A N N U A L R E P O R T
Corporate Directory
Directors
Reg Weine (Non-executive Chairman)
Tom Kiing (Non-executive Director)
Hugh Robertson (Non-executive Director)
Maggie Beer AM (Non-executive Director)
Company Secretary
Clinton Orr
Chief Executive Officer
Chantale Millard
Registered office
2 Keith Street,
Tanunda, SA 5352
Tel: +61 3 7004 1307
Fax: +61 3 9077 9233
Principal place of business
2 Keith Street,
Tanunda, SA 5352
Tel: +61 8 7004 1307
Fax: +61 8 9077 9233
Share register
Boardroom Pty Limited
Level 12, 225 George Street, Sydney NSW 2000
GPO Box 3993, Sydney NSW 2001
Tel: 1300 737 760
Fax: 1300 653 459
Auditor
PricewaterhouseCoopers
Level 19/2 Riverside Quay
Southbank, VIC 3006
Stock exchange listing
Maggie Beer Holdings Limited shares are listed on the
Australian Securities Ex-change (ASX code: MBH)
Website maggiebeerholdings.com.au
Corporate Governance Statement
The Company’s Corporate Governance charters are
located on the Company’s website at the following link:
www.maggiebeerholdings.com.au/investors/corporate-governance/
Share our passion of making
quality premium Australian food
& beverage products, using
local ingredients that supports
local farmers and communities
2
Maggie Beer Holdings represents three premium brands, that all follow
the principles of making Australian premium food and beverage products
using Australian ingredients that supports local dairy farmers, fruit and
vegetable growers and their communities.
OUR BRANDS
Maggie Beer Products, Paris Creek Farms and Saint David Dairy are committed
to making innovative products that meet consumers demand for high quality,
nutritious, convenient and indulgent food and beverage products.
All three brands resonate strongly with Australian consumers who are increasingly
looking for locally produced products, which ideally positions us for growth.
Maggie Beer Products is an iconic brand
that bases its reputation on Maggie’s own
philosophy of using superior ingredients,
in season, to produce premium cooking,
entertaining and indulgent products, for the
national and international markets. Flavour
always comes first!
Paris Creek Farms is a leading Australian
bio-dynamic organic dairy processing and
manufacturing company. For more than 30
years it has created a wide range of natural
dairy products in the most sustainable way
and its award-winning dairy products are sold
in both domestic and international markets.
Saint David Dairy is inner-Melbourne’s
only super premium micro-dairy. Loved by
baristas, its ever-growing appeal comes from
its community roots, single source dairy and
its superior performing dairy products – it’s
based in Fitzroy – and its milk is local.
LONGTABLE GROUP | ANNUAL REPORT 2019 |
“Our three premium brands
operate in high growth
channels and markets, and
are positioned for growth”
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LONGTABLE GROUP | ANNUAL REPORT 2019 |
OUR MISSION IS TO MATCH THE
EVOLVING NEEDS OF CONSUMERS, BY
PRODUCING INNOVATIVE FOOD AND
BEVERAGE PRODUCTS OF THE HIGHEST
QUALITY, TO MATCH PEOPLE’S EVER-
CHANGING LIFESTYLES.
Corporate directory
Chairman’s Address
Letter from the CEO
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 Maggie Beer Holdings Limited
Shareholder information
Corporate Governance Statement
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Maggie Beer Holdings Limited
ABN 69 092 817 171
Annual Report - 30 June 2020
LETTER FROM THE
CHAIRMAN
slowdown in H2, finished the full year
with double digit revenue growth.
Reflecting the heart of our business,
during the year we relocated our
corporate office from Melbourne back
to South Australia and reduced its
size. With the overwhelming support
of our shareholders, we renamed
the Group, Maggie Beer Holdings,
consistent with our vision and ethos.
The Group’s continued success is due
to our key stakeholders and the:
• hard work and commitment of our
employees;
• support of our loyal customers and
suppliers;
• strong consumer following for our
premium positioned Food and
Beverage portfolio.
On behalf of the Board, I would like
to thank our hard-working dedicated
team members, our loyal customers
and suppliers, and our shareholders
for their patience and continued
support.
With a strong balance sheet, an
enviable brand portfolio, a significant
e-commerce data base, and a strong
pipeline of innovative new products,
Maggie Beer Holdings is positioned to
grow in FY21.
I very much look forward to
welcoming you at our Annual General
Meeting in October and continuing
to grow the Maggie Beer Holdings’
portfolio of premium food and
beverage brands.
Reg Weine
Chairman
increase its presence in the premium
entertaining categories. The “Cooking
with Maggie” series demonstrated
the unrivalled brand love that Maggie
Beer enjoys. We also benefited from
the consumer shift to online purchasing
during COVID-19, through our
Maggie Beer Food Club and direct to
consumer model.
The turnaround in Paris Creek Farms
accelerated in the second half of
FY20, with strong revenue growth,
manufacturing efficiency improvements
and achievement of our China organic
certification. Whilst there is still work
to do, to reposition the portfolio and
better balance the basket of dairy
products that we manufacture, the
foundations are solid and momentum
is building.
Our Melbourne based St David Dairy
business has been more adversley
impacted by COVID-19 than our other
businesses given the disruption to the
food service and hospitality sectors
and stage 4 restrictions in Victoria.
However, management were quick
to divert its channel focus from cafés
to specialty retail during the sustained
lockdown periods and despite the
“ The Group
achieved its first
positive trading
EBITDA”
Dear Shareholders,
The 2020 financial year was
extremely challenging given the
devasting impacts of Australia’s
summer bushfires followed by the
global COVID-19 pandemic. The
impact of COVID-19 continues to
affect the economy, our business,
and the communities in which we
operate. During this crisis, employee
safety and wellbeing has been our
primary concern. Securing our supply
chain and meeting customer demand
continues to be a strong focus, as is
financial discipline and sustainability.
Despite these unprecedented
challenges, the Group achieved its first
positive trading EBITDA as a premium
food and beverage Group, reflecting:
• The underlying strength of our
premium brands;
• Diversified business model;
• Completion of the ‘cost-out’ and
corporate restructuring activities.
It is also pleasing to see Group
revenue increase for the full year
despite the strong headwinds. Facing
difficult trading conditions, our three
businesses – Maggie Beer Products,
Paris Creek Farms and St David Dairy
– all performed well.
Maggie Beer Products continued to
6
“We renamed the Group, Maggie Beer Holdings,
consistent with our vision and ethos.”
PAG E 7
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | CEO’s REPORT
the three businesses have all been
impacted by these events in varying
degrees at different times, the Group’s
diversification – channels, customers,
and brands – enabled it to navigate
through the challenges and continue
to grow.
Turnaround strategy delivering
benefits with $3.9 million of savings
achieved
In response to FY19’s disappointing
results, the Group commenced its
turnaround in June 2019. The initial
step was to restructure and reset
the cost base of Paris Creek Farms.
Following this, our corporate office
was restructured, and steps were
taken to implement efficiencies and
refinements at Maggie Beer Products
and St David Dairy.
Together, these changes generated
savings in FY20 of $3.9 million
across the Group. In addition,
synergies were also realised, in
particular between Maggie Beer
Products and Paris Creek Farms,
with shared distribution, finance,
purchasing and Enterprise Resource
Planning (ERP).
Positive financial results despite
tough trading conditions
Whilst focusing on manufacturing
and supply chain efficiencies, the
team also worked hard to drive
revenue growth across the business.
Pleasingly, the Group achieved FY20
net sales of $44.5 million, up 3.8%
on a comparable FY19, despite the
tough trading conditions.
A key financial focus for FY20 was
to return the Group to a positive
cashflow run rate by the end of the
financial year, which I am pleased to
say we have been able to achieve.
The Group also achieved a positive
trading EBITDA for the first time as a
premium food and beverage group
in FY20.
Multiple growth platforms for
profitable Maggie Beer Products
After an uplift in sales in March, as a
result of consumer panic buying due
to COVID-19, sales dropped in April,
before rebounding in May and June,
growing 25% on the same months in
FY19.
The love for the Maggie Beer brand
continued, with the launch of the
“Cooking with Maggie” series in
April 2020, which now has over 4.5
million views on social media, and
resulted in a large increase in direct
to consumer e-commerce sales in the
last quarter of FY20.
With more people cooking and
entertaining at home, we saw solid
growth in the range of Maggie
Beer Products, particularly cooking
stocks and cheeses. New cheese
lines were launched during the year,
increasing Maggie Beer Products’
presence in the cheese category.
Maggie Beer Products will also
launch its healthy and convenient
plant based ready meals nationally in
Coles supermarkets, in October. The
business is now focusing on growing
its e-commerce presence, while
expanding its core portfolio with
better ranging and distribution.
Paris Creek Farms returns to positive
trading EBITDA run rate
Off the back of a well-executed
cost base reset in June 2019,
together with a focus on gaining
manufacturing efficiencies, achieving
better distribution, reducing wastage
and growing sales, Paris Creek
Farms returned to a positive trading
EBITDA run rate by the end of FY20.
Dear Shareholders,
I am humbled and honoured to have
been given the opportunity in FY20
to lead our great business.
The past 12 months presented the
Group with many challenges, but
also many opportunities. FY20 was
a year of transformational change
as we sustainably built on the base
of our three premium Australian food
and beverage brands – Maggie Beer
Products, Paris Creek Farms and St
David Dairy.
Group showed its resilience during
extraordinarily tough trading
conditions
Like many businesses, the Group
faced extraordinarily tough trading
conditions in FY20. Firstly, with the
summer bushfires followed shortly
after by the COVID-19 pandemic
in March 2020, which continues to
disrupt Australian and international
markets and economies. The safety
and wellbeing of our employees
has always been paramount, with
full COVID-19 response plans
implemented across all businesses.
Pleasingly the Group has so far
proven to be resilient. Although
8
With 19% net sales growth in the
second half of FY20 (compared to
H2 FY19), the business has good
momentum entering FY21.
St David Dairy ’s sales increased
by 13% year on year, despite
COVID- 19 impacts
St David Dairy was impacted by
COVID-19 restrictions placed on
the hospitality and food service
businesses. However, consumer
loyalty to its brand, together with its
ability to contract its cost base and
expand into the retail and home
delivery market, St David Dairy
remained cashflow positive and
still achieve a double-digit EBITDA
margin as well as considerable sales
growth for FY20.
The business also took the
opportunity to review its cost base
during March and April and put
in place further manufacturing
efficiencies, which coupled with the
enhanced diversified sales model,
will set the business up for a strong
FY21.
Company name change to Maggie
Beer Holdings reinforced brand
equity
Looking to the future and with
discerning consumers increasingly
looking for premium Australian food
and beverage products and brands,
the Board took the opportunity to
change the name of the Group
to Maggie Beer Holdings. In July
2020, shareholders overwhelmingly
approved the name change, making
the Group easily recognisable as
a premium Australian food and
beverage company.
Positioned for growth
After a year of cost-out, restructuring
and consolidation, Maggie Beer
Holdings Group is now positioned
for growth. All three brands will
benefit from increased ranging,
brand awareness, and new product
development, supported by a well-
funded marketing strategy.
The past twelve months highlighted
the incredible work and dedication
of the teams across our three
brands, and I would like to take this
opportunity to thank all our amazing
people. I would also like to thank
our shareholders for their continued
belief and support of the Maggie
Beer Holdings Group.
Maggie Beer Holdings is proud
to make premium Australian food
and beverage products, using local
produce that supports local dairy
farmers, fruit and vegetable growers
and their local communities. This is
our very essence and the ethos of
our three businesses.
Maggie Beer Products, Paris Creek
Farms and St David Dairy resonate
strongly with Australian consumers
who are increasingly looking for
high-quality food and beverages
brands using locally sourced
ingredients. We are excited about
the future of the Maggie Beer
Holdings Group and what it means
for our shareholders, customers, staff,
suppliers and the communities in
which we operate.
Chantale Millard
CEO
“The Company is
well positioned for
sustained growth
with a streamlined
cost base, a
strong pipeline
of innovative
products and
renewed focus on
the core strengths
of the individual
businesses
and brands”
PAG E 9
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | OPERATIONS
REPORT
Financial Performance
• St David Dairy: Resilient sales
In FY20, and in particular the second
half of the year, the Group faced
exceptionally adverse economic
conditions stemming from the summer
bushfires affecting NSW, VIC and
SA up to the end of February 2020,
and the global COVID-19 pandemic
impacting Australia from the middle
of March 2020. Despite this, the
Group’s FY20 statutory financial
results, particularly in the second half,
reflect the benefits now flowing from
the successful changes implemented
over the past 18 months.
The Group achieved FY20 revenue of
$45.6 million, incorporating a full year
of St David Dairy and Maggie Beer
Products. FY19 included 11 months of
activities for St David Dairy (acquired
on 1 August 2018) and 2.5 months
of 100% activities of Maggie Beer
Products, together with 9.5 months
of 48% of Maggie Beer Products net
profit as an associate (acquisition of
the remaining 52% was completed on
15 April 2019).
The Group incurred a loss after tax of
$14.8 million (FY19: loss of $21.7
million) reflecting:
• Maggie Beer Products: Continued to
perform well with improved EBITDA
(on a full ownership basis) even with
the impact of the 2020 summer
bushfires and COVID-19 pandemic.
• Paris Creek Farms: A non-cash,
non-operating goodwill impairment
expense of $12.1 million reduced
goodwill to nil for this asset, while
a sales turnaround and reduced
operating costs returned the business
to positive trading EBITDA run-rate
late FY20.
growth and double-digit % EBITDA
margin despite the impact of
COVID-19 restrictions on the
hospitality sector.
• Head Office: Reduced corporate
costs.
All trading EBITDA numbers exclude
the positive impact from the adoption
of AASB16 on 1 July 2019 to make
them comparable to FY19 EBITDA
numbers.
Maggie Beer Products
Despite the impact of the summer
bushfires and COVID-19 pandemic,
Maggie Beer Products continued to
deliver strong results with EBITDA up
35%, on a comparable FY19 basis, to
$2.7 million (comparable FY19: $2.0
million). With a continued focus on
operational efficiencies the business
was able to increase its EBITDA margin
by 3.4 points to 12.9% (comparable
FY19: 9.5%).
Net sales of $20.8 million were
almost flat against the prior year
(comparable FY19: $20.9 million),
a direct impact of the bushfires and
COVID-19 pandemic. However,
sales performed strongly in May and
June 2020, up 25% on May and
June FY19, as consumers turned to
Australian brands that they know and
trust. The business also saw growth
from its e-commerce sales, with more
consumers looking for home delivery
options. Maggie Beer cheese was
the number one selling line for the year
with fruit paste, stocks and pate all
contributing strongly.
Continuing from the successful Q4
FY18 restructure and cost out initiatives
reducing labour, selling, marketing and
“After much
change the Board
is pleased with
the business
turnaround
in FY20.”
10
overhead expenses, total expenses
as a percentage of net sales reduced
by a further 3 points to 35% in FY20
(comparable FY19: 38%).
While focusing on the business
cost base, management is also
concentrating on launching new
products to address changing
consumer tastes, with five new cheese
lines launched nationally in June
2020 and its plant-based ready-made
meals launching nationally in Coles
in October 2020, and further new
product launches planned for FY21.
Paris Creek Farms
Paris Creek Farms’ performance
in FY20 reflected the anticipated
turnaround in sales and benefits from
operational changes that started to
be implemented in Q4 FY19 and
continued into FY20. The business’
reduced cost base and recovery in
sales, underpinned a very strong
improvement in EBITDA. A positive
monthly trading EBITDA run-rate was
achieved by the end of FY20, with
H2 FY20 trading EBITDA close to
break-even.
Net sales for FY20 grew by 7% to
$16.0 million (FY19: $15.0 million).
The second half of the year saw
stronger revenue growth with sales
for H2 FY20 up 19% to $8.2 million
(H2 FY19: $6.9 million). Growth
returned in branded dairy products
in supermarkets in the core South
Australia market. In supermarkets in
South Australia, private label volumes
also increased with strengthened
relationships with key customers in
major and independent markets,
amongst other initiatives implemented
since H2 FY19.
FY20 gross profit was up 25% to
$6.9 million (FY19: $5.6 million),
with gross margin percentage
improving by 6.0 points to 43.3%,
with H2 FY20 reaching 46.3%,
its highest level since acquisition.
This improvement is the result of the
business’ focus on increasing sales of
its more profitable and higher volume
lines, reduced overhead costs, less
wastage and better utilisation of the
business’ manufacturing assets and
milk pool.
Paris Creek Farms’ farmers continue
to deliver milk in accordance with
its supply growth trajectory, with any
excess milk over the spring months
being on-sold to third parties.
Significant savings resulted from
successful cost reduction initiatives
implemented since Q4 FY19, with
total expenses reduced by $1.6
million over FY20 (equivalent to $2.2
million at FY19 sales levels). Labour
costs reduced significantly, being
10 points lower than FY19 as a
percentage of sales.
Overall, excluding non-recurring
significant items, Paris Creek Farms
FY20 EBITDA was $3.0 million higher
than a comparable FY19. Further
refinements to its cost base and
improving sales and products mix, are
expected to underpin further growth in
FY21.
St David Dairy
St David Dairy has proven to be
tremendously resilient in the face of
COVID-19 related restrictions imposed
on the hospitality and foodservice
sector across Australia from mid-March
2020, with the business still managing
to grow sales in Q4 FY20. Sales for
the month of June 2020 prior to stage
4 restrictions, were back to the growth
rate enjoyed in H1 FY20.
The business experienced a short
but sharp drop in sales in the last
2 weeks of March 2020 when a
large number of hospitality businesses
scrambled to adapt to the new
COVID-19 restrictions imposed by the
State Governments. St David Dairy
responded to the sudden change by
contracting its cost base, channelling
any excess milk in March to other
processors and expanding its footprint
into grocers and independent retailers.
Despite the exceptionally adverse
conditions, St David Dairy continued
to deliver revenue growth and
increased customer numbers. Sales
were up 13% to $8.2 million
(comparable FY19: $7.2 million),
with the number of ordering customers
(stores/cafes) up 20% (up 18% from
H2 FY19).
Although milk sales slowed in late
March and early April 2020, sales
regained momentum in May and June
2020, and continue to be the largest
product category at 67% of total net
sales (FY19: 73%). FY20 milk sales
were up 4% compared to FY19, and
the introduction of plant-based milk has
seen some diversification with its share
now 4% of total sales (FY19: Nil).
The sales increase to retailers in Q4
FY20 resulted in a 59% increase in
yoghurt sales (compared to FY19 on a
full ownership basis). The continuing
growth in demand by our Sydney
based distributor, coupled with an
increased demand by bakeries and
restaurants, underpinned growth in
butter and cream sales (up 17% and
39% respectively compared to FY19
PAG E 11
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | H1 FY20 Maggie Beer Products sales.
The adoption of AASB16 Leases from
1 July 2019 has had a negligible
impact on the Group’s net assets
($0.0 million).
A disciplined approach to working
capital and the Group’s cash
management will continue.
Outlook
Despite the significant challenges
during the year, the Board is pleased
with the business turnaround in FY20
and anticipates that the Group is now
in a strong position to capitalise on the
growth opportunities for its premium
branded food and beverage portfolio.
With a continued focus on working
capital initiatives, a strong innovation
pipeline and increasing consumer
demand, the business should deliver
long term sustainable growth for the
Group, and shareholder value.
OPERATIONS REPORT (Continued)
on a full ownership basis).
Gross Profit (GP) reflected the positive
sales performance for the period.
However, gross margin percentage
was adversely impacted by industry
wide increasing milk (up 10% on a
comparable FY19) and cream costs
(up 5% on a comparable FY19)
resulting in a 2.6 point decrease in
gross margin percentage to 52.0%
(comparable FY19: 54.6%).
FY20 EBITDA of $1.0 million was
directly impacted by raw material
cost increases, while the renewal of
the ageing truck fleet at the start of
H2 FY20 mitigated some of the extra
freight costs incurred in H1 FY20
and will contribute positively to future
EBITDA margin. Labour costs stabilised
in FY20 and finished in line with FY19
as a percentage of sales, despite some
reduced activity in parts of March and
April 2020.
St David Dairy has proven particularly
agile and resilient in responding to
COVID-19 challenges and with milk
and cream input prices softening in
FY21 and its new diversified business
model, the business is expected to
continue to grow in FY21, under
current trading conditions.
Corporate
Shared services and corporate office
costs of $2.5 million (excluding one-
off items) were $2.0 million lower
(comparable FY19: $4.5 million), with
employee costs the most significant
component. FY20 included net one off
costs of $0.5 million (H1 FY19: $0.1
million) related to the corporate office
restructure, offset by a claim settlement
and COVID-19 government grants.
The corporate office was realigned to
meet current Group requirements.
Balance Sheet
The Group is supported by a strong
balance sheet with net assets of $50.6
million (30 June 2019: $65.5 million),
including a cash balance of $7.2
million at 30 June 2020 (30 June
2019: $9.8 million) and an undrawn
invoice finance facility of $3 million.
The decrease in net assets is mainly
a result of the $12.1 million non-cash
full impairment of Paris Creek Farms’
goodwill at 31 December 2019.
With a reduced cost base across
the Group, a turnaround in sales in
Paris Creek Farms, and collections
from Maggie Beer Products’ seasonal
sales, positive operating cashflow of
$3.1 million was generated in H2
FY20. The lower cash balance over
the course of FY20 was mainly due to
corporate office restructure costs and
cash funding to Paris Creek Farms in
H1 FY20.
Inventory at 30 June 2020 was $3.5
million (30 June 2019: $3.6 million)
or 7.9% of annualised sales (FY19:
8.5%), with Maggie Beer Products
holding $2.5 million of stock (30
June 2019: $2.7 million) and Paris
Creek Farms $0.8 million (30 June
2019: $0.8 million). Overall working
capital for the company is at circa
10% of sales (excl. AASB16 impacts),
a decrease of 4 points compared to
31 December 2019 as a result of the
collection in H2 FY20 of the stronger
12
WE BELIEVE IN
SUSTAINABLE
FARMING AND
CREATING
PRODUCTS AS
NATURALLY AS
THEY CAN BE
PAG E 13
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | 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
Milk supply
Mitigation action
• Delivery of the Company’s strategic initiatives focused on shifting the product mix to value
added products to reduce the exposure to price movements.
• Fixed in prices within farmer supplier contracts.
• 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.
COVID-19
• All production facilities of the Group have enacted a COVID-19 response plan, which
includes following Government recommendations and imposed restrictions, physical
distancing measures, increased sanitisation and cleaning procedures, a higher level of
personal protective clothing, temperature checks and contactless delivery.
• Full business segregation measures have been put in place within all three manufacturing
sites, to ensure isolated shutdowns and continuing operations should a staff member become
infected with COVID-19.
• Alternative production sites were identified wherever possible, in case a site was shut down
due to COVID-19.
• Where possible, staff have been directed to work from home.
• Employee safety and wellbeing is paramount with strict COVID-19 testing regimes and
support in place for employees who feel unwell.
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
Environmentally
sustainable
business practices
• 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
prodcts.
• 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.
• The Group employs suitable people to monitor and manage compliance.
• The Group employs suitable people to monitor and manage compliance.
• 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.
Change in
regulations
Attraction,
retention of key
roles
14
PAG E 15
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | 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 Maggie Beer Holdings
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 2020.
Directors
The following persons were directors
of Maggie Beer Holdings Limited
during the whole of the financial
year and up to the date of this
report, unless otherwise stated:
Reg Weine (Non-executive Chairman)
(appointed 13 March 2020)
Tom Kiing (Non-executive Director)
Hugh Robertson (Non-executive Director)
Maggie Beer AM (Non-executive Director)
Tony Robinson (Non-executive
Chairman) (retired 29 November 2019)
Laura McBain (Managing Director)
(resigned 27 November 2019)
Principal activities
During FY20, the principal continuing
activities of the consolidated
entity was the sale of branded
premium food and beverage in
Australia and overseas markets.
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 $14.8 million (30
June 2019: $21.7 million).
Financial Position
The net assets of the consolidated
entity decreased by $14.9 million
to $50.6 million (30 June 2019:
$65.5 million). This decrease was
mainly due to the non-cash impairment
charge to goodwill relating to Paris
Creek Farms of $12.1 million.
Operating results for the year
The consolidated entity reported a
net loss after tax of $14.8 million
for the financial year (FY19: loss
of $21.7 million). The reduced net
loss achieved reflected a resilient
performance from all operating
businesses in the face of exceptionally
adverse economic conditions due to
the summer bushfires and COVID-19
pandemic. The net loss after tax of
$14.8m, included the $12.1 million
non-cash goodwill impairment of Paris
Creek Farms at 31 December 2019.
Significant changes in the state of affairs
On 30 October 2019 the Company
announced the resignation of Laura
McBain as Managing Director and
Chief Executive Officer, and the
appointment of Chantale Millard as the
acting Chief Executive Officer. Laura
McBain’s resignation took effect on 27
November 2019, with Chantale Millard
being formally appointed as the Chief
Executive Officer on 2 December 2019.
On 27 November 2019 the
Company announced the resignation
of Michael Caragounis as Chief
Financial Officer of the Company
at the end of January 2020.
On 29 November 2019 the
“With Maggie
Beer Products
direct to
consumer sales
growing by
220% in Q4 of
FY20, we have
the opportunity
to capitalise
on its growing
Food Club
membership and
on-line social
media presence
to grow revenue”
16
Company announced the
retirement of Tony Robinson as
the Chairman and Non-Executive
Director of the Company.
On 13 March 2020, the Company
announced the appointment of Reg
Weine as Non-Executive Chairman.
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
On 16 July 2020, the Company
held a General Meeting of
shareholders where the following
resolutions were approved
by the shareholders:
• Change of name to Maggie Beer
Holdings Limited
In accordance with the Boards
strategy to refresh and enhance
the Company’s brand, the name
of the company was changed
from Longtable Group Limited to
Maggie Beer Holdings Limited.
The Board believes that changing
the name of the Company to
Maggie Beer Holdings Limited
better reflects the Company’s core
focus, whilst the Maggie Beer
brand provides a premium halo
for the Company’s diverse product
portfolio. Maggie Beer Holdings
will be instantly recognised
by shareholders, employees,
customers and consumers of
the Company’s products. The
Board hopes that the proposed
new name will help to facilitate
an improved understanding
of the Company’s businesses
and our potential for growth.
• Non-executive directors’ fees
Likely developments and
expected results of operations
taken in shares
The Director Fees Plan was
established to allow the
Company’s directors to elect,
from time to time, to be paid
their remuneration through the
issue of Shares in the Company,
rather than as a cash payment.
The Board believes the Director
Fees Plan will form an important
part of the remuneration for
the Company’s non-executive
Directors that elect to participate
in the Director Fees Plan, aligning
their interests with those of
Shareholders by linking their
remuneration to the long term
success of the Company and
its financial performance.
• Chairman’s options
4,500,000 Options were
issued to the Chairman, Reg
Weine, under the Company’s
Employee Share Option Plan.
On 20 August 2020, after the
Board considered the Group’s
strong balance sheet and cash
position, the Company repaid
a $400,000 loan in full early,
together with accrued interest, to
the Beer Family Holdings Pty Ltd as
trustee for the Beer Family Trust.
No other matter or circumstance
has arisen since 30 June 2020
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.
The future developments of the
consolidated entity includes
leveraging the strength of each
brand, growing the distribution
points for each business, launching
new products, creating further
synergies across the group and
driving brand awareness through
targeted marketing campaigns.
Information on these developments
is included in the review of
operations and activities.
Environmental regulation
The Company takes a proactive
approach in relation to the
management of 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
tanked offsite and fully utilised
by a business local to the Paris
Creek Farms, which includes the
wastewater in its compost matter.
The EPA has approved Paris Creek
Farms’ action plans in regards to
wastewater generated at the site.
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 17
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
DIRECTORS’ REPORT (Continued)
Information on Directors
REG WEINE
TOM KIING
HUGH ROBERTSON
Non-executive Chairman
(appointed 13 March 2020)
Non-executive Director
Non-executive Director
Experience and expertise:
Experience and expertise:
Experience and expertise:
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:
Envirosuite Ltd (ASX :EVS)
(Appointed 1 November 2018)
Former directorships (last 3 years):
TasFoods Limited (ASX: TFL) -
resigned 10 February 2017 AMA
Limited (ASX: AMA) - resigned
3 August 2018 Centrepoint
Alliance Limited (ASX: CAF)
(resigned 29 October 2018)
Special responsibilities:
Member of Audit and Risk Committee
and chairman of Remuneration
and Nomination Committee
Interests in shares:
2,508,421 fully paid
up ordinary shares
Interests in options: None
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
Former directorships (last 3 years):
Melbourne IT Limited (ASX: MLB)
- resigned 30 September 2017
Special responsibilities:
Chairman of Audit and Risk
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
Reg Weine is a dynamic and
trusted executive with over 25
years’ experience in agri-food and
FMCG businesses, including the past
10 years as Managing Director/
CEO. Reg has worked with large
companies and leading brands
including SPC Ardmona (Coca-Cola
Amatil), Bulla Dairy Foods, and
Blackmores. His FMCG experience
includes international expansion and
new market entry and Reg has a
deep understanding of global food &
beverage markets including China.
Reg is on the Board of the Apple and
Pear Association Ltd (APAL) as well
as Starlight Children’s Foundation.
He was previously a Board Member
of the Australia Food & Grocery
Council (AFGC) and past Chair of
the AFGC’s Sustainability Committee.
Reg has a Bachelor of Business from
Monash University, is a Graduate of
the Australian Institute of Company
Directors (GAICD) and is a Certified
Practising Marketer and Fellow with
the Australian Marketing Institute.
Other current directorships: None
Former directorships
(last 3 years): None
Special responsibilities:
Member of the Audit and Risk
Committee and member of the
Remuneration and Nomination
Committee
Interests in shares: None
18
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:
6,295,332 fully paid up ordinary
shares (4,650,000 of these shares are
held in escrow until 15 April 2021)
Interests in options: None
MAGGIE BEER AM
Non-executive Director
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 Australia
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
the consolidated entity as part of
‘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 19
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
DIRECTORS’ REPORT (Continued)
Information On Directors (Continued)
Company Secretary
Meetings of directors
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 over ten years of
relevant experience, having worked
with ASX listed organisations as
a General Counsel, Company
Secretary and in private practice.
The number of meetings of the
company’s Board of Directors
(‘the Board’) held during the year
ended 30 June 2020, and the
number of meetings attended
by each director were:
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.
Reg Weine
Tony Robinson
Tom Kiing
Hugh Robertson
Maggie Beer
Laura McBain
Full Board
Audit Committee
Attended
Held
Attended
Held
5
5
14
14
11
4
5
5
14
14
14
4
1
1
2
1
2
1
1
1
2
2
2
1
Held: represents the number of meetings held during the time the director held office.
20
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 renumeration
• Details of remuneration
• Executive contracts
• Share-based compensation
• Additional information
• Additional disclosures relating
to 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
good reward governance practices:
• competitiveness and
reasonableness
• acceptability to shareholders
• 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
• reflecting competitive reward
for contribution to growth
in shareholder wealth
• providing a clear structure
for earning rewards
Maggie Beer has committed
to a two-year period as brand
ambassador from April 2019,
continuing her association with
the Maggie Beer brand, its
product development program and
customer relationship. Maggie
Beer receives fees of $13,092 per
month for her services. Maggie
Beer received $157,104 for
services provided during the year.
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 except the company’s
Chairman have elected to receive
their fees in shares in the company.
On 16 July 2020, the Company held
a General Meeting of shareholders
where the following items were
approved by the shareholders:
core component of plan design
• Issue of up to 4,500,000
• 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
Options to Reg Weine (or his
nominee) under the Company’s
Employee Share Option Plan.
• Issue of Shares in the Company to
Tom Kiing (or his nominee under
the Company’s Director Fees Plan.
• Issue of Shares in the Company
to Hugh Robertson (or his
nominee) under the Company’s
Director Fees Plan.
• Issue of Shares in the Company
to Maggie Beer (or her
nominee) under the Company’s
Director Fees Plan.
PAG E 21
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | DIRECTORS’ REPORT (Continued)
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
22
performance measurements selected
are revenue growth and Earnings
Before Interest Tax Depreciation
and Amortisation (EBITDA). They
have been selected as the most
appropriate measures of trading
performance, and are calculated
based on a percentage above
a revenue and EBITDA threshold
level. This allows the individual to
be rewarded for growth in revenue
and profitability of the company.
The percentage and threshold
level can differ for each individual
and are reviewed every year. The
revenue and EBITDA 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 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 2019 Annual
General Meeting (‘AGM’)
At the 2019 AGM, 98.7% of
the votes received supported the
adoption of the remuneration
report for the year ended 30
June 2019. The company
did not receive any specific
feedback at the AGM regarding
its remuneration practices.
Executive contracts
The remuneration and other terms
of employment for executives are
covered in formal employment
contracts that have no fixed terms.
The group 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
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
Maggie Beer Holdings Limited:
• Reg Weine (appointed
13 March 2020)
• Tom Kiing
• Hugh Robertson
• Maggie Beer AM
• Laura McBain (resigned
27 November 2019)
• Tony Robinson (retired
29 November 2019)
And the following persons:
• Chantale Millard (Chief
Executive Officer) (appointed
2 December 2019)
• Michael Caragounis (Chief
Financial Officer) (resigned
23 January 2020)
Table A: KMP remuneration for the year ended 30 June 2020
Short-term benefits
2020
Cash salary
and fees
Bonus
Others*
Post-
employment
benefits
Super-
annuation
Non-Executive Directors:
Reg Weine**
Tom Kiing***
Hugh Robertson***
Maggie Beer***
Tony Robinson**
Executive Directors:
Laura McBain**
$
$
$
$
17,580
20,000
18,265
18,265
22,831
-
-
-
-
-
-
-
-
-
-
1,670
-
1,735
1,735
2,169
152,280
- 180,390
7,001
Other Key Management Personnel:
Chantale Millard
278,997 135,000
-
21,003
Michael Caragounis**
222,779
- 122,085
12,459
Long-term
benefits
Share-based
payments
Long
Service
Leave
$
Equity
Settled
$
-
20,000
20,000
20,000
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
19,250
40,000
40,000
40,000
25,000
339,671
435,000
357,323
750,997 135,000 302,475
47,772
60,000 1,296,244
*
**
These include termination payments made to Laura McBain and Michael Caragounis of $180,390 and $122,085 respectively.
Reg Weine appointed 13 March 2020 as Non-executive Chairman. Laura McBain resigned 27 November 2019 as Managing Director.
Michael Caragounis resigned 23 January 2020 as Chief Financial Officer. Tony Robinson retired 29 November 2019 as Non-executive Chairman.
*** Non-executive directors have agreed to have their salaries settled for shares in the Company in lieu of cash for the second half
year of FY20. This amounts to $20,000 each for Tom Kiing, Hugh Robertson and Maggie Beer respectively.”
Table B: KMP remuneration for the year ended 30 June 2019
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
$
2019
Non-Executive Directors:
Tony Robinson
Tom Kiing
Hugh Robertson
Maggie Beer
Executive Directors
Laura McBain*
54,795
40,000
36,530
7,610
329,951
Other Key Management Personnel:
Michael Caragounis**
334,469
803,355
5,205
-
3,470
723
-
-
-
-
Total
$
60,000
40,000
40,000
8,333
-
-
-
-
20,531
1,140
69,994
421,616
20,531
50,460
920
10,150
366,070
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.
PAG E 23
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
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
Non-Executive Directors:
Reg Weine
Tom Kiing
Hugh Robertson
Maggie Beer
Tony Robinson
Executive Directors:
Laura McBain
Other Key Management Personnel:
Chantale Millard
Michael Caragounis
Share-based compensation
Fixed remuneration
At risk - STI
At risk - LTI
2020
2019
2020
2019
2020
2019
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
83%
-
-
-
-
-
-
69%
100%
-
97%
31%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17%
-
3%
No options or performance rights were granted as remuneration to KMP during FY19
Table D: Number of options granted as remuneration to KMP during FY19
KMP
Grant date
Laura McBain*
Laura McBain*
Michael Caragounis**
Michael Caragounis**
* Laura McBain resigned 27 November 2019 as Managing Director and the options above have been forfeited.
** Michael Caragounis resigned 23 January 2020 as Chief Financial Officer and the options above have been forfeited.
28/11/2018
28/11/2018
28/11/2018
28/11/2018
Number
granted
940,000
3,760,000
120,000
480,000
Value per
Option
0.03
0.06
0.03
0.06
Number
Vested
-
-
-
-
Table E: Movements during FY20 in the options over shares in the Company held directly,
indirectly or beneficially, by each KMP, including their related parties
Balance at
start of year
Additions
Disposals/
Other
Total
Number
Vested
Laura McBain*
Michael Caragounis**
7,500,000
600,000
8,100,000
* Laura McBain resigned 27 November 2019 as Managing Director.
** Michael Caragounis resigned 23 January 2020 as Chief Financial Officer.
-
-
-
(7,500,000)
(600,000)
(8,100,000)
-
-
-
-
-
-
Received
as part of
remuneration
-
-
-
Table F: Terms and Conditions of options over ordinary shares affecting remuneration of directors and KMP
Expiry date
Number of options
Exercise Price
Grant date
Vesting/ exercisable
date
Fair value per
option at grant date
13/10/2017
28/11/2018
28/11/2018
28/11/2018
13/10/2017
30/06/2020
30/06/2021
30/06/2021
13/10 2022
28/11 2023
28/11 2023
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
Following Laura McBain and Michael Caragounis’ resignation on 27 November 2019 and 23 January 2020 respective-ly, the options above have been forfeited.
There were no performance rights over ordinary shares granted to directors and other key management personnel as part of compensation that were outstanding as at
30 June 2020.
24
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 2020 are set out below:
Name
Laura McBain*
Michael Caragounis**
* Laura McBain resigned 27 November 2019 as Managing Director, causing the performance rights above to be forfeited.
** Michael Caragounis resigned 23 January 2020 as Chief Financial Officer, causing the unvested performance rights above to be forfeited.
-
47,333
-
-
-
-
Number of
rights granted
during the year
2020
Number of
rights granted
during the year
2019
600,000
189,333
Number of
rights vested
during the year
2020
Number of
rights vested
during the year
2019
Table H: Movement during FY20 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**
Disposals
/ Other
(600,000)
(142,000)
(742,000)
* Laura McBain resigned 27 November 2019 as Managing Director, causing the performance rights above to be forfeited.
** Michael Caragounis resigned 23 January 2020 as Chief Financial Officer, causing the unvested performance rights above to be forfeited.
Received as part
of remuneration
-
-
-
Balance at
start of year
600,000
189,333
789,333
Additions
Total
-
-
-
-
-
-
Table I: Terms and Conditions of performance rights affecting remuneration of directors and KMP
Number of
performance
rights
Expiry date*
Vesting date
Grant date
28/11/2018
28/11/2018
28/11/2018
28/11/2018
* Performance rights expire 60 days after notice of vesting or otherwise at date noted. Performance rights granted carry no dividend or voting rights.
31/08/2019
31/08/2020
31/08/2021
31/08/2021
30/06/2019
30/06/2020
30/06/2021
30/06/2021
$167,333
$167,333
$167,333
$287,334
Following Laura McBain and Michael Caragounis’ resignation on 27 November 2019 and 23 January 2020 respectively, the unvested rights above have been
forfeited.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below:
Sales revenue
Net loss before tax
Loss after income tax
2020
$’000
45,555
(14,754)
(14,754)
2019
$’000
25,753
(24,160)
(21,656)
2018
$’000
8,733
(7,694)
(6,670)
2017
$’000
-
(10,293)
(10,293)
2016
$’000
-
(1,827)
(1,827)
The factors that are considered to affect total shareholders return (‘TSR’) are summarised below:
Share price at financial year end ($)
Basic earnings per share (cents per share)
2020
2019
2018
2017*
2016*
0.140
(7.120)
0.210
(16.726)
0.730
(10.308)
0.016
(40.571)
0.040
(24.250)
Diluted earnings per share (cents per share)
The value of basic and diluted earnings per share relating to 2015 - 2017 years have been adjusted to reflect the share consolidation of 25:1 completed in 2018. No
dividend has been paid in the past 5 years.
(10.308)
(16.726)
(40.571)
(7.120)
(24.250)
PAG E 25
Number Vested
-
47,333
47,333
Fair value
per right at
grant date
$0.01
$0.03
$0.06
$0.06
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
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:
Received
as part of
remuneration
Balance at
start of year
Disposals/Other**
Additions/Other
Balance at the
end of year
Ordinary shares
Tony Robinson**
Hugh Robertson
Tom Kiing
Maggie Beer*
Chantale Millard
Laura McBain**
Michael Caragounis**
1,561,793
2,129,586
8,429,010
4,895,332
6,593
4,498,120
200,000
21,720,434
-
-
-
-
-
-
-
-
378,835
-
1,400,000
-
-
-
1,778,835
(1,561,793)
(4,498,120)
(200,000)
(6,259,913)
-
2,508,421
8,429,010
6,295,332
6,593
-
-
17,239,356
* 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 2019 financial year.
These shares are held in escrow until 15 April 2021.
** Laura McBain resigned 27 November 2019 as Managing Director and her shareholdings are no longer disclosed.
Michael Caragounis resigned 23 January 2020 as Chief Financial Officer and his shareholdings are no longer disclosed.
Tony Robinson retired 29 November 2019 as Non-executive Chairman and his shareholdings are no longer disclosed..
“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, Beer Family Holding Pty Ltd ATF Beer Family Trust.
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.
Upon maturity, the Group has funded $100,000 of the redemption amount out of the Group’s cash reserves, with the
balance of $400,000 as loan funds advanced by the Note Holder to the Group. The Group and the Note Holder have
entered into a loan agreement for the $400,000 loan, which is unsecured. The loan was repaid on 20 August 2020.
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 receives fees of
$13,092 per month for her services. Maggie Beer received $157,104 for services provided during the year.
This concludes the remuneration report, which has been audited.
Shares under option
Unissued ordinary shares of Maggie Beer Holdings Limited under option at the date of this report are as follows:
Grant date
Expiry date
17 December 2013
16 July 2020
16 July 2020
16 July 2020
26
18 December 2020
16 July 2024
16 July 2024
16 July 2024
Exercise
price
$1.500
$0.150
$0.180
$0.200
Number
under option
50,321
1,500,000
1,500,000
1,500,000
4,550,321
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
Expiry date*
31 August 2021
31 August 2021
Number
under rights
15,667
15,667
31,334
* 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
faith or indemnification is otherwise not permitted under the
Corporations Act.
The following ordinary shares of Maggie Beer Holdings
Limited were issued during the year ended 30 June
2020 and up to the date of this report on the exercise of
performance rights granted:
Date performance rights granted
Ordinary fully paid shares issued following
the vesting and exercise of Performance
Rights
Number of
shares issued
125,666
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
The Company has executed deeds of indemnity in terms of
Article 27 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 27
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
DIRECTORS’ REPORT (Continued)
Proceedings on behalf of the company
Auditor
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.
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
Reg Weine
Non-Executive Chairman
27 August 2020
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 26 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.
28
AUDITOR’S
INDEPENDENCE
DECLARATION
PAG E 29
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | 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 Maggie Beer Holdings Limited (formerly known as Longtable Group Limited) for the year ended 30 June 2020, 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 Maggie Beer Holdings Limited and the entities it controlled during the period. Brad Peake Melbourne Partner PricewaterhouseCoopers 27 August 2020 “ 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 eat e n la t e l y”
LONGTABLE GROUP LIMITED | AN NUAL REPORT 2019 |
John Lethlean
The Australian
“We can now expand further into the ready meals
market with Maggie Beer Products, premium retail
with St David Dairy and explore new export markets
with Paris Creek Farm’s China organic certification -
we are all very excited by the growth opportunities”
SA Dair y Awar ds
Par is C ree k Far ms Bio -Dyn am i c
Fres h S alt e d B u tt e r – Go ld
Pa r is Cree k Far ms Bi o-Dyn am i c
Re du ced Fat Mil k – G ol d
Australian Food Awards
Par is Cree k Far ms Bi o- Dyn am i c
Tr i p l e Cre am Cam e m ber t – G ol d
DIAA
S ain t Da vid D ai r y F ir st Li t e
Re du ce d Fat Mil k - G o ld
PARIS CREEK FAR MS
BIO-DYN AMI C
FULL CREAM QUAR K –
TOP GOLD MEDAL
FINANCIAL STATEMENTS
32
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR
ENDED 30 JUNE 2020
Revenue
Revenue
Other income
Expenses
Raw materials and consumables used
Overheads
Occupancy and utilities costs
Employee benefits expense
Transportation expense
Professional fees
Marketing and advertising expense
Other expenses
Depreciation expense
Amortisation expense
Finance costs
Impairment expense
Gain / (loss) related to associates
Loss before income tax benefit
Income tax benefit
Loss after income tax benefit for the year attributable
to the owners of Maggie Beer Holdings Limited
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable
to the owners of Maggie Beer Holdings Limited
Basic earnings per share
Diluted earnings per share
Refer to note 4 for detailed information on Restatement of comparatives.
Consolidated
NOTE
2020
$’000
2019
$’000
44,503
1,052
45,555
25,616
137
25,753
(22,936)
(14,954)
(1,513)
(1,285)
(1,370)
(1,516)
(11,892)
(10,693)
(3,161)
(701)
(869)
(2,440)
(2,181)
(956)
(308)
(2,350)
(1,178)
(824)
(2,335)
(1,337)
(570)
(74)
(12,067)
(15,190)
-
2,478
(14,754)
(24,160)
-
2,504
(14,754)
(21,656)
-
-
(14,754)
(21,656)
Cents
(7.120)
(7.120)
Cents
(16.726)
(16.726)
14
11
7
35
35
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
PAG E 33
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | STATEMENT OF FINANCIAL
POSITION AS AT
30 JUNE 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Other current financial liabilities
Employee benefits
Total current liabilities
Non-current liabilities
Other non-current financial liabilities
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Refer to note 4 for detailed information on Restatement of comparatives.
Consolidated
NOTE
2020
$’000
2019
$’000
8
9
10
12
13
14
15
16
17
18
19
20
21
7,245
8,022
3,500
429
19,196
17,347
3,345
24,138
44,830
9,819
6,562
3,628
794
20,803
19,131
-
36,855
55,986
64,026
76,789
6,883
1,721
970
9,574
3,700
153
3,853
6,848
1,193
1,346
9,387
1,798
136
1,934
13,427
11,321
50,599
65,468
120,695
1,634
(71,730)
120,695
1,721
(56,948)
50,599
65,468
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
34
STATEMENT OF CHANGES
IN EQUITY FOR THE YEAR
ENDED 30 JUNE 2020
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 benefit for the year - restated
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 20)
23,471
-
-
-
-
Share-based payments
-
127
(21,656)
(21,656)
-
-
(21,656)
(21,656)
-
-
23,471
127
Balance at 30 June 2019
120,695
1,721
(56,948)
65,468
Refer to note 4 for detailed information on Restatement of comparatives.
Consolidated
Balance at 1 July 2019
Contributed
Equity
$’000
Options
Reserves
$’000
Accumulated
Losses
$’000
Total equity
$’000
120,695
1,721
(56,948)
65,468
Adjustment for adoption of AASB 16
-
-
(28)
(28)
Balance at 1 July 2019 - restated
120,695
1,721
(56,976)
65,440
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:
Share-based payments
-
-
-
-
-
-
-
(14,754)
(14,754)
-
-
(14,754)
(14,754)
(87)
-
(87)
Balance at 30 June 2020
120,695
1,634
(71,730)
50,599
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
PAG E 35
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED
30 JUNE 2020
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Other income received
Consolidated
NOTE
2020
$’000
2019
$’000
43,945
(45,158)
1,054
25,981
(34,069)
137
Net cash used in operating activities
34
(159)
(7,951)
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
31
-
(15,857)
Payments for property, plant and equipment
Purchase of intangibles
(1,098)
(306)
(852)
-
Net cash used in investing activities
(1,404)
(16,709)
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Repayment of loan
Proceeds from chattel mortgage
Proceeds from new loan
Repayment of convertible note
Principal elements of lease (June 2019 -
finance lease payments)
Interest and other finance costs paid
-
-
(105)
516
400
(500)
(1,098)
(224)
20,900
(1,115)
-
-
-
-
(14)
(74)
Net cash from/(used in) financing activities
(1,011)
19,697
Net decrease in cash and cash equivalent
(2,574)
(4,963)
Cash and cash equivalents at the beginning of the
financial year
9,819
14,782
Cash and cash equivalents at the end of the financial year
7,245
9,819
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
36
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
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 the
company and controlled entities.
The Company is a public company,
incorporated and domiciled in
Australia.
Maggie Beer Holdings Limited
changed its name from Longtable
Group Limited on 16 July 2020.
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 27
August 2020.
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 realisation of assets and the
settlement of liabilities in the ordinary
course of business.
For the year ended 30 June 2020,
the consolidated entity has incurred
losses of $14.8 million (2019:
$21.7 million) and incurred net cash
outflows of $2.6 million (2019:
$5.0 million outflow). Since 1
January 2020, the consolidated
entity has incurred losses of $0.5m
and generated net cash inflows of
$2.1m. As at year end, the cash
position was $7.2 million (30 June
2019: $9.8 million).
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.
As detailed above and in the
Operations Report, the significant
changes to the structure and
operations of the business in the past
year have allowed the company to
be resilient even in exceptionally
adverse trading conditions
experienced in FY20 with the
summer bushfires and the COVID-19
pandemic in the later part of the
year.
The company’s ability to generate
cash flows in continued challenging
economic conditions has also been
stress tested with scenarios including
a 10% drop in sales over the next
12 months.
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.
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
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 30.
Principles of consolidation
The consolidated financial statements
incorporate the assets and liabilities
of all subsidiaries of Maggie Beer
Holdings Limited (‘company’ or
‘parent entity’) as at 30 June 2020
and the results of all subsidiaries
for the year then ended. Maggie
Beer Holdings Limited and its
subsidiaries together are referred to
in these financial statements as the
‘consolidated entity’.
PAG E 37
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 2. Significant accounting policies (continued)
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 its
power to affect its returns.
A list of controlled entities is contained in
Note 32 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.
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.
Revenue recognition
The consolidated entity recognises revenue
as follows:
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.
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
38
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.
The company 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. The company is
the designated parent entity for tax
consolidation purposes.
Leases
Until the 2019 financial year, leases
of property, plant and equipment
were classified as either finance
leases or operating leases.
Until 30 June 2019, leases of
property, plant and equipment
where the group, as lessee, had
substantially all the risks and rewards
of ownership were classified as
finance leases. Finance leases were
capitalised at the lease’s inception at
the fair value of the leased property
or, if lower, the present value of
the minimum lease payments. The
corresponding rental obligations, net
of finance charges, were included
in other short-term and long-term
payables. Each lease payment was
allocated between the liability and
finance cost. The finance cost was
charged to profit or loss over the
lease period so as to produce a
constant periodic rate of interest on
the remaining balance of the liability
for each period. The property, plant
and equipment acquired under
finance leases was 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 group
will obtain ownership at the end of
the lease term.
Leases in which a significant
portion of the risks and rewards of
ownership were not transferred to
the group as lessee were classified
as operating leases. Payments made
under operating leases (net of any
incentives received from the lessor)
were charged to profit or loss on a
straight-line basis over the period of
the lease.
Lease income from operating leases
where the group is a lessor is
recognised in income on a straight-
line basis over the lease term. Initial
direct costs incurred in obtaining an
operating lease are added to the
carrying amount of the underlying
asset and recognised as expense
over the lease term on the same basis
as lease income. The respective
leased assets are included in the
balance sheet based on their nature.
The group did not need to make any
adjustments to the accounting for
assets held as lessor as a result of
adopting the new leasing standard.
The group leases various offices,
warehouses, equipment and vehicles.
Rental contracts are typically made
for fixed periods of 1-5 years but
may have extension options.
Contracts may contain both lease
and non-lease components. The
group allocates the consideration in
the contract to the lease and non-
lease components based on their
relative stand-alone prices. However,
for leases of real estate for which
the group is a lessee, it has elected
not to separate lease and non-lease
components and instead accounts for
these as a single lease component.
Lease terms are negotiated on an
individual basis and contain a
wide range of different terms and
conditions. From 1 July 2019, leases
are recognised as a right-of-use asset
and a corresponding liability at the
date at which the leased asset is
available for use by the group. The
lease agreements do not impose
any covenants other than the security
interests in the leased assets that are
held by the lessor. Leased assets may
not be used as security for borrowing
purposes.
PAG E 39
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 2. Significant accounting policies (continued)
Assets and liabilities arising from a lease are
initially measured on a present value basis.
Lease liabilities include the net present value of
the following lease payments:
• fixed payments (including in-substance
fixed payments), less any lease incentives
receivable
• variable lease payment that are based on
an index or a rate, initially measured using
the index or rate as at the commencement
date
• amounts expected to be payable by the
group under residual value guarantees
• the exercise price of a purchase option if
the group is reasonably certain to exercise
that option, and
• payments of penalties for terminating the
lease, if the lease term reflects the group
exercising that option.
Lease payments to be made under reasonably
certain extension options are also included
in the measurement of the liability. The lease
payments are discounted using the interest
rate implicit in the lease. If that rate cannot
be readily determined, which is generally
the case for leases in the group, the lessee’s
incremental borrowing rate is used, being the
rate that the individual lessee would have to
pay to borrow the funds necessary to obtain
an asset of similar value to the right-of-use
asset in a similar economic environment with
similar terms, security and conditions.
To determine the incremental borrowing rate,
the group used recent third-party financing
received by the individual lessee as a starting
point, adjusted to reflect changes in financing
conditions since third party financing was
received.
The group is exposed to potential future
increases in variable lease payments based
on an index or rate, which are not included in
the lease liability until they take effect. When
adjustments to lease payments based on an
index or rate take effect, the lease liability is
reassessed and adjusted against the right-of-
use asset.
Lease payments are allocated between
principal and finance cost. The finance cost is
charged to profit or loss over the lease period
so as to produce a constant periodic rate
of interest on the remaining balance of the
liability for each period.
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.
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
40
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, as well as the
restatement disclosed in note 4 as a
result of the finalisation of accounting
for the business combinations.
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.
PAG E 41
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
42
Note 2. Significant accounting policies (continued)
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 2019.
New and revised Standards and
amendments thereof and Interpretations
effective for the current year that are relevant
to the entity include:
AASB 16 Leases
The group has adopted AASB 16 Leases
retrospectively from 1 July 2019, but has
not restated comparatives for the 2019
reporting period, as permitted under the
specific transition provisions in the standard.
The reclassifications and the adjustments
arising from the new leasing rules are
therefore recognised in the opening balance
sheet on 1 July 2019. The new accounting
policies are disclosed above.
On adoption of AASB 16, the group
recognised lease liabilities in relation to
leases which had previously been classified
as ‘operating leases’ under the principles
of AASB117 Leases. These liabilities
were measured at the present value of the
remaining lease payments, discounted using
the lessee’s incremental borrowing rate as of
1 July 2019. The weighted average lessee’s
incremental borrowing rate applied to the
lease liabilities on 1 July 2019 was 4.0%
For leases previously classified as finance
leases the entity recognised the carrying
amount of the lease asset and lease
Properties
Equipment and motor vehicles
Total right-of-use assets
liability immediately before transition as the
carrying amount of the right of use asset
and the lease liability at the date of initial
application. The measurement principles of
AASB 16 are only applied after that date.
Operating lease commitments
as at 30 June 2019
Discounted using the lessee’s
incremental borrowing rate of
at the date of
initial application
Add: finance lease liabilities
recognised
as at 30 June 2019
Add: lease liabilities not
on the balance sheet
as at 30 June 2019
Of which are:
Current lease liabilities
Non-current lease liabilities
1 July 2019
$’000
2,680
(238)
1,632
235
4,309
1,166
3,143
4,309
The associated right-of-use assets for property
leases were measured on a retrospective
basis as if the new rules had always been
applied. Other right-of use assets were
measured at the amount equal to the lease
liability, adjusted by the amount of any
prepaid or accrued lease payments relating
to that lease recognised in the balance sheet
as at 30 June 2019. There were no onerous
lease contracts that would have required an
30 June 2020
$’000
30 June 2019
$’000
1,698
1,647
3,345
2,415
1,864
4,279
adjustment to the right-of-use assets
at the date of initial application.
The change in accounting policy
affected the following items in the
balance sheet on 1 July 2019:
• right-of-use assets – increase by
$4.3 million
• Property, plant and equipment –
decrease by $1.6 million
• lease liabilities – increase by $2.7
million
The net impact on retained earnings
on 1 July 2019 was a decrease of
$0.03 million.
(i) Impact on segment disclosures
and earnings per share
Adjusted EBITDA, segment assets
and segment liabilities for 30 June
2020 all increased as a result of
the change in accounting policy.
Lease liabilities are now included in
segment liabilities, whereas finance
lease liabilities were previously
excluded from segment liabilities.
The following segments were
affected by the change in policy:
following practical expedients
permitted by the standard.
• the use of a single discount rate
to a portfolio of leases with
reasonably similar characteristics
• the accounting for operating
leases with a remaining lease
term of less than 12 months as
at 1 January 2019 as short-term
leases
• the exclusion of initial direct costs
for the measurement of the right-
of-use asset at the date of initial
application, and
• the use of hindsight in
determining the lease term where
the contract contains options to
extend or terminate the lease.
The group has also elected not
to reassess whether a contract is,
or contains a lease at the date
of initial application. Instead, for
contracts entered into before the
transition date the group relied
on its assessment made applying
AASB 117 and Interpretation
Maggie Beer Products
Paris Creek Farms
St David Dairy
Other segment
Adjusted
EBITDA
$’000
524
24
139
76
763
Segment
Assets
$’000
2,559
338
448
-
Segment
Liabilities
$’000
2,203
390
527
482
3,345
3,602
Earnings per share decreased
by 0.031 cents per share for the
twelve months to 30 June 2020 as
a result of the adoption of AASB
16.
(ii) Practical expedients applied
In applying AASB 16 for the
first time, the group has used the
4 Determining whether an
Arrangement contains a Lease.
(iii) Accounting policy for right-of-
use assets
A right-of-use asset is recognised
at the commencement date of
a lease. The right-of-use asset is
measured at cost, which comprises
the initial amount of the lease
liability, adjusted for, as applicable,
any lease payments made at or
before the commencement date net
of any lease incentives received,
any initial direct costs incurred,
and, except where included in the
cost of inventories, an estimate
of costs expected to be incurred
for dismantling and removing the
underlying asset, and restoring the
site or asset.
Right-of-use assets are depreciated
on a straight-line basis over the
unexpired period of the lease or
the estimated useful life of the asset,
whichever is the shorter. Where
the consolidated entity expects to
obtain ownership of the leased
asset at the end of the lease term,
the depreciation is over its estimated
useful life. Right-of use assets are
subject to impairment or adjusted
for any remeasurement of lease
liabilities, which may occur as
a result of changes, extensions
or other modifications to the
lease. If the right-of-use asset is
nil, any adjustment as a result of
remeasurement is recorded in the
statement of comprehensive income.
The consolidated entity has elected
not to recognise a right-of-use asset
and corresponding lease liability
for short-term leases with terms of
12 months or less and leases of
low-value assets. Lease payments on
these assets are expensed to profit
or loss as incurred.
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
2020.
PAG E 43
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | Note 3. Critical accounting judgements, estimates and assumptions
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
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 judgements,
estimates and assumptions on historical
experience and on other various factors,
including expectations of future events,
management believes to be reasonable under
the circumstances. The resulting accounting
judgements and estimates will seldom equal the
related actual results. The judgements, estimates
and assumptions that have a significant risk of
causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the
respective notes) within the next financial year
are discussed below.
COVID-19 pandemic
Judgement has been exercised in considering
the impacts that the COVID-19 pandemic has
had, or may have, on the consolidated entity
based on known information. This consideration
extends to the nature of the products and
services offered, customers, supply chain,
staffing and geographic regions in which the
consolidated entity operates. Other than as
addressed in specific notes, there does not
currently appear to be either any significant
impact upon the financial statements or any
significant uncertainties with respect to events or
conditions which may impact the consolidated
entity unfavourably as at the reporting date
or subsequently as a result of the COVID-19
pandemic.
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.
Lease term
The lease term is a significant component in
the measurement of both the right-of-use asset
and lease liability. Judgement is exercised
in determining whether there is reasonable
certainty that an option to extend the lease or
purchase the underlying asset will be exercised,
or an option to terminate the lease will not be
exercised, when ascertaining the periods to
be included in the lease term. In determining
the lease term, all facts and circumstances that
create an economical incentive to exercise
an extension option, or not to exercise a
termination option, are considered at the lease
commencement date. Factors considered
may include the importance of the asset to the
consolidated entity’s operations; comparison of
terms and conditions to prevailing market rates;
incurrence of significant penalties; existence
of significant leasehold improvements; and
the costs and disruption to replace the asset.
The consolidated entity reassesses whether it
is reasonably certain to exercise an extension
option, or not exercise a termination option, if
there is a significant event or significant change
in circumstances. No options to extend or
terminate lease terms have been included in the
measurement of right-of-use assets and lease
liabilities.
Business combinations
As discussed in note 31, the business
combinations in the last year had been
accounted for on a provisional basis. The
fair value of assets acquired, liabilities and
contingent liabilities assumed were initially
estimated by the consolidated entity taking
into consideration all available information at
the reporting date. Fair value adjustments on
the finalisation of the business combination
accounting was retrospective, where
applicable, to the period the combination
occurred and may have had an impact on
the assets and liabilities, depreciation and
amortisation reported as detailed note 4.
44
NOTE 4.
RESTATEMENT OF COMPARATIVES
Retrospective fair value adjustments
on finalisation of business
combination accounting
During the financial period ended
30 June 2019 the consolidated
entity made a number of business
acquisitions, details of which are
set out in note 31.
In relation to the business
acquisitions, the consolidated entity
originally performed a provisional
assessment of the fair value of
the assets and liabilities as at the
date of the acquisition and for the
purposes of the balance sheet as
at 30 June 2019, the assets and
liabilities were originally recorded
at provisional fair values.
Under Australian Accounting
Standards, the consolidated entity
had up to 12 months from the
date of acquisition to complete
its initial acquisition accounting.
The consolidated entity has
completed this exercise to consider
the fair value of intangible assets
acquired in the acquisitions and,
in accordance with Accounting
Standards, has retrospectively
adjusted the values of the relevant
identifiable intangible assets and
has transferred the differences
between the provisional valuation
and the finalised fair value to the
respective Goodwill accounts.
The adjustments to the fair values
have an equal and opposite
impact on the goodwill recorded
on acquisition. Accordingly, such
adjustments have no impact on the
aggregate of the net assets or the
consolidated entity’s net profit after
tax.
Details of the specific adjustments
are set out in note 31.
Statement of profit or loss and other comprehensive income
Extract
Loss before income tax benefit
Income tax benefit*
2019
$’000
Reported
(24,160)
Consolidated
$’000
Adjustment
-
2019
$’000
Restated
(24,160)
-
2,504
2,504
Loss after income tax benefit for the year attributable to the owners
of Maggie Beer Holdings Limited
(24,160)
2,504
(21,656)
Other comprehensive income for the year, net of tax
-
-
-
Total comprehensive income for the year attributable to the owners
of Maggie Beer Holdings Limited
(24,160)
2,504
(21,656)
* A deferred tax asset of $2,504 thousand attributable to carried forward tax losses was recognised to offset the equivalent deferred liability arising from the
intangible assets acquired through the business combinations.
Statement of financial position at the beginning of the earliest comparative period
When there is a restatement of comparatives, it is mandatory to provide a third statement of financial
position at the beginning of the earliest comparative period, being 1 July 2018. However, as there were no
adjustments made as at 1 July 2018, the consolidated entity has elected not to show the 1 July 2018 statement
of financial position.
PAG E 45
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 4. Restatement of comparatives (continued)
Statement of financial position at the end of the earliest comparative period
2019
$’000
Reported
Consolidated
$’000
Adjustment
2019
$’000
Restated
406
20,415
388
388
794
20,803
34,739
53,870
2,116
2,116
36,855
55,986
74,285
2,504
76,789
62,964
2,504
65,468
(59,452)
2,504
(56,948)
62,964
2,504
65,468
Extract
Assets
Current assets
Other current assets
Total current assets
Non-current assets
Intangible assets
Total non-current assets
Total assets
Net assets
Equity
Accumulated losses
Total equity
46
NOTE 5. 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 Chief Executive Officer (‘CEO’) 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 $16.96 million (2019: $6.98 million) are concentrated in a small number of external
customers.
Paris Creek
Farms
$’000
StDavid
Dairy
$’000
MBP
$’000
Other
segments
$’000
Total
$’000
Consolidated - 2020
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 expense
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
16,043
(513)
15,530
55
15,585
(1,917)
(12,068)
(13,985)
8,190
-
8,190
85
8,275
20,783
-
20,783
174
20,957
-
-
-
738
738
302
-
302
1,847
-
1,847
(2,918)
-
(2,918)
19,099
19,278
25,897
9,504
20,749
1,668
3,828
2,099
45,016
(513)
44,503
1,052
45,555
(2,686)
(12,068)
(14,754)
-
(14,754)
73,778
(9,752)
64,026
28,344
(14,917)
13,427
PAG E 47
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 5. Operating segments (continued)
Consolidated - 2019 - Restated
Revenue
Sales of goods to external customers
Intersegment sales
Total sales revenue
Other revenue
Total revenue
Profit before income tax expense,
impairment and fair value gain
Impairment expense
Fair value gain
Profit/(loss) before income tax benefit
Income tax benefit
Loss after income tax benefit
Liabilities
Assets
Segment assets
Intersegment eliminations
Total assets
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
(6,782)
(15,190)
-
(21,972)
6,647
-
6,647
-
6,647
640
-
-
640
4,241
-
4,241
16
4,257
-
-
-
63
63
(45)
-
-
(45)
(4,787)
-
2,004
(2,783)
30,546
17,740
27,828
11,806
18,010
1,523
5,477
1,395
25,840
(224)
25,616
137
25,753
(10,974)
(15,190)
2,004
(24,160)
2,504
(21,656)
87,920
(11,131)
76,789
26,405
(15,084)
11,321
Refer to note 4 for detailed information on Restatement of comparatives
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 Executive Officer (‘CEO’). The CEO is responsible for the
allo-cation of resources to operating segments and assessing their performance
48
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 Other income, Raw materials and consumables
used, Employee benefits expense and Other expenses:
Government grants (COVID-19 related)
Claim settlement (Note 28)
Restructure costs
Abandoned project
Litigation costs
New product launch transitional costs
Exceptional stock write-off
Disposal of excess raw milk
Consultant fees (ex Paris Creek Farms vendors)
Doubtful debts expense
Other
Total significant items
Consolidated
2020
$’000
393
500
(946)
(135)
(61)
-
-
-
-
-
(109)
2019
$’000
-
-
(465)
-
-
(603)
(371)
(311)
(220)
(150)
(3)
(358)
(2,123)
PAG E 49
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 7. INCOME TAX BENEFIT
Income tax benefit
Current tax
Deferred tax expense
Consolidated
2020
$’000
2019
$’000
(602)
(3,232)
Amounts not brought to account as a Deferred Tax Asset in the current year
602
Recognition of deferred tax asset
Aggregate income tax benefit
-
-
3,232
(2,504)
(2,504)
Numerical reconciliation of income tax benefit and tax at the statutory rate
Loss before income tax benefit
(14,754)
(24,160)
Tax at the statutory tax rate of 30%
(4,426)
(7,248)
Tax effect amounts which are not deductible/(taxable) in calculating
taxable income:
Non-deductible expenses
Non-assessable non-operating income
Amounts not brought to account as a Deferred Tax Asset in the current
year
Recognition of deferred tax asset
Income tax benefit
3,884
(60)
602
-
-
4,617
(601)
3,232
(2,504)
(2,504)
Consolidated
2020
$’000
2019
$’000
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
(Australia)
Potential tax benefit @ 30%
19,967
5,990
19,033
5,710
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.
50
NOTE 8. CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Trade receivables (net of loss allowance provision)
Lease receivable (sub-lease)
Other receivables
GST receivable
Consolidated
2020
$’000
2019
$’000
7,135
6,282
532
90
265
-
280
8,022
6,562
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 with a further focus
in this financial year on collection risk following the impact of the COVID-19 pandemic. Individual
debts which are known to be uncollectable are written off when identified. The Group recognises a
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. This includes general macroeconomic
indicators such as RBA cash rate and GDP growth.
Trade receivables are generally due for settlement between 30 and 60 days.
The COVID-19 pandemic has not resulted in any additional receivables write-offs.
Credit risks related to receivables
Refer to note 23 for additional information.
NOTE 9 CURRENT ASSETS - INVENTORIES
Stock on hand - at cost
Consolidated
2020
$’000
2019
$’000
3,500
3,628
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.
PAG E 51
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 10. CURRENT ASSETS - OTHER CURRENT ASSETS
Prepayments
Security deposits
Other current assets
Consolidated
2020
$’000
185
151
93
2019
$’000
Restated
235
141
418
429
794
Refer to note 4 for detailed information on Restatement of comparatives
NOTE 11.
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 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 31 for further details
Reconciliation of carrying amount of investment
Opening net assets
Profit / (loss) for the period
Reversal of equity investment upon control
Closing net assets
Consolidated
2020
$’000
2019
$’000
-
-
-
-
11,666
987
(12,653)
-
52
Note 11. Non-current assets - investments accounted for using the equity method (continued)
Company share %
Company’s share of opening net assets
Company’s share of net profit / (loss) for the period up to 16 April 2019
Fair value gain of 48% equity investment upon gaining control
Reversal of equity investment upon consolidation
Carrying amount of investment in associate
Consolidated
2020
$’000
2019
$’000
-
-
-
-
-
4,907
474
2,004
(7,385)
-
In accordance with the equity method, on initial recognition the investment in an associate or a joint
venture is recog-nised 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 31 - Business
Combination for more details.
NOTE 12. 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
Consolidated
2020
$’000
460
2019
$’000
460
1,274
1,111
(394)
880
(437)
674
13,935
14,941
(4,336)
(3,588)
9,599
11,353
6,983
6,977
(575)
(333)
6,408
6,644
17,347
19,131
PAG E 53
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 12. Non-current assets - property, plant and equipment (continued)
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 2018
Additions
Additions through business combinations
(note 31)
Transfers in/(out)
Depreciation expense
Balance at 30 June 2019
Additions
Disposals
Transfer out on adoption of AASB 16
Depreciation expense
Balance at 30 June 2020
Land
$’000
460
-
-
-
-
460
-
-
-
-
460
Motor
vehicles
$’000
742
21
Building and
leasehold
improvements
$’000
6,793
Plant
and other
equipment
$’000
7,590
72
760
245
(63)
(271)
674
551
(21)
(204)
(120)
212
(206)
(227)
6,644
6
-
-
(242)
3,573
269
(839)
11,353
632
(28)
(1,427)
(931)
Total
$’000
15,585
853
4,030
-
(1,337)
19,131
1,189
(49)
(1,631)
(1,293)
880
6,408
9,599
17,347
Refer to note 24 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 or
diminishing value basis over their useful lives to the Group commencing from the time the asset is held ready for use.
Leasehold improve-ments are depreciated over the shorter of either the unexpired period of the lease or the estimated
useful lives of the improvements.
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.
54
NOTE 13. NON-CURRENT ASSETS - RIGHT-OF-USE ASSETS
Land and buildings - right-of-use
Less: Accumulated depreciation
Plant and equipment - right-of-use
Less: Accumulated depreciation
Motor vehicles - right-of-use
Less: Accumulated depreciation
Consolidated
2020
$’000
2,822
(1,124)
1,698
1,926
(447)
1,479
372
(204)
168
3,345
2019
$’000
-
-
-
-
-
-
-
-
-
-
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 2019
Additions upon adoption of AASB 16
Additions
Disposal
Depreciation expense
Land and
buildings
$’000
-
Plant and
equipment
$’000
-
Motor
vehicle
$’000
-
Total
$’000
-
2,415
1,660
204
4,279
446
(494)
(669)
-
-
5
-
(181)
(41)
451
(494)
(891)
Balance at 30 June 2020
1,698
1,479
168
3,345
PAG E 55
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 13. Non-current assets - right-of-use assets (continued)
The consolidated entity notes the following items in relation to the adoption of AASB 16 for the period
ended 30 June 2020:
• Depreciation charge for land and building right-of-use assets amounted to $669 thousand for the period
ending 30 June 2020;
• Interest expense on land and building lease liabilities amounted $101 thousand for the period ending 30
June 2020;
• During the year, the group sub-leased one of its properties, and as a result the associated right-of-use
asset was disposed of, amounting to $509 thousand as at disposal date. A lease receivable of $532
thousand has been recognised in relation to the sub-lease as at 30 June 2020
• Total cash outflow for leases is $1,137 thousand for the period ending 30 June 2020;
• On 12 February 2020, the group extended a lease held by SDD for 5 years, which resulted in addition
of $459 thousand to the lease liability and right-of-use asset for the period;
• The carrying amount of right-of-use assets at the end of the reporting period by class of underlying
asset is $1,861 thousand, $1,317 thousand, and $168 thousand, for land and buildings, plant and
equipment, and mo-tor vehicle right-of-use assets, respectively.
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
NOTE 14. NON-CURRENT ASSETS - INTANGIBLE ASSETS
Goodwill
Brand
Less: Accumulated amortisation
Customer contracts
Less: Accumulated amortisation
Software and website
Less: Accumulated amortisation
56
Refer to note 4 for detailed information on Restatement of comparatives
Consolidated
2020
$’000
2019
$’000
Restated
15,388
27,454
6,838
6,838
(697)
(292)
6,141
6,546
3,075
3,075
(769)
(278)
2,306
2,797
416
(113)
303
112
(54)
58
24,138
36,855
Note 14. Non-current assets - intangible assets (continued)
Refer to note 4 for detailed information on Restatement of comparatives.
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 2018
Additions through business
combinations (note 31)
Impairment of assets
Amortisation expense
Balance at 30 June 2019
Additions from internal
developments
Impairment of assets
Amortisation expense
Goodwill -
Paris Creek
$’000
27,257
Goodwill -
St David
$’000
-
Goodwill
- Maggie
Beer
Products
$’000
-
Brand*
$’000
-
Customer
Contracts**
$’000
-
Other
Intangible
$’000
-
-
11,802
3,585
6,838
3,075
58
Total
$’000
27,257
25,358
(15,190)
-
-
-
-
-
-
(292)
-
(278)
-
-
(15,190)
(570)
12,067
-
11,802
-
3,585
-
6,546
-
2,797
-
58
305
36,855
305
(12,067)
-
-
-
-
-
-
(405)
-
(491)
-
(59)
(12,067)
(955)
Balance at 30 June 2020
-
11,802
3,585
6,141
2,306
304
24,138
* The cost of the brand intangible asset consists of $2,163 thousand allocated to the St David Dairy CGU and $4,675 thousand allocated to the Maggie Beer Products
CGU as at 30 June 2020.
** The cost of the customer contract intangible asset consists of $1,515 thousand allocated to the St David Dairy CGU and $1,560 allocated to the Maggie Beer
Products CGU as at 30 June 2020.
Goodwill was acquired as a result of business combinations entered into during the previous year, refer to note 31
for details.
PAG E 57
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 14. Non-current assets - intangible assets (continued)
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 impairment 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. These impairment
tests have been completed via a multiple scenario
approach in response to significant uncertainties in
the market.
At 30 June 2020, for Maggie Beer Products and
St David Dairy, the recoverable amounts have
been determined based on value-in-use calculations
which uses cash flow projections based on financial
forecasts covering a five-year period, including
changes in working capital and expenditure for
maintenance. Cash flows are extrapolated using
estimated growth rates beyond the five-year period.
58
Key assumptions used in the value-in-use calculations
for the Maggie Beer Products and St David Dairy
CGUs are based on a large range of data,
including available independent grocery and
dairy reports on the Australian market, overlaid
with management’s latest forecast for financial year
2021 and incorporating previous revenue growth,
achievable margin, reasonable expense increases,
capital expenditure for maintenance and entity
specific long-term averages for the latter years.
In considering the outlook for Maggie Beer Products
and St David Dairy, and the specific impacts of the
COVID-19 pandemic, management considered a
range of possible scenarios and have applied a
probability weighting to each of these in order to
determine an estimation of future cash flows which
has a reasonable and appropriate basis.
Maggie Beer Products
Base Scenario
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). The starting point is an assessment of the
market, leveraging industry reports and overlaying
with known sales growth opportunities e.g. extra
sales growth from 5 new cheese lines launched in
Woolworths in Q4 FY20, the continued growth in
cheese and cooking stocks, the recent increase in
fruit paste sales in Aldi and growth in independent
retail market and from its e-commerce business which
had substantial growth in H2 FY20 as the business
increased its online presence and implemented its
new digital marketing plan. Industry reports indicate
there was significant growth in online sales pre
COVID-19, which is only expected to increase as
buyer behaviours have changed during COVID-19.
The average revenue growth over the forecast period
is assumed at 5.8% per annum (compared with an
average of 5.1% per annum for the 4 years from
FY17 to FY20).
Costs
Gross margin in FY21 is expecting to soften slightly
from its FY20 levels, due to the increase in 3rd party
produced cheese and cooking stocks revenue as a
percentage of total sales, and is then assumed to
remain flat for the remainder of the model’s period
with the sales mix including increased higher margin
from e-commerce sales. Raw material price increases
are minimal and are to be matched by price
increases with retailers to offset, as was evidenced
in the current year. All fixed costs, including selling,
administration and management labour, are
modelled to grow at 2.0% a year, in line with the
Reserve Bank of Australia’s inflation target range of
2–3 per cent, on average, over time.
Long-term growth rate
The long-term growth rate is the weighted average
growth rate used to extrapolate cash flows beyond
the modelled period. A long-term growth rate of
2.0% has been used in the value-in-use calculations,
which is on the lower end of the long-term Reserve
Bank of Australia’s inflation target range of 2–3 per
cent, on average, over time.
Discount rate
The discount rate represents 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 pre-tax discount
rate of 12.53% per annum (8.77% post tax) for
Maggie Beer Products. The discount rate includes
a COVID-19 pandemic risk premium of 0.75%
to allow for the overall uncertainty in the wider
economy even though the Consumer Staples sector
has generally experienced limited downside (or even
positive) impacts from the COVID-19 pandemic
and there is less uncertainty around future earnings
expectations. Also included in the discount rate
is a specific company risk rate of 2.00% to
recognise the abnormally low risk-free rate of
0.92% at 30 June 2020.
In addition to the base scenario detailed above,
management has included 2 other scenarios likely
PAG E 59
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 14. Non-current assets - intangible assets (continued)
to materially impact the carrying value of the CGU.
The first scenario is sales in each year from FY21 to
FY25 being 10% lower than forecast. The second
is raw material prices increasing an extra 4.0pt on
average over the period FY21 to FY25 compared to
CPI (2.0%).
Scenarios
Base Case
Lower Sales
Raw
Material
prices
Long term
growth rate /
CPI
Discount rate
(post-tax)
Growth in
sales (5-year
CAGR)
Raw material
prices increase
Probability
weighting
2.00%
2.00%
2.00%
8.77%
8.77%
8.77%
5.8%
3.6%
5.8%
2.0%
2.0%
6.0%
80% -
estimated
most likely
outcome
10% - low
probability
and low
impact
10% - low
probability
and low
impact
Headroom/
(Deficit) ($’000) 10,218
1,844
4,401
Probability weighted headroom ($’000)
8,799
Review outcome
In completing the impairment review based on the
scenarios and their assumptions and the weights
above, the value in use of the Maggie Beer Products
business exceeded its carrying value by $8.8
million.
St David Dairy
Base scenario
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). The starting point is an assessment of
the market, leveraging dairy industry reports and
overlaying with known sales growth opportunities
e.g. increased sales in speciality retail stores, plant-
based milk products.
The FY21 forecast as approved by the Board
assumes a gradual recovery in the first half of the
year with an acceleration in the second half of FY21
to reach annual sales growth equivalent to that
of FY20 at 13.2%. The average revenue growth
over the remaining forecast period is modelled
at 11.1% per annum, half the 22.6% per annum
(Compounded Annual Growth Rate CAGR) sales
growth achieved in the 4 years from FY17 to FY20,
and is underpinned by:
• industry reports expect milk sales (volume and
price) to increase 5% to 7% year on year from
FY21 to FY25,
• further capturing market share of cafes and
restaurants in Melbourne initially (only currently
selling to 5% of cafes and restaurants in inner
Melbourne) and continuing to expand into other
States of Australia. Currently sales outside of
Victoria represent 8% of the business,
• increased demand for plant-based milk which
currently accounts for 7% of all milk consumption
in Australia and is expected to grow at a double
digit CAGR in the period FY20 to FY25,
• continued expansion into premium and specialty
grocers where “buy fresh, buy local” continues to
gain momentum.
Costs
Industry reports indicate milk and cream prices
will decrease in FY21, relative to FY20, and are
expected to remain below the levels experienced
in the current year. Costs have assumed a stabilised
milk and cream prices with no price increase
expected in FY21 and any future increases matched
by price increases, improved delivery costs with
more efficient and more reliable trucks purchased
in FY20, along with a now stable and experienced
management team.
Long-term growth rate
60
The long-term growth rate is the weighted average
growth rate used to extrapolate cash flows beyond
the modelled period. A long-term growth rate of
2.0% has been used in the value-in-use calculations,
which is on the lower end of the long-term Reserve
Bank of Australia’s inflation target range of 2–3 per
cent, on average, over time.
Discount rate
The discount rate represents 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 pre-tax discount
rate of 13.25% per annum (9.28% post tax) for St
David Dairy. The discount rate includes a COVID-19
pandemic risk premium of 0.75% to allow for the
overall uncertainty in the wider economy even
though the Consumer Staples sector has generally
experienced limited downside impacts from
COVID-19 pandemic and there is less uncertainty
around future earnings expectations. Also included
in the discount rate is a specific company risk rate of
2.00% to recognise the abnormally low risk-free rate
of 0.92% at 30 June 2020.
In addition to the base scenario detailed above,
management has included 3 other scenarios, which
if they occurred, would be likely to materially impact
the carrying value of the CGU. The first scenario is
sales in each year from FY21 to FY25 being 10%
lower than forecast. The second is milk prices to
be 2% higher per year from FY21 to FY25 with no
ability to pass onto consumers. The third is delivery
cost savings are 1% lower per year from FY21 to
FY25.
Review outcome
In completing the impairment review based on the
scenarios and their assumptions and the weights
above, the value in use of the St David Dairy
business exceeds its carrying value of goodwill by
$1.7 million.
Brand
Brand acquired in a business combination are
amortised on a straight-line basis over the period of
their expected benefit, being their finite life range of
5-20 years.
Customer contracts
Customer contracts acquired in a business
combination are amortised on a straight-line basis
over the period of their expected benefit, being their
finite life range of 0-10 years.
Scenarios
Long term growth rate / CPI
Discount rate (post-tax)
Growth in sales (5-year CAGR)
Milk price increase pa from FY20
Delivery cost savings (as % of sales)
Probability weighting
Headroom/(Deficit) ($’000)
Probability weighted headroom ($’000)
Base Case
Lower Sales
Farmgate milk
price increase
Delivery costs
2.00%
9.28%
11.5%
1.8%
1.6pt
2.00%
9.28%
9.2%
1.8%
1.6pt
55% -
estimated
most likely
outcome
10% - low
medium
probability
and low
impact
2.00%
9.28%
11.5%
3.6%
1.6pt
25% -
medium
probability
and
medium
impact
2.00%
9.28%
11.5%
1.8%
0.6pt
10% - low
probability
and medium
impact
2,754
(242)
257
1,505
1,705
PAG E 61
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 15. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES
Trade payables
Employee related payables
Other payables
Consolidated
2020
$’000
2019
$’000
4,922
5,232
886
1,075
659
957
6,883
6,848
Refer to note 23 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.
NOTE 16. CURRENT LIABILITIES - OTHER CURRENT FINANCIAL LIABILITIES
Related party loans
Convertible note payable
Current portion of chattel mortgage loan
Finance lease liability
Lease liability
Consolidated
2020
$’000
551
-
73
-
1,097
2019
$’000
292
500
-
401
-
1,721
1,193
Refer to note 23 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. The fair value of the convertible note has been deemed to be the
principal amount of the note payable.
On conversion date, the Group has funded $100,000 of the redemption amount out of the Group’s
cash reserves, with the balance of $400,000 as loan funds advanced by the Note Holder to the
Group. The Group and the Note Holder have entered into a loan agreement for the $400,000 loan,
which is unsecured and classified as a non-current liability. The $400,00 loan along with accrued
interest have been repaid on 20 August 2020.
The chattel mortgage loan above represents the current portion of the chattel mortgage used to finance
the acquisition of St David Dairy’s new truck fleet during the year. The mortgage is secured over the
truck fleet and is repaid over a term of 5 years at an interest rate of 5.99%.
62
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 $3.0 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 2020, the aggregate amount outstanding under the facilities was $nil and the subsidiary
was in compliance with its obligations under those facilities.
NOTE 17. CURRENT LIABILITIES - EMPLOYEE BENEFITS
Employee benefits
Accounting policy for employee benefits
Short-term employee benefits
Consolidated
2020
$’000
2019
$’000
970
1,346
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 bal-ance 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.
NOTE 18. NON-CURRENT LIABILITIES - OTHER NON-CURRENT FINANCIAL LIABILITIES
Related party loans
Non-current portion of chattel mortgage
Finance lease liability
Lease liability
Refer to note 23 for further information on financial instruments.
Refer to note 29 for further information on related party transactions.
Consolidated
2020
$’000
752
443
-
2,505
3,700
2019
$’000
716
-
1,082
-
1,798
PAG E 63
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 18. Non-current liabilities - other non-current financial liabilities (continued)
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
2020
$’000
2019
$’000
-
-
-
441
1,209
1,650
(167)
1,483
Upon adoption of AASB 16 Leases, the majority of leases are now recognised on the balance sheet.
As per note 16, Maggie Beer Products Pty Ltd, a subsidiary of the consolidated entity, has an invoice facility
secured over the receivables of the subsidiary.
The related party loans are unsecured.
The chattel mortgage is secured over the St David Dairy newly acquired fleet of delivery trucks.
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 19. NON-CURRENT LIABILITIES - EMPLOYEE BENEFITS
Employee benefits
Consolidated
2020
$’000
153
2019
$’000
136
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 high quality corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
64
NOTE 20. EQUITY - ISSUED CAPITAL
Movements in ordinary share capital
Ordinary shares - fully paid
207,262,291
207,152,292
120,695
120,695
Consolidated
2020
Shares
2019
Shares
2020
$’000
2019
$’000
Movements in ordinary share capital
Details
Balance
Issue of shares to shareholders
Issue of shares to vendors*
Date
Shares
Issue price
$’000
1 July 2018
111,293,473
30 July 2018
1 August 2018
7,142,856
4,285,714
$0.700
$0.630
$0.200
97,224
4,999
2,700
2,181
Issue of shares to shareholders
4 March 2019
10,905,000
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
$0.000
1,000
(1,114)
Balance
30 June 2019
207,152,292
Conversion of performance rights to
ordinary shares upon vesting
10 December
2019
109,999
$0.000
Balance
30 June 2020
207,262,291
120,695
-
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 Combina-tion, 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.
Share buy-back
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 2019 Annual Report.
No shares were bought back during the year ended
30 June 2020 (2019: NIL).
Accounting policy for issued capital
Ordinary shares are classified as equity.
Capital risk management
Capital is regarded as total equity, as recognised in the
statement of financial position, plus net debt. Net debt
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.
PAG E 65
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 21. EQUITY - RESERVES
Options reserve
Options reserve
Consolidated
2020
$’000
2019
$’000
1,634
1,721
Options reserve arises on the grant of share options to Directors and employees of the Group and Maggie Beer
Products under the Group incentive option scheme. Amounts are transferred out of the reserve and into issued
capi-tal 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 36 to the financial statements. Other than minimal administration costs, which are
ex-pensed 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.
66
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 2018
Share based payment
Balance at 30 June 2019
Share based payment*
Balance at 30 June 2020
Option
reserve
$’000
1,594
127
Total
$’000
1,594
127
1,721
1,721
(87)
(87)
1,634
1,634
* The decrease in the share-based payment reserve during the financial period has resulted from the expiry and forfeiture of options and performance rights
previously expensed, partially offset by expense over unvested per-formance rights.
NOTE 22. EQUITY - DIVIDENDS
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Franking credits
Franking credits available for subsequent financial years based
on a tax rate of 30%
Consolidated
2020
$’000
2019
$’000
7,568
7,568
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
PAG E 67
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 23. 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 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 asso-
ciated 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 ex-posure to interest rate risk, and by being aware of market forecasts for interest rate, 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
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.
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:
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
72
72
(50)
(36)
(36
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)
Consolidated - 2020
Bank deposits
Consolidated - 2019
Bank deposits
68
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. This includes general macroeconomic indicators such as RBA cash rate and GDP growth.
Generally, trade receivables are written off when there is no reasonable expectation of recovery.
Indicators of this in-clude the failure of a debtor to engage in a repayment plan, no active enforcement
activity and a failure to make con-tractual 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 recog-nised 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.
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
2020
$’000
Loss
allowance
provision
2019
$’000
-
-
142
142
37
100
144
281
Gross amount
2020
$’000
5,108
1,796
373
2019
$’000
3,754
2,611
198
7,277
6,563
Liquidity risk
The Group manages liquidity risk by monitoring cash flow and maturity profiles of financial assets and
liabilities.
PAG E 69
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 23. 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 principal and interest 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 -2020
Non-derivatives
Non-interest bearing
Trade and other payables
-
6,873
20
-
Interest-bearing - fixed rate
Chattel mortgage
Related party loan
Lease liability
Total non-derivatives
Consolidated -2019
Non-derivatives
Non-interest bearing
Trade and other payables
Convertible note
Interest-bearing - fixed rate
Related party loan
Lease liability
Total non-derivatives
5.99%
2.46%
4.00%
101
579
1,248
8,801
101
167
1,308
1,596
404
475
1,285
2,164
-
-
150
-
6,893
606
1,371
3,841
150
12,711
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
-
-
6,848
500
-
-
-
-
-
-
6,848
500
2.80%
10.80%
292
441
8,081
146
420
566
438
622
1,060
132
-
132
1,008
1,483
9,839
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually dis-
closed above.
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.
70
Fair value of financial instruments
There were no financial instruments that are measured subsequent to initial recognition at fair value as at
reporting date.
The fair values of financial assets and liabilities, together with their carrying amounts in the statement of financial
position, for the consolidated entity are as follows:
Consolidated
Assets
Cash and cash equivalents
Trade and other receivables
Liabilities
Trade and other payables
Convertible note
Chattel mortgage
Lease liability
Related party loans
2020
2019
Carrying
amount
$’000
Fair value
$’000
Carrying
amount
$’000
Fair value
$’000
7,245
8,022
9,819
6,562
9,819
6,562
15,267
16,381
16,381
6,893
-
516
3,602
1,303
6,848
500
-
1,483
1,008
9,839
6,848
500
-
1,483
1,008
9,839
12,314
12,314
7,245
8,022
15,267
6,893
-
516
3,602
1,303
NOTE 24. 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 71
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 25. KEY MANAGEMENT PERSONNEL DISCLOSURES
Directors
The following persons were directors of Maggie Beer Holdings Limited during the financial year:
Reg Weine
Non-executive Chairman (appointed 13 March 2020)
Tom Kiing
Non-executive Director
Hugh Robertson
Non-executive Director
Maggie Beer AM Non-executive Director
Tony Robinson
Non-executive Chairman (retired 29 November 2019)
Laura McBain
Managing Director (resigned 27 November 2019)
Other key management personnel
The following persons 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:
Chantale Millard
Chief Executive Officer (appointed 2 December 2019)
Michael Caragounis
Chief Financial Officer (resigned 23 January 2020)
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
Long-term benefits
Share-based payments
Consolidated
2020
$
2019
$
1,178,472
803,355
47,772
-
60,000
50,460
2,060
80,144
1,286,244
936,019
72
NOTE 26. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by
PricewaterhouseCoopers, the auditor of the company:
Audit services - PricewaterhouseCoopers
Audit or review of the financial statements
Other services - PricewaterhouseCoopers
Other assurance services
Other services
Tax advisory
Consolidated
2020
$
2019
$
148,200
150,000
-
10,000
100,000
100,000
26,000
30,500
126,000
140,500
274,200
290,500
NOTE 27. CONTINGENT ASSETS
On 16 March 2020, an amicable resolution was reached with the vendors of B.-d Farms Paris Creek Pty
Ltd in regards to the Company’s Claim relating to particular warranties provided by the vendors as a part
of the acquisition of Paris Creek Farms. The matter was settled for $500,000 which has been recorded as
other income in the statement of profit and loss.
NOTE 28. COMMITMENTS
Lease commitments - operating
Committed at the reporting date but not recognised as liabilities,
payable:
Within one year
One to five years
Consolidated
2020
$
2019
$
-
-
-
753
1,927
2,680
Upon adoption AASB 16 from 1 July 2019, the majority of operating leases are now recognised on the
balance sheet.
PAG E 73
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 | NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 29. RELATED PARTY TRANSACTIONS
Parent entity
Maggie Beer Holdings Limited (previously Longtable Group Limited) is the parent entity of the consolidated
entity.
Subsidiaries
Interests in subsidiaries are set out in note 32.
Key management personnel
Disclosures relating to key management personnel are set out in note 25 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
2020
$
2019
$
171,913
71,463
657,804
157,104
128,627
39,548
During the previous financial year, the consolidated entity also paid or had payable $606,269 in relation
to insurance renewals and related services provided by an entity associated with Tony Robinson, PSC
Insurance Group Limited
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:
Consolidated
2020
$
2019
$
Current receivables:
Trade receivables from entities with common directorship
384
21,083
Current payables:
Trade payables to entities with common directorship
Trade payables to key management personnel
42,158
14,401
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.
74
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
2020
$
2019
$
Total borrowings:
Loan from entity with common directorship
1,303
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%.
On conversion of the 500,000 Convertible Note on 15 April 2020, the Group has funded $100,000
of the redemption amount out of the Group’s cash reserves, with the balance of $400,000 as loan funds
advanced by the Note Holder to the Group. The Group and the Note Holder have entered into a loan
agreement for the $400,000 loan, which is unsecured. The maturity date is 1 July 2021 and the interest rate
is 1.70%. The loan and accrued interest have been repaid on 20 August 2020.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
PAG E 75
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 30. 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
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Options reserve
Accumulated losses
Total equity
Contingent liabilities
2020
$’000
(14,982)
(14,982)
2019
$’000
(17,402)
(17,402)
2020
$’000
2019
$’000
9,263
11,769
57,393
71,776
1,586
1,379
2,097
1,396
120,695
120,695
1,634
1,721
(67,033)
(52,036)
55,296
70,380
There were no contingent liabilities of the company (2019: NIL).
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 (2019: 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 31. 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.
76
At the date of finalisation of the annual year report, the consolidated entity has 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 been definitively determined at the
end of the reporting pe-riod. 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.
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.
Following completion of acquisition accounting the following purchase price adjustments were made:
• an increase of other current assets acquired by $388,000;
• recognition and increase of liabilities by $1,104,000 in relation to deferred tax liabilities on intangibles
acquired;
• as a result of the adjustments above, a net increase in the amount allocated to goodwill of $716,000.
The fair values of the identifiable net assets acquired are detailed 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
Deferred tax liability
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid or payable to vendor
MBH shares issued to vendor
Value of MBH share issued at $0.63 (63 cents) per share*
Fair value
$’000
169
423
407
53
438
245
2,163
1,515
(436)
(725)
(1,104)
3,148
11,802
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 Combi-nation, 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 77
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 31.Business combinations (Continued)
The fair values of the identifiable net assets acquired are detailed below:
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, the Group 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 annual year report, the consolidated entity has 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 Maggie Beer Products Pty Ltd has been
definitively 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 val-ues 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.
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.
Following completion of acquisition accounting the following purchase price adjustments were made:
• an increase in the amount allocated to the brand intangible asset of $188,000;
• recognition and increase of the amount allocated to the customer contract intangible asset acquired of
$1,560,000;
• an increase in the deferred tax liability in relation to the changes in the acquired intangible assets of
$1,400,000;
• as a result of the adjustments above, a net decrease in the amount allocated to goodwill of $348,000.
78
Note 31.Business combinations (Continued)
The fair value of the identifiable net assets acquired are detailed below.
Cash and cash equivalents
Trade receivables
Inventories
Other current assets
Plant and equipment
Brand
Customers contracts
Other intangible assets
Trade payables
Borrowings
Employee benefits provision
Related party loans
Deferred tax liability
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
MBH shares issued to vendor**
MBH Convertible note***
i. Consideration transferred
Fair value
$’000
3,972
3,497
2,147
143
3,347
4,675
1,560
58
(1,602)
(1,139)
(481)
(977)
(1,400)
13,800
3,585
17,385
7,385
8,500
1,000
500
17,385
*
The company paid $10 million for the acquisition of the remaining 52% of the equity interest in MBP it did not
al-ready 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.
ii. Acquisition related costs
There were no material acquisition related costs incurred due to the existing ownership holding.
PAG E 79
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
Note 31.Business combinations (Continued)
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity in-struments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instru-ments 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
as-sumed 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 acquisi-tion-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 acquirer is recognised at the acquisition-date fair value.
Subse-quent 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 in-vestment 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 differ-ence is recognised as a gain directly in profit or loss by the acquirer on
the acquisition-date, but only after a reas-sessment of the identification and measurement of the net assets
acquired, the non-controlling interest in the ac-quiree, 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 provi-sional 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 measure-ment period ends on either the earlier of (i) 12 months from the date of the
acquisition or (ii) when the acquirer re-ceives all the information possible to determine fair value.
80
NOTE 32. INTERESTS IN SUBSIDIARIES
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 /
Country of incorporation
2020
%
Australia
Australia
Australia
100.00%
100.00%
100.00%
2019
%
100.00%
100.00%
100.00%
* Maggie Beer Holdings Limited (previously 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
NOTE 33. EVENTS AFTER THE REPORTING PERIOD
On 16 July 2020, the Company held a General Meeting of shareholders where the following resolutions
were approved by the shareholders:
• Change of name to Maggie Beer Holdings Limited
In accordance with the Boards strategy to refresh and enhance the Company’s brand, the name of the
company was changed from Longtable Group Limited to Maggie Beer Holdings Limited.
The Board believes that changing the name of the Company to Maggie Beer Holdings Limited better
reflects the Company’s core focus, whilst the Maggie Beer brand provides a premium halo for the
Company’s diverse product portfolio. Maggie Beer Holdings will be instantly recognised by shareholders,
employees, customers and consumers of the Company’s products. The Board hopes that the proposed new
name will help to facilitate an improved understanding of the Company’s businesses and our potential for
growth.
• Non-executive directors’ fees taken in shares
The Director Fees Plan was established to allow the Company’s directors to elect, from time to time, to be
paid their remuneration through the issue of Shares in the Company, rather than as a cash payment. The
Board believes the Director Fees Plan will form an important part of the remuneration for the Company’s
non-executive Directors that elect to participate in the Director Fees Plan, aligning their interests with those
of Shareholders by linking their remuneration to the long term success of the Company and its financial
performance.
• Chairman’s options
4,500,000 Options were issued to the Chairman, Reg Weine, under the Company’s Employee Share
Option Plan.
• Related party loan
The $400,000 related party loan (refer to note 16. Current liabilities - other current financial liabilities)
along with accrued interest have been repaid on 20 August 2020.
No other matter or circumstance has arisen since 30 June 2020 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.
PAG E 81
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 34
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-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
Decrease/(increase) in inventories
Decrease in deferred tax liabilities
Increase/(decrease) in other provisions
Decrease/Increase in trade creditors and accruals
Interest expense in finance costs
Consolidated
2020
$’000
2019
$’000
Restated
(14,754)
(21,656)
3,126
(87)
-
-
-
1,906
127
(474)
(2,004)
74
12,067
15,190
(558)
128
-
(354)
49
224
365
(86)
(2,504)
104
1,007
-
Net cash used in operating activities
(159)
(7,951)
Refer to note 4 for detailed information on Restatement of comparatives
Non-cash investing and financing activities consist of shares issued during the prior year as
consideration for business combinations, as disclosed in Note 32.
82
NOTE 35. EARNINGS PER SHARE
Loss after income tax attributable to the owners of Maggie Beer
Holdings Limited
Weighted average number of ordinary shares used in
calculating basic earnings per share
Consolidated
2020
$’000
2019
$’000
(14,754)
(21,656)
Number
Number
207,212,713
129,476,274
Weighted average number of ordinary shares used in
calculating diluted earnings per share
207,212,713
129,476,274
Basic earnings per share
Diluted earnings per share
Refer to note 4 for detailed information on Restatement of comparatives
Cents
(7.120)
(7.120)
Cents
(16.726)
(16.726)
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 Maggie Beer
Holdings 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.
PAG E 83
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
NOTES TO THE FINANCIAL
STATEMENTS 30 JUNE 2020
NOTE 36. SHARE-BASED PAYMENTS
The options and performance rights hold no voting or dividend rights and are not transferable.
Set out below is a summary of options outstanding at reporting date:
2020
Grant date
Vesting date
Exercise
price
Balance at the
start of the
year
Granted
Expired/forfeited/
other
Balance at
the end of
the year
17/12/2013 17/12/2019 $1.500
50,321
17/12/2013 17/12/2020 $1.500
50,321
07/08/2017 07/08/2017 $0.500 2,800,000
28/11/2018 30/06/2020 $0.750 1,132,000
28/11/2018 30/06/2021 $0.750 4,528,000
8,560,642
-
-
-
-
-
-
(50,321)
-
-
50,321
(2,800,000)
(1,132,000)
(4,528,000)
-
-
-
(8,510,321)
50,321
Options granted on 07/08/2017, which vested on the same day, have an expiry date of
27/05/2020, six months after Laura McBain’s resignation date.
Following Laura McBain and Michael Caragounis’ resignation on 27 November 2019 and
23 January 2020 respectively, the unvested options above have been forfeited.
2019
Grant date
Vesting date
Exercise
price
Balance at the
start of the
year
Granted
17/12/2013 17/12/2018
$1.500
50,321
17/12/2013 17/12/2019
$1.500
50,321
17/12/2013 17/12/2020
$1.500
50,321
07/08/2017 07/08/2017
$0.500 2,800,000
-
-
-
-
28/11/2018 30/06/2020
$0.750
28/11/2018 30/06/2021
$0.750
- 1,132,000
- 4,528,000
Expired/
forfeited/
other
(50,321)
-
-
Balance at the
end of the year
-
50,321
50,321
- 2,800,000
- 1,132,000
- 4,528,000
2,950,963 5,660,000
(50,321) 8,560,642
Set out below is a summary of the performance rights outstanding at reporting date:
Grant date
Vesting date
28/11/2018
30/06/2019
28/11/2018
30/06/2020
28/11/2018
30/06/2021
2020
number
-
15,666
31,334
2019
number
230,000
230,000
580,000
47,000
1,040,000
84
Options issued to previous Managing Director
There are no EPS hurdles attached to the options granted on 17 December 2013 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
$0.285 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.
b) 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.
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.
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, Chantale Millard 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 Rob-
inson 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 em-
ployee from a disposal of the loan funded shares and the distribution or after-tax amount in respect of a cash divi-dend
received by the employee in respect of the loan funded shares.
PAG E 85
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
DIRECTORS’ DECLARATION
30 JUNE 2020
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 posi-tion as at 30 June 2020 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 be-come 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
Reg Weine
Non-Executive Chairman
27 August 2020
86
Independent auditor’s report
To the members of Maggie Beer Holdings Limited (formerly known as Longtable Group Limited)
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Maggie Beer Holdings Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 30 June 2020 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 2020
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 consolidated 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 (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
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.
PAG E 87
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
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.
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
● For the purpose of our audit we used overall Group
● Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
● Maggie Beer Holdings Limited operates across
three operating segments with its head office
functions based in South Australia, Australia.
materiality of $445,000, which represents
approximately 1% of the Group’s total revenues.
● 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 chose Group total revenues because, in our
view, it is the benchmark against which the
performance of the Group is most commonly
measured.
● 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.
88
Key audit matter
How our audit addressed the key audit matter
Impairment assessment of the St David Dairy
Cash Generating Unit (CGU)
(Refer to note 14)
We performed the following procedures, amongst
others, on the impairment assessment of SDD cash
generating unit (CGU):
The Group acquired St David Dairy (“SDD”) in August
2018 and recognised goodwill of $11.8 million,
intangible assets of $3.7 million and other net liabilities
of $0.5 million.
The Group performed an impairment assessment of the
SDD assets using a value-in-use discounted cash flow
model and determined that no impairment is required.
In order to assess the recoverability of these assets, the
Group prepared a financial model to determine if the
carrying values were supported by forecast future cash
flows, discounted to present value (the "model").
We considered this to be a key audit matter because of
the financial significance of goodwill and other
intangibles recognised in the statement of financial
position and the level of judgement involved by the
Group in determining the assumptions used to perform
impairment testing.
●
●
●
assessed whether the SDD CGU included
assets, liabilities and cash flows directly
attributable to the CGU and a reasonable
allocation of corporate assets and overheads
considered whether the model was consistent
with the basis required by Australian
Accounting Standards
tested that forecast cash flows used in the
model were consistent with the most up-to-
date budget formally approved by the Board
● with the assistance of PwC valuation experts,
assessed whether the discount rate used in the
model were reasonable by comparing them to
market data, comparable companies and
industry research
●
●
●
●
compared the terminal growth rate used in
the model to historical growth rates achieved
and external economic forecasts
tested the mathematical accuracy of the
calculations in the model
evaluated the Group's ability to forecast future
cash flows by comparing historical budgets
with reported actual results
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.
Accounting for business combinations (Refer to
note 4 and note 31)
The Group acquired two businesses in the financial
year ended 30 June 2019 and were presented on a
provisional basis:
Our procedures in relation to the accounting for the
business combinations included amongst others:
PAG E 89
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
●
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.
In the year ended 30 June 2020, the Group made fair
value adjustments when finalising the accounting for
business combinations. The impact of these
adjustments is presented in note 4 where comparatives
have been restated to reflect the acquisition as if it had
been finalised at 30 June 2019.
We determined that this is a key audit matter due to
the materiality of the transactions, the judgement
involved in calculating the fair value of the net assets
acquired and resultant goodwill arising on the
acquisitions.
Other information
●
●
●
assessed the final valuation of identifiable
intangible assets and fair value of other assets
acquired
tested the mathematical accuracy of the
Group’s calculation of the resulting goodwill
arising on acquisition
assessed the accuracy and completeness of
business combination disclosures in the
financial statements, in light of the
requirements of Australian Accounting
Standards.
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 2020, 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.
90
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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 21 to 26 of the directors’ report for the year
ended 30 June 2020.
In our opinion, the remuneration report of Maggie Beer Holdings Limited for the year ended 30 June
2020 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
27 August 2020
PAG E 91
MAGGIE BEER HOLDINGS LIMITED | ANNUAL REPORT 2020 |
SHAREHOLDER INFORMATION
30 JUNE 2020
The shareholder information set out below was applicable as at 25 August 2020.
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 to10,000
10,001 to 100,000
100,001 and over
Number
of holders
of ordinary
shares
1,041
672
355
665
153
Number of ordinary
shares held
Percentage of
ordinary shares
held
259,918
1,880,927
2,736,148
21,584,223
180,801,075
0.13
0.91
1.32
10.41
87.23
2,886
207,262,291
100
Holding less than a marketable parcel
799
74,457
0.03%
1 - 1,000
1,001 - 5,000
5,001 to10,000
10,001 to 100,000
100,001 and over
Number
of option
holders
Number of
options held
Percentage
of options
held
Number of
performance
rights
holders
Number of
performance
rights held
Percentage
of
performance
rights held
-
-
-
1
1
1
-
-
-
50,321
-
-
-
1.11%
4,500,000
98.89%
4,550,321
-
-
-
2
-
2
-
-
-
-
-
-
31,334 100.00%
-
-
30,000
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Rubi Holdings Pty Ltd
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