ANNUAL
REPORT
2024
ABOUT
ECOFIBRE
Ecofibre owns a portfolio of high-quality advanced
manufacturing and technology businesses in the
United States and Australia.
We operate three vertically integrated businesses
focused on sustainable polymers and natural
materials, natural health care, and hemp seed
genetics. In addition, we own a majority interest in a
life sciences business that is developing
treatments for malignant and non-malignant
gynaecological diseases.
Ecofibre Advanced Technologies (formerly known
as Hemp Black) is an advanced manufacturing
business with specialist capabilities in
performance yarn extrusion and polymer
compounding, sustainable materials and
bioplastics.
Ananda Health is a leading US manufacturer of
cannabinoid-based health products for human and
pet consumption. Our focus is on providing high-
quality, research-backed products in Australia and
the USA, targeting conditions including sleep,
anxiety, aches and discomfort, and gynaecological
conditions. See anandaprofessional.com and
anandahemp.com.au.
Ecofibre Genetics owns one of the world's largest
collections of hemp seed genetics and is a leading
supplier of seed genetics to the hemp fibre and
grain industry in the US and Australia.
EOF Bio Inc. is a majority owned, US-based clinical-
stage biotechnology company focused on a new
generation of patient- centered cannabinoid-
based drugs that improve health outcomes and
enhance quality of life, starting with women's health
and endometriosis. Spun out of Ecofibre in July
2023 it is focused on commercialising an
expanding estate of issued patents.
OVERVIEW
1
FY24 Highlights
Key metrics
Chairman’s message
Managing Director’s report
Leadership team
3
5
6
8
10
CONTENTS
OPERATING + FINANCIAL REVIEW
2
Group overview
Ecofibre Advanced Technologies
Ananda Health
Ecofibre Genetics
EOF Bio
Ananda Food
Material business risks
13
17
19
21
22
23
24
FINANCIAL STATEMENTS
DIRECTORS’ REPORT
4
SHAREHOLDER AND ASX INFORMATION
6
Board of Directors
Directors’ report
Remuneration report
Auditor’s independence declaration
Financial statements
Notes to the financial statements
Consolidated entity disclosure statement
SIGNED REPORTS
5
Directors’ declaration
Independent auditor’s report
Five-year financial history
Shareholder information
Investor information
Corporate directory
28
30
35
42
44
49
88
90
91
97
98
100
103
3
ECOFIBRE LIMITED ANNUAL REPORT 2024
1
OVERVIEW
1.
2
ANNUAL REPORT 2024
ECOFIBRE LIMITED
FY2 Highlights
4
ECOFIBRE LIMITED ANNUAL REPORT 202
3
4
* Normalised result, excluding impairments, one-off items and EOF Bio
Refocussed business
Good progress in a transition year
Stronger, aligned leadership team
Remains focused on unlocking the potential of our advanced
manufacturing and technology businesses that deliver
sustainable solutions in growth markets
Strengthened leadership with CEO appointment supported by
a highly capable leadership team
Board and management are aligned on the changes that are
necessary to create sustainable value for our shareholders
Progress on Cash Positive Plan
Cash Positive Plan to transition Ecofibre to a more sustainable
business performance
Addressing balance sheet – reduce risk in asset values and
restructure debt
Improved EBITDA*
$5.9m loss in FY24 (FY23: $13.2m)
Strong half year improvement trend: $0.9m loss in 2H24 vs
$8.6m loss in 1H23
Reset cost base*
Operating costs down 27% (-$9.0m) to $23.9m in FY24
FY24 gross margin remained strong: 56%
4
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Key FY24 metrics
$28.0m
Revenue
down from $30.6m to
39%
Gross Margin
up from 33% to
-$26.1m
Other Income
down from -$2.5m to
$25.5m
Operating Costs
down from $32.9m to
-$39.8m
EBITDA
down from -$22.4m to
$45.2m
Loss after Tax
up from $39.9m to
-12.53cps
EPS
$28.0m
Revenue
down from $30.6m to
56%
Gross Margin
flat at
$0.9m
Other Income
up from $0.2m to
$23.9m
Operating Costs
down from $32.9m to
-$5.9m
EBITDA
up from -$13.2m to
$11.3m
Loss after Tax
improved from $19.4m to
-3.13cps
EPS
$6.7m
Cash
$2.6m
Inventory
down from $9.4m to
$2.9m
Investment
(R&D)
$3.0m
Investment
(Capital)
4.29cps
NTA
per share
FY24 RESULT
FY24 RESULT
Normalised*
BALANCE SHEET &
OTHER METRICS
ECOFIBRE LIMITED ANNUAL REPORT 202
5
4
* Normalised result, excluding impairments, one off items and EOF Bio
1 Revenue, Gross Margin, Other Income and Opex - excludes Ananda Food
2 EBITDA, Loss after tax and EPS -includes Ananda Food and Minority Interest
6
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Chairman’s Message
Dear Shareholders
2024 has been a transition year for Ecofibre - transition in leadership and transition in financial discipline and commercial
practices, which are supporting continued improvement in the underlying performance of all operating divisions.
Our goal is to unlock the potential of our advanced manufacturing and technology businesses which are delivering
sustainable, high-quality solutions for our customers.
These businesses operate in growing markets for sustainable polymers and natural materials, natural health-care
products, hemp seed genetics and the development of cannabinoid-based drugs that improve health outcomes and
enhance quality of life.
A Cash Positive Plan was established to transition us to a more sustainable business performance. While challenges
remain, we have a clear plan, and are making progress.
We are addressing the balance sheet to ensure our asset values are conservatively realistic and are progressing the
comprehensive restructure of our debt.
We have broadened and augmented the leadership team and now have a highly capable team of leaders.
We understand the company's situation, and the board and management are fully aligned on the changes that are
necessary to create sustainable value for our shareholders.
Ecofibre's underlying EBITDA loss for FY24 was $5.9m, an improvement from a loss of $13.2m in FY23.
Importantly, trading performance improved in both of Ecofibre's two key business units. Ecofibre Advanced
Technologies and Ananda Health were both EBITDA-positive in the second half of the year on a normalised basis.
The overall improvement in trading performance was driven by a significant reduction in normalised operating costs,
down $9m from $32.9m to $23.9m.
Revenue declined 9%, from $30.6m to $28.0m. This was mainly due to weak trading in the US CBD market and weaker
sales of turf yarn following unseasonal wet weather in southern California, a key market for one of our synthetic turf
customers.
The Company's total loss after tax for the period was $45.2m. This included several impairments and one-off items
totalling a net $28.6m, the majority of which were recognised in the first half of the year.
We finished the year with cash of $6.7m, which was bolstered in January following asset sales and EOF-Bio completing a
funding round.
It's important to highlight that, over the past two years, operating momentum has been steadily improving, largely due to
our actions.
In the first half of FY23, our EBITDA loss was $8.6m. We saw that narrow in the second half of FY23 and the first half of
this year. In the second half of FY24, we saw EBITDA approaching break-even with a loss of $0.9m – and this included
additional compliance, advisory and litigation costs that are not typical.
Overall, there is still much to do across the business, but this is pleasing progress.
Our #1 priority is on returning the business to cash flow positive status.
The Cash Positive Plan we announced in November 2023 has four priorities.
ECOFIBRE LIMITED ANNUAL REPORT 202
7
4
Simplifying by focusing on the core business
Highlights this year included exiting our plastics consulting business in the first half and the sale of Ananda's food
business in March for $2.0m.
Lowering operating costs and debt
Our cost reduction performance was a highlight, with another 11% reduction in 2H24, that equates to a cumulative 41%
reduction in costs since the 1H23.
Progress on debt reduction has been slower than anticipated. The sale and leaseback of two of the group's freehold
properties did not proceed to completion.
As a result, we commenced a debt restructure program at the end of FY24, the first step being to extend the maturity of
our secured and unsecured loans providing us time to work with Chiron Financial on a comprehensive debt restructuring
plan. We expect to provide investors with a further update on progress during the first half of FY25.
Deliver ongoing revenue growth at Ecofibre Advanced Technologies
Highlights here included our biomedical business resuming production in 2H24, and we commenced commercial
production of NEOLAST for Under Armour and for Celanese customers.
This progress was partially offset by lower sales of turf yarn, where our existing production line has been running at
approximately half capacity since March 2024. I'm pleased to say that we've recently seen signs of improvement in this
market.
Realising value in EOF-Bio.
We also made good progress in FY24 with the appointment of Simon Allen as CEO, a highly capable veteran biotech
executive.
Simon has lowered the cost burn in the business, developed the clinical protocol ready for IND submission, extended
our partners to include a CRO that will support the Endometriosis Clinical Trial and a capital markets firm that is driving the
current EOF-Bio capital raise. Post the financial year end we have also changed the corporate structure, moving from an
LLC to an Inc.
During 2H24 we realized some value from this business by partially selling down Ecofibre's stake, resulting in our 72%
majority ownership stake.
These four priorities will continue to guide us in FY25.
With the appointment of Ulrich Tombuelt, who joined us earlier last month, we now have the right leadership group in
place. It's a group that is aligned with the CPP and what needs to be done to lead the business profitably into the next era
of growth.
And importantly, the group is also setting the right tone for our broader team. Commercial disciplines, customer and
supplier engagement, enterprise-wide teamwork and a strong sense of values and day-today behaviours.
Thank you
Vanessa Wallace
Chairman
8
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Dear Shareholders,
I'm very pleased to have joined Ecofibre at this pivotal moment in the Company's history.
As I joined Ecofibre a little less than two months ago, my comments will necessarily be brief. However, I want to take this
opportunity to introduce myself, provide a few initial impressions from my time so far in the business, and talk about why I
am excited about the Company and its future prospects.
As I said in our full year results presentation, it's not my style to speak too much about myself, however I feel some further
introduction is warranted.
My background is strongly focussed on textiles and manufacturing, and I've held a number of senior leadership roles in
the industry over the last 20 years.
I have spent my life in this business. My father worked in spinning mills in Germany. And I worked in those mills as a
vacation job when I was growing up. Following these early experiences, my university studies were in mechanical
engineering and textiles, and in the first 5 years of my career I worked in almost 60 countries as I began to build a broad
experience in the industry.
I then settled in the United States, where I have lived for the past 20 years, and most recently, I was the CEO of Sattler
Corp based in Hudson, North Carolina.
What has attracted me to Ecofibre is the opportunity for innovation in a variety of niche but growing markets.
Since starting in the business, what I've experienced is a great team with great, experienced people - a necessity for the
business to increase its significant potential.
For me, it's all about our people, their capabilities, and our ability to work together as a team. Critically, that teamwork
starts with the Board, which I have found to be committed and open to change. In all our discussions its clear to me that
nothing which moves the Company forward is off the table.
Our people are receptive, engaged and willing to take on more challenges. It's also clear that we can make a step
change in our culture by providing our people with more freedom ... and more responsibility.
At Ecofibre Advanced Technologies, our largest business, I've been encouraged by the conversations I've held with our
customers.
They are interested in the opportunity we provide to supply more sustainable yarns and our reputation for solutions. It will
take time, but I know we can do more.
The same is true of our other businesses; Ananda Health, Ecofibre Genetics and EOF-Bio.
It's nothing new to tell you that the Ecofibre group faces significant challenges. The Company has been very clear about
this, and I know that honeymoons don't last long for a new CEO in these situations.
What I can tell you is that we have a strong Cash-Positive Plan, it’s delivering results, and I believe we have opportunities
to do more and to move faster.
Managing Director’s report
We have a portfolio of niche manufacturing and technology businesses in growing markets. Growing markets for
sustainable polymers and natural materials. Growing markets for natural health-care products and hemp seed genetics.
And an important opportunity to develop cannabinoid-based drugs to improve health outcomes and enhance quality of
life.
I would like to thank shareholders, the Board, and all our team for the opportunity to lead Ecofibre as we look to capitalise
on the businesses' many capabilities and execute on our growth strategy in a focussed and disciplined manner. I'm very
pleased to have joined at this time, and I look forward to meeting many of you in person when I am in Australia for our
Annual General Meeting on 16 October.
Ulrich Tombuelt
Managing Director and CEO
ECOFIBRE LIMITED ANNUAL REPORT 202
9
4
Jonathan Brown
Chief Financial Officer
and Joint Company
Secretary, Interim
Genetics President
Jonathan joined Ecofibre
in April 2016 and
established the finance
and corporate functions of
Ecofibre ahead of the
Company's ASX listing in
March 2019.
Jonathan is a Chartered
Accountant with over 25
years commercial
experience.
Prior to joining Ecofibre in
2016, Jonathan worked for
AMP, the London Stock
Exchange and Ferrier
Hodgson in a variety of
roles including corporate
strategy, M&A, senior
finance roles and
insolvency &
reconstruction.
10
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Leadership Team
Alex Nance
President, Ananda
Health
Alex joined Ananda Health
in September 2017 and is
responsible for the overall
management and delivery
of the Ananda product
range. He helped to
develop the current facility
and is also responsible for
all aspects of quality
control and planning.
Alex's background is in
toxicology and chemical
production. Prior to joining
Ananda he worked at
Ethos Laboratories as
Laboratory Production
Manager and Dubois
Chemicals as a chemist.
Alex holds a Bachelor of
Science in Pharmaceutical
Sciences from The Ohio
State University.
Ulrich (Uli) Tombuelt
Managing Director.
CEO and President
Ecofibre Advanced
Technologies
Uli joined Ecofibre on 5
August 2024 as Managing
Director and CEO. Uli has
a track record as a
successful CEO and
operational and
commercial business
leader. He has created
value in multiple
manufacturing and
distribution businesses,
including developing
strong customer
relationships. Uli has spent
most of his career in the
textile industry in the
United States and
Germany and has
experience in successfully
establishing manufacturing
operations in China.
ECOFIBRE LIMITED ANNUAL REPORT 202
11
4
Robin Sheldon
General Counsel and
Joint Company
Secretary
Prior to joining Ecofibre,
Robin was employed by
Thomas Jefferson
University as Sr, VP of
Jefferson Strategic
Ventures, VP of its
Innovation Pillar and
Associate Counsel. Prior to
Jefferson, Robin was a
partner at Fox Rothschild,
LP, where she specialized
in mergers & acquisitions,
private equity and
intellectual property
issues, especially in the
biotech area. She was the
General Counsel of
Half.com, Inc. (acquired by
eBay, Inc.), Associate
Counsel for Sanchez
Computers, and Counsel
for SEI Investments. Robin
has been an adjunct
professor at Temple
University's Beasley
School of Law, and
frequent lecturer on the
ethics of Intellectual
Property.
Kate Douglass
Group Controller & IT
Kate joined Ecofibre in
October 2016, and is a
Chartered Certified
Accountant with over 20
years' experience in
corporate accounting and
financial management.
Kate has overall
responsibility for Ecofibre's
IT systems and financial
controls.
Prior to joining Ecofibre in
2016 Kate worked as an
accountant and controller
for companies including
One Harvest and British
Land.
Simon Allen
CEO EOF-Bio
Simon has 30+ years of
global biotechnology
experience spanning
multiple technology
platforms and therapeutic
sectors, and has a broad
commercial skillset across
strategy, operations, drug
development, finance, and
sell-side business
development.
Simon's experience
includes 27 partnerships, 7
financings, and 6 scientific
publications (some
including Biosafety Level 3
work). He has also worked
as an equities analyst
covering selected
companies within the
pharmaceutical and
medical device sectors.
Brad Forbes
Ecofibre Advanced
Technologies General
Manager
Brad joined the business
in April 2016, and has over
twenty years experience
working for advanced
manufacturing businesses
serving a range of
industries, including
cleanroom and controlled
environments and
production of consumable
products for
pharmaceutical
manufacturers, healthcare
and med device.
Brad has held a range of
positions including sales
support, product
development,
manufacturing roles to
Operations Manager.
Brad has extensive
extrusion experience
includes PET
spinning/warping for the
automotive industry, static
dissipative fibers, Injection
molding for a med device
company, through to his
current responsibilities as
General Manager of
Ecofibre Advanced
Technologies.
12
ANNUAL REPORT 2024
ECOFIBRE LIMITED
OPERATING +
FINANCIAL
REVIEW
2.
FY21
28.0
56%
0.9
(23.9)
(5.9)
2.9
3.0
FY24
ECOFIBRE LIMITED ANNUAL REPORT 202
13
4
GROUP RESULT
AUDm
Revenue
Gross Margin*
Other Income (Expense)*
Operating Costs*
EBITDA*
Investments:
Research & Development
Capital Expenditure
FY21
30.6
56%
0.2
(32.9)
(13.2)
4.8
1.6
%
-9%
0ppts
277%
27%
55%
-39%
88%
%
FY23
1
* normalised
Group Overview
1 In this report, normalised items exclude impairments of inventory and fixed and intangible assets, adjustments to Contingent Consideration, loss from sale of
Ananda Food, gain from cancellation of Employee Share Scheme interests held by the former CEO and foreign exchange gains or losses in other income
AUDm
Improved Underlying Business
In the year to 30 June 2024 ('FY24'), the operating performance Ecofibre's business improved significantly, with
normalised EBITDA improving from a loss of $13.2m in FY23 to a loss of $5.9 in FY24.
A key driver of the result was a 27% improvement in operating costs, which more than offset a 9% reduction in revenues
year on year.
The trend of improved underlying performance is demonstrated by the normalised half-year EBITDA results throughout
FY23 and FY24:
-8.6
-4.6
-5.0
-0.9
1H23
2H23
1H24
2H24
Normalised EBITDA ($m)
1H23 to 2H24
14
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Revenue, Direct Costs and Margin
As noted above, Group revenue excluding discontinued operations decreased 9%, from $30.6m to $28.0m (-$2.6m):
Ÿ Ecofibre Advanced Technologies (FY24: $17.0m; FY23: $17.3m) - declined by 2% in FY24, which included the
impact of lower turf yarn orders from a key customer in 4Q24.
Ÿ Ananda Health (FY24: $10.0m; FY23: $13.0m) - revenue declined by 23% in FY24, mainly due to difficult trading
conditions in the US CBD market.
Ÿ Ecofibre Genetics (FY24: $1.0m; FY23: 0.3m) – revenue grew, however the prior year included in the impact of
credits issued to seed customers following damage to fibre planting seed in transit to the USA.
Normalised gross margin (excluding inventory impairments) for the Group was flat at 56%. Within each business
segment:
Ÿ Ecofibre Advanced Technologies margin down 1% (FY24: 49%; FY23: 50%)
Ÿ Ananda Health margin down 2% (FY24: 68%; FY23: 70%)
Ÿ Ecofibre Genetics margin was higher (FY24: 50%; FY23: -181%).
Other Income
Normalised Other Income increased from $0.2m in FY23 to $0.9m in FY24.
The FY24 result included $0.5m received from the Group's insurers in relation to prior year seed losses. Neither the prior
year seed losses or the corresponding insurance recovery have been normalised in the FY23 or FY24 results.
Operating Expenses
Operating expenses reduced by 27%, from $32.9m to $23.9m (-$9.0m). This was driven by reductions in R&D, staff
costs and depreciation. By business segment, the reduction in operating costs was as follows: Ananda Health (-
$6.4m), Ecofibre Advanced Technologies (-$2.1m), Ecofibre Genetics (+$0.4m) and Corporate (-$0.9m).
Operating costs also reduced half on half, totalling $12.6m in 1H24 and reducing to $11.3m in 2H24 despite restructuring
and litigation costs in that period.
Loss After Tax and Balance Sheet Adjustments
In FY24 Ecofibre incurred a total loss after tax, including discontinued operations and minority interests, of $45.2m (FY23
loss: $39.9m).
The result included net asset impairment charges (-$31.3m), one-off income and expenses (+$2.8m), and separately
funded EOF Bio expenses (-$5.2m). These items have been normalised and removed from the results shown in this
Operating + Financial Review to show the underlying performance of the business in FY24 and FY23.
Further details on the impairment charges and one-off income and expenses are provided below.
Review of Operations and Results (continued)
ECOFIBRE LIMITED ANNUAL REPORT 202
15
4
Inventory
Ananda Health
Ecofibre Advanced Technologies
Total
Gross Impairment Expense
by Asset Type and Business Segment
AUDm
.
2.9
1.7
4.6
Property, Plant and Equipment
Ecofibre Advanced Technologies
Corporate
Total
Intangible Assets
Ecofibre Advanced Technologies
Total
Total Impairment Expense
Ananda Health cannabinoid extracts written down to
estimated market value if sold as is ($1.1m) and
provisions for slow moving, obsolete or expired
inventory ($1.7m).
Impairments recognised for Ecofibre Advanced
Technologies various polymers and yarns ($1.7m)
Ecofibre Advanced Technologies pyrolysis machine
and multi-component yarn extrusion machines
written down (-$3.0m).
Partial impairment recognised against the book value
of the Georgetown, KY property (-$8.7m).
Partial impairment of Goodwill that had been
recognised on the acquisition of the TexInnovate
business in August 2020.
.
3.0
8.7
11.7
.
27.0
27.0
43.3
One-off income and expense items (+$2.8m) included:
- Gain from forfeiture and subsequent cancellation of Employee Share Scheme interests held by the former CEO,
$3.8m
- Loss on disposal of Ananda Food -$0.8m
- Foreign exchange and other, -$0.3m
Pre-tax asset impairment charges (-$31.3m)
2.
1.
The majority of these impairments ($38.7m) had previously been recognised in the December 2023 half year accounts.
The above impairment loss is partially offset by the reversal of a provision for contingent consideration ($12.0m) that had
been recognised since the acquisition of the TexInnovate business, and represents the value of cash consideration that
would become payable if the acquired business delivers USD6.0m earnings before interest and tax (EBIT) for two
consecutive annual periods by August 2027. Because the acquired business did not report an EBIT profit in FY24, and
the need for significant additional capital investment since acquisition, it is considered highly unlikely that these
performance conditions will be met.
Review of Operations and Results (continued)
16
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Cashflows and Balance Sheet
Cash held by the Group as at 30 June 2024 totalled $6.7m, including $2.4m held by EOF Bio.
FY24 cash movements comprised:
Ÿ $14.0m operating cash outflows, including $2.8m cash expenditure on R&D and $2.6m interest paid.
Operating cash outflows improved from the first half to the second half, from -$5.9m in 1H24 to -$4.4m outflow in
2H24 (excluding EOF Bio).
Ÿ $0.9m investing cash outflows, including $2.0m sale of Ananda Food offset by investment in new equipment,
particularly initial equipment for the second turf yarn line, and equipment commissioning and building modification
TM
costs for the Under Armour NEOLAST
machine ($2.9m).
Ÿ $14.3m financing cash inflows, including $4.9m net proceeds from issue of EOF shares, $5.5m for new units issued
by EOF Bio, $5.1m from partial sale of investment in EOF Bio, less $1.0m repaid in July 2023 to the James & Cordelia
Thiele Trust Fund (J&CTTF).
The value of Inventory and Biological Assets reduced by $6.7m during the period, from $9.9m to $3.2m, including the
impact of $4.6m inventory impairment expenses.
Other Current Assets reduced by $1.1m, from $1.5m to $0.4m, mainly due to receipt of the balance of the United States
Employee Retention Credits grant received during the year.
Non-current assets reduced by $63.2m during the period, from $97.1m to $33.9m.
Ÿ Property, Plant and Equipment reduced by $34.5m to $8.6, mainly due to impairment charges and the reclass of the
Group's Land and Buildings held for sale as at 30 June 2024 from non-current to current assets.
Ÿ Intangible Assets reduced from $53.7m to $25.3m, reflecting the impairment to the value of goodwill described
above.
Current liabilities total $20.8m, up from $6.5m at the beginning of the period. The FY24 balance includes $1.0m due to
J&CTTF and $15.0m due to Nubridge Commercial Lending LLC in January 2025 which are now classified as current
rather than non-current liabilities.
Non-current liabilities reduced by $28.1m from $37.6m to $9.5m. This reflects the reclassification of the Nubridge loan,
and part of the J&CTTF loan, as Current Liabilities, as well as the reversal of the TexInnovate Contingent Consideration
Liability previously discussed. The FY24 balance of Non Current Liabilities now includes the non-current portion of the
J&CTTF term loan ($6.0m) and Lambert Super Fund loan ($3.5m).
Overall, the Group's net assets reduced from $74.6m to $40.9m during the period, mainly due to the asset impairments
described above.
The number of shares on issue increased by 29.9m shares to 365.6m mainly as a result of the institutional placement and
share purchase plan (SPP) in August 2023. At the end of the period the Net Tangible Assets per share was 4.29 cps (30
June 2023: 6.28 cps).
The value of net assets, and the Consolidated Statement of Other Comprehensive Income, included a loss of $0.9m in
FY24 because US dollar weakened against the Australian dollar, and as a consequence the net assets of the group's US
entities were revalued.
Review of Operations and Results (continued)
FY21
17.0
49%
0.2
(9.5)
0.4
1.2
2.9
ECOFIBRE LIMITED ANNUAL REPORT 202
17
4
Revenue
Gross Margin*
Other Income (Expense)*
Operating Costs*
EBITDA*
Investments:
Research & Development
Capital Expenditure
FY21
17.3
50%
0.0
(11.6)
(1.2)
1.8
0.9
%
-2%
-1ppts
nm
18%
137%
-36%
222%
FY24
%
FY23
* normalised
nm - not meaningful
AUDm
Ecofibre Advanced Technologies delivered an EBITDA profit of $0.4m in FY24, up from a loss of $1.2m in FY23.
The result was driven by a significant reduction in Operating Costs, down 18% from $11.6m to $9.5m, including lower staff
costs and R&D and the impact of unprofitable businesses closed over the last 24 months.
Revenue reduced by 2% during FY24, which included lower turf yarn sales particularly in 4Q24, partially offset by
revenue from new customers such as Cruz Foam.
TM
In FY25 the business will focus on scaling commercial production of NEOLAST
for Under Armour, filling production
capacity on its existing turf yarn production line and completing the commissioning and filling production capacity for its
second turf yarn line.
Performance apparel yarns
Ecofibre Advanced Technologies has signed a memorandum of understanding with Under Armour for a three-year
TM
supply partnership to produce NEOLAST
yarn, using a polymer developed by Celanese Corporation, for apparel use.
The business installed new equipment sourced by Under Armour for the production line at its Greensboro facility in
2Q24, and expects to conclude the purchase of the equipment, an indirect supply agreement with Under Armour, and
supply agreements with Under Armour's mills in 1Q25.
TM
Commercial production of NEOLAST
yarn commenced in late 4Q24 and targeting full rate production by 2Q25.
Synthetic turf yarns
Ecofibre Advanced Technologies supplies specialised, textured turf yarns to two of the largest synthetic turf
manufacturers in the United States.
Production is typically run at capacity 24/7, and the ongoing focus of the business has been to maximise production
volumes and revenues. Industry demand for artificial turf is driven by year-round use for customers, no requirement for
watering, mowing, pesticides, herbicides, or fertilizers, and lower maintenance costs. Opportunities may exist in the
future to secure additional production capacity in conjunction with a large customer.
In 2H24, the business committed to purchase and install a second turf yarn production line to capitalise on market
demand.
However, demand reduced in 4Q24 due to unseasonal wet weather in southern California, a key retail market for one of
the key customers of the business, and the line operated at ~50% capacity for most of that period. The customer in
question has recently recommenced orders, and the business is monitoring the progressive return of demand.
Review of Operations and Results (continued)
AUDm
18
ANNUAL REPORT 2024
ECOFIBRE LIMITED
nd
In addition, commissioning of the 2 turf line, together with associated capital expenditure, has been deferred pending
requirement for the additional capacity.
Medical device yarns
Ecofibre Advanced Technologies operates a dedicated, ISO9001 production facility supplying yarn for vascular grafts to
a long-term customer, Intervascular SAS which is part of the Getinge AB group.
In the US the product and its manufacture are regulated by the US FDA, and barriers to entry for new suppliers are very
high due to the certification process for medical devices.
Intervascular reduced its inventory of yarn in 1H24 due to increased production capacity and greater supply chain
certainty, and orders largely ceased during that period. Sales orders and revenues resumed in 2H24.
Sustainable packaging
In early FY24, the business has entered into a three-year agreement with Cruz Foam to manufacture sustainable, bio-
degradable packaging foam for Cruz Foam's customers. The product is able to replace polystyrene in several different
applications: for further details on Cruz Foam and its products, see cruzfoam.com.
Manufacturing equipment and production materials are supplied by Cruz Foam, and the manufacturing facility is
operated by Ecofibre Advanced Technologies at its premises in Greensboro, NC.
Review of Operations and Results (continued)
ECOFIBRE LIMITED ANNUAL REPORT 202
19
4
Revenue
Gross Margin*
Other Income (Expense)*
Operating Costs*
EBITDA*
Investments:
Research & Development
Capital Expenditure
FY22
10.0
68%
0.0
(8.4)
(0.8)
0.6
-
%
-23%
-1ppts
0%
43%
79%
-78%
-100%
FY24
%
* normalised
AUDm
Ananda Health has delivered a 79% year on year EBITDA improvement despite ongoing challenging CBD market
conditions in the USA. This result included a normalised EBITDA profit of $0.2m in 2H24.
Market overview
The CBD market in the US continues to be challenging, with the lack of regulatory classification from the FDA remaining a
barrier to sustainable growth in the industry. Despite hemp-derived CBD being federally legal since December 2018, the
FDA is still yet to approve these products as a dietary supplement. The lack of a regulatory classification constrains
growth by limiting financial transactions, hampering demand generating activities, and enabling low-quality non-
efficacious products to enter the market.
In January 2024, the FDA recognised that existing regulatory frameworks for foods and supplements are not appropriate
for CBD and that it would need to work with Congress to develop a new, tailored regulatory framework.
Market growth in the Australia has been stronger for cannabinoids, however mainly focused in high-THC segments
(THC, or Tetrahydrocannabinol, is the major psychoactive component in cannabis) and smokable flower formats.
Ecofibre does not participate in these markets.
Strategy overview
Ananda Health continued to focus on profitable, cash-positive operations, and, on a normalised basis, delivered positive
EBITDA in both of the last two quarters of FY24.
Having reset the cost base, Ananda Health is gradually increasing its investment in sales and marketing to drive sales
growth in non-CBD products as well as its core CBD product range.
Ananda Health launched a new, non-CBD product Glunozym, on Amazon USA late in 4Q24. This product is a dietary
supplement that can assist with blood sugar control and weight loss management , and can be marketed and sold
through distribution channels not currently available to CBD products. The business will continue to increase its focus on
CBD and non-CBD products, new channels, and contract manufacturing in FY25.
US manufacturing and distribution
Ananda Health distributes most of its products in the US as Ananda Professional, the premium brand for US independent
pharmacies.
The business also targets selected white label clients, utilising the capabilities and capacity of its production facility in
Georgetown, Kentucky, and its research-backed product formulation capabilities.
Ananda Health also supplies study material under FDA IND (Investigational New Drug) regulations to support phase 2
clinical studies in cannabinoid science.
Review of Operations and Results (continued)
FY22
13.0
69%
0.0
(14.8)
(3.8)
2.7
0.3
FY23
AUDm
20
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Revenue in the US declined in FY24, with other US competitors also reporting lower revenues. The US business is
positioned for growth through new product formulas, format innovation, high quality standards and a continued strategic
focus on adding value to patients and consumers seeking to utilise hemp and other botanicals to improve wellness.
Ÿ
Non-CBD Products: Ananda Health is expanding into new channels with focus on non-CBD products including
Glunozym, as detailed above, with the aim to increase the proportion of non-CBD product sales over time.
Ÿ
Format Innovation: Gummy formats continue to drive growth in the dietary supplement market due to their ease of
use compared to other formats. The Ananda Professional gummy range follows a benefit-driven naming
convention and includes additional active ingredients that are supported by research at therapeutic doses.
Ananda Health has invested to create an internal gummy manufacturing capability, as quality gummy manufacturers
are still relatively scarce in the industry, and the internal capability provides the business with an important capability
to control quality, taste and product performance.
Ÿ
Pharmacist and Practitioner Recommendations: Ananda Health remains focused on the professional healthcare
market for CBD products, which it targets through high quality standards, research, and highly efficacious product
formulation.
This channel requires investment in education for both practitioners and their customers, and a focus on treatment
protocols and technical marketing initiatives. Practitioners have significant influence with their customers, and
they typically focus on customers with a high discretionary spend.
Ÿ
Quality Standards: Ananda Health has been certified by the Australian TGA for Active Pharmaceutical Ingredient
(API) and is scheduled for an audit in 1H25, with the aim being to extend the product range available in Australia. The
certification is a requirement for ongoing Australian medicinal cannabis operations and is also globally recognized
as one of the peak quality standards for pharmaceutical manufacturing.
Australia
In Australia, Ananda Health imports CBD dominant (< 0.3% THC) products from its production facility in the US and does
not participate in the high-THC or dried flower market segments. Products are distributed through 3rd party distributors
who sell product as medicinal cannabis to pharmacies under Schedule 4 and Schedule 8 (S4 and S8) regulations issued
by the Australian TGA, via the Special Access Scheme and via prescription through Authorised Prescribers.
Review of Operations and Results (continued)
ECOFIBRE LIMITED ANNUAL REPORT 202
21
4
Review of Operations and Results (continued)
Revenue
Gross Margin*
Other Income (Expense)*
Operating Costs*
EBITDA*
Investments:
Research & Development
Capital Expenditure
FY22
1.0
50%
0.5
(0.6)
0.4
-
-
FY21
0.3
-181%
0.0
(0.3)
(0.8)
0.1
-
%
215%
nm
nm
-100%
147%
100%
-
-
FY24
%
FY23
AUDm
The US market for hemp fibre seed has been growing off a small base, as new industrial applications are developed for
hemp stalk (inner 'hurd' and exterior 'fibre') materials. Ecofibre's ECO-MS77 is widely considered to be a premium fibre
genetic in the US based on yield and ability to grow in multiple US latitudes.
FY23 was a disappointing year for the genetics business as weather and transport issues contributed to ~$3m lost seed
sales. Revenue improved in FY24, and in FY25 the business will continue to focus on building its fibre seed sales in the
US. A one-off insurance payout was received in FY24 related to the prior year's insurance claim.
ECOFIBRE GENETICS
AUDm
* normalised
nm - not meaningful
22
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Review of Operations and Results (continued)
EOF Bio is a US-based clinical-stage biotechnology company and a majority-owned subsidiary of the Ecofibre Group.
EOF-Bio is focused on the development of a new generation of patient-centred cannabinoid-based drugs to improve
health outcomes and enhance quality of life, starting with women's health and endometriosis.
EOF-Bio was established in 4Q23 to commercialize patents and other intellectual property co-developed with The
University of Newcastle. The new entity has enabled specialist and dedicated management focus, and the capacity to
raise funds from external investors to continue developing and commercialising its portfolio of intellectual property.
With additional patents pending, EOF-Bio now has rights to eight issued patents within Endometriosis, Endometrial
Cancer, Ovarian Cancer, Head and Neck Cancer, and Stabilized Compositions.
The new entity raised $0.9m in June 2023 and a further $5.5m in seed capital from new investors through the issue of
new units. Following the issue of these units, and the sale of existing units held by the Ecofibre Group in FY24, the Group
now holds a 72% economic interest in EOF Bio.
In FY25, EOF Bio is seeking Series A funding to proceed with the next stage of clinical trials, targeting initiation of Phase
2a clinical trial for Endometriosis Associated Pain (EAP) to generate additional human proof- of-concept data for its EOF-
001 product.
Revenue
Gross Margin*
Other Income (Expense)*
Operating Costs*
EBITDA*
Investments:
Research & Development
Capital Expenditure
FY22
-
-
-
(5.2)
-
1.1
-
FY24
AUDm
EOF Bio
AUDm
* normalised
EOF Bio was established at the end of FY23 and commenced operation
in July 2024.
ECOFIBRE LIMITED ANNUAL REPORT 202
23
4
Review of Operations and Results (continued)
Revenue
Gross Margin*
Other Income (Expense)*
Operating Costs
EBITDA*
Investments:
Research & Development
Capital Expenditure
FY22
1.7
25%
0.1
(1.6)
(0.6)
-
0.1
%
-9%
-10ppts
0%
36%
48%
-100%
-75%
FY23
%
* normalised
AUDm
The hemp food and animal products business of Ananda Food was sold in 3Q24 for $3.0m, including $2.0m cash paid
on completion and up to $1.0m earnout subject to sales of the cat litter product line.
The sale enabled the Group to exit a sub-scale business, increase focus on Ecofibre's core businesses and provide
additional funding to enable delivery of its cash positive plan and reduce group financing risk.
In the Group's financial statements, the net financial contribution of the Ananda Food business is separately shown as a
Loss after Income Tax from Discontinued Operations.
AUDm
FY22
1.9
15%
0.1
(2.4)
(1.2)
0.1
0.4
FY23
24
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Review of Operations and Results (continued)
Material Business Risks
Ecofibre recognises the importance of, and is committed to, the identification, monitoring and effective management of
risks associated with its activities across the Group.
The following information details material Group-wide risks, not in any particular order. These material risks do not include
generic risks, such as changes to macroeconomic conditions affecting businesses in the USA and Australia (such as
inflationary pressures, global instability, including impacts on major customer strategies, supply chains and foreign
exchange rates.) These risks are considered within each business unit's strategy and budgeting process.
Ÿ
Turning around the business to achieving cash flow positive operations is
fundamental to Ecofibre's sustainability and credibility with business partners and
investors.
Key to managing this risk has been to Improve operating profits and cashflows
across each of the Group's businesses through revenue growth, the sale of surplus
assets, and cost control, to deliver cash positive operations and profitability.
This operational focus has been supplemented with tight governance, with weekly
cash monitoring, independent external reviews, tight financial controls.
Further, working capital management of inventory and procurement processes has
been tightened. Cash investment in growth Opex and Capex have enhanced
business case processes and oversight.
Cash Liquidity &
Working Capital risks
Ÿ
The Group must refinance its debt that falls due in 2025 while maintaining sufficient
capital to fund its operations and growth plans.
The Group is currently working with US based financial advisory Group, Chiron
Financial, to restructure its term debt with lenders, including ~$16m due for
repayment in January 2025.
Financing risks
Ÿ
All businesses operate in competitive markets are exposed to shifting customer
preferences and face new and existing competitors. All businesses are also
innovating to create differentiation. Poor strategy or bad execution in any Business
Unit across any part of the value chain results in loss of core cash flow engine for the
short to medium term.
Each business is focused on executing its own strategies to deepen customers
engagement and differentiate our products. Twice yearly the businesses present
their strategies and status against their strategies to the Board. The Group's
businesses are also deepening their understanding of our customer marketplaces
to ensure our strategies address market risks.
Strategic risks
ECOFIBRE LIMITED ANNUAL REPORT 202
25
4
Ÿ
Implementing Ecofibre Advanced Technologies' growth strategy involves the scale-
TM
up of innovative product manufacturing, including; successful scaling of NEOLAST
production for Under Armour, and ensuring the Turf line is running close to maximum
capacity before and after the 2nd Turf line is successfully commissioned.
Key to managing these risks is working closely with our business partners to bring
these innovative products to market. This includes building and maintaining close
on-site operational relationships with our business partners, maintaining and
empowering our core operational team to optimise machinery performance, deliver
against DIFOT (delivery in full and on time). In addition, building a pipeline of potential
new customers is key to ensuring capacity remains fully utilised.
EAT Operational
Scale-up
Ÿ
Life-science research and commercialization is inherently risky, takes time, and
requires capital to be invested years ahead of cash value being generated.
Ecofibre has an attractive portfolio of research assets which it has chosen to
commercialize via a separate, self-funded, entity. EOF-Bio provides Ecofibre
shareholders with an ability to retain an economic interest without carrying the full
life-science risk exposure.
Life-science risks
Ÿ
Ecofibre Genetics is a leading supplier of seed genetics to the hemp fibre and grain
industry in the US and Australia. Seed sales are exposed to agricultural risks,
including crop failure and germination rates as well as the broader climate,
commodity market and transport risks associated with getting product to market.
Key to managing these risks is having branded seed genetics, such as MS77,
managing agricultural and yield risks in the fibre seed business to grow seed
inventory and sales pipeline, good contracting, using insurance to mitigate residual
risks where economic.
Agricultural risks
Ÿ
Ananda Health's CBD products operate in a regulated environment that remains
murky in the USA, with the 2018 Farm Bill clarifying federal legality but state variations
adding confusion and uncertainty. The current FDA position on CBD is that it warrants
a new category of guidance that is neither a dietary supplement nor a drug. The most
material risk would be for the guidance to restrict market access.
To mitigate this risk, Ananda Health and EOF-Bio focus on supporting science-
backed, research-supported quality-manufactured product which will benefit from
the highest level of regulation. Ananda Health also continues to diversify its product
offering into non-CBD products able to be sold in a broader range of channels.
Regulatory risks
Review of Operations and Results (continued)
26
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Ÿ
Ecofibre operations are underpinned by commercial contracts with its business
customer and supply chain partners and employment contracts with team members.
Key to successful operations is entering robust commercial contracts, delivering
against these contracts and managing any issues that may arise.
Managing contractual risks requires disciplined, aligned teamwork between
Business Unit leadership, finance and legal. Ecofibre has put a lot of focus on
embedding this discipline and it remains a focus moving forward.
Ÿ
The Group is managing a number of existing or potential claims, which are set out in
the Contingent Liabilities section of this Financial Report (refer Note 24 to the
Financial Statements). Collectively, these claims do not present a material risk to the
operations of the business, unless they impact future capital raisings.
Contractual & Legal
risks
Ÿ
People are at the heart of our ability to operate, grow and be a good citizen within the
communities we operate in. Ecofibre requires team members with appropriate skills,
capabilities and values to execute Business Unit and Group strategies. Mitigating key
person risk and retention of critical staff and ensuring our teams live the values and
behaviours expected is paramount.
There are a number of people programs that support mitigation of this risk.
Ÿ Clear expectations around codes of conduct, visibility of our values and
leadership role modelling of behaviours , supported by policy training and taking
action when expectations are not met.
Ÿ Recruitment practices and investments to strengthen employee value
propositions so the right talent is attracted and retained by the Group
People & culture risk
Other portfolio risks include systems complexity and cyber risk. The Group's businesses are dependent on
sophisticated business processes and systems to operate effectively. If these systems do not operate as intended,
through cyber-attack or otherwise, the group's ability to operate its businesses would be significantly impacted.
Environmental, social and governance risks are considered material to the Group's business strategies and financial
prospects, particularly in relation to agricultural and yield risks. Any current risk from climate change may include
unpredictable high impact weather events such as tornados in the United States or rain and frost events impacting crops
which can cause significant damage in a short period, and the risk that any disaster recovery actions may not be
sufficient to mitigate consequent losses.
Ecofibre published its most recent Governance Report in September 2024.
Review of Operations and Results (continued)
DIRECTORS’
REPORT
3.
ECOFIBRE LIMITED ANNUAL REPORT 202
27
4
28
ANNUAL REPORT 2024
ECOFIBRE LIMITED
Board of Directors
Your Board of Directors, as at the date of this report, is profiled below.
Experience and expertise:
Vanessa has a long track record as a director of
listed and non-listed companies including
Wesfarmers Ltd, SEEK Ltd, Doctor Care Anywhere
PLC and Palladium Global Holdings Inc. Her
executive career includes almost 30 years as a
strategy management consultant, where she
focused on financial services, health and
consumer product industries, including co-
leading the Booz & Company business in Japan
for 4 years. Earlier in her career she was a
Portfolio Manager with investment bank
Schroders. Vanessa is an early-stage investor in
the health sector and the founding Chairman of
Australian digital health & biotechnology business,
Drop Bio Ltd.
Board Committee Memberships
Chairman of the Board
Audit, Risk and Compliance Committee (interim
Chair from May 2024)
People and Nominations Committee
Health and Government Relations Committee
EOFBio Inc. Board Director
Qualifications
BCom (UNSW), MBA (IMD, Switzerland)
Other current directorships
Wesfarmers Ltd, SEEK Ltd, Drop Bio Limited
Former directorships in last 3 years
Doctor Care Anywhere PLC
Palladium Global Holdings Inc.
Vanessa Wallace
Independent Chairman
Experience and expertise:
Uli joined Ecofibre on 5 August 2024 as
Managing Director and CEO. Uli has a track
record as a successful CEO and operational
and commercial business leader. He has
created value in multiple manufacturing and
distribution businesses, including
developing strong customer relationships.
Uli has spent most of his career in the textile
industry in the United States and Germany
and has experience in successfully
establishing manufacturing operations in
China.
Board Committee Memberships
None
Qualifications
Dipl.-Ing. (Niederrhein University)
Other current directorships
None
Former directorships in last 3 years
None
Ulrich Tombuelt
Managing Director. CEO and President
Ecofibre Advanced Technologies
ECOFIBRE LIMITED ANNUAL REPORT 202
29
4
Experience and expertise:
Prof. Robinson has over 25 years leadership
experience as a board director, academic
physician and scientist across research,
healthcare and medicine, and tertiary education.
He has extensive experience covering academia,
government, public and private health providers,
research institutes and philanthropic
organisations. He is currently a director of
Cochlear, an ASX listed global hearing implants
business; MaynePharma, an ASX listed
pharmaceutical manufacturer; and QBiotics, a drug
development company. From 2015 to 2021 Prof.
Robinson has also chaired the Australian
Government's National Health and Medical
Research Council, and the Medical Benefits
Schedule Review Task Force.
Experience and expertise:
Michele's executive career spans 30 years as an
operating business executive, independent
director and founder working across the
technology, wine and professional services
sectors. Her leadership contributions and passion
lie in developing and implementing growth
strategy, scaling brands and businesses, driving
digital growth and transformation, and supporting
positive environmental impact and de-
carbonisation. She began her career in Australia
as a management consultant with Booz Allen and
Hamilton and then spent most of her career to
date working in the US, including running
Shutterfly's US$1B revenue consumer
ecommerce business in Silicon Valley and Staples'
Print and Marketing Services business across
1,200 US stores. Michele holds bachelor's
degrees in Commerce and Law from UNSW, an
MBA from Wharton, and a Master of Wine.
Board Committee Memberships
Chairman of Health and Government Relations
Committee
Audit, Risk and Compliance Committee
People and Nominations Committee
EOF-Bio Inc. Board Director
Qualifications
MD (USyd), MSc (USyd), FRACP, FAAHMS,
FAIRCD
Other current directorships
Cochlear Limited, Mayne Pharma Group Limited
and Qbiotics Limited
Former directorships in last 3 years
None.
Board Committee Memberships
Chair of the People and Nomination Committee
Audit, Risk and Compliance Committee (Chair
from March – May 2024)
Qualifications
BCom (UNSW), LLB (UNSW), MBA (Wharton,
University of Pennsylvania, USA)
Other current directorships
Baron Philippe de Rothschild, SA
Claranova S.E
Former directorships in last 3 years
None.
Professor Bruce Robinson
Independent Non-Executive Director
Michele Anderson
Independent Non-Executive Director
Directors’ report
Your directors present their report, together with the financial statements, on the consolidated entity consisting of
Ecofibre Limited (referred to hereafter as the 'Company') and the entities it controlled at the end of, or during, the year
ended 30 June 2024.
Board of Directors
The following persons were directors of Ecofibre Limited during the whole of the financial year and up to the date of
this report, unless otherwise indicated:
Vanessa Wallace, Chairman
Prof. Bruce Robinson
Michele Anderson
Eric Wang, Managing Director (until 28 November 2023)
Mark Bayliss (retired 29 March 2024)
Ulrich Tombuelt (appointed on 5 August 2024)
Company Secretaries
Jonathan Brown and Robin Sheldon are the joint company secretaries of the Company. Robin was appointed by the
board as a General Counsel and Joint Company Secretary of the Company with effect from 22 January 2021 to act
jointly with Jonathan who is the Company’s Chief Financial Officer and has been the Company Secretary of the
Company since 18 June 2019.
Jonathan Brown is a Chartered Accountant with over 25 years’ commercial experience. He has a Bachelors Degree in
Accounting, Graduate Diploma in Advanced Accounting and a Graduate Diploma in Finance and Investment from
FINSIA.
Robin Sheldon has 30 years experience in corporate law. Prior to joining Ecofibre, Ms. Sheldon was employed by
Thomas Jefferson University as Sr, VP of Jefferson Strategic Ventures, VP of its Innovation Pillar and Associate
Counsel.
Principal activities
The principal continuing activities of the Group during the year were three vertically integrated high-quality advanced
manufacturing and technology businesses focused on sustainable polymers and natural materials, natural health
care, and hemp seed genetics. In addition, we own a majority interest in a life sciences business that is developing
treatments for malignant and non-malignant gynaecological diseases.
Significant changes in the state of affairs in FY24
On 7 July 2023 Ecofibre announced that EOF Bio LLC (EOF Bio) had been established to commercialise patents for
the treatment of endometriosis and ovarian cancer. EOF Bio has the exclusive rights to commercialise intellectual
property developed by Ecofibre and the University of Newcastle pursuant to an exclusive license agreement. Under
the terms of the license agreement, royalties will be payable on any sub-license of the intellectual property to a third
party and on any products developed by EOF-BIO or its sub-licensee.
30 ECOFIBRE LIMITED ANNUAL REPORT 2024
DIRECTORS’ REPORT
Significant changes in the state of affairs in FY24 (continued)
Ecofibre received notification from the United States Patent and Trademark Office (USPTO) of additional patents
being issued;
o
Third patent, US Utility Patent Application No. 18/050,021 Methods of Treating Endometrial Cancer Using
Hemp Extract, was issued on 24 October, 2023.
o
Fourth patent, US Utility Patent Application No.[18/049,977 Systems And Methods For Producing Hemp
Extracts And Compositions was issued on 2 January 2024.
On 31 July 2023 Ecofibre’s Advanced Technologies business announced that it had entered into a memorandum
of understanding (MOU) with Under Armour to supply specialty yarn for apparel use. The MOU anticipated a final
agreement under which Hemp Black would purchase equipment financed by Under Armour to supply yarn for 3
years.
On 31 July 2023 the Company announced that Ecofibre Advanced Technologies had entered an Agreement with
Cruz Foam to manufacture a sustainable, bio-degradable packaging material for its customers.
Ecofibre Advanced Technologies biomedical yarn customer, Intervascular, temporarily suspended the purchase of
biomedical yarn during 1H24 in order to reduce inventory levels post COVID-19 due to greater supply chain certainty.
On 16 August 2023 Ecofibre announced that the Board had agreed to extend the term of the earnout agreement
from the original acquisition of the TexInnovate group of companies on 24 August 2020 from 5 to 7 years on account
of the 2-year COVID-19 disruption.
On 24 August 2023 Ecofibre announced an institutional placement and share purchase plan (SPP) to fund Hemp
Black growth. The company subsequently issued 27.8m new shares to institutional investors at $0.18 per share
(total: $5.0m) and 1.9m shares to SPP investors at the same price (total: $0.3m). Total SPP funds included $0.12m
contributed by directors following approval by shareholders at the Company’s annual general meeting held on 23
November 2023.
During the period, Ecofibre refunded $0.8m to US seed growers in relation to seed damaged in transit from Australia
to the USA in FY23, and received $0.5m from the related insurance claim.
On 28 November 2023 Ecofibre’s managing director & CEO Eric Wang resigned. 7.2m share rights held by the
former CEO in the Ecofibre’s Employee Share Trust (EST) were cancelled effective on the date of his resignation
and returned to the Employee Share Trust. Following this, the Board stepped in to assist management with the day-
to-day operations and commenced the search for the new CEO.
On 21 February 2024, Simon Allen was appointed CEO of EOF Bio LLC.
On 5 March 2024, the Company announced that an employee had commenced legal proceedings against the
Company, its subsidiary Ecofibre USA Inc, and the directors and officers of the Company in the Court of Chancery
for the State of Delaware, USA, which made claims in relation to the management of EOF Bio LLC and seeks orders
including unspecified damages. The Company advised that the Board considered that the legal proceedings relied
on assertions that are factually incorrect and without foundation, and that it had appointed legal advisers to
vigorously defend the proceedings.
On 28 March 2024, Ecofibre Limited completed the sale of hemp food and animal products business of Ananda
Food Pty Ltd to a wholly owned subsidiary of Elixinol Wellness Limited. The Company received cash consideration
of $2m and recognised a loss of $0.8m in relation to the sale. An additional payment of up to $1.0m may be received
subject to cat litter product sales between 1 April 2024 and 30 June 2025.
On 29 March 2024, Mark Bayliss retired as non-executive director.
On 13 May 2024, the Company announced a conditional agreement for the sale and leaseback of its properties in
Greensboro, North Carolina. The purchaser subsequently terminated the agreement, and Ecofibre engaged
Houston-based investment bank Chiron Financial LLC to support a debt restructuring plan.
ECOFIBRE LIMITED ANNUAL REPORT 2024 31
Significant changes in the state of affairs in FY24 (continued)
On 24 May 2024, the President of Ecofibre Advanced Technologies, Jeff Bruner, resigned and John Foley was
appointed as Interim Group CEO and also President of Ecofibre Advanced Technologies.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
Matters subsequent to the end of the financial year
In July 2024, EOF Bio LLC was converted to a C-Corporation with the strong support of voting shareholders. This
important step enables broader access to institutional biotech investors in connection with future financing. As
such, EOF Bio is now known as EOF Bio Inc.
In July 2024, the Company reached an agreement with its secured lender, Nubridge Commercial Lending LLC to
extend the repayment date of the loan to 1 January 2025, and that the interest rate on the loan would be increased
from 8.49% p.a. to 13.49% effective 1 July 2024.
In July 2024, the Company also reached an agreement with an unsecured lender, the James & Cordelia Thiele Trust
Fund, to amend the terms of the loan. Under the revised terms of the loan, $1m repayable on 1 January 2025 and
$6m repayable on 15 July 2025 at an interest rate of 11% until 30 September 2024 and 14% thereafter.
Since 31 December 2023, the Company has categorised its 3 properties in the United States as held for sale.
Subsequent to year end, and following a review of the Company’s financing strategy by Chiron Financial LLC, the
Company made the decision to pursue a wholistic recapitalisation of the Company’s balance sheet. Accordingly, the
properties are no longer being actively marketed for sale.
On 5 August 2024, Ulrich Tombuelt was appointed as Managing Director and CEO for the Group and President of
Ecofibre Advanced Technologies Inc.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly
affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs
in future financial years.
Likely developments
For further information about likely developments in the operations of the Group, refer to the Review of Operations and
Result section. The expected results from those operations in future financial years have not been included because
they depend on factors such as general economic conditions, the risks outlined and the success of the Group
strategies.
Environmental regulation
The Group is subject to and compliant with all aspects of environmental regulations for its business activities. The
directors are not aware of any environmental law that is not being complied with.
Ecofibre takes its ESG responsibilities seriously. At its core the business aims to have a positive impact on society
and on the environment.
Any current risk from climate change is not considered material, however 'random' high impact weather events such
as tornados or floods in the United States could cause significant damage in a short period. The Group's agricultural
risk is considered low, as it has a highly diversified growing strategy and maintains sufficient inventory to protect
against shortages of hemp inputs in each business.
Ecofibre published its most recent Governance Report on the same date as this annual report.
DIRECTORS’ REPORT
32 ECOFIBRE LIMITED ANNUAL REPORT 2024
DIRECTORS’ REPORT
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held during
the year ended 30 June 2024, and the number of meetings attended by each director, were:
Director
Board
ARCC
HGRC
PNC
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Vanessa Wallace
20
20
6
6
1
1
3
3
Eric Wang *
4
4
1***
-
1
1
1
1
Bruce Robinson
19
20
5
6
1
1
3
3
Michele Anderson
19
20
5
6
-
-
3
3
Mark Bayliss **
14
14
4
4
-
-
1***
-
ARCC – Audit, Risk and Compliance Committee
HGRC – Health & Government Relations Committee, final meeting 21 July 2023 following the formation of EOF Bio
PNC – People and Nominations Committee
* until 28 November 2023
** until 29 March 2024
*** attended by invitation
Held: represents the number of meetings held during the time the director was a member of the relevant
committee.
Indemnity and insurance of officers
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and
executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of
insurance prohibits disclosure of the full details of the cover and the amount of the premium.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the company or any related entity against a liability incurred by the auditor.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of
taking responsibility on behalf of the company for all or part of those proceedings.
The company was not party to any such proceedings during the year.
ECOFIBRE LIMITED ANNUAL REPORT 2024 33
Non-audit services
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 23 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 23 to the financial statements do not compromise
the external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
●
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting
Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a
management or decision-making capacity for the company, acting as advocate for the company or jointly sharing
economic risks and rewards.
Dividend
No dividend was declared or paid during the year (FY23: Nil).
Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financials/ Directors’ Report) Instrument 2016/191, the amounts in
this report are rounded off to the nearest thousand dollars unless otherwise indicated.
Auditor's independence declaration
The auditor’s independence declaration has been received and can be found on page 42 of the annual report.
Auditor
William Buck (Qld) continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the directors
_________________________________________
_________________________________________
Vanessa Wallace
Michele Anderson
Director
Director
16 September 2024
16 September 2024
Sydney
New York
DIRECTORS’ REPORT
34 ECOFIBRE LIMITED ANNUAL REPORT 2024
REMUNERATION REPORT
Remuneration report
The remuneration report details the key management personnel (KMP) remuneration arrangements for the
consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations. It also
details the Company’s Employee Share Scheme (ESS) available to all employees in the Group.
KMP are those persons having authority and responsibility for planning, directing, and controlling the activities of the
entity, directly or indirectly, including the Board of Directors and Executive KMP, the CEO and CFO.
Non-Executive KMP
•
Vanessa Wallace – independent Chairman
•
Prof. Bruce Robinson – independent Director
•
Michele Anderson – independent Director
•
Mark Bayliss – former independent Director (retired 29 March, 2024)
Executive KMP
•
Eric Wang – former Managing Director and CEO (until 28th November, 2023)
•
John Foley – Interim CEO (appointed 13 May 2024 and in role through fiscal year end until the new CEO
commenced on August 5th, 2024)
•
Jonathan Brown – CFO and Joint Company Secretary
The remuneration report is set out under the following main headings:
1.
Principles used to determine the nature and amount of remuneration
2.
Details of remuneration
3.
Service agreements
4.
Additional disclosures relating to key management personnel
5.
Employee share scheme
1.
Principles used to determine the nature and amount of remuneration
The performance of the consolidated entity depends on the quality of its directors and executives. The Board is responsible
for recruiting and determining and reviewing remuneration arrangements for its directors and executives.
Executive Remuneration
The executive remuneration approach works in combination with people development programs and company culture.
Total executive compensation includes fixed remuneration and reward-based remuneration, based on position,
responsibility and performance. It typically includes a combination of base pay, share-based payments (tenure and
performance based), and other benefits such as superannuation and health care which may be country and person specific.
Fixed remuneration is reviewed periodically by the Board based on individual and business performance, the overall
performance of the consolidated entity and comparable market remuneration. Executives may receive their fixed
remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any
additional costs to the consolidated entity and provides additional value to the executives.
ECOFIBRE LIMITED ANNUAL REPORT 2024 35
1.
Principles used to determine the nature and amount of remuneration (continued)
Executive Remuneration (continued)
Reward-based remuneration performs several roles, first and foremost to attract, motivate and retain high-quality
executives, also to support value-creating decision making over the medium to long term.
The reward framework is designed to align executive reward to shareholders' interests:
●
Focus on short and medium-term drivers of shareholder value, that are controllable by Executives such as sales,
EBITDA and/or cash generation; and
●
Have equity as a core component of retention and incentive plan design; and
●
Have room to reward above-plan performance so the team participates in shareholder value growth
Share rights are typically awarded to executives from shares already held in an Employee Share Trust (EST). Once the
executive meets time and performance-based conditions, the shares vest. Where these conditions are not met the awarded
rights lapse and shares stay to the EST.
Long-term incentives (LTI) include share-based payments and any long service leave that accrues, for example in Australia.
In FY 2024, the proportion of fixed remuneration and at-risk long-term incentives were as follows;
Fixed remuneration
At risk - LTI
2024
2023
2024
2023
Former Managing Director & CEO:
Eric Wang *
100%
42%
-
58%
Interim CEO:
John Foley
100%
-
-
-
CFO:
Jonathan Brown
78%
78%
22%
22%
* The share rights of the former CEO were cancelled during FY24 following his resignation
The detail of FY24 Executive remuneration is outlined in Section 2 of this report. The Board, working with the CEO, reviews
senior management remuneration periodically to ensure the remuneration framework is fit for purpose.
Non-Executive Director Remuneration
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by the
Company’s members in general meeting. In 2017, Shareholders approved a maximum annual aggregate fee pool of
$500,000. No increase in this pool has been sought since then.
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the Board. Any changes to directors' fees in FY24 are noted in
Section 2 of this report.
In 2021 and 2022, at the AGMs, shareholders approved the issue of 3-year options over shares for non-executive
directors with an estimated fair value on date of issue equivalent to 25% of annual director fees. The Directors
took the options in lieu of cash fees for a three year period.
All options were granted over unissued fully paid ordinary shares in the Company. Options granted carry no dividend or
voting rights. Options vest based on the provision of service over the vesting period whereby the non-executive director
becomes beneficially entitled to the option on vesting date. Options are exercisable by the holder as from the vesting
date. There has not been any alteration to the terms or conditions of the grant since the grant date. There are no amounts
paid or payable by the recipient in relation to the granting of such options other than on their potential exercise.
The value of options over ordinary shares granted and lapsed for directors as part of compensation during the year ended
30 June 2024 are set in Section 4 of this Report.
36 ECOFIBRE LIMITED ANNUAL REPORT 2024
REMUNERATION REPORT
Fixed remuneration
At risk - LTI
2024
2023
2024
2023
Chairman:
Vanessa Wallace
80%
80%
20%
20%
Directors:
Bruce Robinson
80%
80%
20%
20%
Michele Anderson
64%
78%
36%
22%
Mark Bayliss (retired 29 March 2024)
64%
74%
36%
26%
2.
Details of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the tables below.
Short-term
benefits
Termination
payments
Post-
employ-
ment
benefits
Long
term
benefits
Share-based payments
Cash salary
and fees
Termination
fees
Super-
annuation
Long
service
leave
Equity-
settled
shares
Equity-
settled
options
Total
$
$
$
$
$
$
$
2024
Non-Executive KMP
Chairman:
Vanessa Wallace
146,284
-
3,716
-
-
38,417
188,417
Directors:
Bruce Robinson
56,250
-
-
-
-
14,406
70,656
Michele Anderson
61,341
-
6,134
-
-
37,676
105,151
Mark Bayliss (retired 29
March 2024)
50,625
-
-
-
-
28,257
78,882
Executive KMP
CEO:
Eric Wang (until 28
November 2023)
141,666
100,584
-
-
(3,645,060)*
-
(3,402,810)
John Foley (Interim CEO 13
May 2024 – 3 August 2024)
106,542
-
-
-
-
-
106,542
CFO:
Jonathan Brown
247,326
-
-
4,194
73,000
-
324,520
810,034
100,584
9,850
4,194
(3,572,060)
118,756
(2,528,642)
* Due to resignation on 28 November 2023, the service condition attached to the share grant were not met and
therefore the rights to shares have been forfeited. $3,645,060 represents the reversal of the cumulative expense
recognised in previous periods in relation to unvested share rights.
The Non-Executive Directors, particularly the Chairman, took on additional duties to support the management of the
Company starting November 2023, when Eric Wang resigned, through to the appointment of the interim CEO on 13 May
2024. No additional fees were paid for these additional duties over this time period.
1.
Principles used to determine the nature and amount of remuneration (continued)
Non-Executive Director Remuneration
In FY 2024, the proportion of fixed remuneration and at-risk long-term incentives were as follows;
REMUNERATION REPORT
ECOFIBRE LIMITED ANNUAL REPORT 2024 37
2. Details of remuneration (continued)
Short-term
benefits
Post-
employ-
ment
benefits
Long term
benefits
Share-based payments
Cash salary
and fees
Super-
annuation
Long
service
leave
Equity-
settled
shares
Equity-
settled
options
Total
$
$
$
$
$
$
2023
Non-Executive KMP
Chairman:
Vanessa Wallace
150,000
-
-
-
38,417
188,417
Directors:
Jon Meadmore (retired 20
February 2023)
49,018
-
-
-
(10,084)
38,934
Bruce Robinson
56,250
-
-
-
14,406
70,656
Michele Anderson
69,570
7,305
-
-
21,977
98,852
Mark Bayliss (appointed 1
September 2022)
61,969
-
-
-
21,977
83,946
Executive KMP:
CEO
Eric Wang
340,881
-
-
473,988
-
814,869
CFO:
Jonathan Brown
231,730
5,654
8,663
72,984
-
319,031
959,418
12,959
8,663
546,972
86,693
1,614,705
3. Service agreements
Remuneration and other terms of employment for executives are formalised in service agreements. The details of
these agreements, as at the end of FY24, or as at the date of retirement were as follows:
Name:
Eric Wang
Title:
Former Managing Director and Chief Executive Officer
Agreement commenced
/ ended:
Commenced: 8 December 2017
Ended: 28 November 2023
Details:
Base salary of US$220,000 per annum, and long term incentives
LTI:
7,200,000 shares are held by the ESS Trustee as potential LTI under the ESS and will
vest in tranches upon satisfaction of the following share price hurdles and earliest
vesting dates for each tranche. As at 28 November 2023 all three tranches of shares
lapsed, returning all shares to the ESS pool.
Share
tranches
Share Price Hurdle
Earliest Vesting
Date
2,400,000
Share price on ASX of at least $1.50 based on
a rolling 30 day volume weighted average
price (VWAP) during the period between 1
January 2022 and 31 December 2024
30 June 2022
2,400,000
Share price on ASX of at least $1.83 based on
a rolling 30 day VWAP during the period
between 1 January 2023 and 31 December
2024
30 June 2023
2,400,000
Share price on ASX of at least $2.17 based on
a rolling 30 day VWAP during the period
between 1 January 2024 and 31 December
2024
30 une 2024
REMUNERATION REPORT
38 ECOFIBRE LIMITED ANNUAL REPORT 2024
Name:
John Foley
Title:
Interim CEO
Agreement commenced
/ ended:
13 May 2024
5 August 2024
Details:
US$10,000 per week
Name:
Jonathan Brown
Title:
CFO and Joint Company Secretary
Agreement commenced:
8 December 2017
Details:
Base salary of US$165,760 per annum, to be reviewed every 12 months from the date of
commencement plus long-term incentives
LTI:
1,600,002 shares are held by the ESS Trustee as potential LTI under the ESS and will
vest in tranches upon satisfaction of the following share price hurdles and earliest vesting
dates for each tranche:
Share
tranches
Share Price Hurdle
Earliest Vesting
Date
800,001
Share price on ASX of at least $1.83 based on
a rolling 30 day VWAP during the period
between 1 January 2022 and 31 December
2024
31 July 2022
800,001
Share price on ASX of at least $2.17 based on
a rolling 30 day VWAP during the period
between 1 January 2024 and 31 December
2024
31 July 2024
4.
Additional disclosures relating to key management personnel
Post the end of the period, on 5 August 2024, Ulrich Tombuelt was appointed as CEO and Managing Director. The
material remuneration terms of his contract are as follows:
Name:
Ulrich Tombuelt
Title:
CEO & Managing Director
Agreement commenced:
5 August 2024
Details:
Base salary of US$300,000 per year
Tenure based Equity:
3 million shares upon appointment, vesting progressively over 3 years after first year
anniversary
Performance based equity:
Shares to be granted when certain market capitalization milestones are realized. Value
of share grant will equal 1-3% of value uplift upon achieving milestones. Milestones
are measured at any time In the year when the 30 day VWAP triggers share grant.
Ecofibre
Market
Capitalization
Milestone
$50m
$100m
$200m
$300m
$500m
$600m
Value Uplift
$25m
$50m
$100m
$100m
$200m
$100M
Share grant will equal % of value uplift
3%
3%
2%
2%
1%
1%
3.
Service agreements (continued)
REMUNERATION REPORT
ECOFIBRE LIMITED ANNUAL REPORT 2024 39
4.
Additional disclosures relating to key management personnel (continued)
KMP Shareholding as at June 30th, 2024
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at the start
of the year
Net purchased /
(sold)
Received on
exercising options
Balance at the end
of the year^
Ordinary shares
Vanessa Wallace
605,000
166,667
-
771,667
Michele Anderson
-
166,667
-
166,667
Bruce Robinson
30,000
166,667
-
196,667
Jonathan Brown
2,517,244
-
-
2,517,244
Eric Wang*
15,745,082
-
-
15,745,082
Mark Bayliss**
-
166,667
-
166,667
18,897,326
666,668
-
19,563,994
^ Where a director ceased to be a director throughout the year, “Balance at the end of the year” reflects the
balance of shares as at the date they ceased to be a director.
* Eric Wang ceased to be a member of the KMP, effective 28 November 2023.
** Mark Bayliss ceased to be a member of the KMP, effective 29 March 2024.
No shares were received as remuneration by the directors.
Non- Executive Option holding as at June 30th 2024
The number of options over unissued ordinary shares in the company held during the financial year by each director
and other members of key management personnel of the consolidated entity, including their personally related parties,
is set out below:
Balance at the
start of the
financial year
Granted as
compensation Expired/forfeited
Balance at the end
of the financial year
Options over ordinary shares
Vanessa Wallace
386,001
-
-
386,001
Bruce Robinson
144,750
-
-
144,750
Michele Anderson
628,491
-
-
628,491
Mark Bayliss
628,491
-
(628,491)
-
1,787,733
-
(628,491)
1,159,242
Post Mark Bayliss’s retirement on 29 March 2024, his 628,491 options lapsed.
None of the options granted are exercisable at 30 June 2024.
Option holder
Value of options granted
during the year
Value of options exercised
during the year
Value of options lapsed
during the year
$
$
$
Mark Bayliss
-
-
107,472
Details of these options are as follows:
Grant date
Expiry date
Exercise price
Balance at the end of the year
1 Dec 2021
7 Oct 2024
$0.83
530,751
1 Dec 2022
7 Oct 2025
$0.22
628,491
There were no other options over unissued ordinary shares apart from the 1,159,242 held by directors. No person
entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the
company or of any other body corporate.
REMUNERATION REPORT
40 ECOFIBRE LIMITED ANNUAL REPORT 2024
Details of shareholder returns are provided below:
Unit
2020
2021
2022
2023
2024
Share price at year end
$/share
2.22
0.68
0.20
0.21
0.03
Quantity of shares
Qty
305,619,401
326,696,691
335,510,772
335,744,765
365,629,116
Market capitalisation
$’000
678,475
222,154
67,102
70,506
10,969
Revenue
$’000
50,717
28,793
30,220
32,510
29,690
Net profit/(loss) after tax $’000
13,156
(6,986)
(14,670)
(39,913)
(45,152)
Net assets
$’000
63,001
111,797
109,942
74,647
40,968
Employee share scheme (ESS)
The Board believes that employees should be given the opportunity to become shareholders in our business, and
that the share scheme helps engage, retain and motivate employees over the long term, and to encourage alignment
with the performance of the Group.
The employee share scheme is an LTI designed to help the Group attract and retain the best staff as we deliver our
long-term strategy. These shares will be issued to employees from shares already held by the employee share trust
(EST) if employees meet time-based, performance based or time and performance based, vesting hurdles. The time-
based hurdles are 1, 2, 3 or 4 years, typically depending on the seniority of the employee.
Key terms of the ESS are:
How is it paid?
Employees are eligible to receive shares if they meet certain time-based, performance-
based or time and performance-based vesting hurdles.
How can employees
earn, and how is
performance
measured?
Different vesting conditions are offered to various employees. The conditions include:
a.
Share price hurdles – earned when share price exceeds a certain level on a 30
days volume weighted average price (VWAP) basis within a certain period.
b. Profit-based hurdles – earned when Group or business unit profitability achieve
target levels.
c. Sales target hurdle– earned when achieving certain sales, gross margin or volume
targets.
d. Time-based hurdles – earned when employee remains with the Group within 1 to 4
years.
When is performance
measured?
The performance measures are tested at the date specific in each offer document.
What happens if an
employee leaves?
If an employee resigns or is terminated for cause, any unvested LTI under the ESS are
typically forfeited, unless otherwise determined by the Board.
If an employee ceases employment during the performance period by reason of
redundancy, ill health, death, or other circumstances approved by the Board, the
employee may receive a pro-rata number of unvested shares based on achievement of
the vesting conditions over the performance period up to the date of ceasing
employment (subject to Board discretion).
This concludes the remuneration report, which has been audited.
REMUNERATION REPORT
ECOFIBRE LIMITED ANNUAL REPORT 2024 41
Level 22, 307 Queen Street, Brisbane QLD 4000
GPO Box 563, Brisbane QLD 4001
+61 7 3229 5100
qld.info@williambuck.com
williambuck.com
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
Audit Independence Declaration
Lead Auditor’s Independence Declaration under Section 307C of
the Corporations Act 2001
To the directors of Ecofibre Limited
As lead auditor for the audit of Ecofibre Limited for the year ended 30 June 2024, I declare that, to the best
of my knowledge and belief, there have been:
— no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Ecofibre Limited and the entities it controlled during the year.
William Buck (Qld)
ABN 21 559 713 106
M J Monaghan
Partner
Brisbane, 16 September 2024
42 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED ANNUAL REPORT 2024 43
FINANCIAL
STATEMENTS
4.
Consolidated Statement of Profit or Loss
For the year ended 30 June 2024
2024
2023
Note
$’000
$’000
Revenue
27,984
30,642
Direct costs
5
(16,970)
(20,065)
Gross profit
11,014
10,577
Other income (expense)
4
(26,109)
(2,467)
Other operating expenses
5
(25,475)
(32,932)
Interest expense
(3,056)
(2,876)
Profit (loss) before income tax from continuing operations
(43,626)
(27,698)
Income tax credit (expense)
6
314
(10,007)
Profit (loss) after income tax from continuing operations
(43,312)
(37,705)
Profit (loss) after income tax from discontinued operations
13
(1,840)
(2,208)
Profit (loss) after income tax for the period
(45,152)
(39,913)
Profit (loss) for the period is attributable to:
Non-controlling interest
(808)
-
Members of the company
(44,344)
(39,913)
(45,152)
(39,913)
Earnings (loss) per share from continuing operations:
Basic earnings (loss) per share - cents
(12.02)
(11.23)
Diluted earnings (loss) per share - cents
(12.02)
(11.23)
Earnings (loss) per share from discontinued operations:
Basic earnings (loss) per share - cents
(0.51)
(0.66)
Diluted earnings (loss) per share - cents
(0.51)
(0.66)
Total earnings (loss) per share:
Basic earnings (loss) per share - cents
(12.53)
(11.89)
Diluted earnings (loss) per share - cents
(12.53)
(11.89)
The above consolidated statement of profit or loss should be read in conjunction with the accompanying notes
44 ECOFIBRE LIMITED ANNUAL REPORT 2024
Consolidated Statement of Other Comprehensive Income
For the year ended 30 June 2024
2024
2023
$’000
$’000
Profit (loss) after income tax
(45,152)
(39,913)
Other comprehensive profit (loss) for the year:
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign controlled entities
34
(945)
2,967
Total comprehensive profit (loss) for the year
(46,097)
(36,946)
Total comprehensive profit (loss) is attributable to:
Non-controlling interest
(808)
-
Members of the company
(45,289)
(36,946)
(46,097)
(36,946)
The above consolidated statement of other comprehensive income should be read in conjunction with the
accompanying notes
ECOFIBRE LIMITED ANNUAL REPORT 2024 45
Consolidated Statement of Financial Position
As at 30 June 2024
2024
2023
Note
$’000
$’000
CURRENT ASSETS
Cash and cash equivalents
7
6,737
7,289
Trade and other receivables
8
3,082
2,885
Inventories
9
2,630
9,380
Biological assets
10
576
568
Other current assets
11
346
1,455
Tax recoverable
61
51
Land and building held for sale
12
23,941
-
TOTAL CURRENT ASSETS
37,373
21,628
NON-CURRENT ASSETS
Intangible assets
14
25,275
53,680
Right-of-use assets
15
-
305
Property, plant and equipment
16
8,599
43,121
TOTAL NON-CURRENT ASSETS
33,874
97,106
TOTAL ASSETS
71,247
118,734
CURRENT LIABILITIES
Trade and other payables
17
4,750
5,113
Lease liabilities
15
-
335
Tax payable
36
15
Borrowings
18
15,993
1,000
TOTAL CURRENT LIABILITIES
20,779
6,463
NON-CURRENT LIABILITIES
Lease liabilities
15
-
92
Contingent consideration
33
-
11,518
Deferred tax liabilities
19
-
407
Borrowings
18
9,500
25,607
TOTAL NON-CURRENT LIABILITIES
9,500
37,624
TOTAL LIABILITIES
30,279
44,087
NET ASSETS
40,968
74,647
EQUITY
Issued capital
21
120,811
115,673
Other equity
22
9,924
865
Foreign currency translation reserve
34
3,832
4,777
Accumulated losses
(95,911)
(65,917)
Share capital reserve
-
14,300
Share-based payment reserve
30
1,307
4,932
Equity attributable to the members of the company
39,963
74,630
Non-controlling interest
22
1,005
17
TOTAL EQUITY
40,968
74,647
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
46 ECOFIBRE LIMITED ANNUAL REPORT 2024
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
Note
Issued
capital
Other
equity
Share-
based
payment
reserve
Share
capital
reserve
Foreign
currency
translation
reserve
Accumulated
gains (losses)
Non-
controlling
interest
Total
Consolidated
$'000 $'000
$'000
$’000
$'000
$'000
$'000
$'000
Balance 30 June 2022
115,347
-
4,489
14,300
1,810
(26,004)
-
109,942
Loss for the year
-
-
-
-
-
(39,913)
-
(39,913)
Other comprehensive
income
-
-
-
-
2,967
-
-
2,967
Total comprehensive
income for the year
-
-
-
-
2,967
(39,913)
- (36,946)
Transactions with owners in their capacity as owners:
Shares issued
-
865
-
-
-
-
17
882
Share Options exercised
-
-
-
-
-
-
-
-
Share-based payments
346
-
443
-
-
-
-
789
Share issue cost
(20)
-
-
-
-
-
-
(20)
Balance 30 June 2023
115,673
865
4,932
14,300
4,777
(65,917)
17
74,647
Loss for the year
-
-
-
-
-
(44,344)
(808)
(45,152)
Other comprehensive
income
-
-
-
-
(945)
-
-
(945)
Total comprehensive
income for the year
-
-
-
-
(945)
(44,344)
(808)
(46,097)
Transactions with owners in their capacity as owners:
Shares issued
5,339
-
-
-
-
-
-
5,339
Share Options cancelled
-
-
(50)
-
-
50
-
-
Contingent consideration
written off
33
-
-
(14,300)
-
14,300
-
-
Change in proportion held
by non-controlling interest
-
9,059
-
-
-
-
1,796
10,855
Share-based payments
166
-
(3,575)
-
-
-
-
(3,409)
Share issue cost
21
(367)
-
-
-
-
-
-
(367)
Balance 30 June 2024
120,811
9,924
1,307
-
3,832
(95,911)
1,005
40,968
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
ECOFIBRE LIMITED ANNUAL REPORT 2024 47
Consolidated Statement of Cash Flows
For the year ended 30 June 2024
2024
2023
Note
$’000
$’000
Cash flows from operating activities
Receipts from customers
28,749
33,855
Government grants
730
2,629
Payments to suppliers and employees
(40,943)
(45,012)
Interest received
56
165
Interest paid
(2,569)
(2,355)
Income tax paid
(40)
3,808
Net cash flows used in from operating activities
26
(14,017)
(6,910)
Cash flows from investing activities
Payments for property, plant and equipment
(3,212)
(1,708)
Payments for business acquisition
-
(399)
Receipt from sale of property, plant and equipment
241
495
Receipt from sale of discontinued operations
2,000
-
Other
58
32
Net cash flows used in investing activities
(913)
(1,580)
Cash flows from financing activities
Proceeds from borrowings
-
9,170
Repayment of borrowings
18
(1,000)
(2,000)
Repayment of lease liabilities
15
(275)
(405)
Proceeds from issue of shares
21,22
10,854
871
Receipt from sale of investment in subsidiary
22
5,130
-
Share issue transaction costs
(367)
-
Net cash flows generated from financing activities
14,342
7,636
Net decrease in cash and cash equivalents held
(588)
(854)
Cash and cash equivalents at the beginning of the financial year
7,289
7,251
Effect of movement in exchange rates on cash held
36
892
Cash and cash equivalents at the end of the financial year
7
6,737
7,289
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
48 ECOFIBRE LIMITED ANNUAL REPORT 2024
Notes to the financial statements
1.
Material accounting policy information
Ecofibre Limited ('the Company' or ‘Ecofibre’) is a for profit company limited by shares incorporated in Australia.
The nature of the operations and principal activities of the Group are described in the Directors’ Report.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued
by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Basis of preparation
The financial statements are general purpose financial statements which 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.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial
statements containing relevant and reliable information about transactions, events and conditions. Compliance
with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards. The following is a summary of the material accounting policies
adopted by the Group in the preparation of the financial statements. The accounting policies have been
consistently applied, unless otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs modified by
the revaluation of selected non-current assets, financial assets, financial liabilities and biological assets for which
fair value basis of accounting has been applied.
The financial statements are presented in Australian dollars and all values are rounded to the nearest thousand
dollars in accordance with ASIC Corporation Instrument 2016/191 unless otherwise stated.
a) Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in note 30.
ECOFIBRE LIMITED ANNUAL REPORT 2024 49
NOTES TO THE FINANCIAL STATEMENTS
1.
Material accounting policy information (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated
entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the consolidated entity.
c) Foreign currency translation
The financial statements are presented in Australian dollars, which is Ecofibre's functional and presentation
currency.
Foreign currency transactions and balances
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in
foreign currencies are recognised in profit or loss.
Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at
historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items
measured at fair value are reported at the exchange rate at the date when fair value was determined.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the
extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in
the statement of profit or loss or statement of other comprehensive income.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at
the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using
the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All
resulting foreign exchange differences are recognised in other comprehensive income through the foreign
currency reserve in equity.
The foreign currency reserve is recognised in profit or loss if the foreign operation or net investment is disposed.
b) Principles of consolidation
The consolidated financial statements incorporate the results and assets and liabilities of all entities controlled
by Ecofibre Limited ("parent entity") as at 30 June 2024 and results of all controlled entities for the year then
ended. The parent entity and its controlled entities together are referred to in the financial statements as "the
consolidated entity" or "the Group". Subsidiaries are all those entities over which the parent entity has control.
The parent entity controls an entity when it is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through the power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the parent entity.
Where controlled entities have entered the group during the year, the financial performance of those entities is
included only for the period of the year that they were controlled.
50 ECOFIBRE LIMITED ANNUAL REPORT 2024
NOTES TO THE FINANCIAL STATEMENTS
1.
Material accounting policy information (continued)
d)
Revenue recognition
The consolidated entity recognised 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.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other contingent
events. Such estimates are determined using either the 'expected value' or 'most likely amount' method. The
measurement of variable consideration is subject to a constraining principle whereby revenue will only be
recognised to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue
recognised will not occur. The measurement constraint continues until the uncertainty associated with the
variable consideration is subsequently resolved. Amounts received that are subject to the constraining principle
are recognised as a refund liability.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery of the
goods, the risks and rewards are transferred to the customer and there is a valid sales contract. Amounts
disclosed as revenue are net of sales rebates, returns and trade discounts.
Bill-and-hold arrangements
Bill-and-hold arrangements occur when there is a sale to a customer and the customer requests the consolidated
entity to warehouse its products for a period of time until it can accept delivery or arrange transfer of the products
to third parties. Revenue from bill-and-hold arrangements is recognised when the customer obtains title and
acknowledges control of a product.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government grants
Government grants relating to costs are recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
ECOFIBRE LIMITED ANNUAL REPORT 2024 51
e)
Income Tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities
attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where
applicable.
A charge for current income tax expense is recognised based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively
enacted throughout the reporting period.
Deferred tax is accounted for using the liability method in respect of temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax
will be recognised from the initial recognition of an asset or liability, excluding a business combination, where
there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the statement of profit or loss and other comprehensive income
except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be
available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the company and
consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and comply
with the conditions of deductibility imposed by the law.
f) Discontinued operations
A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as
held for sale and that represents a separate major line of business or geographical area of operations, is part of
a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired
exclusively with a view to resale. The results of discontinued operations are presented separately on the face of
the statement of profit or loss and other comprehensive income.
g) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to
be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted
from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets
are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the
reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months
after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
1.
Material accounting policy information (continued)
NOTES TO THE FINANCIAL STATEMENTS
52 ECOFIBRE LIMITED ANNUAL REPORT 2024
NOTES TO THE FINANCIAL STATEMENTS
1.
Material accounting policy information (continued)
h) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses. Trade receivables are generally due for
settlement within 60 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a
lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped
based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
i)
Inventories
Inventories and agricultural produce are valued at the lower of cost and net realisable value on a standard cost
basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes. Costs
of purchased inventory are determined after deducting rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
j)
Biological assets
Biological assets are measured on initial recognition and at the end of each reporting period at their fair value less
costs to sell.
k) Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they
might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a cash-generating unit.
ECOFIBRE LIMITED ANNUAL REPORT 2024 53
l)
Property, plant and equipment
Plant and equipment
Plant and equipment is measured on the cost basis less accumulated depreciation and impairment losses.
The carrying value of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the assets' employment and subsequent disposal. The expected net cash
flows have been discounted to their net present values in determining recoverable amounts.
Depreciation
Depreciation is calculated on the basis of writing off the net cost of each item of property, plant and equipment
over its expected useful life to the entity. Estimates of remaining useful lives are made on a regular basis for all
assets, with annual reassessments for major items. The expected useful lives vary from 3 to 40 years.
m) Intangible assets
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually
for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and
is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss
and are not subsequently reversed.
n) Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
1.
Material accounting policy information (continued)
NOTES TO THE FINANCIAL STATEMENTS
54 ECOFIBRE LIMITED ANNUAL REPORT 2024
NOTES TO THE FINANCIAL STATEMENTS
1.
Material accounting policy information (continued)
o) Employee entitlements
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave, expected
to be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees’
services up to the reporting date and are measured on the basis of when the benefit is expected to be settled.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of
the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together
with non-vesting conditions that do not determine whether the consolidated entity receives the services that
entitle the employees to receive payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each
reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on
which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated
as follows:
•
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied
by the expired portion of the vesting period.
•
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability
at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the
cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided
all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases
the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over
the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the
cancelled and new award is treated as if they were a modification.
ECOFIBRE LIMITED ANNUAL REPORT 2024 55
1.
Material accounting policy information (continued)
p) Cash and cash equivalents
For purposes of the statement of cash flows, cash includes deposits at call with financial institutions and other
highly liquid investments with short periods to maturity which are readily convertible to cash on hand and are
subject to an insignificant risk of changes in value, net of outstanding bank overdrafts.
q) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participants at the measurement date and assumes that the transaction
will take place either in the principal market or in the absence of a principal market, in the most advantageous
market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based
on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which
sufficient data is available to measure fair value, are used, maximising the use of relevant observable inputs and
minimising the use of unobservable inputs.
r) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Ecofibre Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
s) Changes in ownership interests
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any
difference between the amount of the adjustment to non-controlling interests and any consideration paid or
received is recognised in a separate reserve within equity attributable to owners of Ecofibre Limited.
t) New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30
June 2024. The consolidated entity has assessed the impact of any new or amended Accounting Standards and
Interpretations, and concluded that they would not have any material impact.
NOTES TO THE FINANCIAL STATEMENTS
56 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
Critical accounting estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various
factors, including expectations of future events, management believes to be reasonable under the
circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results.
The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be
recovered principally through a sale transaction rather than through continued use. They are measured at the
lower of their carrying amount and fair value less costs of disposal. For non-current assets or assets of disposal
groups to be classified as held for sale, they must be available for immediate sale in their present condition and
their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets
of disposal groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair
value less costs of disposal of a non-current assets and assets of disposal groups, but not in excess of any
cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other
expenses attributable to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are
presented separately on the face of the statement of financial position, in current assets. The liabilities of disposal
groups classified as held for sale are presented separately on the face of the statement of financial position, in
current liabilities.
Going concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and settlement of liabilities in the normal course of business.
The Group incurred a loss for the year of $45.152m (2023: $39.913m) and net cash outflows from operations
were $14.017m (2023: $6.910m). As at 30 June 2024, cash and cash equivalents were $6.737m including cash
in EOF Bio ($2.4m). Total cash at 30 June 2023 was $7.289m.
The above factors indicate a material uncertainty exists which may cast significant doubt as to whether the Group
will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the
normal course of business and at the amounts stated in the financial report.
ECOFIBRE LIMITED ANNUAL REPORT 2024 57
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
Critical accounting estimates and judgements (continued)
Going concern (continued)
The directors plan to continue the Group’s operations on the basis outlined below and believe there will be
sufficient funds for the Group to meet its obligations and liabilities for at least twelve (12) months from the date
of this report based on the Group implementing its Cash Positive Plan.
The Group remains focused on returning the business to positive operating cashflows in the short term, reducing
financial risk in the medium term, and delivering on the four key priorities of its Cash Positive Plan:
1. Focus on core businesses
2. Reduce operating costs and debt
3. Deliver ongoing revenue growth in Ecofibre Advanced Technologies (EAT)
4. Realise value in EOF-Bio
The directors believe the Group is able to continue as a going concern after consideration of both the above and
the following factors:
•
Supported by Houston-based investment bank Chiron Financial LLC (Chiron), repayment dates for Nubridge
Commercial Lending LLC (Nubridge) and James & Cordelia Thiele Trust Fund (Thiele) loans were successfully
extended from July 2024 to 1 January 2025.
•
Over the remainder of 2024, Chiron will work with Ecofibre to renegotiate and extend the Company’s term
loans and secure new working capital for its operations. The term loans currently outstanding are summarised
below:
-
Nubridge - USD10.0m repayable 1 January 2025
-
Thiele - AUD1.0m repayable 1 January 2025, AUD6.0m repayable 15 July 2025
-
Lambert Superannuation Fund - AUD3.5m repayable 15 July 2025
•
In 1H24, EAT installed new equipment for the production of NEOLASTTM elastomer yarn for Under
Armour. Commercial production commenced in late 4Q24 and the business is targeting full capacity utilisation
by the end of 2Q25. In addition, EAT is targeting full utilisation of its existing turf yarn production line by 3Q25,
and the installation, commissioning and full utilisation of a 2nd turf yarn production line by late 4Q25. The
above are expected to grow operating cash inflows to the business.
•
On 5 August 2024 the Company appointed an experienced textiles executive, Mr Ulrich ‘Úli’ Tombuelt as
Managing Director and CEO of the Group and President of EAT. Mr Tombuelt will lead an experienced team to
deliver the Company’s strategy and cash positive plan.
The financial report does not include any adjustments relating to the recoverability and classification of recorded
asset amounts or liabilities that might be necessary should the Group not continue as a going concern and meet
its debts as and when they become due and payable.
Share-based payment transactions
The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using the
Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were
granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have
no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact
profit or loss and equity.
Provision for impairment of inventories
The provision for impairment of inventories requires a degree of estimation and judgement. The level of the
provision is assessed by taking into account recent and expected future sales experience, production
requirements, the age of inventories and other factors that affect inventory obsolescence.
58 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
Critical accounting estimates and judgements (continued)
Taxation
There are many transactions and calculations undertaken during the ordinary course of business for which the
ultimate tax determination is uncertain. The consolidated entity recognises liabilities or receivables for anticipated
tax issues based on estimates of whether additional taxes will be due or refundable. Where the final tax outcome
of these matters is different from the amounts that were actually recorded, such differences will impact the
current and deferred tax positions in the period in which such determination is made.
Deferred tax assets are recognised for deductible temporary differences and carried forward tax losses where
the consolidated entity considers it is probable that future taxable amounts will be available to utilise those
temporary differences and losses.
Biological assets
Biological assets, in the form of planted hemp crops, are accounted for under AASB 141 Agriculture, which requires
that the assets be measured at fair value less costs to sell. Fair value is determined using a range of judgemental
assumptions including cost per area (acre or hectare), total area planted and percentage of maturity of the crops
based on estimated harvest dates.
Goodwill
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate whether
goodwill has suffered any impairment, in accordance with the accounting policy stated in note 1. The recoverable
amounts of cash-generating units have been determined based on value-in-use calculations. These calculations
require the use of assumptions, including estimated discount rates based on the current cost of capital and
growth rates of the estimated future cash flows.
ECOFIBRE LIMITED ANNUAL REPORT 2024 59
3.
Operating segments
Identification of reportable operating segments
The consolidated entity is organised into six segments based on differences in products and services provided:
polymers yarns and textiles (Ecofibre Advanced Technologies), nutraceuticals (Ananda Health), hemp seed
genetics (Ecofibre Genetics), group corporate functions, (Corporate), clinical-stage biotechnology (EOF Bio),
and hemp food (Ananda Food). This includes two new segments identified since the last reporting period (Seed
and EOF Bio). The corresponding items of segment information have been restated where necessary for these
new segments.
These segments are based on the internal reports that are reviewed and used by the Board of Directors (BOD)
in assessing performance and in determining the allocation of resources.
The BOD reviews the profit or loss before income tax for each segment. The accounting policies adopted
for internal reporting to the BOD are consistent with those adopted in the financial statements.
Types of products and services
The principal products and services of each of the operating segments are as follows:
Ecofibre Advanced
Technologies
Advanced manufacturing business with specialist capabilities in performance yarn
extrusion, polymer compounding and textiles manufactured in the United States
Ananda Health
Production and sale of hemp related and other nutraceutical products in the United
States and Australia
Ecofibre Genetics
Supply of seed genetics to the hemp fibre and grain industry in the US and Australia
Ecofibre Corporate
Group corporate and shared service functions
EOF Bio Inc.
Majority owned, US-based clinical-stage biotechnology company focused on a new
generation of patient-centered cannabinoid-based drugs that improve health
outcomes and enhance quality of life, starting with women’s health and
endometriosis.
Ananda Food
(discontinued)
Production and sale of hemp related food and pet products primarily in Australia
Intersegment transactions
Intersegment transactions are made at arms-length market rates and are eliminated on consolidation.
Intersegment receivables and payables
Intersegment transactions are initially recognised at the consideration received. Intersegment receivables and
payables that earn or incur non-market interest are not adjusted to fair value based on market interest rates.
Intersegment receivables and payables are eliminated on consolidation.
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
60 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
Operating segments (continued)
Operating segment information
a)
Segment performance
Consolidated - 2024
Ecofibre
Advanced
Techno-
logies
$’000
Ananda
Health
$’000
Ecofibr
e
Geneti
cs
$’000
Ecofibre
Corporate
$’000
EOF Bio
$’000
Ananda
Food
(discon-
tinued)
$’000
Total
$’000
Revenue
Sales to external customers
16,980
10,005
999
-
-
1,706
29,690
Total sales revenue
16,980
10,005
999
-
-
1,706
29,690
Government grant
-
-
-
-
-
71
71
Foreign exchange gain (loss)
(22)
(5)
30
(224)
-
(24)
(245)
Interest income
-
-
-
56
-
-
56
Other income
204
36
500
12,036
6
-
12,782
Total revenue and other
income
17,162
10,036
1,529
11,868
6
1,753
42,354
Impairment loss – inventory
(1,671)
(2,872)
(49)
-
-
(2)
(4,594)
Impairment loss – equipment
& intangible assets
(30,061)
-
-
(8,665)
-
-
(38,726)
Loss on disposal of
subsidiary
-
-
-
-
-
(831)
(831)
Other expenses
(18,220)
(11,562)
(1,109)
(4,825)
(5,193)
(2,760)
(43,669)
Loss before income tax
(32,790)
(4,398)
371
(1,622)
(5,187)
(1,840)
(45,466)
Consolidated - 2023
Revenue
Sales to external customers
17,333
12,991
317
-
-
1,869
32,510
Intersegment sales
-
-
-
-
-
99
99
Total sales revenue
17,333
12,991
317
-
-
1,968
32,609
Government grant
-
-
9
-
-
94
103
Foreign exchange gain (loss)
(3)
(24)
(6)
(446)
-
15
(464)
Interest income
-
20
-
141
-
-
161
Other income
20
27
-
3,603
-
15
3,665
Total revenue and other
income
17,350
13,014
320
3,298
-
2,092
36,074
Impairment loss – inventory
(1,679)
(4,804)
-
-
-
(58)
(6,541)
Impairment loss – equipment
& intangible assets
(4,035)
(1,688)
-
(86)
-
(9)
(5,818)
Other expenses
(20,297)
(18,781)
(1,161)
(9,198)
-
(4,085)
(53,522)
Intersegment purchases
-
-
-
-
-
(48)
(48)
Segment profit (loss) before
income tax
(8,661)
(12,259)
(841)
(5,986)
-
(2,108)
(29,855)
Intersegment eliminations
(51)
Loss before income tax
(29,906)
ECOFIBRE LIMITED ANNUAL REPORT 2024 61
3.
Operating segments (continued)
b)
Segment assets and liabilities
Discontinued
operations / assets
held for sale
Consolidated - 2024
Ecofibre
Advanced
Techno-
logies
$’000
Ananda
Health
$’000
Ecofibr
e
Geneti
cs$’0
00
Ecofibre
Corporate
$’000
EOF
Bio
$’000
Ananda
Food
$’000
Land &
building
$’000
Total
$’000
Assets
Segment assets
36,991
2,207
1,069
302
-
-
23,941
64,510
Unallocated assets:
Cash and cash
equivalents
6,737
Total assets
71,247
Liabilities
Segment liabilities
1,213
681
877
1,226
789
-
-
4,786
Unallocated liabilities:
Borrowings
25,493
Total liabilities
30,279
Consolidated - 2023
Assets
Segment assets
67,957
7,138
506
837
-
2,295
32,712
111,445
Unallocated assets:
Cash and cash
equivalents
7,289
Total assets
118,734
Liabilities
Segment liabilities
2,142
1,413
1,535
12,510
-
(120)
-
17,480
Unallocated liabilities:
Borrowings
26,607
Total liabilities
44,087
c)
Geographical information
Sales
to external customers
Geographical
non-current assets
30 June 2024
$’000
30 June 2023
$’000
30 June 2024
$’000
30 June 2023
$’000
Australia
Discontinued
1,706
1,868
-
-
Continuing
1,306
1,249
7
1,371
United States of America
Discontinued
-
-
-
-
Continuing
26,678
29,393
33,867
95,735
29,690
32,510
33,874
97,106
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
62 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.
Other income / (expense) from continuing operations
2024
2023
$'000
$'000
Government grant and tax incentives
-
10
Foreign exchange gain (loss)
(219)
(479)
Interest
56
161
Impairment loss – equipment *
(3,051)
(2,106)
Impairment loss – building **
(8,665)
-
Impairment loss – goodwill (note 14)
(26,820)
-
Impairment loss – other intangibles ***
(191)
(3,703)
Contingent consideration earnout extension
-
3,484
Contingent consideration written off (note 33)
12,036
-
Other income
745
166
(26,109)
(2,467)
* FY24 Equipment impairment loss relates to the write down of a pyrolysis machine and multi-component yarn
extrusion machine held by Ecofibre Advanced Technologies ($3.0m).
The FY23 Equipment impairment loss related to closure of the Hemp Black garment business, as well as various
fixed and intangible assets owned by Ananda Health in line with lower capacity utilisation at its production facility
in Georgetown, Kentucky.
** FY24 Building impairment relates to the difference between book value, and an opinion of value prepared by
an independent appraiser for the Georgetown, Kentucky production facility, which was held for sale as at 30
June 2024. In accordance with accounting standards, the financial statements do not reflect any increase in
value above book value potentially applicable to the two properties in Greensboro, North Carolina.
*** impairment of other intangibles relate to a customer list previously acquired by Ecofibre Advanced
Technologies.
ECOFIBRE LIMITED ANNUAL REPORT 2024 63
5.
Expenses from continuing operations
2024
2023
$'000
$'000
a)
Direct costs
Costs of goods sold
12,264
13,187
Impairment loss – inventory*
4,592
6,506
Other inventory write downs
114
372
16,970
20,065
* FY24 Inventory impairment loss was recognised to reduce the carrying value of inventories to net realisable
value, including:
-
Ananda Health: $1.1m for cannabinoid extracts written down to estimated market value if sold as is rather
than processed into finished goods, $1.7m for slow moving, obsolete or expired inventory, and
-
Ecofibre Advanced Technologies: $1.7m for various polymers and yarns
2024
2023
b)
Other operating expenses
$'000
$'000
Employees and contractors
12,991
14,399
Share based payments (note 30)
(3,122)
714
Sales and marketing
903
1,226
Travel and accommodation
474
608
Equipment modification and maintenance
1,093
1,202
Short-term and low value lease payments
244
264
Legal fees and compliance
3,718
1,990
Accounting and audit
461
433
Depreciation and amortisation
2,226
3,912
Research and development
2,884
4,656
Bad and doubtful debts
151
11
Other
3,452
3,517
25,475
32,932
6.
Income tax
a)
The aggregated amount of income tax attributable to the financial year differs from the prima facie amount
calculated on the operating profit. The difference is reconciled as follows:
Profit/ (loss) before income tax
(45,466)
(29,906)
Prima facie tax (benefit) / tax on (loss) / profit from ordinary activities
before income tax at 30% (2023: 30%)
(13,640)
(8,972)
Adjustment for foreign tax rates
651
317
Tax effect of permanent differences:
-
Share based payments
-
26
-
Research and development expenses
10
570
-
COVID-19 government assistance
-
-
-
Know-how amortisation
-
(361)
-
Foreign witholding taxes
-
29
-
Contingent consideration
127
(687)
-
Tax effect of inter-entity eliminations
(481)
5,548
-
Other
2,451
156
Change in opening deferred taxes resulting from change in tax rate
-
-
R & D tax rebate received
202
(869)
Currency conversion differences upon consolidation
-
-
Tax over provided in prior period
442
(200)
Deferred tax asset written off
-
14,450
Current year losses for which no DTA is recognised
9,924
-
Income tax (benefit)/ expense
(314)
10,007
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
64 ECOFIBRE LIMITED ANNUAL REPORT 2024
6.
Income tax (continued)
b)
Income tax expense
2024
2023
$'000
$'000
Current tax
161
248
Deferred tax - origination and reversal of temporary differences
(882)
9,959
Under/(over) provision from previous years
-
Current tax
(68)
1
-
Deferred tax
475
(201)
Aggregate income tax expense
(314)
10,007
c)
Franking credits
Franking credits available for the subsequent financial year amount to $nil (2023 - $nil). This represents
the balance of the franking account as at the end of the financial year adjusted for franking credits that will
arise from the payment of any income tax payable as at the end of the year.
The Group has significant carried forward losses available in Australia and the United States which are able to be
used to offset future taxable income in both countries. Nevertheless the value of these losses and other timing
difference are no longer recognised in the Consolidated Statement of Financial Position as a Deferred Tax Asset
pursuant to the requirements of AASB 112 Income Taxes.
The Group will continuously assess the Deferred Tax Asset and make any necessary adjustments based on
changes in circumstances and tax legislation.
The group has $27,386k of income tax losses to utilise in Australia and $34,550k of income tax losses to utilise
in the USA. An asset has not been recognised in respect of these tax losses at 30 June 2024.
2024
2023
7.
Cash and cash equivalents
$'000
$'000
Cash at bank
6,537
6,942
Term deposits and other cash equivalents
200
347
6,737
7,289
ECOFIBRE LIMITED ANNUAL REPORT 2024 65
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024
2023
$'000
$'000
8.
Trade and other receivables
Trade debtors
3,145
2,842
Allowance for expected credit losses
(94)
(87)
GST receivable
31
130
3,082
2,885
Allowance for expected credit losses
The consolidated entity has recognised a loss of $136,000 (2023: loss of $11,000) from continuing operations
in the profit or loss in respect of the expected credit losses for the year.
Movement in the allowance for expected credit losses are as follows:
Opening balance
87
119
Additional provisions recognised
76
32
Receivables written off during the year as uncollectable
(19)
(48)
Unused amounts reversed
(50)
(16)
Closing balance
94
87
9.
Inventories
Finished goods
1,587
2,130
Work in progress
2,156
3,314
Raw materials
2,975
4,399
Provision for impairment
(4,088)
(463)
2,630
9,380
Summary of inventory by segment:
Ecofibre Advanced Technologies
1,182
2,769
Ananda Health
1,322
4,581
Ananda Food
-
1,964
Ecofibre Genetics
126
66
2,630
9,380
10. Biological assets
Crops planted
576
568
The risk of crop failure due to weather conditions is managed through planting at different locations and times.
Reconciliation of biological assets:
2024
2023
$'000
$'000
Crops planted at 1 July
568
579
Harvested and transferred to raw material inventory
(568)
(579)
Crops planted
576
568
Balance at 30 June
576
568
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
66 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024
2023
11.
Other current assets
$'000
$'000
Employee retention credit grant
-
654
Prepayments
326
711
Other
20
90
346
1,455
12. Assets held for sale
In FY24 the Board made the decision to market the Company’s three freehold properties in the United States
for sale to investors, subject to leaseback on terms to be negotiated, in order to repay a USD10m secured
loan from Nubridge Commercial Lending LLC.
The Company’s properties are expected to be worth more than the loan value. In particular, the market value
of the two properties in Greensboro, North Carolina is expected to be significantly higher than book value,
offset by a lower market value for the property in Georgetown, Kentucky. As indicated in Note 4 of the financial
statements, an $8.7m impairment loss has been recorded to account for the difference between fair value
less costs of disposal and book value for the property in Georgetown, Kentucky. Assets held for sale are
carried at the lower of these two amounts.
Subsequent to the end of the financial year, the Board engaged Houston-based investment bank Chiron
Financial LLC to provide advice on monetising assets, reducing financing risk and funding growth across its
businesses, which may include renegotiation, consolidation and extension of existing or new loan facilities.
The value of the assets held for sale are as follows:
2024
$'000
Land and building held for sale
23,941
ECOFIBRE LIMITED ANNUAL REPORT 2024 67
13. Discontinued operations
Description:
On 28 March 2024, Ecofibre Limited completed the sale of hemp food and animal products business of
Ananda Food Pty Ltd to a wholly owned subsidiary of Elixinol Wellness Limited. The Company received cash
consideration of $2m and recognised a loss of $0.8m in relation to the sale. An additional payment of up to
$1.0m may be received subject to cat litter product sales between 1 April 2024 and 30 June 2025. As per
AASB9 Financial Instruments, no amount has been recognised as a receivable in relation to the additional
payment as at 30 June 2024.
Financial performance information:
2024
2023
$'000
$'000
Revenue
1,706
1,868
Direct costs
(1,279)
(1,706)
Gross profit
427
162
Other income (expense)
46
114
Other operating expenses
(1,457)
(2,439)
Interest expense
(25)
(45)
Profit (loss) before income tax of discontinued operation
(1,009)
(2,208)
Loss on disposal before income tax
(831)
Income tax expense
-
-
Profit (loss) after income tax of discontinued operation
(1,840)
(2,208)
Cash flow information:
Cash flows used in operating activities
(505)
(491)
Cash flows used in investing activities
(53)
(412)
Cash flows used in financing activities
558
903
Net movement in cash and cash equivalents from discontinued operations
-
-
Carrying amounts of assets and liabilities disposed:
2024
$'000
Cash and cash equivalents
200
Trade and other receivables
433
Inventories
1,896
Biological assets
267
Other current assets
118
Intangible assets
315
Right-of-use assets
118
Property, plant and equipment
548
Assets classified as held for sale
3,895
Trade and other payables
981
Lease liabilities
152
Liabilities classified as held for sale
1,133
Net assets
2,762
Details of disposal:
Total sale consideration
2,000
Carrying amount of net assets disposed
2,762
Disposal cost
69
Loss on disposal before income tax
(831)
Loss on disposal after income tax
(831)
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
68 ECOFIBRE LIMITED ANNUAL REPORT 2024
14. Intangible assets
2024
2023
$'000
$'000
Goodwill at acquisition date
48,814
48,814
Less: Impairment
(26,820)
-
Foreign currency impact
3,281
4,252
25,275
53,066
Patents, customer list and trademarks – at cost
302
4,039
Less: Accumulated amortisation
(106)
(378)
Less: Impairment
(191)
(3,047)
Foreign currency impact
(5)
-
-
614
Software – at cost
-
320
Less: Accumulated amortisation
-
(257)
Less: Impairment
-
(63)
-
-
Website development – at cost
-
1,129
Less: Accumulated amortisation
-
(527)
Less: Impairment
-
(602)
-
-
Total intangible assets at cost / acquisition
49,116
54,302
Less: Accumulated amortisation
(106)
(1,162)
Less: Impairment
(27,011)
(3,712)
Foreign currency impact
3,276
4,252
25,275
53,680
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are
set out below:
Goodwill
Patents, customer
list and trademarks
Software
Website
development
Total
$’000
$’000
$’000
$’000
$’000
Balance at 1 July 2022
51,093
3,643
82
550
55,368
Additions
-
250
-
224
474
Amortisation
-
(243)
(18)
(174)
(435)
Impairment
-
(3,047)
(63)
(602)
(3,712)
Exchange difference
1,973
11
(1)
2
1,985
Balance at 1 July 2023
53,066
614
-
-
53,680
Amortisation
-
(103)
-
-
(103)
Impairment
(26,820)
(191)
-
-
(27,011)
Disposal
-
(315)
-
-
(315)
Exchange difference
(971)
(5)
-
-
(976)
Balance at 30 June 2024
25,275
-
-
-
25,275
ECOFIBRE LIMITED ANNUAL REPORT 2024 69
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
14.
Intangible assets (continued)
Goodwill impairment testing
Goodwill acquired through business combinations have been allocated to the following cash-generating units:
2024
2023
$'000
$'000
Ecofibre Advanced Technologies (acquisition of TexInnovate business)
25,275
53,066
The recoverable amount of the consolidated entity's goodwill was determined by a scenario based, value-in-use
calculation using a discounted cash flow model based on a 5 year projection period and a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most
sensitive.
As at 30 June 2024, the following key assumptions were used in the discounted cash flow model to re-test the
recoverable amount of the consolidated entity’s goodwill:
o
15% pre-tax discount rate (FY23: 15% pre-tax discount rate) *
o
In FY25, key revenue shifts have been estimated as follows:
§
Turf Line 1: approximately 50% utilization, increasing to 100% in January 2025
§
Turf Line 2: new equipment commissioned and utilisation increasing to 100% between April and
June 2025
§
Under Armour: full utilization by November 2024 and held flat thereafter
o
From FY26, 100% utilisation of turf line 1 & 2 and Under Armour machine
o
After FY26, 3% growth rate assumed
* The pre-tax discount rate of 15% has been set using the estimated weighted average cost of capital to equate
the present value of future cashflows against the current carrying value of fixed and intangible assets.
Management believes the projected revenue growth rate is prudent and justified.
Management’s estimation of increased operating costs is based on estimated cost inflation and an effort by the
consolidated entity to contain costs.
There were no other key assumptions.
Based on the above, the impairment charge of $26.8m recognised by the entity as at 31 December 2023 has
been retained as the carrying amount of the cash-generating unit exceeded this recoverable amount for the
TexInnovate business. The recoverable amount at 31 December 2023 was calculated as $51.57m.
The directors have made judgements and estimates in respect of impairment testing of goodwill. Should these
judgements and estimates not occur the resulting goodwill recoverable amount may decrease.
If net cash inflows are reduced by 19% through the forecast period, with all other assumptions remaining
constant then goodwill would need to be impaired. The discount rate would be required to increase to 20%
before goodwill would need to be impaired, with all other assumptions remaining constant. Management
believes that other reasonable changes in the key assumptions on which the recoverable amount of goodwill is
based would not cause the cash-generating unit’s carrying amount to exceed its recoverable amount.
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
70 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15.
Leases
The Group leases warehouse, factory and administrative facilities. The leases typically run for a period of 2 to 3
years with some leases having the option to renew the lease after that date. Lease terms are renegotiated upon
expiry of each lease to reflect market rentals. Some leases provide for additional rent payments that are based
on changes in local price indices.
The Group leases office equipment with contract terms of 5 years. These leases are for low-value items, and
the Group has elected not to recognise right-of-use assets and lease liabilities for these leases.
The weighted average incremental borrowing rate applied to lease liabilities at the date of initial application
was 10% (2023: 10%).
Information about leases for which the Group is a lessee is presented below.
i. Right-of-use assets
Right-of-use assets relate to leased properties that do not meet the definition of investment property and are
presented as below:
Buildings
Farming and
processing
equipment
Total
2024
$’000
$’000
$’000
Balance at 1 July 2023
305
-
305
Disposals of right-of-use assets
(118)
-
(118)
Depreciation charge for the year
(187)
-
(187)
Exchange difference
-
-
-
Balance at 30 June 2024
-
-
-
2023
Balance at 1 July 2022
835
3
838
Disposal of right-of-use assets
(96)
-
(96)
Depreciation charge for the year
(438)
(3)
(441)
Exchange difference
4
-
4
Balance at 30 June 2023
305
-
305
ii)
Lease liabilities
The lease liabilities are presented as below:
2024
2023
$’000
$’000
Balance at 1 July
427
930
New leases during the period
-
-
Disposals during the period
(152)
(96)
Payments
(297)
(463)
Interest charges during the period
22
60
Exchange difference
-
(4)
Balance at 30 June
-
427
Lease liability recognised as at 30 June of which are:
Current lease liabilities
-
335
Non-current lease liabilities
-
92
-
427
ECOFIBRE LIMITED ANNUAL REPORT 2024 71
15.
Leases (continued)
iii) Amounts recognised in profit or loss
Interest on lease liabilities
22
60
Depreciation charge
187
441
iv) Amounts recognised in statement of cash flows
Cash outflow for leases:
Financing cash outflow
275
405
Operating cash outflow
22
60
v) Extension options
Some property leases contain extension options exercisable by the Group up to 2 to 3 years before the end of
the non-cancellable contract period. Where practicable, the Group seeks to include extension options in new
leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by
the lessors. The Group assesses at lease commencement date whether it is reasonably certain to exercise the
extension options. The Group reassesses where it is reasonably certain to exercise the options if there is a
significant event or significant changes in circumstances within its control.
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
72 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
16.
Property, plant, and equipment
2024
2023
$'000
$'000
Capital work in progress
3,920
3,583
Land
-
3,001
Buildings
-
32,116
Less: accumulated depreciation
-
(2,405)
-
29,711
Motor vehicles
293
294
Less: accumulated depreciation
(257)
(246)
36
48
Office equipment
1,581
1,586
Less: accumulated depreciation
(1,568)
(1,509)
13
77
Plant and machinery
14,110
16,259
Less: accumulated depreciation
(9,480)
(9,558)
4,630
6,701
Total property, plant and equipment
19,904
56,839
Less: accumulated depreciation
(11,305)
(13,718)
8,599
43,121
Capital
WIP
Land
Building
Motor
vehicles
Office
equipment
Plant and
machinery
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
2023 Movement Schedule
Carrying value 1 July 2022
6,294
2,900
30,253
323
466
6,755
46,991
Additions
1,590
-
-
44
12
126
1,772
Transfer
(3,805)
-
-
-
7
3,798
-
Disposals
-
-
-
(282)
-
(77)
(359)
Impairment
(730)
-
-
-
-
(1,376)
(2,106)
Depreciation
-
-
(802)
(47)
(420)
(2,594)
(3,863)
Exchange difference
234
101
260
10
12
69
686
Carrying value 30 June 2023
3,583
3,001
29,711
48
77
6,701
43,121
2024 Movement Schedule
Carrying value 1 July 2023
3,583
3,001
29,711
48
77
6,701
43,121
Additions
3,739
-
358
-
7
73
4,177
Transfer
(294)
-
11
-
-
283
-
Disposals
-
-
-
-
-
(5)
(5)
Discontinued operations
(30)
-
-
-
(1)
(517)
(548)
Impairment
(3,051)
-
(8,665)
-
-
-
(11,716)
Transfer to land and building
held for sale
-
(2,980)
(20,961)
-
-
- (23,941)
Depreciation
-
-
(403)
(11)
(70)
(1,882)
(2,366)
Exchange difference
(27)
(21)
(51)
(1)
-
(23)
(123)
Carrying value 30 June 2024
3,920
-
-
36
13
4,630
8,599
ECOFIBRE LIMITED ANNUAL REPORT 2024 73
17.
Trade and other payables
2024
$'000
2023
$'000
Trade creditors
1,434
2001
Employee entitlements
534
679
Other creditors and accruals
2,782
2,433
4,750
5,113
18. Borrowings
Current
2024
$'000
2023
$'000
Unsecured term loan
1,000
1,000
Secured term loan
14,993
-
15,993
1,000
Non-current
Unsecured term loans
9,500
10,500
Secured term loan
-
15,107
9,500
25,607
Unsecured term loans
In June 2020, the Company obtained a $10m loan from James & Cordelia Thiele Trust Fund. On 15 July 2022,
$2m was repaid and on 15 July 2023 $1m was repaid. In July 2024 the terms of the loan were renegotiated as
follows: $1m repayable on 1 January 2025 and $6m repayable on 15 July 2025. The interest rate on the loan is
11% p.a. to 30 September 2024 and 14% p.a. thereafter. The original terms were $1m repayable on 15 July
2024, $6m repayable on 15 July 2025 and the interest rate on the loan was 11% p.a.
In March 2022, Ecofibre received a $3.5m loan from the Lambert Superannuation Fund. The interest rate on
the loan was 10% p.a. In December 2022, the term of the loan was extended, and the loan is now repayable
on 15 July 2025.
Secured term loan
In June 2022, the Group obtained a USD10m loan from Nubridge Commercial Lending LLC in the United States.
The Group’s interests in the following properties were pledged as security for the loan: Corporate Boulevard,
Georgetown, Kentucky; Cessna Drive, Greensboro, North Carolina; West Market Street, Greensboro, North
Carolina. In addition, the shareholdings owned by Ecofibre Limited are included as security interests.
In April 2024 the terms of the loan were renegotiated as follows: the interest rate on the loan was 8.49% p.a.
to 1 July 2024 and 13.49% thereafter. The loan is repayable on 1 January 2025.
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
74 ECOFIBRE LIMITED ANNUAL REPORT 2024
19. Deferred tax liabilities
2024
$'000
2023
$'000
Deferred tax liability comprises temporary difference attributable to:
Amounts recognized in profit or loss:
Property, plant and equipment
-
2,081
Carried forward losses
-
(1,674)
Deferred tax liabilities
-
407
Movements:
Opening balance
407
318
(Credited) / debited to profit or loss
(407)
89
Closing balance
-
407
20. Employee share trust
On 29 June 2018, the Company entered into an Employee Securities Trust Deed with Pacific Custodians Pty
Limited (PCPL) to set up an employee share trust (EST). PCPL is the trustee for the EST.
The movement of Ecofibre's shares held in the EST are as follows:
2024
Number of
shares
2023
Number of
shares
Balance at 1 July
13,469,786
13,469,786
Shares transferred to EST
-
150,000
Shares issued by the EST to employees as part of the ESS
(225,000)
(150,000)
Balance as at 30 June
13,244,786
13,469,786
21.
Issued Capital
2024
2023
2024
2023
$'000
$'000
Quantity
Quantity
Ordinary shares
120,811
115,673
365,629,116
335,744,765
Movement in ordinary shares
Opening balance 1 July
115,673
115,347
335,744,765
335,510,772
Shares issued for services rendered
-
108
-
233,993
New shares issue @ $0.18 per share
5,339
-
29,659,351
-
Shares issued by the EST
166
238
225,000
150,000
Shares transferred to EST
-
-
-
(150,000)
Share issue cost
(367)
(20)
-
-
Closing balance 30 June
120,811
115,673
365,629,116
335,744,765
378,873,902 total shares are on issue by the parent entity, which includes 365,629,116 consolidated shares on
issue plus shares held by the EST (13,244,786) which have been issued by the parent entity and are eliminated
on consolidation.
ECOFIBRE LIMITED ANNUAL REPORT 2024 75
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. Other equity
EOF Bio LLC. units issued and capital contribution at the end of the reporting period are as follows:
2024
2023
2024
2023
$'000
$'000
Quantity
Quantity
Units issued: *
Preference units
6,429
882
5,265
584
Common units
178
-
30,130
30,000
Total Contribution / Issued
6,607
882
35,395
30,584
Sale of units
5,130
-
Less: non-controlling interest^
(1,813)
(17)
9,924
865
* In addition to the above, 1,600 incentive units were issued that contain rights to a share in future profits that
will vest if commercialisation targets are met. Incentive unitholders do not have voting rights or preference
rights and are subject to vesting conditions as set out in the award agreements.
Cash proceeds from issuance of new preference units in FY24 amounted to $5.5m
^The calculation of non-controlling interest percentage as at the end of the reporting period is summarized as
follows:
2024
2023
Units held by:
Quantity
Quantity
Ecofibre USA Inc.
25,546
30,000
Non-controlling interest
9,849
584
Total units issued
35,395
30,584
Ownership:
Ecofibre USA Inc.
72.2%
98.1%
Non-controlling interest
27.8%
1.9%
100%
100%
In 2H24, Ecofibre partially sold its stake in EOF Bio for $5.1m, resulting in a change in the ownership stake. Per
AASB10 Consolidated Financial Statements, the proceeds from this sale were recorded directly through equity
due to accounting policy shown on Note 1(s).
Per AASB10 – Consolidated Financial Statements, 100% of EOF-BIO is consolidated into Ecofibre Group’s financial
statements, less one-line adjustments to recognise the value of non-controlling interests in equity and profit or
loss. The individual balance sheet and profit and loss items in the consolidated financial statements therefore
include 100% of EOF Bio. The attributed value of the non-controlling interest as at the end of the reporting period
is as follows:
2024
2023
$'000
$'000
Non-controlling interest – issued capital
(1,813)
(17)
Non-controlling interest – attribution of accumulated loss
808
-
(1,005)
(17)
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
76 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
23. Remuneration of auditors
During the financial year the following fees were paid or payable for
services provided by William Buck (Qld), the auditor of the company,
its network firms and unrelated firms:
2024
$
2023
$
Audit services – William Buck (Qld)
- Annual audit
73,000
70,250
- Half year review
20,000
19,000
Audit and review of financial statements
93,000
89,250
Audit services – unrelated firms
- Annual audit
86,301
86,415
- Half year review
15,158
21,604
101,459
108,019
Total Audit Services
194,459
197,269
Other services – William Buck (Qld)
- Review of quarterly reporting and accounting assistance
14,025
12,500
Other services – network firms
- Preparation of income tax return and business advisory
38,100
19,495
- Transfer pricing review and tax advisory
-
40,895
Total Other Services
52,125
72,890
24. Contingent liabilities and commitments
i)
Contingent liability
EOF Bio litigation
Various claims have been made against the Group and Directors by former employees in the Court of Chancery
for the State of Delaware, USA. The proceedings make claims in relation to the management of EOF Bio Inc. and
seeks orders including unspecified damages. The Group has moved to dismiss the claims. One of the former
employees has also brought an employment related claim, based on substantially the same allegations in the
United State District Court for the District of Delaware. As both matters are before the courts, no further
information has been disclosed as this may prejudice the position of the Group.
ELI Seed claim
Environmental Living Industries, LLC seeks damages from the Group for a 2023 seed crop that failed due to a
transportation issue that was resolved in the Group's favour. The parties are in settlement negotiations and,
therefore, no further information can be disclosed as this may prejudice the position of the parties.
Texinnovate
As part of the purchase price of the assets of the Texinnovate portfolio of businesses in August 2020, payouts
based on Ecofibre Advanced Technologies, Inc. (formerly known as Hemp Black Inc.) earnings before interest
and taxes (EBIT) will occur if vesting conditions are met. The Company has determined that the vesting conditions
for the requisite Ecofibre Advanced Technologies, Inc. EBIT will not occur.
ECOFIBRE LIMITED ANNUAL REPORT 2024 77
24. Contingent liabilities and commitments (continued)
i)
Contingent liability (continued)
Elixinol Wellness (Byron Bay) Pty Ltd
The Company has been advised by Elixinol Wellness (Byron Bay) Pty Ltd, the purchaser of the food and pet
products business of Ananda Food Pty Ltd, that it believes it has a claim in relation to the sale. Ecofibre denies
the claim and the parties are likely to refer the matter to an independent expert in 1Q25 in accordance with the
dispute resolution provisions in the contract.
Mr Nice Guy
The Group had sought declaratory judgments regarding a previous agreement in the United States, and as
part of the litigation, the defendants asserted various counter claims against the Group. In May 2024 the litigation
was closed and all appeals were found in favour of the Group.
Personal Property Tax
The Group has received an assessment for Personal Property Tax from the Commonwealth of Kentucky which
seeks to adjust tax declared and paid for the period 2019–22 by a group subsidiary entity, Ecofibre Kentucky
LLC. The Group does not agree with the Commonwealth's calculation of taxes owed, but has paid the amount it
calculated as being underpaid. The parties are still discussing the final calculations.
ii) Commitment:
2024
$’000
2023
$’000
Capital expenditure commitments not provided for in the financial
statements
1,685
-
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
78 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. Interests in subsidiaries
The financial statements of the subsidiaries have been prepared in accordance with International Financial
Reporting Standards as issued by the International Accounting Standards Board. These financial statements
also comply with Australian Accounting Standards and interpretation issued by the Australian Accounting
Standards Board (AASB).
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly
owned subsidiaries:
Name
Principal place of business /
Country of Incorporation
Ownership Interests
2024
2023
%
%
Ecofibre Services Pty Ltd (ES)
Australia
100%
100%
Ananda Food Pty Ltd (AF)
Australia
-
100%
Ecofibre Asia Pacific Pty Ltd (EAP)
Australia
100%
100%
Ecofibre USA Inc. (EUSA)
United States of America
100%
100%
Ananda Hemp Inc. (AH)
United States of America
100%
100%
Ecofibre Kentucky LLC (EK)
United States of America
100%
100%
Ecofibre Advanced Technologies Inc. (EAT)
(formerly Hemp Black Inc.)
United States of America
100%
100%
Ecofibre Advanced Technologies Biomedical,
LLC (EATB) (formerly Hemp Black Biomedical,
LLC)*
United States of America
-
100%
Ecofibre Advanced Technologies Polymer, LLC
(EATP) (formerly Hemp Black Polymer, LLC)*
United States of America
-
100%
EOF Distribution Inc. (EOFD)
United States of America
100%
100%
Ecofibre USA RE LLC (EUSARE)
United States of America
100%
100%
Ecofibre Uruguay SA (EU)
Uruguay
100%
100%
EOF Bio Inc (BIO) (formerly EOF BIO LLC)
United States of America
72.2%
98.1%
Ecofibre Genetics Pty Ltd (Genetics)
Australia
100%
-
ES’s principal activity is the provision of group corporate functions and research and development services.
AF’s principal activity is the growing, processing and distribution of hemp food products.
EAP’s principal activity is sales and distribution of hemp products.
EUSA’s principal activity is an investment holding company.
AH's principal activity is the marketing and distribution of hemp nutraceutical products.
EK's principal activity is to support the manufacture of hemp nutraceutical products.
EAT's principal activity is to develop and commercialise hemp fibre products.
EATB’s principal activity is manufacturing, and sale of customised polymer-based yarns used for internal medical
implants and applications.
EATP’s principal activity is to provide performance masterbatch and custom compounding to the plastics
industry for technical textiles.
EOFD is a special purpose sales and marketing entity for the Ananda Health business in the United States.
EUSARE is a special purpose entity for the securitisation of the loan from Nubridge.
EU is a dormant entity.
BIO’s principal activity is to research and commercialise gynaecological and other treatments using hemp
derived cannabinoids.
Genetic’s principal activity is to grow and sell improved hemp seed genetics.
* Merged into Ecofibre Advanced Technologies Inc. on 9 April 2024.
ECOFIBRE LIMITED ANNUAL REPORT 2024 79
26. Reconciliation of profit after income tax to net cash flows from operating
activities
2024
$'000
2023
$'000
Net profit (loss) after income tax
(45,152)
(39,913)
Depreciation and amortisation
2,660
4,739
Gain from disposal of fixed assets
(149)
(52)
Loss on disposal of Ananda Food Pty Ltd
(831)
-
Impairment of fixed and intangible assets
38,727
5,818
Contingent consideration
(12,036)
(2,478)
Provision for expected credit losses
136
(32)
Share-based payments
(3,205)
681
Movement in foreign exchange
945
173
Unrealised foreign exchange loss
457
(428)
Change in operating assets and liabilities
Decrease (increase) in assets
Trade and other debtors
(637)
4,164
Prepayments
267
740
Inventories
4,854
6,322
Biological assets
(275)
11
Deferred tax assets
-
9,670
Tax recoverable
(10)
3,892
Increase (decrease) in liabilities
Trade creditors
414
(153)
Other creditors and accruals
349
(359)
Interest payable
-
157
Tax payable
21
(16)
Employee entitlements
(145)
65
Deferred tax liabilities
(407)
89
Net cash flows from operating activities
(14,017)
(6,910)
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
80 ECOFIBRE LIMITED ANNUAL REPORT 2024
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27. Financial risk management objectives and policies
The Group’s principal financial instruments comprise receivables, payables and cash and cash equivalents.
The main risks arising from the Group’s financial instruments are credit risk, interest rate risk, foreign exchange
risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which
it is exposed. These include monitoring the levels of exposure to foreign exchange and interest rates and
assessments of market forecasts for foreign exchange and interest rates.
The Group’s exposure to market interest rates relates primarily to the Group’s funds held on term deposits. All
interest-bearing liabilities are at fixed interest rates. At the end of the reporting period the Group had the
following financial assets exposed to interest rate risk.
2024
2023
$'000
$'000
Financial Assets
Cash and cash equivalents
6,737
7,289
The Group’s policy is to place funds in interest-bearing accounts and term deposit where the funds are surplus
to immediate requirements. The Group’s interest rate exposure is reviewed near the maturity date of term
deposits, to assess whether more attractive rates are available without increasing risk.
The following sensitivity analysis is based on the interest rate exposures in existence at the end of the reporting
period. At 30 June 2024, if interest rates had moved, as illustrated in the table below, with all other variables
held constant, profit after tax and equity would have been affected as follows:
Profit after tax higher/ (lower)
Equity higher/ (lower)
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Consolidated
+ 1% (100 basis points)
67
73
67
73
- 0.5 % (50 points)
(34)
(36)
(34)
(36)
The movements in profits is due to higher/ (lower) interest income from cash balances. There is no impact on
equity other than impact on accumulated losses.
Risk exposures and responses
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and trade
and other receivables. The Group’s maximum exposures to credit risk at the end of the reporting period in
relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the
Statement of Financial Position. The Group minimises concentrations of credit risk in relation to trade receivables
by having payment terms of 60 days and receivable balances are monitored on an ongoing basis.
Interest rate risk
ECOFIBRE LIMITED ANNUAL REPORT 2024 81
27. Financial risk management objectives and policies (continued)
Liquidity risk
The Group’s objective is to maintain sufficient funds to finance its current operations and additional funds to
ensure its long-term survival. The Group will rely on increasing sales and operating cashflows to finance ongoing
operations. Liquidity risk is monitored through rolling cash flow forecasts that are tabled and reviewed by the
Board. Total liabilities are payable as follows:
2024
2023
$’000
$’000
Less than one year
20,776
6,463
Between one and five years
9,503
37,624
Later than five years
-
-
30,279
44,087
Foreign currency risk
The Group is exposed to fluctuations in foreign currencies on product sales and purchases of goods and
services in currencies other than the Group’s functional currency. The group manages this risk by monitoring
the level of exposure to foreign currency transactions and forecasting currency requirements through rolling
cash flow forecasts.
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial
liabilities at the reporting date were as follows:
Assets
Liabilities
2024
2023
2024
2023
Consolidated
$'000
$'000
$'000
$'000
US dollars
14,883
12,512
15,053
5,927
The consolidated entity had net liabilities denominated in foreign currencies of US$170,000 (assets of
US$14,883,000 less liabilities of $15,053,000) as at 30 June 2024 (2023: net assets of US$6,585,000). Based
on this exposure, had the Australian dollar weakened by 5%/strengthened by 5% against these foreign
currencies with all other variables held constant, the consolidated entity's profit before tax for the year would
have been $12,700 lower/higher (2023: $497,400 higher/lower). The percentage change is the expected
overall volatility of the significant currencies, which is based on management’s assessment of reasonable
possible fluctuations taking into consideration movements over the last 6 months each year and the spot rate
at each reporting date. The actual foreign exchange loss for the year ended 30 June 2024 was $244,000
(2023: loss of $464,000).
Fair value
The carrying amount of all other recognised financial assets and financial liabilities are considered a reasonable
approximation of their fair value due to their short-term nature.
ECOFIBRE LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
82 ECOFIBRE LIMITED ANNUAL REPORT 2024
NOTES TO THE FINANCIAL STATEMENTS
28. Key management personnel disclosures
Compensation
The aggregated compensation made to the key management personnel of the parent entity is set out below:
2024
2023
$
$
Short-term employee benefits and directors fees
810,034
959,418
Share based payments
(3,453,304)
633,665
Long-term employee benefits
4,194
8,663
Post-employment benefits
9,850
12,959
Termination payment
100,584
-
(2,528,642)
1,614,705
29. Parent entity information
Set out below is the supplementary information about the parent entity.
2024
2023
$’000
$’000
Profit (Loss) after income tax
(19,197)
(8,762)
Total comprehensive income
(19,197)
(8,762)
Statement of financial position
Total current assets
21,735
17,773
Total assets
107,290
122,004
Total current liabilities
6,017
3,887
Total liabilities
24,395
21,358
Equity
Issued capital
120,811
115,673
Share based payment reserve
1,189
4,932
Share capital reserve
-
14,300
Accumulated losses
(39,105)
(34,259)
Total equity
82,895
100,646
30. Share-based payments
Non-Executive Director (NED) share options
A share option plan has been established by the consolidated entity and approved by shareholders at a general
meeting, whereby the consolidated entity may grant options over ordinary shares in the company to the Non-
Executive Directors of the consolidated entity. The options are issued for nil consideration and are granted in
accordance with the Company’s Share and Option Plan, the terms of which were summarized in the Company’s
2019 IPO Prospectus.
Set out below are summaries of options granted under the plan:
Grant date
Expiry date Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
1 Dec 2021
7 Oct 2024 $0.83
530,751
-
-
-
530,751
1 Dec 2022
1 Oct 2025 $0.22
1,256,982
-
-
(628,491)
628,491
Weighted average exercise price
$0.40
$0.00
$0.00
$0.22
$0.50
None of the options granted are exercisable at 30 June 2024.
ECOFIBRE LIMITED ANNUAL REPORT 2024 83
NOTES TO THE FINANCIAL STATEMENTS
30. Share-based payments (continued)
Non-Executive Director (NED) share options (continued)
The weighted average remaining contractual life of options outstanding at the end of the financial year was 0.8
years.
2024
2023
$’000
$’000
Expenses recognized during the year for NED share options
119
87
Employee shares
Employment agreements were signed with key employees who have an impact on the Group's performance.
The agreements include clauses which entitled the employees to payment in shares of the Company if certain
performance conditions are met.
The expenses recognised for employee services received during the year as part of the employee share
scheme are as follows:
2024
2023
$’000
$’000
Expenses from equity-settled share-based payment transactions from
continuing operations
(3,241)*
627
Expenses from equity-settled share-based payment transactions from
discontinued operations
(83)
(33)
* An income is recorded as performance conditions have not been met and the employees entitlement were
forfeited.
Share-based payment reserve
2024
2023
$’000
$’000
NED options
197
129
Employee shares
1,110
4,803
Total share-based payment reserve
1,307
4,932
The share-based payment reserve is used to record the cost of equity-settled transactions over the vesting
period.
Share-based payment expense from continuing operations
2024
2023
$’000
$’000
NED options
119
87
Employee shares
(3,241)
627
Total share-based payment expense
(3,122)
714
84 ECOFIBRE LIMITED ANNUAL REPORT 2024
NOTES TO THE FINANCIAL STATEMENTS
31.
Earnings per share (EPS)
2024
2023
$’000
$’000
Loss used in the calculation of basic and diluted EPS ($’000)
(45,152)
(39,913)
Weighted average number of shares* outstanding during the period used in
the calculation of basic and diluted EPS:
Basic
360,253,862
335,670,317
Diluted**
360,253,862
335,670,317
* Weighted average number of shares exclude Treasury shares held in the EST.
** Options granted are not included in the diluted weighted average number of shares because they are
antidilutive. Adding these options would result in a lower loss per share.
32. Fair value measurement
Fair value hierarchy
The following tables detail the consolidated entity's assets and liabilities, measured or disclosed at fair value,
using a three level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date
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
Level 1
Level 2
Level 3
Total
$'000
$'000
$'000
$'000
Consolidated - 2024
Assets
Biological assets
-
576
-
576
Land and building held for sale
-
23,941
-
23,941
Liabilities
Contingent consideration
-
-
-
-
Consolidated - 2023
Assets
Biological assets
-
568
-
568
Liabilities
Contingent consideration
-
11,518
-
11,518
There were no transfers between levels during the financial year.
The fair value of biological assets is estimated based on the maturity of the plant, the potential output and the
estimated grower payments when the crops are harvested.
The fair value of contingent consideration is estimated based on the discounting of potential future cash outflow
to present value. The fair value of land and buildings has been estimated based on consideration of the direct
comparison approach and the income approach.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate
their fair values due to their short-term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current
market interest rate that is available for similar financial liabilities.
ECOFIBRE LIMITED ANNUAL REPORT 2024 85
NOTES TO THE FINANCIAL STATEMENTS
33. Contingent consideration
On 21 August 2020, the Group completed the acquisition of TexInnovate, a portfolio of five businesses with
expertise and capabilities across a broad range of high-performance textile disciplines.
Total potential consideration for the businesses and operating assets is USD42.0m, including contingent
consideration with a value up to USD21.0m, is also payable subject to the acquired businesses delivering
USD6.0m earnings before interest and tax (EBIT) for two consecutive annual periods within seven years of
completion. The earliest that any such consideration may become due is in 3 equal tranches of USD7.0m on the
5th, 6th, and 7th anniversaries after completion, payable in equal proportions of cash and shares. 5,924,925
shares will be issued if the performance targets are met.
Based on the Company’s projections, the EBIT target will not be met before the end of the 7th anniversary. As
such, the contingent consideration payable in cash and shares has been written off.
Reconciliation of acquisition date contingent consideration payable in cash to the balance at 30 June 2024:
2024
2023
$'000
$'000
Balance at 1 July fair value^
11,518
13,996
Fair value movement on contingent consideration during the period
614
458
Extension of earnout period*
-
(3,484)
Foreign currency impact
(96)
548
Contingent consideration written off
(12,036)
-
Balance at 30 June 2024
-
11,518
^ The fair value of the contingent consideration is determined based on the probability weighted cash flow
projections discounted at the incremental borrowing rate. The inputs used in the valuation falls under level 2 of
the fair value hierarchy (inputs other than quoted prices that are observable for the asset of liability, either directly
or indirectly).
* To reflect the 2 year interruption due to COVID and the post COVID momentum in the business the earnout
period was extended by 2 years, from 5 years to 7 years.
The write off of the contingent consideration payable in shares of $14.3m resulted in a transfer from Share Capital
Reserve to Retained Earnings.
34. Foreign currency translation reserve
Foreign currency translation reserve consists of exchange differences arising from translation of foreign
subsidiary’s financial statements, where the subsidiaries reporting currency differs from that of the consolidated
entity’s currency. The balance sheet is translated either at historical spot rates or the closing rate at the end of
the period. Profit and loss is translated at average rates.
The majority of the Company’s business is conducted in Australian and United States dollars. The closing
exchange rate for this currency pair changed by 0.7% during the year as the USD depreciated against the AUD
(2024: AUD1 for USD0.6670, 2023: AUD1 for USD0.6619).
The foreign currency translation reserve as at 30 June 2024 consists of the following exchange differences:
86 ECOFIBRE LIMITED ANNUAL REPORT 2024
NOTES TO THE FINANCIAL STATEMENTS
34. Foreign currency translation reserve (continued)
Balance sheet component
Rate used for translation
$'000
Investment in subsidiaries
Historical spot rate
5,301
Retained earnings
Average rate
(1,469)
Total
3,832
Movement in the foreign currency translation reserve:
$'000
Balance at 30 June 2023
4,777
Exchange differences on translation of foreign controlled entities
(945)
Balance at 30 June 2024
3,832
35. Events after the reporting period
In July 2024, EOF Bio LLC was converted to a C-Corporation with the strong support of voting shareholders.
This important step enables broader access to institutional biotech investors in connection with future
financing. As such, EOF Bio is now known as EOF Bio Inc.
In July 2024, the Company reached an agreement with an unsecured lender, the James & Cordelia Thiele Trust
Fund, to amend the terms of the loan. The original terms were $1m repayable on 15 July 2024, $6m repayable
on 15 July 2025 and the interest rate on the loan was 11%p.a. Under the revised terms of the loan, $1m repayable
on 1 January 2025 and $6m repayable on 15 July 2025 at an interest rate of 11% until 30 September 2024 and
14% thereafter.
Since 31 December 2023, the Company had categorised its 3 properties in the United States as held for sale.
Subsequent to 30 June 2024, and following a review of the Company’s financing strategy by Chiron Financial
LLC, the Company made the decision to pursue a wholistic recapitalisation of the Company’s balance sheet.
Accordingly, the properties are no longer being actively marketed for sale.
On 5 August 2024, Ulrich Tombuelt was appointed as Managing Director and CEO for the Group.
No other matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may
significantly affect the consolidated entity's operations, the results of those operations, or the consolidated
entity's state of affairs in future financial years.
ECOFIBRE LIMITED ANNUAL REPORT 2024 87
Consolidated entity disclosure statement
Place formed /
Ownership
interest
Entity name
Entity type
Country of incorporation
%
Tax residency
Ecofibre Limited
Body corporate
Australia
NA
Australia *
Ecofibre Services Pty Ltd
Body corporate
Australia
100.00%
Australia *
Ecofibre Asia Pacific Pty Ltd
Body corporate
Australia
100.00%
Australia *
Ecofibre Genetics Pty Ltd
Body corporate
Australia
100.00%
Australia *
Ecofibre USA Inc.
Body corporate
United States of America
100.00%
United States of Americaˆ
Ananda Hemp Inc.
Body corporate
United States of America
100.00%
United States of Americaˆ
Ecofibre Kentucky LLC
Body corporate
United States of America
100.00%
United States of Americaˆ
Ecofibre Advanced
Technologies Inc.
Body corporate
United States of America
100.00%
United States of Americaˆ
EOF Distribution Inc.
Body corporate
United States of America
100.00%
United States of Americaˆ
Ecofibre USA RE LLC
Body corporate
United States of America
100.00%
United States of Americaˆ
EOF Bio LLC.
Body corporate
United States of America
72.2%
United States of America
Ecofibre Uruguay SA
Body corporate
Uruguay
100.00%
Uruguay
*
Ecofibre Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime.
ˆ
Ecofibre USA Inc. (the 'USA head entity') and its wholly-owned USA subsidiaries have formed an income tax
consolidated group under the tax consolidation regime.
88 ECOFIBRE LIMITED ANNUAL REPORT 2024
SIGNED
REPORTS
5.
ECOFIBRE LIMITED ANNUAL REPORT 2024 89
Directors’ declaration
In the directors’ opinion:
•
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements
•
the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 1 to the financial statements;
•
the attached financial statements and notes give a true and fair view of the Group’s financial position as at 30
June 2024 and of its performance for the financial year ended on that date;
•
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable;
•
the information disclosed in the attached consolidated entity disclosure statement is true and correct.
The directors have been given the declarations from the CEO and CFO, required by section 295A of the Corporations
Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
________________________________________
Vanessa Wallace
Director
16 September 2024
Sydney
90 ECOFIBRE LIMITED ANNUAL REPORT 2024
Level 22, 307 Queen Street, Brisbane QLD 4000
GPO Box 563, Brisbane QLD 4001
+61 7 3229 5100
qld.info@williambuck.com
williambuck.com
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report to the members of Ecofibre Limited
Report on the audit of the financial report
Our opinion on the financial report
In our opinion, the accompanying financial report of Ecofibre Limited (the Company) and its subsidiaries
(the Group) is in accordance with the Corporations Act 2001, including:
— giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its financial
performance for the year then ended; and
— complying with Australian Accounting Standards and the Corporations Regulations 2001.
What was audited?
We have audited the financial report of the Group, which comprises:
— the consolidated statement of financial position as at 30 June 2024,
— the consolidated statement of profit or loss for the year then ended
— the consolidated statement of other comprehensive income for the year then ended,
— the consolidated statement of changes in equity for the year then ended,
— the consolidated statement of cash flows for the year then ended,
— notes to the financial statements, including material accounting policy information,
— the consolidated entity disclosure statement, and
— the directors’ declaration.
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 & 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.
ECOFIBRE LIMITED ANNUAL REPORT 2024 91
24.06.30 Audit Report - Ecofibre Limited
Material uncertainty related to going concern
We draw attention to Note 2 in the financial report, which indicates that the Group incurred a net loss of
$45.152m (2023: $39.913m) and net cash outflows from operations were $14.017m (2023:$6.910m) during
the year ended 30 June 2024. As stated in Note 2, these events or conditions, along with other matters as
set forth in Note 2, indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the Material uncertainty related to going
concern section, we have determined the matters described below to be the key audit matters to be
communicated in our report.
Impairment
Assessment
of Goodwill
Intangible
Assets
Area of focus
(refer also to notes 2 & 14)
Included in the statement of financial
position is a goodwill intangible asset
balance of $25.3 million as at 30 June
2024.
In accordance with AASB 136 –
Impairment of assets the Group is
required to, at least annually, perform an
impairment assessment of goodwill and
intangible assets that have an indefinite
useful life.
All intangible assets including goodwill
have been allocated to cash generating
units (“CGUs”). The recoverable amount
of the underlying CGUs are supported by
value-in-use calculations which are based
on future discounted cash flows models
(“DCF Models”). DCF models contain
significant judgement and estimation in
respect of future cash flow forecasts,
discount rate and terminal growth rate
assumptions. Changes in certain
assumptions can lead to significant
changes in the assessment of the
recoverable amount. An impairment of
$26.820m was recorded during the year.
As such this matter has been determined
as a key area of focus for our audit.
How our audit addressed the key audit
matter
Our audit procedures included:
— A detailed evaluation of the Group’s
budgeting procedures upon which the
forecast is based and testing the
principles and integrity of the discounted
future cash flow models;
— Testing the accuracy of the calculation
derived from the forecast model and
assessing key inputs to the calculations
such as revenue growth, discount rates
and working capital assumptions;
— Evaluating the work of the expert used
by management for the preparation of
the model;
— Evaluating whether the discount rate
used in the model appropriately reflected
the risks of the CGU, using the kills and
know-how of our inhouse specialists;
and
— Reviewing the sensitivity analysis of the
calculations.
We also considered the adequacy of the
Group’s disclosures in the notes to the
financial statements.
92 ECOFIBRE LIMITED ANNUAL REPORT 2024
Other information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2024, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
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.
Discontinued
operations
and assets
held for sale
Area of focus
(refer also to notes 2, 12 & 13)
During the year ended 30 June 2024 the
Group disposed of Ananda Food Pty Ltd.
Further it made a decision to market the
Group’s three freehold properties for sale
to investors. This required the Group to
determine the lower of the fair value less
costs of disposal and book value for these
properties.
Due to the significance of the transactions
to the Group’s financial position and
performance this matter was considered a
key audit matter.
How our audit addressed the key audit
matter
Our audit procedures included:
— Verified that the accounting treatment
of the transactions, including
presentation and disclosure was in
accordance with the accounting
standards; and
— Agreed the sale proceeds to the
supporting sale agreements.
— Performed audit procedures over the
balances relating to the disposal of
assets at the date of settlement in
order to calculate the loss on disposal.
— Agreed the fair value of buildings held
for sale back to supporting valuation
assessments and the agreed the
calculation of impairment.
We have also assessed the adequacy of
disclosures in the notes to the financial
statements.
ECOFIBRE LIMITED ANNUAL REPORT 2024 93
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
— the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001; and
— the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
— the financial report (other than the consolidated entity disclosure statement) that gives a true and fair
view and is free from material misstatement, whether due to fraud or error; and
— the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group 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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
94 ECOFIBRE LIMITED ANNUAL REPORT 2024
Report on the Remuneration Report
Our opinion on the Remuneration Report
In our opinion, the Remuneration Report of Ecofibre Limited, for the year ended 30 June 2024, complies
with section 300A of the Corporations Act 2001.
What was audited?
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2024.
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.
William Buck (Qld)
ABN 21 559 713 106
M J Monaghan
Partner
Brisbane, 16 September 2024
ECOFIBRE LIMITED ANNUAL REPORT 2024 95
96 ECOFIBRE LIMITED ANNUAL REPORT 2024
SHAREHOLDER
AND ASX
INFORMATION
6.
Shareholder and ASX Information
Five-year financial history
2024
2023
2022
2021
2020
$’000
$’000
$’000
$’000
$’000
Summarised income statement
Sales Revenue*
29,690
32,510
30,220
28,793
50,717
Other income*
(26,894)
(2,353)
2,144
4,951
6,482
Total revenue and other income*
2,796
30,157
32,364
33,744
57,199
Operating profit (loss) before
depreciation and amortisation,
finance costs and income tax*
(39,781)
(22,407)
(15,296)
(4,580)
19,187
Depreciation and amortisation*
(2,660)
(4,739)
(5,073)
(4,290)
(2,049)
EBIT*
(42,441)
(27,146)
(20,369)
(8,870)
17,138
Net finance costs*
(3,025)
(2,760)
(1,379)
(1,173)
113
Income tax (expense) credit*
314
(10,007)
7,078
3,057
(4,095)
Profit (Loss) after income tax
attributable to members of Ecofibre
Limited*
(44,344)
(39,913)
(14,670)
(6,986)
13,156
Factors affecting total shareholders
return
Share price at financial year end ($)
0.03
0.21
0.20
0.68
2.22
Total dividends declared (cents per
share)
-
-
-
-
-
Basic earnings per share (cents per
share)
(12.53)
(11.89)
(4.41)
(2.16)
4.43
Financial position as at 30 June
Total assets
71,247
118,734
149,554
141,745
84,295
Total liabilities
30,279
44,087
39,612
29,948
21,294
Net assets
40,968
74,647
109,942
111,797
63,001
Net tangible asset per ordinary share
($)
4.29
6.28
13.23
17.64
19.60
Net debt to equity (%)
62%
36%
17%
9%
16%
Total liabilities / total assets (%)
42%
37%
26%
21%
25%
* Includes discontinued operations
^Ecofibre was listed on ASX in March 2019.
ECOFIBRE LIMITED ANNUAL REPORT 2024 97
Shareholder information
The shareholder information set out below was applicable as at 4 September 2024.
Number of securityholders
There are 4,435 holders of ordinary shares, 3 holders of options (unquoted) over ordinary shares, 7 holders of
employee share rights (unquoted), 1 holder of performance rights (unquoted) and 13 holders of EOF BIO units. There
were no other classes of equity securities on issue.
Fully paid ordinary shares
Distribution of ordinary shares
Size of shareholding
Number of shareholders
Number of shares
% of shares on
issue
1 to 1,000
1,752
842,009
0.22%
1,001 to 5,000
1,339
3,391,994
0.90%
5,001 to 10,000
418
3,256,339
0.86%
10,001 to 100,000
752
23,996,660
6.33%
100,001 and over
174
347,386,900
91.69%
Total
4,435
378,873,902
100.00%
Holding less than a marketable parcel
3,710
10,117,658
Twenty largest holders of quoted ordinary shares
The names of the twenty largest holders of quoted ordinary shares are listed below:
Name
Number
% of quoted
ordinary shares
HSBC Custody Nominees (Australia) Limited
86,483,762
22.83%
Barjoy Pty Ltd
37,688,454
9.95%
Barry Martin Lambert & Joy Wilma Lillian Lambert
34,000,000
8.97%
Phil Warner Pty Ltd
29,883,879
7.89%
Kylie Warner Pty Ltd
18,762,574
4.95%
Thomas Jefferson University
12,178,259
3.21%
Eric Wang
8,644,158
2.28%
Pacific Custodians Pty Limited (Employee Securities TST Unallocated A/C)
7,200,000
1.90%
Warner Research Institute Limited
6,648,700
1.75%
Texsymmetry Inc
6,595,959
1.74%
Pacific Custodians Pty Limited (Employee Securities TST A/C
6,044,786
1.60%
Barry Martin Lambert
5,555,556
1.47%
Yarrawonga Holdings Pty Limited
4,665,159
1.23%
Freshwater Superannuation Fund Pty Limited
4,017,830
1.06%
Troncell Pty Ltd
2,922,078
0.77%
BT Portfolio Services Ltd
2,729,730
0.72%
Eric Wang + Christie Wang (ATF The Ghengis Khan Super Fund)
2,574,423
0.68%
Mr Eric Tse Wang
2,443,829
0.65%
Profitous Pty Ltd
2,164,287
0.57%
Bad Ness Pty Ltd
2,092,858
0.55%
Total
283,296,281
74.77%
Substantial holders
Substantial holders in the Company as disclosed in substantial holding notices given to the Company were as
follows:
Name of substantial holder
Number of shares over
which interest is held
% of issued capital
Barry Martin Lambert
74,236,900
23.57%
Philip Warner
53,109,243
17.17%
Perennial Value Management Limited (PVM)
52,882,484
14.03%
James William Vicars
30,841,174
9.97%
98 ECOFIBRE LIMITED ANNUAL REPORT 2024
SHAREHOLDER INFORMATION
Unquoted Options
There were 1,159,242 unquoted options over ordinary shares as follows:
Unquoted options – description
Number of options
Number of holders
Non-executive director options expiring 7 October 2024
exercisable @ AU$0.83 per share
530,751
2
Non-executive director options expiring 1 October 2025
exercisable @ AU$0.22 per share
628,491
1
Total
1,159,242
3
Unquoted Employee Share Rights
There are 11,260,002 unquoted performance rights on issue held by 11 holders as follows:
Size of holding
Number of holders
Number of Rights
% of Rights on issue
1-1,000
-
-
0.00%
1,001 – 5,000
-
-
0.00%
5,001 – 10,000
-
-
0.00%
10,001 – 100,000
2
200,000
3.20%
100,001 and above
5
6,050,002
96.80%
Total
7
6,250,002
100.00%
Unquoted Performance Rights
There are 5,924,925 unquoted performance rights on issue as follows:
Unquoted performance rights – description
Number of rights
Number of holders
TexInnovate performance rights – contingent consideration
expiring 21 August 2027
5,924,925
1
Total
5,924,925
1
Voting Rights
Ordinary shares carry voting rights on a one-for-one basis. Unquoted options, employee share rights, and
performance rights do not carry voting rights.
Units in EOF Bio at 4 September 2024
Number of common and
preferred units
%
Ecofibre Ltd
25,546
72.2%
Non-controlling interest
9,849
27.8%
Total
35,395
100%
In addition to the above, 1,600 incentive units were issued that contain rights to a share in future profits that will vest
if commercialisation targets are met.
Voting Rights
Common units carry voting rights, whereas Preferred units and Incentive Units do not.
ECOFIBRE LIMITED ANNUAL REPORT 2024 99
Investor information
Shareholder services
Ecofibre’s share register is maintained by Link Market Services Limited. By visiting the Link Investor Centre,
shareholders can:
•
View their holding details
•
Register to receive Annual Reports electronically
•
Access and update information held by the Share Registry
•
View information relating to transaction history
•
Provide their Tax File Number or ABN
•
Download forms, change address details, update communication preferences and add or amend direct credit
details.
When you visit the Link Investor Centre, you will need your Security Reference Number (SRN) or Holder Identification
Number (HIN) to verify your identity. Your SRN/HIN is available on your holding/transaction and distribution statements.
Recent legislative changes to the Corporations Act 2001 (Cth) mean there are new options for how Ecofibre
shareholders receive communications. Ecofibre will no longer send physical meeting documents unless a shareholder
requests a copy to be mailed.
Electronic communication has the added advantage of being timelier and more cost-effective, which benefits all
shareholders, and Ecofibre encourages all shareholders to provide an email address so we can communicate with you
electronically when shareholder notices become available online, for items such as meeting documents, dividend
statements, and annual reports.
Shareholders can still elect to receive some or all of their communications in physical or electronic form. To review
your communication preference or sign up to receive your shareholder communications via email, please update your
details at the Link Investor Centre.
For all other questions, please contact the Registry:
Link Market Services Limited
Level 21, 10 Eagle Street, BRISBANE, QLD, AUSTRALIA, 4000
Share registry telephone: 1300 554 474
registrars@linkmarketservices.com.au
linkmarketservices.com.au
100 ECOFIBRE LIMITED ANNUAL REPORT 2024
INVESTOR INFORMATION
Information on Ecofibre
Ecofibre website
Up-to-date information on the company can be obtained from the company’s website ecofibre.com.
Securities Exchange listing
Ecofibre shares are listed on the Australian Securities Exchange under the code EOF.
Share prices can be accessed from major Australian newspapers, on the Ecofibre website, or at asx.com.au.
Privacy
A copy of the Ecofibre Privacy Policy is available on the Ecofibre website.
Ecofibre Investor Relations department
Further information and publications about the company’s operations are available by contacting the Investor
Relations department via the Ecofibre website.
ECOFIBRE LIMITED ANNUAL REPORT 2024 101
102 ECOFIBRE LIMITED ANNUAL REPORT 2024
Corporate directory
ECOFIBRE LIMITED ANNUAL REPORT 2024 103
Registered Office
Level 12, 680 George Street
Sydney NSW 2000
Principal place of business
Level 12, 680 George Street
Sydney NSW 2000
Share Registry
Link Market Services
Level 21
10 Eagle Street
Brisbane QLD 4000
Auditor
William Buck (Qld)
Level 21, 307 Queen Street,
Brisbane QLD 4000
Solicitor
Colin Biggers & Paisley Lawyers
Level 35, 1 Eagle Street
Brisbane QLD 4000
ƀ.cbp.com.au
Banker
Commonwealth Bank of Australia
240 Queen Street
Brisbane QLD 4000
Stock exchange listing
Ecofibre Limited shares are listed on the
Australian Securities Exchange (ASX code: EOF)
Corporate Governance Statement
ecofibre.com/investors/corporate/
Directors
Vanessa Wallace
Prof. Bruce Robinson
Michele Anderson
Company Secretary
Jonathan Brown
Robin Sheldon
ANNUAL
REPORT
2024