounting, at tax rates that are expected to apply to their
respective period of realisation, provided they are enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised to the extent that it is probable that they will be able to be utilised against future taxable
income, based on the Group’s forecast of future operating results which is adjusted for significant non‑taxable income and
expenses and specific limits to the use of any unused tax loss or credit. Deferred tax liabilities are always provided for in full.
The Group does not currently recognise deferred tax assets and liabilities due to uncertainty regarding the utilisation of prior
year losses in future years.
Deferred tax assets and liabilities are offset only when the Group has a right and intention to set off current tax assets and
liabilities from the same taxation authority.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except
where they relate to items that are recognised in other comprehensive income (such as the revaluation of land) or directly
in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
Clean Seas Seafood Limited and its wholly‑owned Australian controlled entity have implemented the tax consolidation
legislation from 1 July 2007. As a consequence, these entities are taxed as a single entity and the deferred tax assets and
liabilities of these entities are set off in the consolidated financial statements.
4.15 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, together with other short‑term, highly liquid
investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of
changes in value.
4.16 equity and reserves
Share capital represents the fair value of shares that have been issued. Any transaction costs associated with the issuing
of shares are deducted from share capital, net of any related income tax benefits.
Share rights reserve represents, in accordance with AASB 2 Share‑based Payment, the allocated fair value at grant date of
share rights that have been granted and remain outstanding at the reporting date. The value determined is recognised
evenly over the financial years in which services are provided as specified by the performance period for each grant of share
rights, subject to subsequent revision of the number of share rights expected to vest and the number that ultimately vest.
The recognised value of share rights that vest and are exercised is transferred to share capital on the issue of shares.
Retained earnings/accumulated losses include all current and prior period retained profits and losses.
All transactions with owners of the Parent are recorded separately within equity.
Clean SeaS Seafood limited
47
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
4.17 employee benefits
Short‑term employee benefits
Short‑term employee benefits are benefits, other than termination benefits, that are expected to be settled wholly within
twelve (12) months after the end of the period in which the employees render the related service. Examples of such benefits
include wages and salaries, non‑monetary benefits and annual leave. Short‑term employee benefits are measured at the
undiscounted amounts expected to be paid when the liabilities are settled.
other long‑term employee benefits
The Group’s liabilities for long service leave are included in other long term benefits as they are not expected to be settled
wholly within twelve (12) months after the end of the period in which the employees render the related service. They are
measured at the present value of the expected future payments to be made to employees. The expected future payments
incorporate anticipated future wage and salary levels, experience of employee departures and periods of service, and are
discounted at rates determined by reference to market yields at the end of the reporting period on high quality corporate
bonds that have maturity dates that approximate the timing of the estimated future cash outflows. Any re‑measurements
arising from experience adjustments and changes in assumptions are recognised in profit or loss in the periods in which the
changes occur.
The Group presents employee benefit obligations as current liabilities in the statement of financial position if the Group
does not have an unconditional right to defer settlement for at least twelve (12) months after the reporting period,
irrespective of when the actual settlement is expected to take place.
Post‑employment benefit plans
The Group provides post‑employment benefits through various defined contribution plans.
defined contribution plans
The Group pays fixed contributions into independent entities in relation to various plans for individual employees. The Group
has no legal or constructive obligations to pay contributions in addition to its fixed contributions, which are recognised as an
expense in the period that relevant employee services are received.
4.18 Share‑based employee remuneration
All goods and services received in exchange for the grant of any share‑based payment are measured at their fair values.
Where employees are rewarded using share‑based payments, the fair values of employees’ services are determined indirectly
by reference to the fair value of the equity instruments granted. This fair value is appraised at the grant date and excludes
the impact of non‑market vesting conditions (for example profitability and earnings per share growth targets and
performance conditions).
All share‑based remuneration is ultimately recognised as an expense in profit or loss with a corresponding credit to share
rights reserve. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, based
on the best available estimate of the number of share rights expected to vest.
Non‑market vesting conditions are included in assumptions about the number of share rights that are expected to
become exercisable. Estimates are subsequently revised if there is any indication that the number of share rights expected
to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period.
No adjustment is made to any expense recognised in prior periods if share rights ultimately exercised are different to that
estimated on vesting.
Upon exercise of share rights, the proceeds received and the accumulated amount in the share rights reserve applicable
to those share rights, net of any directly attributable transaction costs, are allocated to share capital.
48
Notes to the Consolidated Financial Statements (Continued)
4.19 Provisions, contingent liabilities and contingent assets
Provisions for product warranties, legal disputes, onerous contracts or other claims are recognised when the Group has a
present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic resources will
be required from the Group and amounts can be estimated reliably. Timing or amount of the outflow may still be uncertain.
Restructuring provisions are recognised only if a detailed formal plan for the restructuring has been developed and
implemented, or management has at least announced the plan’s main features to those affected by it. Provisions are not
recognised for future operating losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the most reliable
evidence available at the reporting date, including the risks and uncertainties associated with the present obligation.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined
by considering the class of obligations as a whole. Provisions are discounted to their present values, where the time value of
money is material.
Any reimbursement that the Group can be virtually certain to collect from a third party with respect to the obligation
is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
No liability is recognised if an outflow of economic resources as a result of present obligation is not probable. Such situations
are disclosed as contingent liabilities, unless the outflow of resources is remote in which case no liability is recognised.
4.20 Biological assets
Biological assets comprise live fish held for sale and Broodstock.
Live fish held for sale are valued at their fair value less costs to sell in accordance with AASB141 Agriculture. Estimated fair
values are based on the number and size of fish held at the reporting date, actual selling prices achieved in the three weeks
following the reporting date and other relevant factors, including allowance for future mortality, assessed as impacting fair
value in accordance with AASB141.
Broodstock are valued at their fair value less costs to sell in accordance with AASB141 Agriculture. Estimated fair values
take into account the valuation of live fish held for sale and estimated value as Broodstock.
In the Directors’ opinion, insurance cover is currently not available at commercially acceptable rates for the live Yellowtail
Kingfish held for sale or the Broodstock. The Directors have therefore chosen to actively manage the risks as the preferred
alternative and review this on an annual basis.
4.21 Goods and Services tax (GSt)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset
or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive
of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST components of investing
and financing activities, which are disclosed as operating cash flows.
4.22 Rounding of amounts
The Parent Entity has applied the relief available to it under ASIC Class Order 2016/191 and accordingly, amounts in the
financial statements and directors’ report have been rounded off to the nearest $1,000, or in certain cases, the nearest dollar.
Clean SeaS Seafood limited
49
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
4.23 Significant management judgement in applying accounting policies
When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions
about the recognition and measurement of assets, liabilities, income and expenses.
Significant management judgement
The following are significant management judgements in applying the accounting policies of the Group that have the
most significant effect on the financial statements.
Fair value of live fish held for sale and Broodstock
Management values live fish held for sale at their fair value less costs to sell in accordance with AASB141 Agriculture.
Estimated fair values are based on the number and size of fish held at the reporting date, actual selling prices achieved in
the three weeks following the reporting date and other relevant factors, including allowance for future mortality, assessed
as impacting fair value in accordance with AASB141. These estimates may vary from net sale proceeds ultimately achieved
Broodstock was revalued during FY22.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Group’s
future taxable income against which the deferred tax assets can be utilised. In addition, significant judgement is required
in assessing the impact of any legal or economic limits or uncertainties in relevant tax jurisdictions in relation to the value
of accessible carried forward losses into future years (see Note 4.14).
Estimation uncertainty
Information about estimates and assumptions that have the most significant effect on recognition and measurement
of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.
Impairment
In assessing impairment, management estimates the recoverable amount of each asset or cash‑generating unit based on
expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about
future operating results and the determination of a suitable discount rate (see Note 4.11).
Useful lives of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected
utility of the assets. Uncertainties in these estimates relate to technical and other forms of obsolescence.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at
each reporting date. The future realisation of these inventories may be affected by market‑driven changes that may reduce
future selling prices.
50
Notes to the Consolidated Financial Statements (Continued)
5. oPeRatinG SeGmentS
Management currently identifies the Group’s two segments as finfish sales and tuna operations as detailed in Note 1.
These operating segments are monitored by the Group’s Chief Executive Officer and strategic decisions are made on the
basis of adjusted segment operating results.
Segment information for the reporting period is as follows:
Revenue
From external customers
Segment revenues
Other income
Net gain from changes in value of fish
Fish husbandry expense
Employee benefits expense
Fish processing and selling expense
Frozen selling expense
Impairment – frozen inventory and biological assets
Depreciation and amortisation
Other expenses
Finance costs and income
Segment operating profit before tax
Segment assets 2022
Revenue
From external customers
Segment revenues
Other income
Net gain from changes in value of fish
Fish husbandry expense
Employee benefits expense
Fish processing and selling expense
Frozen selling expense
Impairment – frozen inventory and biological assets
Depreciation and amortisation
Other expenses
Finance costs and income
Segment operating loss before tax
Segment assets 2021
finfish
sales
2022
$’000
tuna
operations
2022
$’000
Unallocated
2022
$’000
66,164
66,164
369
20,036
(32,115)
(13,367)
(12,702)
(11,001)
–
(3,817)
(3,880)
–
9,687
86,476
–
–
–
–
–
–
–
–
(211)
(15)
–
–
(226)
–
–
–
–
–
–
–
–
–
–
–
(785)
(785)
12,982
finfish
sales
2021
$’000
tuna
operations
2021
$’000
Unallocated
2021
$’000
48,460
48,460
1,454
1,444
(29,549)
(13,784)
(10,982)
(10,618)
(9,882)
(3,789)
(3,131)
-
(30,377)
71,494
-
-
-
-
-
-
-
-
-
(21)
(289)
-
(310)
434
-
-
-
-
-
-
-
-
-
-
(1,410)
(1,410)
30,072
total
2022
$’000
66,164
66,164
369
20,036
(32,115)
(13,367)
(12,702)
(11,001)
(211)
(3,832)
(3,880)
(785)
8,676
99,458
total
2021
$’000
48,460
48,460
1,454
1,444
(29,549)
(13,784)
(10,982)
(10,618)
(9,882)
(3,810)
(3,420)
(1,410)
(32,097)
102,000
Clean SeaS Seafood limited
51
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
No segment liabilities are disclosed because there is no measure of segment liabilities regularly reported to the Group’s
Chief Executive Officer. Unallocated operating income and expense consists of net interest and unallocated assets consist
of cash and cash equivalents.
Revenues from external customers in the Group’s domicile, Australia, as well as its major other markets have been identified
on the basis of the customer’s geographical location. Non‑current assets are allocated based on their physical location.
The Group’s revenues from external customers and its non‑current assets are divided into the following geographical areas:
Australia
Europe
Other countries
Total
Revenue
2022
$’000
39,020
21,583
5,561
66,164
non‑current
assets
2022
$’000
21,950
–
–
21,950
Revenue
2021
$’000
30,378
13,507
4,575
48,460
non‑current
assets
2021
$’000
20,223
-
-
20,223
During 2022 $4.01 million or 6% (2021: $2.9 million or 6%) of the Group’s revenues depended on a single customer in the
finfish sales segment.
6. ReVenUe
Revenue for the reporting periods consist of the following:
Sale of fresh fish products
Sale of frozen fish products
Total
7. otHeR inCome
Government stimulus (JobKeeper)
Other income
Total other income
2022
$’000
49,059
17,105
66,164
2022
$’000
–
369
369
2021
$’000
36,323
12,137
48,460
2021
$’000
978
476
1,454
From April 2020, the Group qualified for JobKeeper for certain qualifying employees. At 30 June 2021 the Group had
recognised other income of $0.98 million (FY20 $0.84 million). JobKeeper was not received in FY22.
52
Notes to the Consolidated Financial Statements (Continued)
8. fiSH HUSBandRY eXPenSe
Fish husbandry expense consist of the following:
Fish feed
Farm operating expense
Hatchery operating expense
Total fish husbandry expense
9. finanCe inCome and finanCe CoStS
Finance income for the reporting periods consist of the following:
Interest income from cash and cash equivalents
Finance costs for the reporting periods consist of the following:
Interest expenses for borrowings at amortised cost:
– Convertible note
– Leases
– Other borrowings
Total
2022
$’000
21,328
9,038
1,749
32,115
2022
$’000
1
2022
$’000
560
109
117
786
2021
$’000
20,069
7,788
1,692
29,549
2021
$’000
5
2021
$’000
1,153
162
100
1,415
Clean SeaS Seafood limited
53
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
10. inCome taX eXPenSe
The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective
tax rate of 30% (2021: 26%) and the reported tax expense in profit or loss are as follows:
Profit/(Loss) before tax
Domestic tax rate for Clean Seas Seafood Limited
Expected tax expense/(income)
Adjustment for R&D tax incentive refund – corporate tax rate component
Current year tax expense added to/(offset against) prior year tax losses
Adjustment for derecognition of tax losses
Utilisation of tax losses not previously recognised
Adjustment for tax‑exempt income
Actual tax expense/(income)
Tax expense comprises:
– R&D tax incentive refund – corporate tax rate component
– Deferred tax expense
Tax expense/(income)
2022
$’000
8,676
30%
2,603
–
–
–
(2,603)
–
–
–
–
–
2021
$’000
(32,097)
26%
(8,345)
-
-
8,345
-
-
-
-
-
-
Due to uncertainty regarding the utilisation of prior year tax losses in future years, the tax losses are not recognised as an
asset. At 30 June 2022, carried forward tax losses are estimated to be $77 million (2021: $94 million) and non‑refundable
R&D tax offsets are estimated to be $18 million (2021: $14.3 million).
11. CaSH and CaSH eQUiValentS
Cash and cash equivalents include the following components:
Cash at bank
12. tRade and otHeR ReCeiVaBleS
Trade and other receivables consist of the following:
Trade receivables, gross
Allowance for credit losses
Trade receivables
Other receivables
Total
54
2022
$’000
12,982
2021
$’000
30,072
2022
$’000
4,841
(58)
4,783
516
5,299
2021
$’000
6,151
(76)
6,075
308
6,383
Notes to the Consolidated Financial Statements (Continued)
All amounts are short‑term. The net carrying value of trade receivables is considered a reasonable approximation of fair value.
Expected credit
loss rate
Carrying
amount
Allowance for
expected losses
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
Total
2022
%
1.0%
2.6%
0.0%
0.0%
2021
%
0.6%
2.9%
0.0%
0.0%
2022
$’000
4,251
583
–
7
2021
$’000
4,430
1,719
2
-
4,841
6,151
2022
$’000
2021
$’000
43
15
–
–
58
26
50
-
-
76
The movement in the allowance for credit losses can be reconciled as follows:
Reconciliation of allowance for credit losses
Balance at 1 July
Amounts written off/(uncollectable)
Additional provision recognised
Impairment loss reversed
Balance 30 June
2022
$’000
2021
$’000
76
(18)
–
–
58
76
-
-
-
76
An analysis of unimpaired trade receivables that are past due is given in Note 34.3.
13. finanCial aSSetS and liaBilitieS
13.1 Categories of financial assets and liabilities
Note 4.12 provides a description of each category of financial assets and financial liabilities and the related
accounting policies.
Financial assets at amortised cost
Cash and cash equivalents
Trade and other receivables
Totals
Other liabilities
Convertible note
Borrowings
Trade and other payables
Totals
notes
11
12
notes
22
21
20
2022
$’000
12,982
5,299
18,281
2022
$’000
–
7,625
9,456
17,081
2021
$’000
30,072
6,383
36,455
2021
$’000
9,551
13,464
8,900
31,915
No financial assets or liabilities are recognised at Fair Value through Other Comprehensive Income or Fair Value through
Profit or loss.
A description of the Group’s financial instrument risks, including risk management objectives and policies is given in Note 34.
Clean SeaS Seafood limited
55
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
13.2 other financial assets and liabilities
The carrying amount of the following financial assets and liabilities is considered a reasonable approximation of fair value:
•
•
•
cash and cash equivalents;
trade and other receivables;
trade and other payables; and
• borrowings.
14. inVentoRieS
Inventories consist of the following:
Frozen fish products
(Less) impairment
Frozen fish products
Fish feed (at cost)
Other (at cost)
Total
2022
$’000
2,148
–
2,148
4,555
990
7,693
2021
$’000
11,411
(2,176)
9,235
1,355
662
11,252
At 30 June 2021, the Group recognised an impairment of $2.2 million to ensure that inventory is stated at the lower of cost
and net realisable value (NRV). Management estimates the net realisable values of inventories, taking into account the most
reliable evidence available at each reporting date. There was no impairment recognised for the period ending 30 June 2022.
2022
$’000
32,505
56,091
(36,055)
20,036
–
(2,950)
49,591
2021
$’000
49,783
29,677
(28,233)
1,444
(7,706)
(11,016)
32,505
15. BioloGiCal aSSetS – CURRent
Live Yellowtail Kingfish – held for sale
Carrying amount at beginning of period
Adjusted for:
Gain from physical changes at fair value less costs to sell
Decrease due to harvest for sale as fresh
Net gain recognised in profit and loss
Decrease due to impairment
Decrease due to harvest for processing to frozen inventory
Carrying amount at end of period
The closing biomass comprised 3,509 tonnes at an average weight of 2.19kg comprising:
• Year Class 2020: 269 tonnes at an average weight of 5.98 kg;
• Year Class 2021: 1,960 tonnes at an average weight of 3.32 kg; and
• Year Class 2022: 1,280 tonnes at an average weight of 1.32 kg.
In FY21 closing biomass of 3,295 tonnes at an average weight of 2.46kg comprising:
• Year Class 2019: 463 tonnes at an average weight of 5.90 kg;
• Year Class 2020: 2,265 tonnes of YC20 at an average weight of 4.15 kg; and
• Year Class 2021: 567 tonnes YC21 at an average weight of 0.8 kg.
During FY22 harvests totalled 2,919 tonnes (FY21: 3,416 tonnes).
56
Notes to the Consolidated Financial Statements (Continued)
During FY21, the Group recognised an impairment of $7.7 million to ensure that Live fish inventory is stated at fair value in
accordance with AASB 141 Agriculture. There has been no further impairments recognised in the period to 30 June 2022.
There is inherent uncertainty in the biomass estimate and resultant live fish valuation. This is common to all such valuations
and best practice methodology is used to facilitate reliable estimates. biomass is estimated using a model that simulates
fish growth. Actual growth will invariably differ to some extent, which is monitored and stock records adjusted via harvest
counts and weights, periodic sample weight checks, physical counts on transfer to sea cages and subsequent splitting of
cages, mortality counts and reconciliation of the perpetual records after physical counts and on cage closeout.
16. PRoPeRtY, Plant and eQUiPment
Details of the Group’s property, plant and equipment and their carrying amount are as follows:
Gross carrying amount
Balance 1 July 2021
Additions
Disposals
Balance 30 June 2022
Depreciation and impairment
Balance 1 July 2021
Disposals
Depreciation
Balance 30 June 2022
Carrying amount 30 June 2022
Gross carrying amount
Balance 1 July 2020
Additions
Disposals
Balance 30 June 2021
Depreciation and impairment
Balance 1 July 2020
Disposals
Depreciation
Balance 30 June 2021
Carrying amount 30 June 2021
land &
buildings
$’000
Plant &
equipment
$’000
4,366
71
–
4,437
42,452
5,128
(65)
47,515
total
$’000
46,818
5,199
(65)
51,952
(1,826)
(29,037)
(30,863)
–
(104)
(1,930)
2,507
38
(3,480)
(32,479)
15,036
38
(3,584)
(34,409)
17,543
land &
buildings
$’000
Plant &
equipment
$’000
total
$’000
43,396
3,422
-
4,244
122
-
4,366
39,152
3,300
-
42,452
46,818
(1,667)
(25,637)
(27,304)
-
(159)
(1,826)
2,540
-
(3,400)
(29,037)
13,415
-
(3,559)
(30,863)
15,955
All depreciation and impairment charges are included within depreciation, amortisation and impairment of
non‑financial assets.
The Property, Plant and Equipment has been pledged as security for the Group’s bank borrowings (see Note 21).
Clean SeaS Seafood limited
57
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
17. BioloGiCal aSSetS – non‑CURRent
Finfish Broodstock
Carrying amount at beginning of period
FV gain from revaluation of YTK Broodstock
Impairment of SBT Broodstock
Carrying amount at end of period
18. intanGiBle aSSetS
Details of the Group’s intangible assets and their carrying amounts are as follows:
2022
$’000
244
84
(211)
117
Net carrying amount
Balance at 1 July 2021
Addition
Amortisation
Disposal
Net carrying amount 30 June 2022
Balance at 1 July 2020
Addition
Amortisation
Net carrying amount 30 June 2021
ice fresh
licence
$’000
PiRSa
leases and
licences
$’000
Southern
Bluefin
tuna quota
$’000
779
-
(52)
-
727
-
779
-
779
2,827
-
-
-
2,827
2,827
-
-
2,827
130
-
-
(130)
-
130
-
-
130
2021
$’000
244
-
-
244
total
$’000
3,736
-
(52)
(130)
3,554
2,957
779
-
3,736
At each reporting date, the Directors review intangible assets for impairment.
impairment assessment
The Group operates one cash generating unit comprising fin‑fish operations.
The recoverable amount of the consolidated entity’s non‑current assets has been determined by value‑in‑use cash
flow projections from financial budgets for FY23 as reviewed by the Board. In establishing the cash flow projections,
due consideration was given to the economic impacts associated with macroeconomic trends. The discounted cash flow
model is based on a 3‑year projection period and extrapolated for a further 2 years, together with a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash‑generating unit is most sensitive.
The following key assumptions were used in the discounted cash flow model for the finfish operation:
• 10.6% discount rate; and
• 2.5% long term revenue and operating cost growth rate.
The discount rate of 10.6% reflects management’s estimate of the time value of money and the consolidated entity’s
weighted average cost of capital adjusted for the finfish operation, the risk free rate and the volatility of the share price
relative to market movements. Sensitivity analysis indicates that headroom continues to be present if the discount rate
is increased to 18.5%.
Management believes the projected 2.5% revenue growth rate is prudent and justified, based on the general market
conditions. Sensitivity analysis on the long‑term growth rate indicates that headroom continues to be present if growth
rate is reduced to 0.5%.
Accordingly, the Group has concluded that no impairment is required based on current market and economic conditions
and expected future performance.
58
Notes to the Consolidated Financial Statements (Continued)
19. RiGHt‑of‑USe aSSetS
The following table shows the movements in right‑of‑use assets:
Opening carrying amount
Remeasure lease
Amortisation
Closing carrying amount
2022
$’000
288
644
(196)
736
2021
$’000
539
-
(251)
288
The main leased site is the Royal Park processing plant in Adelaide, South Australia. The lease has a minimum term of 2 years
to March 2023 and two subsequent renewal options of 3 years and includes a right of first refusal to purchase.
During FY22, the Group remeasured the Royal Park lease to include the renewal option of 3 years, expiring 16 March 2026.
20. tRade and otHeR PaYaBleS
Trade and other payables consist of the following:
Current:
– Trade payables
– Related party payables
– Other payables
Total trade and other payables
2022
$’000
6,690
–
2,766
9,456
2021
$’000
5,167
59
3,674
8,900
All amounts are short‑term. The carrying values of trade payables and other payables are considered to be a reasonable
approximation of fair value.
21. BoRRoWinGS
Borrowings consist of the following:
Current:
– Trade finance facility
– Lease liabilities – bank (note 33.1)
– Lease liabilities – other (note 33.2)
– Insurance premium funding
Total borrowings – current
Non-current:
– Cash advance facility
– Lease liabilities – bank (note 33.1)
– Lease liabilities – other (note 33.2)
Total borrowings – non-current
2022
$’000
1,837
1,054
181
1,460
4,532
1,991
528
574
3,093
2021
$’000
9,471
977
187
1,395
12,030
-
1,310
124
1,434
Clean SeaS Seafood limited
59
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
In December 2021, the Group renewed its Finance Facility with Commonwealth Bank of Australia, with a facility limit
to $32.15 million. The Finance Facility comprises $12 million Trade Finance Facility, $14 million Market Rate Loan Facility,
$6 million Equipment Finance Facility and $150,000 Corporate Card Facility. This is an ongoing facility subject to annual
review and is secured against all Group assets.
The Group is subject to financial covenants, including operating cash flows and current ratio, which are reviewed quarterly.
The Group was compliant with all its covenants as at 30 June 2022.
22. ConVeRtiBle noteS
Convertible notes:
At beginning of year
Conversions to shares during year
Notes redeemed
Total convertible notes at end of year
Transaction costs capitalised:
At beginning of period/year
Transaction costs capitalised during year
Transaction costs amortised during year
Total transaction costs at end of year
Total convertible notes (net of transaction costs) at end of year
2022
$‘000
10,007
(3,345)
(6,662)
–
(456)
–
456
–
–
2021
$’000
13,770
(3,763)
-
10,007
(695)
(60)
299
(456)
9,551
On the 28 July 2021, The Directors of Clean Seas announced that the Company has given notice to the holder of
Convertible Notes (ASX:CSSG) that the Company will fully redeem all outstanding Convertible Notes on the 27 August 2021.
Of the 15,403,907 Convertible Notes issued on or before 20 January 2020, a total of 8,854,562 notes have been converted by
Noteholders to Ordinary Shares, and the remaining notes were redeemed by the Company for approximately $6.7 million.
23. PRoViSionS
The carrying amounts and movements in the provisions account are as follows:
annual
leave
$’000
881
723
(635)
969
969
-
long
service
leave
$’000
672
163
(169)
666
366
300
total
$’000
1,553
886
(804)
1,635
1,335
300
Carrying amount 1 July 2021
Additional provisions
Amount utilised
Carrying amount 30 June 2022
Current employee benefit provision
Non-current employee benefit provision
60
Notes to the Consolidated Financial Statements (Continued)
24. emPloYee RemUneRation
24.1 employee benefits expense
Expenses recognised for employee benefits are analysed below:
Salaries and wages
Termination payments
Superannuation – defined contribution plans
Leave entitlement accrual adjustment
Short term incentive
Long term incentive – share rights
Other on‑costs
Total
2022
$’000
9,525
–
905
1,151
486
422
878
2021
$’000
9,145
1,329
828
946
589
49
898
13,367
13,784
On 27th August 2020, the Company announced that the Managing Director & CEO Mr David Head would retire from his
role with the Company in October 2020. Along with Mr Head, the Company announced other changes to its Executive team.
In total, termination payments for FY21 was $1.3 million, which comprised approximately $0.8 million in share rights
granted in FY21.
24.2 Share‑based employee remuneration
The Company granted a total of 2,959,302 FY22 LTI share rights to senior executives during the year (FY21 no share rights
were granted to Executives). The share rights will vest if specified performance targets are achieved and the executive
remains employed by the Company for three years including the year for which the share rights were granted, or in other
circumstances agreed with the executive or at the discretion of the Board. Each share right on exercise converts to one
ordinary share, subject to adjustment in specified circumstances. On exercise of share rights, a dividend equivalent issue of
additional shares replicates the benefit of any dividends paid on ordinary shares during the performance period. No amount
is payable on vesting or exercise. During FY22 18,483 fully paid ordinary shares (FY21 1,495,062) were issued on the exercise
of vested share rights and nil share rights lapsed (FY21 821,676).
The valuation of share rights has remained consistent with prior issues. One‑third of the valuation at the end of the first
year is expensed in the first year. Two‑thirds of the valuation in the second year, less the amount expensed in the first year,
is expensed in the second year. The final valuation at the end of the third year, less amounts expensed in the previous two
years, is expensed or written back in the third year. Each year is subject to further review of the number of share rights
expected to vest, in accordance with AASB 2 Share‑based Payment.
The share rights valuation has been prepared by an Independent Valuation expert using a Black Scholes model.
The valuation is based on the fair value at grant date of the equity instruments granted. For the FY21 and FY22 LTI share
rights, which were granted in FY22 the valuation includes Clean Seas share price on 21 January 2022 being $0.625 with
adjustments for future dividends, volatility and achievement of EPS and share price targets.
Share right tranche
FY21 Tranche 1
FY21 Tranche 2
FY21 Tranche 3
FY22 Tranche 1
Grant date
21-Jan-22
21-Jan-22
21-Jan-22
21-Jan-22
Valuation
price
exercise
price
number
of rights
Vesting
dates
0.520
0.415
0.344
0.625
nil
nil
nil
nil
426,067
30-Jun-23
426,066
30-Jun-23
426,066
30-Jun-23
1,681,103
30-Jun-23
Clean SeaS Seafood limited
61
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
25. eQUitY
25.1 Share capital
The share capital of Clean Seas Seafood Limited consists only of fully paid ordinary shares; the shares do not have a par value.
All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at a shareholders’ meeting.
Shares issued and fully paid:
– At beginning of the year
– Share placements(i)
– Convertible notes
– Share rights
– STI paid via equity
2022
Shares
2021
Shares
2022
$’000
2021
$’000
158,648,059
105,977,370
224,772
–
43,859,650
6,686,141
18,483
–
6,946,328
1,495,062
369,649
(345)
3,457
17
–
195,937
23,359
3,763
1,510
203
Total contributed equity at 30 June
165,352,683
158,648,059
227,901
224,772
(i) Clean Seas Seafood completed an institutional placement to raise $25 million ($23 million net of costs). In FY22 the group recognised costs
of $345k which related to services rendered in relation to the institutional placement.
25.2 Share rights reserve
The Company has granted share rights to certain executives as part of their remuneration arrangements as a Long Term
Incentive (LTI). Share rights outstanding are as follows:
Share rights outstanding:
– At beginning of the year
– Granted during the year/changes to share rights
already granted
– Exercised during the year
– Lapsed during the year
Total share rights at 30 June
Details of these share rights are provided at note 24.2.
2022
Share rights
2021
Share rights
2022
$’000
334,250
2,650,988
2,959,302
-
(18,483)
(1,495,062)
–
3,275,069
(821,676)
334,250
102
422
(17)
–
507
2021
$’000
766
846
(1,510)
-
102
62
Notes to the Consolidated Financial Statements (Continued)
26. eaRninGS PeR SHaRe and diVidendS
26.1 earnings per share
Basic earnings per share have been calculated using the profit/(loss) attributable to shareholders of Clean Seas Seafood
Limited as the numerator (i.e. no adjustments to profit were necessary in 2022 or 2021).
Diluted earnings per share have been calculated using the profit/(loss) attributable to shareholders of Clean Seas Seafood
Limited adjusted for Convertible note interest as the numerator.
The reconciliation of the weighted average number of shares for the purposes of diluted earnings per share to the weighted
average number of ordinary shares used in the calculation of basic earnings per share is as follows:
Amounts in thousand shares:
– Weighted average number of shares used in basic earnings per share
165,091
117,319
– Shares deemed to be issued for no consideration in respect of share‑based payments
and convertible notes
Weighted average number of shares used in diluted earnings per share
2,033
167,124
-
117,319
2022
‘000
2021
‘000
26.2 dividends
dividends paid and proposed
Dividends declared during the year
Franking credits
2022
$’000
–
2021
$’000
-
Parent
2022
$’000
2021
$’000
The amount of the franking credits available for subsequent reporting periods are:
– Balance at the end of the reporting period
– Franking credits that will arise from the payment of the amount of provision
for income tax
– Franking debits that will arise from the payment of dividends recognised as a liability
at the end of the reporting period
– Franking credits that will arise from the receipt of dividends recognised as receivables
at the end of reporting period
Total franking credits available
–
–
–
–
–
Clean SeaS Seafood limited
-
-
-
-
-
63
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
27. ReConCiliation of CaSH floWS fRom oPeRatinG aCtiVitieS
2022
$’000
8,676
3,832
422
–
785
1,986
59
3,559
1,084
(378)
(17,086)
2,498
82
699
6,218
2021
$’000
(32,097)
3,810
846
203
1,410
1,480
(361)
(3,410)
(493)
17,278
952
54
495
(9,833)
2022
$
2021
$
118,032
104,471
14,650
3,100
17,750
135,782
11,950
36,250
48,200
152,671
Profit/(Loss) for the year
Adjustments for:
– Depreciation and amortisation
– LTI share rights expense
– STI paid via equity
– Net interest expense included in investing and financing
– Non‑cash insurance expense
– Net gain from the sale of non‑current assets
Net changes in working capital:
– Change in inventories
– Change in trade and other receivables
– Change in prepayments
– Change in biological assets
– Change in trade and other payables
– Change in other employee obligations
– Changes offset in investing
Net cash used in operating activities
28. aUditoR RemUneRation
Audit and review of financial statements
Other services
– Taxation compliance
– Other tax services
Total other service remuneration
Total auditor’s remuneration
64
Notes to the Consolidated Financial Statements (Continued)
29. Related PaRtY tRanSaCtionS and KeY manaGement PeRSonnel diSCloSUReS
The Group’s related parties comprise its key management and entities associated with key management. The Remuneration
Report in the Directors’ Report sets out the remuneration of directors and specified executives.
A substantial shareholder in Clean Seas Seafood Limited is Australian Tuna Fisheries Pty Ltd (ATF) (Marcus Stehr is a Director).
ATF and its associated entities controlled 3.77% of issued shares at 30 June 2022 (2021: 4.68%) and it is associated with
Stehr Group Pty Ltd, H & A Stehr Superannuation Fund, Sanchez Tuna Pty Ltd and Marcus Stehr Australia Pty Ltd. These
transactions were as follows:
Australian Tuna Fisheries Pty Ltd:
– Receipts for ice, expenses, SBT quota lease and contract labour
– Payments for towing, contract labour, fish feed, marina and net shed rent and electricity
Stehr Group Pty Ltd
– Payments for office rent
Marcus Stehr Australia Pty Ltd
– Receipt from the sale of SBT Quota
2022
$’000
4
(1,545)
(36)
175
2021
$’000
3
(536)
(45)
-
The following balances are outstanding as at the reporting date in relation to transactions with related parties:
Current payables
– Australian Tuna Fisheries Pty Ltd
2022
$’000
2021
$’000
–
59
The totals of remuneration paid or payable to the key management personnel of the Group during the year are as follows:
Short‑term employee benefits
Post‑employment benefits
Long‑term benefits
Total Remuneration
2022
$
2021
$
1,272,974
1,104,440
62,045
283,321
55,882
41,600
1,618,340
1,201,922
The Remuneration Report contained in the Directors’ Report contains details of the remuneration paid or payable to each
member of the Group’s key management personnel for the year ended 30 June 2022.
30. ContinGent aSSetS and liaBilitieS
The Group has unrecognised carry forward tax losses. This contingent asset is discussed in Note 10.
At 30 June 2022, the Group has bank guarantees of $55,000 (2021: $68,229).
There are no other material contingent assets or liabilities.
Clean SeaS Seafood limited
65
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
31. CaPital CommitmentS
Property, plant and equipment
2022
$’000
611
2021
$’000
1,005
Capital commitments relate to items of plant and equipment and site works where funds have been committed but the
assets not yet received. The amounts are expected to be paid to suppliers in FY23.
32. inteReStS in SUBSidiaRieS
Set out below are details of the subsidiaries held directly by the Group:
Name of the subsidiary
Clean Seas Aquaculture
Growout Pty Ltd
Clean Seas Seafood
International Pty Ltd
Country of incorporation
and principal place of
business
Australia
Australia
Group proportion
of ownership interests
Principal activity
30 June 2022
30 June 2021
Growout and sale of
Yellowtail Kingfish
Sale of Yellowtail Kingfish
100%
100%
100%
100%
33. leaSeS
33.1 lease liabilities – bank
The Group holds a number of motor vehicles and plant & equipment under lease arrangements with the Commonwealth
Bank of Australia. The net carrying amount of these assets is $2.2 million (2021: $2.4 million).
The Group’s lease liabilities, which are secured by the related assets held under leases, are classified as follows:
2022
$’000
2021
$’000
1,054
977
528
1,310
Lease liabilities – bank
Current:
– Lease liabilities – bank
Non‑current:
– Lease liabilities – bank
66
Notes to the Consolidated Financial Statements (Continued)
Future minimum lease payments at the end of each reporting period under review were as follows:
Minimum lease payments due
30 June 2022
Lease payments
Finance charges
Net present values
30 June 2021
Lease payments
Finance charges
Net present values
33.2 lease liabilities – other
Current:
– Lease liabilities
Non-current:
– Lease liabilities
30 June 2022
Lease payments
Finance charges
Net present values
30 June 2021
Lease payments
Finance charges
Net present values
Within
1 year
$’000
1,106
(52)
1,054
1,068
(91)
977
1‑5
years
$’000
556
(28)
528
1,358
(48)
1,310
after
5 years
$’000
–
–
–
–
–
–
2022
$’000
181
574
total
$’000
1,662
(80)
1,582
2,426
(139)
2,287
2021
$’000
187
124
Minimum lease payments due
Within
1 year
$’000
1‑5
years
$’000
after
5 years
$’000
total
$’000
208
(27)
181
198
(11)
187
608
(34)
574
126
(2)
124
–
–
–
-
-
-
816
(61)
755
324
(13)
311
Clean SeaS Seafood limited
67
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
34. finanCial inStRUment RiSK
34.1 Risk management objectives and policies
The Group is exposed to various risks in relation to financial instruments. The Group’s financial assets and liabilities
by category are summarised in Note 13.1. The main types of risks are market risk, credit risk and liquidity risk.
The Group’s risk management is coordinated at its head office, in close cooperation with the Board of Directors, and focuses
on actively managing those risks to secure the Group’s short to medium‑term cash flows.
The Group does not engage in the trading of financial assets for speculative purposes nor does it write options. The most
significant financial risks to which the Group is exposed are described below.
34.2 market risk analysis
The Group is exposed to market risk through its use of financial instruments and specifically to currency risk, interest rate
risk and certain other price risks, which result from both its operating and investing activities.
foreign currency sensitivity
Most of the Group’s transactions are carried out in Australian dollars (AUD). Exposures to currency exchange rates mainly
arise from the Group’s overseas sales, which are currently primarily denominated in Euro (EUR).
To mitigate the Group’s exposure to foreign currency risk, non‑AUD cash flows are monitored, customer payments are
credited to foreign currency bank accounts and converted to AUD on a managed basis and forward exchange contracts
may be entered into in accordance with the Group’s risk management policies. Where the amounts to be paid and received
in a specific currency are expected to largely offset one another, no further hedging activity is undertaken.
Foreign currency denominated financial assets and liabilities which expose the Group to currency risk are disclosed below.
The amounts shown are those reported to key management translated into AUD at the closing rate:
Short term exposure
Long term exposure
eUR
a$’000
USd
a$’000
other
a$’000
eUR
a$’000
USd
a$’000
other
a$’000
2,742
(257)
2,485
3,411
(625)
2,786
942
(201)
741
1,907
(30)
1,877
18
(19)
(1)
25
(817)
(792)
–
–
–
-
-
-
–
–
–
-
-
-
–
–
–
-
-
-
30 June 2022
– Financial assets
– Financial liabilities
Total exposure
30 June 2021
– Financial assets
– Financial liabilities
Total exposure
The following table illustrates the sensitivity of profit and equity in regards to the Group’s financial assets and financial
liabilities and the AUD/EUR exchange rate ‘all other things being equal’. It assumes a +/– 5% change in this exchange rate
for the year ended at 30 June 2022 (2021 +/– 5%). The sensitivity analysis is based on the impact on the Group’s valuation
of live fish held for sale.
Profit and Equity
Increase/(Decrease)
30 June 2022
30 June 2021
increase 5%
a$’000
decrease 5%
a$’000
(1,241)
(886)
1,372
980
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the
analysis above is considered to be representative of the Group’s exposure to currency risk.
interest rate sensitivity
The Group’s policy is to minimise interest rate cash flow risk exposures on long‑term financing.
68
Notes to the Consolidated Financial Statements (Continued)
34.3 Credit risk analysis
Credit risk is the risk that a counterparty fails to discharge an obligation to the Group. The Group is exposed to this risk for
various financial instruments, for example by granting trade credit to customers and investing surplus funds. The Group’s
maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as
summarised below:
Classes of financial assets
Carrying amounts:
– Cash and cash equivalents
– Trade and other receivables
Total
2022
$’000
2021
$’000
12,982
5,299
18,281
30,072
6,383
36,455
The Group continuously monitors defaults of customers and other counterparties, identified either individually or by
group and incorporates this information into its credit risk controls. Where available at reasonable cost, external credit
ratings and/or reports on customers and other counterparties are obtained and used. The Group’s policy is to deal only
with creditworthy counterparties.
The Group’s management considers that all of the above financial assets that are not impaired or past due for each of the
30 June reporting dates under review are of good credit quality.
At 30 June, the Group has certain trade receivables that have not been settled by the contractual due date but are not
considered to be impaired. The amounts at 30 June analysed by the length of time past due, are:
Not more three (3) months
More than three (3) months but not more than six (6) months
More than six (6) months but not more than one (1) year
More than one (1) year
Total
2022
$’000
583
7
–
–
2021
$’000
1,719
3
-
-
590
1,722
The Group applies the AASB 9 simplified model of recognising lifetime expected credit losses for all trade receivables
as these items do not have a significant financing component.
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess
shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical
location of customers.
The expected loss rates are based on the payment profile for sales over the past 24 months before 30 June 2022 as
well as the corresponding historical credit losses during that period. The historical rates are adjusted to reflect current
and forwarding looking macroeconomic factors affecting the customer’s ability to settle the amount outstanding.
The Group is not exposed to any significant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics. Trade receivables consist of a large number of customers in various industries and geographical
areas. Based on historical information about customer default rates management consider the credit quality of trade
receivables that are not past due or impaired to be good.
On the above basis the expected credit loss for trade receivables as at 30 June 2022 and recognised a provision for $58k.
The credit risk for cash and cash equivalents is considered negligible, since the counterparties are reputable banks with
high quality external credit ratings.
Clean SeaS Seafood limited
69
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
34.4 liquidity risk analysis
Liquidity risk is the risk that the Group might be unable to meet its obligations. The Group manages its liquidity needs
by monitoring scheduled debt servicing payments for long‑term financial liabilities as well as forecast cash inflows and
outflows due in day‑to‑day business. The data used for analysing these cash flows is consistent with that used in the
contractual maturity analysis below. Liquidity needs are monitored in various time bands, on a day‑to‑day and week‑to‑week
basis, as well as on the basis of a rolling monthly projection. Net cash requirements are compared to available cash and
borrowing facilities in order to determine headroom or any shortfalls. This analysis shows that available borrowing facilities
are expected to be sufficient over the lookout period.
As at 30 June 2022, the Group’s non‑derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
30 June 2022
Trade and other payables
Cash advance facility
Trade finance facility
Insurance premium funding
Finance lease obligations
Lease obligations
Total
Current
Non-current
Within
6 months
$’000
6 – 12
months
$’000
9,456
–
1,837
1,294
528
91
13,206
–
–
–
166
526
90
782
1 – 5
years
$’000
–
1,991
–
–
528
574
3,093
5+
years
$’000
–
–
–
–
–
–
–
This compares to the maturity of the Group’s non‑derivative financial liabilities in the previous reporting periods as follows:
30 June 2021
Convertible notes
Trade finance facility
Trade and other payables
Finance lease obligations
Lease obligations
Insurance premium funding
Total
Current
Non-current
Within
6 months
$’000
6 – 12
months
$’000
-
9,471
8,900
477
101
1,008
19,957
-
-
-
500
86
387
973
1 – 5
years
$’000
9,551
-
-
1,310
124
-
10,985
5+
years
$’000
-
-
-
-
-
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities
at the reporting date.
70
Notes to the Consolidated Financial Statements (Continued)
35. faiR ValUe meaSURement
35.1 fair value measurement of non‑financial instruments
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into
three levels of a fair value hierarchy. The three levels are defined based on the observability of significant inputs to the
measurement, as follows:
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly; and
•
Level 3: unobservable inputs for the asset or liability.
The following table shows the various Levels within the hierarchy of non‑financial assets measured at fair value on a
recurring basis at 30 June 2022:
30 June 2022
Biological assets – current
Biological assets – non‑current
Southern bluefin tuna quota
Total
30 June 2021
Biological assets – current
Biological assets – non‑current
Southern bluefin tuna quota
Total
level 1
$’000
level 2
$’000
–
–
–
–
–
–
–
–
level 1
$’000
level 2
$’000
-
-
-
-
-
-
-
-
level 3
$’000
49,591
117
–
total
$’000
49,591
117
–
49,708
49,708
level 3
$’000
32,505
244
130
total
$’000
32,505
244
130
32,879
32,879
The fair values of the biological assets are determined in accordance with Note 4.20.
Valuation processes
The biological assets of the Group are considered Level 3 and are valued internally by the Group as there is no observable
market for them. The value is based on the estimated exit price per kilogram and the value changes for the average weight
of each fish as it progresses through the growth and transformation cycle. The average weight of the fish is sample
measured periodically and the value is determined by applying the average weight to the estimated weight.
The average lifecycle of Large Kingfish is approximately 2 years to minimum initial harvest size (harvest weight 4.5 kg),
while for Small Kingfish (harvest weight 1.5 kg) it is approximately 1 year. The value per fish is based on this weight
estimate adjusted for future mortalities and multiplied by the expected market price at the relevant point of transformation.
Significant changes in any of the significant unobservable inputs in isolation would result in significant changes in fair
value measurement.
The net increment/(decrement) in the fair value of Kingfish is recognised as income/(expense) in the reporting period.
The current fair value per kg for Large Kingfish is $15.75/kg (FY21: $12.79/kg) and for Small Kingfish $12.75/kg.
(FY21:$10.00). Kingfish which are less than 250 grams are valued at $3.00 per fish.
Clean SeaS Seafood limited
71
ANNUAL REPORT 2022 Notes to the Consolidated Financial Statements (Continued)
36. CaPital manaGement PoliCieS and PRoCedUReS
The Group’s capital management objectives are:
•
•
to ensure the Group’s ability to continue as a going concern; and
to provide an adequate return to shareholders.
Management assesses the Group’s capital requirements in order to maintain an efficient overall financing structure while
avoiding excessive leverage. The Group manages the capital structure and makes adjustments to it in the light of changes in
economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure,
the Group considers the issue of new shares, dividends, return of capital to shareholders and sale of assets to reduce debt.
The Group has satisfied its covenant obligations for the Finance Facility Commonwealth Bank of Australia at 30 June 2022.
37. PaRent entitY infoRmation
Information relating to Clean Seas Seafood Limited (‘the Parent Entity’):
Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Share rights reserve
Accumulated losses
Total equity
Statement of profit or loss and other comprehensive income
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income
2022
$’000
2021
$’000
10,969
90,262
6,110
8,723
81,539
227,902
507
28,736
111,743
15,165
26,309
85,434
224,773
102
(146,870)
(139,441)
81,539
85,434
(7,429)
(8,234)
–
-
(7,429)
(8,234)
The Parent Entity has $65,840 capital commitments to purchase plant and equipment (2021: Nil). Refer Note 31 for
further details of the commitment.
The Parent Entity has not entered into a Deed of Cross Guarantee. Refer Note 30 in relation to contingent assets
and liabilities.
38. PoSt‑RePoRtinG date eVentS
There are no other matters or circumstances that have arisen since the end of the year that have significantly affected
or may significantly affect either:
the entity’s operations in future financial years;
the results of those operations in future financial years; or
the entity’s state of affairs in future financial years.
•
•
•
72
Directors’ Declaration
In the opinion of the Directors of Clean Seas Seafood Limited:
• The consolidated financial statements and notes of Clean Seas Seafood Limited are in accordance with the
Corporations Act 2001, including:
– Giving a true and fair view of its financial position as at 30 June 2022 and of its performance for the financial
year ended on that date; and
– Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
• There are reasonable grounds to believe that Clean Seas Seafood Limited will be able to pay its debts as and when
they become due and payable.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2022.
Note 2 confirms that the consolidated financial statements also comply with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Travis Dillon
Chairman
Dated the 31 day of August 2022
Clean SeaS Seafood limited
73
ANNUAL REPORT 2022 Independent Auditor’s Report
Grant Thornton Audit Pty Ltd
Grant Thornton House
Level 3
170 Frome Street
Adelaide SA 5000
GPO Box 1270
Adelaide SA 5001
T +61 8 8372 6666
Independent Auditor’s Report
To the Members of Clean Seas Seafood Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Clean Seas Seafood Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
consolidated financial statements, including a summary of significant accounting policies, and the Directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
for the year ended on that date; and
b complying with Australian Accounting Standards, which complies with the International Financial
Reporting Standards as issued by the International Accounting Standards Board, 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.
www.grantthornton.com.au
ACN-130 913 594
Grant Thornton Audit Pty Ltd ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Limited ABN 41 127 556 389 ACN 127 556 389.
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or
refers to one or more member firms, as the context requires. Grant Thornton Australia Limited is a member firm of Grant Thornton International Ltd (GTIL).
GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member
firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one
another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127
556 389 ACN 127 556 389 and its Australian subsidiaries and related entities. Liability limited by a scheme approved under Professional Standards
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74
Independent Auditor’s Report (Continued)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these
matters.
Key audit matter
How our audit addressed the key audit matter
Impairment of intangible assets
Note 18
As at 30 June 2022, the Group’s intangible assets of
$3,554,000 comprise Primary Industries and Regions
South Australia (PIRSA) Water Leases and Licences, and
the Ice Fresh Licence.
The Group is required to perform an annual impairment
test of intangible assets with an indefinite useful life and
those not ready for use in accordance with AASB 136
Impairment of Assets.
Management has tested the intangibles for impairment by
comparing the carrying amount with the recoverable
amount. The recoverable amount was determined on a
value-in-use basis.
The Group’s computations require several estimates and
assumptions. Therefore, an inherent risk is involved in
determining these material assets' value.
We have determined this is a key audit matter due to the
judgements and estimates required in calculating the
recoverable amount on a value-in-use basis.
Our procedures included, amongst others:
• enquiring with management to obtain and document an
understanding of management’s process and controls
related to the assessment of impairment, including
management’s calculation of the recoverable amount;
• assessing management’s identification of the
appropriate cash-generating unit;
• evaluating management’s value-in-use calculations to
assess for reasonableness of:
− mathematical accuracy of the calculations;
− management’s ability to forecast accurately;
−
forecasted cash flows to be derived by the
intangible assets;
− other inputs applied to the value-in-use
calculations, including discount rates, expected
terminal value, and cash flow adjustments;
−
the sensitivity of the significant inputs and
assumptions made by management in preparing its
calculation;
• evaluating the model against the requirements of
AASB 136; and
• assessing the adequacy of the Group’s disclosures
within the financial statements regarding the
judgements and estimates used by management to
assess the recoverable value of the intangible assets.
(cid:3)(cid:3)
Clean SeaS Seafood limited
75
Grant Thornton Australia Limited
2
(cid:3)
ANNUAL REPORT 2022
Independent Auditor’s Report (Continued)
Valuation of biological assets
Note 15 and 17
The Group holds biological assets, including Kingfish
measured at $49,708,000 as at 30 June 2022. AASB 141
Agriculture requires these assets to be measured at fair
value less costs of disposal.
Estimating the fair value is a complex process involving
several judgements and estimates. Due to the nature of
the asset, the valuation technique includes a model that
uses a number of inputs from internal sources.
This area is a key audit matter due to the complex nature
of the estimate and judgements applied.
Our procedures included, amongst others:
• enquiring with management to obtain and document an
understanding of management’s process and controls
related to the valuation methodology applied to
biological assets;
• assessing the inputs used in the valuation model
including comparing to actual performance subsequent
to reporting date and the historical performance of the
Group;
•
reviewing the historical accuracy of the Group's
assessment of the fair value of Kingfish by comparing it
to actual outcomes; and
• assessing the adequacy of the Group’s disclosures
within the financial statements regarding the
judgements and estimates used by management in
their valuation of biological assets.
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
Grant Thornton Australia Limited
3
(cid:3)
76
Independent Auditor’s Report (Continued)
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1_2020.pdf.This
description forms part of our auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in the Directors’ report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of Clean Seas Seafood Limited, for the year ended 30 June 2022
complies with section 300A of the Corporations Act 2001.
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
I S Kemp
Partner – Audit & Assurance
Adelaide, 31 August 2022
Clean SeaS Seafood limited
77
Grant Thornton Australia Limited
4
(cid:3)
ANNUAL REPORT 2022
ASX Additional Information
Additional information required by the ASX Limited Listing Rules and not disclosed elsewhere in this report is set out below.
The information is effective as at 27 July 2022.
oRdinaRY SHaRe CaPital (QUoted)
165,352,683 fully paid ordinary shares are held by 3,923 shareholders.
SUBStantial SHaReHoldeRS
The number of shares held by substantial shareholders and their associates, as stated on their most recent Substantial
Shareholder notice, are set out below:
Shareholder
Bonafide Wealth Management AG1
Regal Funds Management Pty Ltd (RFM)2
GCI CSS (Hofseth & Nevera) LLC3
1. Notice released to ASX on 29 October 2021.
2. Notice released to ASX on 7 June 2022.
3. Notice released to ASX on 7 July 2021.
VotinG RiGHtS
number
of shares
28,800,700
8,296,654
10,100,000
Ordinary Shares: On a show of hands, every member present at a meeting in person or by proxy shall have one vote and
upon a poll each fully paid share shall have one vote.
Distribution of equity security holders – ordinary shares
number
of holders
774
1,671
545
819
114
3,923
Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001+
Total
78
ASX Additional Information (Continued)
There were 583 holders of less than a marketable parcel of ordinary shares (less than $500).
Twenty (20) largest shareholders
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
CS THIRD NOMINEES PTY LIMITED
AUSTRALIAN TUNA FISHERIES PTY LTD
UBS NOMINEES PTY LTD
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD
DHC CAPITAL PTY LTD
BRISPOT NOMINEES PTY LTD
CS FOURTH NOMINEES PTY LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
FERNBOW PTY LTD
MR HAGEN HEINZ STEHR & MRS ANNA STEHR
CROFTON PARK DEVELOPMENTS PTY LTD
MR MURRAY JOHN GILBERT & MR MARTIN PETER GILBERT
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MRS VALERIA VANSELOW
MS KYLIE LYNETTE NUSKE & MR MATTHEW JAMES COOK
Ordinary shares
Number of
shares held
Percentage of
issued shares
39,643,446
28,353,454
23.98%
17.15%
8,357,114
6,416,763
5,162,837
4,873,956
3,211,873
2,837,530
1,742,036
1,652,565
1,611,329
1,599,898
1,321,917
1,080,000
1,063,853
755,921
734,324
720,597
650,000
608,592
5.05%
3.88%
3.12%
2.95%
1.94%
1.72%
1.05%
1.00%
0.97%
0.97%
0.80%
0.65%
0.64%
0.46%
0.44%
0.44%
0.39%
0.37%
Total securities of top 20 holdings
112,398,005
67.97%
SeCURitieS eXCHanGe
The Company is listed on the Australian Securities Exchange . The Company’s securities have a secondary listing
on the Euronext Growth Oslo/Norway (“OSE”).
on maRKet BUY BaCK
There is no current on market buy back.
ReGiSteRed offiCe
The address and telephone number of the Company’s registered office are:
7 Frederick Road, Royal Park SA 5014
Telephone: +61 1800 870 073
SHaRe ReGiStRY
The address and telephone number of the Company’s share registry, Boardroom Pty Limited, are:
Boardroom Pty Limited, Level 12, 225 George Street, Sydney New South Wales 2000
Telephone: (02) 9290 9600
Clean SeaS Seafood limited
79
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