A N N U A L R E P O R T
Corporate Directory
Directors
Tony Robinson (Non-executive Chairman)
Tom Kiing (Non-executive Director)
Hugh Robertson (Non-executive Director)
Maggie Beer (Non-executive Director)
Laura McBain (Managing Director)
Company Secretary
Clinton Orr
Chief Financial Officer
Michael Caragounis
Registered Office
Level 30, 55 Collins Street
Melbourne VIC 3000
Tel: +61 3 9692 7222
Fax: +61 3 9077 9233
Principal place of business
Level 30, 55 Collins Street
Melbourne VIC 3000
Tel: +61 3 9692 7222
Fax: +61 3 9077 9233
Share Register
Boardroom Pty Limited
Level 12, 225 George Street, Sydney NSW 2000
GPO Box 3993, Sydney NSW 2001
Tel: 1800 000 639
Fax: (02) 9279 0664
Auditor
PricewaterhouseCoopers
Level 19/2 Riverside Quay
Southbank, VIC 3006
Stock exchange listing
Longtable Group Limited shares are listed on the
Australian Securities Exchange (ASX code: LON)
Website www.longtablegroup.com
Corporate Governance Statement
The Company’s Corporate Governance charters
are located on the Company’s website at the following link:
https://www.longtablegroup.com/investors/corporate-governance/
SHARE OUR PASSION FOR
INVESTING IN THE FUTURE
OF FOOD & CULTURE.
2
Longtable Group has curated a house
of premium brands in lifestyle food and
beverages with a focus on consumer
demand for high quality, nutritious,
premium food and beverages.
Setting our sights on the premium
food and beverage industry in 2016,
we have been motivated by the aim
of meeting the high expectations of
consumers. We noticed that the way
we eat food was changing rapidly.
People were starting to care more about
high-quality food products, especially
concerned with convenient healthy
choices, and a connection with the way
their food was made. We have ideally
positioned ourselves to serve this growing
market with the ownership of Paris Creek
Farms and St David Dairy, as well as
the 100% acquisition of premium food
label Maggie Beer Products, an iconic
Australian brand which has delighted
Australians for over 40 years.
OUR BRANDS
Maggie Beer Products bases its reputation
on Maggie’s own philosophy of using
superior ingredients, in season, to produce
the best niche market gourmet products for
the national and international markets.
Paris Creek Farms is a leading Australian
bio-dynamic organic dairy processing and
manufacturing company with over 30 years
of creating a wide range of natural dairy
products in the most sustainable way.
Saint David Dairy is inner-Melbourne’s
only super premium micro-dairy. Its growing
appeal comes from its community roots –
it’s based in Fitzroy – and its milk is local.
At a time when provenance and ‘food
miles’ count, it’s little wonder that word has
spread among those who want something
wholesome and as natural as possible.
LONGTABLE GROUP | ANNUAL REPOR T 2019 |
“ Our strategic direction informs our
structure, where individual premium
products or brands can focus on what
they each do best without limiting the
broader group’s business trajectory.”
4
LONGTABLE GROUP | ANNUAL REPOR T 2 019 |
OUR MISSION IS TO BE A
LEADER IN MATCHING THE
HIGH EXPECTATIONS OF
CONSUMERS FOR NEW,
HIGH QUALITY FOOD AND
BEVERAGE EXPERIENCES
TO THE BEHAVIOURAL
CHANGES WE SEE.
Corporate directory
Letter from the Chairman
Managing Director’s Report
Operations Report
Corporate Risk Management
Directors’ Report
Auditor’s independence declaration
Statement of profit or loss and other
comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the members
of Longtable Group Limited
Shareholder information
2019 Corporate Governance Statement
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Longtable Group Limited
ABN 69 092 817 171
Annual Report - 30 June 2019
LETTER FROM THE
CHAIRMAN
already and we are appreciative of
the vote of confidence that Maggie
showed in Longtable by agreeing to
be part of the business post moving
to 100% ownership of Maggie Beer
Products.
The Longtable Group of businesses
has sound business fundamentals
and the Board and Management
team remain very focussed on our
business strategy of supporting and
growing our portfolio of brands,
through innovative new products,
marketing campaigns, improved
manufacturing efficiencies and
channel development. We believe the
company has a bright future.
On behalf of the Board, I would like
to thank all stakeholders including
customers and suppliers and in
particular, our shareholders for their
support.
I very much look forward to
welcoming you at the Annual General
Meeting in November.
Tony Robinson
Chairman
“ Share our
passion for
investing in
the future
of food &
culture.”
Dear Shareholders,
partners and customers.
The 2019 financial year proved
to be a year with some great
successes but also some significant
disappointments.
The successes have been the
acquisitions of St David Dairy and the
remaining 52% of shares in Maggie
Beer Products, with both these
businesses becoming 100% owned
subsidiaries of Longtable Group. Both
St David Dairy and Maggie Beer
Products are performing well and are
generating sound financial outcomes.
The key disappointment is with the
results at Paris Creek Farms. Post
acquisition, we made changes to
the business that were intended
to accelerate growth. Regrettably
these initiatives did not achieve that
goal and instead, caused us to both
lose some focus on our core South
Australian market and on running the
factory effectively and efficiently. The
outcome has been that the business’s
financial performance deteriorated.
It is pleasing to be able to say
momentum is building in that
business as we rebuild the skill and
understanding of the manufacturing
plant and the relationships with our
Given the success achieved in
making a similar turn around at
Maggie Beer Products we are
confident of achieving a similar
outcome at Paris Creek Farms and
we continue to believe that the
business has outstanding products
and partners and that the outlook for
the business remains strong.
It is important to also note that at
the same time, we are continuing to
grow our other two businesses and
maximise the outcome available to
those businesses. Both continue to
identify significant opportunities to
further the brands and revenue.
In May 2019, the Company
announced that I intend to step
down as Chairman of the Board
upon completion of the necessary
process to identify and integrate a
new Chairman. An extensive search
process has been undertaken and
we are now at the final stages of that
process. We will continue to keep
shareholders informed of progress.
The other significant Board change
this year was the inclusion of Maggie
Beer to the Board. Maggie has made
a significant contribution to the Board
6
MANAGING
DIRECTOR’S REPORT
our product mix to achieve better
manufacturing results, and driving cost
efficiencies throughout our businesses.
We expect the full benefits of
these initiatives to be realised in
FY20. Coupled with growth in
sales and distribution, this should
underpin a return to profitable,
cash flow positive results during
the second half of FY20.
Whilst the Paris Creek Farms business
has been slow to deliver results,
we have delivered a significant
turnaround in the performance of
Maggie Beer Products. The joint
efforts of the executive teams at
Maggie Beer and Longtable have
driven this result and are now
focused on doing the same with Paris
Creek Farms, including realising the
synergy benefits from leveraging both
businesses being in South Australia.
With 100% ownership of Maggie
Beer Products, we are very excited
about the potential to grow the
size and scale of this business.
We will bring closer together the
impact and reach of Maggie Beer’s
reputation with the growth of a
range of products that are closely
aligned with the brand’s values. As
Maggie says: “it’s all about the
taste”, and her continued involvement
in Longtable as a non-executive
director is a highly valuable part
of the ongoing evolution of this
iconic brand under our ownership.
At St David Dairy, we have continued
to develop and grow the brand,
its revenue through expanding its
customer base and growing in Butter.
Jamie Kitchen was recently appointed
General Manager of
St David Dairy to lead its continued
growth. His deep knowledge for
quality and efficiency tied with his
passion for the highest standards
in customer service mean we are
well placed to continue to build this
brand. There remains significant
opportunity in the Melbourne and
Victorian region which we intend
to capitalise on first, although we
remain excited about St David
Dairy’s growth opportunities in
Sydney and other major cities.
From the start, we have said that we
intended to build a house of premium
brands, and the 87 awards and
accolades received during the year
are a confirmation of the quality and
excellence of the food we produce.
Our beautifully presented and
packaged food reflects the dedication
of our team. We are very grateful
for their commitment and proud of
their achievements, and we take this
opportunity on behalf of the Board to
thank all of them for their contribution
to Longtable over the past 12 months.
Australia has long regarded itself
as a niche food bowl of Asia and
considers this as a key driver of
growth and opportunity for export.
Yet, aside from a handful of specialist
companies, Longtable stands alone
in focusing on curating brands that
stand to deliver these outcomes.
We are excited about the future
of Longtable Group for our
customers, staff, communities we
operate in, and our shareholders,
and look forward to sharing with
you these future successes.
PAGE 7
Over the last two years, Longtable
Group has transformed from a
single investment in Maggie Beer
Products to a house of premium
food and dairy brands, offering
contemporary, authentic choices
to discerning consumers.
Over the 12 months ended 30
June 2019 (FY19), the Group
has successfully completed two
acquisitions – St David Dairy and
Maggie Beer Products, building on
its ownership of Paris Creek Farms.
FY19 was a challenging year for
Paris Creek Farms. Several changes
to product sizing, packaging and
pricing were implemented, not all
of which resonated with consumers.
While updated pricing has been
accepted, changes to sizing of
the product and its packaging
needed to be revisited and we have
implemented changes that have
returned Paris Creek Farms to growth.
While acquiring and integrating
businesses, and transforming
Paris Creek Farms, we have also
focused on improving our operating
model, developing a deeper
understanding of the core drivers of
our manufacturing assets, optimising
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | OPERATIONS
REPORT
Financial Performance
The Group’s statutory financial
results reflect a continued period
of transformational change on the
pathway to growth and are not
representative of the underlying
business earnings into future periods.
The Group achieved Revenue of
$25.75 million (2018: $8.73 million),
reflecting Paris Creek Farms’ sales for
the full financial year together with
St David Dairy’s and Maggie Beer
Products’ sales since their respective
acquisition dates of 1 August 2018
and 16 April 2019.
The Group incurred a loss after tax of
$24.16 million (2018 loss: $6.67
million) reflecting:
• A non-cash goodwill impairment
expense of $15.19 million relating
to Paris Creek Farms, reducing
goodwill to $12.07 million
(2018: $27.26m);
• a fair value gain of $2.0 million
from the 48% equity investment
of Maggie Beer Products upon
acquisition;
• the continuing transition of Paris
Creek Farms to a sophisticated
corporate business model;
• the restructure of Paris Creek Farms
to enhance efficiencies and mitigate
cost increases, and
• corporate costs associated with
acquisitions and building group
structure.
Revenue and Costs
The past 12 months for Paris Creek
Farms, while challenging and its
performance disappointing, have
repositioned the company for
profitable growth from H2 FY20.
During H1 FY19, all of the products
within the portfolio were re-branded,
re-packaged and re-priced setting the
foundation to launch across the Eastern
Seaboard (ESB). Customer feedback
resulting from bottle functionality
challenges with the introduction of the
re-packaged milk bottles led to a swift
re-introduction of the 2L and 1L milk
bottles during March and April. The
re-introduction was well received and
despite some resulting loss of share in
South Australia, early results provide
confidence of not only recovering
share but also growing share whilst
pursuing ranging opportunities across
the ESB.
Furthermore, sales performance
incorporated the continued shift
towards lower price point customer
channels, coupled with temporary
deranging of some SKUs to comply
with retailer ranging review windows,
re-ranged again late in Q4 FY19.
This adversely impacted volume and
gross margin. Product category mix
shifted slightly towards milk at 63% of
sales, with yogurt consistent at 18%,
and a slight reduction in cheese to 8%
(temporary deranging) of sales, with
the balance in the other categories.
Intercompany sales of cheese to
Maggie Beer Products began late
in FY19, with the successful ranging
of cheddar under the Maggie Beer
brand. The prior period stock
investment is expected to be consumed
via this initiative, given the successful
sell through recorded thus far.
Paris Creek Farms’ valuable resource –
biodynamic organic milk – continued
to increase, with availability increasing
by approximately 7% compared
to the prior comparative period
(PCP), at largely the same cost per
litre, approximately 65c. Raw milk
“The Group
anticipates
that FY20 will
demonstrate the
opportunities for
long term growth
of the three high
quality premium
food and dairy
businesses it
has acquired.”
8
processed through the plant however
was approximately 1 million litres
or 10.4% less than FY18 due to the
lower sales performance. There were
8 farmer suppliers in the network as at
30 June 2019. The excess raw milk
of circa 3 million litres was sold to
other processors at an overall discount
per litre compared to the purchase
cost (total cost of $0.29 million).
Costs overall at Paris Creek Farms
increased by approximately 13% or
$1.03 million for FY19 compared to
FY18. The major contributors to the
increase were:
• labour increases associated with
enterprise agreement increases
(+3%) in addition to unproductive
labour and overtime incurred from
product launches and product
transitions (+11% or +$0.46
million);
• cost increases and usage charges
of electricity and gas in addition
to cleaning chemicals (+25% or
$0.19 million);
• maintenance costs associated with
machinery breakdowns and moving
to a preventative maintenance
regime (+43% or +$0.18 million);
and
• quality assurance and laboratory
testing usage increase due to
product transitions and increased
ESL (extended shelf life) supply
(+40% or $0.12 million).
Limited spend in Advertising and
Marketing initiatives in FY18 led to a
prudent increased investment in FY19
of $0.41 million or circa 3% of sales,
in support of the re-branding initiatives.
This level of spend is expected to
continue, to support brand recognition
via e-commerce and other platforms,
particularly with expansion across the
ESB.
Given the sales performance and cost
increases, management implemented
two restructures (in April and June) to
mitigate cost increases and re-base
costs relative to the brand’s short
term sales trajectory. This led to one
off restructure costs ($0.47 million
in redundancies) as a result of a
reduction in staff numbers, expected to
contribute approximately $1.8 million
in gross annualised savings in FY20
and beyond.
St David Dairy continued its sales
growth trajectory, through further
customer acquisitions (net sales +23%
v FY18) albeit at a higher cost base
due to cost increases – raw milk and
cream due to industry wide price
increases, and labour overtime via
contractors catering for the growth in
the near term. Since acquisition, St
David Dairy has contributed operating
cash of $0.9 million to the Group.
As a result of the cost increases,
management successfully implemented
market price increases in June to
mitigate some of raw material cost
increases.
Even though the cost increases resulted
in a deterioration of both Gross
Margin and EBITDA, there is high
confidence that margins will recover
in FY20 due to the price increase
and closer management of costs,
particularly in labour. The planned
expansion of the footprint into Sydney
has been put on hold until sales via
the current distributor increase to a
point that can justify the investment.
Footprint expansion opportunities will
also be considered in Melbourne
during FY20 as volumes are expected
to outgrow capacity.
Maggie Beer Products’ trading
performance for FY19 saw a
strong turnaround from the prior
year, returning a positive EBITDA of
$1.99 million (2018 loss: $1.47
million). The result was slightly above
management’s guidance to the market
($1.7 million to $1.9 million) in the
acquisition business case. With the
acquisition effective from 16 April
2019, EBITDA of $0.20 million was
recognised upon consolidation, with
the balance accounted via equity
accounting. From FY20, Longtable
will consolidate the full results of
Maggie Beer Products.
Net sales were 9% up on FY18 at
$20.9 million with the successful
expansion of the Cheese category
into Woolworths, adding $2.4 million
in new sales, albeit at a relatively
lower gross margin, together with
repositioning stocks, with sales up
70% or $0.9 million on FY18. This
more than mitigated shortfalls in the
fruit pastes and ice-cream categories.
As a result of implementing a
more efficient cost structure late in
FY18, overall costs were 26% or
$2.83 million lower than FY18,
predominantly from the reduction of
staff costs (27% or $1.67 million
lower) confirming the sustainability
of the restructure savings. Overall
operating activities contributed to
$1.95 million in cash in FY19.
Group office costs for FY19,
which include the costs of shared
resources and services, reflect the full
complement of staff and executives
to drive and execute the Group’s
strategic initiatives versus FY18’s
PAG E 9
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | OPERATIONS REPORT (Continued)
transitional period. Over the past 12
months there has been a heightened
focus on all corporate expenses, with
reductions in the utilisation of external
advisors and other costs. Employee
benefits expense increased to $2.70
million (FY18: $1.13 million). This,
together with corporate overhead and
administration costs of $1.78 million
(FY18: $2.24 million) contributed to
the overall loss of the Group.
Further to Paris Creek Farms’ non-
cash goodwill impairment charge of
$15.19 million and Maggie Beer
Products’ fair value gain on acquisition
of $2.00 million, costs totalling $2.54
million (FY18: $4.10 million) are
considered normalisation adjustments
given they are ‘’one-off’ in nature.
These included costs associated with
acquisitions of $0.29 million
(FY18: $1.35 million); employee
share-based payment adjustment of
$0.13 million (FY18: $1.97 million);
and business related normalisation
adjustments mainly attributed with Paris
Creek Farms’ new product launch
transitional costs and restructure costs
of $1.69 million (FY18: $0.8 million).
Supportive Balance Sheet
The Group is supported by a solid
balance sheet with net assets at 30
June 2019 of $62.96 million (30 June
2018: $63.53 million), including
a cash balance of $9.82 million
(2018: $14.78 million). The cash
balance places the Group in a strong
position to progress its strategic and
operational initiatives.
Maggie Beer Products and St David
Dairy are expected to again contribute
positively to the Group’s cash position
in FY20, with Paris Creek Farms
expected to start positively contributing
from H2 FY20. The businesses
are not expected to spend on any
major capital investment except
where opportunities are identified
for significant new product launches
aligned with brand credentials.
Inventory at 30 June 2019 was $3.63
million (8.5% of full year sales), with
Maggie Beer Products holding $2.70
million of stock (6.3% of full year sales)
and Paris Creek Farms’ inventory
balance at $0.79 million (1.8% of full
year sales).
A disciplined approach to working
capital and the Group’s cash
management will continue.
Strategic Progress
The Group’s strategic ambition is to
be a leader in matching the high
expectations of consumers for new,
high quality food and beverage
experiences to the inherent lifestyle
changes for modern life.
Having acquired Paris Creek Farms,
St David Dairy and Maggie Beer
Products over the past two years, the
Group now has a portfolio of premium
food and dairy brands to achieve
its ambition. Growth from these
businesses is expected from organic
opportunities in products, both existing
and through new product development
and distribution.
There are also synergistic opportunities
across the Group and its portfolio of
premium brands, sharing resources in
new product development, distribution,
sales, logistics and manufacturing that
will be facilitated and enabled via a
common IT platform. The Group has
already commenced activating some
of these opportunities and this will
continue into FY20.
Outlook
The Group anticipates that FY20 will
demonstrate the opportunities for long
term growth of the three high quality
premium food and dairy businesses it
has acquired.
For Paris Creek Farms, even though
trading performance was below
expectations in FY19, management
remain confident that it will return to
profitability, albeit taking longer than
originally expected. Paris Creek Farms
remains strategically sound with access
to the largest pool of bio-dynamic
organic milk in Australia, re-enforced
by milk availability being up on last
year. The opportunity remains in
converting this milk to value added
products and management expect
a positive run rate effective from H2
FY20.
In addition, the growth runway for
Paris Creek Farms is underpinned by
resetting prices, new product launches
and its new brand look – the core
fundamentals of this process have been
undertaken – and supported by further
operational efficiencies at the factory
site.
For St David Dairy, growth will be
underpinned by further extending
its footprint via a beach head into
Sydney, together with expanding into
South Australia.
At Maggie Beer Products, the focus
remains on growing its relationships
with retailers and introducing new
products as it leverages the credentials
of the Maggie Beer popularity and
notoriety, and also seeks to leverage
opportunities with Paris Creek Farms.
10
WE BELIEVE THAT THE WAY
WE EAT FOOD IS EVOLVING
RAPIDLY. PEOPLE ARE MORE
AND MORE FOCUSED ON
HEALTHY, CONVENIENT FOOD
CHOICES, SUSTAINABLE FOOD
PRODUCTION, AND BUILDING
A CONNECTION TO THE WAY
THEIR FOOD IS MADE.
PAG E 11
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | CORPORATE RISK
MANAGEMENT
The Company is committed to the effective management of risk to reduce uncertainty in the Group’s business
outcomes and to protect and enhance shareholder value. There are various risks that could have a material impact on
the achievement of the Group’s strategic objectives and future prospects.
Key risks and mitigation activities associated with the Company’s objectives are set out below:
Risk
Dairy Prices
Mitigation action
• Delivery of the Company’s strategic initiatives focused on shifting
to value added products to reduce any exposure to prices.
• Locked in prices within farmer supplier contracts.
Milk supply
• Contracts with all farmer suppliers to capture available supply.
• Provide farmer suppliers incentives to grow their milk pool.
• Provide incentives to attract new farmer suppliers to convert from
conventional farming to biodynamic organic farming.
Profitable Growth
• Establishing prices to reflect the premium nature of the product range.
• Targeted sales channels to maximise distribution.
• Focused allocation of milk supply to maximise the
profitability of the product portfolio.
• Optimisation of the existing product portfolio
complemented with new product development.
• Target investment in delivering growth strategies into new markets.
People safety
• Focus on safety through active identification and
management of safety hazards and operational risks.
• Continued capital investment to mitigate safety hazards.
Product quality and safety
• Continue to deliver food quality and safety disciplines with absolute
commitment to meeting or exceeding all food safety requirements.
• Continued capital investment to support the production of quality products.
Environmentally sustainable
business practices
• Mechanisms in place to identify, manage and monitor
compliance with key environmental requirements.
• Focus on reducing environmental footprint through
effective management of emissions.
• Continued investments to increase operational
effectiveness and efficiency of productive assets.
Change in regulations
• The Group employs suitable people to monitor and manage compliance.
Attraction, retention of key roles
• New experienced leadership team to deliver key strategic
initiatives and execution of business plans.
• Further investment in talent to continue to align
with the Group’s organic growth plans.
12
WE AIM TO BE AT THE
FOREFRONT OF MAINSTREAM
FOOD & BEVERAGE TRENDS,
BUT NOT SIDE-TRACKED BY
FADS, RECOGNISING THAT
OPPORTUNITIES ARISE LOCALLY
& INTERNATIONALLY.
PAG E 13
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | DIRECTORS’
REPORT
The directors present their report, together
with the financial statements, on the
consolidated entity (referred to hereafter
as the ‘consolidated entity’) consisting
of Longtable Group Limited (referred to
hereafter as the ‘company’ or ‘parent entity’)
and the entities it controlled at the end of,
or during, the year ended 30 June 2019.
Directors
The following persons were directors of
Longtable Group Limited during the whole
of the financial year and up to the date
of this report, unless otherwise stated:
Tony Robinson
(Non-executive Chairman)
Tom Kiing
(Non-executive Director)
Hugh Robertson
(Non-executive Director)
Maggie Beer
(Non-executive Director)
(appointed 18 April 2019)
Laura McBain
(Managing Director)
Principal activities
During the financial year the principal
continuing activities of the consolidated
entity were the expansion of its
activities in the food and beverage
industry with a particular focus on
premium products. This included:
• managing its investment in Maggie
Beer Products Pty Ltd (“MBP”), and
expanding to 100% ownership;
• completing the acquisition of St David
Dairy Pty Ltd (“St David Dairy”); and
• transitioning the operations of B.-d
Farm Paris Creek Pty Ltd (“Paris Creek
Farms”) to a corporate structure.
Dividends
There were no dividends paid,
recommended or declared during the
current or previous financial year.
Review of operations
The loss for the consolidated entity after
providing for income tax amounted to
$24.16 million (30 June 2018: $6.67
million).
Financial Position
The net assets of the consolidated entity
decreased by $0.57 million to $62.96
million (30 June 2018: $63.53 million).
The decrease during the year was due
to the acquisition of St David Dairy and
MBP, which resulted in $23.18 million of
goodwill and other intangible assets, and
$23.47 million of share capital issued
during the year, net of transaction costs,
offset by the impairment in the investment in
B.d Paris Creek Farms Pty Ltd amounting to
$15.19 million.
Operating results for the year
The consolidated entity reported a net
loss after tax of $24.16 million for the
financial year, which was an increase in
loss of $17.49 million from the previous
corresponding period (2018: loss of
$6.67 million). The increase in net
loss is mainly due to accounting for the
Company’s impairment of the investment in
B.d Paris Creek Farms Pty Ltd, amounting to
$15.19 million.
Significant changes in the state of affairs
On 30 July 2018, the Company held a
general meeting of shareholders to approve
tranche two of the two-tranche placement
being 7.1 million fully paid ordinary shares
at an issue price of $0.70 (70 cents) per
share, raising approximately $5 million
before costs. The Company completed
its placement on 1 August 2018.
“We are well
positioned to
quickly activate
opportunities,
stretch existing
business
capabilities and
bring innovation
both small and
large to the
organisation.”
14
On 1 August 2018 the Company
completed its acquisition of St David
Dairy Pty Ltd following approval of
shareholders, having paid $12.25
million in cash and $2.7 million in
shares issued at a fair value issue price
of $0.63 (63 cents) to the vendor.
The shares have been escrowed, with
fifty percent of the shares escrowed
for 12 months from the date of issue
and the remaining fifty percent of the
shares escrowed for 24 months from
the date of issue. On 18 July 2019
the Company announced the release
of the first fifty percent of the shares
in escrow, in line with the acquisition
agreement, on 1 August 2019.
On 4 March 2019 the Company
announced the acquisition of the
remaining 52% of Maggie Beer
Products Pty Ltd (“MBP”) for $10 million
comprising a mix of cash, shares and
convertible note, and a Capital Raising
of $15.89 million comprising an
institutional placement of $2.18 million
and a fully underwritten rights issue of
$13.71 million to fund the acquisition
and provide working capital to support
the growth strategy of Longtable.
On 1 April 2019 the Company
advised that the fully underwritten
non-renounceable entitlement offer
of 1 new fully paid ordinary share
for every 1.95 existing fully paid
ordinary shares at $0.20 per share
(Entitlement Offer) announced on
the ASX on 4 March 2019 to
raise up to approximately $13.71
million, closed 29 March 2019.
Applications were received under
the Entitlement Offer for a total of
20,506,119 new fully paid ordinary
shares (New Shares) meaning that
a total of $4,101,223.80 was
raised under the Entitlement Offer.
The New Shares issued comprised
of 19,828,392 shares applied for
under shareholder entitlements and
a further 677,727 shares applied
for by certain shareholders as
‘Additional New Shares’ above the
respective shareholders’ entitlements.
Also on 1 April 2019, the Company
gave notice of a shortfall under the
Entitlement Offer of approximately
48,019,130 shares (Shortfall Shares).
The Shortfall Shares were offered to
Bell Potter Securities Limited, being the
underwriter to the Entitlement Offer
pursuant to the terms of the underwriting
agreement with the Company and
were issued without disclosure under
Part 6D.2 of the Corporations Act
2001 (Cth) to certain institutional
and professional investors. Issue of
all new shares under the Entitlement
Offer occurred on 4 April 2019.
On 16 April 2019 the Company
completed its acquisition of MBP
following approval of shareholders,
having paid $8.5 million in cash, $1
million in shares issued at the deemed
issue price of $0.20 (20 cents) and a
convertible note valued at $0.5 million.
The shares have been escrowed for
24 months from the date of issue.
Following the acquisition of MBP,
on 18 April 2019 the Company
announced the appointment of
Maggie Beer to the Board of Directors
as a Non-executive Director.
There were no other significant changes
in the state of affairs of the consolidated
entity during the financial year.
Matters subsequent to the
end of the financial year
No matter or circumstance has
arisen since 30 June 2019 that
has significantly affected, or may
significantly affect the consolidated
entity’s operations, the results of those
operations, or the consolidated entity’s
state of affairs in future financial years.
Likely developments and
expected results of operations
The future developments of the
consolidated entity includes
full integration of Maggie Beer
products, growth in distribution
points for each food and beverage
brand held by Longtable, leverage
of the manufacturing synergies
across the group and marketing
campaigns to deliver awareness.
Information on these developments is
included in the review of operations
and activities on pages 8 - 10.
Environmental regulation
The Company takes a proactive
approach in relation to the
management of all environmental
matters. Paris Creek Farms is licenced
under the Environment Protection Act
1993 to undertake milk processing
works. In accordance with customary
wastewater management practices
for a dairy facility, wastewater
generated by the plant is treated by
a DAF plant. Paris Creek Farms has
completed an assessment to reduce the
environmental impact of wastewater
irrigation and has submitted to the
Environment Protection Authority
(EPA), and the EPA has approved,
an Environmental Improvement Plan
dated 18 April 2019 (“EIP”). The
EIP contains actions to be undertaken
by Paris Creek Farms to minimise the
environmental impact while irrigating.
All other significant environmental
risks have been reviewed and the
Group has no other legal obligation
to take corrective action in respect
of any environmental matter.
PAG E 15
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | DIRECTORS’ REPORT (Continued)
Information on Directors
TONY ROBINSON
TOM KIING
HUGH ROBERTSON
Non-executive Chairman
Non-executive Director
Non-executive Director
Experience and expertise:
Experience and expertise:
Experience and expertise:
Board member since July 2008, Tom
is also a director of Bridge Capital
Pty Ltd, an Australian technology
investment firm that manages a
portfolio of investments in the IT
sector. Tom also sits on the Board
of The Atomic Group, a retail and
footwear company in Australia
which holds the Adidas license
in Australia. Tom has extensive
experience as a technology, retail
and consumer brand executive in
building and growing businesses
in the field. Tom travels extensively
through the ASEAN region to
promote a wide range of Australian
investment opportunities to Asian
institutions and private investors.
Other current directorships:
None
Hugh is a senior investment adviser
with Bell Potter. He has worked in
the stockbroking industry for 36
years with a variety of firms including
Falkiners stockbroking, Investor
First and Wilson HTM. Among his
areas of interest is a concentration
on small cap industrial stocks.
Other current directorships:
Centrepoint Alliance Limited (ASX:
CAF) (appointed 2 May 2016)
Former directorships (last 3 years):
Hub 24 Limited (ASX: HUB) -
resigned 29 February 2016
TasFoods Limited (ASX: TFL) -
resigned 10 February 2017
AMA Limited (ASX: AMA) -
resigned 3 August 2018
Former directorships (last 3 years):
Special responsibilities:
Melbourne IT Limited (ASX: MLB)
- resigned 30 September 2017
Special responsibilities:
Chairman of Audit Committee and
a member of the Remuneration
and Nomination Committee
Interests in shares:
8,429,010 fully paid
up ordinary shares
Interests in options:
None
Member of Audit Committee
and chairman of Remuneration
and Nomination Committee
Interests in shares:
2,129,586 fully paid
up ordinary shares
Interests in options:
None
Tony Robinson joined the Board
on 26 October 2015 and has
significant experience in ASX
listed entities both as a Managing
Director and Board member. Tony
brings particular experience and
expertise in capital markets and
capital structures which is important
for listed entities, as well as bringing
extensive operating experience
from across a number of industries
including financial services,
telecommunications and transport.
Tony holds a number of other
directorships, including Executive
Director of PSC Insurance Group Ltd
(ASX:PSI), Non-Executive Director
of Bendigo and Adelaide Bank
Ltd (ASX:BEN) and Non-Executive
Director and Chairman of Pacific
Current Group Limited ( ASX:PAC ).
Other current directorships:
Bendigo and Adelaide Bank Limited
(ASX: BEN), Pacific Current Group
Limited (ASX: PAC), PSC Insurance
Group Ltd Limited (ASX: PSI)
Former directorships (last 3 years):
TasFoods Limited (ASX: TFL) -
resigned 13 March 2018
Special responsibilities:
Chairman of the Board of Directors.
Member of the Audit Committee
and a member of the Remuneration
and Nomination Committee
Interests in shares:
1,561,793 fully paid ordinary shares
Interests in options:
None
16
LAURA MCBAIN
Managing Director
Experience and expertise:
Laura was formerly the CEO and
Managing Director of Bellamy’s
Australia Ltd from 2014 to 2017,
prior to which she was CEO/
General Manager since 2007.
During these years, Laura oversaw
significant change, innovation
and business growth including
expansion into South East Asia and
China. Prior to joining Bellamy’s,
Laura practised as an accountant
specialising in the area of providing
business advisory and taxation
services to SMEs in both Sydney and
Tasmania. Laura holds a Bachelor
of Commerce, in 2013 completed
the IMD Leadership Challenge and
completed the IESE, Wharton and
CEIBS Global executive program in
2017. In 2013, Laura was named
the Telstra Tasmanian Business
Woman of the Year and went on
to be named the Telstra Australian
Business Woman of the Year for
2013 (Private and Corporate).
Other current directorships:
None
Former directorships (last 3 years):
Bellamy’s Australia Ltd (ASX: BAL)
(resigned 23 January 2017)
Interests in shares:
4,498,120 fully paid
up ordinary shares
Interests in options:
7,500,000 unlisted options
Interests in rights:
600,000 unlisted performance rights
MAGGIE BEER
Non-executive Director
(appointed 18 April 2019)
Experience and expertise:
Maggie Beer’s career in the food
industry spans over 40 years,
beginning as a farmer at the
Pheasant Farm in 1979, whereby
the fresh, seasonal ingredients
produced led to a farm shop in the
Barossa, and soon after a nationally
acclaimed restaurant, followed
by a commercial food production
business, Maggie Beer Products.
Maggie was Telstra South Australian
Business Woman of the Year in
1997, Senior Australian of the Year
2010 and once again in 2011,
appointed as a Member of the
Order of Australia in 2012 and
awarded an honorary doctorate of
Macquarie University in 2013, and
honorary doctorate of the University
of South Australia in 2016 in
recognition of her achievements in
tourism, hospitality and the promotion
of Australian cuisine. In addition
to this, Maggie established the
Maggie Beer Foundation in 2014
to improve the food experiences for
older Australians, particularly those
living within aged care homes.
Maggie Beer joined the board
of Longtable Group as part of
the acquisition of Maggie Beer
Products Pty Ltd by the group.
Maggie continues to play a pivotal
role in the growth and strategy
of the Maggie Beer Products
business as well remaining deeply
involved in the development of
new and exciting products.
Other current directorships:
None
Former directorships (last 3 years):
None
Special responsibilities:
None
Interests in shares:
4,895,332 fully paid up
ordinary shares (4,650,000
of these shares are held in
escrow until 15 April 2021)
Interests in options:
None
‘Other current directorships’ quoted
above are current directorships for
listed entities only and excludes
directorships of all other types of
entities, unless otherwise stated.
‘Former directorships (last 3 years)’
quoted above are directorships
held in the last 3 years for
listed entities only and excludes
directorships of all other types of
entities, unless otherwise stated.
PAG E 17
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | DIRECTORS’ REPORT (Continued)
Information On Directors (Continued)
Company secretary
Mr Clinton Orr
Clinton holds a Bachelor of Law
and Bachelor of Commerce. He is
General Counsel and Company
Secretary for the Company and
brings to the role approximately ten
years of relevant experience, having
worked with ASX listed organisations
as a general counsel, company
secretary and in private practice.
Meetings of directors
The number of meetings of the
company’s Board of Directors
(‘the Board’) held during the year
ended 30 June 2019, and the
number of meetings attended
by each director were:
Tony Robinson
Tom Kiing
Hugh Robertson
Maggie Beer
Laura McBain
Full Board
Audit Committee
Attended
Held
Attended
Held
14
14
13
3
14
14
14
14
3
14
4
4
3
-
-
4
4
4
-
-
Held: represents the number of meetings held during the time the director held office.
Retirement, election and
continuation in office of directors
The Board of Directors (Board)
has power to appoint persons as
Directors to fill any vacancies. Other
than those Directors appointed
during the year, one-third (or the
nearest number to) are required to
retire by rotation at each annual
general meeting and are eligible to
stand for re-election together with
those Directors appointed during
the year to fill any vacancy who
must retire and stand for election.
Remuneration Report (audited)
The remuneration report details
the key management personnel
remuneration arrangements for the
consolidated entity, in accordance with
the requirements of the Corporations
Act 2001 and its Regulations.
Key management personnel are
those persons having authority
and responsibility for planning,
directing and controlling the
activities of the entity, directly or
indirectly, including all directors.
The remuneration report is set out
under the following main headings:
• Principles used to determine the
nature and amount of remuneration
• Details of remuneration
• Executive Contracts
18
• Share-based compensation
good reward governance practices:
• Additional information
• competitiveness and reasonableness
• Additional disclosures relating to
• acceptability to shareholders
key management personnel
Principles used to determine the
nature and amount of remuneration
The objective of the consolidated
entity’s executive reward framework
is to ensure reward for performance
is competitive and appropriate for
the results delivered. The framework
aligns executive reward with the
achievement of strategic objectives and
the creation of value for shareholders,
and it is considered to conform to the
market best practice for the delivery of
reward. The Board of Directors (‘the
Board’) ensures that executive reward
satisfies the following key criteria for
• performance linkage / alignment
of executive compensation
• transparency
The Nomination and Remuneration
Committee is responsible for
determining and reviewing
remuneration arrangements for
its directors and executives. The
performance of the consolidated
entity depends on the quality of
its directors and executives. The
remuneration philosophy is to attract,
motivate and retain high performance
and high quality personnel.
No external specialist remuneration
advice is sought in respect of
remuneration arrangements for Non-
Executive Directors of the Board and
Key Management Personnel of the
Group during the year. General reward
advice is sought on an ad hoc basis.
The reward framework is designed
to align executive reward to
shareholders’ interests. The Board
have considered that it should seek to
enhance shareholders’ interests by:
• having economic profit as a core
component of plan design
• focusing on sustained growth in
shareholder wealth, consisting of
dividends and growth in share
price, and delivering constant or
increasing return on assets as well
as focusing the executive on key
non-financial drivers of value
• attracting and retaining
high calibre executives
Additionally, the reward
framework should seek to enhance
executives’ interests by:
• rewarding capability and experience
• reflecting competitive reward
for contribution to growth
in shareholder wealth
• providing a clear structure
for earning rewards
In accordance with best practice
corporate governance, the structure of
non-executive director and executive
director remuneration is separate.
Non-executive directors remuneration
Longtable remuneration policy for
non-executive directors aims to ensure
that Longtable can attract and retain
suitably qualified and experienced
directors having regard to the size
and nature of the organisation, the
levels of fees paid to non-executive
directors of other comparable listed
companies and, the responsibilities
and work requirements of the Board
members. Fees are established annually
for the Chairman and Non-Executive
Directors. The total fees paid by the
Group to members of the Board,
including fees paid for their involvement
on Board committees, are kept within
the total approved by shareholders
from time to time. ASX listing rules
require the aggregate non-executive
directors remuneration be determined
periodically by a general meeting.
Shareholders approved a maximum
fee pool of $400,000 per annum
at the Company’s annual general
meeting held on 30 October 2006.
There are no retirement allowance
benefits to Non-Executive Directors.
Maggie Beer has committed to a two-
year period as brand ambassador,
continuing her association with the
Maggie Beer brand, its product
development program and customer
relationship. Maggie Beer recieves
fees of $13,092 per month for her
services. Maggie Beer received
$32,730 for services provided from
16 April 2019 to 30 June 2019.
Each Non-Executive Director receives
a fee for being a Director of the
Company but no additional fees for
sitting on or chairing committees.
Director Fees are inclusive of
superannuation entitlements.
All Non-Executive Directors enter into a
service agreement with the Company
in the form of a letter of appointment.
Executive remuneration
The consolidated entity aims to reward
executives based on their position
and responsibility, with a level and
mix of remuneration which has both
fixed and variable components.
The executive remuneration and reward
framework has four components:
• base pay and non-monetary benefits
• short-term performance incentives
• share-based payments
• other remuneration such
as superannuation and
long service leave
The combination of these comprises
the executive’s total remuneration.
Fixed remuneration, consisting of
base salary, superannuation and
non-monetary benefits, are reviewed
annually by the Nomination and
Remuneration Committee based
on individual and business unit
performance, the overall performance
of the consolidated entity and
comparable market remunerations.
Executives may receive their fixed
remuneration in the form of cash or
other fringe benefits (for example
motor vehicle benefits) where it does
not create any additional costs to
the consolidated entity and provides
additional value to the executive.
The short-term incentives (‘STI’) program
is designed to align the targets of the
business units with the targets of those
executives responsible for meeting
those targets. Short-term incentives are
used to differentiate rewards based on
performance on a year by year basis.
The principal performance indicator
of the short-term incentive plan is the
Group’s financial performance. The
financial performance measurement
selected is revenue growth. It has
been selected as the most appropriate
measure of trading performance, and
is calculated based on a percentage
above a revenue threshold level. This
allows the individual to be rewarded
for growth in revenue. The percentage
PAG E 19
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | DIRECTORS’ REPORT (Continued)
and threshold level can differ for
each individual and are reviewed
every year. The revenue thresholds
are determined based on the ability
of the Key Management Personnel
to influence the Group’s earnings.
The long-term incentives (‘LTI’) include
long service leave and share-based
payments. Shares and options are
occasionally awarded to executives
over a period of three years based
on long-term incentive measures.
These include increase in shareholders
value relative to the entire market
and the increase compared to the
consolidated entity’s direct competitors.
Consolidated entity performance and
link to remuneration
Remuneration for certain individuals is
directly linked to the performance of
the consolidated entity. A portion of
cash bonus and incentive payments
Executive Contracts
are dependent on defined earnings
per share targets being met. The
remaining portion of the cash
bonus and incentive payments are
at the discretion of the Nomination
and Remuneration Committee.
Refer to the section ‘Additional
information’ below for details of
the earnings and total shareholders
return for the last five years.
Voting and comments made at the
company’s 2018 Annual General
Meeting (‘AGM’)
At the 2018 AGM, 84% of the votes
received supported the adoption
of the remuneration report for the
year ended 30 June 2018. The
company did not receive any specific
feedback at the AGM regarding
its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of
key management personnel of
the consolidated entity are set
out in the following tables.
The key management personnel of
the consolidated entity consisted
of the following directors of
Longtable Group Limited:
• Tony Robinson
• Tom Kiing
• Hugh Robertson
• Maggie Beer
(appointed 18 April 2019)
• Laura McBain
And the following person:
• Michael Caragounis
(Chief Financial Officer)
The remuneration and other terms of employment for executives are covered in formal employment contracts that have
no fixed terms. Longtable may terminate an executive’s employment contract immediately for cause, in which case the
executive is not entitled to any payment other than the value of total fixed remuneration (and accrued entitlements) up to
the termination date
Current KMP Executive
Notice Period by
Longtable / Notice
Period by Executive
Payment in lieu of notice /
Redundancy for
fundamental change in role
Laura McBain
Michael Caragounis
6 months
4 months
Yes / No
Yes / Yes
Redundancy
N/A
Redundancy payment of 6 months’
salary and will include any
applicable pay in lieu of notice
20
Table A: KMP remuneration for the year ended 30 June 2019
2019
Non-Executive Directors:
Tony Robinson
Tom Kiing
Hugh Robertson
Maggie Beer
Executive Directors:
Laura McBain*
Other Key Management Personnel:
Michael Caragounis**
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
Bonus***
Non-
monetary
Super-
annuation
$
$
$
$
Long
Service
Leave
$
Equity
Settled
$
Total
$
54,795
40,000
36,530
7,610
329,951
334,469
803,355
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,205
-
3,470
723
-
-
-
-
-
-
-
-
60,000
40,000
40,000
8,333
20,531
1,140
69,994 421,616
20,531
920
10,150 366,070
50,460
2,060
80,144 936,019
*
During the year the Company issued 4,700,000 options and 600,000 performance rights to Laura McBain. In accordance with AASB
2 - Share Based Payments, a share based payment expense of $69,994 has been accounted for during the financial year.
**
During the year the Company issued 600,000 options and 189,333 performance rights to Michael Caragounis. In accordance with AASB
2- Share Based Payments, a share based payment expense of $10,150 has been accounted for during the financial year.
*** At the date of signing this Annual Report, the Board has not approved any Bonus for KMP. The Board are, however, still assessing performance criteria
and accordingly, may award an STI payment to KMP for FY19, which will be disclosed in the Company’s remuneration report in FY20.
Table B: KMP remuneration for the year ended 30 June 2018
2018
Non-Executive Directors:
Tony Robinson*
Tom Kiing
Hugh Robertson
Executive Directors:
Laura McBain**
Other Key Management Personnel:
Michael Caragounis
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
and fees
$
Bonus
$
Non-
monetary
Super-
annuation
$
$
Equity
Settled
$
54,033
40,000
36,528
296,478
-
-
-
-
142,140 61,079
569,179 61,079
-
-
-
-
-
-
Total
$
83,645
40,000
39,998
5,133
24,479
-
3,470
-
-
18,378
1,974,186 2,289,042
8,598
-
211,817
35,579
1,998,665 2,664,502
* On 18 July 2016, the Company granted a total of 8.75 million loan funded shares to Tony Robinson and a share
based payment amount of $24,479 was accounted for during the previous financial year.
** During the previous financial year, the Company issued shares and options to Laura McBain, in accordance with the terms of her
appointment as announced on 8 August 2018. In accordance with AASB 2- Share Based Payments, a share based payment
expense of $1,974,186 has been accounted for during the previous financial year as a fair value adjustment.
PAG E 21
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
DIRECTORS’ REPORT (Continued)
Refer to notice of AGM as announced 28 November 2018 for details of the performance conditions for share based payments.
Table C: Proportion of KMP’s fixed remuneration and remuneration linked to performance
Name
2019
2018
2019
2018
2019
2018
Fixed remuneration
At risk - STI
At risk - LTI
Non-Executive Directors:
Tony Robinson
Tom Kiing
Hugh Robertson
Maggie Beer
Executive Directors:
Laura McBain
100%
100%
100%
100%
71%
100%
100%
-
83%
14%
Other Key Management Personnel:
Michael Caragounis
97%
71%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29%
-
-
-
17%
86%
29%
3%
-
Share-based compensation
Table D: Number of options granted as remuneration to KMP during FY19
Options
Share-based payments granted as
remuneration to KMP during FY19
Laura McBain
Laura McBain
Michael Caragounis
Michael Caragounis
Grant date
Number
granted
Value per
Option
Number
Vested
28/11/2018
940,000
28/11/2018
3,760,000
28/11/2018
28/11/2018
120,000
480,000
0.03
0.06
0.03
0.06
-
-
-
-
Table E: Movements during FY19 in the options over shares in the Company held directly, indirectly or beneficially,
by each KMP, including their related parties
Laura McBain
Michael Caragounis
Balance at
start of year
Received
as part of
remuneration
2,800,000
4,700,000
-
600,000
2,800,000
5,300,000
Additions
Disposals/
Other
Total
Number
Vested
-
-
-
-
-
-
7,500,000
600,000
8,100,000
-
-
-
Table F: Terms and Conditions of options over ordinary shares affecting remuneration of directors and KMP
Grant date
Vesting/ exercisable
date
Expiry date
Exercise Price
Number of options
Fair value per
option at grant date
13/10/2017
28/11/2018
28/11/2018
28/11/2018
13/10/2017
13/10/2021
30/06/2020
28/11/2023
30/06/2021
28/11/2023
30/06/2021
28/11/2023
$0.50
$0.75
$0.75
$0.75
2,800,000
1,060,000
1,590,000
2,650,000
$0.20
$0.03
$0.06
$0.06
22
Table G: Number of performance rights affecting remuneration of directors and KMP
The number of performance rights over ordinary shares granted to and vested by directors and other key
management personnel as part of compensation during the year ended 30 June 2019 are set out below:
Name
Laura McBain
Michael Caragounis
Number of
rights granted
during the year
2019
Number of
rights granted
during the year
2018
Number of
rights vested
during the year
2019
Number of
rights vested
during the year
2018
600,000
189,333
-
-
-
-
-
-
Table H: Movement during FY19 in the performance rights over shares in the Company held
directly, indirectly or beneficially, by each KMP, including their related parties
Laura McBain
Michael Caragounis
Balance at
start of year
Received as part
of remuneration
Additions
Disposals
/ Other
Total
Number
Vested
-
-
-
600,000
189,333
789,333
-
-
-
-
-
-
600,000
189,333
789,333
-
-
-
Table I: Terms and Conditions of performance rights affecting remuneration of directors and KMP
Grant date
Vesting date
Expiry date*
Exercise price
Number of
performance rights
Fair value per
right at grant date
28/11/2018
30/06/2019
31/08/2019
28/11/2018
30/06/2020
31/08/2020
28/11/2018
30/06/2021
31/08/2021
28/11/2018
30/06/2021
31/08/2021
$0.75
$0.75
$0.75
$0.75
167,333
167,333
167,333
287,334
$0.01
$0.03
$0.06
$0.06
*Performance rights expire 60 days after notice of vesting or otherwise at date noted.
Performance rights granted carry no dividend or voting rights.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2019 are summarised below:
Sales revenue
Net loss before tax
Loss after income tax
2019
$’000
25,753
(24,160)
(24,160)
2018
$’000
2017
$’000
2016
$’000
2015
$’000
8,733
(7,694)
(6,670)
-
-
(10,293)
(10,293)
(1,827)
(1,827)
-
(6,640)
(6,640)
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year end ($)
2019
0.210
2018
0.730
2017*
0.016
2016*
0.040
2015*
0.020
Basic earnings per share (cents per share)
(18.660)
(10.308)
(40.571)
(24.250)
(151.500)
Diluted earnings per share (cents per share)
(18.660)
(10.308)
(40.571)
(24.250)
(151.500)
* The value of basic and diluted earnings per share relating to 2015-2017 have been adjusted to reflect the share consolidation of 25:1 completed in 2018. No
dividend has been paid in the past 5 years.
PAG E 23
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
DIRECTORS’ REPORT (Continued)
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
start of year
Received as part
of remuneration
Additions/ Other
Disposals/
Other
Balance at
end of year
Ordinary shares
Tony Robinson
Hugh Robertson
Tom Kiing
Maggie Beer*
Laura McBain
Michael Caragounis
1,561,793
2,129,586
8,429,010
4,895,332
4,498,120
200,000
21,714,021
* Shares held by Maggie Beer include shares issued as a part of the purchase price for Maggie Beer Products Pty Ltd, an acquisition completed during the financial year.
731,793
721,893
4,057,291
4,895,332
1,524,786
180,000
12,111,095
830,000
1,407,693
4,371,719
-
2,973,334
20,000
9,602,926
-
-
-
-
-
-
-
-
-
-
-
-
-
-
These shares are held in escrow until 15 April 2021.
Other transactions with key management personnel and their related parties
As a part of the purchase of Maggie Beer Products Pty Ltd (“MBP”) 1 Convertible Note was issued to the then owner
of MBP, Maggie Beer.
The fair value of the convertible note issued was $0.5 million, with terms including:
i) 12 months maturity with no coupon;
ii) Redeemable from completion date through to maturity for scrip at the holder’s election;
iii) Redeemable at maturity for either cash or scrip at the holder’s election;
iv) Conversion price of 20 cents if scrip is elected.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Longtable Group Limited under option at the date of this report are as follows:
Grant date
Expiry date
Exercise
price
$1.500
$1.500
$0.500
$0.750
$0.750
$0.750
Number
under option
50,321
50,321
2,800,000
1,132,000
1,698,000
2,830,000
8,560,642
13 December 2019
13 December 2019
13 October 2021
28 November 2023
28 November 2023
28 November 2023
17 December 2013
17 December 2013
13 October 2017
28 November 2018
28 November 2018
28 November 2018
24
Shares under performance rights
Unissued ordinary shares of Longtable Group Limited under performance rights at the date of this report are as follows:
Grant date
28 November 2018
28 November 2018
28 November 2018
28 November 2018
Expiry date*
31 August 2019
31 August 2020
31 August 2021
31 August 2021
Exercise
price
Number
under option
$0.750
$0.750
$0.750
$0.750
230,000
230,000
230,000
350,000
1,040,000
* Performance rights expire 60 days after notice of vesting or otherwise at date noted.
No person entitled to exercise the performance rights had or has any right by virtue of the performance
right to participate in any share issue of the company or of any other body corporate.
Shares issued on the exercise of
options or performance rights
There were no ordinary shares of Longtable
Group Limited issued on the exercise of options
or performance rights during the year ended 30
June 2019 and up to the date of this report.
Indemnity and insurance of officers
The company has indemnified the directors and executives
of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally
liable, except where there is a lack of good faith.
The Company has indemnified each Director referred
to in this report, the Company Secretary and previous
Directors and secretaries (Officers) against all liabilities
or loss (other than to the Company or a related body
corporate) that may arise from their position as Officers
of the Company and its controlled entities, except where
the liability arises out of conduct involving a lack of good
faith or indemnification is otherwise not permitted under
the Corporations Act. The indemnity stipulates that the
Company will meet the full amount of any such liabilities,
including costs and expenses, and covers a period of seven
years after ceasing to be an Officer of the Company.
The Company has also indemnified the current and
previous Directors of its controlled entities and certain
members of the Company’s senior management for
all liabilities and loss (other than to the Company or
a related body corporate) that may arise from their
position, except where the liability arises out of conduct
involving a lack of good faith or indemnification is
otherwise not permitted under the Corporations Act.
The Company has executed deeds of indemnity in favour of
each Non-Executive Director of the Company and certain
Non-Executive Directors of related bodies corporate of the
Company as well as with the Company Secretary.
The Company has paid insurance premiums in respect
of Directors’ and Officers’ liability insurance contracts,
for Officers of the Company and of its controlled entities.
The insurance cover is on standard industry terms and
provides cover for loss and liability for wrongful acts in
relation to the relevant person’s role as an Officer, except
that cover is not provided for loss in relation to Officers
gaining any profit or advantage to which they were
not legally entitled, or Officers committing any criminal,
dishonest, fraudulent or malicious act or omission, or any
knowing or wilful violation of any statute or regulation.
Cover is also only provided for fines and penalties in
limited circumstances and up to a small financial limit.
The insurance does not provide cover for the
independent auditors of the Company or of a
related body corporate of the Company.
In accordance with usual commercial practice, the insurance
contract prohibits disclosure of details of the nature of the
liabilities covered by the insurance, the limit of indemnity
and the amount of the premium paid under the contract.
Indemnity and insurance of auditor
The company has not, during or since the end of the
financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity
against a liability incurred by the auditor.
During the financial year, the company has not paid
a premium in respect of a contract to insure the
auditor of the company or any related entity.
PAG E 25
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | DIRECTORS’ REPORT (Continued)
Proceedings on behalf of the company
Auditor
PricewaterhouseCoopers continues in office in accordance
with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of
directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
Tony Robinson
Non-Executive Chairman
29 August 2019
No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the company, or to intervene
in any proceedings to which the company is a party
for the purpose of taking responsibility on behalf of
the company for all or part of those proceedings.
Non-audit services
Details of the amounts paid or payable to the auditor for
non-audit services provided during the financial year by the
auditor are outlined in note 27 to the financial statements.
The directors are satisfied that the provision of non-
audit services during the financial year, by the auditor
(or by another person or firm on the auditor’s behalf), is
compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
Officers of the company who are former
partners of PricewaterhouseCoopers
There are no officers of the company who are
former partners of PricewaterhouseCoopers.
Rounding of amounts
The company is of a kind referred to in Corporations
Instrument 2016/191, issued by the Australian Securities
and Investments Commission, relating to ‘rounding-
off’. Amounts in this report have been rounded off in
accordance with that Corporations Instrument to the nearest
thousand dollars, or in certain cases, the nearest dollar.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as
required under section 307C of the Corporations Act
2001 is set out immediately after this directors’ report.
26
PAGE 27
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | PricewaterhouseCoopers, ABN 52 780 433 757 2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration As lead auditor for the audit of Longtable Group Limited for the year ended 30 June 2019, I declare that to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Longtable Group Limited and the entities it controlled during the period. Brad Peake Melbourne Partner PricewaterhouseCoopers 29 August 2019 Making
Headlines
“ Tr iple cream, double ash br ie from Pa r is Creek Fa r ms i n
SA , one of t he be tt er Australia n c heeses I’ ve ea t e n l at e l y ”
John Lethlean
LONGTABLE GROUP LIMITED | ANNUAL REPOR T 2019 |
The Australian
OUR VISION IS TO DELIVER AN
AWARD WINNING BRAND TO
CUSTOMERS IN AUSTRALIA,
ASIA AND FURTHER ABROAD.
G OLD
SO UT H AUS T R A L IAN
DA IRY AWA R DS
Par i s C re e k Far m s
Bio -d y nam ic Fres h
Sa l t e d Bu tt e r
Bio - d yn am ic Full
Cre a m Quar k
B i o- d y nam ic
Red uce d Fat Mil k
OVERAL L
C HAMPION AWAR D
DIAA AUS TRALI AN DAI RY
PRODUCT COMP ETITIO N
S t Da vid Dai r y
Full Cream Mi lk
FINANCIAL STATEMENTS
30
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR
ENDED 30 JUNE 2019
Revenue
Expenses
Consolidated
NOTE
2019
$’000
5
25,753
2018
$’000
8,733
Raw materials and consumables used
(14,954)
(4,765)
Overheads
Occupancy and utilities costs
Employee benefits expense
Transportation expense
Professional fees
Marketing and advertising expenses
Other expenses
Depreciation expense
Amortisation expense
Finance costs
Impairment expense
Gain / (loss) related to investment in associates
(1,370)
(1,516)
(10,693)
(2,350)
(1,178)
(824)
(2,335)
(1,337)
(570)
(74)
14
12
(15,190)
2,478
(590)
(490)
(5,152)
(704)
(1,771)
(138)
(1,570)
(515)
-
(138)
-
(594)
Loss before income tax benefit
(24,160)
(7,694)
Income tax benefit
7
-
1,024
Loss after income tax benefit for the year attributable
to the owners of Longtable Group Limited
(24,160)
(6,670)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive income for the year attributable
to the owners of Longtable Group Limited
(24,160)
(6,670)
Cents
Cents
Basic earnings per share
Diluted earnings per share
36
36
(18.660)
(18.660)
(10.308)
(10.308)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
PAG E 31
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | STATEMENT OF FINANCIAL
POSITION AS AT
30 JUNE 2019
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Investments accounted for using the equity method
Property, plant and equipment
Intangible assets
Other
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Other financial liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Other financial liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Consolidated
NOTE
2019
$’000
2018
$’000
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
9,819
6,562
3,628
406
20,415
-
19,131
34,739
-
53,870
14,782
2,935
1,341
317
19,375
4,907
15,585
27,257
750
48,499
74,285
67,874
6,848
1,193
1,346
9,387
1,798
136
1,934
3,514
100
432
4,046
264
38
302
11,321
4,348
62,964
63,526
120,695
1,721
(59,452)
97,224
1,594
(35,292)
62,964
63,526
The above statement of financial position should be read in conjunction with the accompanying notes
32
STATEMENT OF CHANGES
IN EQUITY FOR THE YEAR
ENDED 30 JUNE 2019
Consolidated
Balance at 1 July 2017
Contributed
Equity
$’000
Options
Reserves
$’000
Accumulated
Losses
$’000
Total equity
$’000
37,158
899
(28,622)
9,435
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
(note 21)
60,066
-
-
-
-
Share-based payments (note 22)
-
695
(6,670)
(6,670)
-
-
(6,670)
(6,670)
-
-
60,066
695
Balance at 30 June 2018
97,224
1,594
(35,292)
63,526
Consolidated
Balance at 1 July 2018
Contributed
Equity
$’000
Options
Reserves
$’000
Accumulated
Losses
$’000
Total equity
$’000
97,224
1,594
(35,292)
63,526
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs
(note 21)
23,471
-
-
-
-
Share-based payments (note 22)
-
127
(24,160)
(24,160)
-
-
(24,160)
(24,160)
-
-
23,471
127
Balance at 30 June 2019
120,695
1,721
(59,452)
62,964
The above statement of changes in equity should be read in conjunction with the accompanying notes
PAG E 33
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED
30 JUNE 2019
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Other income received
Consolidated
NOTE
2019
$’000
2018
$’000
25,981
8,402
(34,069)
(12,762)
137
58
Net cash used in operating activities
35
(7,951)
(4,302)
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
32
(15,857)
(30,406)
Payments for property, plant and equipment
Payments for assets under finance lease
Payments for deposits on investment
(852)
(14)
-
(60)
(112)
(750)
Net cash used in investing activities
(16,723)
(31,328)
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Repayments of borrowings
Interest and other finance costs paid
20,900
(1,115)
-
(74)
56,255
(2,256)
(7,644)
-
Net cash from financing activities
19,711
46,355
Net increase/(decrease) in cash and cash equivalents
(4,963)
10,725
Cash and cash equivalents at the beginning of the
financial year
14,782
4,057
Cash and cash equivalents at the end of the financial year
8
9,819
14,782
The above statement of cash flows should be read in conjunction with the accompanying notes
34
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 1.
GENERAL INFORMATION
The financial report is a general
purpose financial report that has been
prepared in accordance with Accounting
Standards and Interpretations, the
Corporations Act 2001 and complies
with other requirements of the law.
The financial report covers Longtable
Group Limited and controlled
entities. Longtable Group Limited
is a public company, incorporated
and domiciled in Australia.
For the purpose of preparing the
consolidated financial statements,
the Company is a for-profit entity.
The financial report includes the
consolidated financial statements of
the Group and is referred to as the
Group or consolidated entity.
The directors have the power to amend
and reissue the financial report.
The financial statements were authorised
for issue, in accordance with a resolution
of directors, on 29 August 2019.
NOTE 2.
SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted
in the preparation of the financial
statements are set out either in the
respective notes or below. These policies
have been consistently applied to all the
years presented, unless otherwise stated.
Going concern
The financial statements have been
prepared on the going concern basis,
which assumes the continuity of normal
business activities, and the realization
of assets and the settlement of liabilities
in the ordinary course of business.
For the year ended 30 June 2019, the
consolidated entity has incurred losses
of $24.16 million (2018: $6.67
million) and incurred net cash outflows
of $7.95 million from operations (2018:
$4.30 million). As at year end, the
cash position was $9.82 million (30
June 2018: $7.30 million excluding
cash earmarked for the acquisition of
St David Dairy on 1 August 2018).
The Company expects its normal cash
flows over the next 12 months from
the date of signing to be sufficient
to continue as a going concern.
Basis of preparation
These general purpose financial statements
have been prepared in accordance with
Australian Accounting Standards and
Interpretations issued by the Australian
Accounting Standards Board (‘AASB’)
and the Corporations Act 2001, as
appropriate for for-profit oriented entities.
These financial statements also comply
with International Financial Reporting
Standards as issued by the International
Accounting Standards Board (‘IASB’).
The presentation and functional currency
of the group is Australian dollars.
Historical cost convention
The financial statements have been
prepared under the historical cost
convention, except for, where applicable,
the revaluation of financial assets and
liabilities at fair value through profit
or loss, financial assets at fair value
through other comprehensive income,
investment properties, certain classes
of property, plant and equipment and
derivative financial instruments.
Critical accounting estimates
The preparation of the financial
statements requires the use of certain
critical accounting estimates. It also
requires management to exercise its
judgement in the process of applying
PAG E 35
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
36
Note 2. Significant accounting policies (continued)
the consolidated entity’s accounting
policies. The areas involving a higher
degree of judgement or complexity,
or areas where assumptions and
estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act
2001, these financial statements present
the results of the consolidated entity only.
Supplementary information about the
parent entity is disclosed in Note 31.
Principles of consolidation
The consolidated financial statements
incorporate the assets and liabilities
of all subsidiaries of Longtable Group
Limited (‘company’ or ‘parent entity’)
as at 30 June 2019 and the results
of all subsidiaries for the year then
ended. Longtable Group Limited and
its subsidiaries together are referred
to in these financial statements
as the ‘consolidated entity’.
Subsidiaries are all those entities over
which the consolidated entity has control.
The consolidated entity controls an
entity when the consolidated entity is
exposed to, or has rights to, variable
returns from its involvement with the
entity and has the ability to affect those
returns through its power to direct the
activities of the entity. Subsidiaries are
fully consolidated from the date on which
control is transferred to the consolidated
entity. They are de-consolidated
from the date that control ceases.
A controlled entity is any entity the
Company has the power over, and is
exposed or has rights to variable returns
from its involvement in the entity, and has the
ability to use it power to affect its returns.
A list of controlled entities is contained
in Note 33 to the financial statements.
All inter-company balances and
transactions between entities in the
consolidated entity, including any
recognised profits or losses, have
been eliminated on consolidation.
Accounting policies of subsidiaries
have been changed where necessary
to ensure consistency with those
policies applied by the parent entity.
Where controlled entities have
entered or left the consolidated entity
during the year, their operating results
have been included/excluded from
the date control was obtained or
until the date control ceased.
The investments in controlled entities
are measured at cost in the parent
entity’s financial statements.
Intercompany transactions, balances
and unrealised gains on transactions
between entities in the consolidated
entity are eliminated. Unrealised
losses are also eliminated unless the
transaction provides evidence of the
impairment of the asset transferred.
Accounting policies of subsidiaries
have been changed where necessary
to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is
accounted for using the acquisition
method of accounting. A change in
ownership interest, without the loss of
control, is accounted for as an equity
transaction, where the difference between
the consideration transferred and the book
value of the share of the non-controlling
interest acquired is recognised directly
in equity attributable to the parent.
Income tax
The charge for current income tax
expense/(benefit) is based on the
profit/(loss) for the year adjusted for
any non-assessable or disallowed
items. It is calculated using the tax
rates that have been enacted or
are substantially enacted by the
statement of financial position date.
Deferred tax is accounted for
using the statement of financial
position liability method in respect
of temporary differences arising
between the tax bases of assets
and liabilities and their carrying
amounts in the financial statements.
No deferred income tax will be
recognised from the initial recognition
of an asset or liability, excluding
a business combination, where
there is no effect on accounting
or taxable profit or loss.
Deferred tax is calculated at the tax
rates that are expected to apply
to the period when the asset is
recognised or liability is settled.
Deferred tax is credited in the profit
or loss except where it relates to
items that may be credited directly to
equity, in which case the deferred tax
is adjusted directly against equity.
Deferred 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.
Longtable Group Ltd and its wholly-
owned Australian subsidiaries have
formed an income tax consolidated
group under the tax consolidation
regime. Each entity in the Group
recognised its own current and
deferred tax liabilities, except for
any deferred tax assets resulting from
unused tax losses and tax credits,
which are immediately assumed
by the parent entity. The current tax
liability of each Group entity is then
subsequently assumed by the parent
entity. The Group entered into the tax
consolidation regime from 1st June
2006 and notified the Australian
Taxation Office that it had formed
an income tax consolidated Group
to apply from 1st June 2006. The
tax will be paid by the parent entity
as the Group has not entered into
a tax funding agreement. Longtable
Group Ltd is the designated parent
entity for tax consolidation purposes.
Current and non-current
classification
Assets and liabilities are presented
in the statement of financial
position based on current and
non-current classification.
An asset is classified as current
when: it is either expected to be
realised or intended to be sold
or consumed in the consolidated
entity’s normal operating cycle; it
is held primarily for the purpose of
trading; it is expected to be realised
within 12 months after the reporting
period; or the asset is cash or cash
equivalent unless restricted from
being exchanged or used to settle
a liability for at least 12 months
after the reporting period. All other
assets are classified as non-current.
A liability is classified as current
when: it is either expected to be
settled in the consolidated entity’s
normal operating cycle; it is held
primarily for the purpose of trading;
it is due to be settled within 12
months after the reporting period;
or there is no unconditional right to
defer the settlement of the liability
for at least 12 months after the
reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are
always classified as non-current.
Leases
Lease payments for operating
leases, where substantially all the
risks and benefits remain with the
lessor, are charged on a straight
line basis as expenses in the
periods in which they are incurred,
except where another systematic
basis is more representative of the
time pattern in which economic
benefits from the leased asset are
consumed. Contingent rentals
arising under operating leases are
recognised as an expense in the
period in which they are incurred.
A distinction is made between
finance leases, which effectively
transfer from the lessor to the lessee
substantially all the risks and benefits
incidental to the ownership of leased
assets, and operating leases, under
which the lessor effectively retains
substantially all such risks and
benefits.
Finance leases are capitalised.
A lease asset and liability are
established at the fair value of the
leased assets, or if lower, the present
value of minimum lease payments.
Lease payments are allocated
between the principal component
of the lease liability and the finance
costs, so as to achieve a constant
rate of interest on the remaining
balance of the liability.
Leased assets acquired under a
finance lease are depreciated
over the asset’s useful life or over
the shorter of the asset’s useful
life and the lease term if there is
no reasonable certainty that the
consolidated entity will obtain
ownership at the end of the lease
term.
PAG E 37
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
38
Note 2. Significant accounting policies (continued)
Operating lease payments, net of any
incentives received from the lessor, are
charged to profit or loss on a straight-
line basis over the term of the lease.
Impairment of non-financial assets
At each reporting date, the
consolidated entity reviews the
carrying amounts of its tangible and
intangible assets to determine whether
there is any indication that those
assets have suffered an impairment
loss. If any such indication exists, the
recoverable amount of the asset is
estimated in order to determine the
extent of the impairment loss (if any).
Where the asset does not generate
cash flows that are independent
from other assets, the consolidated
entity estimates the recoverable
amount of the cash-generating unit
to which the asset belongs.
Goodwill, intangible assets with
indefinite useful lives and intangible
assets not yet available for use are
tested for impairment annually and
whenever there is an indication
that the asset may be impaired.
An impairment of goodwill is
not subsequently reversed.
Recoverable amount is the higher of
fair value less costs of disposal and
value in use. In assessing value in use,
the estimated future cash flows are
discounted to their present value using a
pre-tax discount rate that reflects current
market assessments of the time value
of money and the risks specific to the
asset for which the estimates of future
cash flows have not been adjusted.
If the recoverable amount of an
asset (or cash generating unit) is
estimated to be less than its carrying
amount, the carrying amount of
the asset (cash generating unit) is
reduced to its recoverable amount. An
impairment loss is recognised in the
statement of profit or loss and other
comprehensive income immediately.
Where an impairment loss subsequently
reverses, the carrying amount of the
asset (cash generating unit) is increased
to the revised estimate of its recoverable
amount, but only to the extent that
the increased carrying amount does
not exceed the carrying amount that
would have been determined had no
impairment loss been recognised for
the asset (cash generating unit) in prior
years. A reversal of an impairment
loss is recognised in income.
Finance costs
Finance costs attributable to
qualifying assets are capitalised as
part of the asset. All other finance
costs are expensed in the period
in which they are incurred.
Financial Liabilities
Financial liabilities are classified
as other financial liabilities.
Other financial liabilities, including
borrowings, are initially measured at
fair value, net of transaction costs.
Other financial liabilities are
subsequently measured at amortised
cost using the effective interest method,
with interest expense recognised
on an effective yield basis.
The effective interest method is a
method of calculating the amortised
cost of a financial liability and of
allocating interest expense over the
relevant period. The effective interest
rate is the rate that exactly discounts
estimated future cash payments through
the expected life of the financial
liability, or (where appropriate) a
shorter period, to the net carrying
amount on initial recognition.
The Group derecognises financial
liabilities when, and only when, the
Group’s obligations are discharged,
cancelled or they expire.
Transaction costs that relate to the
issue of the convertible notes are
allocated to the liability and equity
components in proportion to the
allocation of the gross proceeds.
Transaction costs relating to the
equity component are recognised
directly in equity. Transaction costs
relating to the liability component
are included in the carrying
amount of the liability component
and are amortised over the lives
of the convertible notes using
the effective interest method.
Goods and Services Tax (‘GST’)
and other similar taxes
Revenues, expenses and assets are
recognised net of the amount of
GST, except where the amount of
GST incurred is not recoverable from
the Australian Tax Office. In these
circumstances the GST is recognised
as part of the cost of acquisition
of the asset or as part of an item
of the expense. Receivables and
payables in the statement of financial
position are shown inclusive of GST.
Cash flows are included in the
Statement of Cash Flows on a gross
basis and the GST component of
cash flows arising from investing
and financing activities, which is
recoverable from, or payable to,
the taxation authority is classified
as part of operating cash flows.
Comparative figures
Where required by Accounting
Standards comparative figures
have been adjusted to conform
with changes in presentation
for the current financial year.
Rounding of amounts
The company is of a kind referred
to in Corporations Instrument
2016/191, issued by the
Australian Securities and Investments
Commission, relating to ‘rounding-
off’. Amounts in this report have
been rounded off in accordance
with that Corporations Instrument to
the nearest thousand dollars, or in
certain cases, the nearest dollar.
Amendments to Accounting
Standards that are mandatorily
effective for the current
reporting period
The entity has adopted all of
the new and revised Standards
and Interpretations issued by the
Australian Accounting Standards
Board (the AASB) that are relevant
to their operations and effective
for an accounting period that
begins on or after 1 July 2018.
New and revised Standards
and amendments thereof and
Interpretations effective for the
current year that are relevant
to the entity include:
• AASB 9 - Financial Instruments
• AASB 15 - Revenue from
Contracts with Customers
The adoption of these standards has
not had a material impact on the
Group.
Australian Accounting Standards
and Interpretations that have
recently been issued or amended
but are not yet mandatory, have
not been early adopted by the
consolidated entity for the annual
reporting period ended 30 June
2019. The consolidated entity’s
assessment of the impact of these
new or amended Accounting
Standards and Interpretations,
most relevant to the consolidated
entity, are set out below.
AASB 16 Leases
The Group is required to adopt
AASB 16 Leases from 1 July
2019. AASB 16 replaces existing
leases guidance, including
AASB 117 Leases and related
Interpretations. The Group has
assessed the estimated impact that
initial application of AASB 16 will
have on its consolidated financial
statements, as described below.
AASB 16 introduces a single, on-
balance sheet lease accounting
model for lessees. A lessee
recognises a right-of-use asset
representing its right to use the
underlying asset and a lease
liability representing its obligation
to make lease payments. There are
recognition exemptions for short-term
leases and leases of low-value items.
The Group will recognise new assets
and liabilities for its operating leases
of warehouse and office facilities.
The nature of expenses related
to those leases will now change
because the Group will recognise
a depreciation charge for right-
of-use assets and interest expense
on lease liabilities. Previously, the
Group recognised operating lease
expense on a straight-line basis
over the term of the lease, and
recognised assets and liabilities
PAG E 39
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
40
Note 2. Significant accounting policies (continued)
only to the extent that there was a
timing difference between actual lease
payments and the expense recognized.
Based on the information currently
available, the Group estimates that
it will recognise right-of-use assets
within a range of approximately $2.4
million to $2.6 million on 1 July 2019,
and lease liabilities within a range
of $2.4 million to $2.6 million.
For classification within the statement
of cash flows, operating cash
flows are expected to increase by
approximately $0.73 million as the
lease payments will be separated into
both a principal (financing activities)
and interest (financing activities)
component rather than operating.
The Group plans to apply AASB 16
initially on 1 July 2019, using the modified
retrospective approach. Therefore, the
cumulative effect of adopting AASB 16
will be recognised as an adjustment
to the opening balance of retained
earnings at 1 July 2019, with no
restatement of comparative information.
NOTE 3.
CRITICAL ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements
requires management to make judgements,
estimates and assumptions that affect
the reported amounts in the financial
statements. Management continually
evaluates its judgements and estimates in
relation to assets, liabilities, contingent
liabilities, revenue and expenses.
Management bases its judge-ments,
estimates and assumptions on historical
experience and on other various factors,
including expectations of future events,
management believes to be reasonable
under the circumstances. The resulting
accounting judgements and estimates
will seldom equal the related actual
results. The judgements, estimates and
assumptions that have a significant risk
of causing a material adjustment to the
carrying amounts of assets and liabilities
(refer to the respective notes) within the
next financial year are discussed below.
Goodwill and other indefinite life
intangible assets
The consolidated entity tests annually,
or more frequently if events or changes
in circumstances indicate impairment,
whether goodwill and other indefinite
life intangible assets have suffered
any impairment, in accordance with
the accounting policy stated in note
14. The recoverable amounts of cash-
generating units have been determined
based on value-in-use calculations. These
calculations require the use of assumptions,
including estimated discount rates based
on the current cost of capital and growth
rates of the estimated future cash flows.
Share-based payment transactions
The consolidated entity measures the
cost of equity-settled transactions with
employees by reference to the fair value
of the equity instruments at the date at
which they are granted. The fair value
is determined by using either the Bino-
mial or Black-Scholes model taking into
account the terms and conditions upon
which the instruments were granted. The
accounting estimates and assumptions
relating to equity-settled share-based
payments would have no impact on the
carrying amounts of assets and liabilities
within the next annual reporting period
but may impact profit or loss and equity.
Business combinations
As discussed in note 32, the business
combinations in the current year have
been accounted for on a provisional
ba-sis. The fair value of assets acquired,
liabilities and contingent liabilities assumed
are initially estimated by the consoli-
dated entity taking into consideration all
available information at the reporting
date. Fair value adjustments on the fi-nalisation of the business combination accounting is retrospective, where
applicable, to the period the combination occurred and may have an impact on the assets and liabilities,
depreciation and amortisation reported.
NOTE 4. OPERATING SEGMENTS
Identification of reportable operating segments
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the
consolidated entity that are regularly reviewed by the managing director (the Chief Operating Decision Maker) in
order to allocate resources to the segment and to assess its performance.
There are currently four operating segments under the criteria set out in AASB 8, being B.-d Farm Paris Creek Pty
Ltd (“Paris Creek Farms”), St David Dairy Pty Ltd (“St David Dairy”), Maggie Beer Products Pty Ltd (“MBP”) and
other corporate costs.
Information regarding these segments is set out below.
All operations were in Australia for both current and comparative period.
Revenues of approximately $6.98 million (2018: $3.04 million) are concentrated in a small number of external
customers.
Consolidated - 2019
Revenue
Sales of goods to external customers
Intersegment sales
Total sales revenue
Other revenue
Total revenue
Profit/(loss) before income tax expense,
Impairment and fair value gain
Impairment and fair value gain
Profit/(loss) before income tax expense
Income tax expense
Loss after income tax expense
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Paris
Creek Farms
$’000
St David
Dairy
$’000
MBP
$’000
Other
segments
$’000
Total
$’000
14,952
(224)
14,728
58
14,786
6,647
-
6,647
-
6,647
4,241
-
4,241
16
4,257
-
-
-
63
63
25,840
(224)
25,616
137
25,753
(6,782)
(15,189)
(21,971)
640
-
640
(45)
-
(45)
(4,788)
2,004
(2,784)
-
(10,975)
(13,185)
(24,160)
(24,160)
30,546
16,636
26,428
11,806
18,010
1,523
5,477
1,395
85,416
(11,131)
74,285
26,405
(15,084)
11,321
PAG E 41
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 4. Operating segments (continued)
Consolidated - 2018
Revenue
Sales of goods to external customers
Other revenue
Interest revenue
Total revenue
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Paris Creek
Farms
$’000
MBP
$’000
Other
segments
$’000
Total
$’000
8,607
68
-
8,675
-
-
-
-
-
-
58
58
(1,683)
(594)
5,417)
20,622
47,771
13,263
-
-
1,274
14,537
(10,189)
4,348
8,607
68
58
8,733
(7,694
1,024
(6,670)
68,393
(519)
67,874
Accounting policy for operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on
the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’), Longtable’s
Managing Director. The CODM is responsible for the allocation of resources to operating segments and
assessing their performance.
42
NOTE 5. REVENUE
Revenue from sale of goods
Other revenue
Revenue
Consolidated
2019
$’000
25,616
137
2018
$’000
8,607
126
25,753
8,733
The group has adopted AASB 15 Revenue from Contracts with Customers effective 1 July 2018 which
resulted in changes in accounting policies and required no retrospective adjustments to the amounts
recognised in the financial statements. In accordance with the transition provisions in AASB 15, the
Group has adopted the new standard with the modified retrospective method and has determined the
application of AASB 15 to have an immaterial impact on the group’s financial statements.
A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the payment is due.
AASB 15 Revenue from Contracts with Customers – Accounting policies changes
Accounting for revenue from sale of goods
Revenue from the sale of goods is recognised to the extent that the Group satisfies its single
performance obligation to transfer agreed goods and the transaction price can be readily identified.
All revenue is recognised at a point when control of the goods is transferred to the customer i.e. when
the goods are delivered to the customer. Revenue is measured at the fair value of the consideration
received or receivable being the amount to which the entity expects to be entitled to in exchange for
goods. Amounts disclosed as revenue are net of discounts, trade allowances and rebates.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
PAG E 43
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 6. SIGNIFICANT ITEMS
Significant items relate to significant changes in the business during the past financial year and are
identified due to their nature and magnitude on the assessment of business performance.
The following significant items are included in Raw materials and consumables used, Employee benefits
expense and Other expenses:
New product launch transitional costs
Redundancy
Exceptional stock write-off
Disposal of excess raw milk
Consultant fees (ex Paris Creek Farms vendors)
Doubtful debts expense
Paris creek employment entitlement true-up
Other
Total significant items
NOTE 7. INCOME TAX BENEFIT
Income tax benefit
Current tax
Deferred tax expense
Consolidated
2019
$’000
2018
$’000
603
465
371
311
220
150
-
3
-
-
-
-
175
157
257
266
2,123
855
Consolidated
2019
$’000
2018
$’000
(3,232)
(822)
Amounts not brought to account as a Deferred Tax Asset in the current year
3,232
Current year movements
Aggregate income tax benefit
-
-
654
(856)
(1,024)
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
(24,160)
(7,694)
Tax at the statutory tax rate of 30%
(7,248)
(2,308)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Non-assessable non-operating income
4,617
629
(601)
-
Amounts not brought to account as a Deferred Tax Asset in the current year
3,232
655
Income tax benefit
44
-
(1,024)
Consolidated
2019
$’000
2018
$’000
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
(Australia)
27,381
11,333
Potential tax benefit @ 30%
8,214
3,400
The above potential tax benefit for tax losses has not been recognised in the statement of financial
position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or
failing that, the same business test is passed.
The Australian entity has unused capital losses of $6.25 million (at 30%: $1.87 million) that are not
recognised in the financial report, in addition to the losses stated above.
Deferred tax balances disclosure
Deferred tax assets
Deferred tax liabilities
Net temporary differences
Consolidated
2019
$’000
2018
$’000
-
-
-
519
(519)
-
The above potential tax benefit, which excludes tax losses, for deductible temporary differences has not
been recognised in the statement of financial position as the recovery of this benefit is uncertain.
NOTE 8. CURRENT ASSETS - CASH AND CASH EQUIVALENTS
Cash at bank
Cash on deposit
Accounting policy for cash and cash equivalents
Cash and cash equivalents comprise cash on hand and cash in banks.
Consolidated
2019
$’000
2018
$’000
9,819
14,772
-
10
9,819
14,782
PAG E 45
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 9. CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Trade receivables (net of loss allowance provision)
GST receivable
Consolidated
2019
$’000
2018
$’000
6,282
2,817
280
118
6,562
2,935
Accounting policy for trade and other receivables
Trade receivables and other receivables are all classified as financial assets held at amortised cost.
Trade receivables are initially recognised at fair value and subsequently at amortised cost using the
effective interest rate method, less a loss allowance provision. The carrying value of trade and other
receivables, less loss allowance provisions, is considered to approximate fair value, due to the short
term nature of the receivables.
The collectability of trade and other receivables is reviewed on an ongoing basis. Individual debts
which are known to be uncollectable are written off when identified. The Group recognises an loss
allowance provision based upon anticipated lifetime losses of trade receivables. The anticipated losses
are determined with reference to historical loss experience adjusted to reflect current and forward-
looking information and is regularly reviewed and updated.
Trade receivables are generally due for settlement between 30 and 60 days.
Credit risks related to receivables
Refer to Note 24 for additional information.
NOTE 10. CURRENT ASSETS - INVENTORIES
Stock on hand - at cost
Consolidated
2019
$’000
2018
$’000
3,628
1,341
Accounting policy for inventories
Stock on hand is stated at the lower of cost and net realisable value. Cost comprises of purchase and
delivery costs, net of rebates and discounts received or receivable. All stock on hand is recognised
using the First In First Out (‘FIFO’) method of valuation.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
46
NOTE 11. CURRENT ASSETS - OTHER CURRENT ASSETS
Prepayments
Consolidated
2019
$’000
406
2018
$’000
317
NOTE 12. NON-CURRENT ASSETS - INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
On 19 July 2016, the Company paid $15 million to acquire 48% of the shares of Maggie Beer
Products Pty Ltd (MBP), a company domiciled in Australia that manufactures and sells premium and food
and beverage products.
On 30 June 2017, the Group reassessed the carrying amount of its investment in MBP, for indicators
of impairment such as unexpected poor performance for that financial year. As a result, an internal
valuation of MBP was performed to determine the Group’s share of the enterprise value.
An impairment loss of $8.48 million was recognised in the Statement of Profit or Loss and Other
Comprehensive Income.
On 30 June 2018, the Group reassessed the carrying amount of its investment in MBP, for indicators
of impairment such as unexpected poor performance for this financial year. As a result, an internal
valuation of MBP was performed to determine the Group’s share of the enterprise value. No impairment
was noted as a result of this assessment
On 16 April 2019, the Group acquired the remaining 52% of MBP that it did not already own. This
resulted in control of the company, and consolidation of its balances from this date onward. Please refer
to Note 32 for further details.
Investment in Maggie Beer Products Pty Ltd ("MBP")
Summarised Balance Sheet
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Reconciliation of carrying amount of investment
Opening net assets
Profit / (loss) for the period
Reversal of equity investment upon control
Closing net assets
Consolidated
2019
$’000
2018
$’000
-
4,907
-
-
-
-
-
10,476
7,658
(5,299)
(1,169)
11,666
11,666
12,905
987
(1,239)
(12,653)
-
-
11,666
PAG E 47
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 12. Non-current assets - investments accounted for using the equity method (continued)
Consolidated
2019
$’000
2018
$’000
Company share %
Company’s share of opening net assets
4,907
5,501
Company’s share of net profit / (loss) for the period up to 16 April 2019
474
(594)
Fair value gain of 48% equity investment upon gaining control
Reversal of equity investment upon consolidation
2,004
(7,385)
-
-
Carrying amount of investment in associate
-
4,907
In accordance with the equity method, on initial recognition the investment in an associate or a joint
venture is recognised at cost, and the carrying amount is increased or decreased to recognise the
investor’s share of the profit or loss of the investee after the date of acquisition. The investor’s share of the
investee’s profit or loss is recognised in the investor’s profit or loss. Distributions received from an investee
reduce the carrying amount of the investment.
The total carrying amount of the investment has been fair valued and reversed as at 16 April 2019,
upon acquisition of the remaining 52% of Maggie Beer Products Pty Ltd. Refer to Note 32 - Business
Combination for more details.
NOTE 13. NON-CURRENT ASSETS - PROPERTY, PLANT AND EQUIPMENT
Land
Motor vehicles
Less: Accumulated depreciation
Plant and equipment
Less: Accumulated depreciation
Building and leasehold improvements
Less: Accumulated depreciation
48
Consolidated
2019
$’000
460
1,111
(437)
674
2018
$’000
460
828
(86)
742
14,941
7,884
(3,588)
(294)
11,353
7,590
6,977
6,906
(333)
(113)
6,644
6,793
19,131
15,585
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below
Consolidated
Balance at 1 July 2017
Additions
Additions through business combinations
Disposals
Depreciation on disposal
Depreciation expense
Balance at 30 June 2018
Additions
Additions through business combinations
(note 32)
Transfers in/(out)
Depreciation expense
Land
$’000
-
-
460
-
-
-
460
-
-
-
-
Motor
vehicles
$’000
-
-
828
-
-
(86)
742
21
245
(63)
(271)
Building and
leasehold
improvements
$’000
-
Plant
and other
equipment
$’000
-
31
6,875
-
-
(113)
368
7,877
(361)
21
(315)
Total
$’000
-
399
16,040
(361)
21
(514)
6,793
72
7,590
760
15,585
853
212
(206)
(227)
3,573
269
(839)
4,030
-
(1,337)
Balance at 30 June 2019
460
674
6,644
11,353
19,131
Refer to note 25 for further information on fair value measurement.
Accounting policy for property, plant and equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets.
The depreciable amount of all fixed assets including recognised lease assets is depreciated on a straight line basis
over their useful lives to the Group 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. Assets under finance leases are depreciated over their expected useful lives on the same basis as
owned assets.
The following estimated useful lives are used in the calculation of depreciation:
Land
Motor vehicles
n/a
5 years
Plant and equipment
4 to 20 years
Building and leasehold improvements
10 to 33 years
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period,
with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to
the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit
or loss.
PAG E 49
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 14. NON-CURRENT ASSETS - INTANGIBLE ASSETS
Goodwill
Brand
Less: Accumulated amortisation
Customer contracts
Less: Accumulated amortisation
Other intangible assets
Less: Accumulated amortisation
Consolidated
2019
$’000
2018
$’000
27,086
27,257
6,650
(292)
6,358
1,515
(278)
1,237
112
(54)
58
-
-
-
-
-
-
-
-
-
34,739
27,257
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and
previous financial year are set out below:
Balance at 1 July 2017
Additions through business
combinations (note 32)
Goodwill
$’000
-
27,257
Balance at 30 June 2018
27,257
Brand
$’000
-
Customer
contracts
$’000
-
Other
tangible
$’000
-
-
-
-
-
-
-
Total
$’000
-
27,257
27,257
Additions through business
combinations (note 32)
Impairment of assets
Amortisation expense
-
(292)
(278)
15,019
6,650
1,515
58
23,242
(15,190)
-
-
-
-
(15,190)
(570)
Balance at 30 June 2019
27,086
6,358
1,237
58
34,739
50
Goodwill was acquired as a result of business
combinations entered into during the current and
previous year, refer to note 32 for details.
Accounting policy for intangible assets
Intangible assets acquired as part of a
business combination, other than goodwill,
are initially measured at their fair value at
the date of the acquisition. Intangible assets
acquired separately are initially recognised
at cost. Indefinite life intangible assets are not
amortised and are subsequently measured at
cost less any impairment. Finite life intangible
assets are subsequently measured at cost less
amortisation and any impairment. The gains or
losses recognised in profit or loss arising from the
derecognition of intangible assets are measured
as the difference between net disposal proceeds
and the carrying amount of the intangible asset.
The method and useful lives of finite life intangible
assets are reviewed annually. Changes in the
expected pattern of consumption or useful life
are accounted for prospectively by changing the
amortisation method or period.
Accounting policy for goodwill
Goodwill arising in a business combination is
recognised as an asset at the date that control
is acquired (the acquisition date). Goodwill
is measured as the excess of the sum of the
consideration transferred, the amount of any
non-controlling interests in the acquiree, and the
fair value of the acquirer’s previously held equity
interest in the acquiree (if any) over the net of the
acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed.
If, after reassessment, the Group’s interest in the
fair value of the acquiree’s identifiable net assets
exceeds the sum of the consideration transferred,
the amount of any non-controlling interests in
the acquiree and the fair value of the acquirer’s
previously held equity interest in the acquiree
(if any), the excess is recognised immediately
in the statement of profit or loss and other
comprehensive income as a bargain purchase
gain.
Goodwill is not amortised but is reviewed for
impairment at least annually. For the purpose of
impairment testing, goodwill is allocated to each
of the Group’s cash-generating units expected
to benefit from the synergies of the combination.
Cash-generating units to which goodwill has been
allocated are tested for impairment annually,
or more frequently when there is an indication
that the unit may be impaired. If the recoverable
amount of the cash-generating unit is less than its
carrying amount, the impairment loss is allocated
first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets
of the unit pro-rata on the basis of the carrying
amount of each asset in the unit. An impairment
loss recognised for goodwill is not reversed in a
subsequent period.
On disposal of a subsidiary, the attributable
amount of goodwill is included in the
determination of the profit or loss on disposal.
Intangible Assets acquired in a business
combination
Intangible assets acquired in a business
combination and recognised separately from
goodwill are initially recognised at their fair value
at the acquisition date (which is regarded as their
cost). Subsequent to initial recognition, intangible
assets acquired in a business combination are
reported at cost less accumulated amortisation
and accumulated im-pairment losses, on the
same basis as intangible assets that are acquired
separately.
Recoverable amount of goodwill
In accordance with AASB 136, impairment testing
has been undertaken for all cash generating units
(CGUs) with indefinite intangibles or where there
is an indication of impairment. Given St David
Dairy and Maggie Beer Products were acquired
during the year and the business combinations
for these acquisitions are provisional at year end
(refer Note 32), the Company considers the
recent acquisition price to reflect fair value. The
Company has considered the performance of the
two companies post acquisition; no additional
impairment testing was deemed necessary.
PAG E 51
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 14. Non-current assets - intangible assets (continued)
At 30 June 2019, for Paris Creek Farms the
recoverable amount has been determined based
on value-in-use calculations which uses cash
flow projections based on financial forecasts
covering a five-year period, including non-cash
adjustments such as changes in working capital,
depreciation and amortisation, and maintenance
capital expenditure. Cash flows are extrapolated
using estimated growth rates beyond the five-year
period.
Key assumptions used in the value-in-use
calculations for the Paris Creek Farms CGU
are based on management’s latest forecast
for financial year 2020 and a combination
of business case assumptions, forecast milk
availability and long-term averages for the latter
years.
Revenue growth
Revenue growth over the five-year period is based
upon forecasted revenue on a business-as-usual
basis and assumes no New Products Development
(NPD) or new geographies (in accordance
with AASB 136); is in line with the processing
capability and capacity of the business unit; is
underpinned by estimated increases in milk intake
volumes; and supported by modest market price
increases to mitigate the cost increase in raw milk.
Average revenue growth over the forecast period
is anticipated to be 17% per annum (12.2% per
annum for the 4 years from financial year 2021).
Costs
Overall forecast costs are based on past
performance incorporating recent restructure
initiatives and implemented cost savings and
management’s expectations for the future. The
increase in the cost price of procuring biodynamic
organic milk by c.8% to approximately 70 cents
per litre (‘cpl’) from 65cpl in FY19 is used as the
base in FY20 and FY21. Further increases are
assumed in FY22 and beyond equivalent to CPI.
Long-term growth rate
The long-term growth rate is the weighted average
growth rate used to extrapolate cash flows
beyond the budget period. A long-term growth
rate of 2.5% has been used in the value-in-use
calculations, which is consistent with the Reserve
Bank of Australia’s inflation target range.
Post-tax discount rate
Discount rates represent the current market
assessment of the risks relating to the relevant
CGU. In performing the value-in-use calculations
for the CGU, the Group has applied a post-tax
discount rate of 9.58% per annum.
Review outcome
In completing the impairment review based on the
aforementioned business-as-usual assumptions, the
carrying value of goodwill for Paris Creek Farms
was impaired by $15.19m.
Sensitivities
A change in the EBITDA margin by an average
of 1.0pt over the five-year forecast period would
result in a $2.7 million impact to the recoverable
amount of the CGU compared to the carrying
amount of goodwill; a change of 5% in revenue
each year over the forecast period would result in
a $1.7 million impact to the recoverable amount;
and a change of 3% in the cost of raw milk
purchases over the forecast period would result in
a $2.9 million impact to the recoverable amount.
These sensitivities cover the key possible material
impacts to the recoverable amount.
Brand
Brand acquired in a business combination are
amortised on a straight-line basis over the period
of their expected benefit, being their finite life
range of 5-15 years.
Customer contracts
Customer contracts acquired in a business
combination are amortised on a straight-line basis
over the period of their expected benefit, being
their finite life range of 0-10 years.
Intangible assets acquired in a business
combination and recognised separately from
goodwill are initially recognised at their fair value
at the acquisition date (which is regarded as their
cost). Subsequent to initial recognition, intangible
assets acquired in a business combination are
reported at cost less accumulated amortisation
and accumulated impairment losses, on the
same basis as intangible assets that are acquired
separately.
52
NOTE 15. NON-CURRENT ASSETS - OTHER
Other deposits
Consolidated
2019
$’000
-
2018
$’000
750
Other assets above includes a $0.75 million security deposit paid in the prior period with regards
to the acquisition of St David Dairy Pty Ltd. This deposit was non-refundable and forms part of the
acquisition cost of $14.95 million for St David Dairy Pty Ltd.
NOTE 16. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES
Trade payables
Employee related payables
Other payables
Consolidated
2019
$’000
2018
$’000
5,232
2,723
659
957
358
433
6,848
3,514
Refer to note 24 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to
the end of the financial year and which are unpaid. Due to their short-term nature they are measured at
amortised cost and are not discounted. The amounts are unsecured, non-interest bearing and are usually
due for payment within 30 to 60 days of issue.
PAG E 53
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 17. CURRENT LIABILITIES - OTHER FINANCIAL LIABILITIES
Related party loans
Convertible note payable
Lease liability
Consolidated
2019
$’000
292
500
401
2018
$’000
-
-
100
1,193
100
Refer to note 24 for further information on financial instruments.
The convertible note was issued to Beer Family Holdings, a related entity of Maggie Beer, a Non-
Executive Director of the Company, with terms as detailed within note 33. The fair value of the
convertible note has been deemed to be the principal amount of the note payable.
In addition to the above, NAB provides an invoice finance facility to a subsidiary of the Group,
Maggie Beer Products Pty Ltd which is available for $3 million.
The facility is secured over receivables of Maggie Beer Products, and is subject to the subsidiary
complying with its obligations (including financial covenants) under the facility.
At 30 June 2019, the aggregate amount outstanding under the facilities was $nil and the subsidiary
was in compliance with its obligations under those facilities.
NOTE 18. CURRENT LIABILITIES - EMPLOYEE BENEFITS
Employee benefits
Accounting policy for employee benefits
Consolidated
2019
$’000
1,346
2018
$’000
432
Short-term employee benefits
Liabilities for annual leave and long service leave expected to be settled wholly within 12 months of the
reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Provision is made for the Group’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled. Employee benefits payable
later than one year have been measured at the present value of the estimated future cash outflows to be
made for those benefits.
The fair value determined at the grant date of the equity settled share based payments is expensed on
a straight line basis over the vesting period, based on the consolidated entity’s estimate of shares that
will eventually vest. At the end of each reporting period, the Group revises its estimate of the number
of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is
recognised in the statement of comprehensive income such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
54
NOTE 19. NON-CURRENT LIABILITIES - OTHER FINANCIAL LIABILITIES
Related party loans
Lease liability
Refer to note 24 for further information on financial instruments.
Refer to note 30 for further information on related party transactions.
Total secured liabilities
The total secured lease liabilities are as follows:
Commitments in relation to finance leases are payable as follows:
Less than one year
Later than one year but less than five years
Minimum lease payments
Future finance charges
Recognised as liability
Consolidated
2019
$’000
716
1,082
2018
$’000
-
264
1,798
264
Consolidated
2019
$’000
2018
$’000
441
1,209
1,650
(167)
1,483
100
309
409
(45)
364
Assets pledged as security:
The related party loans are unsecured.
The lease liabilities are effectively secured as the rights to the leased assets, recognised in the statement
of financial position, revert to the lessor in the event of default.
NOTE 20. NON-CURRENT LIABILITIES - EMPLOYEE BENEFITS
Employee benefits
Consolidated
2019
$’000
136
2018
$’000
38
Accounting policy for other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are measured at the present value of expected future payments to be made in respect
of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the reporting
date on national government bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
PAG E 55
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 21. EQUITY - ISSUED CAPITAL
Consolidated
2019
Shares
2018
Shares
2019
$’000
2018
$’000
Ordinary shares - fully paid
207,151,703
111,292,884
120,695
97,224
Movements in ordinary share capital
Balance
01 July 2017
738,665,306
Issue of shares - Laura McBain
13 October 2017
35,000,000
$0.018
Issue of shares - Laura McBain
21 December 2017
35,000,000
$0.018
37,158
630
630
Date
Shares
Issue price
$’000
Fair value adjustment to shares issued
to Laura McBain in accordance with
AASB 2 - Share Based Payments
-
$0.000
1,400
Issue of shares to shareholders
22 December 2017
1,433,180,580
$0.030
42,995
Issue of shares to vendors
22 December 2017
116,666,667
$0.040
Issue of shares to shareholders
12 February 2018
66,666,694
$0.030
Consolidation of shares issued on a 25-
for-1 basis
09 March 2018
(2,328,172,077) $0.000
4,667
2,000
-
Issue of shares to shareholders
29 June 2018
14,285,714
$0.700
10,000
Costs of capital raising
-
$0.000
(2,256)
Balance
Issue of shares to shareholders
Issue of shares to vendors*
Issue of shares to shareholders
30 June 2018
30 July 2018
01 August 2018
04 March 2019
111,292,884
7,142,856
$0.700
4,285,714
$0.630
10,905,000
$0.200
97,224
4,999
2,700
2,181
Issue of shares under Entitlement Offer
10 April 2019
68,525,249
$0.200
13,705
Issue of shares to vendors
Costs of capital raising
16 April 2019
5,000,000
$0.200
1,000
-
$0.000
(1,114)
Balance
30 June 2019
207,151,703
120,695
* The Company issued shares to vendors on completion of the acquisition of St David Dairy at a deemed issue price of $0.70 (70 cents) per share, with a total
contract value of $3.00 million. However under AASB 3 - Business Combination, the fair value of $2.70 million is calculated using $0.63 (63 cents) per
share, being the closing share price on the date of shareholder approval (1 August 2018). This resulted in a decrease in the accounting value amounting by
$0.30 million.
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares
have no par value and the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
56
Share buy-back
No shares were bought back during the year ended 30 June 2019 (2018: NIL).
Capital risk management
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt.
Net debt is calculated as total borrowings less cash and cash equivalents.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to
equity holders of the parent, comprising issued capital, retained earnings and reserves. Operating
cash flows are used to maintain and expand the Group’s assets, as well as to make the routine
outflows of payables and tax.
The capital risk management policy remains unchanged from the 2018 Annual Report.
Accounting policy for issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
NOTE 22. EQUITY - RESERVES
Options reserve
Consolidated
2019
$’000
2018
$’000
1,721
1,594
Options reserve
Options reserve arises on the grant of share options to Directors and employees of Longtable Group
and Maggie Beer Products under the Longtable Group incentive option scheme. Amounts are
transferred out of the reserve and into issued capital when the options are exercised.
The company operates an ownership-based remuneration scheme through the Incentive Option
Scheme, details of which are provided in note 37 to the financial statements. Other than minimal
administration costs, which are expensed when incurred, the plan does not result in any cash outflow
from the Company.
The fair value of equity-settled share based payments is measured by use of the Black-Scholes
and Binomial model. The expected life used in the models have been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural
considerations.
The fair value determined at the grant date of the equity settled share based payments is expensed
on a straight line basis over the vesting period, based on the consolidated entity’s estimate of shares
that will eventually vest. At the end of each reporting period, the Group revises its estimate of the
number of equity instruments expected to vest. The impact of the revision of the original estimates, if
any, is recognised in the statement of comprehensive income such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
PAG E 57
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 22. Equity - reserves (continued)
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2017
Share based payment*
Balance at 30 June 2018
Share based payment*
Balance at 30 June 2019
Option
reserve
$’000
899
695
Total
$’000
899
695
1,594
127
1,594
127
1,721
1,721
* Share based payment expense during the financial year has resulted from the following:
- Accounting for the fair value of options issued to directors and employees during the financial period, amounting to $0.08 million;
- Accounting for the fair value of performance rights issued to directors and employees during the financial period, amounting to $0.01 million;
- Accounting for the fair value of loan funded shares, which were issued during the 2017 financial year, amounting to $0.04 million.
NOTE 23. EQUITY - DIVIDENDS
Dividends
There were no dividends paid, recommended or declared during the current or previous financial
year.
Franking credits
Consolidated
2019
$’000
2018
$’000
Franking credits available for subsequent financial years based on a tax
rate of 30%
7,568
6,115
The above amounts represent the balance of the franking account as at the end of the financial year,
adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax at the
reporting date
• franking debits that will arise from the payment of dividends recognised as a liability at the
reporting date
• franking credits that will arise from the receipt of dividends recognised as receivables at the
reporting date
58
NOTE 24. FINANCIAL INSTRUMENTS
Financial risk management objectives
The capital structure of the consolidated entity consists of cash and cash equivalents and equity
attributable to equity holders of the parent, comprising issued capital, retained earnings and reserves.
Operating cash flows are used to maintain and expand the Group’s assets, as well as to make the
routine outflows of payables and tax.
The consolidated entity’s principal financial instruments comprise receivables, payables, cash and
short-term deposits. These activities expose the consolidated entity to a variety of financial risks:
market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk.
The consolidated entity does not have formal documented policies and procedures for the
management of risk associated with financial instruments. However, the Board has responsibility
for managing the different types of risks to which the consolidated entity is exposed. These
responsibilities include considering risk and monitoring levels of exposure to interest rate risk, foreign
exchange rate risk and by being aware of market forecasts for interest rate, foreign exchange and
commodity prices. Ageing analyses and monitoring of specific credit allowances are undertaken to
manage credit risk, liquidity risk is monitored through general business budgets and forecasts.
Market risk
Foreign currency risk
The consolidated entity undertook certain transactions denominated in foreign currency in a prior
period and was exposed to foreign currency risk through foreign exchange rate fluctuations. No such
foreign currency risk exists as at 30 June 2019.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and
financial liabilities denominated in a currency that is not the entity’s functional currency. The risk is
measured using sensitivity analysis and cash flow forecasting.
Price risk
The consolidated entity is not exposed to any significant price risk.
Interest rate risk
The Group’s exposure to market interest rates relates primarily to the Group’s cash and short term
deposits held.
Sensitivity Analysis
The following sensitivity analysis is based on the interest rate risk exposures in existence at the
statement of financial position date.
PAG E 59
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 24. Financial instruments (continued)
At 30 June, if interest rates had moved, as illustrated in the table below, with all other variables held constant,
post tax-loss and equity would have been affected as follows:
Consolidated - 2019
Bank deposits
Consolidated - 2018
Bank deposits
Basis points increase
Basis points decrease
Basis points
change
Effect
on profit
before tax
$’000
Effect
on equity
$’000
Basis points
change
Effect
on profit
before tax
$’000
Effect on
equity
$’000
100
98
98
(50)
(49)
(49)
Basis points increase
Basis points decrease
Basis points
change
Effect
on profit
before tax
$’000
Effect on
equity
$’000
Basis points
change
Effect
on profit
before tax
$’000
Effect on
equity
$’000
100
147
147
(50)
(74)
(74)
Credit risk
The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses
to trade receivables through the use of a provisions matrix using fixed rates of credit loss provisioning. These
provisions are considered representative across all customers of the consolidated entity based on recent sales
experience, historical collection rates and forward-looking information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of
this include the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure
to make contractual payments for a period greater than 1 year.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to
recognised financial assets is the carrying amount of those assets, net of any allowance for impairment losses,
as disclosed in the statement of financial position and notes to the financial report.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested nor
is it the Group’s policy to securitise its trade and other receivables. It is the Group’s policy to consider the credit
worthiness of all customers who wish to trade on credit terms.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant. There are no significant concentrations of credit risk.
60
Allowance for expected credit losses
The loss allowance as at 30 June 2019 was determined as follows for trade receivables:
Not past due
Past due 0 - 60 days
Past due 60+ days
Loss
allowance
provision
2019
$’000
Loss
allowance
provision
2018
$’000
37
100
144
281
2
18
137
157
Gross amount
2019
$’000
3,754
2,611
198
2018
$’000
1,535
1,035
404
6,563
2,974
Liquidity risk
The Group manages liquidity risk by monitoring cash flow and maturity profiles of financial assets
and liabilities.
PAG E 61
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 24. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the consolidated entity’s remaining contractual maturity for its financial instrument
liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based
on the earliest date on which the financial liabilities are required to be paid. The tables include both interest
and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from
their carrying amount in the statement of financial position.
Weighted
average
interest rate
%
1 year or
less
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Over 5
years
$’000
Remaining
contractual
maturities
$’000
Consolidated-2019
Non-derivatives
Non-interest bearing
Trade and other payables
Convertible note
-
-
6,848
500
-
-
-
-
-
-
6,848
500
Interest-bearing - fixed rate
Related party loan
Lease liability
Total non-derivatives
2.80%
10.80%
292
441
8,081
146
420
566
438
622
1,060
132
-
132
1,008
1,483
9,839
Weighted
average
interest rate
%
1 year or
less
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
Over 5
years
$’000
Remaining
contractual
maturities
$’000
Consolidated-2018
Non-derivatives
Non-interest bearing
Trade and other payables
-
3,514
-
Interest-bearing - fixed rate
Lease liability
Total non-derivatives
5.25%
100
3,614
264
264
-
-
-
-
-
-
3,514
364
3,878
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually
disclosed above.
62
Fair value of financial instruments
The directors consider that the carrying amounts of financial assets and financial liabilities recognised at
amortised cost in the financial statements approximate their fair values.
There were no financial instruments that are measured subsequent to initial recognition at fair value as at
reporting date.
Consolidated
Assets
Cash and cash equivalents
Trade and other receivables
Liabilities
Trade and other payables
Convertible note
Lease liability
Related party loans
2019
2018
Carrying
amount
$’000
Fair value
$’000
Carrying
amount
$’000
Fair value
$’000
9,819
6,562
16,381
6,848
500
1,483
1,008
9,839
9,819
6,562
14,782
14,782
2,935
2,935
16,381
17,717
17,717
6,848
500
1,483
1,008
9,839
3,514
3,514
-
364
-
-
364
-
3,878
3,878
NOTE 25. FAIR VALUE MEASUREMENT
Accounting policy for fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that the
transaction will take place either: in the principal market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement
is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for
which sufficient data are available to measure fair value, are used, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
PAG E 63
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 26. KEY MANAGEMENT PERSONNEL DISCLOSURES
Directors
The following persons were directors of Longtable Group Limited during the financial year:
Tony Robinson
Non-Executive Chairman
Tom Kiing
Non-Executive Director
Hugh Robertson
Non-Executive Director
Maggie Beer
Non-Executive Director (appointed 18 April 2019)
Laura McBain
Managing Director
Other key management personnel
The following person also had the authority and responsibility for planning, directing and controlling
the major activities of the consolidated entity, directly or indirectly, during the financial year:
Michael Caragounis
Chief Financial Officer
Compensation
The aggregate compensation made to directors and other members of key management personnel of
the consolidated entity is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2019
$
803,355
52,520
80,144
2018
$
630,258
35,579
1,998,665
936,019
2,664,502
64
NOTE 27. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by
PricewaterhouseCoopers, the auditor of the company, and its network firms:
Assurance services - PricewaterhouseCoopers
Audit or review of the financial statements
Other Assurance services
Other services - PricewaterhouseCoopers
Other services
Tax advisory
Consolidated
2019
$
2018
$
150,000
10,000
160,000
100,000
30,500
130,500
290,500
-
-
-
-
-
Audit services - Deloitte Touche Tohmatsu - Prior Auditor of Company
Audit or review of the financial statements
-
78,300
Other services - Deloitte Touche Tohmatsu - Prior Auditor of Company
Tax advisdory
-
-
12,500
90,800
NOTE 28. CONTINGENT ASSETS
As at the date of signing this report, Longtable Group Limited has notified the previous vendors of B.-d
Farms Paris Creek Pty Ltd of a Warranty Claim under the Share Sale Agreement. The Warranty Claim
relates to particular warranties provided by the vendors as a part of the acquisition of Paris Creek.
Given the Warranty Claim is at a preliminary stage, the Directors are not in a position currently to
recognise a contingent asset, however do expect an amicable outcome, given the positive relationship
between both parties.
PAG E 65
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 29. COMMITMENTS
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities,
payable:
Within one year
One to five years
Consolidated
2019
$’000
2018
$’000
753
1,927
2,680
-
-
-
NOTE 30. RELATED PARTY TRANSACTIONS
Parent entity
Longtable Group Limited is the parent entity of the consolidated entity.
Subsidiaries
Interests in subsidiaries are set out in note 33.
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report
included in the directors’ report.
Transactions with related parties
During the year, Maggie Beer Products Pty Ltd entered into the following trading transactions with
related parties that are not members of the consolidated entity:
Sale of goods and services:
- To entities with common directorship
Payment for goods and services:
- From entities with common directorship
- From key management personnel
Consolidated
2019
$
2018
$
71,463
128,627
39,548
-
-
-
During the financial year, the consolidated entity paid or had payable $129,530 in relation to
insurance renewals and related services provided by an entity associated with Mr Tony Robinson,
PSC Insurance Group Limited (2018:$358,725)
During the year, the Company completed capital raisings amounting to a fair value of $20.89
66
million from the issue of 86,573,105 shares at various issue prices. These capital raisings were fully
underwritten by Bell Potter Securities Limited, an entity associated with Hugh Robertson. Bell Potter was
paid management and underwriting fees of $1,000,675 (2018: $2,152,864).
In addition, 48,019,130 Shortfall shares were offered to Bell Potter Securities Limited in its capacity as
underwriter under Entitlement Offer capital raising issued on 4 April 2019.
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related
parties entered into by Maggie Beer Products Pty Ltd, with related parties that are not members of the
consolidated entity:
Current receivables:
Trade receivables from entities with common directorship
Current payables:
Trade payables to entities with common directorship
Trade payables to key management personnel
Consolidated
2019
$
2018
$
21,083
7,975
14,401
-
-
-
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or
received. No expense has been recognised in the current or prior periods for bad or doubtful debts in
respect of the amounts owed by related parties.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Current borrowings:
Loan from entity with common directorship
Consolidated
2019
$
2018
$
1,008
-
As part of the acquisition of Maggie Beer Products Pty Ltd the company acquired an unsecured related
party loan of $0.977 million with the vendor. The loan primarily relates to the dividend paid by
Maggie Beer Products Pty Ltd and subsequently loaned back. The repayment of this loan will be made
over the equivalent of 10 years and is interest bearing at a term deposit rate of 2.8%.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
PAG E 67
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 31. PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Total current assets
Total assets
2019
$’000
(17,402)
(17,402)
11,769
2018
$’000
(4,989)
(4,989)
16,692
71,776
66,482
Total current liabilities
1,379
999
Total liabilities
Equity
Issued capital
Options reserve
Accumulated losses
1,396
1,275
120,695
1,721
(52,036)
97,224
1,594
(33,611)
Total equity
70,380
65,207
Contingent liabilities
There were no contingent liabilities of the company (2018: $0.08 million).
Capital commitments - Property, plant and equipment
There were no commitments for the acquisition of property, plant and equipment by the parent entity
during the year (2018: NIL).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as
disclosed in these financials, except for the following:
• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
NOTE 32. BUSINESS COMBINATIONS
St David Dairy Pty Ltd
Effective 1 August 2018, the consolidated entity acquired 100% of the ordinary shares of St David
Dairy Pty Ltd (“St David Dairy”) for a total consideration of $14.95 million. St David Dairy is a
premium inner-city dairy product processing and distribution business located at Fitzroy in Melbourne.
68
At the date of finalisation of the year end report, the consolidated entity has not yet finalised its
analysis on whether all identifiable intangible assets have been recognised and vendor warranties and
representations met. Accordingly, the initial accounting for the acquisition of St David Dairy has only
been provisionally determined at the end of the reporting period. For tax purposes, the tax values of St
David Dairy’s assets are required to be reset based on market values of the assets when admitted into
the tax consolidated group.
The acquired business contributed revenues of $6.65 million and a profit after tax of $0.64 million to the
consolidated entity for the period ending 30 June 2019. If the business had been acquired as of 1 July
2018 then it would have contributed $7.25 million in revenue and a profit after tax of $0.07 million.
The trade and other receivables on date of acquisition is equivalent to the gross contractual receivables
acquired less expected credit loss.
The goodwill is not deductible for tax purposes.
The provisional fair values of the identifiable net assets acquired are detailed below and no material
movements are expected from the fair value of the net assets presented below:
Cash and cash equivalents
Trade and other receivables
Other current assets
Inventories
Plant and equipment
Motor vehicles
Brand
Customer contracts
Trade and other payables
Other current liabilities
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
Longtable Group Limited shares issued to vendor
Value of share issued at $0.63 (63 cents) per share*
Fair value
$’000
169
423
19
53
438
245
2,163
1,515
(436)
(725)
3,864
11,086
14,950
12,250
2,700
14,950
* The Company issued shares to vendors on completion of the acquisition of St David Dairy at a deemed issue price of $0.70 (70 cents) per share, with
a total contract value of $3.00 million. However under AASB 3 - Business Combination, the fair value of $2.70 million is calculated using $0.63 (63
cents) per share, being the closing share price on the date of shareholder approval (1 August 2018). This resulted in a decrease in the accounting value
amounting by $0.30 million.
PAG E 69
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 32. Business combinations (continued)
i. Consideration transferred
The fair value of the ordinary shares issued to vendor was $0.63 (63 cents) per ordinary share, being
the closing share price on 1 August 2018 (date of shareholder approval). The shares have been
escrowed, with fifty percent of the shares escrowed for 12 months from the date of issue and the
remaining fifty percent of the shares escrowed for 24 months from the date of issue.
ii. Acquisition related costs
Acquisition-related costs amounting to $0.02 million are not included as part of consideration for the
acquisition and have been recognised as transaction costs for the period ended 30 June 2019.
Maggie Beer Products Pty Ltd (“MBP”)
On 16 April 2019 Longtable Group Limited
acquired the 52% of shares in MBP that it did
not already own, for a mix of cash, shares and a
convertible note.
This increased its existing ownership from 48%
to 100%, and resulted in the Group gaining control
of MBP.
At the date of finalisation of the year end report,
the consolidated entity has not yet finalised its
analysis on whether all identifiable intangible assets
have been recognised and vendor warranties
and representations met. Accordingly, the initial
accounting for the acquisition of MBP has only been
provisionally determined at the end of the reporting
period. For tax purposes, the tax values of MBP’s
assets are required to be reset based on market
values of the assets when admitted into the tax
consolidated group.
The acquired business contributed revenue of
$4.26 million and a net loss after tax of $0.05
million to the Group for the period since acquisition
to 30 June 2019. If the business had been acquired
as of 1 July 2018 then it would have contributed
$21.02 million in revenue and a profit after tax of
$0.96 million.
The trade and other receivables on date of
acquisition is equivalent to the gross contractual
receivables acquired less expected credit loss.
The goodwill is not deductible for tax purposes.
70
Details of the aggregated purchase consideration, the provisional net assets acquired and goodwill are as
follows:
Cash and cash equivalents
Trade receivables
Inventories
Other current assets
Leasehold improvements
Plant and equipment
Brand
Other intangible assets
Trade payables
Borrowings
Employee benefits provision
Related party loans
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Fair value of 48% equity interest previously held
Cash paid or payable to vendor
Longtable Group Limited shares issued to vendor
Longtable Group Limited Convertible note
Fair value
$’000
3,972
3,497
2,147
143
212
3,135
4,487
58
(1,602)
(1,139)
(481)
(977)
13,452
3,933
17,385
7,385
8,500
1,000
500
17,385
i. Consideration transferred
The company paid $10 million for the acquisition of the remaining 52% of the equity interest in MBP it did
not already own.
The deemed issue price of the ordinary shares issued to vendor was $0.20 (20 cents) per ordinary share.
The shares have been escrowed until 15 April 2021.
The fair value of the convertible note issued was $0.5 million, with terms including:
i) 12 months maturity with no coupon;
ii) Redeemable from completion date through to maturity for scrip at the holder’s election;
iii) Redeemable at maturity for either cash or scrip at the holder’s election;
iv) Conversion price of 20 cents if scrip is elected.
PAG E 71
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 32. Business combinations (continued)
ii. Acquisition related costs
There were no material acquisition related costs
incurred due to the existing ownership holding.
Accounting policy for business combinations
The acquisition method of accounting is used to
account for business combinations regardless
of whether equity instruments or other assets are
acquired.
The consideration transferred is the sum of the
acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred by the
acquirer to former owners of the acquiree and the
amount of any non-controlling interest in the acquiree.
For each business combination, the non-controlling
interest in the acquiree is measured at either fair
value or at the proportionate share of the acquiree’s
identifiable net assets. All acquisition costs are
expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated
entity assesses the financial assets acquired and
liabilities assumed for appropriate classification
and designation in accordance with the contractual
terms, economic conditions, the consolidated entity’s
operating or accounting policies and other pertinent
conditions in existence at the acquisition-date.
Where the business combination is achieved
in stages, the consolidated entity remeasures its
previously held equity interest in the acquiree at the
acquisition-date fair value and the difference between
the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the
NOTE 33. INTERESTS IN SUBSIDIARIES
acquirer is recognised at the acquisition-date fair
value. Subsequent changes in the fair value of the
contingent consideration classified as an asset or
liability is recognised in profit or loss. Contingent
consideration classified as equity is not remeasured
and its subsequent settlement is accounted for within
equity.
The difference between the acquisition-date fair
value of assets acquired, liabilities assumed and any
non-controlling interest in the acquiree and the fair
value of the consideration transferred and the fair
value of any pre-existing investment in the acquiree
is recognised as goodwill. If the consideration
transferred and the pre-existing fair value is less
than the fair value of the identifiable net assets
acquired, being a bargain purchase to the acquirer,
the difference is recognised as a gain directly in
profit or loss by the acquirer on the acquisition-date,
but only after a reassessment of the identification
and measurement of the net assets acquired, the
non-controlling interest in the acquiree, if any, the
consideration transferred and the acquirer’s previously
held equity interest in the acquirer.
Business combinations are initially accounted for
on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also
recognises additional assets or liabilities during the
measurement period, based on new information
obtained about the facts and circumstances that
existed at the acquisition-date. The measurement
period ends on either the earlier of (i) 12 months from
the date of the acquisition or (ii) when the acquirer
receives all the information possible to determine fair
value.
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiaries in accordance with the accounting policy described in these financial reports:
B.-d Farms Paris Creek Pty Ltd*
St David Dairy Pty Ltd*
Maggie Beer Products Pty Ltd* **
Ownership interest
Principal place of
business
2019
%
Australia
Australia
Australia
100.00%
100.00%
100.00%
2018
%
100.00%
-
48.00%
*
Longtable Group Limited, B.-d Paris Creek Farms Pty Ltd, Maggie Beer Products Pty Ltd and St David Dairy Pty Ltd are parties to a deed of cross guarantee
under which each company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the
requirement to prepare a financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785
** The 48% ownership of Maggie Beer Products was equity accounted for in the 2018 year and up until control was obtained on 16 April 2019.
Refer to note 12 for additional details.
72
NOTE 34. EVENTS AFTER THE REPORTING PERIOD
No matter or circumstance has arisen since 30 June 2019 that has significantly affected, or
may significantly affect the consolidated entity’s operations, the results of those operations, or the
consolidated entity’s state of affairs in future financial years.
NOTE 35
RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED IN OPERATING ACTIVITIES
Loss after income tax benefit for the year
Adjustments for:
Depreciation and amortisation
Share of loss - associates
Share-based payments
Share of profit - associates
Net fair value gain on investments
Interest expense classified as financing cashflow
Impairment expense
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
Increase in inventories
Decrease in other current assets
Decrease in deferred tax liabilities
Increase in other provisions
Decrease/Increase in trade creditors and accruals
Consolidated
2019
$’000
2018
$’000
(24,160)
(6,670)
1,906
-
127
(474)
(2,004)
74
15,190
365
(86)
-
-
104
919
514
594
1,999
-
-
-
-
(287)
(331)
(110)
(1,024)
155
858
Net cash used in operating activities
(7,951)
(4,302)
Non-cash investing and financing activities consist of shares issued during the year as consideration
for business combinations, as disclosed in Note 32.
PAG E 73
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
NOTE 36. EARNINGS PER SHARE
Loss after income tax attributable to the owners of
Longtable Group Limited
Consolidated
2019
$’000
2018
$’000
(24,160)
(6,670)
Number
Number
Weighted average number of ordinary shares used in
calculating basic earnings per share
129,476,274
64,709,694
Weighted average number of ordinary shares used in
calculating diluted earnings per share
129,476,274
64,709,694
Basic earnings per share
Diluted earnings per share
Cents
Cents
(18.660)
(18.660)
(10.308)
(10.308)
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Longtable
Group Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the financial year, adjusted for bonus elements
in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share
to take into account the after income tax effect of interest and other financing costs associated with
dilutive potential ordinary shares and the weighted average number of shares assumed to have been
issued for no consideration in relation to dilutive potential ordinary shares.
NOTE 37. SHARE-BASED PAYMENTS
On 28 November 2018 the consolidated entity received approval for its Performance Rights Plan,
and granted 600,000 performance rights under this plan to Laura McBain, 189,333 to Michael
Caragounis and 250,667 to other employees. The consolidated entity also granted 4,700,000
unlisted options to Laura McBain and 600,000 options to Michael Caragounis on this date. These
options and performance rights are subject to vesting conditions related to service and performance.
The options and performance rights hold no voting or dividend rights, and are not transferable.
.
74
Set out below is a summary of options outstanding at reporting date:
2019
Grant date
Vesting date
Exercise
price
Balance at the
start of the
year
Granted
Consolidation of
options*
17/12/13 13/12/18 $1.500
50,321
17/12/13 13/12/19 $1.500
50,321
17/12/13 13/12/20 $1.500
50,321
08/08/17 13/10/21 $0.500 2,800,000
-
-
-
-
28/11/18 30/06/20 $0.750
28/11/18 30/06/21 $0.750
28/11/18 30/06/21 $0.750
-
-
-
1,132,000
1,698,000
2,830,000
2,950,963
5,660,000
2018
-
-
-
-
-
-
-
-
Expired/
forfeited/
other
Balance at
the end of the
year
(50,321)
-
-
-
50,321
50,321
- 2,800,000
- 1,132,000
- 1,698,000
- 2,830,000
(50,321) 8,560,642
Grant date
Vesting date
Exercise
price
Balance at the
start of the
year
Granted
Consolidation of
options*
Expired/
forfeited/
other
Balance at
the end of the
year
17/12/13 13/12/18 $1.500 1,258,033
17/12/13 13/12/19 $1.500 1,258,033
17/12/13 13/12/20 $1.500 1,258,033
-
-
-
(1,207,712)
(1,207,712)
(1,207,712)
-
-
-
50,321
50,321
50,321
8/08/17 13/10/21 $0.500
- 70,000,000 (67,200,000)
- 2,800,000
3,774,099 70,000,000 (70,823,136)
- 2,950,963
*As a result of the 25-for-1 share consolidation completed in March 2018.
Set out below is a summary of the performance rights outstanding at reporting date:
Grant date
28/11/18
28/11/18
28/11/18
Vesting date
30/06/19
30/06/20
30/06/21
2019
number
230,000
230,000
580,000
1,040,000
2018
number
-
-
-
-
PAG E 75
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2019
Note 37. Share-based payments (continued)
Options issued to previous Managing Director
There are no EPS hurdles attached to the options granted to the previous Managing Director, Martin
Burke, however, there are market conditions as follows:
a) The option will vest on the daily closing price of ordinary shares (as quoted on ASX) remaining at
or above $0.085 throughout any consecutive 20 business day period (being a date on which the
ASX is open for trading) commencing at any time after the date that is 12 months after the date of
issue of the Options and ending before the expiry date.
b) The option will vest on the daily closing price of ordinary shares (as quoted on ASX) remaining at
or above $0.285 throughout any consecutive 20 business day period (being a date on which the
ASX is open for trading) commencing at any time after the date that is 12 months after the date of
issue of the Options and ending before the expiry date.
c) The option will vest on the daily closing price of ordinary shares (as quoted on ASX) remaining at
or above $0.50 throughout any consecutive 20 business day period (being a date on which the
ASX is open for trading) commencing at any time after the date that is 12 months after the date of
issue of the Options and ending before the expiry date.
Loan Funded Share Plan (LFSP)
On 24 June 2016, the Company granted a total of 21,750,000 (870,000 post share
consolidation completed March 2018) loan funded shares to Tony Robinson and employees of
Maggie Beer Products Pty Ltd (MBP).
MBP was a joint venture of the company and did not form part of the consolidated group at the time
the LFSP was issued and the amounts attributable were expensed. Amounts attributable to the share
based payments to Tony Robinson and employees of MBP are expensed by the company as these
share based payments vest.
The loans to acquire the shares are to be repaid by the repayment dates set out in the loan
agreement. If the loan is not repaid by the repayment date, the Company will have recourse only
to the cash proceeds received by the employee from a disposal of the loan funded shares and the
distribution or after-tax amount in respect of a cash dividend received by the employee in respect of
the loan funded shares.
Options issued to current Managing Director in prior financial year
On 13 October 2017 the company issued the current Managing Director, Laura McBain,
70,000,000 options, all of which vested on issue, and are able to be exercisable on or before 13
October 2021.
There are no market conditions or EPS hurdles attached to these options.
The 70,000,000 options are equivalent to 2,800,000 options post the share consolidation
completed in March 2018.
Share based payments expense for the period consists of the following:
- Fair value adjustment to shares issued to Laura McBain in accordance with AASB 2 - Share Based
payments of $1.4 million.
- Fair value of options issued to Laura McBain during the period amounting to $0.57 million.
- Fair value of loan funded shares issued during the 2017 financial year to Tony Robinson amounted
to $0.024 million in the 2018 financial year.
76
DIRECTORS’ DECLARATION
30 JUNE 2019
In the directors’ opinion:
• the attached financial statements and notes comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements;
• the attached financial statements and notes comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in note 2 to
the financial statements;
• the attached financial statements and notes give a true and fair view of the consolidated entity’s
financial position as at 30 June 2019 and of its performance for the financial year ended on
that date; and
• there are reasonable grounds to believe that the company will be able to pay its debts as and
when they become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act
2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
On behalf of the directors
Tony Robinson
Non-Executive Chairman
29 August 2019
PAG E 77
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
Independent auditor’s report
To the members of Longtable Group Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Longtable Group Limited (the Company) and its controlled
entities (together the Group or Longtable) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2019 and of its
financial performance for the year then ended
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
the statement of financial position as at 30 June 2019
the statement of changes in equity for the year then ended
the statement of cash flows for the year then ended
the statement of profit or loss and other comprehensive income for the year then ended
the notes to the financial statements, which include a summary of significant accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
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 (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.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
78
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Materiality
Audit scope
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
Longtable Group Limited operates across three
operating segments with its head office functions
based in Melbourne, Australia.
For the purpose of our audit we used overall Group
materiality of $629,000, which represents
approximately 1% of the Group’s net assets.
We applied this threshold, together with
qualitative considerations, to determine the scope
of our audit and the nature, timing and extent of
our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
We applied this threshold because, in our view, it
is the benchmark against which the performance of
the Group should be measured due to fluctuations
in profit and loss and the acquisitions of St David
Diary Pty Ltd and Maggie Beer Products Pty Ltd
during the period.
We utilised a 1% threshold based on our
professional judgement, noting it is within the
range of commonly acceptable thresholds.
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 for the current period. The key audit 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. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the
Audit and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Impairment assessment of the Paris Creek
Farms Cash Generating Unit (CGU)
(Refer to note 14)
Each year, the Group is required under the Australian
Auditing Standards to perform an impairment
assessment of goodwill. In the 2018 financial year, the
We performed the following procedures, amongst
others, on the impairment assessment of PCF cash
generating unit (CGU):
assessed whether the PCF CGU included assets,
liabilities and cash flows directly attributable to the
PAGE 79
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
Key audit matter
How our audit addressed the key audit matter
Group acquired Paris Creek Farms (“PCF”) and
recognised goodwill of $27.3 million, PP&E of $16.0
million and other net liabilities of $8.1 million.
The Group performed an impairment of the PCF assets
using a value-in-use discounted cash flow model. The
impairment assessment resulted in an impairment loss
of $15.2 million, which was allocated to goodwill. The
remaining carrying value of goodwill recognised as at
30 June 2019 is $12.1 million.
When an impairment assessment is performed, there
are significant judgements made by the Group in
relation to assumptions, such as:
expected revenue growth and earnings, as taken
from board approved budgets for financial year
2020 and projected to 2024
cost of acquiring raw milk
discount rates
the long term growth rates.
We considered this to be a key audit matter because of
the level of judgement involved by the Group in
determining the assumptions used to perform
impairment testing and because there was a material
impairment recognised in the current year.
Accounting for business combinations
(Refer to note 32 – Business Combinations)
The Group acquired two businesses during the year
ended 30 June 2019:
100% of St David Dairy Pty Ltd on 1 August
2018
The remaining 52% of Maggie Beer Products
Pty Ltd (“MBP”) on 16 April 2019.
We determined that the accounting for business
combinations was a key audit matter due to the
materiality of the value of the transactions, net assets
acquired and resultant goodwill arising on the
acquisitions, as well as the judgment involved in the
accounting for the step acquisition of MBP and
preliminary allocation of purchase price to acquired
CGU and a reasonable allocation of corporate assets
and overheads
considered whether the value-in-use discounted cash
flow model was consistent with the basis required by
Australian Accounting Standards
tested that forecast cash flows used in the
impairment model were consistent with the most up-
to-date budget formally approved by the Board
considered whether the forecast cash flows used in
the impairment model were reasonable by:
assessing the key inputs in the model such as
the revenue and earnings growth, cost of
acquiring raw milk and long term growth rate.
assessing Paris Creek Farm’s discount rate
calculations, including having regard to the
inputs utilised in the weighted average cost of
capital such as peer company betas and risk free
rate, assisted by PwC valuation experts
tested the mathematical accuracy on a sample basis
of the impairment model’s calculations
evaluated the adequacy of the disclosures made in
note (14), including those regarding the key
assumptions and sensitivities to changes in such
assumptions, in light of the requirements of
Australian Accounting Standards.
Our procedures in relation to the accounting for
acquisitions included amongst others:
Testing of the initial consideration paid for
each of the acquisitions to the bank
statements and the purchase agreements
Obtaining purchase agreements for each of the
acquisitions to determine consideration from
issued equity and convertible notes
Testing, on a sampling basis, acquired net
asset balances to supporting documentation
Assessing the preliminary valuation of
identifiable intangible assets and fair value of
other assets acquired
Assessed the Group’s accounting for the step
acquisition of MBP, including the
reasonableness of control premium applied
and re-performing the calculation of fair value
gain on revaluation of equity investment upon
gaining control of MBP
80
Key audit matter
How our audit addressed the key audit matter
assets.
Assessing the mathematical accuracy of the
Group’s calculation of the resulting goodwill
arising on acquisition
Assessing the accuracy and completeness of
business combination disclosures in the
financial statements.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 30 June 2019, 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 on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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 the financial report.
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LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 18 to 24 of the directors’ report for the year
ended 30 June 2019.
In our opinion, the remuneration report of Longtable Group Limited for the year ended 30 June 2019
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.
PricewaterhouseCoopers
Brad Peake
Partner
Melbourne
29 August 2019
82
SHAREHOLDER INFORMATION
30 JUNE 2019
The shareholder information set out below was applicable as at 7 August 2019.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Number
of holders
of ordinary
shares
1,115
787
432
714
149
3,197
1,539
National Nominees Limited
Rubi Holdings Pty Ltd (John Rubino S/F A/C)
BNP Paribas Noms Pty Ltd (Drp)
CVC Limited
HSBC Custody Nominees (Australia) Limited - A/C 2
BNP Paribas Nominees Pty Ltd (IB AU Noms Retailclient Drp)
Sieana Pty Ltd
Citicorp Nominees Pty Limited
Beer Family Holdings Pty Ltd (Beer Family A/C)
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd Drp
Vermilion 21 Pty Ltd (The Mcnelhaus Super Fund A/C)
Ben Evans Pty Ltd (The Evans Family A/C)
Gisborne Park Pty Ltd
Buduva Pty Ltd (Baskerville Super Fund A/C)
Fifty Second Celebration Pty Ltd (McBain Family A/C)
Bungeeltap Pty Ltd (H & B Robertson S/F A/C)
Mr Martin John Holtman
Mr Shane Paul Bradley & Ajo Trustee Company Limited & (Bradley
Investment A/C)
Giovanni Nominees Pty Ltd (Giovanni Family Fund A/C)
HSBC Custody Nominees (Australia) Limited
Ordinary shares
Number held
% total shares
issued
22,550,408
10.89
18,729,327
14,239,724
13,559,495
10,397,936
9,311,387
8,429,010
6,560,568
4,650,000
4,588,899
4,498,120
4,285,714
4,203,846
2,580,899
2,184,916
2,129,586
2,000,001
1,600,000
1,430,770
1,357,948
9.04
6.87
6.55
5.02
4.49
4.07
3.17
2.24
2.22
2.17
2.07
2.03
1.25
1.05
1.03
0.97
0.77
0.69
0.66
139,288,554
67.25
PAG E 83
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
Substantial holders
The Company has received the following substantial Shareholder notices:
IOOF Holdings Limited
Rubi Holdings Pty Ltd
CVC Limited
Voting rights
Ordinary shares
Number held
% total shares
issued
29,878,489
14.42
20,160,097
13,717,519
9.73
6.62
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Options do not carry voting rights.
Securities subject to voluntary escrow
Class
Expiry date
Number of shares
Fully paid ordinary shares
Fully paid ordinary shares
Fully paid ordinary shares
1 August 2020
15 April 2021
15 April 2021
2,142,857
4,650,000
350,000
7,142,857
84
2019 CORPORATE
GOVERNANCE
STATEMENT
The Board of Longtable Group Limited (the Company or Group) is responsible for the overall corporate
governance of the Group. The Board believes that good corporate governance helps ensure the future success
of the Company, adds value to stakeholders and enhances investor confidence.
The ASX Listing Rules require listed companies to prepare a statement disclosing the extent to which they
have complied with the recommendations of the ASX Corporate Governance Council (Recommendations)
during the reporting period. The Recommendations are not prescriptive, such that if a company considers a
recommendation to be inappropriate having regard to its own circumstances, it has the flexibility not to follow
it. Where a company has not followed all the Recommendations, it must identify which ones and provide
reasons for not following them.
This Corporate Governance Statement (Statement) discloses the extent to which Longtable Group Limited has
followed the Recommendations, or where appropriate, indicates a departure from the Recommendations
with an explanation. This Statement should be read in conjunction with the material on our website www.
longtablegroup.com, including the 2019 Annual Report.
This Statement is current as at 30 June 2019 and has been approved by the Board of Directors of the
Company.
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Recommendation 1.1 - Role of the Board and Management
The role of the Board is to provide overall strategic guidance and effective oversight of management.
The Board has a formal Board Charter which is available on our website at www.longtablegroup.com.
The Board Charter sets out the specific responsibilities of the Board, requirements as to the Board’s composition,
the roles and responsibilities of the Chairman and Company Secretary, the establishment, operation and
management of Board Committees, Directors’ conflicts of interest and information, details of the Board’s
relationship with management, details of the Board’s performance review and details of the Group’s Codes of
Conduct.
The Board delegates responsibility for the day-to-day management of the Company and its business to the
Managing Director (MD). The MD is supported by the senior executive team and delegates authority to
appropriate senior executives for specific activities. The Board maintains ultimate responsibility for strategy,
control and risk profile of the Group.
Recommendation 1.2: Appointment of Directors
The Company undertakes appropriate checks before appointing a person or putting forward to security holders
a candidate for election or re-election, as a Director.
We provide our shareholders with all material information relevant to a decision on whether or not to elect or
re-elect a Director. The information is provided to shareholders in a Notice of Meeting pursuant to which the
resolution to elect or re-elect a Director will be voted on.
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LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | 2019 Corporate Governance Statement (continued)
Recommendation 1.3: Appointment Terms
Each director and senior executive is party to a written agreement with the Company which sets out the terms
of that Director’s or senior executive’s appointment.
Recommendation 1.4: Company Secretary
The Board is supported by the Company Secretary, whose role includes supporting the Board on governance
matters, assisting the Board with meetings and directors’ duties, and acting as an interface between the
Board and senior executives across the Group. The Board and individual Directors have access to the
Company Secretary.
The Company Secretary is accountable to the Board, through the Chair, on all matters regarding the proper
functioning of the Board.
The Board is responsible for the appointment of the Company Secretary.
Recommendation 1.5: Diversity Policy
The workforce of the Company comprises individuals with diverse skills, backgrounds, perspectives and
experiences and this diversity is valued and respected. The Company has implemented a Diversity Policy
which can be viewed at www.longtablegroup.com. The Diversity Policy provides a framework for the
Company to establish and achieve measurable diversity objectives, including in respect of gender diversity.
The Diversity Policy allows the Board to set measurable gender diversity objectives, if considered appropriate,
and to assess annually both the objectives (if any have been set) and the Company’s progress in achieving
them.
The Diversity Policy is available on the Company’s website at www.longtablegroup.com.
The measurable objectives in FY19 include:
• increasing the representation of women on the Board as vacancies and circumstances allow. As of 30 June
2019 the representation of women on the Board increased from 25% to 40%.
• strengthen the talent pipeline to ensure the representation of women in senior management positions. As of
30 June 2019 the representation of women in senior management roles is 50%.
The proportion of women on the Board, in senior executive positions and women across the entire
organisation as at 30 June 2019 was as follows:
• Women on the Board – 40%
• Women in senior executive positions – 50%
• Women across the entire organisation – 49%
The Board is committed to appointing the best person into any position in the Company, whilst simultaneously
taking steps to provide supporting infrastructure for diversity and bringing open-minded approach to the skills
and experience required for each role.
The Company was not a “relevant employer” under the Workplace Gender Equality Act 2012 during the
financial year ended 30 June 2019 as it is not a non-public sector employer with 100 or more employees in
Australia for any six months or more of a reporting period.
86
Recommendation 1.6: Board Performance Assessment
The Board is committed to formally evaluating its performance, the performance of its committees (if
applicable) and individual Directors, as well as the governance processes supporting the Board. The Board
does this through an annual assessment process.
The review process involves:
• completion of a questionnaire/survey by each director, facilitated by the Company Secretary;
• the preparation and provision of a report to each director with feedback on the performance of the Board
based on the survey results; and
• The Board meeting to discuss any areas and actions for improvement.
A Board performance assessment took place during FY2019.
Recommendation 1.7: Senior Executive Performance Assessment
Senior Executives are appointed by the MD and their Key Performance Indicators (KPI’s) contain specific
financial and non-financial objectives.
These KPI’s are reviewed annually by the MD. The performance of each Senior Executive against these
objectives is evaluated annually.
A performance evaluation was carried out during the year.
PRINCIPLE 2 – BOARD STRUCTURE
Recommendation 2.1: Nomination Committee
The Board has established a Nomination & Remuneration Committee to assist the Board in ensuring it is
equipped to discharge its responsibilities. The Committee has guidelines for the nomination and selection of
Directors and for the operation of the Board.
The Committee has three members, all of which are independent and comprises of:
- Hugh Robertson – Independent Chairman
- Antony Robinson – Independent Member
- Tom Kiing – Independent Member
The Nomination & Remuneration Committee Charter is available on the Company’s website at
www.longtablegroup.com.
The number of meetings held and attended by the Nomination & Remuneration Committee during the financial
year ended 30 June 2019 were as follows:
Attended
Held
Hugh Robertson
Antony Robinson
Tom Kiing
1
2
2
2
2
2
Recommendation 2.2: Board Skills Matrix
The following matrix sets out the key skills and experience of the directors and whether such skills and
experience are represented on the Board and its committees. The Directors’ Report also outlines the period of
office, relevant skills, experience, expertise and background particular to each director in office at the date of
this report.
PAG E 87
LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 |
2019 Corporate Governance Statement (continued)
Skills and Experience
Strategic Agility
Ability to think strategically and identify and critically
assess strategic opportunities and threats and
challenge the options in the context of the strategic
objectives of the Company.
Financial Acumen
Senior experience in public company financial
accounting, management and reporting
Health and Safety
Experience in workplace health and safety
Risk and Compliance Oversight
Ability to identify key risks to the company in a
wide range of areas including legal and regulatory
compliance and monitor risk and compliance
management frameworks and systems.
Corporate Governance Knowledge & experience
in best practice corporate governance structures,
policies and processes.
Executive Management
Experience at an executive level in a successful
career.
Marketing / Sales Experience
A broad range of commercial / business experience,
in specific areas including marketing, sales, branding
and business systems, export and innovation.
Operational and Supply Chain Experience
Manufacturing, Operations and Supply Chain
management experience across multiple operations
nationally and/or internationally.
FMCG Experience
Business experience specifically in fast moving
consumer goods businesses.
Remuneration
and Nomination
Committee
Audit
and Risk
Committee
Board
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
The Managing Director brings a deep understanding of the Company’s business and operations as well as
the industry in which the Company operates.
In addition, the Board, with the assistance of the Remuneration and Nomination Committee:
• considers the skills, background, knowledge, experience and diversity necessary to allow it to meet the
Company’s purpose;
• assesses the skills, background, knowledge, experience and diversity currently represented on the Board;
and
• identifies any inadequacies in Board representation in these areas and agrees the process necessary to
ensure a candidate is selected who brings them to the Board.
88
Recommendation 2.3: Independent Directors
An independent Director is a Non-Executive Director who:
• is not a member of management;
• is free from any business or other relationship that could materially interfere with, or could reasonably be
perceived to materially interfere with, the independent exercise of judgement;
• meets the criteria for independence set out in Box 2.3 of the Corporate Governance Principles and
Recommendations published by the ASX Corporate Governance Council (Best Practice Recommendations);
• has not served on the Board for a period which could materially interfere with the director’s ability to act in
the best interests of the Group; and
• does not have any interest or business relationship which could, or could reasonably be perceived to,
materially interfere with the directors’ ability to act in the best interests of the Company
‘Materiality’ for these purposes is assessed on a case by case basis having regard to the Group’s and the
relevant director’s circumstances, including the significance of the relationship to the director in the context of
the director’s activities as a whole.
The Board has three independent Directors, Antony Robinson (Non-Executive Chairman), Tom Kiing (Non-
executive Director) and Hugh Robertson (Non-Executive Director).
Maggie Beer is not considered to be independent on the basis that she has been employed in an executive
capacity by one of the Company’s subsidiaries, Maggie Beer Products Pty Ltd, and there has not been a
period of at least three years between ceasing such employment and serving on the Board.
Laura McBain is not considered to be independent on the basis that she has been engaged in an executive
management role with the Company.
The length of service for each director is set out in the following table:
Name
Length of Service
Laura McBain
1 year and 10 months.
Tom Kiing
10 years and 11 months.
Tony Robinson
3 years and 8 months.
Hugh Robertson
3 years and 8 months.
Maggie Beer
2 months.
Recommendation 2.4: Majority Independence
As at the date of this Statement, three of the five Directors are deemed independent and the Company does
have a majority of independent directors.
Recommendation 2.5: Board Chair
The Chair, Antony Robinson, was appointed to the position on 26 October 2015 and is considered an
independent Director.
The roles of Chair and MD are exercised by different individuals, being Antony Robinson and Laura McBain,
respectively.
Recommendation 2.6: Induction, Education and Training
In accordance with the Company’s Nomination & Remuneration Committee Charter, the Nomination &
Remuneration Committee is responsible for establishing and reviewing induction and continuing professional
development programs and procedures for Directors to ensure that they can effectively discharge their
responsibilities.
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LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | 2019 Corporate Governance Statement (continued)
Directors are also encouraged to personally undertake appropriate training and refresher courses, as
appropriate, to maintain the skills required to discharge their obligations to the Company.
PRINCIPLE 3 – ACT ETHICALLY AND RESPONSIBLY
Recommendation 3.1: Code of Conduct
The Board recognises the need to observe the highest standards of corporate practice and business conduct.
Accordingly, the Board has adopted a Code of Conduct for Directors and Senior Executives designed to:
• provide a framework for decisions and actions in relation to ethical conduct in employment;
• support the Company’s business reputation and corporate image; and
• make Directors’ and senior executives aware of the consequences if they breach the Code of Conduct for
Directors and Senior Executives
The Code of Conduct for Directors and Senior Executives can be found on our website at www.
longtablegroup.com.
The key aspects of this code are to:
• act fairly with honesty and integrity in the best interests of the Company and in the reasonable expectations
of shareholders;
• act in accordance with all applicable laws, regulations, and the Company policies and procedures; and
• act in an appropriate business-like manner when representing the Company in public forums.
The Code of Conduct for Directors and Senior Executives sets out the Company’s policies on various matters
including integrity, conflicts of interest, confidentiality and protection and proper use of assets.
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN CORPORATE REPORTING
Recommendation 4.1: Audit Committee
It is the Board’s responsibility to ensure that an effective internal control framework exists within the Company.
This includes internal controls to deal with both the effectiveness and efficiency of significant business processes,
the safeguarding of assets, the maintenance of proper accounting records, and the reliability of financial
information as well as non-financial considerations such as the benchmarking of operational key performance
indicators.
The Board has established an Audit Committee, which operates under a formal charter approved by the Board,
to which it has delegated the responsibility to establish and maintain the framework of internal control and
ethical standards for the management of the company. The Committee also provides the Board with additional
assurance regarding the reliability of financial information for inclusion in the financial reports.
The Committee comprises of three members, all of whom are independent non-executive directors. The Chair of
the Committee is independent and is not the Chair of the Board. The Audit Committee membership is provided
below:
- Tom Kiing – Independent Chairman
- Antony Robinson - Independent Member
- Hugh Robertson – Independent Member
The Audit Committee Charter is available on the Company’s website at www.longtablegroup.com.
Details of meetings held by the Committee during the year and member attendances are set out in the 2019
Directors’ Report.
90
Recommendation 4.2: Assurances
The MD and Chief Financial Officer (CFO) provide a declaration to the Board prior to the Board’s approval
of the Company’s financial results for the financial period. This process was followed for the 2019 half year
and full year financial results, where the MD and CFO provided a declaration to the Board that, in their
opinion, the financial records have been properly maintained and that the financial statements comply with
the appropriate accounting standards and give a true and fair view of the financial position and performance
of the Group, and their opinion has been formed on the basis of a sound system of risk management and
internal control which is operating effectively.
Recommendation 4.3: External Auditor
Pricewaterhouse Coopers (PwC) was appointed auditor of the Company at the Company’s Annual General
Meeting held on 28 November 2018. The Company’s previous auditor was Deloitte Touche Tohmatsu
(Deloitte). Deloitte was present at the 2018 AGM and was available to answer questions from security
holders relevant to the 2018 audit.
PwC will attend our 2019 AGM and a representative will be available to answer shareholder questions
about the conduct of the 2019 audit and the preparation and content of the auditor’s report.
PwC’s independence declaration is contained in the Directors’ Report in our 2019 Annual Report.
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE
Recommendation 5.1: Continuous Disclosure Policy
We are committed to providing information to shareholders and to the market in a manner that is consistent
with the meaning and intention of the ASX Listing Rules and the Corporations Act 2001.
To comply with these obligations, the Board has adopted a Continuous Disclosure Policy, which is available
on our website at www.longtablegroup.com.
PRINCIPLE 6 – RESPECT THE RIGHTS OF SECURITY HOLDERS
Recommendation 6.1: Information and Governance
Information about the Company and its corporate governance policies is available on our website at
www.longtablegroup.com.
The Company discloses information on our website to provide shareholders with links to annual and interim
reports, ASX announcements, presentations and other key information.
Recommendation 6.2: Investor Relations
We endeavour to communicate with shareholders and other stakeholders in an open, regular and timely
manner so that the market has sufficient information to make informed investment decisions. The Company
has a program approved by the Board with respect to investor relations.
The Company has adopted a Shareholder Communications Policy (Policy) which aims to promote
and facilitate effective two-way communication with investors. The Policy outlines a range of ways in
which information is communicated to shareholders and is available on the Company’s website www.
longtablegroup.com.
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LONGTABLE GROUP LIMITED | ANNUAL REPORT 2019 | 2019 Corporate Governance Statement (continued)
Recommendation 6.3: Shareholder Meeting Participation
Shareholders are forwarded the Company’s Annual Report, if requested (it is otherwise made available on
the Company’s website), and documents relating to each General Meeting, being the notice of meeting,
any explanatory memorandum and a proxy form. The Board encourages full participation at security holder
meetings.
The Board regards each General Meeting as an important opportunity to communicate with shareholders and
it provides a key forum for shareholders to ask questions about the Company, its strategy and performance.
At shareholder meetings, the Company will provide an opportunity for shareholders and other stakeholders to
hear from and put questions to the Board, management and if applicable our external auditor.
Further information is included in the Company’s Shareholder Communications Policy, which is located on the
Company’s website at www.longtablegroup.com.
Recommendation 6.4: Electronic Communication with Shareholders
The Shareholder Communication Policy provides that security holders are given the option to receive
communication from, and send communications to, the Company and its share registry, Computershare,
electronically. Links are made available to the Company’s website on which all information provided to the
ASX is immediately posted.
Shareholder queries should be referred to the Company Secretary at first instance.
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK
Recommendation 7.1: Risk Committee
The Audit Committee has delegated responsibilities in relation to risk management as set out in the Audit
Committee Charter. Its role includes assisting the Board to:
(a) Review and make recommendations regarding the adequacy and integrity of the Company’s risk
management framework and system of internal controls; and
(b) Reviewing compliance with relevant laws and regulations.
At the date of this report the Audit Committee comprises of three members, all of whom are independent
directors and the Chair of the Committee is not the Chair of the Board. The members of the Audit Committee
are:
- Tom Kiing –Independent Chairman
- Antony Robinson - Independent Member
- Hugh Robertson – Independent Member
The Audit Committee Charter is available on the Company’s website at www.longtablegroup.com.
Details of meetings held by the Audit Committee during the year and member attendances are set out in the
2019 Directors’ Report.
Recommendation 7.2: Risk Management Framework
The Group’s risk management framework is supported by the Board of directors, management team and the
Audit Committee. The Board is responsible for approving and review the Company’s risk management strategy
and policy. Management are responsible for monitoring that appropriate processes and controls are in place
to effectively and efficiently manage risk.
A review of the entity’s risk management framework was carried out during the financial year ended 30 June
2019.
92
Recommendation 7.3: Internal Audit
The Audit Committee Charter provides for the Audit Committee to monitor the need for an internal audit function.
The Company did not have an internal audit function for the past financial year. Due to the size of the Company,
the Board does not consider it necessary to have an internal audit function.
The Company will employ the following process for evaluating and continually improving the effectiveness of its
risk management and internal control processes:
(i)
(ii)
the Audit Committee will monitor the need for an internal audit function having regard to the size,
location and complexity of the Company’s operations; and
the Audit Committee will periodically undertake an internal review of financial systems and processes,
and where systems are considered to require improvement, these systems are developed.
Recommendation 7.4: Economic, Environmental and Social Sustainability Risk
The Company now has material exposure to environmental and social sustainability risks following the acquisition
of the company’s new businesses during the year. The Company is currently in a transformational period and will
continue to review its economic, environmental and social sustainability risks over the coming reporting periods
and report against those risks.
PRINCIPLE 8 – REMUNERATE FAIRLY AND RESPONSIBILITY
Recommendation 8.1: Remuneration Committee
The Board has established a Nomination & Remuneration Committee to assist the Board in ensuring it is equipped
to discharge its responsibilities. The Nomination & Remuneration Committee has guidelines for the nomination and
selection of directors and for the operation of the Board. The Nomination & Remuneration Committee comprises
of three members, the majority of whom are independent directors as follows:
- Tom Kiing –Independent Chairman
- Antony Robinson - Independent Member
- Hugh Robertson – Independent Member
The Nomination & Remuneration Committee Charter is available on the Company’s website at
www.longtablegroup.com.
The number of meetings held and attended by the Nomination & Remuneration Committee during the financial
year ended 30 June 2019 were as follows:
Attended
Held
Hugh Robertson
Antony Robinson
Tom Kiing
1
2
2
2
2
2
Recommendation 8.2: Remuneration Policies and Practices
Details of the Company’s remuneration practices for its Directors and senior executives are disclosed in the
Remuneration Report in the Company’s Annual Report.
Separate disclosure regarding the remuneration of the Company’s directors (executive and non-executive) is
disclosed in the Company’s Annual report, as lodged with the ASX and issued to shareholders.
Recommendation 8.3: Equity Based Remuneration Scheme
The Company had an Employee Share Plan (ESP) and Employee Option Plan (EOP) during the financial year. The
Company’s Share Trading Policy provides details of whether participants can enter into transactions which limit
the economic risk of participating in the ESP and EOP. The Share Trading Policy is available on the Company’s
website at www.longtablegroup.com.
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