Leading
Australian
Aquaculture
AnnuAl RepoRt 2023
ouR VISIon
To be a global leader
in aquaculture, inspiring
culinary experiences
around the world
through our sustainable
premium seafood.
Contents
WHo We ARe
WHAt We Do
CHAIRMAn’S RepoRt
FY23 peRFoRMAnCe HIGHlIGHtS
Meet ouR BoARD AnD MAnAGeMent
ouR CoMpetItIVe ADVAntAGe
StRAteGIC oBJeCtIVeS
02
04
08
09
11
12
14
ConSolIDAteD FInAnCIAl StAteMentS
16
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.
CleAn SeAS SeAFooD lIMIteD
AnnuAl RepoRt 2023
01
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
02
lICenSe CApACItY
(tonneS)
10,000
WHYALLA
ARNO BAY
PORT
LINCOLN
ADELAIDE
3,500
4,000
2,500
PORT
LINCOLN
ARNO
BAY
WHYALLA
TOTAL
WHAt W e D o
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. 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.
Hatcheries
Marine Farms
Harvesting
Processing
SensoryFresh™
Markets
S
e
l
A
S
D
n
A
n
o
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t
C
u
D
o
R
p
,
I
G
n
D
e
e
R
B
e
l
C
Y
C
l
l
u
F
CleAn SeAS SeAFooD lIMIteD
AnnuAl RepoRt 2023
03
WHAt W e D o
Hatchery
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 three 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.
Each year the
hatchery produces
over one million
fingerlings from our
unique, selectively
bred broodstock.
04
WHAt W e D o
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
CleAn SeAS SeAFooD lIMIteD
AnnuAl RepoRt 2023
05
Fresh Spencer Gulf
Kingfish is delivered to
customers around the
world twice per week,
52 weeks per year.
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
06
WHAt W e D o
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.
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
benefits. While Clean Seas remains focused 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.
WHAt W e D o
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,
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 2023
07
Chairman’s Report
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.
In my report last year I spoke of the
expectation that the strong progress
against our strategic goals would
translate into positive cash flow
and operating profits in FY23, and
I’m delighted to now report that this
is indeed the case. While the FY22 result
was underpinned by the discounted
sales of surplus frozen inventory, the
FY23 numbers are on a clean trading
year, highlighting the true potential
of our business model.
The transition from clearance frozen
inventory to full price sales, as well as
the continued efforts of our sales team
to educate the market on the quality,
culinary flexibility and provenance of
our fish has driven price upwards in
FY23 and contributed to the strong
profit result.
In addition to optimising frozen
inventory, we have been able to bring
our live fish biomass back into balance,
turning working capital more quickly
and reducing the carrying cost of our
live inventory by harvesting the fish
in a shorter time period than we have
done in the past. This has resulted
in our best feed conversion ratio
for many years and helped partially
offset the higher feed input costs that
we experienced in FY23. While our
production cost was up versus FY22
due to high feed prices, our improved
growth rate allowed us to better
leverage our fixed cost base and
our farming costs excluding feed
were lower per kilogram than FY22.
In order to further control our input
costs going forward we made the
important and exciting decision to
acquire a new automated feed barge,
which is currently been constructed
and is due for delivery in early 2024.
The acquisition of this best practice
technology will allow us to receive feed
deliveries by sea direct from the mill,
ensure we do not miss the feeding
of our fish due to weather or resource
constraints, and save on fuel and
labour in the dispensing of our fish
feed. In doing so, this technology will
allow us to better protect ourselves
from any future cost increases.
In FY23 we successfully trailed the
substitution of fish oil with sustainably
produced algal oil, without seeing a loss
in performance. As a result of this
success we have begun using our algal
oil in our production feeds and expect
the rate of substitution to increase
in the years to come.
Our Company was founded on full
lifecycle breeding and farming values,
and the growing of a native fish in its
natural environment gives us significant
quality. 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 lower cost
frozen supply chain.
Looking ahead, we will continue
to make appropriate investments
in infrastructure, which will focus
on further reducing cost of production,
enhancing operational and financial
stability, and unlock capacity to grow
sales volumes and realise the benefits
from increased scale and improved
operational leverage.
We are justifiably proud of what the
entire Clean Seas team has achieved,
and in FY23 we made considerable
further progress towards achieving
our achieve our vision, namely being
the highest quality lowest cost producer
of Yellowtail Kingfish globally.
Thank you for your support of our
business and best wishes to you all.
travis Dillon
Chairman
“I am pleased to
present the 2023
Annual Report for
Clean Seas Seafood
Limited (ASX:CSS,
OSE:ASX).”
08
FY23 Performance
Highlights
FY23 highlights the
turnaround and
strong foundation
ReCoRD
ReVenue oF
$69.4
MILLION
Up 5% on FY22
opeRAtInG
CASH FloW oF
$1.5
MILLION
opeRAtInG
eBItDA oF
$3.7
MILLION
up $8.5 MIllIon on FY22
SIGnIFICAnt AVAIlABle
CASH AnD FunDInG oF
$33.8
MILLION
SAleS
VoluMeS oF
3,054
TONNES
CleAn SeAS SeAFooD lIMIteD
AnnuAl RepoRt 2023
09
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.
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 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 15 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 2023
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 over 20 years of Kingfish selective
breeding and farming experience. The market for
Kingfish 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.
People & culture
• Our 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, agriculture and
international business.
12
Clean Seas is the global
leader in full life cycle
breeding and farming
of Yellowtail Kingfish
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.
• Committed and loyal group of
approximately 4,000+ shareholders.
• Supportive and engaged
banking partner.
Breeding & farming
• Clean Seas is the global leader in
full life cycle breeding and farming
of Yellowtail Kingfish.
• Over 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 is native to
the Spencer Gulf and thrives
in this environment.
Supply chain
Markets
•
In house processing of whole fresh
and value‑added products provide
end‑to‑end control from egg
to customer.
• Liquid nitrogen technology
provides scope for further
new product development
and channel diversification.
• SensoryFresh™ technology
allows for lower cost shipping
options without impacting
on product quality.
• 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.
• 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™ is a leading
freezing technologies provide
strong product quality
advantages over traditional
frozen processes and
supply chains.
Funding
• Funding headroom with
cash and undrawn facilities
of $33.7m (including $6.4m
in cash) at 30 June 2023.
Environmental, Social
and Governance (ESG)
•
In FY23, Clean Seas formed it’s
key ESG priorities, including:
–
–
–
the establishment of an
ESG reporting framework
selecting a platform that
can assist in preparing the
ESG report and start gathering
the necessary information
for its compilation
engaging with a reputable
partner who will aid Clean Seas
in calculating its greenhouse
gas emissions, ensuring
accuracy and compliance.
In FY23, Clean Seas ran a successful
trial to substitute the fish oil in its
diet with sustainably sourced algal
oil. In this trial, up to 100% of the
fish oil in the diet was replaced with
algal oil without materially impacting
the health or performance of the
Kingfish. As a result of this trial,
algal oil has now been incorporated
into Clean Seas’ production diet,
with the expectation that this will
evolve into more sustainable diets
in the future.
•
CleAn SeAS SeAFooD lIMIteD
AnnuAl RepoRt 2023
13
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.
StR AteGIC o BJeCtIV eS
Building scale
around a premium
and sustainable
farming operation
14
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 going forward, 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 2023
15
Consolidated Financial Statements
For the year ended 30 June 2023
Clean Seas Seafood Limited
ABN 61 094 380 435
Directors’ Report
Auditor's Independence Declaration
Corporate Governance Statement
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
1 Nature of operations
17
39
40
41
42
43
44
45
45
2 General information and statement of compliance 45
17 Biological assets – non-current
18 Intangible assets
19 Right-of-use assets
20 Trade and other payables
21 Borrowings
22 Provisions
23 Employee remuneration
24 Equity
25 Earnings per share and dividends
26 Reconciliation of cash flows from
operating activities
27 Auditor remuneration
3 Changes in accounting policies
4 Summary of accounting policies
5 Operating Segments
6 Revenue
7 Other income
8 Fish husbandry expense
9 Finance income and finance costs
10 Income tax expense
11 Cash and cash equivalents
12 Trade and other receivables
13 Financial assets and liabilities
14 Inventories
15 Biological assets – current
16 Property, plant and equipment
28 Related party transactions
and key management personnel disclosures
29 Contingent assets and liabilities
30 Capital commitments
31 Interests in subsidiaries
32 Leases
33 Financial instrument risk
34 Fair value measurement
35 Capital management policies and procedures
36 Parent entity information
37 Post-reporting date events
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
45
46
54
55
55
55
56
56
56
57
58
58
59
60
60
61
62
62
62
63
63
64
65
66
67
67
68
68
68
69
70
73
74
75
75
76
77
81
16
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 2023.
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 Joint 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 Yellowtail Kingfish, producing fingerlings for sale and growout; and
• The growout of Spencer Gulf 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 Kingfish of premium quality.
The consolidated financial statements are presented in Australian Dollars (‘$AUD’), which is also the functional currency of the
Parent Company.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
17
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 $6.0 million, which compares
to a statutory profit after tax of $8.7 million in FY22. Importantly, underlying earnings before interest, tax, depreciation,
and amortization (EBITDA) reached $3.7 million, indicating a turnaround from an operating loss of $4.8 million in FY22.
Financial Performance 1
pRoduCtion metRiC
Tonnes sold (WWE)
Net Growth (tonnes)
Harvest volumes (tonnes)
Closing Live Fish Biomass (tonnes)
Frozen inventory
opeRAtinG ReSultS ($/KG) 1
Revenue $/kg
Post farmgate costs $/kg
Farmgate $/kg
Production costs $/kg
Gross profit $/kg
Indirect & R&D costs $/kg
operating eBitdA $/kg
opeRAtinG ReSultS ($’000) 1
Revenue
Post farmgate costs
net farmgate revenue
Production costs
Gross profit
Indirect & R&D costs
operating eBitdA
underlying Adjustments
Impairment
AASB 141 SGARA and cost allocation
Total underlying adjustments
Statutory eBitdA
Depreciation & amortisation
Statutory eBit
Net interest costs
Statutory npAt
FY22
3,757
3,152
2,919
3,508
164
17.61
(3.41)
14.20
(12.38)
1.82
(3.10)
(1.28)
66,164
(12,815)
53,349
(46,514)
6,835
(11,659)
(4,824)
(211)
18,328
18,117
13,293
(3,832)
9,461
(785)
8,676
FY23
3,054
3,837
3,354
3,991
376
22.73
(4.87)
17.86
(13.03)
4.83
(3.62)
1.21
69,411
(14,870)
54,541
(39,804)
14,737
(11,044)
3,693
(675)
7,149
6,474
10,167
(3,840)
6,327
(331)
5,996
CHAnGe
%
-19%
22%
15%
14%
129%
$
5.12
(1.46)
3.66
(0.65)
3.01
(0.52)
2.49
$’000
3,247
(2,055)
1,192
6,710
7,902
615
8,517
n/a
n/a
(11,643)
(3,126)
(8)
(3,134)
454
(2,680)
1. Operating Results 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 Group’s
external auditors.
18
Directors’ Report continued
The improvement in profitability in FY23 reflects the advantages gained from a 29% and 26% increase in revenue and farmgate
per kg, respectively, as well as farming and overhead cost efficiencies achieved. Although production costs rose to $13.03 per kg
due to increased feed prices, the gains achieved in revenue per kg more than offset this increase. As a result, Clean Seas delivered
a gross profit of $4.83 per kg and an underlying operating EBITDA of $1.21 per kg.
In previous financial years, Clean Seas had undertaken a significant program to reduce working capital by optimising live fish
biomass and reducing inventory of frozen Kingfish. In FY22 alone, frozen inventory was reduced by 892 tonnes. With excess
inventory successfully cleared and notwithstanding a reduction in sales volumes in FY23, the corresponding benefit in pricing
and cost efficiencies underpinned an excellent FY23 result.
Financial Performance
Sales volumes and revenue
FY22 to FY23 Geographical Revenue ($'000)
7,318
(3,474)
(777)
180
66,164
Australia
Europe
North America
Asia
69,411
Clean Seas’ achieved revenue of $69.4 million in FY23, representing a 5% increase on FY22. The result highlights the Group’s
ability to grow revenue per kg across both Fresh and Frozen products and geographical area. Revenue per kg increased to
$22.73 in FY23, representing a 29% increase on FY22.
Historical revenue $/kg
24
22
20
18
16
14
12
10
g
k
/
$
17.36
17.10
16.14
17.38
16.63
14.30
FY19
FY20
16.92
15.31
11.84
FY21
22.82
22.73
22.18
19.29
17.61
14.06
FY22
FY23
In FY23, fresh revenue per kg continued its upward trend, reaching a record $22.82 per kg, showing growth of 18% compared
to FY22. The increase in fresh pricing reflects growth across all geographical regions.
Fresh Price
Frozen Price
Total
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
19
Directors’ Report continued
During FY23, the Group faced limited frozen supply, however, customer demand for premium frozen products continued and
consequently frozen revenue per kg increased by an impressive 58%, reaching $22.18 per kg in FY23.
FY22 to FY23 Geographical volumes (tonnes)
(104)
(485)
(116)
2
3,757
Australia
Europe
North America
Asia
3,054
Total sales volumes for FY23 were 3,054 tonnes, which was a 19% reduction compared to FY22. The decline in sales volumes
is attributed to the transition away from surplus frozen inventory, which played a significant role in the FY22 results.
Consequently, total frozen volumes declined by 65%, reaching 420 tonnes in FY23. However, despite the absence of surplus
frozen inventory, strong demand led to improved pricing, reaching record highs. In contrast, the Group recorded a 3% increase
in total Fresh volumes, totalling 2,634 tonnes.
Australian sales volumes decreased by 5% to 2,049 tonnes in FY23. This slight reduction in sales volumes is primarily due
to the one-off sale of 150 tonnes of frozen clearance inventory in FY22. The Fresh Australian business continued its growth
in FY23, increasing to 2,008 tonnes, representing a 4% increase from FY22.
Sales volumes in Europe decreased by 485 tonnes to 752 tonnes in FY23. The reduction in sales volumes reflects the
decrease in available frozen inventory and the emergence of more challenging economic conditions and increased
competition. However, the decline in sales volumes was partially offset by growth in revenue per kilogram, increasing
by 38% to $24.08 per kg.
North America also experienced a decline in volumes, with a reduction of 116 tonnes to 191 tonnes. This decrease was primarily
driven by a 131-tonne reduction in frozen sales volumes, but was partially offset by a growth in Fresh sales of 15 tonnes.
FY22 to FY23 Revenue – price and Volumes ($'000)
9,278
(11,080)
1,640
3,409
66,164
Fresh Volume
Fresh Price
Frozen Volume
Frozen Price
69,411
Despite a 19% reduction in sales volumes, Revenue increased by $3.2 million (5%). The growth in revenue was driven by
growth in both Fresh and Frozen pricing, increasing by 18% and 58% respectively. The improvement in price more than offset
the loss of frozen sales.
20
Directors’ Report continued
Production costs
Production costs increased by $0.65 per kg to $13.03 per kg in FY23. Costs were adversely impacted by inflationary pressures,
increasing the cost of feed, labour, electricity, and fuel, however the impact was partially offset by efficiencies on the farm.
The Group achieved an improvement in economic feed conversion ratio (eFCR) and reduced farming costs per kg (excluding
feed) as fish growth rates exceeded cost increases.
FY22 to FY23 Feed costs ($'000)
5,310
3,364
21,328
Increase in feed
consumed
Increase in feed
price
30,002
In FY23 Clean Seas benefitted from the work completed to reduce excess live fish biomass and reduce the time taken to grow
its fish to harvest by bringing forward the year class cutover date. In FY23 the Group transitioned year classes in March 2023,
and, as a result eFCR reduced from 2.57 in FY22 to 2.43 in FY23. The reduced time in water also helped Clean Seas achieve
a reduction in farming costs per kg, excluding feed.
The rising cost of feed put pressure on Clean Seas’ cost base, with the average cost of feed increasing by 21% to $3.22 per kg
compared to FY22. Given feed accounts for approximately 60% of total production costs and has remained persistently high,
Clean Seas has made a strategic investment in a new automated feed barge which will transform the feeding process at our
Arno Bay farm site. Feeding at this location is performed manually, resulting in lower fish growth rates compared to the
automated Louth Bay (Port Lincoln) farming site due to weather-related missed feed days. The new automated feed barge
will allow for remote and consistent feed dispensing at the Arno Bay farm site, regardless of the weather conditions.
The feed barge possesses a storage capacity of 650 tonnes of feed, which can be directly received via ocean transhipment
from the feed mill, eliminating the need for road transport and double handling. This streamlining of operations is expected
to significantly reduce freight costs and further decrease the overall cost of production.
The investment in the automated feed barge is projected to yield a payback period of less than four years, demonstrating its
financial viability. Moreover, it is expected to further reduce eFCR (feed conversion ratio), which will contribute to enhanced
cost savings and overall profitability for Clean Seas.
Underlying Gross Profit
The improvement in Underlying Gross Profit to $4.83 per kg reflects improvements in pricing, which has more than offset
the increase in post farmgate and production costs. More importantly, it reflects the progress made against the strategic
plan which was focused on establishing a business model capable of consistently generating a gross profit margin of between
$4.00 to $5.00 per kg.
Indirect costs
The downward trend in indirect costs continued in FY23, reducing to $11.04 million, which was an improvement of approximately
$0.6 million. However, on a per kg basis indirect costs increased by $0.52 per kg to $3.62 and represents weakened operational
leverage following the 19% reduction in sale volumes.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
21
Directors’ Report continued
Underlying Operating EBITDA
In FY23, Clean Seas achieved enhanced profitability by boosting its revenue and farmgate price per kg by 29% and 26%,
respectively. Despite facing challenges such as high feed prices and inflationary pressures affecting input costs, the Group
managed to achieve an impressive underlying operating EBITDA of $1.21 per kg. This success can be attributed to the effective
implementation of the FY21 to FY23 turnaround strategy, which has transformed Clean Seas into a profitable business,
generating positive operating EBITDA and operating cash flows. This transition marks a significant milestone in the Group’s
journey towards sustained profitability and growth.
Adjustments to underlying Operating EBITDA include:
•
impairment: Clean Seas entered into an agreement with IceFresh in June 2021 to obtain a non-transferable,
non-sublicensable, worldwide license to the IceFresh Technology solely for use in connection with the distribution
of retail products of Kingfish. The current strategic plan does not include the sale of retail fish products and is therefore
not a current focus for the Group. The carrying value has been written down to nil.
• SGARA and cost allocation: Live fish biomass and frozen inventory is accounted for in accordance with AASB 141 ‘Agriculture’.
Under AASB 141, the Group 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 Operating EBITDA, the Group eliminates these entries. Furthermore, to calculate Underlying EBITDA, the Group
has included the required entries to reflect a theoretical historical cost Profit and Loss.
Statutory Net Profit
Clean Seas has delivered a statutory profit in FY23 of approximately $6.0 million driven by an improvement in operating
earnings, coupled with a significant increase in the growth of Live Fish net growth tonnes (+22%) and increase in valuation.
Under AASB 141, the Group is required to recognise a gain or loss in the Profit and Loss when changes occur to live fish biomass
(i.e. net growth) or expected future profits (i.e. changes in valuation).
Cash Flow
CASH FloW SummARY ($’000)
Cash receipts
Operating cash flow
Investing cash flow
Financing cash flow
net increase/(decrease) in cash held
Operating cash flow
MOVEMENT
FY22
67,376
6,218
(5,753)
(17,555)
(17,090)
FY23
69,612
1,510
(4,838)
(3,297)
(6,625)
$
2,236
(4,708)
915
14,258
10,465
%
3%
-76%
16%
81%
61%
Cash receipts for the full year ended 30 June 2023 reached $69.6 million, which exceeded FY22 by $2.2 million (representing
a 3% increase), which benefited from optimising working capital by selling down frozen inventory by 892 tonnes to 164 tonnes
at 30 June 2022.
Feed payments increased by 23% to $27.5 million in FY23 driven by an increase in Live Fish biomass growth of 22% and
a 21% increase in the average feed price. Payments to employees increased by 18% driven by inflationary pressures and
growing biomass.
The growth in cash receipts more than offset the increase in costs, which allowed Clean Seas to report a Full Year operating
cash flow of approximately $1.5 million and represents the second consecutive positive operating cash flow result.
22
Directors’ Report continued
Investing cash flow
Clean Seas capital investment was approximately $5.0 million in FY23, which comprises maintenance and growth capital
expenditure (capex):
• Growth capex amounted to $2.0 million and comprised three key components: $1.2 million allocated for progress
payments for the new Feed Barge, $0.5 million for implementing a new camera system for the feed barges, and
$0.3 million for acquiring a new Health vessel.
• Maintenance capex amount to approximately $3.0 million in new cages, nets, vehicles, and processing plant improvements.
The Group received $106k from the sale of non-current assets and $53k in interest earned.
Financing cash flow
During FY23, Clean Seas continued its focus on reducing debt and further strengthening the balance sheet, which included
the repayment of short- and medium-term debt of $5.1 million. Interest payments were $0.3 million.
Funding
net CASH/(deBt) $’000
Cash at bank
Working capital facility (Trade Finance Facility)
Senior debt facility (Cash Advance Facility)
Asset finance facility
Insurance premium funding
Lease liability (AASB 16)
total net cash/(debt)
Jun-22
12,982
(1,837)
(1,991)
(1,582)
(1,460)
(755)
5,357
Jun-23
6,357
–
(4,091)
(527)
(1,173)
(807)
(241)
CHAnGe
(FAV/unFAV)
(6,625) ▼
1,837 ▲
(2,100) ▼
1,055 ▲
287 ▲
(52) ▼
(5,598) ▼
The net debt position of ($241k) in June 2023 includes AASB 16 Lease Liabilities. Excluding these items, Clean Seas had adjusted
net cash of $566k. The transition into net debt position reflects the repayment of short- and medium-term debt and the
decision to use cash reserves to fund maintenance capital.
In December 2022, 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 Cash Advance 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, interest coverage and tangible net worth ratios,
which are reviewed quarterly. The Group was compliant with all its covenants as at 30 June 2023.
deBt ARRAnGementS
Senior debt facility (Cash Advance Facility)
Working capital facility (Trade Finance Facility)
Asset finance facility
total
totAl
FACilitY
14,000
12,000
6,000
32,000
dRAWn
undRAWn
(4,091)
–
(527)
(4,618)
9,909
12,000
5,473
27,382
At 30 June 2023, the Group had $27.4 million in undrawn facilities, which will provide sufficient headroom for working capital
and to fund planned capital investment projects.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
23
Directors’ Report continued
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
Subsequent to 30 June 2023, 1,278,199 Share Rights lapsed, which represent the FY21 Long-Term Incentive program, and
the Board approved the issue of 2,164,329 Share Rights, which represent the FY24 annual Long-Term Incentive program.
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.
Likely developments, business strategies and prospects
The Group has made significant progress against its strategic objectives, building channel and market awareness, and
strengthening its balance sheet, despite the impacts of inflationary pressures. The Group 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 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 Select Harvests Limited (ASX:SVH), Non-Executive Director of Lifeline
Australia and member of the CSIRO Agriculture and Food Advisory Committee. Mr Dillon was previously Chairman of Terragen
Holdings Limited (ASX:TGH).
Mr Dillon’s shareholding at signing date was 200,000 shares.
Ms Katelyn Adams – Independent Non-Executive Director
Ms Adams was appointed to the 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 and has a shareholding at signing date was
50,000 shares.
24
Directors’ Report continued
Mr Marcus Stehr – Independent Non-Executive Director
Mr Stehr was appointed to the Board on incorporation in September 2000. He is a member of the Audit and Risk 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.
Mr Gilbert Vergères – Non-Executive Director
Mr Vergères was appointed to the Board on 3 March 2020. He is a member of the Remuneration and Nomination Committee.
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 25 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 Gratton’s shareholding
at signing date was 455,647 shares.
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 15 years’ experience in Corporate Finance and Accounting roles across a 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. Mr Brown’s shareholding at signing date was 106,829 shares.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
25
Directors’ Report continued
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:
BOARD MEETINGS
AUDIT AND RISK
COMMITTEE
REMUNERATION AND
NOMINATIONS COMMITTEE
A
10
10
10
10
B
10
10
9
9
A
3
3
3
–
B
3
3
3
–
A
2
2
–
2
B
2
2
–
2
diReCtoR’S nAme
Travis Dillon
Katelyn Adams
Marcus Stehr
Gilbert Vergères
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)
Unissued shares under option
There are no share options issued at the date of this report.
The Group issued 2,187,564 share rights during the financial year. The Group had 5,146,866 share rights outstanding
at 30 June 2023. Further details are provided in the Remuneration Report.
Shares issued during or since the end of the year as a result
of exercise
The Group issued 136,829 shares during the financial year as a result of the exercise of share rights.
26
Directors’ Report continued
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 FY23.
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 Group’s Non-Executive Directors receive only Director fees (including statutory superannuation where applicable) for their
services and the reimbursement of reasonable expenses. The Board reviews its fees to ensure the Group’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 Group 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 Group 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.
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 FY23 total fees paid to Non-Executive Directors was $400,852.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
27
Directors’ Report continued
The fees payable to Non-Executive Director and Committee fees are summarised below:
CHAnGeS in non-eXeCutiVe diReCtoRS And Committee FeeS
2023
2022
CHAnGe
Chairman
Non-Executive Director
Audit and Risk Committee Chair
Audit and Risk Committee member
Remuneration & Nomination Committee Chair
Remuneration & Nomination Committee member
1. Chairman’s fees are inclusive of all committee fees.
eXeCutiVe RemuneRAtion
$150,000 1
$150,000 1
$70,000
$15,000
$7,500
$12,000
$6,000
$70,000
$15,000
$7,500
$12,000
$6,000
–
–
–
–
–
–
The remuneration structure adopted by the Group for FY23 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 FY23 are summarised as follows:
• CEO: Operating EBITDA in FY23, sales volumes and farmgate, growth capital projects, workplace health and safety, culture
and sustainability.
• CFO: Operating EBITDA in FY23, growth capital projects, workplace health and safety, culture and sustainability.
lonG teRm inCentiVe (lti)
The Group 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 Group delivering
increased shareholder value.
The Group’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 Group’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 Group 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.
28
Directors’ Report continued
SHARe RiGHt
tRAnCHe
GRAnt
dAte
VAluAtion
pRiCe
eXeRCiSe
pRiCe tARGetS
numBeR
oF RiGHtS
VeStinG
dAteS
FY21 Tranche 1
21-Jan-22
FY21 Tranche 2
21-Jan-22
FY21 Tranche 3
21-Jan-22
FY22 Tranche 1
21-Jan-22
FY22 Tranche 2
21-Jan-22
FY22 Tranche 3
21-Jan-22
FY23 Tranche 1
9-Jun-23
0.52
0.415
0.344
0.625
0.625
0.625
0.495
FY23 Tranche 2
9-Jun-23
0.495
FY23 Tranche 3
9-Jun-23
0.495
nil
nil
nil
nil
nil
nil
nil
nil
nil
Share Price $1.0
Share Price $1.5
Share Price $2.0
EPS growth 17%
EPS growth 4%
EPS growth 4%
Cumulative operating EBITDA
over 3 years $15 million
Cumulative operating EBITDA
over 3 years $20 million
Cumulative operating EBITDA
over 3 years $21.5 million
426,067
30-Jun-23
426,066
30-Jun-23
426,066
30-Jun-23
560,368
30-Jun-24
560,368
30-Jun-24
560,368
30-Jun-24
729,188
30-Jun-25
729,188
30-Jun-25
729,188
30-Jun-25
106,829 Share Rights vested and were exercised into Ordinary Shares in FY23 by key management.
peRFoRmAnCe ReVieWS
Management have regular annual performance reviews in accordance with established procedures.
Pursuant to the Board’s and Board Committee’s respective Charters, the Board conducts annual evaluations of its performance,
the performance of its Committees, the Chairman, individual Directors and the key governance processes that support the
Board’s work. The respective Board Committee Charters also require the Committees to evaluate their performance and
composition at least annually to determine whether they are functioning effectively by reference to current best practice.
This evaluation is presented to the Board for review.
VotinG And CommentS mAde At tHe GRoup’S lASt AnnuAl GeneRAl meetinG
The resolution for adoption of the Remuneration Report for the financial year ending 30 June 2022 was passed by 93.9%
of votes in a poll at the Company’s 2022 Annual General Meeting. The Company received no specific feedback on its
Remuneration Report at the Annual General Meeting.
The Directors consider that the relevant remuneration packages of the Board and Executives are appropriate.
ConSeQuenCeS oF peRFoRmAnCe on SHAReHoldeR WeAltH
In considering the Group’s performance and benefits for shareholder wealth, the Board have regard to the following
measures in respect of the current financial year and the previous five financial years:
item
Basic EPS (cents)
Profit/(loss) before tax ($’000)
Profit/(loss) after tax ($’000)
Net Assets ($’000)
Share price at 30 June (cents)
2023
3.62
5,996
5,996
87,053
50.0
2022
5.26
8,676
8,676
80,742
52.0
2021
(27.36)
(32,097)
(32,097)
68,532
52.5
2020
(15.57)
(14,454)
(14,454)
72,458
55.5
2019
1.73
1,446
1,446
73,542
90.5
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
29
Directors’ Report continued
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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 $
$425,750
$299,785
motoR
VeHiCle/
AlloWAnCe
teRm oF
AGReement
Yes
No
Ongoing
Ongoing
notiCe
peRiod
9 months
3 months
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
FiXed
RemuneRAtion
mAXimum
At RiSK – Sti
mAXimum
At RiSK – lti
49%
49%
15%
15%
36%
36%
d Bonuses included in remuneration
Details of the short-term incentive cash bonuses awarded as remuneration to each Key Management Personnel for FY23, 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 FY23.
other Key management personnel
Rob Gratton
David Brown
e Other information
SHAReS Held BY KeY mAnAGement peRSonnel
inCluded in
RemuneRAtion
peRCentAGe
VeSted
duRinG
tHe YeAR
peRCentAGe
FoRFeited
duRinG
tHe YeAR
$106,875
$82,875
74%
84%
26%
16%
The number of ordinary shares in the Group during the 2023 reporting period held by each of the Group’s Key Management
Personnel, including their related parties, is set out below:
Year ended 30 June 2023 – ordinary Shares
peRSonnel
T Dillon
K Adams
M Stehr
G Vergeres
R Gratton
D Brown
totals
BAlAnCe
At StARt
oF YeAR
118,176
–
117,930
320,176
455,647
–
1,011,929
GRAnted AS
RemuneRAtion
ReCeiVed
on eXeRCiSe
otHeR
CHAnGeS 1
Held At tHe
end oF
RepoRtinG
peRiod
200,000
50,000
117,930
320,176
455,647
106,829
81,824
50,000
–
–
–
–
131,824
1,250,582
–
–
–
–
–
–
–
–
–
–
–
–
106,829
106,829
1. Changes are on market purchases and disposals.
No options to acquire shares are held by Key Management Personnel.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
31
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 2023 – Share Rights
peRSonnel
R Gratton
D Brown
totals
BAlAnCe
At StARt
oF YeAR
1,297,402
776,198
2,073,600
otHeR
CHAnGeS
GRAnted AS
RemuneRAtion
eXeRCiSed
lApSed
Held At
tHe end oF
RepoRtinG
peRiod
–
–
–
721,592
493,721
–
(138,877)
1,880,117
(106,829)
–
1,163,090
1,215,313
(106,829)
(138,877)
3,043,207
The share rights will vest if specified performance targets are achieved and the Executive remains employed by the Group 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.
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 3.8% of issued shares at 30 June 2023 (2022: 3.77%) 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
2023
$’000
12
(291)
(47)
–
2022
$’000
4
(1,545)
(36)
175
The following balances are outstanding as at the reporting date in relation to transactions with related parties:
2023
$’000
2022
$’000
9
5
–
–
Current payables
• Australian Tuna Fisheries Pty Ltd
• Stehr Group Pty Ltd
end of audited Remuneration Report.
32
Directors’ Report continued
Environmental, Social and Governance
Clean Seas’ has a strategic ambition to establish a reputation for its sustainable practices and create a safe and collaborative
environment for its employees, which fosters teamwork, and internal development opportunities, and provides the necessary
resources to drive growth, profitability, sustainability, and stability.
To advance our Environmental, Social, and Governance (ESG) credentials, we have identified and are currently addressing the
following key priorities:
1.
Identify a suitable ESG Reporting Framework that aligns with our objectives and reporting requirements.
2. Select a platform that can assist in preparing the ESG report and start gathering the necessary information for
its compilation.
3. Engage and select consultants who will aid Clean Seas in calculating its Greenhouse Gas emissions, ensuring accuracy
and compliance.
By addressing these priorities, Clean Seas aims to strengthen its commitment to sustainability and transparency while
effectively communicating its ESG performance to stakeholders and driving positive change within the organisation.
Our current progress on the key priorities are summarised below:
1. To accurately report Clean Seas’ sustainability performance and establish trust and credibility with stakeholders, we have
carefully chosen an ESG framework that enables us to provide relevant and reliable information. Clean Seas has selected
the World Economic Forum (WEF) Stakeholder Capitalism ESG framework. The WEF Stakeholder Capitalism Metrics
were developed as part of the Measuring Stakeholder Capitalism Initiative, launched in August 2019. This initiative was
a collaborative effort between the World Economic Forum’s International Business Council and leading firms. Its objective
is to enhance how companies measure and demonstrate their performance in environmental, social, and governance
(ESG) areas while tracking their positive contributions to achieving the Sustainable Development Goals (SDGs) consistently.
2. Clean Seas has selected the Socialsuite ESG disclosure platform to effectively monitor our disclosure progress and showcase
our sustainability performance. Socialsuite develop and provide technology solutions that enable the measurement and
management of social impact and ESG reporting. Clean Seas have opted for Socialsuite’s ESG solution because it is
specifically designed for small and mid-cap companies, offering a structured, standardized, and globally recognised
approach to initiating ESG reporting.
3. Clean Seas has selected a consulting group to support the Group in calculating our greenhouse gas (GHG) emissions.
The assessment will be conducted using The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard 1,
as well as ISO 14064-parts 1 & 3. Additionally, their assessments are aligned with Climate Active standards. The GHG
Assessment conducted will identify and evaluate both direct and indirect emissions resulting from Clean Seas’ activities.
Environmental
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.
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
Group’s ongoing operations.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
33
Directors’ Report continued
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 Group’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 GreenPowerTM
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. Two key projects are described below:
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.
In FY23 the Group ran a successful trial to substitute the fish oil in its diet with sustainably sourced algal oil. In this trial, up to
100% of the fish oil in the diet was replaced with algal oil without materially impacting the heath or performance of the Kingfish.
As a result of this trial, algal oil has now been incorporated into Clean Seas production diet, with the expectation that this will
evolve into more sustainable diets in the future.
Polystyrene box replacement for fresh fish transportation
Whilst Clean Seas currently relies on polystyrene boxes for transporting all fresh products, the Group is taking steps to explore
more sustainable packaging options. To this end, Clean Seas is conducting trials with a 100% reusable and recyclable packaging
solution, aligning with Clean Seas’ commitment to environmental responsibility.
If the trials prove successful, Clean Seas intends to eliminate the use of polystyrene boxes entirely from its seafood supply chain.
This strategic move demonstrates Clean Seas’ dedication to adopting eco-friendly practices and reducing its environmental
impact by promoting the use of sustainable and recyclable packaging materials.
Social
Clean Seas has maintained its commitment to engaging with its customers, suppliers, investors, and the community.
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 FY23 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. The first scholarship under this program was awarded
to an undergraduate in Environmental Science and Marine Biology in April 2023.
People
Our values & behaviours are at the heart of everything we do and are focused on four key pillars being: Do What’s Right;
Work as a Team, Challenge Boundaries and Make it Happen Safely. These values and behaviours lay the foundations for
how we behave, what we choose to do, and what we value. Our belief is that these values will become part of everyday
life at Clean Seas and are essential for us to become a global leader in aquaculture.
Clean Seas places great emphasis on feedback and in 2022 we undertook our first annual employee survey and our overall
engagement score was 68% across the business. Following this review, the Group has implemented several initiatives aimed
at improving reward and recognition and providing opportunities for training, growth and development.
34
Directors’ Report continued
Clean Seas is focused on providing a blend of working arrangements to manage the needs of our people and the business.
At 30 June 2023 our workforce consisted of the following:
Full time employees
Part time &
casual employees
Non-Executive Directors
Total employees
Male 92
Female 26
Male 26
Female 10
Male 3
Female 1
Male 121
Female 37
Workplace Health and Safety
The Group has again placed significant focus in the areas of compliance with best practice standards for plant & 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.
Clean Seas has engaged an external consultant to conduct a review of Clean Seas’ systems and processes to ensure compliance
with Work Health and Safety (WHS) obligations. This review will be untaken in the first half of FY24. The review aims to identify
potential gaps in the current safety measures and develop a remediation plan to address them effectively. Taking proactive
measures and investing in safety compliance and improvement reflects the Group’s commitment to the well-being of its
employees and stakeholders.
Clean Seas takes employee well-being seriously and prioritises their mental health and emotional support. As part of this
commitment, Clean Seas provides all its employees with access to the Employee Assistance Program (EAP). Through this
program, all employees are provided with free counselling services. The EAP is designed to offer a confidential and supportive
space where employees can seek professional guidance and assistance to address any personal or work-related challenges
they may be facing. By providing this valuable resource, Clean Seas aims to foster a positive and supportive work environment
that promotes the overall well-being of its workforce.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
35
Directors’ Report continued
Governance
Corporate Governance framework
The Board of Directors and management of Clean Seas recognise the importance of good corporate governance and are
committed to maintaining and enhancing the highest standards across the Group. The Clean Seas Board has established
a transparent and high quality corporate governance framework comprising codes, policies and charters under which the
Group operates. The framework outlines the Group and management’s commitment to act ethically, openly, fairly, and diligently
when promoting the interests of shareholders, employees, customers, suppliers and broader community interests.
The Board’s roles and responsibilities are formalised in a Board Charter which is available on the Group’s website. The Charter
is reviewed periodically to ensure it remains appropriate given the operations of the business and the responsibilities and
composition of the Board. In addition to the Board Charter, the Board has developed a Policy on Delegation and Matters
Reserved for the Board which clearly establishes the relationship between the Board and Management and further describes
their respective roles and responsibilities in a manner consistent with the ASX Principles.
Although the shareholders appoint Clean Seas’ Directors, the Board seeks to ensure that the Directors have a broad range
of experience and commercial expertise or appropriate professional qualifications most relevant to the sound governance of
the Group. Clean Seas routinely reviews the skills of the board through the development of a board skills matrix. The matrix
identifies the skills and experience required for Board members to fulfil their responsibilities effectively.
In FY23 the Board engaged a corporate governance and board leadership consultancy to conduct workshops and skills training
for the Directors, ensuring that they remain up-to-date with development of regulations and stakeholder expectations with
respect to their role on the Board of Clean Seas.
The Board currently comprises four Non-Executive Directors, including the Chairman. Clean Seas’ Board has a majority
of independent Non-executive Directors, and three Directors are considered to be independent.
We have a Policy on Independence of Directors that outlines the criteria for determining independence, which includes factors
such as shareholding, relationships with the Group, and business relationships with senior executives. We regularly assess our
Non-executive Directors’ independence to ensure that remain independent in their decision-making.
Clean Seas is committed to promoting diversity and inclusion, and our Board reflects this commitment. The Group has a policy
to promote diversity at all levels of the organisation. Our Board has one female Director, accounting for 25% of the Board.
We also recognise the importance of Board diversity, and through our selection and recruitment processes we actively seek
out Board members with diverse backgrounds and perspectives to enhance the board skills matrix.
Anti-bribery and corruption
Clean Seas is committed to upholding the highest standards of ethical behaviour, transparency, and accountability.
We recognise that corruption is a major threat to sustainable development and can have significant negative impacts
on our business, stakeholders, and society as a whole. The Group does not tolerate wilful acts of bribery and corruption
in its operations and activities since such acts are legally, morally and ethically wrong. Clean Seas has therefore adopted
an Anti-bribery and Corruption Policy and a Code of Conduct which apply to all staff and directors. These policies outline
our commitment to ethical behaviour, including zero-tolerance for bribery, corruption, and any other forms of unethical
conduct. Clean Seas Seafood has a zero-tolerance approach to corruption and bribery, and we have not had any reported
incidents of corruption during the reporting period.
Whistleblower Policy
The Group recognises the importance of providing employees, Board members and other stakeholders with a safe and
confidential environment to report any unethical behaviour. To achieve this, the Group has implemented a Whistleblower
Protection Policy that allows individuals to report any illegal, unethical, or inappropriate behaviours or practices without
fear of retribution. No reports have been received under this policy during the reporting period.
36
Directors’ Report continued
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 D 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.
• 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.
Indemnities given to and insurance premiums paid for
Directors and officers
Under rules 50 and 51 of the Group’s Constitution, each of the Group’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 Group from disclosing the level of premium paid.
The Directors, the Company Secretary, the CFO and the CEO have entered into Deeds of Indemnity and Access which indemnify
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 Group. The Deed requires the Group 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.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
37
Directors’ Report continued
Non-audit services
During the year, Grant Thornton, the Group’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 Group 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 Group, acting as an advocate for the Group or jointly sharing risks
and rewards.
Details of the amounts paid to the auditors of the Group, Grant Thornton, and its related practices for audit and non-audit
services provided during the year are set out in Note 27 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 39 of this financial report and forms part of this Directors’ Report.
Proceedings of behalf of the Group
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking responsibility on behalf
of the Group for all or part of those proceedings.
Rounding 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
29 August 2023
38
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 2023, 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, 29 August 2023
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.
#10416828v1w
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
39
Corporate Governance Statement
The Group’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 Group 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 Group has prepared a statement which sets out the corporate governance practices that were in operation
throughout the financial year, 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 Group’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
Group and will provide shareholders with information as to where relevant governance disclosures can be found.
The Group’s corporate governance policies and charters are all available on the Group’s Website
https://www.cleanseas.com.au/investors/corporate-governance/.
40
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2023
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
Depreciation and amortisation expense
Other expenses
profit before finance items and tax
Finance costs
Finance income
profit before tax
Income tax benefit/(expense)
profit for the year after tax
other comprehensive income for the year, net of tax
total comprehensive profit 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
23.1
17/18
16/18/19
9
9
10
25.1
25.1
2023
$’000
69,411
611
23,390
(41,723)
(15,331)
(15,518)
(6,594)
(675)
(3,840)
(3,404)
6,327
(384)
53
5,996
–
5,996
–
5,996
3.62
3.56
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
Note: This statement should be read in conjunction with the notes to the financial statements.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
41
Consolidated Statement of Financial Position
As at 30 June 2023
noteS
2023
$’000
2022
$’000
11
12
14
15
16
19
17
18
20
21
22
21
22
6,357
5,223
11,191
1,500
62,250
86,521
12,982
5,299
7,693
1,943
49,591
77,508
18,929
17,543
766
117
2,827
22,639
109,160
13,681
1,685
1,394
16,760
4,913
434
5,347
22,107
87,053
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
24.1
24.2
228,019
227,901
704
507
(141,670)
(147,666)
87,053
80,742
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
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
Note: This statement should be read in conjunction with the notes to the financial statements.
42
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Balance at 1 July 2021
Profit for the year
Share placement costs
Convertible note conversions
Share rights reserve movement
Balance at 30 June 2022
Profit for the year
Share rights reserve movement
Balance at 30 June 2023
noteS
24.1
24.1
24.2
24.2
SHARe
CApitAl
$’000
224,772
–
(345)
3,457
17
227,901
–
118
228,019
SHARe
RiGHtS
ReSeRVe
$’000
ACCumulAted
loSSeS
$’000
totAl
eQuitY
$’000
102
(156,342)
68,532
–
–
–
405
507
–
197
704
8,676
–
–
–
(147,666)
5,996
–
(141,670)
8,676
(345)
3,457
422
80,742
5,996
315
87,053
Note: This statement should be read in conjunction with the notes to the financial statements.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
43
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
noteS
2023
$’000
2022
$’000
operating activities
Receipts from customers
Payments to suppliers excluding feed
Payments for feed
Payments to employees
net cash provided by operating activities
26
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
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
11
Note: This statement should be read in conjunction with the notes to the financial statements.
69,612
(27,107)
(27,508)
(13,487)
1,510
(4,997)
–
–
106
–
53
67,376
(27,448)
(22,282)
(11,428)
6,218
(6,004)
(779)
813
41
175
1
(4,838)
(5,753)
–
–
2,100
(5,066)
(331)
(3,297)
(6,625)
12,982
6,357
(1,124)
(6,662)
4,156
(13,167)
(758)
(17,555)
(17,090)
30,072
12,982
44
Notes to the Consolidated Financial Statements
1 Nature of operations
Clean Seas Seafood Limited and its subsidiaries’ (‘the Group’) principal activities include finfish, which comprises the
propagation, growout and sale of Yellowtail Kingfish. The Group continues to enhance its operations through new
research and world’s best practice techniques to deliver Yellowtail Kingfish of premium quality.
As noted in Note 1 of the FY22 Financial Statements, the Tuna operations is no longer a focus for the Group, and until
sufficient resources are available there are no current plans to undertake further Southern Bluefin Tuna (SBT) research
programs. As a consequence, in FY22 the Group impaired its remaining Tuna Broodstock and sold its SBT quota.
Refer to Note 5 for further information about the Group’s operating segments.
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 2023 were approved and authorised for issue by the
Board of Directors on 29 August 2023.
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 effective for the first time to annual periods beginning on or after 1 July 2022
that have had a material impact to the financial statements.
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 2023 but will be applicable to the Group
in future reporting periods have been considered to be insignificant to the Group.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
45
Notes to the Consolidated Financial Statements continued
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 2023. 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.
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 Board has considered the requirements of AASB 8 Operating Segments and the internal reports that are reviewed by the
chief operating decision maker (the Board of Directors) in allocating resources and have concluded that there are no separately
identifiable segments.
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.
46
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.
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.
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 IcefreshTM 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
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.
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.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
47
Notes to the Consolidated Financial Statements continued
4 Summary of accounting policies (continued)
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%
• 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.
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.
48
Notes to the Consolidated Financial Statements continued
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).
• 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.
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.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
49
Notes to the Consolidated Financial Statements continued
4 Summary of accounting policies (continued)
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)
• 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.
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.
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.
50
Notes to the Consolidated Financial Statements continued
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
AnnuAl RepoRt 2023
51
Notes to the Consolidated Financial Statements continued
4 Summary of accounting policies (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.
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.
52
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 AASB 141 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 AASB 141 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
AnnuAl RepoRt 2023
53
Notes to the Consolidated Financial Statements continued
4 Summary of accounting policies (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 AASB 141 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 AASB 141 Agriculture. These estimates may vary from net sale
proceeds ultimately achieved.
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.
5 Operating Segments
The Board has considered the requirements of AASB 8 Operating Segments and the internal reports that are reviewed by the
chief operating decision maker (the Board of Directors) in allocating resources and have concluded that there are no separately
identifiable segments.
54
Notes to the Consolidated Financial Statements continued
6 Revenue
Revenue for the reporting periods consist of the following:
Sale of fresh fish products – at a point in time
Sale of frozen fish products – at a point in time
total
2023
$’000
60,097
9,314
69,411
2022
$’000
49,059
17,105
66,164
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.
The Group’s revenues from external customers are divided into the following geographical areas:
Australia
Europe
Other countries
total
ReVenue
2023
$’000
ReVenue
2022
$’000
46,328
18,110
4,973
69,411
39,020
21,583
5,561
66,164
During 2023 $5.04 million or 7% (2022: $4.01 million or 6%) of the Group’s revenues depended on a single customer in the
finfish sales segment.
7 Other income
Other income
total other income
8 Fish husbandry expense
Fish husbandry expense consist of the following:
Fish feed
Farm operating expense
Hatchery operating expense
total fish husbandry expense
2023
$’000
611
611
2022
$’000
369
369
2023
$’000
30,002
9,581
2,140
41,723
2022
$’000
21,328
9,038
1,749
32,115
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
55
Notes to the Consolidated Financial Statements continued
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
10 Income tax expense
2023
$’000
53
2022
$’000
1
2023
$’000
2022
$’000
–
86
298
384
560
109
117
786
The major components of tax expense and the reconciliation of the expected tax expense based on the domestic effective tax
rate of 30% (2022: 30%) 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)
Utilisation of tax losses not previously recognised
tax expense/(income)
2023
$’000
5,996
30%
1,799
2022
$’000
8,676
30%
2,603
(1,799)
(2,603)
–
–
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 2023, carried forward tax losses are estimated to be $45.8 million (2022: $77 million) and non-refundable R&D tax
offsets are estimated to be $20.7 million (2022: $18 million).
11 Cash and cash equivalents
Cash and cash equivalents include the following components:
Cash at bank
2023
$’000
6,357
2022
$’000
12,982
56
Notes to the Consolidated Financial Statements continued
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
2023
$’000
4,613
(58)
4,555
668
5,223
2022
$’000
4,841
(58)
4,783
516
5,299
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
Not overdue
0 to 3 months overdue
3 to 6 months overdue
Over 6 months overdue
total
2023
%
0.9%
3.2%
75%
100%
2022
%
1.0%
2.6%
0.0%
0.0%
2023
$’000
4,066
542
5
–
2022
$’000
4,251
583
–
7
4,613
4,841
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
An analysis of unimpaired trade receivables that are past due is given in Note 33.3.
ALLOWANCE FOR
EXPECTED LOSSES
2023
$’000
2022
$’000
37
17
4
–
58
43
15
–
–
58
2023
$’000
2022
$’000
58
(1)
1
–
58
76
(18)
–
–
58
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
57
Notes to the Consolidated Financial Statements continued
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 At AmoRtiSed CoSt
Borrowings
Trade and other payables
totals
noteS
11
12
noteS
21
20
2023
$’000
6,357
5,223
11,580
2023
$’000
6,598
13,681
20,279
2022
$’000
12,982
5,299
18,281
2022
$’000
7,625
9,456
17,081
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 33.
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
Fish feed (at cost)
Other (at cost)
total
2023
$’000
7,849
2,497
845
11,191
2022
$’000
2,148
4,555
990
7,693
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 2023 (2022: Nil).
58
Notes to the Consolidated Financial Statements continued
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 harvest for processing to frozen inventory
Carrying amount at end of period
2023
$’000
49,591
68,534
(45,144)
23,390
(10,731)
62,250
liVe YelloWtAil KinGFiSH
BiomASS (tonneS)
YeAR
ClASS 19
YeAR
ClASS 20
YeAR
ClASS 21
YeAR
ClASS 22
YeAR
ClASS 23
Balance at 1 July 2021
Net gain from physical changes
Decrease due to harvest
Balance at 30 June 2022
Net gain from physical changes
Decrease due to harvest
Balance at 30 June 2023
444
(44)
(400)
–
–
–
–
2,265
437
(2,434)
268
10
566
1,479
(85)
1,960
17
(278)
(1,977)
–
–
–
1,280
–
1,280
2,285
(1,099)
2,466
–
–
–
–
1,525
–
1,525
liVe FiSH AVeRAGe WeiGHt (KG)
Average weight at 30 June 2022
Average weight at 30 June 2023
YeAR
ClASS 19
YeAR
ClASS 20
YeAR
ClASS 21
YeAR
ClASS 22
YeAR
ClASS 23
–
–
5.98
–
3.32
–
1.32
3.67
–
1.40
2022
$’000
32,505
56,091
(36,055)
20,036
(2,950)
49,591
totAl
3,275
3,152
(2,919)
3,508
3,837
(3,354)
3,991
totAl
2.19
2.27
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.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
59
Notes to the Consolidated Financial Statements continued
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 2022
Additions
Disposals
Balance 30 June 2023
depreciation and impairment
Balance 1 July 2022
Disposals
Depreciation
Balance 30 June 2023
Carrying amount 30 June 2023
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
lAnd &
BuildinGS
$’000
plAnt &
eQuipment
$’000
4,437
130
–
4,567
47,515
4,823
(4,694)
47,644
totAl
$’000
51,952
4,953
(4,694)
52,211
(1,930)
(32,479)
(34,409)
–
(108)
(2,038)
2,529
4,694
(3,459)
4,694
(3,567)
(31,244)
(33,282)
16,400
18,929
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
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).
17 Biological assets – non-current
FinFiSH BRoodStoCK
Carrying amount at beginning of period
Fair value gain from revaluation of YTK Broodstock
Impairment of SBT Broodstock
Carrying amount at end of period
2023
$’000
117
–
–
117
2022
$’000
244
84
(211)
117
60
Notes to the Consolidated Financial Statements continued
18 Intangible assets
Details of the Group’s intangible assets and their carrying amounts are as follows:
net carrying amount
Balance at 1 July 2022
Addition
Amortisation
Impairment
Disposal
net carrying amount 30 June 2023
Balance at 1 July 2021
Addition
Amortisation
Disposal
Net carrying amount 30 June 2022
iCe FReSH
liCenCe
$’000
piRSA
leASeS And
liCenCeS
$’000
SoutHeRn
BlueFin
tunA
QuotA
$’000
727
–
(52)
(675)
–
–
779
–
(52)
–
727
2,827
–
–
–
–
2,827
2,827
–
–
–
2,827
–
–
–
–
–
–
130
–
–
(130)
–
totAl
$’000
3,554
–
(52)
(675)
–
2,827
3,736
–
(52)
(130)
3,554
At each reporting date, the Directors review intangible assets for impairment.
Clean Seas entered into an agreement with IceFresh in June 2021 to obtain a non-transferable, non-sublicensable, worldwide
license to the IceFresh Technology solely for use in connection with the distribution of retail products of Kingfish. The current
strategic plan does not include a retail fish category and is not a current focus for the Group and thus the carrying value has
been written down to nil.
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 FY24 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:
• 12.9% post tax discount rate; and
• 2.5% long term revenue and operating cost growth rate.
The discount rate of 12.9% 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 18.7%.
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 0.6%.
Apart from the impairment identified for IceFresh, the Group has concluded that no further impairment is required based
on current market and economic conditions and expected future performance.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
61
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
Additions
Amortisation
Closing carrying amount
2023
$’000
736
–
251
(221)
766
2022
$’000
288
644
–
(196)
736
The main leased site is the Royal Park processing plant in Adelaide, South Australia. The lease has a minimum term of 3 years
to March 2026 with subsequent renewal options of 3 years and includes a right of first refusal to purchase.
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
2023
$’000
11,923
14
1,744
13,681
2022
$’000
6,690
–
2,766
9,456
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 32.1)
•Lease liabilities – other (note 32.2)
•Insurance premium funding
Total borrowings – current
Non-current:
•Cash Advance Facility
•Lease liabilities – bank (note 32.1)
•Lease liabilities – other (note 32.2)
Total borrowings – non-current
62
2023
$’000
2022
$’000
–
273
239
1,173
1,685
4,091
254
568
4,913
1,837
1,054
181
1,460
4,532
1,991
528
574
3,093
Notes to the Consolidated Financial Statements continued
In December 2022, 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 Cash Advance 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 EBITDA interest coverage ratio,
tangible net worth divided by total tangible assets, quarterly operating cash flows which are reviewed quarterly. The Group
was compliant with all its covenants as at 30 June 2023.
22 Provisions
The carrying amounts and movements in the provisions account are as follows:
Carrying amount 1 July 2022
Additional provisions
Amount utilised
Carrying amount 30 June 2023
Current employee benefit provision
non-current employee benefit provision
23 Employee remuneration
23.1 Employee benefits expense
Expenses recognised for employee benefits are analysed below:
Salaries and wages
Superannuation – Defined contribution plans
Leave entitlement accrual adjustment
Short term incentive
Long term incentive – Share rights
Other on-costs
total
AnnuAl
leAVe
$’000
lonG
SeRViCe
leAVe
$’000
969
787
(665)
1,091
1,091
–
666
159
(88)
737
303
434
2023
$’000
11,144
1,068
1,205
476
315
1,123
15,331
totAl
$’000
1,635
946
(753)
1,828
1,394
434
2022
$’000
9,525
905
1,151
486
422
878
13,367
23.2 Share-based employee remuneration
The Group granted a total of 2,187,564 FY23 LTI Share Rights to senior executives during the year (FY22 2,959,302 Share Rights
were granted to Executives). The share rights will vest if specified performance targets are achieved and the executive remains
employed by the Group 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. During FY23 136,829 fully paid ordinary
shares (FY22 18,483) were issued on the exercise of vested Share Rights and 178,938 Share Rights lapsed (FY22 nil).
One-third of the grant date fair value 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.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
63
Notes to the Consolidated Financial Statements continued
23 Employee remuneration (continued)
The FY23 LTI Share Rights were granted on 6 June 2023. The valuation considers Clean Seas share price on 6 June 2023 being
$0.495 and achievement of Operating EBITDA targets.
The Share Rights valuation for FY21 and FY22 was prepared by an Independent Valuation expert. The valuation was based on
the fair value at grant date of the equity instruments granted. 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
GRAnt
dAte
VAluAtion
pRiCe
eXeRCiSe
pRiCe tARGetS
numBeR
oF RiGHtS
VeStinG
dAteS
FY21 Tranche 1
21-Jan-22
FY21 Tranche 2
21-Jan-22
FY21 Tranche 3
21-Jan-22
FY22 Tranche 1
21-Jan-22
FY22 Tranche 2
21-Jan-22
FY22 Tranche 3
21-Jan-22
FY23 Tranche 1
9-Jun-23
0.52
0.415
0.344
0.625
0.625
0.625
0.495
FY23 Tranche 2
9-Jun-23
0.495
FY23 Tranche 3
9-Jun-23
0.495
nil
nil
nil
nil
nil
nil
nil
nil
nil
Share Price $1.0
Share Price $1.5
Share Price $2.0
EPS growth 17%
EPS growth 4%
EPS growth 4%
Cumulative operating EBITDA
over 3 years $15 million
Cumulative operating EBITDA
over 3 years $20 million
Cumulative operating EBITDA
over 3 years $21.5 million
426,067
30-Jun-23
426,066
30-Jun-23
426,066
30-Jun-23
560,368
30-Jun-24
560,368
30-Jun-24
560,368
30-Jun-24
729,188
30-Jun-25
729,188
30-Jun-25
729,188
30-Jun-25
24 Equity
24.1 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 placement costs (i)
•
•
•
convertible notes
share rights
2023
SHAReS
2022
SHAReS
2023
$’000
2022
$’000
165,352,683
158,648,059
227,901
224,772
–
–
136,829
–
6,686,141
18,483
–
–
118
(345)
3,457
17
total contributed equity at 30 June
165,489,512
165,352,683
228,019
227,901
Notes:
(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.
64
Notes to the Consolidated Financial Statements continued
24.2 Share rights reserve
The Group 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:
2023
SHARe
RiGHtS
2022
SHARe
RiGHtS
2023
$’000
2022
$’000
Share rights outstanding:
• at beginning of the year
• granted during the year/changes to share rights
3,275,069
334,250
2,187,564
2,959,302
already granted
• exercised during the year
lapsed during the year
•
total share rights at 30 June
(136,829)
(178,938)
(18,483)
–
5,146,866
3,275,069
507
315
(118)
–
704
102
422
(17)
–
507
Details of these Share Rights are provided at note 23.2.
25 Earnings per share and dividends
25.1 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 2023 or 2022).
Diluted earnings per share have been calculated using the profit/(loss) attributable to shareholders of Clean Seas
Seafood Limited.
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
•
shares deemed to be issued for no consideration in respect of share-based payments
and convertible notes
165,482
3,014
165,091
2,033
Weighted average number of shares used in diluted earnings per share
168,496
167,124
2023
‘000
2022
‘000
25.2 Dividends
Dividends Paid and Proposed
dividends declared during the year
2023
$’000
–
2022
$’000
–
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
65
Notes to the Consolidated Financial Statements continued
25 Earnings per share and dividends (continued)
25.3 Franking credits
PARENT
2023
$’000
2022
$’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
–
–
–
–
–
26 Reconciliation of cash flows from operating activities
2023
$’000
5,996
4,515
315
331
2,141
106
(3,498)
76
4
(12,659)
4,225
193
(235)
1,510
profit/(loss) for the year
Adjustments for:
•Depreciation and amortisation
•LTI share rights expense
•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 provided by operating activities
66
–
–
–
–
–
2022
$’000
8,676
3,832
422
785
1,986
59
3,559
1,084
(378)
(17,086)
2,498
82
699
6,218
Notes to the Consolidated Financial Statements continued
27 Auditor remuneration
Audit and review of financial statements
other services
taxation compliance
•
• other tax services
total other service remuneration
total auditor’s remuneration
2023
$
2022
$
124,386
118,032
11,330
–
11,330
135,716
14,650
3,100
17,750
135,782
28 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 3.8% of issued shares at 30 June 2023 (2022: 3.77%) 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
2023
$’000
12
(291)
(47)
–
2022
$’000
4
(1,545)
(36)
175
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
2023
$’000
2022
$’000
9
5
–
–
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
67
Notes to the Consolidated Financial Statements continued
28 Related party transactions and key management
personnel disclosures (continued)
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
2023
$
2022
$
1,333,744
1,272,974
62,398
203,912
62,045
283,321
1,600,054
1,618,340
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 2023.
29 Contingent assets and liabilities
At 30 June 2023, the Group has bank guarantees of $59,350 (2022: $55,000).
There are no other material contingent assets or liabilities.
30 Capital commitments
Property, plant and equipment
2023
$’000
3,328
2022
$’000
611
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 FY24.
Approximately $2.6 million of capital commitment relate to the purchase of the new automated feed barge from
Southern Ocean Solutions. Forward contracts were entered into to hedge foreign currency movements upon settlement.
31 Interests in subsidiaries
Set out below are details of the subsidy held directly by the Group:
GROUP PROPORTION OF
OWNERSHIP INTERESTS
nAme oF tHe SuBSidiARY
CountRY oF
inCoRpoRAtion
And pRinCipAl
plACe oF
BuSineSS
Clean Seas Aquaculture Growout Pty Ltd
Australia
pRinCipAl ACtiVitY
30 June 2023
30 June 2022
Growout and sale
of Yellowtail Kingfish
100%
100%
Clean Seas Seafood International Pty Ltd
Australia
Dormant company
0% (i)
100%
Notes:
(i) During FY23 Clean Seas closed down Clean Seas Seafood International. The Company was dormant and was not an operating entity.
68
Notes to the Consolidated Financial Statements continued
32 Leases
32.1 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 $1.7 million (2022: $2.2 million).
The Group’s lease liabilities, which are secured by the related assets held under leases, are classified as follows:
leASe liABilitieS – BAnK
Current:
• Lease liabilities – bank
Non-current:
• Lease liabilities – bank
2023
$’000
273
254
Future minimum lease payments at the end of each reporting period under review were as follows:
MINIMUM LEASE PAYMENTS DUE
WitHin 1
YeAR
$’000
1-5 YeARS
$’000
AFteR 5
YeARS
$’000
291
(18)
273
1,106
(52)
1,054
265
(11)
254
556
(28)
528
–
–
–
–
–
–
2022
$’000
1,054
528
totAl
$’000
556
(29)
527
1,662
(80)
1,582
2023
$’000
2022
$’000
239
568
181
574
30 June 2023
Lease payments
Finance charges
net present values
30 June 2022
Lease payments
Finance charges
Net present values
32.2 Lease liabilities – Other
Current:
• Lease liabilities
non-current:
• Lease liabilities
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
69
Notes to the Consolidated Financial Statements continued
32 Leases (continued)
30 June 2023
Lease payments
Finance charges
net present values
30 June 2022
Lease payments
Finance charges
Net present values
MINIMUM LEASE PAYMENTS DUE
WitHin 1
YeAR
$’000
1-5 YeARS
$’000
AFteR 5
YeARS
$’000
totAl
$’000
273
(34)
239
208
(27)
181
607
(39)
568
608
(34)
574
–
–
–
–
–
–
880
(73)
807
816
(61)
755
33 Financial instrument risk
33.1 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.
33.2 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.
70
Notes to the Consolidated Financial Statements continued
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
30 June 2023
•
•
financial assets
financial liabilities
total exposure
30 June 2022
financial assets
•
•
Total exposure
financial liabilities
euR
A$’000
uSd
A$’000
otHeR
A$’000
euR
A$’000
uSd
A$’000
otHeR
A$’000
2,746
(177)
2,569
2,742
(257)
2,485
1,659
(1)
1,658
942
(201)
741
8
(28)
(20)
18
(19)
(1)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
The following table illustrates the sensitivity of profit and equity in regards to the Group’s financial assets and financial
liabilities and the AUD/EUR exchange rate ‘all other things being equal’. It assumes a +/– 5% change in this exchange rate
for the year ended at 30 June 2023 (2022 +/– 5%). The sensitivity analysis is based on the impact on the Group’s valuation
of live fish held for sale.
pRoFit And eQuitY inCReASe/(deCReASe)
30 June 2023
30 June 2022
inCReASe 5%
A$’000
deCReASe 5%
A$’000
(1,276)
(1,241)
1,411
1,372
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.
33.3 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
2023
$’000
2022
$’000
6,357
5,223
11,580
12,982
5,299
18,281
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.
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
71
Notes to the Consolidated Financial Statements continued
33 Financial instrument risk (continued)
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
2023
$’000
542
5
–
–
2022
$’000
583
7
–
–
547
590
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 2023 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 2023 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.
33.4 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.
72
Notes to the Consolidated Financial Statements continued
As at 30 June 2023, the Group’s non-derivative financial liabilities have contractual maturities (including interest payments
where applicable) as summarised below:
30 June 2023
Trade and other payables
Cash Advance Facility
Insurance premium funding
Finance lease obligations
Lease obligations
total
CURRENT
NON-CURRENT
WitHin
6 montHS
$’000
6 – 12
montHS
$’000
1 – 5 YeARS
$’000
5+ YeARS
$’000
13,681
–
1,005
139
119
14,944
–
–
168
134
120
422
–
4,091
–
254
568
4,913
–
–
–
–
–
–
This compares to the maturity of the Group’s non-derivative financial liabilities in the previous reporting periods as follows:
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
1 – 5 YeARS
$’000
5+ YeARS
$’000
9,456
–
1,837
1,294
528
91
13,206
–
–
–
166
526
90
782
–
1,991
–
–
528
574
3,093
–
–
–
–
–
–
–
The above amounts reflect the contractual undiscounted cash flows, which may differ to the carrying values of the liabilities
at the reporting date.
34 Fair value measurement
34.1 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
• level 3: unobservable inputs for the asset or liability
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
73
Notes to the Consolidated Financial Statements continued
34 Fair value measurement (continued)
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 2023:
30 June 2023
Biological assets – current
Biological assets – non-current
Southern bluefin tuna quota
total
30 June 2022
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
62,250
117
–
totAl
$’000
62,250
117
–
62,367
62,367
leVel 3
$’000
49,591
117
–
totAl
$’000
49,591
117
–
49,708
49,708
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 $18.02/kg (FY22: $15.75/kg) and for Small Kingfish $16.78/kg. (FY22:$12.75).
Kingfish which are less than 250 grams are valued at $3.00 per fish.
35 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 2023.
74
Notes to the Consolidated Financial Statements continued
36 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
2023
$’000
2022
$’000
5,074
82,842
3,011
7,513
75,329
228,020
704
10,969
90,262
6,110
8,723
81,539
227,902
507
(153,395)
(146,870)
75,329
81,539
(6,525)
(7,429)
–
–
(6,525)
(7,429)
The Parent Entity has $53,537 capital commitments to purchase plant and equipment (2022: $65,840). Refer Note 30 for further
details of the commitment.
The Parent Entity has not entered into a Deed of Cross Guarantee. Refer Note 29 in relation to contingent assets and liabilities.
37 Post-reporting date events
Subsequent to 30 June 2023, the Board approved the issue of 2,164,329 Share Rights which represents the FY24 annual
Long-Term Incentive program.
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.
CleAn SeAS SeAFood limited
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75
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 2023 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 2023.
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 29 day of August 2023
76
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 2023, 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 2023 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.
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‘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).
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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
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AnnuAl RepoRt 2023
77
Independent Auditor’s Report continued
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current 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 2023, the Group’s intangible assets of
$2,827,000 comprise of Primary Industries and
Regions South Australia (PIRSA) Water Leases and
Licences.
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 have 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;
• assessing the accuracy of the impairment expense
recorded and the completeness of related
disclosures; 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.
Grant Thornton Audit Pty Ltd 2
78
Independent Auditor’s Report continued
Key audit matter
How our audit addressed the key audit matter
Valuation of biological assets -
Note 15 & 17
The Group holds biological assets, including Kingfish
measured at $62,367,000 as at 30 June 2023. 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.
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;
This area is a key audit matter due to the complex
nature of the estimate and judgements applied.
•
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 2023, 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.
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.
Grant Thornton Audit Pty Ltd 3
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79
Independent Auditor’s Report continued
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 2023.
In our opinion, the Remuneration Report of Clean Seas Seafood Limited, for the year ended 30 June 2023
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, 29 August 2023
80
Grant Thornton Audit Pty Ltd 4
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 21 July 2023.
Ordinary share capital (quoted)
165,358,179 fully paid ordinary shares are held by 3,759 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 AG 1
GCI CSS (Hofseth & Nevera) LLC 2
1. Notice released to ASX on 17 January 2023.
2. Notice released to ASX on 7 July 2021.
Voting Rights
numBeR oF SHAReS
30,585,594
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
HoldinG
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001+
total
numBeR
oF HoldeRS
759
1,560
535
790
115
totAl
unitS
449,250
3,905,747
4,073,277
24,854,287
132,206,951
3,759
165,489,512
There were 770 holders of less than a marketable parcel of ordinary shares (less than $500).
CleAn SeAS SeAFood limited
AnnuAl RepoRt 2023
81
ASX Additional Information continued
tWentY (20) lARGeSt SHAReHoldeRS
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
UBS NOMINEES PTY LTD
AUSTRALIAN TUNA FISHERIES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BOND STREET CUSTODIANS LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
DHC INTERNATIONAL PTY LIMITED
CROFTON PARK DEVELOPMENTS PTY LTD
MR HAGEN HEINZ STEHR & MRS ANNA STEHR
BNP PARIBAS NOMINEES PTY LTD
FERNBOW PTY LTD
MR MURRAY JOHN GILBERT & MR MARTIN PETER GILBERT
DHC CAPITAL PTY LTD
NETWEALTH INVESTMENTS LIMITED
DMSF PTY LTD
MS KYLIE LYNETTE NUSKE & MR MATTHEW JAMES COOK
ORDINARY SHARES
numBeR
oF SHAReS
Held
peRCentAGe
oF iSSued
SHAReS
34,678,163
31,093,443
20.95%
18.79%
7,791,482
5,653,956
5,162,837
4,864,287
4,273,697
4,119,150
3,500,000
1,414,895
1,379,980
1,255,921
1,249,991
1,245,112
1,158,000
926,852
752,565
725,944
656,642
608,592
4.71%
3.42%
3.12%
2.94%
2.58%
2.49%
2.11%
0.85%
0.83%
0.76%
0.76%
0.75%
0.70%
0.56%
0.45%
0.44%
0.40%
0.37%
total Securities of top 20 Holdings
112,511,509
67.99%
Securities Exchange
The Group is listed on the Australian Securities Exchange. The Group’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 Group’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 8, 210 George Street, Sydney New South Wales 2000
Telephone: (02) 9290 9600
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colliercreative.com.au #CSS0013
CleAn SeAS SeAFood limited
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83
cleanseas.com.au