Fa rm Pride F oods Lt d.
A BN: 4 2 080 590 030
551 CH A NDL ER ROA D
K E YSBOROUGH, V IC 3173
AUS T R A L I A
T: 1300 693 3 47
farmpride.com.au
Annual Report
2021
FPR0038 AR21 Cover Only_PFO.indd All Pages
FPR0038 AR21 Cover Only_PFO.indd All Pages
16/8/21 10:56 am
16/8/21 10:56 am
Farm Pride Foods Limited and Controlled Entities
Corporate Information
Farm Pride Foods Ltd.
ABN 42 080 590 030
Directors
Peter Bell (Non-Executive Chairman)
Malcolm Ward (Non-Executive Director)
Bruce De Lacy (Independent Non-Executive Director)
Management Team
Daryl Bird (Chief Executive Officer)
Robin Donohue (Chief Financial Officer)
Company Secretary
Bruce De Lacy
Registered office and principal place of business
551 Chandler Road
Keysborough, Victoria 3173
+61 3 9798 7077
Solicitors
Gadens
Level 25 Bourke Place
600 Bourke Street
Melbourne, Victoria 3000
Financiers
MC FP Pty Ltd
Level 18, 90 Collins Street
Melbourne, Victoria 3000
Share Registry
Computershare Registry Services Pty. Ltd.
Yarra Falls, 452 Johnston Street
Abbotsford, Victoria 3067
ASX: FRM
Auditors
Pitcher Partners
Level 13, 664 Collins Street
Docklands, Victoria 3008
Internet Address
www.farmpride.com.au
1
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
TABLE OF CONTENTS
Chairman’s Report
Directors’ Report
Auditor’s Independence Declaration
Financial Report for the year ended 30 June 2021
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
3
5
18
19
20
21
22
23
55
56
61
2
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Chairman’s Report
The Company’s net revenue decreased by 14.8% to $76.991 million (2020: $90.327 million).
The loss after tax was $11.971 million (2020: $2.169 million loss). Underlying EBITDA was a loss of
$4.330 million down from $2.672 million in 2020.
The results reflect the impact of the avian influenza (AI) event that the Company suffered early in
FY21 and the disruption caused by COVID19. The more significant impact of AI was that retail
customers placed volume the Company could not supply with our competitors. The company was not
able to recover this lost volume in FY21.
Management effort in FY21 continued to be focussed on the recovery of the AI affected farms. In
February 2021, Agriculture Victoria issued Revocation of Quarantine Notices for the affected farms.
Re-population of the flocks at the affected farms is now largely complete, delivering productive
capacity in line with the requirements of the business.
Following the AI outbreak, the Company with its advisors undertook a strategic review of the
business to determine a pathway to facilitate a timely and sustainable financial recovery. This review
determined that the cage free farm at Pittsworth in Queensland was surplus to its needs. As a result,
the Company finalised the sale of this farm in March 2021
Settlement proceeds from the sale of the Pittsworth farm were $3.100 million excluding expenses.
Funds from the sale were directed to working capital and the reduction of debt as at 30 June 2021 by
$0.732 million.
The Company also entered into an unconditional agreement to sell its Keysborough manufacturing
facility.
The reduction in property, plant and equipment to $31.627 million (2020: $45.020 million) reflects in
large part the sale of the Pittsworth farm and the re-classification of the Keysborough manufacturing
facility to an asset held for re-sale. The lower level of capital expenditure reflects our focus and effort
to recover quickly from AI.
On 9 July 2021, the Company completed the sale of its Keysborough manufacturing facility for
$18.500m. Proceeds from the sale were used to reduce debt and provide working capital to drive
the business recovery, further develop the Company’s cage free capacity and to support its
innovation platform. The Company also entered into a long-term lease of the facility of fifteen
years, with an additional five-year option, with the purchaser RF Corval, a specialist property fund
manager and investment company.
The 3-year plan “Managing for Value” continues to be relevant and a focus for the business. While
COVID and AI stalled our progress during the past 12 months, work effort continues to develop the
farm network and capacity to meet market needs which continue to evolve to focus on cage free
eggs. Relationships in the supermarket channel continue to be strong as we seek additional growth
opportunities around the cage free transition. The focus on organic and incremental sales growth in
industrial ingredients continues to be a business priority.
Internally, effort continues to focus on structuring our efforts to accelerate new product development.
Innovation programs continue to be bolstered with additional technical resources. New product
launches are planned for late H1 FY22.
3
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
In summary, FY21 has contained the most challenges the Company has ever had to face. The new
financial year continues to present challenges in managing the impact of the COVID pandemic in
Australia. The Company remains on high vigilance and is making every effort to protect as far as is
possible against any incursions that may impact health and safety of our staff or present any
commercial impact to the business.
Save for unavoidable impact from COVID in the new financial year, the Board and management
believe the underlying business operational and structural fundamentals remain resilient and that the
Company will recover from the challenges experienced in FY21 and return to an upward trajectory in
the coming twelve months.
The Board wishes to thank all our customers for their continued support and especially to every one
of our employees who have worked so hard to ensure our business could meet the challenges of
FY21
We look forward to continuing to supply a quality product to all our customers.
Peter Bell
Chairman
Farm Pride Foods Ltd
27 August 2021
4
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
The directors present their report together with the financial report of the consolidated entity consisting
of Farm Pride Foods Limited (‘the Company’) and the entities it controlled (the ‘group’), for the
financial year ended 30 June 2021 and auditor’s report thereon.
Directors
The names of directors in office at any time during or since the end of the year are:
Peter Bell
Malcolm Ward
Bruce De Lacy
Non-executive Director, Chair
Non-executive Director
Independent Non-executive Director
The directors have been in office since the start of the year to the date of this report unless otherwise
stated.
Principal activities
The principal activities of the group during the financial year were the production, processing,
manufacturing and sale of eggs and egg products.
There has been no significant change in the nature of these activities during the financial year.
Review of operations and financial results
Statutory consolidated net profit after tax attributable to the members of Farm Pride Foods Ltd
(“Statutory Profit”) for the year ended 30 June 2021 was a loss of $11.971 million (2020: $2.169
million loss). Underlying earnings before interest, tax, depreciation and amortisation (“Underlying
EBITDA”) was a loss of $4.330 million (2020: $2.672 million profit).
Underlying EBITDA represents statutory earnings before interest, tax, depreciation and amortisation
adjusted for items that are material to revenue or expense that are unrelated to the underlying
performance of the business (‘significant items’). Farm Pride believes that presenting Underlying
EBITDA provides a better understanding of its financial performance by facilitating a more
representative comparison of financial performance between financial periods. The results are
presented with reference to the Australian Securities and Investment Commission Regulatory Guide
230 “Disclosing non-IFRS financial information”.
The following table reconciles the Statutory Profit to Underlying EBITDA for the year ended 30 June
2021:
Statutory (loss) / profit
Add back:
- Interest (finance costs)
- Income tax (benefit) / expense
- Depreciation
- Lease adjustment AASB16
EBITDA
Significant items:
AI Compensation \ recovery
AI asset write off and stock losses
Impairment of property, plant and equipment
Underlying EBITDA
30 June 2021
$’000
30 June 2020
$’000
(11,971)
(2,169)
2,376
(2,547)
9,090
(4,588)
(7,640)
(3,561)
3,652
3,219
(4,330)
2,291
(930)
8,069
(4,589)
2,672
-
-
-
2,672
5
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Operating and financial review (continued)
The annual result reflects the impact of the Avian Influenza outbreak (AI) in July 2020 that centred on
the Company’s two farm operations in the Lethbridge area South West of Melbourne. As detailed in
the ASX market releases following the outbreak, approximately 33% of our productive hen flock was
affected. The management of the AI outbreak was made more difficult and complex with the physical
movement restrictions imposed by the Victorian Government due to COVID.
While the visible net financial position of the AI outbreak was a net loss of $0.091 million
(compensation for loss of stock and flock $3.414 million, cost recovery from other initiatives $0.147
million, stock and flock loss $3.652million) the event was a major disruption to sales from Q1
onwards. Our retailer customers were forced to replace volume from the Company via competitors.
Management effort in FY21 continued to be focussed on the recovery of the AI affected farms. In
February 2021, Agriculture Victoria has issued Revocation of Quarantine Notices for the effected
farms. Re-population of the flocks was underway across Q4 of FY2021 to re-build productive capacity
in line with the future strategic plan and direction of the business.
The sale of the cage free farm at Pittsworth Qld was completed in March 2021 for $3.100 million
excluding expenses. An impairment of $3.219 million was also recognised in the first half results for
FY21 to reflect the realised sale value.
As outlined below as a subsequent event, the Company also entered into a sale process for its
Keysborough manufacturing facility. With the unconditional sales agreement and settlement of the
transaction straddling year end, the capital gain on the sale is taxable in FY21 but the accounting
profit on sale will only be accounted for in FY22.
For further discussion of the review and results of operations of the group reference should be made to
the Chairman’s Report dated 27 August 2021.
Significant changes in the state of affairs
There have been no significant changes in the group’s state of affairs during the financial year, other
than as disclosed in this report.
Subsequent events
On 9 July 2021, the Company settled the sale of its Keysborough manufacturing facility. Proceeds
of $18.500 million from the sale were used to reduce debt and provide working capital to drive the
business recovery, develop the Company’s cage free capacity and to support its innovation
platform. The Company has entered into a long-term lease of the facility of fifteen years with an
additional five-year option with the purchaser RF Corval, a specialist property fund manager and
investment company.
Apart from the sale of the Keysborough manufacturing facility no other circumstance has arisen
since 30 June 2021 that has significantly affected or may significantly affect:
-
-
-
the operations, in financial years subsequent to 30 June 2021, of the group, or
the results of those operations, or
the state of affairs, in financial years subsequent to 30 June 2021, of the group.
Environmental regulation
The group’s operations are not subject to any significant environmental, Commonwealth or State
regulations or laws. The group is not aware of any significant breaches of environmental regulations
during the financial year.
Dividend paid, recommended and declared
No dividends were paid, declared or recommended since the start of the financial year.
6
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Share options
No options over unissued shares or interests in the consolidated entity were granted during or since
the end of the financial year and there were no options outstanding at the end of the financial year.
Information on directors and company secretary
The qualifications, experience and special responsibilities of each person who has been a director
of Farm Pride Foods Limited at any time during the year and up to the date of this report is provided
below, together with details of the company secretary as at the year end.
Peter Bell
Non-executive Chairman - Appointed 30 May 2008, Member of the Audit Committee until
22 November 2018
Peter has been involved at all levels of the egg industry for more than 50 years.
He continues to be directly involved in the management of commercial egg farms as
well as a contributor to industry and regulatory agencies.
He is a director of AAA Egg Company Pty Ltd and its subsidiary West Coast Eggs Pty
Ltd, Days Eggs Pty Ltd and Pure Foods Eggs Pty Ltd. These companies are egg
producers and marketers in Western Australia, South Australia and Tasmania.
Malcolm Ward
Non-executive Director – Appointed 30 May 2008, Member of the Audit Committee
Malcolm has been in the egg industry for over 30 years having owned and
operated cage and free-range farms and has served on industry related boards
in the area of farm management and feed supply. He is also a director of AAA
Egg Company Pty Ltd and its subsidiary West Coast Eggs Pty Ltd as well as
being a director on a number of other private companies. Malcolm is the
Managing Director of his family’s independent supermarkets and also has
commercial interests in property. He is also a director of Australian United Retailers Limited, appointed
17 November 2010.
Bruce De Lacy
Independent Non-executive director – Appointed 30 November 2018, Chair of the
Audit Committee – Appointed 22 November 2018
Bruce has over 35 years’ experience in the egg industry and has previously been
employed in a number of positions at the Company including Chief Executive
Office, General Manager and Chief Operating Officer.
Directors’ meetings
Board of Directors
Audit Committee
Eligible to
attend
Attended
Eligible to
attend
Attended
Peter Bell
Malcolm Ward
Bruce De Lacy
26
26
26
* Peter Bell attended meetings by invitation.
23
26
26
7
-
10
10
10*
10
10
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Directors’ interests in shares
Directors’ relevant interests in shares of Farm Pride Foods Limited or options over shares in the
Company are detailed below:
Directors’ relevant interests in:
Ordinary shares of
Farm Pride Foods
Limited
Options over shares in
Farm Pride Foods
Limited
Peter Bell
Malcolm Ward
Bruce De Lacy
2,064,250
2,031,772
195,502
-
-
-
Peter Bell and Malcolm Ward have an indirect interest in the 27,486,302 shares held by West Coast
Eggs Pty Ltd (2020: 27,486,302 shares) and the 1,000 shares held by Southern Egg Pty Ltd (2020:
1,000).
Indemnification and Insurance of directors and officers
During the financial year, the Company has paid premiums to insure each of the Directors and
Officers against liabilities for costs and expenses incurred by them in defending any legal
proceedings arising out of their conduct while acting in the capacity of Director or Officer of the
Company.
Under the Directors and Officers Liability Insurance Policy the company shall not release to any third party or
otherwise publish details of the nature of the liabilities insured by the policy or the amount of the premium.
Accordingly, the Company relies on section 300 (9) of the Corporations Act 2001 to exempt it from the
requirement to disclose the nature of the liability insured against and the premium amount of the policy
Proceedings on behalf of the company
No person has applied for leave of Court to bring proceedings on behalf of Farm Pride Foods Limited or
any of its subsidiaries.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations
Act 2001 in relation to the audit for the financial year is provided within this report.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors as part of the terms
of its engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify the auditors during or since the financial year.
8
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Non-audit services
Non-audit services are approved by resolution of the Audit and Risk Committee and approval is
provided in writing to the board of directors. Non-audit services were provided by the auditors of
entities in the consolidated group during the year, namely Pitcher Partners (Melbourne), network firms
of Pitcher Partners, and other non-related audit firms, as detailed below. The directors are satisfied
that the provision of the non-audit services during the year by the auditor is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001 for the following
reasons:
all non-audit services were subject to the corporate governance procedures adopted by Farm
Pride Foods Ltd and have been reviewed and approved by the Audit and Risk Committee to
ensure they do not impact on the integrity and objectivity of the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did
not involve reviewing or auditing the auditor’s own work, acting in a management or decision
making capacity for Farm Pride Foods Ltd or any of its related entities, acting as an advocate for
Farm Pride Foods Ltd or any of its related entities, or jointly sharing risks and rewards in relation
to the operations or activities of Farm Pride Foods Ltd or any of its related entities.
Amounts paid and payable to Pitcher Partners (Melbourne) for non-audit services:
Taxation services
23,737
14,000
2021
$
2020
$
Rounding of amounts
In accordance with ASIC Corporations (Rounding in Financial/Director’s Reports) Instrument
2016/191, the amounts in the Directors’ report and in the Financial Report have been rounded to
the nearest thousand dollars, or in certain cases, to the nearest dollar (where indicated).
Remuneration Report (Audited)
The directors present the group’s 2021 remuneration report which details the remuneration
information for Farm Pride Foods Limited’s key management personnel (‘KMP’) in accordance with
the Corporations Act 2001 and its Regulations (‘Remuneration Report’). The Remuneration Report
has been audited by Farm Pride Foods Ltd external auditors, Pitcher Partners.
9
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
(a)
Key management personnel
The Remuneration Report discloses the remuneration arrangements and outcomes for people listed
in the table below who are those individuals who have been determined as KMP as defined by AASB
124 Related Party Disclosures.
Name
Position
Term as KMP
Non-Executive Directors
Peter Bell
Malcolm Ward
Bruce De Lacy
Senior Executives
Daryl Bird
Geeta Kulkarni
Robin Donohue
Non-executive Chairman
Non-executive Director
Non-executive Director, Company Secretary
Full financial year
Full financial year
Full financial year
Group Chief Executive Officer
Group Chief Financial Officer, Resigned 21 May
2021
Group Chief Financial Officer, Appointed 31 May
2021
Full financial year
Part of financial year
Part of financial year
(b)
Remuneration policy
The performance of the group depends upon the quality of its directors and executives. To be
successful, the group must attract, motivate and retain highly skilled directors and executives. To this
end, the group adopts the following principles in its remuneration framework:
–
–
–
–
–
–
Provide competitive rewards to attract high caliber executives;
Link executive rewards to the performance of the group and the creation of shareholder value;
Establish appropriate performance hurdles for variable executive remuneration;
Meet the Company’s commitment to a diverse and inclusive workplace;
Promote the Company as an employer of choice;
Comply with relevant legislation and corporate governance principles.
In accordance with best practice corporate governance, the structure of non-executive director and
executive remuneration is separate and distinct.
The board of directors are responsible for determining and reviewing compensation arrangements for
directors and executives. The board of directors assess the appropriateness of the nature and amount
of remuneration of directors and executives on a periodic basis by reference to relevant market
conditions, as well as whether performance targets have been met, with the overall objective of
ensuring maximum shareholder benefit from the retention of a high-quality board and executives.
(c)
Use of Remuneration Consultants
To ensure the board of directors are fully informed when making remuneration decisions, the group
seeks external remuneration advice. Remuneration consultants are engaged by, and report directly
to, the board of directors. In selecting remuneration consultants, the Board of directors considers
potential conflicts of interest and requires independence from the group’s key management personnel
and other executives as part of their terms of engagement.
During the year ended 30 June 2021, the group did not engage external remuneration consultants.
10
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Remuneration Report (continued)
(d)
Non-Executive Director Remuneration
Objective
The board aims to set aggregate remuneration at a level which provides the group with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to
shareholders.
Structure
The group’s Constitution and the ASX Listing Rules specify the aggregate remuneration of non-
executive directors shall be determined from time to time by a general meeting. An amount not
exceeding the amount determined is then divided between the directors as agreed.
The cap on aggregate non-executive director’s remuneration (which requires shareholder approval),
and the manner in which it is apportioned amongst non-executive directors, is reviewed annually. The
board will consider advice from external consultants as well as fees paid to non-executive directors of
comparable companies when undertaking the annual review process.
Non-executive directors receive fees and do not receive share-based remuneration or bonus
payments.
Superannuation contributions are made by the Group on behalf of non-executive directors in line with
statutory requirements and are included in the remuneration package amount allocated to individual
directors.
The remuneration of non-executive directors for the year ended 30 June 2021 is detailed in the table
titled KMP Remuneration on page 14 (the ‘Remuneration Table’).
(e)
Executive Remuneration
Objective
The group aims to reward executives with a level and mix of remuneration commensurate with their
position and responsibilities within the group. This involves:
– Rewarding executives for company, business unit and individual performance against targets
set by reference to appropriate benchmarks
Aligning the interest of executives with those of shareholders
Linking reward with the strategic goals and performance of the group
Ensuring total remuneration is competitive by market standards.
–
–
–
Structure
In determining the level and make-up of executive remuneration, the board of directors engage
external consultants on market levels of remuneration for comparable roles. Remuneration consists of
the following key elements:
–
–
Fixed remuneration
Variable remuneration.
The proportion of fixed remuneration and variable remuneration is established for each executive by
the board of directors. The variable portion consists of a short-term cash bonus which is performance-
based and is disclosed separately in the Remuneration Table.
The board of directors also considers current market conventions with regards to the splits between
fixed, short-term and long-term incentive elements.
11
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Remuneration Report (continued)
Fixed Remuneration
Objective
The level of fixed remuneration is set to provide an appropriate and market-competitive base level of
remuneration. Fixed remuneration is reviewed annually by the board of directors consisting of a
review of group, business and individual performance, relevant comparative remuneration in the
market and internal and external advice on policies and practices where necessary.
Structure
Total fixed remuneration (‘TFR’) is the non-variable component of an executive’s annual
remuneration. It consists of the base salary plus any superannuation contributions paid to a complying
super fund on the executive’s behalf, and the cost (including any component for fringe benefits tax) for
other items such as novated vehicle lease payments.
Linking remuneration to performance - variable remuneration
Remuneration is linked to performance to retain high calibre executives by motivating them to achieve
performance goals which are designed to increase shareholders value.
Variable remuneration
Objective
The objective of executive variable remuneration is to link executive remuneration to the achievement
of the group’s annual operational and financial targets through a combination of both company and
individual performance targets.
Structure
Variable remuneration is expressed as a percentage of a participant’s TFR comprising base salary,
superannuation contributions and may include other non-cash benefits, and are based on the
achievement of group-wide budgeted revenue and profit targets each financial year and individual
performance targets at the board’s discretion.
For executives, the group provides a remuneration package that incorporates annual cash bonuses,
payable at the discretion of the board of directors.
12
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3
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Remuneration Report (continued)
(h)
Shareholdings of KMP
Peter Bell
Malcolm Ward
Bruce De Lacy
Balance
1 July 2020
Received as
remuneration
Options
exercised
2,314,250
2,031,772
195,502
4,541,524
-
-
-
-
-
-
-
-
Other
On market
purchases/
(sales)
(250,000)
-
-
(250,000)
Balance
30 June 2021
2,064,250
2,031,772
195,502
4,291,524
Peter Bell and Malcolm Ward have an indirect interest in the 27,486,302 shares held by West Coast Eggs Pty Ltd
(2020: 27,486,302 shares) and the 1,000 shares held by Southern Egg Pty Ltd (2020: 1,000).
(i)
Other transactions with KMP
The value of transactions (inclusive of GST) and amounts receivable/(payable) between directors and their related
entities and Farm Pride Foods Limited and its controlled entities.
Director related entities1
Transaction
Revenue
Expenditure
AAA Egg Company Pty Ltd
(P. Bell / M. Ward)
Specialised Breeders Australia
Pty Ltd 2 (P. Bell)
Days Eggs Pty Ltd
(P. Bell)
Hy-Line Australia Pty Ltd 2
(P. Bell)
Pure Foods Eggs Pty Ltd
(P. Bell)
West Coast Eggs Pty Ltd
(P. Bell / M. Ward)
Purchases
Purchases
Egg supply /
Purchases
Purchases
Egg sales
Egg sales /
Purchases
2021
$’000
2020
$’000
2021
$’000
-
-
-
-
-
-
27
195
151
-
41
-
27
-
-
2020
$’000
10
107
420
5,319
-
854
776
164
154
Balance
Receivable /
(Payable)
2021
$’000
2020
$’000
-
-
-
(83)
(10)
(4)
-
3
77
(850)
3
71
1 Peter Bell and Malcolm Ward through their related entities provide birds, eggs and egg products to and acquire eggs, egg product and
packaging from Farm Pride Foods Limited and its controlled entities. These transactions are on normal trading terms and conditions. Director’s
administrative expenses are reimbursed at cost.
2 Peter Bell resigned as director of Specialised Breeders Australia Pty Ltd and Hy-Line Australia Pty Ltd effective 31 Oct 2019.
Transactions in the above table represent related party transactions for the full financial year from July ‘20 – June ’21 and comparatives for
July ’19 - June ’20.
15
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Remuneration Report (continued)
(j)
Service Agreements
The contracts for service between the group and executives are on a continuing basis, the terms of which are not
expected to change in the immediate future. Remuneration and other terms of employment for key management
personnel are formalised in service agreements as follows:
Chief Executive Officer
Daryl Bird is the Chief Executive Officer of the Company appointed on 1 December 2018. Daryl is employed under
a standard employment contract with no defined length of tenure. Under the terms of his employment contract:
Daryl may resign from his position by providing the group with three months written notice,
The group may terminate this agreement by providing three months written notice or provide payment in
lieu of the notice period, or the unexpired part of any notice period,
The group may terminate at any time without notice if serious misconduct has occurred,
Daryl’s total remuneration includes $20,000 car allowance per annum,
For the financial years commencing 1 July 2019 onwards, Daryl will participate in the group’s Short-Term
Incentive and Long-Term Incentive programs.
Details of Daryl Bird’s salary are detailed in the Remuneration Table.
Chief Financial Officer
Robin Donohue is the Chief Financial Officer of the Company appointed 31 May 2021. Robin is employed under a
standard employment contract with no defined length of tenure.
Robin may resign from his position by providing the group with three months written notice,
The group may terminate this agreement by providing three months written notice or provide payment in
lieu of the notice period, or the unexpired part of any notice period,
The group may terminate at any time without notice if serious misconduct has occurred,
For the financial years commencing 1 July 2021 onwards, Robin participates in the group’s Short-Term
Incentive program and is entitled to a performance bonus of up to 15% of the cash salary at the time of
payment of the bonus.
Details of Robin Donohue’s salary are detailed in the Remuneration Table.
(k)
Revenue and Other Income
The group’s revenue, profit before tax and earnings per share for the last five financial years is presented in the table
below:
Revenue
Net (loss)/profit before tax
Net (loss)/profit after tax
Share price at end of year in dollars
Basic (loss)/earnings cents per share
Diluted (loss)/earnings cents per share
2021
$’000
76,991
(14,518)
(11,971)
0.42
(21.69)
(21.69)
2020
$’000
90,327
(3,099)
(2,169)
0.27
(3.93)
(3.93)
2019
$’000
86,641
(5,324)
(3,858)
0.21
(6.99)
(6.99)
2018
$’000
86,116
858
503
0.88
0.91
0.91
2017
$’000
97,778
12,232
8,481
1.16
15.37
15.37
16
Farm Pride Foods Limited and Controlled Entities
Directors’ Report
Remuneration Report (continued)
Voting and comments made at the company’s 2020 Annual General Meeting (AGM)
At the company’s most recent AGM, a resolution to adopt the prior year remuneration report was put to the vote and
at least 75% of votes were cast as ‘yes’ for adoption of that report. No comments were made on the remuneration
report that was considered at the AGM.
This is the end of the audited remuneration report.
Signed in accordance with a resolution of the directors.
Peter Bell
Director
Melbourne
27 August 2021
17
FARM PRIDE FOODS LIMITED
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF FARM PRIDE FOODS LIMITED
In relation to the independent audit for the year ended 30 June 2021, to the best of my knowledge and
belief there have been:
(i)
(ii)
No contraventions of the auditor independence requirements of the Corporations Act 2001; and
No contraventions of APES 110 Code of Ethics for Professional Accountants (including Independence
Standards).
This declaration is in respect of Farm Pride Foods Limited and its controlled entities during the year.
STEPHEN SCHONBERG
Partner
Date: 27 August 2021
PITCHER PARTNERS
Melbourne
18
Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008
Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities
Adelaide Brisbane Melbourne Newcastle Sydney Perth
pitcher.com.au
Farm Pride Foods Limited and Controlled Entities
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Revenue and other income
Revenue from contracts with customers
Interest revenue and other income
Less: Expenses
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Employee benefits expense
Depreciation
Impairment of property, plant and equipment
Loss on disposal of biological assets
Finance costs
Other expenses
(Loss)/Profit before income tax
Income tax benefit / (expense)
(Loss)/Profit from continuing operations
(Loss)/Profit for the year
Notes
4
4
5
5
5
5
5
5
5
6
2021
$’000
73,316
3,675
76,991
(1,470)
(52,537)
(15,305)
(9,090)
(3,219)
(3,652)
(2,376)
(3,860)
2020
$’000
90,234
93
90,327
1,153
(66,543)
(15,811)
(8,069)
-
-
(2,291)
(1,865)
(14,518)
(3,099)
2,547
(11,971)
(11,971)
930
(2,169)
(2,169)
Total comprehensive (loss) / income for the period
(11,971)
(2,169)
Basic (loss)/earnings per share (cents per share)
Diluted (loss)/earnings per share (cents per share)
19
19
(21.69)
(21.69)
(3.93)
(3.93)
The above statement should be read in conjunction with the accompanying notes.
19
Farm Pride Foods Limited and Controlled Entities
Consolidated Statement of Financial Position
Notes
20
8
9
10
11
12
10
6
14
13
15
14
17
16
14
17
18
2021
$’000
1,285
6,105
4,541
7,603
778
2,868
2020
$’000
4,412
7,439
6,011
6,382
812
-
23,180
25,056
414
5,827
10,966
31,627
48,834
3,146
3,280
15,581
45,020
67,027
72,014
92,083
10,610
13,303
3,959
1,928
4,380
1,983
16,497
19,666
18,709
7,462
201
26,372
42,869
29,145
29,578
(433)
29,145
19,441
11,648
212
31,301
50,967
41,116
29,578
11,538
41,116
Current Assets
Cash and short-term deposits
Trade and other receivables
Inventories
Biological assets
Other current assets
Assets held for re-sale
Total current assets
Non-current assets
Biological assets
Deferred tax assets
Lease assets
Property, plant and equipment
Total non-current assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Lease liabilities
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Retained earnings / (losses)
The above statement should be read in conjunction with the accompanying notes.
20
Farm Pride Foods Limited and Controlled Entities
Consolidated Statement of Changes in Equity
Contributed
equity
Retained
earnings /
(losses)
Total
$’000
$’000
$’000
29,578
-
-
-
29,578
29,578
-
-
-
29,578
11,538
(11,971)
-
(11,971)
(433)
13,707
(2,169)
-
(2,169)
11,538
41,116
(11,971)
-
(11,971)
29,145
43,285
(2,169)
-
(2,169)
41,116
Balance as at 1 July 2020
(Loss)/Profit for the year
Other comprehensive income
Total comprehensive income
Balance as at 30 June 2021
Balance as at 1 July 2019
(Loss)/Profit for the year
Other comprehensive income
Total comprehensive income
Balance as at 30 June 2020
The above statement should be read in conjunction with the accompanying notes.
21
Farm Pride Foods Limited and Controlled Entities
Consolidated Statement of Cash Flows
Notes
2021
$’000
2020
$’000
Cash flow from operating activities
Receipts from customers
Payments to suppliers and employees
Finance costs paid
Interest received
Net cash provided by / (used in) operating activities
20
Cash flow from investing activities
Proceeds from sale of property, plant and equipment
Payment for property, plant and equipment
Net cash provided by / (used in) investing activities
Cash flow from financing activities
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Net cash provided by / (used in) financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
20
78,731
(77,186)
(1,760)
-
(215)
3,115
(400)
2,715
-
(1,348)
(4,279)
(5,627)
(3,127)
4,412
1,285
91,240
(82,069)
(2,291)
2
6,882
-
(3,664)
(3,664)
19,441
(13,500)
(3,963)
1,978
5,196
(784)
4,412
The above statement should be read in conjunction with the accompanying notes.
22
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of significant accounting policies
The following is a summary of significant accounting policies adopted by the consolidated entity in the
preparation and presentation of the financial report. The accounting policies have been consistently
applied, unless otherwise stated. Farm Pride Foods Limited (the Company or parent entity) is a for
profit company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Stock Exchange.
(a) Basis of preparation of the financial report
This financial report is a general-purpose financial report, which has been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board (AASB).
The financial report has been prepared under the historical cost convention, as modified by
revaluations to fair value for certain classes of assets as described in the accounting policies.
The financial report is presented in Australian dollars and all values are rounded to the nearest
thousand ($’000), except when otherwise indicated.
The financial report was authorised for issue by the directors as at 27 August 2021.
Compliance with International Financial Reporting Standards (IFRS)
The consolidated financial statements of Farm Pride Foods Ltd also comply with the International
Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
Significant accounting estimates
The preparation of the financial report requires the use of certain estimates and judgements in
applying the consolidated entity’s accounting policies. Those estimates and judgements significant
to the financial report are disclosed in Note 2.
(b) New and revised accounting standards effective at 30 June 2021
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
AASB 2018-7 principally amends AASB 101 Presentation of Financial Statements and AASB 108
Accounting Policies, Changes in Accounting Estimates and Errors. The amendments refine the definition
of material in AASB 101. The amendments clarify the definition of material and its application by
improving the wording and aligning the definition across AASB Standards and other publications. The
amendment also includes some supporting requirements in AASB 101 in the definition to give it more
prominence and clarifies the explanation accompanying the definition of material.
The application of AASB 2018-7 has not materially impacted the financial statements of the group.
AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark
Reform
AASB 2019-3 has been issued to respond to the effects of Interbank Offered Rates (IBOR) reform on
financial reporting. The amendments provide temporary reliefs which enable hedge accounting to
continue during the period of uncertainty before the replacement of an existing interest rate benchmark
with an alternative nearly risk-free interest rate.
The reliefs apply to all hedging relationships that are directly affected by the interest rate benchmark
reform. A hedging relationship is affected if the reform gives rise to uncertainties about the timing and/or
amount of benchmark-based cash flows of the hedged item or the hedging instrument.
The application of AASB 2019-3 has not materially impacted the financial statements of the group.
23
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of significant accounting policies
(c) Accounting standards issued but not yet effective
AASB 2020-1: Amendments to Australian Accounting Standards – Classification of Liabilities as
Current or Non-current
AASB 2020-1 amends AASB 101 Presentation of Financial Statements to clarify requirements for the
presentation of liabilities in the statement of financial position as current or non-current.
AASB 2020-1 mandatorily applies to annual reporting periods commencing on or after 1 January 2022
and will be first applied by the Group in the financial year commencing 1 July 2022.
AASB 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018 –
2020 and Other Amendments
AASB 2020-3 amends AASB 1 First-time Adoption of Australian Accounting Standards, AASB 3
Business Combinations, AASB 9 Financial Instruments, AASB 116 Property, Plant and Equipment,
AASB 137 Provisions, Contingent Liabilities and Contingent Assets and AASB 141 Agriculture as a
consequence of the recent issuance by IASB of the following IFRS: Annual Improvements to IFRS
Standards 2018-2020, Reference to the Conceptual Framework, Property, Plant and Equipment:
Proceeds before Intended Use and Onerous Contracts – Cost of Fulfilling a Contract.
AASB 2020-3 mandatorily applies to annual reporting periods commencing on or after 1 January 2022
and will be first applied by the Group in the financial year commencing 1 July 2022.
(d) Going concern
The financial report has been prepared on the basis that the Group is a going concern, which
assumes continuity of normal business activities and the realisation of assets and the settlement of
liabilities in the ordinary course of business.
During the year ended 30 June 2021 the Group incurred a net loss after tax of $11.971 million
(2020: loss $2.169 million). Net cash flow from operating activities was an outflow of $0.215 million
(2020: cash inflow $6.882 million). As at 30 June 2021 current assets of $23.180 million exceed
current liabilities of $16.497 million by $6.683 million. (2020: current assets of $25.056 million
exceed current liabilities of $19.666 million by $5.390 million). Borrowings of $18.709 million (2020
$19.441 million) are classified as non-current.
As described in Note 16 the Group has debt facilities at 30 June 2021 providing funding of up to
$22.152 million. This facility was drawn to $18.932 million as at 30 June 2021. The facility
agreement expires on 16 August 2022.
With the completion of the sale of the Keysborough manufacturing facility for $18.500 million on 9
July 2021, $7.500 million of the debt facility was repaid, reducing the Group’s borrowings to
$11.432 million. The repayment of a principal component of the borrowing reduced the facility limit
by $7.081 million to $15.071 million. The remainder of the proceeds from the sale of Keysborough
were retained by the Group to fund future growth and innovation initiatives.
The Group continues to actively manage its cash flows through management of inventory levels,
debtors and creditors within strict terms and limits. The Group continues to refine its internal
controls and governance. This includes targeted capital expenditure to improve asset life, quality
and safety with a view to support the Group’s focus on diversified revenue sources to adapt to
changing market conditions.
The directors in their consideration of the appropriateness of the going concern basis for the
preparation of the financial report have reviewed the Group’s cash flow forecasts and revenue
projections based on current market conditions and business plans.
On this basis, no adjustments have been made to the financial report relating to the recoverability
and classification of the carrying amount of assets or the amount and classification of liabilities that
might be necessary should the Group not continue as a going concern.
24
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of significant accounting policies
(e) Biological assets
Biological assets comprise flocks of hens. As there is no active market for flocks of hens, the
biological assets are recorded based upon the capitalised cost of the flock less accumulated
amortisation. The cost is amortised over the productive life of the flock. This is between 50 and 60
weeks. The flocks are held for the purposes of producing eggs.
(f) Borrowing costs
Borrowing costs are expensed as incurred, except for borrowings directly incurred as part of the cost
of the construction of a qualifying asset, in which case the costs are capitalised until the asset is ready
for its intended use or sale.
Borrowing costs include interest expense calculated using the effective interest method, finance
charges in respect of finance leases and exchange differences arising from foreign currency
borrowings to the extent that they are regarded as an adjustment to interest costs and other costs that
an entity incurs in connection with its borrowing of funds.
(g) Cash and cash equivalents
Cash and cash equivalents include cash on hand and at banks short term deposits with an original
maturity of three months or less held at call with financial institutions, and bank overdrafts. Bank
overdrafts are shown within borrowings in current liabilities on the consolidated statement of
financial position.
(h) Employee benefits
Short term employee benefit obligations
Liabilities arising in respect of wages and salaries, annual leave, accumulated sick leave and any
other employee benefits (other than termination benefits) expected to be settled wholly before twelve
months after the end of the annual reporting period are measured at the (undiscounted) amounts
based on remuneration rates which are expected to be paid when the liability is settled.
The expected cost of short-term employee benefits in the form of compensated absences such as
annual leave is recognised in the provision for employee benefits. All other short-term employee
benefit obligations are presented as payables in the consolidated statement of financial position.
Other long-term employee benefit obligations
The provision for other long-term employee benefits, including obligations for long service leave and
annual leave, which are not expected to be settled wholly before twelve months after the end of the
reporting period, are measured at the present value of the estimated future cash outflow to be made in
respect of the services provided by employees up to the reporting date. Expected future payments
incorporate anticipated future wage and salary levels, duration of service and employee turnover, and
are discounted at rates determined by reference to market yields as the end of the reporting period on
high quality corporate bonds that have maturity dates that approximate the terms of the obligations.
Any re-measurements for changes in assumptions of obligations for other long-term employee
benefits are recognised in profit or loss in the period in which the change occurs.
Other long-term employee benefit obligations are presented as current liabilities in the balance sheet if
the entity does not have an unconditional right to defer settlement for at least twelve months after the
reporting date, regardless of when the actual settlement is expected to occur. All other long-term
employee benefit obligations are presented as non-current liabilities in the statement of financial
position.
25
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of significant accounting policies
(i) Events after the reporting period
Events after the reporting period are those events, favourable or unfavourable, that occur between the
end of the reporting period and the date when the financial report is authorised for issue.
The amounts recognised in the financial statements reflect events after the reporting period that
provide evidence of conditions that existed at the reporting date. Whereas events after the reporting
period that are indicative of conditions that arose after the reporting period (i.e. which did not exist at
the reporting date) are excluded from the determination of the amounts recognised in the financial
statements.
(j) Financial instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the group becomes party to the
contractual provisions of the instrument. For financial assets, this is equivalent to the date that the
group commits itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value adjusted for transaction costs, except where the
instrument is classified as fair value through profit or loss, in which case transaction costs are
immediately recognised as expenses in profit or loss.
Classification of financial assets
Financial assets recognised by the group are subsequently measured in their entirety at either amortised
cost or fair value, subject to their classification and whether the group irrevocably designates the
financial asset on initial recognition at fair value through other comprehensive income (FVtOCI) in
accordance with the relevant criteria in AASB 9.
Financial assets not irrevocably designated on initial recognition at FVtOCI are classified as
subsequently measured at amortised cost, FVtOCI or fair value through profit or loss (FVtPL) on the
basis of:
(a)
(b)
The group’s business model for managing the financial assets; and
The contractual cash flow characteristics of the financial asset.
Classification of financial liabilities
Financial liabilities classified as held-for-trading, contingent consideration payable by the group for the
acquisition of a business, and financial liabilities designated at FVtPL, are subsequently measured at fair
value.
All other financial liabilities recognised by the group are subsequently measured at amortised cost.
Trade and other receivables
Trade and other receivables arise from the group’s transactions with its customers and are normally
settled within 30 days.
Consistent with both the group’s business model for managing the financial assets and the contractual
cash flow characteristics of these assets, trade and other receivables are subsequently measured at
amortised cost.
Impairment of financial assets
The following financial assets are tested for impairment by applying the ‘expected credit loss’
impairment model:
(a)
debt instruments measured at amortised cost;
(b)
debt instruments classified at fair value through other comprehensive income; and receivables
from contracts with customers, contract assets and lease receivables.
26
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of significant accounting policies
The group applies the simplified approach under AASB 9 to measuring the allowance for credit losses
for receivables from contracts with customers, contract assets and lease receivables. Under the AASB
9 simplified approach, the group determines the allowance for credit losses for receivables from
contracts with customers, contract assets and lease receivables on the basis of the lifetime expected
credit losses of the financial asset. Lifetime expected credit losses represent the expected credit losses
that are expected to result from default events over the expected life of the financial asset.
The group determines expected credit losses based on the group’s historical credit loss experience,
adjusted for factors that are specific to the financial asset as well as current and future expected
economic conditions relevant to the financial asset. When material, the time value of money is
incorporated into the measurement of expected credit losses. There has been no change in the
estimation techniques or significant assumptions made during the reporting period.
The group has identified contractual payments more than 365 days past due as default events for the
purpose of measuring expected credit losses. These default events have been selected based on the
group’s historical experience. Because contract assets are directly related to unbilled work in progress,
contract assets have a similar credit risk profile to receivables from contracts with customers.
Accordingly, the group applies the same approach to measuring expected credit losses of receivables
from contracts with customers as it does to measuring impairment losses on contract assets.
The measurement of expected credit losses reflects the group’s ‘expected rate of loss’, which is a product
of the probability of default and the loss given default, and its ‘exposure at default’, which is typically the
carrying amount of the relevant asset. Expected credit losses are measured as the difference between all
contractual cash flows due and all contractual cash flows expected based on the group’s exposure at
default, discounted at the financial asset’s original effective interest rate.
Financial assets are regarded as ‘credit-impaired’ when one or more events have occurred that have a
detrimental impact on the estimated future cash flows of the financial asset. Indicators that a financial
asset is ‘credit-impaired’ include observable data about the following:
(a)
(b)
(c)
(d)
significant financial difficulty of the issuer or the borrower;
breach of contract;
the lender, for economic or contractual reasons relating to the borrower’s financial difficulty, has
granted concessions to the borrower that the lender would not otherwise consider; or
it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation.
The gross carrying amount of a financial asset is written off (i.e. reduced directly) when the counterparty
is in severe financial difficulty and the group has no realistic expectation of recovery of the financial
asset. Financial assets written off remain subject to enforcement action by the group. Recoveries, if
any, are recognised in profit or loss.
(k)
Foreign currency translations and balances
Functional and presentation currency
The financial statements are presented in Australian dollars which is the group’s functional and
presentation currency.
Transactions and balances
Transactions undertaken in foreign currencies are recognised in the group’s functional currency, using
the spot rate at the date of the transaction.
Foreign currency monetary items that are outstanding at the reporting date (other than monetary items
arising under foreign currency contracts where the exchange rate for that monetary item is fixed in the
contract) are restated to the spot rate at the reporting date.
Except for certain foreign currency hedges, all resulting exchange gains or losses are recognised in profit
or loss for the period in which they arise.
27
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of Significant Accounting Policies (continued)
(l) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST.
Revenues, expenses and purchased assets are recognised net of the amount of GST, except where
the amount of GST incurred is not recoverable from the taxation authority. In these circumstances the
GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the consolidated statement of cash flows on a gross basis, except for the
GST component of investing and financing activities, which are disclosed as operating cash flows.
(m) Impairment of non-financial assets
For impairment assessment purposes, assets are generally grouped at the lowest levels for which
there are largely independent cash flows (‘cash generating units’). Accordingly, most assets are tested
for impairment at the cash-generating unit level. Because it does not generate cash flows
independently of other assets or groups of assets, any goodwill recognised by the entity is allocated to
the cash generating unit or units that are expected to benefit from the synergies arising from the
business combination that gave rise to the goodwill.
An impairment loss is recognised where the carrying amount of the asset or cash generating unit
exceeds the asset’s or cash generating unit’s recoverable amount. The recoverable amount of an
asset or cash generating unit is defined as the higher of its fair value less costs to sell and value in
use.
Impairment losses in respect of individual assets are recognised immediately in profit or loss.
Impairment losses in respect of cash generating units are allocated first against the carrying amount of
any goodwill attributed to the cash generating unit with any remaining impairment loss allocated on a
pro rata basis to the other assets comprising the relevant cash generating unit.
(n) Income tax
Current income tax expense or revenue is the tax payable on the current period’s taxable income
based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities.
Deferred tax assets and liabilities are recognised for temporary differences at the applicable tax rates
when the assets are expected to be recovered or liabilities are settled. Deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not
accounted for if it arises from the initial recognition of an asset or liability in a transaction, other than a
business combination, that at the time of the transaction did not affect either accounting profit nor
taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if
it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
28
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of Significant Accounting Policies (continued)
(o)
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured
products includes direct material, direct labour and a proportion of manufacturing overheads based
on normal operating capacity but excluding borrowing costs.
Costs are assigned on a standard cost basis which approximates actual cost. The standard cost
basis is reviewed by management regularly and adjusted to reflect current conditions, where
necessary.
Net realisable value is an estimated selling price in the ordinary course of business less estimated
costs of completion and estimated costs necessary to make the sale.
(p)
Leases
At the commencement date of a lease (other than leases of 12-months or less and leases of low
value assets), the group recognises a lease asset representing its right to use the underlying asset
and a lease liability representing its obligations to make lease payments.
Lease assets
Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the
lease liability, any lease payments made at or before the commencement date of the lease, less any
lease incentives received, any initial direct costs incurred by the group, and an estimate of costs to be
incurred by the group in dismantling and removing the underlying asset, restoring the site on which it
is located or restoring the underlying asset to the condition required by the terms and conditions of
the lease, unless those costs are incurred to produce inventories.
Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement
of the associated lease liability), less accumulated depreciation and any accumulated impairment
loss.
Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the
underlying asset, consistent with the estimated consumption of the economic benefits embodied in
the underlying asset.
Lease liabilities
Lease liabilities are initially recognised at the present value of the future lease payments (i.e. the
lease payments that are unpaid at the commencement date of the lease). These lease payments are
discounted using the interest rate implicit in the lease, if that rate can be readily determined, or
otherwise using the group’s incremental borrowing rate.
Subsequent to initial recognition, lease liabilities are measured at the present value of the remaining
lease payments (i.e. the lease payments that are unpaid at the reporting date). Interest expense on
lease liabilities is recognised in profit or loss (presented as a component of finance costs). Lease
liabilities are remeasured to reflect changes to lease terms, changes to lease payments and any
lease modifications not accounted for as separate leases.
Variable lease payments not included in the measurement of lease liabilities are recognised as an
expense when incurred.
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for
which a lease asset and a lease liability has not been recognised) are recognised as an expense on a
straight-line basis over the lease term.
29
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of Significant Accounting Policies (continued)
(q) Other revenue
Interest revenue is recognised using the effective interest method.
Other revenue is recognised when the right to receive income or other distribution has been
established.
(r)
Principles of consolidation
The consolidated financial statements are those of the consolidated entity, comprising the financial
statements of the parent entity and of all entities, which the parent entity controls. The parent entity
controls an entity when it is exposed, or has rights, to variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are prepared for the same reporting period as the parent
entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar
accounting policies, which may exist.
All inter-company balances and transactions, including any unrealised profits or losses have been
eliminated on consolidation. Subsidiaries are consolidated from the date on which control is
established and are derecognised from the date that control ceases.
(s)
Property held for development and sale
Property held for development and sale is measured at the lower of cost and net realisable value. Cost
includes the cost of acquisition, development, borrowing costs and holding costs until completion of
development. Borrowing costs and holding costs incurred after the completion of development are
expensed as incurred.
(t)
Property, plant and equipment
Cost and valuation
Property, plant and equipment are stated at historical cost less accumulated depreciation and
any accumulated impairment losses. Repairs and maintenance are recognised in profit or loss as
incurred.
Depreciation
Land is not depreciated. The depreciable amounts of all other property, plant and equipment are
calculated using the straight-line method over their estimated useful lives commencing from the time
the asset is held ready for use.
Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or
the estimated useful lives of the improvements.
The useful lives for each class of assets are:
–
–
–
Buildings
Plant and equipment
Leased plant and equipment
2021
Up to 40 years
1 to 20 years
5 to 20 years
2020
Up to 40 years
1 to 20 years
5 to 20 years
30
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of Significant Accounting Policies (continued)
(u) Research and development expenditure
Expenditure on research activities is recognised as an expense when incurred.
Development costs are capitalised when the group can demonstrate all of the following: the technical
feasibility of completing the asset so that it will be available for use or sale; the intention to complete
the asset and use or sell it; the ability to use or sell the asset; how the asset will generate probable
future economic benefits; the availability of adequate technical, financial and other resources to
complete the development and to use or sell the asset; and the ability to measure reliably the
expenditure attributable to the asset during its development. Capitalised development costs are
amortised over their estimated useful lives commencing from the time the asset is available for use.
The amortisation method applied to capitalised development costs is consistent with the estimated
consumption of economic benefits of the asset. Subsequent to initial recognition, capitalised
development costs are measured at cost, less accumulated amortisation and any accumulated
impairment losses.
(v) Revenue from contracts with customers
Sales
The Group’s contracts with customers for the sale of egg products include one performance obligation.
The Group recognises revenue from sale of products at the point in time when control of the asset is
transferred to the customer on delivery of the goods. The normal credit terms are 30 to 60 days.
Variable consideration
Some contracts for the sale of products provide customers with rebates and promotional discounts which
give rise to variable consideration. The variable consideration is estimated at contract inception using the
expected value method based on forecast, timing of settlement and/or volumes and is constrained until it
is highly probable that a significant revenue reversal in the amount of cumulative revenue recognised will
not occur when the associated uncertainty is subsequently resolved.
The amount of revenue reflects the consideration to which the Group expects to be entitled to in
exchange for those goods.
Trade receivables
A receivable represents the Group’s right to an amount of consideration that is unconditional (i.e. only
the passage of time is required before payment of the consideration is due).
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the
customer. If the Group performs by transferring products to a customer before payment is due, a
contract asset is recognised for the right to the earned consideration that is conditional.
Contract liabilities
A contract liability is the obligation to transfer products to customers for which the Group has received
consideration from the customer in advance. If a customer pays consideration before the Group
transfers products to the customer, a contract liability is recognised when the payment is made or the
payment is due. Contract liabilities are recognised as revenue when the Group provides the product
under the contract.
31
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 1: Summary of Significant Accounting Policies (continued)
(w) Provisions
Provisions are recognised when the consolidated entity has a legal or constructive obligation, as a
result of past events, for which it is probable that an outflow of economic benefits will result, and that
outflow can be reliably measured.
The amount recognised as a provision is the best estimate of the expenditure required to settle the
present obligation at the end of the reporting period.
(x) Segment reporting
Management has determined the operating segments based on the reports reviewed by the board of
directors (the chief operating decision maker as defined under AASB 8) that are used to make
strategic and operating decisions. The board of directors considers the business primarily from a
geographic perspective. On this basis the Group has identified one reportable segment, Australia. The
Group does not operate in any other geographic segment.
(y) Comparatives
Where necessary the comparative information has been reclassified and repositioned for
consistency with current year disclosures.
(z) Rounding of amounts
The group have applied the relief under ASIC Corporates (Rounding in Financial/Directors’
Reports) Instrument 2016/191 and accordingly, the amounts in the Financial Reports and in the
Directors’ Report have been rounded to the nearest thousand dollars, or in certain cases, to the
nearest dollar (where indicated).
32
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 2: Significant accounting estimates and judgements
Estimates and assumptions based on future events have a significant inherent risk, and where future
events are not as anticipated there could be a material impact on the carrying amounts of the assets
and liabilities discussed below:
(a)
Impairment of non-current assets other than goodwill
All assets are assessed for impairment at each reporting date by evaluating whether indicators of
impairment exist in relation to the continued use of the asset by the Group. Impairment triggers
include declining product or manufacturing performance, technology changes, adverse changes in the
economic or political environment or future product expectations. If an indicator of impairment exists
the recoverable amount of the asset is determined. Refer to Note 13(b) for further details.
(b)
Income tax
Deferred tax assets and liabilities are based on the assumption that no adverse change will occur in
the income tax legislation and the anticipation that the Group will derive sufficient future assessable
income to enable the benefit to be realised and comply with the conditions of deductibility imposed by
the law.
Deferred tax assets are recognised for deductible temporary differences and tax losses as
management considers that it is probable that future taxable profits will be available to utilise those
temporary differences.
(c)
Fair value measurements
Certain financial assets and liabilities are measured at fair value. Fair values have been determined in
accordance with fair value measurement hierarchy. Refer to Note 3(d): Fair Value Measurements for the
details of the fair value measure key assumptions and inputs.
(d)
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation charges for its property,
plant and equipment. The useful lives could change significantly as a result of technical innovations or
some other event. The depreciation charge will increase where the useful lives are less than
previously estimated lives, and technically obsolete or non-strategic assets that have been abandoned
or sold will be written off or written down.
(e)
Biological assets
The cost of flocks of hens are amortised over the productive life of the flock, which is between 50
and 60 weeks. This is based on the characteristics of the flock and the Group’s historical
operating experience.
(f)
Provision for expected credit losses of trade receivables and contract assets
The Group uses a provision matrix to calculate expected credit losses (ECLs) for trade receivables
and contract assets. The provision rates are based on days past due for groupings of various
customer segments that have similar loss patterns. The provision matrix is initially based on the
Group’s historical observed default rates. The Group will calibrate the matrix to adjust the historical
credit loss experience with forward-looking information. At every reporting date, the historical
observed default rates are updated and changes in the forward-looking estimates are analysed.
The Group’s historical credit loss experience and forecast of economic conditions may also not be
representative of customer’s actual default in the future.
33
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 2: Significant accounting estimates and judgements (continued)
(g) Rebates and promotional discounts liabilities
Rebates and promotional discounts are either settled monthly on settlement of invoice or accrued at
balance sheet date depending on the exact timing of the customer claim. The Group estimates the
rebate and promotional discount based on the percentage specified in the customer contract and
the timing of settlement and/or volumes sold taking into account previous claims made.
(h)
Inventory provisions
Management's judgement is applied in determining the inventory provisions for obsolescence and net
realisable value, where the estimated selling price of inventory is lower than the cost to sell based on
historical observations and management expectations.
34
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 3: Financial instruments risk management objectives and policies
The Group’s activities expose it to a variety of financial risks, including market risk (commodity prices,
foreign currency and interest rate risk), liquidity risk and credit risk.
The Group’s senior management oversees the management of these risks by using various financial
instruments, including derivative financial instruments. It is the Group’s policy that no trading in
derivatives for speculative purposes may be undertaken. The use of financial derivatives is subject to
approval by the Board of Directors.
The Group’s principal financial liabilities, other than derivatives, comprise loans and borrowings,
and trade and other payables. The main purpose of these financial liabilities is to finance the
Group’s operations. The Group’s principal financial assets include trade receivables, and cash
and short-term deposits that derive directly from its operations. The Group is exposed to some
foreign currency risk as the purchase of plant and equipment from time to time is denominated in
foreign currencies.
The Group holds the following financial assets and financial liabilities at reporting date:
Financial assets
Cash and cash equivalents
Receivables
Financial liabilities
Payables
Lease liabilities
Borrowings
(a) Market risk
(i) Commodity price risk
2021
$’000
1,285
6,105
7,390
10,610
11,421
18,709
40,740
2020
$’000
4,412
7,439
11,851
13,303
16,028
19,441
48,772
The Group is affected by the price variability of certain commodities. The Group’s main sales product
is shell eggs which is a commodity that is subject to market conditions. Where possible the Group
enters longer term relationships with key customers that create more certainty around volumes and
price.
The Group’s activities also require the ongoing purchase of grain and/or feed stock and is therefore
affected by fluctuations in the price of feed ingredients, primarily wheat and soy. The Group manages
this exposure utilising forward grain and/or feed stock purchase commitments through its key suppliers,
within certain price parameters agreed by the Board of Directors.
(ii) Foreign exchange risk
The majority of the Group’s operations are denominated in Australian dollars, therefore minimising
the impact of foreign currency risk. The Group undertakes some transactions denominated in foreign
currencies; consequently, exposures to exchange rate fluctuations arise. Exchange rate exposures
are managed utilising forward foreign exchange contracts, subject to approval by the Board of
Directors.
35
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 3: Financial instruments risk management objectives and policies (continued)
Forward foreign exchange contracts
It is the policy of the Group to enter into forward foreign exchange contracts to cover specific foreign
currency payments (normally Euro) for future purchases of plant and equipment.
(iii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in
market interest rates relates primarily to the Group’s external debt facilities and cash at bank held at
variable rates.
The Group’s exposure to interest rate risks in relation to future cash flows and the weighted average
effective interest rates on classes of financial assets and financial liabilities is shown in the table
below.
Sensitivity
The following sensitivity analysis is assessed on the interest rate risk exposures in existence at
reporting date. At 30 June 2021, if interest rates had moved as illustrated in the table below, with all
other variables held constant, the post-tax profit and equity would have been impacted as follows:
Interest rates – increase by 100 basis points
Interest rates – decrease by 100 basis points
(b) Liquidity risk
Impact on post-tax
profit and equity
2021
$’000
(121)
121
2020
$’000
(149)
149
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who assess the
Group’s short, medium and long-term funding and liquidity management requirements. The Group
manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities and by continuously monitoring forecast and actual cash flows. Refer to the Group’s funding
arrangements disclosed in Note 16.
36
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 3: Financial instruments risk management objectives and policies (continued)
Maturities of financial liabilities
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The
tables have been prepared based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the Group can be required to pay.
The table includes both principal and estimated interest cash flows. Cash flows for financial liabilities
without fixed amount or timing are based on the conditions existing at reporting date.
<6
months
$’000
6-12
months
$’000
1-5
years
$’000
Over 5
years
$’000
Total
$’000
Fixed/
Floating
2021
Financial
liabilities
Trade and
other payables
2020
Financial
liabilities
Trade and
other payables
(10,610)
-
-
Loans
-
-
(18,709)
Lease liability
(1,995)
(1,964)
(7,462)
(12,605)
(1,964)
(26,171)
<6
months
$’000
6-12
months
$’000
1-5
years
$’000
Over 5
years
$’000
(13,303)
-
-
Loans
-
-
(19,441)
Lease liability
(2,250)
(2,130)
(10,884)
(15,553)
(2,130)
(30,325)
(c) Credit risk
-
-
-
-
(10,610)
-
(18,709)
Fixed at 9%
(11,421)
Fixed at 3%
(40,740)
Total
$’000
Fixed/
Floating
-
-
(764)
(764)
(13,303)
-
(19,441)
Fixed at 9%
(16,028)
Fixed at 3%
(48,772)
Credit risk refers to the risk that a counterparty will default on its contractual obligations under a
financial instrument or customer contract, resulting in financial loss to the Group. The Group
manages its credit risk by dealing with creditworthy counterparties. The Group’s exposure and the
credit ratings of its counterparties are continuously monitored, and the aggregate value of
transactions concluded is spread amongst approved counterparties.
The Group does not have any significant credit risk exposure to any single counterparty or any group
of counterparties having similar characteristics.
The aging analysis of trade and other receivables is provided in Note 8(b). As the Group undertakes
transactions with a large number of customers and regularly monitors payment in accordance with
credit terms, the financial assets that are neither past due nor impaired, are expected to be received
in accordance with credit terms.
The carrying amount of financial assets recorded in the financial statements, net of any allowance for
impairment, represents the Group’s maximum exposure to credit risk.
37
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 3: Financial instruments risk management objectives and policies (continued)
(d) Fair value of financial instruments
The only financial assets or financial liabilities carried at fair value are forward foreign currency
contracts from time to time. These instruments are considered to be Level 2 financial instruments as
their measurement is derived from inputs other than quoted prices that are observable for the assets
or liabilities, either directly (as prices) or indirectly (derived from prices).
The fair value of forward foreign currency is obtained from third party valuations derived from
discounted cash flow forecasts of forward exchange rates at the end of the reporting period and
contract exchange rates.
There were no transfers between levels 1, 2 and 3 for recurring fair value measurements during the
financial year.
The carrying amount of other financial assets and financial liabilities recorded in the financial
statements approximate their fair values.
Note 4: Revenue
Disaggregation of revenue
In the following table, revenue is disaggregated by major product.
Type of product1
Shell egg
Egg product
Other
Total revenue from contracts with customers
Interest revenue and other income
Total revenue
Consolidated
2021
$’000
2020
$’000
52,420
20,020
876
73,316
3,675
76,991
69,264
20,025
945
90,234
93
90,327
1 The majority of sales (99.5%) are made in Australia. Revenue is recognised at a point in time, upon
satisfaction of the Group’s performance obligation, being delivery of the products to the customer.
38
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 5: Loss from continuing operations
Loss from continuing operations before income tax has been determined after the following specific
expenses:
Cost of goods sold
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Employee benefits expenses
Salaries and wages
Employee superannuation contributions
Total employee benefits expenses
Depreciation of non-current assets and leased assets
Land and buildings
Plant & equipment
Right of use asset
Total depreciation of non-current assets
Foreign exchange translation loss
Flock amortisation (note 10)
Finance costs – interest expense
Impairment of property, plant and equipment
Loss on disposal of biological assets
Consolidated
2021
$’000
2020
$’000
1,470
52,537
54,007
14,097
1,208
15,305
1,636
3,076
4,378
9,090
1
9,456
2,376
3,219
3,652
(1,153)
66,543
65,390
14,555
1,256
15,811
1,205
2,438
4,426
8,069
4
12,449
2,291
-
-
39
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 6: Income tax
(a) Components of tax expense:
Current tax (benefit) / expense
Deferred tax (benefit) / expense
Under/(over) provision in prior years
Income tax expense
(b) Income tax reconciliation
(Loss) / profit before income tax
At the statutory income tax rate of 30% (2020: 30%)
Derecognition of carry forward losses
Under/(over) provision in prior years
Income tax (benefit) / expense
(c) Deferred tax assets and (liabilities) relate to the
following:
Employee benefits
Provisions and accruals
Fixed assets and leases
Carry forward tax losses
Gross deferred tax assets
(d) Movement in deferred tax assets and (liabilities)
Balance at beginning of year
Recognised in profit or loss
Current year losses
Balance at the end of the year
Consolidated
2021
$’000
-
(2,786)
239
(2,547)
(14,518)
(4,355)
1,569
239
2020
$’000
-
(930)
-
(930)
(3,099)
(930)
-
-
(2,547)
(930)
639
201
4, 987
-
5,827
3,280
2,547
-
5,827
659
208
280
2,133
3,280
2,350
930
-
3,280
40
Note 7: Dividends
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
(a) Dividends proposed and recognised as a liability
Consolidated
2021
$’000
Nil
2020
$’000
Nil
(b) Franking credit balance
Balance of franking account at year end
11,485
11,485
Note 8: Receivables
Trade receivables
Allowance for expected credit losses
Other receivables
Consolidated
2021
$’000
5,657
(6)
5,651
454
6,105
2020
$’000
7,115
(6)
7,109
330
7,439
(a) Terms and conditions
Trade receivables are non-interest bearing and generally on 30 to 60 day terms.
Other receivables are non-interest bearing and have repayment terms between 30 and 60 days.
(b) Allowance for expected credit losses
Movements in the allowance for expected credit losses were:
Opening balance as at 1 July
Decrease in allowance for expected credit losses
Consolidated
2021
$’000
2020
$’000
6
-
6
6
-
6
41
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 8: Receivables (continued)
Trade and other receivables ageing analysis as at 30 June is:
Not past due
Past due 31-60 days
Past due 61-90 days
Past due more than 91 days
Gross
2021
$’000
6,083
17
2
9
6,111
Loss
Allowance
2021
$’000
-
-
-
6
6
Gross
2020
$’000
7,247
101
65
32
7,445
Loss
Allowance
2020
$’000
-
-
-
6
6
Due to the short-term nature of these receivables, their carrying value approximates their fair value.
The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security.
Note 9: Inventories
CURRENT
Raw materials
Finished goods
Total inventories
Consolidated
2021
$’000
3,137
1,404
4,541
2020
$’000
3,622
2,389
6,011
42
Note 10: Biological assets
Current
Non-current
Total
Flocks
Cost
Less: Accumulated amortisation
Opening written down value
Additions
Amortisation
Disposal
Closing written down value
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Consolidated
2021
$’000
2020
$’000
7,603
414
8,017
6,382
3,146
9,528
17,473
(9,456)
8,017
9,528
11,597
(9,456)
(3,652)
8,017
16,809
(7,281)
9,528
9,087
12,890
(12,449)
-
9,528
The number of birds held by the Company as at 30 June 2021 was 1,212,953 (2020: 1,427,375).
The average output per bird is approximately 5 eggs per week during their productive period.
Note 11: Other current assets
Prepayments and deposits
Note 12: Assets held for re-sale
Assets held for re-sale
Consolidated
2021
$’000
778
2020
$’000
812
Consolidated
2021
$’000
2020
$’000
2,868
-
Assets held for re-sale
The Group announced on 29 June that after completing an open market Expression of Interest (EOI)
sale process conducted by CBRE Melbourne it has entered into an unconditional agreement to sell its
Keysborough manufacturing site. The settlement process was completed on the 9th July, 2021.
43
Note 13: Property, plant and equipment
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
2021
Cost
Accumulated depreciation
Net book value
Opening net book value as at
1 July 2020
Reclassifications to ‘lease
assets’
Additions
Impairment losses
Disposal
Transfers
Depreciation
Transfer to assets held for re-
sale
Net book value as at 30
June 2021
2020
Cost
Accumulated depreciation
Net book value
Opening net book value as at
1 July 2019
Reclassifications to ‘lease
assets’1
Additions
Transfers
Depreciation
Net book value as at 30
June 2020
Land and
buildings
Plant and
equipment
$’000
25,780
(7,148)
18,632
$’000
45,789
(33,778)
12,011
Capital
works in
progress
$’000
984
-
984
Total
$’000
72,553
(40,926)
31,627
24,926
14,834
5,260
45,020
-
-
(94)
(2,453)
488
(1,636)
(2,599)
(78)
19
(69)
(431)
1,081
(3,076)
(269)
-
(78)
514
(3,056)
(165)
(1,569)
-
-
533
(3,219)
(3,049)
-
(4,712)
(2,868)
18,632
12,011
984
31,627
35,457
(10,531)
24,926
48,995
(34,161)
14,834
5,260
-
5,260
89,712
(44,692)
45,020
25,551
16,177
3,485
45,213
-
-
580
(1,205)
24,926
(214)
-
1,309
(2,438)
14,834
-
(214)
3,664
(1,889)
-
5,260
3,664
-
(3,643)
45,020
1On the initial application of AASB 16 Leases, as at 1 July 2019, the carrying amount of equipment
under finance lease arrangements was reclassified from ‘property, plant and equipment’ to ‘lease
assets’.
44
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 13: Property, plant and equipment (continued)
(a)
Assets pledged as security
Included in the balances of freehold land and buildings and plant and equipment are assets over which
first mortgages have been granted as security over loans (see note 16). The terms of the first
mortgage preclude the assets from being sold or being used as security for further mortgages without
the permission of the first mortgage holder. The mortgage also requires buildings that form part of the
security to be fully insured at all times.
Impairment testing of non-current assets
(b)
The Group performed an impairment test in June 2021. The Group considers the relationship
between its market capitalisation and its book value, among other factors, when reviewing for
indicators of impairment. As at 30 June 2021, the market capitalisation of the Group was below the
book value of its equity, indicating a potential impairment of the Group’s non-current assets. In
addition, the unfavourable trading conditions and drought impacted grain prices have unfavourably
impacted the Group.
As a result of the analysis, management did not identify an impairment other than specific impairments
identified and taken up throughout the year.
45
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 14: Lease assets and liabilities
Lease assets
2021
Cost
Accumulated depreciation
Net book value
Land and
buildings
$’000
Plant and
equipment
$’000
18,094
(7,891)
10,203
1,408
(645)
763
Total
$’000
19,502
(8,536)
10,966
Opening net book value as at 1 July 2020
14,603
978
15,581
Reclassification from PPE
Recognition of leased assets - additions
Re-assessment of lease liability
Depreciation
Net book value as at 30 June 2021
-
-
(368)
(4,032)
10,203
78
53
-
(346)
763
78
53
(368)
(4,378)
10,966
Lease assets
2020
Cost
Accumulated depreciation
Net book value
Opening net book value as at 1 July 2019
Reclassifications from PPE1
Recognition of leased assets as at 1 July
2020
Recognition of leased assets – additions
Depreciation
Net book value as at 30 June 2020
Land and
buildings
$’000
Plant and
equipment
$’000
Total
$’000
18,684
(4,081)
14,603
-
-
18,684
-
(4,081)
14,603
1,323
(345)
978
-
214
795
314
(345)
978
20,007
(4,426)
15,581
-
214
19,479
314
(4,426)
15,581
1 On the initial application of AASB 16 Leases, as at 1 July 2019, the carrying amount of equipment
under finance lease arrangements was reclassified from ‘property, plant and equipment’ to ’lease
assets’.
46
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 14: Lease assets and liabilities (continued)
Lease liabilities
Lease liabilities
Current lease liabilities
Non-current lease liabilities
Total carrying amount of lease liabilities
Lease expenses and cashflows
Depreciation expense on lease assets
Interest expense on lease liabilities
Repayment of lease liability
Total cash outflow relating to leases
Note 15: Payables
Trade creditors
Other payables and accruals
(i) Terms and conditions
Our standard terms are 30 days from the end of month.
2021
$’000
3,959
7,462
11,421
4,378
400
4,279
4,679
2020
$’000
4,380
11,648
16,028
4,426
537
3,963
4,500
Consolidated
2021
$’000
8,822
1,788
2020
$’000
11,519
1,784
10,610
13,303
47
Note 16: Borrowings
Non-current
Secured
Borrowings:
Long term loan2 – Tranche A
Working capital loan – Tranche B1
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Interest Rate
Maturity
Consolidated
2021
$’000
2020
$’000
15,000
3,709
15,000
4,441
18,709
19,441
1 In line with AASB 9, Working capital loan – Tranche B is measured net of transaction costs of $223k.
2 Secured by fixed charge over selected property and company assets.
At the reporting date, the consolidated entity’s financing are as follows.
(i) Long Term Loan – Tranche A
Facilities available
Facilities used
Facilities unused
(ii) Working capital loan – Tranche B
Facilities available
Facilities used
Facilities unused
Consolidated
2021
$’000
15,000
15,000
-
7,152
3,709
3,443
2020
$’000
15,000
15,000
-
8,500
4,861
3,639
Tranche B includes $3.5 million limit exclusively for capitalised interest, if any. The term of the facility
is for three years from the date of the first drawdown, 16 August 2019.
Note 17: Provisions
Current
Employee benefits
Annual leave
Long service leave
Non-current
Employee benefits
Long service leave benefits
Total employee benefits provisions
48
Consolidated
2021
$’000
1,008
920
1,928
2020
$’000
1,031
952
1,983
201
212
2,129
2,195
Note 18: Contributed Equity
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Issued and paid up capital
55,180,175 (2019: 55,180,175) Ordinary shares fully paid
Each share is entitled to 1 vote per share.
(a)
Capital management
Consolidated
2021
$’000
29,578
29,578
2020
$’000
29,578
29,578
The Board reviews the capital structure on an ongoing basis. The Group’s objective is to maintain an
optimal capital structure which seeks to reduce the cost of capital and safeguard the Group’s ability to
continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders. In order to maintain or adjust the capital structure the Group may
adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new
shares.
(b)
Dividends
During the year ended 30 June 2021 no dividends were paid, declared or recommended (2020: Nil).
Note 19 (Loss)/Earnings per share
The following reflects the income and share data used in calculations of basic and diluted
(loss)/earnings per share computations:
Net (loss) / profit from continuing operations
Weighted average
Weighted average number of ordinary shares used in
calculating basic (loss)/earnings per share
Weighted average number of shares used to calculate
diluted (loss)/earnings per share
Consolidated
2021
$’000
2020
$’000
(11,971)
(2,169)
2021
No. of shares
2020
No. of shares
55,180,175
55,180,175
55,180,175
55,180,175
49
Note 20: Cash Flow Information
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
(a) Reconciliation of cash flow from operations with profit
after tax:
(Loss)/profit from ordinary activities after tax
(11,971)
(2,169)
Consolidated
2021
$’000
2020
$’000
Non-cash items
Depreciation
Impairment of property, plant and equipment
Loss on disposal of biological assets
Flock amortisation
Non-cash movement on loan
Non-cash movement on property, plant and equipment and
leases
Changes in operating assets and liabilities net of effects
from acquisition of businesses:
(Increase) / decrease in trade and other receivables
(Increase) / decrease in inventory
(Increase) / decrease in biological assets
(Increase) / decrease in deferred tax asset
(Increase) / decrease in other assets
Increase / (decrease) in trade and other creditors
Increase / (decrease) in employee entitlements
Net cash flow from operating activities
(b) Reconciliation of cash and cash equivalents for the
purposes of the Consolidated Statement of Cash Flows
Cash at bank
9,090
3,219
3,652
9,456
616
(212)
1,334
1,470
(11,597)
(2,547)
34
(2,693)
(66)
(215)
8,069
-
12,449
-
-
764
(1,153)
(12,890)
(930)
(406)
3,092
56
6,882
1,285
1,285
4,412
4,412
50
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 20: Cash Flow Information (continued)
(c) Reconciliation of liabilities arising from financing activities
As at
1 July
Financing
cash flows
Operating cash
flows - interest
paid
$’000
19,441
16,028
$’000
(1,348)
(4,279)
35,469
(5,627)
13,500
198
5,941
(3,963)
13,698
1,978
$’000
-
(400)
(400)
-
(537)
(537)
Non-Cash
Changes
Other
$’000
616
72
688
As at
30 June
$’000
18,709
11,421
30,130
-
20,330
19,441
16,028
20,330
35,469
2021
Bank loans
Lease liabilities
Total liabilities from
financing activities
2020
Bank loans
Lease liabilities
Total liabilities from
financing activities
Note 21: Commitments
Farm cost commitments
Farm commitments relate to commitments for flock replenishment and other farm operating expenditure
commitments:
Farm cost commitments
Note 22: Controlled Entities
Consolidated
2021
$’000
2020
$’000
1,156
10,063
The consolidated financial statements include the financial statements of Farm Pride Foods Limited and
its controlled entities listed below:
List of companies in the group
Parent entity:
Farm Pride Foods Limited
Controlled entities of Farm Pride Foods Limited
Big Country Products Pty Ltd
Farm Pride Property Pty Ltd
Mooroopna Farm Trading Pty Ltd
Farm Pride North Pty Ltd
Carton Packaging Pty Ltd
Country of
incorporation
Percentage owned
2021
2020
Australia
100%
100%
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
51
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 23: Related party disclosures
(a) Parent entity and equity interests in related parties
The parent entity of the Group is Farm Pride Foods Limited, a listed public company, incorporated in
Australia.
Details of the percentage of ordinary share held in subsidiaries are disclosed in Note 22.
(b) Ultimate parent entity
The ultimate parent entity of the Group is AAA Egg Company Pty Limited, a private company,
incorporated in Australia.
(c) Key management personnel
Disclosures relating to key management personnel are set out in the Directors’ report.
(d) Key management personnel compensation
The aggregate compensation of the key management personnel of the Group is set out below:
Short-term employee benefits
Long term employee benefits
Post-employment benefits
Consolidated
2021
$’000
704
-
54
758
2020
$’000
688
-
53
741
Detailed remuneration disclosures are provided in the Remuneration Report on page 13 and 14.
52
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 23: Related party disclosures (continued)
(e) Transactions with directors and director-related entities
The value of transactions (inclusive of GST) and amounts receivable / (payable) between Directors and
their related entities and Farm Pride Foods Limited and its controlled entities.
Director related entities1
Transaction
Revenue
Expenditure
AAA Egg Company Pty Ltd
Purchases
(P. Bell / M. Ward)
Specialised Breeders Australia
Pty Ltd 2 (P. Bell)
Purchases
2021
$’000
2020
$’000
2021
$’000
-
-
-
-
Balance
Receivable /
(Payable)
2021
$’000
2020
$’000
-
-
2020
$’000
10
107
(83)
Days Eggs Pty Ltd
(P. Bell)
Hy-Line Australia Pty Ltd 2
(P. Bell)
Egg supply /
Purchases
27
195
151
420
(10)
(4)
Purchases
-
-
5,319
(850)
Pure Foods Eggs Pty Ltd
Egg sales
41
27
-
-
3
3
(P. Bell)
West Coast Eggs Pty Ltd
(P. Bell / M. Ward)
Egg sales /
Purchases
854
776
164
154
77
71
1Peter Bell and Malcolm Ward through their related entities provide birds, eggs and egg products to and acquire eggs, egg product and
packaging from Farm Pride Foods Limited and its controlled entities. Director’s administrative expenses are reimbursed at cost. These
transactions are on normal trading terms and conditions.
2 Peter Bell resigned as director of Specialised Breeders Australia Pty Ltd and Hy-Line Australia Pty Ltd effective 31 Oct 2019.
Transactions in the above table represent related party transactions for the full financial year from July ‘20 – June ’21 and
comparatives for July ’19 - June ‘20.
53
Farm Pride Foods Limited and Controlled Entities
Notes to the financial statements
Note 24: Parent entity information
Information relating to Farm Pride Foods Limited:
Summarised statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the Parent comprises of the following:
Share capital
Retained earnings
Total shareholder’s equity
Summarised statement of comprehensive income
(Loss) of the parent entity
Total comprehensive (loss) of the parent entity
2021
$’000
23,180
70,641
15,172
40,966
29,578
97
29,675
(11,441)
872)
(11,441)
2020
$’000
25,476
89,557
18,293
48,441
29,578
11,538
41,116
(3,268)
(3,268)
Farm Pride Foods Limited as parent has provided security over the loans of its subsidiaries by a
fixed and floating charge (see note 16).
Note 25: Auditor’s remuneration
Audit and other assurance services
Audit and review of the financial report of the entity and
any other entity in the consolidated entity
Additional Audit procedures required due to the AI
outbreak
Other services
Taxation services
Note 26: Subsequent Events
Consolidated Entity
2021
$
2020
$
131,000
129,000
44,175
-
23,737
198,912
14,000
143,000
On 9 July 2021, the Company settled the sale of its Keysborough manufacturing facility. Proceeds of
$18.500 million from the sale were be used to reduce debt and provide working capital to drive the
business recovery, develop the Company’s cage free capacity and to support its innovation platform.
The Company has entered into a long-term lease of the facility of fifteen years with an additional
five-year option with the purchaser RF Corval, a specialist property fund manager and investment
company.
Apart from the sale of the Keysborough manufacturing facility no other circumstance, has arisen since
30 June 2021 that has significantly affected or may significantly affect:
-
-
-
the operations, in financial years subsequent to 30 June 2021, of the group, or
the results of those operations, or
the state of affairs, in financial years subsequent to 30 June 2021, of the group.
54
Farm Pride Foods Limited and Controlled Entities
Directors’ Declaration
Directors’ Declaration
The Directors declare that the financial statements and notes set out on pages 19 to 54 in
accordance with the Corporations Act 2001:
(a) Comply with Australian Accounting Standards and the Corporations Regulation 2001,
and other mandatory professional reporting requirements;
(b) As stated in Note 1(a) the consolidated financial statements also comply with
International Financial Reporting Standards; and
(c) Give a true and fair view of the financial position of the consolidated entity as at 30
June 2021 and of its performance for the year ended on that date.
In the Directors’ opinion there are reasonable grounds to believe that Farm Pride Foods Limited
will be able to pay its debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made by the
Chief Executive Officer and Chief Financial Officer to the Directors in accordance with sections
295A of the Corporations Act 2001 for the financial year ending 30 June 2021.
This declaration is made in accordance with a resolution of the Directors.
Director
27 August 2021
Melbourne
55
FARM PRIDE FOODS LIMITED
ABN 42 080 590 030
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FARM PRIDE FOODS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Farm Pride Foods Limited “the Company” and its controlled
entities “the Group”, which comprises the consolidated statement of financial position as at 30 June
2021, the consolidated statement of comprehensive income, the consolidated statement of changes in
equity and the consolidated statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) “the Code” that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008
Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities
Adelaide Brisbane Melbourne Newcastle Sydney Perth
pitcher.com.au
56
FARM PRIDE FOODS LIMITED
ABN 42 080 590 030
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FARM PRIDE FOODS LIMITED
Key Audit Matter
Valuation of flock assets
Valuation of flock assets - $8,016,567
Refer to Note 10: Biological Assets
The Group has $8.02 million ($9.53 million as
at 30 June 2020) of biological assets, “the flock
assets”.
The flock assets should be valued at market
value consistent with AASB 141 Agricultural
assets, however, the lack of an active or liquid
market for flock assets means the flock assets
are measured at cost less accumulated
amortisation and impairment losses. The
amortisation rate is based on the estimated life
of an individual flock within the flock assets,
and consequently the valuation of the flock
assets as a whole is subject to judgement.
We have focused on this balance given it is
based on significant estimates involving
subjective judgements and uncertainties over
the estimated flock assets life due to the
impact of factors such as disease and
productive capacity of the individual flocks.
How our audit addressed the key audit matter
Our testing of the flock assets valuation focused
on assessing the appropriateness of
management’s estimates and judgements when
determining the flock assets’ estimated life.
Our procedures included, amongst others:
• Obtained an understanding of processes
and evaluated the design and
implementation of key controls in respect
of the valuation of the flock assets;
• Obtained schedule of total flock assets
as at 30 June 2021 and agreed to the
general ledger;
• Assessed the underlying mathematical
accuracy of the flock asset schedule by
performing a recalculation of the written
down value of the flock assets as at 30
June 2021 based on the total capitalised
cost, age and productive life of each flock
asset as at 30 June 2021;
• Tested the appropriateness and accuracy
of costs capitalised to flock assets by
verifying a sample of costs back to
supporting invoices/documentation;
• Held discussions with management and
assessed the key assumptions used to
determine productive life for each flock
asset as at 30 June 2021;
• Assessed the adequacy of the
presentation and disclosure of the flock
assets in the financial report as at 30
June 2021.
Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008
Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities
Adelaide Brisbane Melbourne Newcastle Sydney Perth
pitcher.com.au
57
FARM PRIDE FOODS LIMITED
ABN 42 080 590 030
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FARM PRIDE FOODS LIMITED
Valuation of Property, plant and equipment
Valuation of property, plant and equipment and
asset held for resale- $34,495,545
Refer to Note 13 and 12: Property, plant and
equipment and asset held for resale.
The Group has $35.4 million ($45.0 million as
at 30 June 2020) of property, plant and
equipment, which represents approximately
47% of total assets.
Australian Accounting Standards require the
Group to assess, at the end of each reporting
period, whether there is any indication of
impairment to assets.
We have focused on this balance due to the
significance of the balance and in light of the
market capitalisation of the company being
less than its net asset value, which is a
potential indicator of impairment. The key
assumptions and methodologies used in the
discounted cash-flow forecast for value-in-use
impairment assessment are complex
judgements made by management.
Our testing of property, plant and equipment
valuation focused on assessing the
appropriateness of management’s judgements in
relation to its determination of cash-generating
unit and the associated value in use calculation.
Our procedures included, amongst others:
• Obtained an understanding of processes
•
•
•
and evaluated the design and
implementation of key controls in respect
of the valuation of property, plant and
equipment;
Evaluated the determination of cash-
generating units;
Evaluated the assumptions and
methodologies utilised in the discounted
cash flow prepared by management,
including discount rate, growth rates and
other key assumptions such as egg
prices and costings for feed;
Assessed the Group’s results in
comparison to historical actuals and
forecasts to determine the
reasonableness of the discounted cash
flow;
• Compared forecast future cash flows to
•
•
•
Board approved budgets;
Tested the mathematical accuracy of the
discounted cash flow model;
Assessed the impact of sensitivities to
sales, feed prices and WACC rates.
Assessed the adequacy of the
presentation and disclosure of property,
plant and equipment in the financial
report as at 30 June 2021.
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 2021, 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.
58
Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008
Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities
Adelaide Brisbane Melbourne Newcastle Sydney Perth
pitcher.com.au
FARM PRIDE FOODS LIMITED
ABN 42 080 590 030
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FARM PRIDE FOODS LIMITED
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
59
Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008
Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities
Adelaide Brisbane Melbourne Newcastle Sydney Perth
pitcher.com.au
FARM PRIDE FOODS LIMITED ABN 42 080 590 030 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF FARM PRIDE FOODS LIMITED Pitcher Partners. An independent Victorian Partnership ABN 27 975 255 196. Level 13, 664 Collins Street, Docklands, VIC 3008 Pitcher Partners is an association of independent firms. Liability limited by a scheme approved under Professional Standards Legislation. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities Adelaide Brisbane Melbourne Newcastle Sydney Perth pitcher.com.au We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 10 to 17 of the directors’ report for the year ended 30 June 2021. In our opinion, the Remuneration Report of Farm Pride Foods Limited and controlled entities, for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. STEPHEN SCHONBERG PITCHER PARTNERS Partner Melbourne Date: 27 August 2021 60 Farm Pride Foods Limited and Controlled Entities
ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in
this report is as follows. The information is current as at 30 July 2021.
(a)
Distribution of equity security
The number of shareholders, by size of holding, in each class of share are:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 +
The number of shareholders holding less than a marketable parcel of
shares are:
(b)
Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
1 WEST COAST EGGS PTY LTD
2
3
4
5
6
7
8
9
10
11 MR TOMASSON MONTALTO + ESTATE LATE MAURO
J P MORGAN NOMINEES AUSTRALIA PTY LTD
NORMPAT PTY LTD
OAKMEADOW PTY LTD
MARKCAMP NO 2 PTY LTD
GLENMON NO2 PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
DAVID RICARDO ASSET MANAGEMENT PTY LTD
MR CLINTON JAMES QUAY
ZERO NOMINEES PTY LTD
MONTALTO
DR HARRY HIRSCHOWITZ + MRS FARIBA YEROSHALMI
NEWECONOMY COM AU NOMINEES PTY LIMITED
12
13 MR DION DEREK MARTINUS
14
15 MRS FRANCESCA D’ALBERTO
16 MISS JEAN SHIONG LI HO
17 MR PETER SCARF + MRS IDA SCARF
18
19 MR GAVIN BRUCE DE LACY
20 MR DONG RONG LUN
CITICORP NOMINEES PTY LIMITED
No. of
shareholders
No. of
shares
431
809
286
285
35
263,194
2,264,339
2,097,957
7,525,763
43,028,922
549
398,888
Listed ordinary
shares held
Percentage of
ordinary
shares
27,486,302
3,431,330
2,064,250
2,011,772
1,071,716
1,003,057
620,249
514,495
500,000
464,244
316,861
255,295
254,244
253,206
241,994
224,000
200,000
196,520
195,502
182,000
49.81
6.22
3.74
3.65
1.94
1.82
1.12
0.93
0.91
0.84
0.57
0.46
0.46
0.46
0.44
0.41
0.36
0.36
0.35
0.33
41,487,037
75.18
61
Farm Pride Foods Limited and Controlled Entities
ASX Additional Information
ASX Additional Information (continued)
(c)
Substantial shareholders
The names of substantial shareholders listed in the Company’s register.
West Coast Eggs Pty Ltd
No. of
shares held
27,486,302
J P Morgan Nominees Australia Pty Ltd
3,431,330
Percentage of
ordinary shares
49.81
6.22
(d)
Voting rights
The voting rights are set out in Article Number 10 of the Company’s Articles of Association. In
summary, voting by or on behalf of members at a meeting shall be by show of hands or upon poll
exercised by one vote for each fully paid ordinary share held or proportionate to the amount paid
on each partly paid ordinary share held.
(e)
Unquoted securities
Nil share options are on issue (2020: Nil).
(f)
Stock Exchange listing
Quotation has been granted for all the ordinary shares of the Company on all members Exchanges
of the Australian Stock Exchange Limited.
Publicly accessible information
For information on corporate governance policies adopted by Farm Pride Foods Ltd refer to our
website:
www.farmpride.com.au
62
Fa rm Pride F oods Lt d.
A BN: 4 2 080 590 030
551 CH A NDL ER ROA D
K E YSBOROUGH, V IC 3173
AUS T R A L I A
T: 1300 693 3 47
farmpride.com.au
Annual Report
2021
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