annual rep ort
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 2 3
www.rarefoodsaustralia.com.au
© 2023 Rare Foods Australia (ASX: RFA). All Rights Reserved.
ACN 52 148 155 042 ∙ +61 8 6181 8888 ∙ Lot 331 Augusta Boat Harbour, Leeuwin Road Augusta WA 6290 ∙ info@rarefoods.com.au
Marine Custodians.
Working with nature for a sustainable future.
PROUD PARTNER
2
2 023 ANNUAL REP ORT
CONTENTS
2023 Highlights
A Message from our Chairman & CEO
Director’s Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Director’s Declaration
Independent Auditor’s Report
Additional Securities Exchange Information
Corporate Directory
4
6
8
23
24
25
26
27
28
60
61
65
68
RA RE FO ODS AU STRALIA
3
the year in review
COMPANY HIGHLIGHTS
SALES
95.5
TONNES
28%
INCREASE
FROM PRIOR YEAR
SALES REVENUE
$5.6
MILLION
40%
INCREASE
FROM PRIOR YEAR
PROCESSING FACILITY
THROUGHPUT
117
TONNES
24%
INCREASE
FROM PRIOR YEAR
4 2 023 ANNUAL REP ORT
4 2 023 ANNUAL REP ORT
2020
2021
2022
2023
2020
2021
2022
2023
2020
2021
2022
2023
48.4T
72T
74.4T
95.5T
2.5M
3.2M
3.9M
5.6M
57T
84T
94T
117T
primary geographical markets
NORTH AMERICA
2%
EUROPE
2%
ASIA
74%
AUSTRALIA
22%
73%
in cashflows
from operating
activities vs fy22
IMPROVEMENT (-$483k vs -$1.7M)
11%
INCREASE
in biomass value
vs fy22
($8.4M vs $7.6M)
RA RE FO ODS AU STRALIA
5
A MESSAGE FROM OUR
CHAIRMAN & CEO
It has been an outstanding year to be involved
with Rare Foods Australia as the entire team
has worked tirelessly to achieve record sales
and revenue while ensuring we can grow the
business.
Our people are the key to a sustainable and
growing business and despite skills shortages in
regional WA, we have attracted quality staff and
built our full-time employees by 30% over the
past year. This has allowed us to develop routines
that are achieving efficiency gains across the
organisation while putting us in an excellent
position to grow.
STRENGTHENING THE CORE BUSINESS
During the year we sold a record 87 tonnes of
Marine Stewardship Council (MSC) accredited
ranched greenlip abalone. Importantly for our
reputation and marketing efforts, the MSC
recognised our ranching process as a wild
enhanced and sustainable fishery, and we remain
the only fishery globally using these practices to
commercially produce greenlip abalone.
Our sales strategy, created by our Sales and
Marketing General Manager Alex Wilson,
is
underpinned by
relationships with Master
in selected regions. These are
Distributors
customers who book tonnage in our Forward
Order Book across a 12-to-24-month period and
distribute to wholesalers, allowing our business
to have streamlined sales channels.
During FY23 we broadened our abalone offerings
to include wild greenlip, brownlip and roei. We
sold a record 95.5 tonnes of abalone products
during FY23, 28% higher than the previous year’s
record. This led to record annual sales revenue of
$5.6 million, 40% higher than in FY22, a credit to
the entire Rare Foods team.
The average price received for abalone product
across FY23 was $54.7 per kg, with the MSC
accredited greenlip achieving $55.3 per kg, 8%
higher than FY22.
INCENTIVISED TO INNOVATE
Crucial to our business is our biomass growth, which
is the primary objective of our Operations team.
We collect 18-month-old
juveniles from our
strategic partner, 888 Abalone in Bremer Bay,
transport them approximately 500km to the
Augusta ranch and deploy them onto the reef
using our specialist Dive team. Those same
abalone are harvested about three years later.
juvenile
During FY23 we began
deployment practices and have enhanced those
practices to better track survival throughout
FY24.
improving
To further increase our biomass and harvest
tonnages we have been developing a data base
to help understand, daily, what is happening on
our reef. This feeds into our “Knowledge” and
“best management routine”, which is being
continuously refined as we gain more data and
insights.
Additionally, our data and the detailed planning
resulting from it which we provide to AusIndustry
thereby enables us to receive R&D tax incentives,
paid to us in cash.
SUSTAINABILITY HERO OF RARE
PRODUCTS FROM THE SOUTH-WEST
A highlight of the year was our founder and
Executive Director Corporate Development Brad
Adams winning the internationally recognised
Marine Stewardship Council (MSC) “Sustainability
Hero” award.
An Augusta-raised professional diver, Brad began
to witness rapidly declining wild abalone stocks
in Flinders Bay more than 20 years ago.
He then experimented tirelessly for more than
two decades to ensure the survival of the abalone
fishery and reinvigoration of the bay in the face
of an industry governed by stakeholders with
different agendas.
Brad’s work culminated in the development of
the commercial operations in Augusta that now
generate 16% of the world’s supply of wild greenlip
abalone and we see other marine life attracted
to the vibrant reef. Looking ahead, we have the
potential to significantly scale our harvests as we
are not subject to quotas.
6 2 023 ANNUAL REP ORT
6 2 023 ANNUAL REP ORT
STRATEGY FOR SCALING UP
The decision to rename our business to Rare
Foods Australia in 2021 was made to reflect
our goal to offer other sustainably produced,
premium foods from the pristine South-West
region of Western Australia.
In a region that offers a rich choice of such products,
we have been very discerning and focused on
investigating only a “chosen few” to which we
believe we can add value and that are scalable.
OUR LATEST INNOVATION
Our first foray into another product stream has
been Ocean Cellared wine which we successfully
trialled in 2020 with local winery Glenarty Road.
Ocean cellaring - or maturing wine on the seabed
- provides enriched flavours and the bottles
develop a light covering of barnacles and coral
which we call the “ocean signature”.
Aligning with our sustainability commitment,
ocean cellared wines also generate fewer carbon
emissions than those matured on land.
We now have formal agreements with Glenarty
Road and Edwards Wines to expand this business
for the local wines that can be sold at a very
attractive price.
We will have 2,300 bottles of our own product
available from November 2023 and are in the
final stages of planning a trial to significantly lift
production using a patented technique from the
Northern Hemisphere.
CASH TO UNDERPIN OUR STRATEGY
During FY23 we generated income of $7.5M and
incurred $8.0M in operating expenses for a net
cash outflow of $0.5M from operating activities.
This was a remarkable 73% improvement in
cashflow from our operating activities compared
to the previous year, and a credit to the entire
Rare Foods team.
Of the cash generated, $0.2M was invested
directly in growth initiatives. Another $0.6M was
invested on due diligence, with particular focus
on strengthening the core business through an
integrated supply chain and scaling the Ocean
Cellared activities.
To ensure we could pursue our growth initiatives
we extended our working capital facility with
the NAB to $2.5M and we ended FY23 with an
operating loss before tax of $0.69M.
EFFECTIVE COMMUNICATION WITH
SHAREHOLDERS AN ONGOING AIM
We now conduct a Quarterly forum with MST
Access, whom we engage to write research on us
to benefit the investment community. We have
noticed a steady increase in attendees to our
Quarterly Forum and if you are unable to join us
live, we encourage you to watch the recordings
online.
We urge all our shareholders to register their
email details with their brokers and follow us on
LinkedIn, Facebook, Instagram or X/Twitter so we
can keep you informed about our progress.
Wishing you all a successful FY24.
Our Sales and Marketing team has evolved
our Ocean Cellared brand and story, with a
preliminary strategy developed to leverage its
unique place in the market.
Yours sincerely,
Peter Harold
NON-EXECUTIVE CHAIRMAN
Rob Jorden
CHIEF EXECUTIVE OFFICER
RA RE FO ODS AU STRALIA
7
DIRECTOR’S REPORT
DIRECTOR’S REPORT
The Directors present the financial report for Rare Foods Australia Limited (formerly Ocean Grown Abalone Ltd.)
(the Company or RFA) and its subsidiaries (the Consolidated Group) for the year ended 30 June 2023.
DIRECTORS
The following persons were Directors of the Company during and up to the date of this report:
Peter Harold
Non-Executive Chairman
Bradley (Brad) Adams
Executive Director Corporate Development
Ignazio (Ian) Ricciardi
Non-Executive Director
Danielle Lee
Non-Executive Director
The qualifications and experience of the Directors and Company Secretary are as follows:
Mr. Peter Harold
Non-Executive Chairman – BAppSc (Chemistry) (Melb Uni), FAICD
Peter is the Managing Director of Poseidon Nickel Limited (ASX:POS) and is a process engineer with over 30
years of corporate experience in the minerals industry, specialising in financing, marketing, project
development and operating, business development and general corporate activities. Before joining
Poseidon, Peter was the Managing Director of Panoramic Resources Limited (ASX:PAN) for 18.5 years. Prior to
founding Panoramic Resources in March 2001, Peter held various senior management positions with Shell
Australia, Australian Consolidated Minerals Limited, Normandy Mining Limited, MPI Mines Limited and the
Gutnick network of companies. Peter is a past Chairman of Youth Focus, having served on the board for 9.5
years. Youth Focus is a not-for-profit charity working to prevent youth suicide and depression.
Special responsibilities:
• Chairman of the Board
• Member of the Remuneration and Nomination Committee
• Member of the Audit and Risk Committee
Other Public Company Directorships held in the past 3 years:
Company Name and Code
Position/s Held
Dates (month/year)
Poseidon Nickel Limited (ASX:POS)
Managing Director
Appointed: March 2020
Ceased: N/A
Mr. Brad Adams
Executive Director Corporate Development - BSc(Biology), G.Dip(Aqua) MBA
Brad is a third-generation fisherman and has worked as a commercial abalone diver along Western
Australia’s south coast for 13 years. In the 1990’s, Brad was involved in setting up one of Tasmania’s first
abalone farms – Tasmanian Tiger Abalone, which later became Cold Gold Abalone.
Brad has been actively involved in Abalone Aquaculture research and development in Western Australia
since 2000. Brad was a director of the Western Australian Fishing Industry Council from 2009 to 2011 and
Chairman from 2011 to 2013. He holds an MBA and Bachelor of Applied Science, Biology from Curtin University
of Technology and a Graduate Diploma, Aquaculture from the University of Tasmania. Brad has been a
Director of and served in an executive capacity for Rare Foods Australia Limited since July 2013.
Other Public Company Directorships held in the past 3 years:
Company Name and Code
Position/s Held
Dates (month/year)
N/A
N/A
N/A
8
2 02 3 A NNUA L RE P OR T
DIRECTOR’S REPORT
Mr. Ian Ricciardi
Non-Executive Director
Ian has been involved in the Western Australian Fishing Industry since 1975. Ian has worked on and operated
prawn trawlers in Shark Bay, Gulf of Carpentaria, and Kimberly Prawn Fisheries. Ian also has interests in the
South West Trawl Fishery, through One Sea Pty Ltd – Rottnest Island Scallop. The Ricciardi family built and
operated an export food processing facility in North Coogee and holds 50% interest in Fremantle City
Coldstores. Ian has significant experience in WA Commercial Fishery related processes and was a founding
investor and director of Great Southern Marine Hatcheries (GSMH), Two Oceans Abalone (TOA) and Rare
Foods Australia Ltd (RFA). Ian is also an active member of WAFIC Resource Access Advisory Committee
(RAAC) since 2019.
Special responsibilities:
• Member of the Remuneration and Nomination Committee
• Member of the Audit and Risk Committee
Other Public Company Directorships held in the past 3 years:
Company Name and Code
Position/s Held
Dates (month/year)
N/A
N/A
N/A
Ms. Danielle Lee
Non-Executive Director – B.Ec, LLB, GDipFinInv
Danielle is an experienced corporate lawyer with more than 25 years of experience. She has a broad range of
skills and legal experience in the areas of corporate advisory, governance and equity capital markets. She has
advised Australian public and private companies in a range of industries on corporate transactions including
capital raisings, ASX listings, business and share acquisitions, shareholder agreements and joint venture
agreements.
Special responsibilities:
• Chair of the Remuneration and Nomination Committee
• Chair of the Audit and Risk Committee
Other Public Company Directorships held in the past 3 years:
Company Name and Code
Position/s Held
Dates (month/year)
Hazer Group Limited (ASX:HZR)
Non-Executive Director
Openn Negotiation Limited (ASX:OPN) Non-Executive Director
Appointed: September 2015
Ceased: N/A
Appointed: March 2021
Ceased: May 2023
DIRECTOR’S INTERESTS
The relevant interests of each director in the securities of the Company as at 30 June 2023 are as follows:
Director
Peter Harold
Danielle Lee
Brad Adams
Ian Ricciardi
Shares
479,428
172,414
4,027,667
19,762,732
Options
Performance Rights
1,000,0001
1,000,0001
-
1,000,0003
-
-
1,570,3542
-
NOTE:
1. These Options are Series E Options and have an exercise price of 11.7 cents and an expiry date of 26 November 2024.
2. Refer to KMP Performance Rights for B Adams in the Remuneration Report (Audited) for further detail.
3. These Options are Series D Options and have an exercise price of 14.2 cents and an expiry date of 27 November 2023.
R A RE FOOD S A USTR A L IA
9
CHIEF EXECUTIVE OFFICER
Rob Jorden
Rob is an experienced change management professional having spent more than 30 years as a management
consultant, specialising in start-up and turnaround situations. He began his career in primary production and more
recently has been involved with various resource companies globally, including consulting to several ASX listed
mining companies. Rob’s previous role was with GPR Dehler Pty Ltd (GPR) where, as an Executive he ran Business
Development and Operations for Australasia, with a particular focus on developing and implementing effective
sales and marketing functions. He has significant expertise in organisational development and implementing new
systems and organisational structures to assist businesses in maximising their margins and realising their growth
potential.
COMPANY SECRETARY
Brent Stockden – BCom & CPA
Brent is a collaborative finance professional with more than 16 years’ experience in a broad range of leadership,
commercial services and corporate management roles. A former auditor of ASX listed entities, Brent has over a
decade of experience in managing high growth environments and developing high performing finance teams in
both ASX listed and private companies, over a broad range of industries. Brent is a member of CPA Australia and
has worked with the Company as Chief Financial Officer since April 2021 and Company Secretary from May 2021.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Group during the financial year, included the deployment,
maintenance of the artificial reef, harvesting, processing and distribution of the MSC accredited Greenlip abalone
from the ocean ranching operations in Flinders Bay, Augusta Western Australia.
During the period the Company was focused on optimising its core activities in the pursuit of production growth,
cost efficiencies and the development of new master distributors.
REVIEW OF OPERATIONS AND FINANCIAL RESULTS
The Group's major activities for the year were:
• deployment of the Greenlip juvenile abalone onto the artificial reef;
• maintenance of the reefs;
• harvesting of the Greenlip abalone;
• processing, and packaging;
• optimisation of existing operations;
• R&D focused on juvenile survival and improved abalone growth rates;
•
•
• pursuit of both organic and value accretive growth opportunities to strengthen and scale the business.
the design, construction and development of the Augusta retail outlet; and
the development of additional worldwide master distributors;
The sales revenue generated from the sale of abalone products, ocean cellaring and abalone processing services
totalled $5.56M for the year ended 30 June 2023 (2022: $3.97M), representing a significant 40% increase on the
prior year.
The Company undertook extensive due diligence on growth opportunities to strengthen and scale the core
business through FY23. In total $0.2M was spent on positioning the core business for growth and $0.6M was spent
directly on due diligence.
As a result, the Company incurred an operating loss before tax for the year ended 30 June 2023 of $0.69M (2022:
Operating profit before tax of $0.03M). The net loss of the Group for the year, after provision for income tax, was
$1.44M (2022: Net loss after provision for income tax was $0.85M).
10
2 02 3 A NNUA L RE P OR T
DIRECTOR’S REPORT
Operations
The Company’s MSC accredited operations recorded a biomass at the end of June 23 of 199 tonnes, (June 22; 203
tonnes) with the average harvest size of the abalone measuring 224g. This represents a 4% improvement on the
prior year (FY22: 215g) demonstrating the maturation of the Flinders Bay ranch. The biomass asset value increased
11% on FY22, to $8.4M (FY22: $7.6M). These increases were underpinned by an 8% increase in the average sale price
per kg and a 27% reduction in the cost to harvest, process and distribute the product.
A total 81 tonnes (FY22: 81.7 tonnes) of abalone was harvested for the year. The harvest was managed to fulfil current
customer demand and ensure biomass growth to meet the growing FY24 forward order book.
Our specialist dive team deployed a total of 1.22M juvenile abalone onto the artificial reef in line with FY22 numbers
of 1.27M. R&D work continued with the main focus on improving juvenile abalone survival and lifting growth rates.
With improved practices implemented to undertake recruitment, onboarding, and induction the Company
continued to attract quality staff despite regional skill shortages. This work resulted in a 30% lift in full-time
employees over the course of FY23.
The Company’s purpose-built processing facility on the Augusta Boat Harbour processed and packed a record 117
tonnes of abalone product for FY23, a 24% improvement on prior year that delivered additional revenue, improved
asset utilisation and supported the development of the Company’s people.
The sales volume of 95.5 tonnes (FY22; 74.1 tonnes) of abalone product generated $5.36M of revenue and represents
a 29% uplift in quantity sold. When combined with ocean cellaring and abalone processing services, the Company
achieved a 40% improvement in revenues generated compared to FY22 (FY23: $5.56M vs FY22: $3.97M).
Corporate
During the year the Company’s executive and management team led the implementation of the strategic choices
aimed at further reducing business risk, lifting internal capabilities to continually improve the core business,
generate greater margins and pursuing new revenue initiatives.
Clarity of focus and priorities has allowed the Company’s executive team the time to pursue value additional
growth opportunities aimed at significantly scaling the business.
DIVIDEND PAID OR RECOMMENDED
During the financial year, the Company did not declare or pay any dividends.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There are no other significant changes in the state of affairs of the Company for the financial year, which affects the
operations of the Group, the results of those operations or the state of affairs of the Group in future financial years.
EVENTS ARISING SINCE THE END OF THE REPORTING PERIOD
There are no other significant matters sufficiently advanced or at a level of certainty since the end of the financial
year, which affects the operations of the Group, the results of those operations or the state of affairs of the Group
in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue to pursue its strategic choices to:
• pursue R&D to improve abalone production;
• develop additional master distributors and further diversify bulk clients;
• grow the retail and tourism presence;
•
seek increase earnings through additional aligned rare products;
•
•
review options to deliver value from aquaculture precinct land in Esperance;
research other rare product supply chains in the premium southwest of Western Australia that could
rapidly add value for Rare Foods; and
• pursue value accretive merger and acquisition opportunities to strengthen and grow the business.
R A RE FOOD S A USTR A L IA
11
OPTIONS
At the date of this report, the unissued ordinary shares of Rare Foods Australia Limited under option are as follows:
Grant date
Class
Expiry date
Exercise price
Number of options
27 Nov 2020
26 Nov 2021
26 Nov 2021
D
E
E
27 Nov 2023
26 Nov 2024
26 Nov 2024
$0.142
$0.117
$0.117
1,000,000
1,000,000
1,000,000
TOTAL
3,000,000
All of these options remained outstanding at balance date.
PERFORMANCE RIGHTS
At the date of this report, the unissued ordinary shares of Rare Foods Australia Limited under performance rights
are as follows:
Class
Grant date
Value per share
Number of
performance rights
E
F
26 Nov 2021 - 10 Dec 2021
$0.075-$0.080
26 Nov 2021 - 10 Dec 2021
$0.075-$0.080
3,669,422
3,669,422
TOTAL
7,338,844
All of these performance rights remained outstanding at balance date.
DIRECTORS’ MEETINGS
The number of Directors’ Meetings (including meetings of Committees of Directors) held during the year, and the
number of meetings attended by each Director is as follows:
Director’s Name
Board Meetings
Audit and Risk
Committee
Nomination and
Remuneration Committee
Peter Harold
Danielle Lee
Brad Adams
Ian Ricciardi
Where:
A
9
9
9
9
B
9
9
8
9
A
2
2
2*
2
B
2
2
2*
2
A
1
1
-
1
B
1
1
-
1
• column A is the number of meetings the Director was entitled to attend; and
• column B is the number of meetings the Director attended.
•
* Attended meetings by invitation.
REMUNERATION REPORT (AUDITED)
This remuneration report, which forms part of the directors’ report, sets out information about the remuneration
of Rare Foods Australia Limited’s key management personnel for the financial year ended 30 June 2023. The term
‘key management personnel’ (‘KMP’) refers to those persons having authority and responsibility for planning,
directing and controlling the activities of the Consolidated Group, directly or indirectly, including any director
(whether executive or otherwise) of the Consolidated Group.
12
2 02 3 A NNUA L RE P OR T
DIRECTOR’S REPORT
KEY MANAGEMENT PERSONNEL
The directors and other key management personnel of the Consolidated Group during or since the end of the
financial year were:
Non-Executive Directors
Peter Harold
Ian Ricciardi
Danielle Lee
Executive Officers
Rob Jorden
Brad Adams
Chairman, Non-Executive Director
Non-Executive Director
Non-Executive Director
Position
Position
Chief Executive Officer
Executive Director - Corporate Development
Brent Stockden
Chief Financial Officer, Company Secretary and Commercial Services Manager
Except as noted, the named persons held their current position for the whole of the financial year and since the
end of the financial year.
REMUNERATION POLICY AND PRINCIPLES
Executive Director Remuneration
Executive pay and reward consist of a base fee and short-term performance incentives. Long term performance
incentives may include options granted at the discretion of the Board and subject to obtaining the relevant
approvals. The grant of options is designed to recognise and reward efforts as well as to provide additional
incentive and may be subject to the successful completion of performance hurdles.
Executives are offered a competitive level of base pay at market rates (for comparable companies) and are
reviewed annually to ensure market competitiveness.
The remuneration policy is designed to encourage superior performance and long-term commitment to the
Company. At this stage of the Company’s development there is no contractual performance-based remuneration.
Non-Executive Director Remuneration
The Company's policy is to remunerate non-executive Directors at a fixed fee for time, commitment and
responsibilities. Remuneration for Non-Executive Directors is not linked to individual performance. Given the
Company is at its early stage of development and the financial restrictions placed on it, the Company may consider
it appropriate to issue unlisted options to Non-Executive Directors, subject to obtaining the relevant approvals.
This Policy is subject to annual review. All of the Directors' option holdings are fully disclosed. From time to time
the Company may grant options to non-executive Directors. The grant of options is designed to recognise and
reward efforts as well as to provide Non-Executive Directors with additional incentive to continue those efforts for
the benefit of the Company.
Non-Executive Directors are remunerated for their services from the maximum aggregate amount (currently
$300,000 per annum) approved by shareholders for this purpose. They receive a base fee which is currently set at
$50,000 including superannuation per annum per non-executive Director and $60,000 including superannuation
per annum for the non-executive Chairman. There are no termination payments to non-executive Directors on
their retirement from office.
From 9 April 2020, all Directors and Executive Management at the time, agreed to reduce their base employment
benefits and directors' fees by 10% to assist in mitigating the costs of the COVID-19 pandemic. To date that variation
has not been reversed.
Executive Officer Remuneration, excluding Executive Directors
The remuneration structure for Executive Officers, excluding Executive Directors, is based on several factors,
including length of service, the particular experience of the individual concerned, and the overall performance of
the Company. The contracts for service between the Company and specified Executives are on a continuing basis,
the terms of which are not expected to change in the immediate future. Upon retirement, Executives are paid
employee benefit entitlements accrued to the date of retirement.
As an incentive, the Company has adopted an employee incentive scheme. The purpose of the employee incentive
scheme is to give employees an opportunity, in the form of performance rights, to subscribe for shares. The
R A RE FOOD S A USTR A L IA
13
Directors consider the plan will enable the Company to retain and attract skilled and experienced employees and
officers and provide them with the motivation to make the Company more successful.
To ensure the executive reward framework is competitive and appropriate for the results delivered, the Board has
appointed a Remuneration and Nomination Committee to assist the Board by making recommendations on
remuneration packages for the Groups KMP’s.
The Remuneration and Nomination Committee is responsible for ensuring the KMP’s reward framework aligns
executive reward with the achievement of strategic objectives and the creation of value for shareholders. The
Board seeks to ensure that KMP’s reward is consistent with the following:
• All KMP receive a base salary (which is based on factors such as length of service and experience),
superannuation, fringe benefits, options and performance incentives.
• Performance incentives are generally only paid once predetermined key performance indicators (KPIs)
•
have been met.
Incentives paid in the form of options or rights are intended to align the interests of the directors and
Company with those of the shareholders.
• The remuneration committee reviews KMP packages annually by reference to the Consolidated Group's
performance, executive performance and comparable information from industry sectors.
The performance of KMPs is measured against criteria agreed with each executive and is focused on increasing
shareholder value. All bonuses and incentives are linked to predetermined performance criteria. The Board may,
however, exercise its discretion in relation to approving incentives, bonuses, options or performance rights and
can recommend changes to the committee's recommendations. The policy is designed to reward executives for
performance leading to long-term growth in shareholder wealth.
Performance-based Remuneration
Employee performance against their respective accountabilities is assessed annually, with measures specifically
tailored to the area each individual is involved in and has a level of control over. Performance-based remuneration
is aligned with target areas the Board believes hold the greatest potential to increase shareholder value, covering
financial and non-financial as well as short and long-term goals.
Performance in relation to accountabilities and the Company budget are assessed annually and in line with the
performance windows established as part of the employee incentive scheme. The remuneration committee
review the assessment and provide a recommendation to the Board in light of the desired and actual outcomes.
Relationship between remuneration policy and Company performance
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives.
Rare Foods Australia Limited is in the early development phase of its operations, and due consideration is made
of developing long term shareholder value. The Board has regard to the following indices in respect of the current
financial year to facilitate the long-term growth of the Consolidated Group:
Item
Sales Revenue ($)
Biomass (Tonnes)
Harvest (Tonnes)
2023
2022
2021
2020
2019
5,561,924
3,976,069
3,287,058
2,529,832
3,059,756
199
81.0
203
81.7
210
75.9
247
54.7
235
55.0
Profit/(Loss) Before Tax ($)
(686,880)
34,974
(1,775,605)
(5,805,552)
2,370,024
Basic earnings per share (Cents)
Increase/(decrease) in share price (%)
(0.71)
2.9%
(0.43)
(10%)
(0.84)
(2.40)
0.59
(17.9%)
(35.9%)
(14.3%)
Performance Conditions Linked to Remuneration
The Consolidated Group seeks to emphasise reward incentives for results and continued commitment to the
Consolidated Group through the provision of various reward schemes.
The performance-related proportions of remuneration based on these targets are included in the following table.
The objective of the reward schemes is to reinforce the short and long-term goals of the Consolidated Group and
provide a common interest between management and shareholders.
14
2 02 3 A NNUA L RE P OR T
DIRECTOR’S REPORT
Employment Details of Members of Key Management Personnel
The following table provides employment details of persons who were, during the financial year, members of KMP
of the Consolidated Group. The table also illustrates the proportion of remuneration that was performance and
non-performance based.
Short-term employee benefits
Salary &
fees
$
Cash
Bonus
$
Non-
monetary
$
Other
$
2023
Post-
employment
benefits
Super-
annuation
$
Long-term
employee
benefits
Long Service
Leave
$
Share
Based
payments
Options
& Rights
Performance
Related
Total
%
Non-executive directors
P Harold1
D Lee1
I Ricciardi1
49,315
41,096
41,096
Executive directors
B Adams1
245,003
Executive officers
R Jorden
B Stockden
245,000
220,000
Total
841,510
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,178
4,315
4,315
-
-
-
-
-
-
54,493
45,411
45,411
27,704
18,849
27,8342
319,390
25,725
23,100
-
-
30,1282
26,7812
300,853
269,881
90,337
18,849
84,743
1,035,439
-
-
-
9
10
10
8
1 From 9 April 2020, all Directors and Executive Management at the time, agreed to reduce their base employment benefits and directors'
fees by 10% to assist in mitigating the costs of the COVID-19 pandemic.
2 Brad Adams, Rob Jorden & Brent Stockden were granted Class E & F performance rights in FY22. Refer performance rights details below.
Short-term employee benefits
Salary &
fees
$
Cash
Bonus
$
Non-
monetary
$
Other
$
2022
Post-
employment
benefits
Super-
annuation
$
Long-term
employee
benefits
Long Service
Leave
$
Share
Based
payments
Options
& Rights
Performance
Related
Total
%
Non-executive directors
P Harold4
D Lee4
I Ricciardi4
49,315
41,096
98,4882
Executive directors
B Adams4
235,982
-
Executive officers
R Jorden
B Stockden
234,486
205,760
Total
865,127
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,932
4,110
4,110
23,827
25,442
21,231
83,652
-
-
-
-
-
-
-
20,7331
20,7331
-
74,980
65,939
102,598
9,8543
269,663
10,0733
8,9533
270,001
235,944
70,346
1,019,125
28
31
-
4
4
4
7
1 Options were granted as part of remuneration/achievement of short-term incentives at an exercise price of $0.117.
2 Ian Ricciardi is a NED and from time to time also provided consulting services totalling $57,392 during the financial year.
3 Brad Adams, Rob Jorden & Brent Stockden were granted Class E & F performance rights. Refer performance rights details below.
4 From 9 April 2020, all Directors and Executive Management at the time, agreed to reduce their base employment benefits and
directors' fees by 10% to assist in mitigating the costs of the COVID-19 pandemic.
R A RE FOOD S A USTR A L IA
15
The following table provides employment details of persons who were, during the financial year, members of KMP
of the Consolidated Group. The table also illustrates the proportion of remuneration that was performance and
non-performance based.
Position Held
as at 30 June 2023
Contract Details
(Duration and Notice Period)
Proportions of
Elements of
Remuneration Related
to Performance (Other
than Performance
Rights & Options
Issued)
Annual
Salary
including
Superann
uation
Proportions of
Elements of
Remuneration
Not Related to
Performance
Non-salary
Cash-based
Incentives
%
Shares
/Units
%
Fixed Salary
/Fees
%
2023
Non-executive directors
P Harold
Chairman
No fixed term. No notice period.
$54,493
D Lee
Non-Executive Director
No fixed term. No notice period.
$45,411
I Ricciardi
Non-Executive Director
No fixed term. No notice period.
$45,411
Executive officers
R Jorden
Chief Executive Officer
No fixed term. 6 months’ notice.
$270,725
B Adams
Executive Director Corporate
Development
No fixed term. 6 months’ notice.
$270,725
B Stockden Chief Financial Officer & Co. Sec No fixed term. 6 months’ notice.
$243,100
-
-
-
-
-
-
-
-
-
-
-
-
100
100
100
100
100
100
The employment terms and conditions of all KMP are formalised in contracts of employment.
Cash Bonuses, Performance-related Bonuses and Share-based Payments
The following table summarises the performance-related holdings for 2023:
Remuneration
Type
No.
Grant
Date
Fair
Value
$
Percentage
Vested/Paid
during Year
%
Percentage
Forfeited
during Year
%
Percentage
Remaining
as Unvested
%
Expiry Date
for Vesting
or Payment
P Harold
Options1
1,000,000 26/11/21 20,733
D Lee
Options1
1,000,000 26/11/21 20,733
B Adams
Performance Rights2
1,570,354 26/11/21
117,776
I Ricciardi
Options
-
-
-
R Jorden
Performance Rights2
1,570,354
10/12/21 125,628
B Stockden Performance Rights2
1,395,870
10/12/21
111,670
100
100
-
-
-
-
-
-
-
-
-
-
-
-
100
-
100
100
26/11/24
26/11/24
30/6/25
-
30/6/25
30/6/25
1 Options were granted as part of remuneration/achievement of short-term incentives at an exercise price of $0.117. Refer KMP options
details below.
2 Brad Adams, Rob Jorden & Brent Stockden were granted Class E & F performance rights. Refer KMP performance rights details below.
16
2 02 3 A NNUA L RE P OR T
DIRECTOR’S REPORT
KMP Options
Peter Harold & Danielle Lee
1,000,000 unlisted options were issued in FY2022 to both Peter Harold and Danielle Lee, pursuant to the
Company’s Employee Incentive Plan, each exercisable at 11.7 cents on or before 26 November 2024. The fair value
at grant date of the options of $41,466, was estimated using the Black and Scholes option valuation method with
the following inputs:
Input
Grant date
Exercise price
Term of option
Share price at grant date
Expected share price volatility
Risk free interest rate
26 Nov 2021
11.7 cents
3 years
7.5 cents
60%
0.96%
Ian Ricciardi
1,000,000 unlisted options were issued in FY2021 to Ian Ricciardi, pursuant to the Company’s Employee Incentive
Plan, each exercisable at 14.27 cents on or before 27 November 2023. The fair value at grant date of the options of
$29,376, was estimated using the Black and Scholes option valuation method with the following inputs:
Input
Grant date
Exercise price
Term of option
Share price at grant date
Expected share price volatility
Risk free interest rate
27 Nov 2020
14.2 cents
3 years
9.6 cents
63%
0.10%
KMP Performance Rights
Brad Adams
The Company previously issued 1,570,354 Performance Rights to Brad Adams, in the role of Executive Director
Corporate Development. The Performance Rights have been issued in 2 classes with 785,177 shares in each class
and subject to separate service and performance conditions as detailed below:
Number of
Performance Rights
Class E
785,177
Service Condition
Performance Condition
Brad Adams to remain
engaged as an
employee for a
continuous period, for
the 2-year period from 1
July 2021 to 30 June
2023; and;
a. The achievement of harvest targets on the Flinders Bay
operation. The proportion of performance rights available
to vest following a determination of the harvest over the
2-year performance period from 1 July 2021 to 30 June
2023 is summarised as follows:
i. Less than 160,000 kgs = 0%
ii. Greater than 160,000 kgs up to 170,000 kgs = Pro-
rata from 50% to 99%
iii. Greater than 170,000 kgs = 100%
b. An alternative performance hurdle to the harvest target,
is a Takeover Event occurring on or before 30 June 2023.
R A RE FOOD S A USTR A L IA
17
Number of
Performance Rights
Class F
785,177
Service Condition
Performance Condition
Brad Adams to remain
engaged as an
employee for a
continuous period, for
the 2-year period from 1
July 2021 to 30 June
2023; and;
a.
The achievement of EBIT targets from the Company’s
operations for the 2-year performance period. The
proportion of performance rights available to vest following
a determination of the EBIT, over the 2-year performance
period from 1 July 2021 to 30 June 2023 is summarised as
follows:
i. Less than or equal to $400,000 = 0%
ii. Greater than $400,000 up to $1,300,000 = Pro-rata
from 50% to 99%
iii. Greater than $1,300,000 = 100%
b. An alternative performance hurdle to the harvest target,
is a Takeover Event occurring on or before 30 June 2023.
For the purposes of the financial statements, the Group has recognised a share-based payment expense for the
relevant performance period, based on the assessed probability of the relevant performance conditions being met.
The probability assessment of the respective performance conditions, are set out below:
(iii) Class E – based on the Company’s assessment, the probability of achieving the applicable performance
condition was considered to be 64% as at 30 June 2023.
(iii) Class F – based on the Company’s assessment, the probability of achieving the applicable performance
condition was considered to be less than 0% as at 30 June 2023.
The performance period for both Class E and Class F performance rights ended on 30 June 2023, management
expect 64% of Class E and 0% of Class F to vest. The percentage vested is ultimately at the discretion of the Board
who have not met to make their determination at the date of the financial statements being issued.
Rob Jorden
The Company previously issued 1,570,354 Performance Rights to Rob Jorden, in the role of Chief Executive Officer.
The Performance Rights have been issued in 2 classes with 785,177 shares in each class and subject to separate
service and performance conditions as detailed below:
Number of
Performance Rights
Class E
785,177
Service Condition
Performance Condition
Rob Jorden to remain
engaged as an
employee for a
continuous period, for
the 2-year period from 1
July 2021 to 30 June
2023; and;
a.
The achievement of harvest targets on the Flinders Bay
operation. The proportion of performance rights available
to vest following a determination of the harvest over the
2-year performance period from 1 July 2021 to 30 June
2023 is summarised as follows:
i. Less than 160,000 kgs = 0%
ii. Greater than 160,000 kgs up to 170,000 kgs = Pro-
rata from 50% to 99%
iii. Greater than 170,000 kgs = 100%
b. An alternative performance hurdle to the harvest target,
is a Takeover Event occurring on or before 30 June 2023.
18
2 02 3 A NNUA L RE P OR T
DIRECTOR’S REPORT
Number of
Performance Rights
Class F
785,177
Service Condition
Performance Condition
Rob Jorden to remain
engaged as an
employee for a
continuous period, for
the 2-year period from 1
July 2021 to 30 June
2023; and;
a.
The achievement of EBIT targets from the Company’s
operations for the 2-year performance period. The
proportion of performance rights available to vest
following a determination of the EBIT, over the 2-year
performance period from 1 July 2021 to 30 June 2023 is
summarised as follows:
i. Less than or equal to $400,000 = 0%
ii. Greater than $400,000 up to $1,300,000 = Pro-rata
from 50% to 99%
iii. Greater than $1,300,000 = 100%
b. An alternative performance hurdle to the harvest target,
is a Takeover Event occurring on or before 30 June 2023.
For the purposes of the financial statements, the Group has recognised a share-based payment expense for the
relevant performance period, based on the assessed probability of the relevant performance conditions being met.
The probability assessment of the respective performance conditions, are set out below:
(iii) Class E – based on the Company’s assessment, the probability of achieving the applicable performance
condition was considered to be 64% as at 30 June 2023.
(iii) Class F – based on the Company’s assessment, the probability of achieving the applicable performance
condition was considered to be less than 0% as at 30 June 2023.
The performance period for both Class E and Class F performance rights ended on 30 June 2023, management
expect 64% of Class E and 0% of Class F to vest. The percentage vested is ultimately at the discretion of the Board
who have not met to make their determination at the date of the financial statements being issued.
Brent Stockden
The Company previously issued 1,395,870 Performance Rights to Brent Stockden, in the role of Chief Financial
Officer, Company Secretary & Commercial Manager. The Performance Rights have been issued in 2 classes with
697,935 shares in each class and subject to separate service and performance conditions as detailed below:
Number of
Performance Rights
Class E
697,935
Service Condition
Performance Condition
Brent Stockden to
remain engaged as an
employee for a
continuous period, for
the 2-year period from 1
July 2021 to 30 June
2023; and;
a.
The achievement of harvest targets on the Flinders Bay
operation. The proportion of performance rights available
to vest following a determination of the harvest over the
2-year performance period from 1 July 2021 to 30 June
2023 is summarised as follows:
i. Less than 160,000 kgs = 0%
ii. Greater than 160,000 kgs up to 170,000 kgs = Pro-
rata from 50% to 99%
iii. Greater than 170,000 kgs = 100%
b. An alternative performance hurdle to the harvest target,
is a Takeover Event occurring on or before 30 June 2023.
R A RE FOOD S A USTR A L IA
19
Number of
Performance Rights
Class F
697,935
Service Condition
Performance Condition
Brent Stockden to
remain engaged as an
employee for a
continuous period, for
the 2-year period from 1
July 2021 to 30 June
2023; and;
a.
The achievement of EBIT targets from the Company’s
operations for the 2-year performance period. The
proportion of performance rights available to vest
following a determination of the EBIT, over the 2-year
performance period from 1 July 2021 to 30 June 2023 is
summarised as follows:
i. Less than or equal to $400,000 = 0%
ii. Greater than $400,000 up to $1,300,000 = Pro-rata
from 50% to 99%
iii. Greater than $1,300,000 = 100%
b. An alternative performance hurdle to the harvest target,
is a Takeover Event occurring on or before 30 June 2023.
For the purposes of the financial statements, the Group has recognised a share-based payment expense for the
relevant performance period, based on the assessed probability of the relevant performance conditions being met.
The probability assessment of the respective performance conditions, are set out below:
(iii) Class E – based on the Company’s assessment, the probability of achieving the applicable performance
condition was considered to be 64% as at 30 June 2023.
(iii) Class F – based on the Company’s assessment, the probability of achieving the applicable performance
condition was considered to be less than 0% as at 30 June 2023.
The performance period for both Class E and Class F performance rights ended on 30 June 2023, management
expect 64% of Class E and 0% of Class F to vest. The percentage vested is ultimately at the discretion of the Board
who have not met to make their determination at the date of the financial statements being issued.
During the reporting period, no other KMP were issued Performance Rights.
KMP Shareholdings
KMP ordinary shares held
The number of ordinary shares held by each of the KMP’s in Rare Foods Australia Limited at 30 June 2023 is as follows:
2023
P Harold
D Lee
I Ricciardi
B Adams
R Jorden
B Stockden
Balance At
Beginning of Year
Granted As Remuneration
During the Year
Other Changes
During the Year
Balance At
End of Year
135,000
-
19,586,372
4,777,667
-
-
24,499,039
-
-
-
-
-
-
-
344,4281
172,4141
176,3602
(750,000)3
172,4144
-
115,616
479,428
172,414
19,762,732
4,027,667
172,414
-
24,614,655
1 Acquisition of 344,428 shares by Non-Executive Director Peter Harold and 172,414 shares by Non-Executive Director Danielle Lee were
purchased off-market as announced to the market on 12th July 2022.
2 Acquisition of 31,751 shares by Non-Executive Director Ian Ricciardi were purchased on market on 1 July 2022 followed by an off-market
acquisition of 144,609 shares as announced to the market on 12th July 2022.
3 Disposal of 750,000 shares on 15 September 2021 were sold off-market to Alex Wilson, General Manager Sales and Marketing, to fund
personal tax obligations arising from conversion of performance rights.
4 Acquisition of 172,414 shares by Chief Executive Officer Rob Jorden were purchased off-market on 8 July 2022.
20
2 02 3 A NNUA L RE P OR T
DIRECTOR’S REPORT
KMP performance rights held
The number of performance rights held by each of the KMP’s in Rare Foods Australia Limited at 30 June 2023 is as follows:
2023
P Harold
D Lee
I Ricciardi
B Adams
R Jorden
B Stockden
Balance At
Beginning of Year
Granted As Remuneration
During the Year
Other Changes
During the Year
Balance At
End of Year
-
-
-
5,570,354
1,570,354
1,395,870
8,536,578
-
-
-
-
-
-
-
-
-
-
(4,000,000)1
-
-
(4,000,000)
-
-
-
1,570,354
1,570,354
1,395,870
4,536,578
1 Class C incentive performance rights granted to Brad Adams lapsed in November 2022. Refer to KMP Performance Rights below.
KMP Options Held
The number of options held by each of the KMP’s in Rare Foods Australia Limited at 30 June 2023 is as follows:
2023
P Harold
D Lee
B Adams
I Ricciardi
R Jorden
B Stockden
Balance At
Beginning of Year
Granted As Remuneration
During the Year
Other Changes
During the Year
Balance At
End of Year
1,000,000
1,000,000
-
1,000,000
-
-
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
-
1,000,000
-
-
3,000,000
Other Equity-related KMP Transactions
There have been no other transactions involving equity instruments apart from those described in the tables above
relating to options, rights and shareholdings.
Other Transactions with KMP and/or their Related Parties
There have been no other transactions with KMP and/or their Related parties that are not covered in other sections
of this report for the year 30 June 2023.
Voting Rights
At the 2022 Annual General Meeting held on 25 November 2022 there were 1% of the votes against the adoption
of the remuneration report.
External Remuneration Consultants
No external remuneration consultants were utilised during the year.
End of the audited remuneration report
R A RE FOOD S A USTR A L IA
21
ENVIRONMENTAL REGULATIONS
The Company’s operations are subject to environmental regulations under Western Australian law. The
Consolidated Group has procedures in place to ensure regulations are adhered to. The Consolidated Group is not
aware of any breaches in relation to environmental matters.
PROCEEDINGS ON BEHALF OF COMPANY
No legal proceedings have been brought against the Company to the date of this report.
CORPORATE GOVERNANCE
The Company’s Corporate Governance Statement is contained in the ‘Corporate Governance’ section of the
Company’s website at https://rarefoodsaustralia.com.au/investor-reports/#corporate-governance.
INDEMNIFICATION AND INSURANCE OF OFFICERS AND DIRECTORS
The Company has made agreements indemnifying all the Directors and Officers of the Consolidated Group against
all losses or liabilities incurred by each Director or Officer in their capacity as Directors or Officers of the
Consolidated Group to the extent permitted by the Corporations Act 2001. The Company paid insurance premiums
in respect of Directors’ and Officers’ Liability Insurance contracts for current officers of the Consolidated Group.
The liabilities insured are damages and legal costs that may be incurred in defending civil or criminal proceedings
that may be brought against the Officers in their capacity as officers of entities in the Group. The total amount of
insurance premiums paid has not been disclosed due to confidentiality reasons.
AUDIT AND NON-AUDIT SERVICES
The Board of Directors, in accordance with advice from the Audit and Risk Committee, is satisfied the provision of
audit and non-audit services during the year is compatible with the general standard of independence of auditors
imposed by the Corporations Act 2001. There were no non-audit services provided by the auditors during the year.
All services provided by the external auditor or associates are reviewed and approved by the Audit and Risk
Committee and/or the Board to ensure they do not adversely affect the integrity and objectivity of the auditor.
During the period BDO Corporate Tax (WA) Pty Ltd was paid $55,801 for the provision of taxation & R&D services
(2022: $61,912). BDO Corporate Finance (WA) Pty Ltd was paid $143,623 for due diligence and financial modelling
support (2022: $10,500). BDO Corporate Tax (WA) Pty Ltd and BDO Corporate Finance (WA) Pty Ltd are affiliate
members of BDO Audit (WA) Pty Ltd. Refer to Note 21 for further details.
The board of directors has considered the position and is satisfied the provision of the non-audit services is
compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The
directors are satisfied the provision of non-audit services by the auditor, as set out in Note 21, did not compromise
the auditor independence requirements of the Corporations Act 2001 for the following reasons:
• all non-audit services have been reviewed by the board to ensure they do not impact the impartiality
and objectivity of the auditor
• none of the services undermine the general principles relating to auditor independence as set out in
APES 110 Code of Ethics for Professional Accountants
INDEMNIFYING OF AUDITORS
No indemnities have been given, or insurance premiums paid, during or since the end of the financial year, for any
person who is or has been an Auditor of the Company.
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 on page 23 of this report.
Signed in accordance with a resolution of the Directors.
Peter Harold
NON-EXECUTIVE CHAIRMAN
31 August 2023
22
2 02 3 A NNUA L RE P OR T
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
R A RE FOOD S A USTR A L IA
23
CONSOLIDATED STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Revenue
Other income
Net interest paid/received (excluding interest expense on lease liability)
Research and development tax incentive
Total income
Changes in inventory
Fair value adjustment of biological assets
Selling & distribution
Processing expenses
Employee benefits expense
Share-based payments
Diving, vessels & operations expense
Corporate & administration
Depreciation & amortisation expense
Interest expense on lease liability
Other expenses
Notes
Consolidated Group
2023
2022
$
$
3
4(a)
4(b)
8
25
11(c)
5,561,924
187,734
(46,923)
1,807,831
7,510,566
(4,939,098)
2,980,490
(335,075)
(94,836)
(3,197,601)
(142,889)
(433,306)
(1,394,669)
(515,979)
(21,336)
(103,147)
(8,197,446)
3,976,069
173,382
(2,907)
1,829,733
5,976,277
(2,442,041)
2,011,870
(220,824)
(151,387)
(2,712,797)
(83,939)
(669,652)
(928,291)
(619,713)
(23,769)
(100,760)
(5,941,303)
Profit / (Loss) before income tax
(686,880)
34,974
Income tax (expense)/benefit
(Loss) after tax from continuing operations
5(a)
(758,605)
(1,445,485)
(889,946)
(854,972)
Other comprehensive loss for the year, net of tax:
- Items that may be reclassified to profit or loss
- Items that will not be reclassified to profit or loss
-
-
-
-
Total comprehensive (loss)/profit for the year
(1,445,485)
(854,972)
(Loss) attributable to:
- Owners of the Company
- Non-controlling interests
Total comprehensive (loss) attributable to:
- Owners of the Company
- Non-controlling interests
(1,444,577)
(908)
(853,430)
(1,542)
(1,445,485)
(854,972)
(1,444,577)
(908)
(853,430)
(1,542)
(1,445,485)
(854,972)
Basic and diluted (loss) per share attributable to the Owners of the Company
Basic and diluted (loss) per share (cents)
22
(0.71)
(0.43)
The accompanying notes form part of these financial statements.
24
2 02 3 A NNUA L RE P OR T
CONSOLIDATED STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Biological assets
Inventory
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Biological assets
Right-of-use assets
Intangible assets
Other assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest bearing liabilities
Lease liabilities
Provisions
Current tax liability
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing liabilities
Lease liabilities
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share-based payment reserve
Accumulated losses
Equity attributable to owners of the Company
Non-controlling interests
TOTAL EQUITY
Notes
6
7
8
9
10
8
11(a)
15
12
13
11(b)
14
5
13
11(b)
15
16
17
18
Consolidated Group
2023
$
19,996
2,175,449
4,315,500
687,329
299,258
2022
$
795,183
2,095,802
3,701,700
836,899
239,348
7,497,532
7,668,932
4,234,806
4,102,531
348,666
90,459
309,136
13,474
4,189,108
3,864,984
375,774
97,682
208,038
69,857
9,099,072
8,805,443
16,596,604
16,474,375
989,404
735,658
26,857
215,538
-
758,385
309,472
21,857
219,329
18,971
1,967,457
1,328,014
382,455
427,416
2,040,574
395,204
458,116
1,328,743
2,850,445
2,182,063
4,817,902
3,510,077
11,778,702
12,964,298
27,129,442
1,308,103
(16,646,370)
11,791,175
(12,473)
27,012,442
1,165,214
(15,201,793)
12,975,863
(11,565)
11,778,702
12,964,298
The accompanying notes form part of these financial statements.
R A RE FOOD S A USTR A L IA
25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated Group
Issued
Capital
Share-
based
Payments
Reserve
Accumulated
Losses
Total
Non-
controlling
interest
Total
Equity
$
$
$
$
$
$
Balance as at 1 July 2021
27,012,442
1,081,275
(14,348,363)
13,745,354
(10,023)
13,735,331
Loss after income tax
benefit for the year
Other comprehensive loss
for the year
Total comprehensive loss
for the year
Transactions with owners
recorded directly in equity
Director options issued
Performance Rights Issued
Total transactions with
owners recorded directly in
equity
Balance as at 30 June
2022
-
-
-
(853,430)
(853,430)
(1,542)
(854,972)
-
-
-
-
-
-
-
(853,430)
(853,430)
(1,542)
(854,972)
-
-
41,466
42,473
-
-
41,466
42,473
-
-
41,466
42,473
-
83,939
-
83,939
-
83,939
27,012,442
1,165,214
(15,201,793)
12,975,863
(11,565)
12,964,298
Balance as at 1 July 2022
27,012,442
1,165,214
(15,201,793)
12,975,863
(11,565)
12,964,298
Loss after income tax
benefit for the year
Other comprehensive loss
for the year
Total comprehensive loss
for the year
Transactions with owners
recorded directly in equity
Director options issued
Performance Rights Issued
Equity issued to service
providers
Total transactions with
owners recorded directly in
equity
Balance as at 30 June
2023
-
-
-
(1,444,577)
(1,444,577)
(908)
(1,445,485)
-
-
-
-
-
-
-
(1,444,577)
(1,444,577)
(908)
(1,445,485)
-
-
-
142,889
117,000
-
-
-
-
-
142,889
117,000
-
-
-
-
142,889
117,000
117,000
142,889
-
259,889
-
259,889
27,129,442
1,308,103
(16,646,370)
11,791,175
(12,473)
11,778,702
The accompanying notes form part of these financial statements.
26
2 02 3 A NNUA L RE P OR T
CONSOLIDATED STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash flows from operating activities
Receipts from customers
Other income
Payments to suppliers and employees
R&D tax incentive
Notes
Consolidated Group
2023
$
2022
$
5,547,930
115,909
(7,976,642)
1,829,733
3,878,310
317,551
(6,933,844)
981,264
Net cash (used in) operating activities
27
(483,070)
(1,756,719)
Cash flows from investing activities
Purchases of plant, equipment and intangible assets
Proceeds from disposals of plant, equipment and intangible assets
Receipt of lease deposits
Interest received
Esperance JV development
(630,401)
22,136
-
1,753
-
(744,574)
26,000
190
6,640
(798)
Net cash (used in) investing activities
(606,512)
(712,542)
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liability
Interest paid
519,612
(457,084)
(25,700)
(70,441)
734,325
(58,084)
(91,112)
(33,366)
Net cash provided by / (used in) financing activities
(33,613)
551,763
Net (decrease) in cash and cash equivalents
(1,123,194)
(1,917,498)
Cash and cash equivalents at the beginning of the year
795,183
2,712,681
Cash and cash equivalents at the end of the year
6, 13
(328,011)
795,183
The accompanying notes form part of these financial statements.
R A RE FOOD S A USTR A L IA
27
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
NOTE 1. NATURE OF OPERATIONS OF RARE FOODS AUSTRALIA LIMITED
Rare Foods Australia Limited (the Company) and its wholly owned subsidiaries’ (the Group) principal activities
during the year included the harvesting of abalone, maintenance of our artificial reef, deployment of juvenile
abalone to promote future harvest production and optimisation of our processing and distribution practices from
our sea ranching operation in Flinders Bay, Augusta Western Australia.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Statement of compliance
These consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. These consolidated financial statements also comply with
International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).
B. Basis of measurement
The financial report is prepared on the accruals basis and the historical cost basis, modified, where applicable, by
the measurement at fair value of selected financial assets and financial liabilities. The financial statements are
presented in Australian dollars, and all values are rounded to the nearest dollar unless otherwise stated.
C. Basis of preparation
i. General purpose financial report
The consolidated general purpose financial report of the Group has been prepared in accordance with the
requirements of the Corporations Act 2001, applicable Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. Rare Foods Australia Limited is the Group’s
ultimate parent company and is a for-profit entity for the purpose of preparing the financial statements. The
Company is a public company limited by shares, incorporated and domiciled in Australia.
The consolidated financial statements for the financial year ended 30 June 2023 were approved and authorised
for issue by the Board of Directors on 31st August 2023.
The financial statements have been prepared using the measurement bases specified by Australian Accounting
Standards for each type of asset, liability, income and expense. The measurement bases are more fully described
in the accounting policies below.
D. Basis of Consolidation
The Group financial statements consolidate those of the parent company and its subsidiaries. The parent controls
a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the
ability to affect those returns through its power over the subsidiary. A list of subsidiaries is provided in Note 31. All
subsidiaries have a reporting date of 30 June.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated
financial statements as well as their results for the year then ended. Profit or loss and other comprehensive income
of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up
to the effective date of disposal, as applicable.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised
gains and losses on transactions between Group companies. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with those adopted by the parent entity.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-
controlling interests”. The Group initially recognises non-controlling interests that are present ownership interests
in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair
value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial
recognition, non-controlling interest are attributed their share of profit or loss and each component of
comprehensive income. Non-controlling interests are shown separately within the equity section of the statement
of financial position and statement of comprehensive income.
28
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
E. Foreign currency translation
Foreign currency transactions during the period are converted to Australian currency using the exchange rates
prevailing at the dates of the transactions. Amounts receivable and payable in foreign currency at balance date
are also converted at the spot rate at each reporting date.
Realised exchange gains and losses during the period are included in the operating profit before income tax as
they arise. Unrealised exchange gains and losses at balance date are included in the operating profit before
income tax to the extent that their realisation is certain.
F. Revenue
Revenue is recognised when or as a performance obligation in the contract with customer is satisfied, i.e. when
the control of the goods or services underlying the particular performance obligation is transferred to the
customer. A performance obligation is a promise to transfer a distinct goods or service (or a series of distinct goods
or services that are substantially the same and that have the same pattern of transfer) to the customer that is
explicitly stated in the contract and implied in the Group's customary business practices.
Revenue is measured at the amount of consideration to which the Group expects to be entitled in exchange for
transferring the promised goods or services to the customers, excluding amounts collected on behalf of third parties
such as sales taxes or services taxes. If the amount of consideration varies due to discounts, rebates, refunds, credits,
incentives, penalties or other similar items, the Group estimates the amount of consideration to which it will be
entitled based on the expected value or the most likely outcome. If the contract with customer contains more than
one performance obligation, the amount of consideration is allocated to each performance obligation based on the
relative stand-alone selling prices of the goods or services promised in the contract. Revenue is recognised to the
extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not
occur when the uncertainty associated with the variable consideration is subsequently resolved.
The control of the promised goods or services may be transferred over time or at a point in time. The control over
the goods or services is transferred over time and revenue is recognised over time if:
1.
2.
3.
the customer simultaneously receives and consumes the benefits provided by the Group's performance
as the Group performs;
the Group's performance creates or enhances an asset that the customer controls as the asset is created
or enhanced; or
the Group's performance does not create an asset with an alternative use and the Group has an
enforceable right to payment for performance completed to date.
Revenue for performance obligations that are not satisfied over time is recognised at the point in time at which
the customer obtains control of the promised goods or services.
i.
Sale of Abalone products
Revenue from sales of Abalone products is recognised at the point in time when control of the asset is transferred
to the customer, i.e. point of delivery of goods to the customer.
ii. Sales of service (processing)
Revenue from rendering processing service is recognised upon the delivery of service to the customers.
iii. Research and development tax incentives
Refund amounts received or receivable under the Federal Government’s Research and Development Tax
Incentives are recognised on an accrual basis.
iv. Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the Group will comply with all attached conditions. Government grants relating to costs are
deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are
intended to compensate. Government grants relating to the purchase of property, plant and equipment are
included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over
the expected lives of the related assets.
R A RE FOOD S A USTR A L IA
29
G. Financial instruments
Financial assets
Initial recognition and measurement
Financial assets are classified at initial recognition and subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. With the exception of trade receivables that do
not contain a significant financing component or for which the Group has applied the practical expedient, the Group
initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit
or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the
Group has applied the practical expedient are measured at the transaction price determined under AASB 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to
give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount
outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual
cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation
or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the
Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Financial assets at amortised cost (debt instruments)
• Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt
instruments)
• Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses
upon derecognition (equity instruments)
• Financial assets at fair value through profit or loss
The Group’s financial assets at amortised cost includes trade receivables.
Financial assets at amortised cost (debt instruments)
The Group measures financial assets at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to
collect contractual cash flows; and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding
Financial assets at fair value through OCI (debt instruments)
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
• The financial asset is held within a business model with the objective of both holding to collect
contractual cash flows and selling and
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment
losses or reversals are recognised in the statement of profit or loss and computed in the same manner as for
financial assets measured at amortised cost.
The remaining fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change
recognised in OCI is recycled to profit or loss.
30
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under AASB 132 Financial
Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-
instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other
income in the statement of profit or loss when the right of payment has been established, except when the Group
benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are
recorded in OCI. Equity instruments designated at fair value through OCI are not subject to impairment assessment.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets
designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to
be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified
as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows
that are not solely payments of principal and interest are classified and measured at fair value through profit or
loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at
amortised cost or at fair value through OCI, as described above, debt instruments may be designated at fair value
through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value
with net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and listed equity investments which the Group had not irrevocably
elected to classify at fair value through OCI. Dividends on listed equity investments are also recognised as other
income in the statement of profit or loss when the right of payment has been established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the
host and accounted for as a separate derivative if: the economic characteristics and risks are not closely related to
the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are
measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is
either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be
required or a reclassification of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately.
The financial asset host together with the embedded derivative is required to be classified in its entirety as a
financial asset at fair value through profit or loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is
primarily derecognised (i.e., removed from the Group’s consolidated statement of financial position) when:
• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to
pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement
or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
and either (a) the Group has transferred substantially all the risks and rewards of the asset,
;
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the
asset, the Group continues to recognise the transferred asset to the extent of its continuing involvement. In that
case, the Group also recognises an associated liability. The transferred asset and the associated liability are
measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of
the original carrying amount of the asset and the maximum amount of consideration that the Group could be
required to repay.
R A RE FOOD S A USTR A L IA
31
Impairment of financial assets
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance
with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the
original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or
other credit enhancements that are integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore,
the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at
each reporting date. The Group has established a provision matrix that is based on its historical credit loss
experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
For debt instruments at fair value through OCI, the Group applies the low credit risk simplification. At every
reporting date, the Group evaluates whether the debt instrument is considered to have low credit risk using all
reasonable and supportable information that is available without undue cost or effort. In making that evaluation,
the Group reassesses the internal credit rating of the debt instrument. In addition, the Group considers that there
has been a significant increase in credit risk when contractual payments are more than 30 days past due.
The Group considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Group may also consider a financial asset to be in default when internal or external information
indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts,
and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near
term. This category also includes derivative financial instruments entered into by the Group that are not
designated as hedging instruments in hedge relationships as defined by AASB 9. Separated embedded derivatives
are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the
initial date of recognition, and only if the criteria in AASB 9 are satisfied. The Group has not designated any financial
liability as at fair value through profit or loss.
32
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that
are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs
in the statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms,
or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of
financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
H. Employee benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees
to balance date. Employee benefits that are expected to be settled within one year have been measured at the
amounts expected to be paid when the liability is settled, plus related on-costs. 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.
I.
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The Group’s subsidiaries, together with the Company, intend to form a tax consolidated group for income tax
purposes with Rare Foods Australia Ltd. as the Head Company. These entities form part of the tax funding and
sharing agreement. In accordance with the tax funding agreement, the current and deferred tax balances are
recognised by each party using a modified standalone payer allocation approach. The Head Company recognises
current tax liabilities or assets, and deferred tax arising from unused tax losses and unused relevant tax credits,
assumed from the tax funding contributing members. The contributing members recognise deferred taxes
relating to temporary differences. The assets or liabilities arising under tax funding agreements with the tax
consolidated entities are recognised as amounts receivable from or payable to other entities in the tax
consolidated group. The tax funding arrangement ensures that the intercompany charge equals the current tax
liability or benefit of each tax consolidated group member, resulting in neither a contribution by the head entity
to the subsidiaries nor a distribution by the subsidiaries to the head entity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However,
deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax
is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
R A RE FOOD S A USTR A L IA
33
the end of the reporting period and are expected to apply when the related deferred income tax asset is realised
or the deferred income tax liability is settled.
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.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive
income or directly in equity, respectively.
J. Good and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
K. Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position includes cash on hand, deposits held at call with
banks and other highly liquid investments that are readily convertible into known amounts of cash and which are
subject to an insignificant risk of changes in value. For the purposes of the Statement of Cash Flows, cash and cash
equivalents are as described above.
L. Trade and other receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of
business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade
receivables are recognised initially at the amount of consideration that is unconditional unless they contain
significant financing components, when they are recognised at fair value. The group holds the trade receivables
with the objective to collect the contractual cash flows and therefore measures them subsequently at amortised
cost using the effective interest method. Details about the group’s impairment policies and the calculation of the
expected credit loss allowance are provided in note 2(g).
M. Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match
them with the costs that they are intended to compensate.
N. Inventories
Inventories are measured at the lower of cost and net realisable value. Costs include all expenses directly attributable to
the manufacturing process. Costs are assigned on the basis of weighted average costs. In the case of abalone stock,
upon harvest the stock is transferred from Biological Assets to Inventory at a revised cost value, being the carrying value
previously determined for that stock in accordance with the AASB 141 (refer Note 2(p) below). Net realisable value is the
estimated selling price in the ordinary course of business less any applicable selling expense.
O. Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
•
•
leases of low value assets; and
leases with a term of 12 months or less.
34
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease
term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the
case) this is not readily determinable, in which case the group’s incremental borrowing rate on commencement
of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they
depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable
element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the
period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
•
•
•
amounts expected to be payable under any residual value guarantee;
the exercise price of any purchase option granted in favour of the group if it is reasonable certain to
assess that option; and
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis
of termination option being exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives
received, and increased for:
•
•
•
lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised where the group is required to dismantle, remove or restore the
leased asset.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on
the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a
straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely,
this is judged to be shorter than the lease term.
When the group revises its estimate of the term of any lease (because, for example, it re-assesses the probability
of a lessee extension or termination option being exercised), it adjusts the carrying amount of the lease liability to
reflect the payments to make over the revised term, which are discounted using a revised discount rate (being the
interest rate implicit in the lease for the remainder of the lease term or, if that cannot be readily determined, the
Group’s incremental borrowing rate at the re-assessment date). An equivalent adjustment is made to the carrying
value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised)
lease term.
The carrying value of lease liabilities is also revised when the variable element of future lease payments dependent
on a rate or index is revised or there is a revision to the estimate of amounts payable under a residual value
guarantee. In both cases an unchanged discount rate is used. In both cases an equivalent adjustment is made to
the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining
(revised) lease term.
When the group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the
nature of the modification:
•
•
•
if the renegotiation results in one or more additional assets being leased for an amount commensurate
with the standalone price for the additional rights-of-use obtained, the modification is accounted for as a
separate lease in accordance with the above policy
in all other cases where the renegotiated increases the scope of the lease (whether that is an extension to the
lease term, or one or more additional assets being leased), the lease liability is remeasured using the discount
rate applicable on the modification date, with the right-of-use asset being adjusted by the same amount.
if the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease
liability and right-of-use asset are reduced by the same proportion to reflect the partial of full termination
of the lease with any difference recognised in profit or loss. The lease liability is then further adjusted to
ensure its carrying amount reflects the amount of the renegotiated payments over the renegotiated term,
with the modified lease payments discounted at the rate applicable on the modification date. The right-
of-use asset is adjusted by the same amount.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis
as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets
are items such as IT-equipment and small items of office furniture.
R A RE FOOD S A USTR A L IA
35
P. Biological Assets
Biological assets comprise abalone stock located on Abitats.
Pursuant to AASB 141 Agriculture standard, abalone stock are valued at the end of each half and full-year reporting
periods at their fair value less costs to sell. Where fair value cannot be reliably measured, biological assets are
measured at cost less impairment losses.
For abalone stock below 90mm (~120g whole weight), these biological assets are measured at cost as the Company
considers that the fair value for this stock cannot be reliably measured on the basis that its commercial sales are
only for product above this size threshold.
Abalone stock above 90mm (~120g whole weight) are measured at fair value less cost to sell. The valuation takes
into consideration estimated growth rates and mortality (refer Note 2(u) for a description of the methodology used
for the estimation of growth rates and mortality rates). The market prices are derived from observable market
prices (when available) and realised prices. The prices are reduced for estimated harvesting costs, processing costs,
freight costs and other selling costs, to determine the net fair value.
The net increase / (decrease) in the fair value of abalone stock at period end is recognised as income / (expense) in
the profit and loss.
Q. Property, plant and equipment
Property, plant and equipment is initially recognised at acquisition cost or manufacturing cost, including any costs
directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating
in a manner intended by the Group’s management. These assets are subsequently measured at cost less and
depreciation and impairment losses.
Repairs and maintenance expenditure is charged to the Statement of Profit or Loss and Other Comprehensive
Income during the financial period in which it is incurred.
Depreciation
The depreciable amount of fixed assets are depreciated on either a diminishing value (DV) method or on a straight-
line (SL) basis over their useful lives to the Group commencing from the time the asset is held ready for use. The
following depreciation rates were applied during the financial period:
• Plant and equipment
13 - 20% SL
•
•
IT & Office equipment
10% - 50% DV
Land & Buildings
4 - 13% SL
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
Derecognition
Additions of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected from its use or disposal. Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains and losses are recognised in the Statement of Profit or Loss and
Other Comprehensive Income.
Impairment
Carrying values of plant and equipment are reviewed at each balance date to determine whether there are any
objective indicators of impairment that may indicate the carrying values may be impaired.
R. Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Company prior to the end
of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of
recognition.
36
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
S. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid
on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
T. Provisions
Provisions are recognised when the entity has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
U. Critical accounting estimates and judgments
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the entity and that are believed to be
reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Biological Assets
Biological assets are measured at fair value less cost to sell in accordance with AASB 141. Abalone stock below
90mm (~120g) are measured at the same rate per mm as the rate charged to the Company by the supplier.
Management estimates this is a more accurate reflection of fair value as it takes into consideration growth rates
from approximately 40mm to 90mm.
Abalone stock above 90mm (120g) is measured at fair value in accordance with AASB 141. Management estimates
the fair value of biological assets, taking into account the most reliable evidence available at each reporting date
in relation to the underlying assumptions, including mortality rates, growth rates, calculation of biomass, harvest
costs, processing costs, selling costs and market prices.
Biomass is calculated using a size/weight algorithm derived from industry reports. In relation to the assumptions
underlying mortality rates and growth rates, from which the stock estimates are extrapolated, including biomass,
these are updated following each six-monthly survival count and size class measurements. The bi-annual stock
counts and measurements are taken over approximately 6% of the entire ranch, which has been determined to
be a statistically relevant sample size.
The future realisation of these biological assets may be affected by any variance between actual results and the
assumptions relied upon.
Net realisable value of inventories
The net realisable value of inventories assessment required a degree of estimation and judgement by taking into
account the recent sales experience, the ageing of inventories and other factors that affect inventory obsolescence.
The quality of inventory is also taken into account in the assessment of net realisable value.
Share based payments
The fair value of equity instruments provided to Directors, employees and services providers are calculated from
the date they are granted utilising the Black and Scholes option pricing model. The fair value of the equity-settled
share-based payments is expensed on a straight-line basis over the vesting period, based on management’s
estimate of the probability that shares that will eventually vest. For the purposes of the financial statements, the
Group has recognised a share-based payment expense for the relevant performance period, based on the assessed
probability of the relevant performance conditions being met.
Fair value measurement hierarchy
The consolidated entity is required to classify all assets and liabilities, measured at fair value, using a three level
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1:
Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date; Level 2: Inputs other than quoted prices included within Level 1 that are observable for the
R A RE FOOD S A USTR A L IA
37
asset or liability, either directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. Considerable
judgement is required to determine what is significant to fair value and therefore which category the asset or
liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models. These include
discounted cash flow analysis or the use of observable inputs that require significant adjustments based on
unobservable inputs.
Impairment
In assessing impairment, management estimates the recoverable amount of each asset or cash generating unit based
on expected future cash flows and uses an interest rate to discount them (where applicable). Estimation uncertainty
relates to assumptions about future operating results and the determination of a suitable discount rate (if applicable).
Useful life of depreciable assets
Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the
expected useful life of the assets. Uncertainties in these estimates include assessing the impact of the Company’s
operating environment and technical and other forms of obsolescence.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is
estimated to discount future lease payments to measure the present value of the lease liability at the lease
commencement date. Such a rate is based on what the entity estimates it would have to pay a third party to
borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar terms,
security and economic environment.
V. Going concern
The financial statements for the year ended 30 June 2023 have been prepared on the basis that the group is a
going concern and therefore, contemplates the continuity of normal business activity, realisation of assets and
settlement of liabilities in the normal course of business.
During the year the group recorded a net loss after tax of $1,445,485 (2022: net loss after tax $854,972) and had net
cash outflows from operating activities of $483,070 (2022: $1,756,719 net cash outflows). At balance date the group
has working capital of $5,530,075 (2022: $5,338,580).
These conditions indicate a material uncertainty that may cast a significant doubt about the Group's ability to
continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities
in the normal course of business.
The Group’s ability to continue as a going concern is dependent upon meeting future revenue and harvesting
targets, its ability to generate cash flow through its business operations and the ability to raise additional finance
from debt or equity if and when required, to contribute to the Group’s working capital position. The Directors
continue to be focused on meeting the Group’s business objectives and are mindful of the funding requirements
to meet these objectives.
The Directors at the date of preparing these annual accounts, have reasonable grounds to believe that the Group
will continue as a going concern, dependent on the following:
•
The International market for abalone maintaining existing demand levels resulting in the achievement
of future sales targets;
• Receipting the annual Ausindustry research and development refund included within the receivables
balance as at 30 June 2023.
•
•
Scaling back certain activities that are non-essential so as to conserve cash; and
The ability to raise additional finance from debt or equity if and when required, to contribute to the
Group’s working capital position.
Should the entity not be able to continue as a going concern it may be required to realise its assets and discharge
its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements. The financial report does not include any adjustments relating to the recoverability or
classification of recorded asset amounts, nor the amounts or classification of liabilities that might be necessary
should the Group not be able to continue as a going concern.
38
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
W. Share-based payments
The Company provides benefits to senior executives of the Company in the form of share-based payments. The
cost of these share-based payments is measured by reference to the fair value of the equity instruments at the
date at which they are granted. The fair value at grant date is measured by use of the Black and Scholes option
pricing model. The expected life used in the model has 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 entity’s estimate of shares that will eventually vest.
X. New accounting standards and interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2023.
There are no other significant Australian Accounting Standards and Interpretations that were recently issued or
amended but are not yet effective and have not been early adopted by the Group for the year ended 30 June 2023.
NOTE 3. REVENUE
Revenue for the reporting period consisted of the following:
Sales
Juvenile Sales
Wild Origin Sales
Sale of abalone products
Ocean Cellar Sales
Processing revenue
Primary geographical markets
Asia
Australia
Europe
North America
Major goods/service lines
By-product
IQF meat
Juvenile abalone
Live abalone
Processing
Retail
Whole frozen abalone
Timing of revenue recognition
Goods or services transferred at a point in time
Goods or services transferred over time
Consolidated Group
2023
$
2022
$
4,942,789
-
416,311
5,359,100
6,409
196,415
3,864,241
7,377
27,746
3,899,364
-
76,705
5,561,924
3,976,069
4,099,988
1,245,464
126,430
90,042
3,021,878
656,636
280,340
17,215
5,561,924
3,976,069
779
4,623,979
-
12,600
196,415
143,797
584,354
76,751
2,951,642
7,377
3,073
76,705
3,900
856,621
5,561,924
3,976,069
5,561,924
-
3,976,069
-
Processing revenue relates to processing activities undertaken for third party customers.
Major customer information
72% of the Group's revenue was attributable to 1 major customer (2022: 61% from 1 customer).
R A RE FOOD S A USTR A L IA
39
NOTE 4. OTHER INCOME
(a) Other revenue for the reporting period consisted of the following:
Government grants
Miscellaneous
Consolidated Group
2023
2022
$
$
118,755
68,979
30,000
143,382
187,734
173,382
(b) Research and Development Tax Incentive
Accrued during the year (refer also Note 7)
1,807,831
1,829,733
1,807,831
1,829,733
NOTE 5.
INCOME TAX
(a) The components of tax expense comprise:
Current income tax
Current income tax expense
Adjustments in respect of current income tax of previous years
Deferred income tax
Relating to the origination and reversal of temporary differences
Adjustments for prior period & movements in deferred taxes not
recognised
Total income tax expense / (benefit) from continuing operations
Deferred income tax (income)/expense included in income tax
expense comprises:
-
(9,563)
183
(1,078)
776,889
(8,721)
758,605
833,908
56,933
889,946
Decrease / (Increase) in deferred tax assets/(liabilities)
768,214
890,842
768,214
890,842
(b) Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period
and not recognised in net profit or loss or other comprehensive
income but directly debited or (credited) to equity.
Net deferred tax
107,225
107,225
(55,424)
(55,424)
(c) The prima facie tax on profit from ordinary activities before
income tax is reconciled to the income tax expense as follows:
(Loss)/Profit Before Income Tax
(686,880)
34,974
Prima facie tax payable on profit from ordinary activities before
income tax at 25% (2022: 26%)
(171,720)
8,744
40
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5.
INCOME TAX (CONTINUED)
Add:
Tax effect of:
- Research & Development Expenditure: Non-deductible
- Other non-deductible permanent adjustments
- Adjustments for prior period & movements in deferred taxes not
recognised
- Tax loss recognised
Less:
Tax effect of:
- Adjustments for current tax of prior period
- Income not assessable for income tax purposes
Income tax (benefit)/expense
Consolidated Group
2023
$
2022
$
1,234,605
165,962
(8,721)
-
1,391,846
1,259,324
23,458
56,934
-
1,348,459
(9,563)
(451,958)
758,605
(1,078)
(457,433)
889,947
The applicable weighted average effective tax rates are as follows:
105%
2,545%
NOTE 6. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Reconciliation to Cashflow Statement
Cash Balances as above
NAB Business Market Loan Overdraft
Balances per statement of cash flows
NOTE 7. TRADE AND OTHER RECEIVABLES
Trade debtors
Sundry & other debtors
GST receivable
19,996
19,996
19,996
(348,007)
(328,011)
795,183
795,183
795,183
-
795,183
146,494
1,974,781
54,174
132,500
1,932,267
31,035
2,175,449
2,095,802
At the reporting date, none of the trade and other receivables were past due or impaired.
Sundry & other debtors for the 2023 financial year represents the research and development tax incentive
for the year of $1,807,831 and $136,950 other debtors (2022: research and development tax incentive
$1,829,722 and $102,545 other debtors).
NOTE 8. BIOLOGICAL ASSETS
CURRENT
Fair Value of Abalone on Abitats
NON CURRENT
Fair Value of Abalone on Abitats
4,315,500
3,701,700
4,315,500
3,701,700
4,102,531
3,864,984
4,102,531
3,864,984
R A RE FOOD S A USTR A L IA
41
NOTE 8. BIOLOGICAL ASSETS (CONTINUED)
The carrying value of abalone on hand at year end was
calculated as follows:
Opening balance
Increases due to purchases
Decreases due to harvest for processing to inventory
Fair value adjustment at year end recognised in profit and loss
Closing balance
Consolidated Group
2023
$
2022
$
7,566,684
1,752,606
(3,881,750)
2,980,490
6,273,395
1,732,619
(2,451,200)
2,011,870
8,418,031
7,566,684
The fair value adjustment that occurred in the financial year of $2,980,490 was predominantly due to
improved sales prices achieved, reductions in the costs to complete and growth in the average abalone
sizes. Despite the net reduction in Biomass, these factors have translated into a positive contribution to
the profit and loss of $2,980,490.
The classification of the closing biological stock between current and non-current is based on the
estimated harvest potential for the following 12-month period, which will be sourced from within the
closing stock above 90mm.
Abalone stock below 90mm (~120g) are valued at a per mm rate. Management estimates this is a more
accurate reflection of fair value as it takes into consideration growth rates from approximately 40mm
to 90mm.
Stock above 90mm is measured at fair market value less costs to sell. The fair value assessment also
assumes a further 10% mortality rate between balance date and harvest date. As these valuation
variables are unobservable, they are deemed Level 3 inputs.
Level 3 analysis: The finance and operational departments undertake the valuation of the abalone. The
calculations are considered to be level 3 fair values. The data is taken from internal management
reporting and work completed by the executives within the operations to determine material inputs of
the model. The key inputs are agreed by the Board of Directors every six months. The following table
summarises the quantitative information about the significant unobservable inputs used in level 3 fair
value measurements:
Description
30 June 2023
30 June 2022
Comments
Selling price
Based on estimated
market price at year end
Based on estimated
market price at year end
Obtained by analysing sales
prices and market research
Percentage
increase/(decrease) from
previous year selling price
8%
19%
Obtained by analysing sales
prices and market research
Weight of live abalone
Adjusted weight of live
abalone for fair value
measurement: 147,402 kg
Adjusted weight of live
abalone for fair value
measurement: 158,463 kg
Based on the results from the
stocktake procedures
Costs to complete
$7.35/Kg
$10/Kg
Based on historical data over the
last 12 months
Mortality
10% of >90mm animals
10% of >90mm animals
Based on historical research
42
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. BIOLOGICAL ASSETS (CONTINUED)
The valuation of the biological assets requires the estimate of the closing number of abalone and
biomass and hence the resultant fair value estimate for closing stock. As detailed in Note 2(u), the
number of abalone and biomass is estimated using a model that factors in projected growth and
mortality rates, which in turn are based on the results of survival counts and size class measurements
taken during the Company’s trial phase and subsequent six-monthly stock counts (based upon a 6%
sample). Actual growth and mortality rates will invariably differ to some extent across the ranch.
The following tables summarises the number of <90mm animals for current year and prior year and
number of >90mm animals for current year and prior year:
No of Abalone
30 June 2023
30 June 2022
< 90mm
> 90mm
Total
673,817
874,600
1,548,417
589,091
919,010
1,508,101
Sensitivity analysis - Biological assets
The following tables summarise the potential impact of changes in the key variables on the biological
asset valuation:
Selling price
-10%
($815,133)
Weight of live abalone
($706,793)
10%
$815,133
$706,793
NOTE 9.
INVENTORY
Harvested stock
Ocean Cellared produce
Ocean Pantry retail stock
Consolidated Group
2023
$
2022
$
670,570
10,477
6,282
835,597
1,302
-
687,329
836,899
Inventory is stated at the lower of cost (value at harvest time on valuation of biological assets) or net
realisable value. The inventory balance includes an allocation of harvest and processing costs (deferred
cost of production). These costs are capitalised and carried forward to harvested stock and subsequently
cost of goods sold when the product is eventually sold.
R A RE FOOD S A USTR A L IA
43
NOTE 10. PROPERTY, PLANT AND EQUIPMENT
Plant & equipment, at cost
less: Accumulated depreciation
Office & IT equipment, at cost
less: Accumulated depreciation
Land & Buildings, at cost
less: Accumulated depreciation
Consolidated Group
2023
$
2022
$
3,793,576
(3,007,643)
785,933
3,574,746
(2,767,773)
806,973
215,409
(132,197)
83,212
4,017,097
(651,436)
3,365,661
112,895
(76,662)
36,233
3,794,021
(448,119)
3,345,901
Net carrying amount
4,234,806
4,189,108
A reconciliation of the movement in the carrying amounts of each class of property, plant and
equipment between the beginning and end of the current financial years:
Plant & equipment
Carrying amount at beginning of year
Additions
Depreciation charges
Disposals
Carrying amount at the end of the year
Office & IT Equipment
Carrying amount at beginning of year
Additions
Depreciation charges
Disposals
Carrying amount at the end of the year
Land & Buildings
Carrying amount at beginning of year
Additions
Depreciation charges
Disposals
Carrying amount at the end of the year
Net carrying amount
806,978
228,237
(139,578)
(109,704)
785,933
36,229
102,515
(55,532)
-
83,212
3,345,902
223,076
(203,317)
-
3,365,661
828,860
352,506
(353,161)
(21,232)
806,973
28,259
43,115
(28,300)
(6,841)
36,233
3,260,878
235,273
(150,249)
-
3,345,902
4,234,806
4,189,108
44
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 11. RIGHT-OF-USE ASSETS
The right-of-use assets have arisen upon adoption of AASB 16 Leases on 1 July 2019. The Group's lease
portfolio includes building and aquaculture leases. The building lease has an average term of 5 years
and the aquaculture leases have an average term of 21 years.
(a) The carrying amount of right-of-use assets is detailed below:
Leased Property
$
Balance at 1 July 2021
Depreciation expense for the year ended
As at 30 June 2022
305,277
(62,936)
242,341
Leased Property
$
Balance at 1 July 2022
Depreciation expense for the year ended
As at 30 June 2023
242,341
(17,311)
225,030
(b) Lease liabilities
Aquaculture
Lease
$
143,230
(9,797)
133,433
Aquaculture
Lease
$
133,433
(9,797)
123,636
Total
$
448,507
(72,733)
375,774
Total
$
375,774
(27,107)
348,666
Current lease liabilities
Non-Current lease liabilities
Total lease liabilities
(c) AASB 16 related amounts recognised in statement of profit or loss
Depreciation charge related to right-of-use assets
Interest expense on lease liabilities
Low-value asset expense
Variable lease payment expense
Consolidated Group
2023
2022
$
$
26,857
427,416
21,857
458,116
454,273
479,973
27,107
21,336
1,960
11,000
72,733
23,769
1,680
10,000
The group has some property leases which contain variable lease payments. These variable lease
payments are recognised in the statement of profit or loss in the period which they occur.
(d) Total yearly cash outflows for leases
25,704
91,112
(e) Options to extend or terminate
The options to extend or terminate are contained in several leases of the Group. There were no
extension options for the building lease. All of the extension or termination options are only exercisable
by the Group. The extension options which management were reasonably certain to be exercised have
been included in the calculation of the lease liability.
NOTE 12. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
511,165
478,239
472,828
285,557
989,404
758,385
Trade payables are not past due and are non-interest bearing. The carrying amount of trade and other
payables are considered to be the same as their fair values due to their short-term nature.
R A RE FOOD S A USTR A L IA
45
NOTE 13.
INTEREST BEARING LIABILITIES
CURRENT
Business Market Loan – Working Capital Facility
Insurance Premium Funding
Business Market Loan – Ocean Pantry
Equipment Loans
NON-CURRENT
Business Market Loan – Ocean Pantry
Equipment Loans
Consolidated Group
2023
$
2022
$
348,007
217,963
49,980
119,708
-
192,901
45,815
70,756
735,658
309,472
137,545
244,910
191,690
203,514
382,455
395,204
Equipment Loans
The equipment loan has been provided to Ocean Grown Abalone Operations Pty Ltd by National
Australia Bank Limited, pursuant to a master asset finance agreement with a facility limit of $1,500,000
(2022: $1,500,000). The loan is secured over the financed asset via an equitable mortgage. Additional loan
security is provided in the form of a charge over the assets of RFA Operations and the Company. The
Company has also provided a guarantee and indemnity to the loan provider for the full facility limit.
The equipment loan at reporting date comprised:
Loan Balance Original Loan
Date
Commenced
Repayments
Final Payment
Date
Interest
Rate
$7,165
$14,594
$7,451
$17,310
$123,372
$15,200
$12,137
$117,650
$11,669
$15,385
$7,912
$14,773
$364,618
$43,542
$33,872
$14,500
$28,886
$159,653
$24,200
$17,710
$137,500
$13,339
$17,080
$8,544
$15,550
May 2019
60 months
Jun 2024
Sept 2021
36 months
Sept 2024
Dec 2021
Mar 2022
Mar 2022
Apr 2022
Jun 2022
36 months
36 months
60 months
36 months
36 months
Aug 2023
60 months
Jan 2023
36 months
Feb 2023
36 months
Apr 2023
Apr 2023
36 months
36 months
Dec 2024
Mar 2025
Mar 2027
Apr 2025
Jun 2025
Aug 2027
Jan 2026
Feb 2026
Mar 2026
Mar 2026
3.99%.
3.89%.
3.71%.
4.38%.
4.97%.
4.80%.
5.66%
6.59%.
7.89%.
8.31%.
8.5%.
7.36%.
Business Market Loan – Ocean Pantry
The equipment loan has been provided to Ocean Grown Abalone Operations Pty Ltd by National Australia
Bank Limited. The loan is secured over the financed asset via an equitable mortgage. Additional loan
security is provided in the form of a charge over the assets of RFA Operations and the Company. The
Company has also provided a guarantee and indemnity to the loan provider for the full facility limit.
The business market loan at reporting date comprised:
• Balance of $187,525. Original loan $250,000, which commenced in March 2022, with 60 monthly
repayments (final payment date of 15 March 2027) and an annual interest rate of 3.14%.
Business Market Loan – Working Capital Facility
The working capital facility has been provided to Rare Foods Australia Ltd. by National Australia Bank
Limited. The loan is an interest only facility, reviewed annually and loan security is provided in the form of
a charge over the assets of RFA Operations and the Company. The Company has also provided a guarantee
and indemnity to the loan provider for the full facility limit.
46
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
The business market loan at reporting date comprised:
• Balance of $348,007 with an annual floating interest rate of 7.16%.
Insurance Premium Funding
The insurance premium funding loan has been provided to Ocean Grown Abalone Operations Pty Ltd
Elantis Premium Funding Limited.
The business market loan at reporting date comprised:
• Balance of $217,963. Original loan $337,142, which commenced in April 2023, with 12 monthly
repayments (final payment February 2023) and an annual interest rate of 2.93%.
NOTE 14. PROVISIONS
Employee entitlements – annual leave
Employee entitlements – long service leave
NOTE 15. DEFERRED TAX ASSETS AND LIABILITIES
Recognised deferred tax assets
Accruals
Provisions
Losses
Expenses taken into equity
Other
Deferred tax assets to offset deferred tax liability
Recognised deferred tax liabilities
Biological & Inventory Asset
Prepayments
Other
Deferred tax assets to offset deferred tax liability
Consolidated Group
2023
$
2022
$
161,914
53,624
140,150
79,179
215,538
219,329
2023
2022
86,721
53,885
50,266
-
174,755
(352,153)
13,474
2,104,508
74,815
213,404
(352,153)
2,040,574
51,328
54,833
624,491
-
47,197
(707,992)
69,857
1,891,671
59,823
104,030
(726,781)
1,328,743
No deferred tax asset has been recognised on capital tax losses of $107,225 (2022: $2,537) at reporting
date.
NOTE 16. CONTRIBUTED EQUITY
(a) Issued and paid up capital
Balance at beginning of year
Issued to service providers
Balance at end of the year
$
27,012,442
117,000
27,129,442
$
27,012,442
-
27,012,442
(b) Movement in ordinary shares
No.
No.
No. fully paid ordinary shares
Issued to service providers
Balance at end of the year
202,295,151
200,742,780
1,552,371
202,295,151
-
200,742,780
R A RE FOOD S A USTR A L IA
47
NOTE 16. CONTRIBUTED EQUITY (CONTINUED)
(c) Ordinary Shares
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion
to the number of shares held. At shareholders meetings, each ordinary share is entitled to one vote when
a poll is called.
On 21 December 2022, a total of 1,214,025 fully paid ordinary shares were issued to two consultants in
consideration for services rendered.
On 3 May 2022, a total of 338,346 fully paid ordinary shares were issued to a consultant in consideration
for services rendered.
(d) Share options
On 27 November 2020, 1,000,000 options, each exercisable at $0.142 on or before 27 November 2023
(Class D) were issued as part remuneration for Ignazio Ricciardi (Non-Executive Director) services.
On 26 November 2021, 2,000,000 options, each exercisable at $0.117 on or before 26 November 2024
(Class E) were issued as part of the remuneration packages for Peter Harold (Non-Executive Chairman)
and Danielle Lee (Non-Executive Director).
NOTE 17. RESERVES
Consolidated Group
2023
2022
$
$
Share-based payment reserve
1,308,103
1,165,214
The share-based payment reserve is used to record the value of equity benefits (options and
performance rights) provided to directors, executives and employees as part of their remuneration and
consultants / advisers for their services.
Refer to Note 25 for details of share-based payments during the financial year.
Movement in reserves:
Share-based payments reserve
Balance at beginning of the year
Options issued to Directors
Performance rights issued to Directors and employees
Balance at the end of the year
1,165,214
-
142,889
1,308,103
1,081,275
41,466
42,473
1,165,214
Refer to Note 25 Share-based payments for further details on performance rights.
NOTE 18. ACCUMULATED LOSSES
Accumulated losses at beginning of year
Profit/(Loss) attributable to Owners of the Company
Accumulated losses at end of year
(15,201,793)
(1,444,582)
(14,348,363)
(853,430)
(16,646,370)
(15,201,793)
48
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19. SUBSEQUENT EVENTS
There are no other significant matters sufficiently advanced or at a level of certainty that would require
disclosure, arisen since the end of the financial year, which significantly affects the operations of the
Consolidated Group, the results of those operations or the state of affairs of the Consolidated Group in
future financial years.
NOTE 20. COMMITMENTS AND CONTINGENCIES
The Consolidated Group had the following supplier purchase
commitments as at 30 June 2023
Within one year
After one year but not more than five years
More than five years
The Consolidated Group had the following capital purchase
commitments as at 30 June 2023
Within one year
After one year but not more than five years
More than five years
Consolidated Group
2023
$
2022
$
902,652
-
-
902,652
1,554,374
1,414,224
-
2,968,598
-
-
-
-
117,500
-
-
117,500
Other than as disclosed in the financial statements, the Consolidated Group does not have any
contingent liabilities at balance sheet date and none have arisen since balance sheet date to the date of
signing the Directors’ report.
NOTE 21. AUDITOR’S REMUNERATION
Auditors of the Group - BDO and related network firms
Audit and review of financial statements
Group
Total audit and review of financial statements
Other statutory assurance services
Non-audit services
Corporate Finance advisory
Group Tax
Total non-audit services
Total services provided by BDO
Other statutory assurance services - RSM
Non-audit services
Consulting services
Total non-audit services
Total services provided by other auditors (excluding BDO)
78,265
78,265
69,889
69,889
143,623
55,801
199,423
10,500
61,912
72,412
277,688
142,301
-
-
-
5,872
5,872
5,872
R A RE FOOD S A USTR A L IA
49
Consolidated Group
2023
$
2022
$
NOTE 22. PROFIT/(LOSS) PER SHARE
The calculation of basic and diluted profit/(loss) per share was
based on the following:
Net (loss) for the year attributable to owners of the Company
(1,444,577)
(853,430)
No.
No.
Weighted average number of ordinary shares used in
calculating basic (loss) per share
202,295,151
200,742,780
Effect of dilution:
Share options
Convertible loans
-
n/a
-
n/a
Adjusted weighted average number of ordinary shares used
in calculating diluted (loss) per share
202,295,151
200,742,780
Basic and diluted (loss) per share (cents)
(0.71)
(0.43)
There is no impact from the 3,000,000 options outstanding at 30 June 2023 (2022: 3,000,000 options) on
the profit per share calculation because they are anti-dilutive. These options could potentially dilute basic
EPS in the future.
NOTE 23. KEY MANAGEMENT PERSONNEL DISCLOSURES
Names and positions held by Directors and other members of Key Management Personnel
(“KMP”) in office at any time during the financial year are set out below:
Name
Position Held
Peter Harold
Non-Executive Chairman
Bradley Adams
Executive Director Corporate Development
Ignazio Ricciardi Non-Executive Director
Danielle Lee
Non-Executive Director
Rob Jorden
Chief Executive Officer
Brent Stockden
Chief Financial Officer & Company Secretary
The aggregate compensation made to Directors and other KMP of the Group during the financial year
is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
860,359
90,337
84,743
865,127
83,652
70,346
1,035,439
1,019,125
50
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 24. RELATED PARTY TRANSACTIONS
The ultimate parent entity is Rare Foods Australia Limited. Refer to Note 31 for a list of all controlled
entities.
In each of the following related party transactions normal commercial terms and conditions applied.
Terms and conditions were no more favourable than those available or which might reasonably be
expected to be available for a similar transaction or service to unrelated parties on arms-length basis.
Ignazio Ricciardi & Silvana Ricciardi ATF IP & S Ricciardi Family Trust, a business entity controlled by Ian
Ricciardi, did not receive any remuneration during the financial year (FY2022: $57,392) for the provision
of commercial consulting services by Ian Ricciardi.
Bigstreet Pty Ltd, of whom Ignazio Ricciardi is a director and in which he holds a beneficial ownership
interest, was paid $3,476 during the financial year (FY2022: $2,007) for the provision of cold storage and
handling services.
Vincenzo Ricciardi, son of Ignazio Ricciardi, was an employee of the Company. He received total
remuneration inclusive of superannuation during the financial year of $60,839 (FY2022: $137,077) as the
Group Financial Controller.
Jodee Adams, the wife of Brad Adams, received remuneration inclusive of superannuation during the
financial year of $5,304 (FY2022: $nil ).
NOTE 25. SHARE-BASED PAYMENTS
The Company makes share-based payments, in the form of options, to directors, executives and
employees as part of their remuneration and to consultants / advisers for their services.
Options
Set out below is a summary of unlisted option movements during the financial year.
2023
2022
Weighted average
exercise price per Option
Number of
options
Weighted average
exercise price per Option
Number of
options
Balance at the start of the period
$0.125
3,000,000
Cancelled during the period
Granted during the period
Exercised during the period
Lapsed during the period
-
-
-
-
-
-
-
-
Balance at the end of the period
$0.125
3,000,000
$0.38
-
$0.117
-
$0.40
$0.125
13,539,450
-
2,000,000
-
(12,539,450)
3,000,000
Outstanding listed options at the end of the year, which were granted as share-based payments, are
summarised as follows:
Series
Grant Date
Expiry Date Exercise Price Number of options
D
E
27 Nov 2020
27 Nov 2023
$0.142
1,000,000
26 Nov 2021
26 Nov 2024
$0.117
2,000,000
Total
3,000,000
R A RE FOOD S A USTR A L IA
51
Fully Paid Ordinary Shares
On the 21st of December 2022, the Company issued 833,333 fully paid ordinary shares to a contractor in
exchange for consultancy services provided. The shares were issued at $0.072 per share for a total fair
value of $60,000.
On the 21st of December 2022, the Company issued 380,692 fully paid ordinary shares to a contractor in
exchange for consultancy services provided. The shares were issued at $0.0788 per share for a total fair
value of $30,000.
On the 5th of May 2023, the Company issued 338,346 fully paid ordinary shares to a contractor in exchange
for consultancy services provided. The shares were issued at $0.0798 per share for a total fair value of
$27,000.
Performance Rights
The following table summarises the performance rights issued during the 2023 reporting and 2022
comparative period:
Class
Grant Date
Number of
Performance
Rights
Value per
Share
Fair Value
2023
2022
Total
expense
Total
expense
E
F
E
F
E
F
26 Nov 2021
785,177
$0.075
$58,888
$28,273
$9,415
26 Nov 2021
785,177
$0.075
$58,888
($440)
$440
10 Dec 2021
2,542,703
$0.080
$203,416
$99,022
$31,164
10 Dec 2021
2,542,703
$0.080
$203,416
($1,454)
$1,454
2 Sept 22
341,542
$0.080
$27,323
$17,488
2 Sept 22
341,542
$0.080
$27,323
-
-
-
Total
7,338,844
$579,254
$142,889
$42,473
During the reporting period, the Company issued 683,083 Performance Rights to full time employees
employed with the Company during the performance window. The Performance Rights have been
issued in 2 classes with 341,542 shares in each class and subject to separate service and performance
conditions as detailed below:
• Class E – Service Condition: remain engaged as an employee for a continuous period, for the 2-
year period from 1 July 2021 to 30 June 2023; and
Performance Condition: The achievement of harvest targets on the Flinders Bay operation. The
proportion of performance rights available to vest following a determination of the harvest over the 2-
year performance period from 1 July 2021 to 30 June 2023 is summarised as follows:
Harvest over performance period
Proportion of Performance Rights available to vest %
Less than 160,000 kgs
0%
Greater than 160,000 kgs up to 170,000 kgs
Pro-rata from 50% to 99%
Greater than 170,000 kgs
100%
52
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 25. SHARE-BASED PAYMENTS (CONTINUED)
An alternative performance hurdle to the harvest target, is a Takeover Event occurring on or before 30
June 2023.
•
Class F – Service Condition: remain engaged as an employee for a continuous period, for the 2
year period from 1 July 2021 to 30 June 2023; and
Performance Condition: The achievement of EBIT targets from the Company’s operations for the 2
year performance period. The proportion of performance rights available to vest following a
determination of the EBIT, over the 2 year performance period from 1 July 2021 to 30 June 2023 is
summarised as follows:
EBIT over performance period
Proportion of Performance Rights available to vest %
Less than or equal to $400,000
0%
Greater than $400,000 up to $1,300,000
Pro-rata from 50% to 99%
Greater than $1,300,000
100%
An alternative performance hurdle to the harvest target, is a Takeover Event occurring on or before 30
June 2023.
For the purposes of the financial statements, the Group has recognised a share-based payment expense for
the relevant performance period, based on the assessed probability of the relevant performance conditions
being met. The probability assessment of the respective performance conditions, are set out below:
(iii) Class E – based on the Company’s assessment, the probability of achieving the applicable
performance condition was considered to be 64% as at 30 June 2023.
(iii) Class F – based on the Company’s assessment, the probability of achieving the applicable
performance condition was considered to be 0% as at 30 June 2023.
The performance period for both Class E and Class F performance rights has concluded, however the
Board will meet post reporting date to assess the achievement of targets against audited results.
R A RE FOOD S A USTR A L IA
53
NOTE 26. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
The Board monitors and manages the financial risk relating to the operations of the Group. Exposure to
a variety of financial risks: credit risk, liquidity risk and market risk (interest rate and currency risk) arises
in the normal course of the Consolidated Group’s business. The risk management policies are designed
to minimise potential adverse effects on the Consolidated Group’s financial performance.
The Consolidated Group holds the following financial instruments as at the reporting date:
Financial assets
Cash and cash equivalents
Trade & other receivables
Deposits
Financial liabilities
Trade and other payables
Lease liabilities
Loans and borrowings
Market Risk
Consolidated Group
2023
$
2022
$
19,996
2,175,449
34,667
2,230,112
511,165
454,273
1,118,111
2,083,549
795,183
2,095,802
34,667
2,925,652
472,828
479,973
704,676
1,657,477
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates
will affect the Consolidated Group’s income or the value of its holding of financial instruments. The
Consolidated Group’s objective is to manage and control market risk exposures within acceptable
parameters, whilst optimising returns.
Currency Risk
The Consolidated Group is exposed to currency risk on overseas sales of abalone product and associated
selling costs that are denominated in US dollars. The Consolidated Group does not have any overseas
borrowings or US dollar cash holdings as at balance date. In order to protect against exchange rate
movements, the consolidated group from time to time has entered into forward foreign exchange
contracts with its banking provider. The Consolidated Group had a no USD debtor balance (2022:
$44,070) and no USD creditor balance at 30 June 2023 (2022: $3,402).
The table below summarises the effect on the Consolidated Group’s comprehensive loss (movement in
average rate) and cash and cash equivalents (movement at balance date) if the AUD / USD exchange
rates moved by +10%:
Percentage shift in AUD / USD exchange rate
10%
Total effect on cash and cash equivalents of +ve movement
Total effect on cash and cash equivalents of -ve movement
Total effect on debtors of +ve movement
Total effect on debtors of -ve movement
Total effect on creditors of +ve movement
Total effect on creditors of -ve movement
-
-
-
-
-
-
10%
(657)
803
5,726
(6,998)
(433)
529
Total effect on comprehensive (loss) of +ve movement
Total effect on comprehensive profit of –ve movement
(355,635)
434,665
(250,523)
306,195
54
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
(CONTINUED)
The following table sets out the interest rates applicable to financial instruments that are exposed to
interest rate risk:
Consolidated
Financial assets
Cash and cash equivalents
Trade & other receivables
Deposits
Total financial assets
Financial liabilities
Trade & other payables
Lease liabilities
Loans and borrowings
Total financial liabilities
Consolidated
Financial assets
Cash and cash equivalents
Trade & other receivables
Deposits
Total financial assets
Consolidated
Financial liabilities
Trade & other payables
Lease liabilities
Loans and borrowings
Total financial liabilities
Interest
bearing
Non-interest
bearing
2023
$
2023
$
Total
2023
$
Weighted
average
interest rate
2023
%
-
-
34,667
34,667
19,996
2,175,449
-
2,195,445
19,996
2,175,449
34,667
2,230,112
2,469
454,273
1,118,111
1,574,853
508,696
-
-
508,696
511,165
454,273
1,118,111
2,083,549
0.80
-
4.60
0.00
4.50
5.94
Interest
bearing
Non-interest
bearing
2022
$
2022
$
Total
2022
$
Weighted
average
interest rate
2022
%
329,227
-
34,667
363,894
465,956
2,095,802
-
2,561,758
795,183
2,095,802
34,667
2,925,652
6,176
479,973
704,676
1,190,825
466,652
-
-
466,652
472,828
479,973
704,676
1,657,477
0.80
-
2.46
0.08
4.50
4.95
The Consolidated Group receives and incurs interest on its cash management deposits based on daily
balances. As at balance date the Company was exposed to a variable interest rate of 7.16% on its working
capital facility drawdown (2022: 0.80%). The Consolidated Group’s US dollar account does not attract
interest.
The Consolidated Group receives interest on its Deposits and at balance date was exposed to a weighted
average fixed interest rate of 4.60% (2022: 2.46%)
Interest payable on trade and other payables relates to the Consolidated Group credit card balances at
balance date.
R A RE FOOD S A USTR A L IA
55
NOTE 26. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
(CONTINUED)
Credit Risk
Credit risk represents the risk of financial loss to the Consolidated Group if a customer or counterparty
to the financial instrument fails to meet its contractual obligations and arises principally from the
Consolidated Group’s receivables from customers. This in turn is influenced by the characteristics of
each customer and the Consolidated Group regularly assesses the creditworthiness of its customers.
The Consolidated Group regularly reviews its trade and other receivables balances for impairment. At
the reporting date, there were no trade and other receivables were past due or impaired (2022: $nil).
The Consolidated Group’s maximum exposure to credit risk at the reporting date was:
Financial assets
Cash and cash equivalents
Trade & other receivables
Deposits
Total financial assets
Consolidated Group
2023
$
19,996
2,175,449
34,667
2,230,112
2022
$
795,183
2,095,802
34,667
2,925,652
The Consolidated Group’s maximum exposure to credit risk at the reporting date was:
Credit quality of financial assets
At 30 June 2023
Financial assets
Cash and cash equivalents
Trade debtors & other receivables 2
Deposits
Total financial assets
Credit quality of financial assets
At 30 June 2022
Financial assets
Cash and cash equivalents
Trade debtors & other receivables2
Deposits
Total financial assets
Equivalent
S&P rating 1
$
Internally
rated No
default
$
Total
$
19,996
-
34,667
54,663
-
2,175,449
-
2,175,449
19,996
2,175,449
34,667
2,230,112
Equivalent
S&P rating 1
$
Internally
rated No
default
$
Total
$
795,183
-
34,667
829,850
-
2,095,802
-
2,095,802
795,183
2,095,802
34,667
2,925,652
1 The equivalent S&P rating of the financial assets and deposits represents the rating of the counterparty with whom
the financial asset is held rather than the rating of the financial asset itself. NAB has a rating of A-1+ (short-term)
and AA- (long-term). CBA has a credit rating of A-1+ (short-term) and AA- (long-term). Bendigo Bank has a rating of
A-2 (short-term) and BBB+ (long-term).
2 Includes trade receivables of $146,494 (FY2022: $132,500). Other receivables include net amounts owing from
Government institutions of $1,807,831 (FY2022: $1,829,733).
56
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT
(CONTINUED)
Liquidity Risk
Liquidity risk arises from the financial liabilities of the Consolidated Group and its ability to meet their
obligations to repay their financial liabilities as and when they fall due. The Consolidated Group
manages liquidity risk by maintaining adequate reserves and monitoring budgeted and actual cash
flows and matching the maturity profiles of financial assets, expenditure commitments and liabilities.
Maturity of financial liabilities
The table below reflects an undiscounted contractual maturity analysis for financial liabilities:
Contractual maturities of
financial liabilities
At 30 June 2023
Non Derivatives
Trade and other payables
Lease liabilities
Loans and borrowings
Total expected outflows
Contractual maturities of
financial liabilities
At 30 June 2022
Non Derivatives
Trade and other payables
Lease liabilities
Loans and borrowings
Total expected outflows
Less than
12 months
$
Between 1
and 2
years
$
Between 2
and 5
years
$
Over 5
years
$
Total
contractual
cash flows
$
Carrying
amount
$
511,165
47,035
785,112
1,343,312
-
47,036
165,887
212,923
-
135,969
235,650
371,619
-
372,921
-
511,165
602,961
1,186,649
511,165
454,273
1,118,111
372,921
2,300,775
2,083,549
Less than
12 months
$
Between 1
and 2
years
$
Between 2
and 5
years
$
Over 5
years
$
Total
contractual
cash flows
$
Carrying
amount
$
472,828
47,036
334,795
854,659
-
47,036
135,886
182,922
-
141,106
199,140
340,246
-
444,249
64,669
508,918
472,828
679,427
734,490
1,886,745
472,828
479,973
704,676
1,657,477
Balances due within 12 months equal their carrying balances as the impact of discounting is not
significant.
Fair Value Measurement of financial instruments
Note 2(G) summarises the Consolidated Group’s approach to fair value assessment of its assets and
liabilities. The carrying amount of the Consolidated Group’s financial instruments are assumed to
approximate their fair value due to either the short-term nature or their terms and conditions.
Capital Risk Management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can continue to provide returns to shareholders and benefits for other
stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to
maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group
has no external requirements imposed upon it in relation to capital structure.
R A RE FOOD S A USTR A L IA
57
NOTE 27. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated Group
2023
$
2023
$
Reconciliation of net Cash provided by Operating Activities to
Operating (Loss) after Income Tax
(Loss) after income tax for the year
(1,445,485)
(854,972)
Depreciation and amortisation
Fair value (FV) adjustment – biological assets
Net interest paid / (received) including interest expense on lease
liability
(Profit)/loss on sale of assets
Director and employee options or performance rights issued
Change in assets and liabilities
Decrease in biological assets and inventory (excluding FV adjustment)
Decrease / (Increase) in trade and other receivables
(Increase) / Decrease in R&D tax refund receivable
(Increase) in deferred tax assets
Increase / (Decrease) in deferred tax liabilities
(Decrease) / Increase in trade and other payables
Increase in income tax payable
Increase in provisions
515,979
(2,980,490)
619,713
(2,011,870)
68,259
(7,359)
142,889
2,278,713
(101,549)
21,902
56,383
711,831
278,665
(19,017)
(3,791)
26,676
4,380
83,939
292,506
76,887
(848,469)
(13,414)
885,467
(87,637)
17,893
52,182
Net cash (used in) / provided by operating activities
(483,070)
(1,756,719)
NOTE 28. OPERATING SEGMENT
For management purposes, the Consolidated Group is organised into one main operating segment,
which involves its abalone ranching operations, inclusive of its seeding, ranching and processing
activities. All of the Consolidated Group’s activities are interrelated, and discrete financial information is
reported to the Board (Chief Operating Decision Makers) as a single segment. Accordingly, all significant
operating decisions are based upon analysis of the Consolidated Group as one segment. The financial
results from this segment are equivalent to the financial statements of the Consolidated Group as a
whole. The Consolidated Group operates only in Australia.
NOTE 29. DIVIDENDS
No dividend was paid or declared by the Company in the period since the end of the financial year and
up to the date of this report. The Directors do not recommend that any amount be paid by way of
dividend for the financial year ended 30 June 2023 (2022: Nil). The balance of the franking account as at
30 June 2023 is Nil (2022: Nil).
58
2 02 3 A NNUA L RE P OR T
NOTES TO THE FINANCIAL STATEMENTS
NOTE 30. PARENT ENTITY INFORMATION
Total assets
Total liabilities
Net assets
Issued capital
Share based payment reserve
Accumulated losses
Total shareholders’ equity
2023
$
2022
$
16,774,479
(4,995,775)
11,778,704
27,129,442
1,308,103
(16,658,841)
11,778,704
15,094,261
(2,324,995)
12,769,266
27,012,442
1,165,214
(15,408,390)
12,769,266
Profit/(Loss) of the parent entity
Total comprehensive profit/(loss) of the parent entity
(1,250,452)
(1,250,452)
(958,731)
(958,731)
(a) Guarantees entered into by the parent entity
Refer to Note 13 for information on the guarantee and other security provided by the
Company in relation to the debts of its subsidiaries.
(b) Contingent liabilities of the parent entity
The Company did not have any other contingent liabilities not recognised as liabilities at
balance date.
(c) Contractual commitments for capital expenditure
The Company did not have any other commitments in relation to capital expenditure
contracted but not recognised as liabilities at balance date.
NOTE 31. CONTROLLED ENTITIES
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiaries in accordance with the accounting policy described in Note 2(d).
Name
Country of Incorporation
Ocean Grown Abalone Operations Pty Ltd
Two Oceans Abalone Pty Ltd
Wylie Bay Abalone Pty Ltd
Ocean Grown Abalone Wylie Bay Pty Ltd
Australia
Australia
Australia
Australia
Percentage Owned
2023
100%
100%
66.67%
100%
2022
100%
100%
66.67%
100%
R A RE FOOD S A USTR A L IA
59
DIRECTOR’S DECLARATION
DIRECTOR’S DECLARATION
FOR THE YEAR ENDED 30 JUNE 2023
The directors of the Company declare that:
1.
The financial statements and notes, as set out on pages 28 to 59 are in accordance with the Corporations
Act 2001, including:
a. complying with Australian Accounting Standards as described in Note 2, the Corporations Act
2001 and with International Financial Reporting Standards; and
b. giving a true and fair view of the consolidated Group’s financial position as at 30 June 2023 and
of its performance for the financial year ended on that date.
2.
In the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the Directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
Peter Harold
NON-EXECUTIVE CHAIRMAN
31 August 2023
60
2 02 3 A NNUA L RE P OR T
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
INDEPENDENT AUDITOR’S REPORT
R A RE FOOD S A USTR A L IA
61
62
2 02 3 A NNUA L RE P OR T
INDEPENDENT AUDITOR’S REPORT
R A RE FOOD S A USTR A L IA
63
64
2 02 3 A NNUA L RE P OR T
ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE INFORMATION
ADDITIONAL SECURITIES EXCHANGE INFORMATION
FOR THE YEAR ENDED 30 JUNE 2023
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 9th August 2023.
1 QUOTATION
Listed securities in Rare Foods Australia Limited are quoted on the Australian Securities Exchange under ASX code
RFA (Fully Paid Ordinary Shares).
2 VOTING RIGHTS
The voting rights attached to the Fully Paid Ordinary shares of the Company are:
a. at a meeting of members or classes of members each member entitled to vote may vote in person or by
proxy or by attorney; and
b. on a show of hands, every person present who is a member has one vote, and on a poll every person
present in person or by proxy or attorney has one vote for each ordinary share held.
There are no voting rights attached to any Options or Performance Rights on issue.
3 DISTRIBUTION OF SHAREHOLDERS
i.
Fully Paid Ordinary Shares
Shares Range
Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
22
108
285
490
173
1078
Units
6,211
372,802
2,320,831
18,404,194
181,191,113
202,295,151
ii. Unlisted Class D Options exercisable at $0.142 on or before 27 November 2023
Shares Range
Holders
Units
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
-
-
-
-
1
1
1Holders who hold more than 20% of securities are:
•
Ian Ricciardi – 1,000,000 options
%
0.00
0.18
1.15
9.10
89.57
100.00%
%
-
-
-
-
-
-
-
-
1,000,0001
1,000,000
100.00
100.00%
R A RE FOOD S A USTR A L IA
65
iii. Unlisted Class E Options exercisable at $0.117 on or before 26 November 2024
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
Holders
-
-
-
-
2
2
1Holders who hold more than 20% of securities are:
•
•
Peter Harold – 1,000,000 options
Danielle Lee – 1,000,000 options
iv. Class E Performance Rights
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
Holders
-
-
-
13
5
18
1Holders who hold more than 20% of securities are:
•
•
Bradley Adams – 785,177 performance rights
Robert Jorden – 785,177 performance rights
v. Class F Performance Rights
Shares Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
Holders
-
-
-
13
5
18
1Holders who hold more than 20% of securities are:
•
•
Bradley Adams – 785,177 performance rights
Robert Jorden – 785,177 performance rights
4 SUBSTANTIAL SHAREHOLDERS
Units
-
-
-
-
2,000,0001
2,000,000
Units
-
-
-
703,198
2,966,224
3,669,422
Units
-
-
-
703,198
2,966,224
3,669,422
%
-
-
-
-
100.00
100.00%
%
-
-
-
19.16
80.84
100.00%
%
-
-
-
19.16
80.84
100.00%
As at 9 August 2023, the Company’s register showed the following substantial shareholders:
UBS Nominees Pty Ltd
Name
Mr Ignazio Peter Ricciardi & Mrs Silvana Ricciardi
NE & HJ Soulos Pty Ltd
No. of Shares
20,963,379
19,762,732
10,313,422
%
10.36
9.11
5.10
5 RESTRICTED SECURITIES
There are currently no restricted securities.
66
2 02 3 A NNUA L RE P OR T
ADDITIONAL SECURITIES EXCHANGE INFORMATION
6 ON MARKET BUY-BACK
There is currently no on market buy back in place.
7 APPLICATION OF FUNDS
The Company has applied its cash and assets readily convertible to cash in a way that is consistent with its business
objectives detailed in its IPO prospectus.
8 TWENTY LARGEST SHAREHOLDERS
The twenty largest shareholders of the Company’s quoted securities as at 9 August 2023 are as follows:
1 UBS Nominees Pty Ltd
Name
No. of Shares
%
20,963,379
10.36
2 Mr Ignazio Peter Ricciardi & Mrs Silvana Ricciardi
19,762,732
3 NE & HJ Soulos Pty Ltd
4 Mrs Helen Gaetana Ricciardi
5 Frewin Corporation Pty Ltd
6
Tomba Nominees Pty Ltd
7 Whale Watch Holdings Limited
8 Mrs Sylvia Ricciardi
9 Mr Michael Kelsey Cross
10 Pyxis Holdings Pty Ltd
11 Blair House Pty Ltd
12 Montrose Investments (WA) Pty Ltd
13 Teakdale Investments Pty Ltd
14 Mr Timothy Malcolm Bowman
15 Mr Bradley Adams
16 Makaba Pty Ltd
17 Citicorp Nominees Pty Ltd
18 Reay Corporation Pty Ltd
19 Tejiman Holdings Pty Ltd
20 Skycrest Investments Pty Ltd
10,313,422
9,988,003
9,543,528
7,704,911
6,811,684
6,468,750
6,300,000
4,800,000
3,800,000
3,000,000
3,000,000
2,799,168
2,652,667
2,370,000
2,215,881
2,187,500
2,057,000
1,609,725
9.11
5.10
4.94
4.72
3.81
3.37
3.20
3.11
2.37
1.88
1.48
1.48
1.38
1.31
1.17
1.10
1.08
1.02
0.80
Total
127,004,800
62.78
R A RE FOOD S A USTR A L IA
67
CORPORATE DIRECTORY
directors
Peter Harold – Non-Executive Chairman
Bradley (Brad) Adams – Managing Director
Ignazio (Ian) Ricciardi – Non-Executive Director
Danielle Lee – Non-Executive Director
auditors
BDO Audit (WA) Pty Ltd
Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
company secretary
Brent Stockden
australian securities exchange
ASX Code Ordinary Shares: RFA
registered office
Lot 331 Augusta Boat Harbour, Leeuwin Road
Augusta WA 6290
Telephone: +61 8 6181 8888
Facsimile: +61 8 6181 8899
Email: investors@rarefoods.com.au
Website Address: www.rarefoodsaustralia.com.au
share registry
Automic Registry Services
Level 5, 191 St Georges Terrace
Perth WA 6000
Enquiries (within Australia): 1300 288 664
Enquiries (outside Australia): +61 2 9698 5414
Facsimile: +61 8 9321 2337
Website: www.automic.com.au
principal place of business
Lot 331 Augusta Boat Harbour,
Leeuwin Road
Augusta WA 6290
68 2 023 ANNUAL REP ORT
GOING GREEN &
PAPERLESS
JOIN OUR SUSTAINABILITY JOURNEY
WHY SWITCH TO PAPERLESS CORRESPONDENCE?
Save time
Save space
Save the environment
Receive announcements and
notifications as soon as they
are released in the ASX in
real-time, instead of waiting
for the post.
Reduce the clutter that enters
your home, and receive
correspondence via email
or as digital, paper-free PDF.
Compatible with any device.
In Australia, each person uses
an average 230kg of paper
per year. Let’s help reduce
this waste by going paper-
free.
At Rare Foods Australia, we strive to be sustainable and reduce our carbon footprint wherever possible.
That means we prefer corresponding via emails vs. a multitude of printed paper.
We feel our shareholders echo our thoughts on this and to that end; here are some simple steps to help
you move towards Email correspondence when hearing from us.
HOW DO I ELECT TO RECEIVE ALL CORRESPONDENCE BY EMAIL?
You can elect to receive all correspondence, such as annual reports, notice of meetings, newsletters and
more, by email. You can make this election by:
1. Using Automic’s Investor Portal − investor.automic.com.au :
• If you have already registered, simply enter your username and password
and click “log in”.
• If you have not yet registered, simply click “register” and follow the prompts.
2. Once you have logged in, click on “profile”.
• You can then select “edit” in the Communication Preferences section.
• Once you have selected “Electronic Only” and added your email address, click “save”.
MANY THANKS FOR YOUR SUPPORT AS WE STRIVE
TOWARDS A MORE SUSTAINABLE FUTURE.
Any issues? Feel free to contact Automic via
email (hello@automic.com.au) or by phone (1300 288 664).
69
RARE FOODS AUSTRALIA www.rarefoodsaustralia.com.au
© 2023 Rare Foods Australia (ASX:RFA). All Rights Reserved.
ACN 52 148 155 042 ∙ +61 8 6181 8888 ∙ Lot 331 Augusta Boat Harbour, Leeuwin Road Augusta WA 6290 ∙ info@rarefoods.com.au